Yes, thank you very much, Mr. Chair.
I am president of the Canadian Home Builders' Association, and I am also a builder in Nova Scotia. As you indicated, I have with me the association's chief operating officer, John Kenward.
The CHBA has made its written submission to the committee and have also updated it to reflect the further 1% reduction in the GST. We have provided copies of our submission supporting housing affordability and choice, as well as copies of an updated edition of our supporting document, The Canadian Housing Industry – Performance and Trends.
The focus of my remarks will be specifically on the submission supporting housing affordability and choice, but I would like to start with a little bit of context.
CHBA does acknowledge the actions of the federal government in several areas, specifically the further reduction of 1% in the GST, which, with the earlier 1% reduction, certainly greatly helps housing affordability across Canada. Further, we do acknowledge that the government has met its commitment on the GST and has illustrated its support for home ownership across Canada.
CHBA also recognizes the government's efforts to address the skilled trades shortages, particularly its new labour market investment strategy and its actions with regard to immigration policy. CHBA also welcomes the federal government commitment to the infrastructure funding, and the industry continues to be pleased with its working partnership with Canada Mortgage and Housing Corporation.
We note that CMHC's value goes far beyond mortgage insurance. Its value is especially significant in technical research, market analysis, information distribution, and project demonstration, particularly in energy efficiency and environmental concerns.
The Canadian Home Builders' Association's pre-budget submission raises five central matters: one, the need to adjust the GST rebate thresholds for new homebuyers; two, the need to expand the definition of a substantial renovation; three, the need to tackle the underground economy head on, which means replacing the contract payment reporting system now in effect and currently grossly ineffective, and also requiring that all businesses have a federal business number; four, the need to reform tax measures for rental housing investment, particularly to examine the zero-rating of investment in housing, rental housing production, and also to re-examine the definition and application of the capital gains tax deferments; and five, the need to monitor federal infrastructure investment to make sure that it does go to the areas of greatest interest to the government and to Canadians—clean air, clean water, clean land, and efficient roads and transit.
I would like to take a couple of those and go into a bit more detail.
With respect to the GST rebate for new homeowner purchases, we emphasize that this input is nowhere near the promise that was made 16 years ago, and housing prices have increased enormously over the past 16 years. For example, in Toronto in 1991, 65% of new home purchasers qualified for the full rebate; and in 2007, only 20%. This situation is common in the large centres such as Vancouver, Toronto, and Calgary, but it's also a serious situation in many smaller centres such as Abbotsford, Ottawa, Montreal, St. Catharines, and Halifax.
With regard to government action to tackle the underground economy, the Canadian Home Builders' Association continues to be disappointed with the lack of effort on the part of the Canada Revenue Agency in this matter.
With regard to the rental housing market, private investment in this area is not meeting projected requirements, simply because the federal tax regime is biased against private investment in rental housing production.
Thank you, Mr. Chair. I hope I have stayed within my five-minute allowance.