Thank you, Chair Easter, Vice-Chair Julian, and members of the standing committee.
My name is Tim Hudak, CEO for the Ontario realtors association. We represent 70,000 realtors in the province of Ontario. Importantly, for the committee's interest, they're women and men across our province who work hard every day to help people achieve the Canadian dream of home ownership. I think all of you, as successful, hard-working MPs, see what our members see in communities each and every day, that the pride of home ownership is one of the most deeply held Canadian values. It binds us as a country. It's a non-partisan issue. It unites every region represented at the table here today, and every generation and every group in this great country.
For decades, rising home ownership provided evidence that we were a growing, confident and prosperous country. We all come from families where, I hope, the next generation would always do better than the one that preceded it. We would have better lives than our parents did. We'd have a greater chance of owning a home—until, sadly, now. Believe it or not, in 2016, for the first time in Canada's history, the rate of home ownership actually declined. It went down to 67.8% across Canada, from 69% five years before.
That has never happened before. It has been a great Canadian story that every year that percentage would go up. There's every indication out there that it's not a one-time blip. Unless we do something differently, falling home ownership will become the new normal in Canada.
It will be no surprise to members around the table from London or Vaughan or Aurora that in Ontario, 81% of people agree that a home is harder to get for young people than it used to be. Millennials are far less likely to own a home at the age of 30 than their parents were. Think about that. This is not just a cyclical change. This isn't a blip. As a matter of fact, this isn't from the economy, because we're now almost a decade into economic recovery. We're in a period of long and low mortgage rates. We've never seen mortgage rates like the ones we've had over the last number of years. But despite the strong economy and low mortgage rates—think about it—home ownership is in decline.
A good question to ask ourselves is, when did we ever have that debate? When did you, as elected officials, ever decide that a good public policy would be to lower home ownership? The folks you represent across this great country were never engaged in that kind of debate, because you know what they'd say: They believe in that Canadian dream, and they want their kids to do better than they did.
Here's a suggestion for the upcoming budget. Set a bold goal that we can reverse this unprecedented decline, that we'll get home ownership back over 70% by 2021, and then aim beyond that, for 75%. Of course, bold action is required to get to this bold objective, but you have that action in your grasp.
The first thing I'd suggest is that we address policy measures that are making home ownership harder in Canada today. Tougher mortgage stress tests have had a dramatic negative effect on Ontario homebuyers. They reduce the purchasing power by 20¢ on every dollar. These stress tests, quite frankly, are just too blunt an instrument. There are many good options to explore when it comes to mortgage rules as well, such as preventing even further damage from the stress tests when interest rates rise, ensuring people can choose among lenders when they renew their mortgages, and the flexibility for things like 30-year amortization periods.
At the same time, policy measures that enable home ownership get eaten away by inflation, such as the $1-million cap on insured mortgages and the $25,000 limit on what we can dip into in our RRSP funds for first-time homebuyers. The problem is that over a generation, those things take hold. They erode purchasing power and move home ownership further away.
Second, you can make a big impact when it comes to increasing housing supply. In the greater Toronto and Hamilton areas, the number of homes built declined by 50% between 2002 and 2016. I commend Minister Morneau for setting up his task force on the provinces and the big cities to look at options. The federal government is the largest landowner in Canada, and having policy tools like infrastructure funds can motivate provinces and cities to bring more land into home supply and home ownership.
One of the quickest actions you can take is to help families actually own a home. Get taxes down...including the first-time homebuyers' credit at the national level. That can make a big difference.
I know by your actions in your ridings and in Parliament that you want to see this turn around. You want to see home ownership rise again. The next federal budget can set that bold objective: reverse the decline, aim for 70% by 2021, and then a bolder term of 75% beyond that.
I thank the members of the committee for their time.