Finance Committee on Sept. 27th, 2018

[Peter Fragiskatos]

I appreciate that.

To the Nobel Women's Initiative, I know very well the study you talked about, the study that the foreign affairs committee put forward, because I had the honour of serving on that committee at that time.

I was quite interested in everything you had to say, particularly the link between involving women and building stable, peaceful societies. I think you and I have spoken in the past about that specific link.

I am glad you said that your arguments are not ideological; they're based on evidence. I am thinking specifically of the evidence that ties stability and long-term peace in post-conflict societies, and the idea that women are involved in the peace process to get to that outcome. Can you speak about that?

In your brief, you call for investment in women's organizations. I'm glad you also mentioned in your brief that the federal government has contributed $1.5 billion over five years as part of the feminist international assistance policy. There is always more that can be done, and this ought to be a fundamental focus of our development policy writ large.

I wonder if you can speak specifically about the tie between peace and involving women.

[Rachel Vincent]

Thank you very much. Thank you for the work on that study. It's an important contribution globally.

Yes, I'm going to give a specific response to your question. When we look at a post-conflict setting, such as Liberia or the Democratic Republic of the Congo, there is a tendency in aid development funding—and this is normal—to fund the most urgent and pressing concern. Humanitarian aid is particularly focused on refugees and the most pressing needs of the moment.

However, the evidence shows that in terms of building lasting peace, you really need long-term investment, core investment, and that the actors who are most capable of sustaining peace and bringing about peace accords, for example, are local actors. This is not something that outside groups can come in and do for a society. It is something that here in Canada we do for ourselves, and groups in conflict countries must do that for themselves as well.

If you look at Liberia, which signed a peace accord in the early 2000s but is now slowly going back to some violence, it's really in part because investments have gone to other places. This is a danger in not sustaining funding to local groups that are actually working on long-term peace and sustainability issues.

[Peter Fragiskatos]

I hate to interrupt you, but I have only a couple of minutes left.

I want to ask you specifically.... In your brief, you call for funding to flow directly to women's organizations. Inevitably, you'll hear concerns about accountability and how we can ensure that the monies that flow are properly accounted for. I'm not terribly sympathetic to the concern, but I think you can probably articulate it better than I could. What's your answer to that?

[Rachel Vincent]

I think that accountability for all of the money that we as a government spend, not just on women's organizations, is a concern. I think we'll find that Global Affairs Canada is looking at this issue closely in partnership with civil society to figure out systems that are flexible and responsive to the needs of smaller groups.

My organization is small. It's hard for us to keep up with the reporting and the accountability back to government funders, because they're quite demanding. However, with assistance we're able to do so. That is the same sort of system we're hoping, in partnership with Global Affairs Canada and other agencies, to be able to provide to smaller groups. They are capable of it. They need some extra support, and that's part of the system that needs to change to enable these groups to deliver on the promises and the vision for peace.

[Peter Fragiskatos]

The capability aspect, I think, is really important. We forget that these organizations have found a way to thrive in the most difficult of circumstances. I mentioned the foreign affairs committee. We went, as I think you know, to Colombia and to Guatemala. We saw women's organizations, particularly those funded by the federal government—this government and governments in the past—thriving, doing extremely well and being accountable along the way, showing exactly where the dollars were going and how they were being spent. It was really inspiring to see.

Thank you very much for your work.

I think I'm at seven minutes now, Mr. Chair.

[The Chair, Liberal, Wayne Easter]

You are. You're right on.

[Rachel Vincent]

I will just say that I think Peter articulates it much better than I do. Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you.

Mr. McColeman, go ahead.

[Phil McColeman, Conservative, Brantford—Brant, ON]

Thank you, witnesses, for being here.

Mr. Bourque, in your comments you mentioned three words, which I wrote down—about the affordability of real estate, the first-time homebuyer tax credit and looking to adapt to the realities of the marketplace in terms of the value of houses, and regulations that are having a large impact on the price of housing. I want to ask you some questions and get your response to them.

Recently, the Canadian Home Builders' Association did studies about the cost of a new home. A new build, of course, has a ripple effect into the resale market, because the resale market adjusts according to the new home prices. These studies have shown that, when the keys are handed from the builder or the developer to the consumer, fully 35% of the price of a new home in some markets, and as high as 45% in other markets across this country, is imposed government costs for regulations, development charges, and taxation by all three levels of government: federal, provincial and municipal. If you broke it down in a pie chart, those things would represent 35% to 45% of the price of that house.

When you hear about that kind of percentage, which is the government's take before we talk about the purchase of the land, the land cost, putting the pipe into the ground, putting the pavement on the roads, the materials for the house, the labour for the house, and the profit margin of everybody who supplies services in that supply chain, how do you react to that?

[Michael Bourque]

We could talk all afternoon about it, but let me just pick up on a couple of points.

First of all, those are the right numbers. In fact, there was another study done, if you don't want to believe the Home Builders. There was an independent study done recently that looked at the costs of regulation for new homes. In Vancouver, the regulatory costs amounted to an average of $600,000 added to the price of a new home. In Toronto, it was $160,000. There's no question that these regulatory costs, whether it's red tape, whether it's charges....

For example, until I read this study and spoke to the author, I didn't realize that one of the things municipalities will do with developers is ask them to pay the full cost up front for infrastructure charges when in fact no municipalities or other governments do that themselves; they amortize it over a certain number of years. Asking a developer to incur the full cost of those charges leaves that company with one choice, which is to pass on those costs to the consumer. That's why the price of homes is so high, and that leads to a lower supply of new homes.

[Phil McColeman, Conservative, Brantford—Brant, ON]

Thank you for sharing those facts because—full disclosure—I was in that business for 25 years. Before you can even put a shovel into the ground, you have to walk into the local engineering and building department and put down whatever the development charge is on that lot. That's before you even start the process, so there are also the financing costs that I forgot to mention in terms of what developers do.

It seems to me that as I've watched this situation of affordability unfold across the country.... We talk about affordability and first-time home buyers. If we could reduce that down to, say, 25% or 20% where we've seen the biggest growth, it's in the development charges. Development charges now range in my community of 100,000 people around $32,000 a door. If it's an apartment building, it's every door in the building. If it's a new home, that's a door.

We definitely need the infrastructure. People don't mind paying their fair share, but people around the municipal level seem to think that this is coming out of the builder's skin or the developer's skin, that somehow they're absorbing those costs. Do you know why? It's because they're making too much money. They're rich guys, right? That's the perception. Do you see that perception at a municipal level in your part of the real estate industry?

In fact, at the end of the day, do you know who pays for it? The person who's buying the house.

[Michael Bourque]

You do get a bit of that. There's a pretty active discussion in the Vancouver municipal election right now around that.

From our perspective, I think the important thing is that the whole real estate market is a spectrum. Whether you're talking about new entrants to the market or more mature and higher-priced properties, the fact is that the supply of new homes is a very important part of ensuring that everybody has a place to live.

If I can, I'll use my own example. I'm sure it's familiar to most people in this room. After I moved out of my parents' house, I found an apartment. It wasn't very expensive; it had rent control for many years. Then, when I could afford to buy a new home, having saved up and found a full-time job, I did that. That apartment went to somebody else who maybe was moving out of their parents' basement or who needed a two-bedroom apartment.

My point, Mr. Chair, is simply that the supply is a spectrum. We need to make sure that there is new building coming on stream because it affects people at all parts of the spectrum.

[Phil McColeman, Conservative, Brantford—Brant, ON]

Can I have one more?

[The Chair, Liberal, Wayne Easter]

We do have the municipalities here if they want to get into this discussion as well, but you can have one quick question.

[Phil McColeman, Conservative, Brantford—Brant, ON]

My time is limited. I would love to hear Mr. Karsten weigh in on this question somewhere down the road—

[Bill Karsten]

Thank you.

[Phil McColeman, Conservative, Brantford—Brant, ON]

—but I'm not going to go to you, Mr. Karsten. I want to go to Madam Lee.

You mentioned that no Canadians really want to work at farm jobs. Can you give me your understanding of why that situation exists when many people are healthy, strong and long-term Canadians...? Thirty-five per cent of my area of the world is in agriculture, and we run into the same things. People don't want to take the jobs. Therefore, we need to have a temporary foreign worker program to supply those jobs. Can you weigh in on why they don't want to do these jobs?

[Dr. Rebecca Lee]

Certainly. To a great extent, in the horticultural area particularly, a lot of the jobs are seasonal. Canadians want full-time, year-round jobs. They also want jobs that are more on a 9-to-5 basis and maybe not a 15-hour day sometimes and a four-hour day at other times. It's the consistency and the ability to have income throughout the year that is mainly the disincentive for Canadians, but it's also the very hard work that farming entails. As I say, they prefer the 9-to-5 or 8-to-4 type of job.

[The Chair, Liberal, Wayne Easter]

Okay. We'll turn to Mr. Julian.

[Peter Julian, NDP, New Westminster—Burnaby, BC]

Thank you, Mr. Chair.

Thanks to our witnesses. You've provided a lot of food for thought today.

I'd like to start with you, Ms. Vincent, and thank you for being here.

I think what I've taken from your comments is that a feminist foreign policy is only a feminist foreign policy if there are resources put in place to support it. It looks to me as if the federal government is currently shortchanging women's rights organizations by about 90¢ on the dollar, providing $30 million a year when we should be providing over $200 million a year.

If we're putting this in our pre-budget report, can you explain in just a minute or two what a difference that would make if we actually had the funding that's required, $220 million a year? What would we see as a result of funding those women's rights organizations?

[Rachel Vincent]

I think you'd see some clear outcomes and a moving of the marker in terms of peace and security globally.

The evidence is clear. For example, when women participate in the formulation of peace accords, they last substantially longer. In other words, they stick longer and have more impact when women are involved. That's just one small example. There are outcomes that are very clearly correlated to the amount of investment. The average women's rights organization in the world is operating on less than $20,000 a year in terms of an operating budget. Imagine doing all that work with less than $20,000 a year. I think it's very clear that the only way to go is the other way, which is to increase investment.

[Peter Julian, NDP, New Westminster—Burnaby, BC]

Thank you very much for that.

I would like to go on to Mr. Karsten. Thank you very much for appearing before the committee.

I'd like to start with bigger issues around extreme weather, which you mentioned.

We know that the federal government currently owes about $2 billion to the provinces and to municipalities for funding that has been provided under the disaster financial assistance arrangement. It's an ongoing issue, that as we have more extreme weather events, the federal government seems more and more reluctant to actually reimburse municipalities and provinces for all of the damages that are caused by climate change. There's also the issue of the infrastructure deficit.

Can you comment on the necessity for the federal government to be responsible in terms of funding municipalities for extreme weather events and the cleanup that is required, and also the federal government's responsibility to meet the challenges of the increasing infrastructure deficit that we're seeing in this country?

[Bill Karsten]

Thank you very much, Mr. Julian, for that question.

As I mentioned in my comments, this is a reality that we're facing throughout the country. Those who doubt climate change is a reality need to do a really serious review of where they are.

It's twofold. One is making sure the costs are covered, but when we talk in terms of climate change, we also need funding to adapt our communities for the future. I watched a great documentary on 60 Minutes just a week ago that had a few gentlemen from the Netherlands talk about not rebuilding after a disaster the way it was before the disaster happened, but taking some positive steps to rebuild your communities so they can be resilient for any future catastrophes. That's the type of funding I think we're talking about as well: to adapt to future requirements, as opposed to just fixing what we have, which is a vital part of the funding, to make sure that communities can rebuild after their infrastructure is ruined.

[Peter Julian, NDP, New Westminster—Burnaby, BC]

Do you have a calculation—maybe Mr. Rubinstein might have as well—of the current infrastructure deficit that exists in the country? The FCM has been very good, I think, of reminding governments that we're increasingly in the hole in terms of keeping up to date with the infrastructure that we require as a modern nation.

[Daniel Rubinstein, Director, Policy and Research, Federation of Canadian Municipalities]

For sure. You're right that we've done that. One of our most recent efforts was to do an infrastructure report card survey with some other private sector partners on the condition of our assets. We know that the level of investment we're putting into our local infrastructure isn't sufficient. That's part of why we're here talking about that broader picture in terms of fiscal tools to support that.

On adaptation itself, we know the level of investment that's on the table right now. The federal disaster mitigation fund is $2 billion over 10 years. We know that this level of funding isn't commensurate with the kind of need there. We're doing research internally to put a number on that. There's lots of room here to improve and make our infrastructure more resilient ahead of disasters.