Finance Committee on Oct. 19th, 2010

[John Dickie]

Again, is it the point for the system to provide subsidies based on the values, so that if you have an expensive home you get a lot of subsidy? Normally, the answer would be no.

Assuming that away, I would say that the point you're making has some validity, but the discrepancy is not nearly as strong as the discrepancy in these numbers. In other words, if you look at the value, owner-occupied housing in this country might be worth 80% of the housing stock and rental 20%. You have your 60:30 split of ownership, an 80:20 split in value, and you have a 93:7 split in subsidies in tax expenditures.

That's what we're saying isn't really right and should be addressed—perhaps by the back door, not by the front door, as my exchange with Mr. Mulcair suggested.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

It depends also on how you determine the values, because some provinces provide low-income renters with some subsidies. For example, in Quebec you get a residential tax credit if you're low-income.

Anyway, that is something else.

[John Dickie]

Many of those programs are also available to homeowners, and we have taken into account some of those. What the study does not address—I'll be quite frank with you, and we have it in written material—is the money that goes to social housing. In our view, social housing is essentially an income support mechanism: it's targeted at low-income people. But people in private rental housing are not receiving very much at all, and frankly, many low-income people are in private rental housing. It's shocking, when you think of it. In Ontario, 80% of people on welfare are in private rental housing, not in social, subsidized housing.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Okay, great. Thanks.

Mr. Marit, I guess this is my yearly question: has the money for the expanded rural roads program been renewed, or was this one year at a time? Have you taken advantage of any stimulus money?

[David Marit]

We have taken advantage of the stimulus. Really, what happened in the case of much of the stimulus package is that we had quite a few municipalities apply, but when your road or your bridge is put in the same category or context as water and waste water and sewer, unfortunately you don't rate as high in the rankings. We slipped through the screen in a lot of this, and that's why we're looking—

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

So again, we have a poorly designed program.

[David Marit]

No, it worked well where it did work, and a lot of our members received some good dollars for it. There's always more that can be needed.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Okay.

I have to put on the record that I want to apologize to the people who were expecting us in Saskatchewan. We had full intentions. We actually were in Saskatoon, but had to come back here because the Conservatives decided not to play ball.

But that's neither here nor there; I had to get that in.

[An hon. member]

No, you didn't.

[Voices]

Oh, oh!

[The Chair, Conservative, James Rajotte]

Thank you for graciously clarifying that for the committee.

Mr. Carrier, you have five minutes.

[Robert Carrier, Bloc, Alfred-Pellan, QC]

Thank you, Mr. Chairman.

Good morning everyone.

My first question is for Mr. Dickie, who is appearing before us today in order to discuss a matter of national interest, namely housing. This is a matter that has an impact on everyone. I come from Quebec and your association has an impact on me.

During your presentation, you talked about housing for low- and medium-income households, which is in short supply in Canada. You raised a really important question. You recommended tax deferral on sale and reinvestment as solutions to improve affordability. There may be a link, but I find it somewhat tenuous. Yesterday, in our committee, we heard about affordable housing and a national plan to build housing, which is sorely lacking in Canada. What do you think about the intervention of the Canada Mortgage and Housing Corporation in building affordable housing?

Could it play a role? We know that it has accumulated a tremendous surplus. Could it in some way play a role in facilitating the construction of affordable housing? You talked about selling housing in order to facilitate the cost of such housing, but we have to start by building housing that is not too expensive. I would like to hear your thoughts on the matter, since you are a specialist in the sector. Do you see a role that the government could play?

[John Dickie]

Thank you, Monsieur Carrier.

The position of our federation is that there should be much more attention paid to direct subsidies to tenants rather than construction, because the situation we have is that low-income people, in the vast bulk of cases now, are housed. They are housed even in adequate housing and suitable housing. But 93% of the so-called problem of inadequate housing is that it costs more than 30% of families' incomes.

Just as Quebec has a system of housing allowances--l'allocation-logement, I believe it's called--and Manitoba has such a system, and Saskatchewan has such a system, and B.C. has such a system, we believe the other provinces should move in that direction and they should be assisted in that regard by the federal government.

A number of years ago, Minister Fontana “broke the link”, if you like, in that there had been a link that the federal money, including presumably CMHC money, could only be used for new construction and not for direct assistance to tenants. In our view, direct assistance to tenants is where you get a much better bang for the buck. For every single person you help this year by constructing a new unit, at a subsidy cost of maybe $120,000, you can give real, useful assistance to 60 households. That $2,000 a year, almost $200 a month, would make a vast difference in their ability to pay.

Now, I realize that I'm comparing capital to operating, but even when you make that change you can help two, three, four people, through direct assistance to tenants, for the same money you spend to build new--quote--“affordable” housing. In Ottawa, Beaver Barracks is being built now. Those units are costing $250,000 a unit, of which the various levels of government are paying $120,000. I mean, for that kind of money, we could buy houses for all the people going into them.

[The Chair, Conservative, James Rajotte]

You have one minute.

[Robert Carrier, Bloc, Alfred-Pellan, QC]

I will use my remaining minute to ask Mr. Bobocel, from Edmonton, a question. I have looked at your document, and in one of your recommendations, I see that you talk about clean energy initiatives. You say that we need to “invest in strategic hydro development in the Northwest Territories”. This is a laudable concern, but I am wondering whether or not it contradicts your request that we maintain the accelerated capital cost allowance, which we currently give for the tar sands. You want this to be maintained by the government.

[The Chair, Conservative, James Rajotte]

Mr. Bobocel has about ten seconds for a very complicated response--

[Robert Carrier, Bloc, Alfred-Pellan, QC]

We know that it is a big greenhouse gas emitter. Do you not feel that this contradicts your first recommendation?

[Robin Bobocel]

No. What we're asking for is strategic investments to leverage private dollars and participation by the federal government where it's required to incent such investment.

Hopefully that answers the question.

[The Chair, Conservative, James Rajotte]

Merci.

I'm going to follow up on that topic. I'll take the next round. I wanted to address the Edmonton chamber.

First of all, to clarify, my perception, Mr. Hersack, is that in response to Mr. Szabo, you indicated that there was a challenge in federal money getting to projects in Alberta in the Edmonton region, and you were asking for an extension of the deadline past the spring of 2011. Am I correct in that perception?

[Rick Hersack]

Yes.

[The Chair, Conservative, James Rajotte]

Well, I've been talking to provincial and municipal representatives, as recently as Friday, who indicated to me that all projects in the Edmonton region will be completed by spring of 2011. So which projects are you referring to?

[Rick Hersack]

I do stand corrected, Mr. Rajotte. The last time I spoke to the City of Edmonton was several months ago on the number of projects that they had potentially going. At that point in time, they did indicate that there would be difficulty in moving those projects forward.

[The Chair, Conservative, James Rajotte]

Okay, because the only project that was raised six months ago was the GO centre, and as recently as Friday, with both provincial and municipal representatives, they said that will be completed by the spring of 2011.

[Rick Hersack]

Yes, it will. As I say, I--

[The Chair, Conservative, James Rajotte]

Okay, I just caution you to be very precise in what you say, because we had this challenge last year when we were in Edmonton, when the mayor said they had trouble accessing federal funds and certain other parties used that, but then as chair I got a letter at night from him correcting the record. It's a little frustrating, frankly, when our own municipality doesn't get the facts right.

Anyway, I'll move on to the accelerated capital cost allowance, which Mr. Carrier raised. I think you know that I'm generally supportive of looking at this concept, but the concerns that we get when we put something like this forward are, number one, that it's a subsidy, and a subsidy to a very large and profitable industry. But we also get another concern, that with the upgrading and refining there's enough capacity south of the border, so why would we look at more upgrading and refining capacity in western Canada?

So I wanted the two of you to perhaps address the challenge of the accelerated capital cost allowance being said to be a subsidy, and whether it is in fact necessary if we have enough capacity south of the border.