Thank you.
As you've mentioned, the theme of this year's pre-budget consultations revolves around enhancing Canada's competitiveness. The quality of life offered by Canadian communities, frequently rated as among the highest in the world, is a competitive advantage, and it's closely tied to the reasonable prospect of owning your own home. Canada's enviable quality of life contributes directly and substantially to our nation's desirability and our ability to attract and retain the world's best and brightest.
This national competitive advantage is under threat. Due to declining affordability and mortgage rule changes, the rate of home ownership in Canada is falling, a particular problem for younger Canadian families and new Canadians. With the dream of home ownership in decline, so too is the desirability of our Canadian communities and our country as a destination.
In a recent CHBA national survey, three of four Canadians polled said that owning a home is a hallmark of being middle class, yet three-quarters of those polled think that with the way things are going, only the rich will be able to own a home in the future, and 81% see today's housing affordability problem as a potential failing of Canada's socio-economic system.
Canadians expect governments to do better. Only one in 10 Canadians thinks governments at any level are doing a good job of addressing the problem. They are looking to government to provide the solution. Two in three Canadians think that younger and new Canadians should be given more flexibility when it comes to buying their first home.
The federal government can address this issue without creating undue risk in the financial system or fuelling home price increases. It can expand the home buyers' plan, back innovative financing tools such as shared-appreciation mortgages, and even return to 30-year mortgages for well-qualified first-time buyers seeking entry-level homes.
Rapid action is needed to protect home ownership, one of Canada's most compelling economic strengths, and its close tie to our quality of life.
In addition to improving access to home ownership via smart mortgage rules, the government can improve the competitiveness of Canada's communities through authoritative data and analysis.
In addressing its concerns over rising debt and housing price acceleration, the government has largely focused on measures that constrain demand. These measures have made it more difficult to become a homeowner, making Canadian communities less attractive, but tighter mortgage rules overlook the primary driver of home price increases in our larger urban centres: a prolonged and significant shortage of housing supply and ever-increasing development taxes.
The chronic shortage of more modest and affordable family-friendly, ground-oriented homes in our largest cities results mainly from public policy. A lack of serviced land coupled with complex regulatory processes make it impossible to respond to market demand. The result is higher home prices, too many buyers, and too few homes.
The federal government needs to support research to quantify how provincial and local zoning, regulations, processes and approval times affect housing supply; to ascertain how well cities are doing in these areas; and to identify best practices. This research can provide the necessary objective reporting that governments need to properly recognize the challenge, identify the issues and develop effective policies and solutions to truly address affordability to make our cities more competitive.
It is also time to make housing affordability a building code objective. CHBA is a strong supporter of the national building code, which is developed via a rigorous, open and evidence-based process, and Canada is widely regarded as having one of the best building code systems in the world.
Currently, however, the system is under stress, as an unprecedented number of changes are contemplated. Governments are seeking solutions to key policy issues like climate change adaptation and mitigation, accessibility, and more through regulation. However, there is a real danger that an accelerated pace of change without simultaneously providing affordable solutions will further impair housing affordability, adding many tens of thousands of dollars to the price of every new home.
The government should therefore ensure that affordability is a clear objective when code changes are considered. Currently costs may be looked at, but affordability is not a code objective in and of itself. We have reached a point where it needs to be.
Finally, to truly address climate change in housing, the government can enhance competitiveness not through excessive regulation but through an energy retrofit tax credit.
Within the government's aggressive climate change goals there has been excessive emphasis on what could be very costly changes to the building code, yet new housing is very efficient and will continue to get even better, as it has for decades, on a voluntary basis. However, the old existing housing stock on average is very inefficient and holds a great deal of potential for cost-effective improvement through retrofits.
Through an energy retrofit tax credit based on use of the EnerGuide rating system, Canadians would improve the energy efficiency of their homes, benefiting themselves, the economy and national competitiveness.
It is also important to note that a tax credit need not simply be a cost to the government either. CHBA analysis has shown that much of the cost of such a program is recovered through a conversion of underground-economy cash jobs to tax-revenue-generated above board jobs.
Thank you very much. I look forward to answering any questions you may have.