Thank you, Mr. Chair.
I'm Bard Golightly, chief operating officer of the Christenson Group in Edmonton, Alberta. We're a residential development company. I'm speaking today on behalf of all my colleagues across the country in the Canadian Home Builders' Association.
Canadian Home Builders' represents more than 8,500 member companies from coast to coast in new home building, home renovation, and residential development. Our industry generates more than $120 billion in economic activity each year and supports over 900,000 jobs for Canadians, directly contributing to the economic health of families and communities across the country.
First, I'd like to touch on the importance of federal infrastructure investment in relation to the affordability of new homes. The new Building Canada plan is important to home builders, to our customers, and to the communities of which we are a part. It is particularly important because federal investment in infrastructure acts to reduce the cost being levied on new home buyers through municipal development taxes, which are a major factor in driving up new home prices and the unfortunate part of the new market fundamentals.
CHBA applauds the government's robust investment in core municipal infrastructure: roads, transit, water, and wastewater systems, and encourages ongoing investments focused on these core areas.
Second, prosperous communities require new households, particularly young working families and new Canadians, to be able to enter the housing market and become homeowners. Unfortunately, it is these younger Canadians and families, those hardest hit by the economic downturn, who face increasing challenges when it comes to home ownership.
Young buyers who are at the start of their working lives are the best able to responsibly take on a long-term debt in the form of a housing investment, yet this is the very group most adversely affected by tighter mortgage rules. These rules, coupled with the inherent challenge of saving for a down payment as house prices rise much faster than incomes, mean an increasing number of young working people and families are being locked out of home ownership.
The tightening of mortgage rules was implemented to stabilize the housing market. With that now achieved, CHBA believes that first-time buyers need and deserve special consideration when it comes to mortgage rules. This would support their home ownership dreams and contribute to prosperous communities.
Reflecting this view, CHBA recommends that well-qualified first-time homebuyers should have access to insured 30-year amortized mortgages. Current rules requiring qualification for the five-year mortgage commitment are quite sufficient to safeguard against debt overextension. We estimate that approximately 85,000 households would be added to the pool of potential homebuyers by such a measure, at no additional cost and little additional risk to the federal government.
Related to this issue is the issue of ever-increasing government-imposed costs on housing. While most such costs are linked to other levels of government, the federal government could improve affordability from coast to coast by ensuring that taxes levied by provincial and municipal governments on new homes are GST exempt. Currently, federal GST applies to new home taxes, levies, charges, and fees imposed by other levels of government, amounting to a tax on tax, amplifying the excessive level of taxation on new homes.
Such an action would demonstrate the federal government's commitment to fair taxation of Canadians, and also signal its concern about how rising new home taxes are reducing affordability, particularly for younger people and families seeking to achieve new home ownership.
I'll end with one final recommendation in the key area of home renovation, a $60 billion-a-year industry that's undermined by cash operators who evade taxes.