Finance Committee on May 6th, 2019

[David LeDrew]

It's $448 billion.

[Pierre Poilievre, Conservative, Carleton, ON]

That has stayed constant now for about six years?

[David LeDrew]

You can correct me if I'm wrong, but it has been trending downwards.

[Pierre Poilievre, Conservative, Carleton, ON]

Yes, that's what I thought. Will this reverse that course? The $1.5 billion, that's just an accounting cost. Was the $1.25-billion cost associated with this just an accounting cost that doesn't reflect the amount on the CMHC book, which will be much larger, presumably?

[Michel Tremblay]

That depends on whether you're talking about our insurance book or the shared equity mortgage. Obviously, as Cynthia pointed out—

[Pierre Poilievre, Conservative, Carleton, ON]

They're separate.

[Michel Tremblay]

—their shared equity mortgage will be on our balance sheet.

[Pierre Poilievre, Conservative, Carleton, ON]

You mean the federal government's balance sheet or CMHC's?

[Michel Tremblay]

It'll be on our balance sheet, which ultimately gets consolidated with the government's. The reality is that the mortgage loan insurance base, not just CMHC but the whole, is actually potentially going to go slightly down because of this program. So it might have some small impact.

[Pierre Poilievre, Conservative, Carleton, ON]

Presumably, the idea is that the mortgage would be reduced—

[Michel Tremblay]

Yes.

[Pierre Poilievre, Conservative, Carleton, ON]

—because it would be absorbed. Okay, I understand.

Thank you.

[The Chair, Liberal, Wayne Easter]

That's an interesting discussion, folks.

Mr. Dusseault.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

What we just heard isn't simple. I just want to be sure I have a clear understanding of the eligibility criteria for this incentive.

Do you have to be pre-qualified for a mortgage loan guaranteed by CMHC before applying for the incentive?

Am I looking at things in the right order?

[Cynthia Leach]

The borrower would need to be qualified for an insured mortgage. It doesn't have to be with CMHC. It could be with one of the two private insurers, Genworth or Canada Guaranty, but, yes, they would have to be qualified based on that insured mortgage and meet all the requirements of mortgage insurance.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Why is the government saying this will increase access to ownership if all those benefiting from the program already qualify for mortgages?

[Cynthia Leach]

As we mentioned earlier, the program can be used to offset the cost of servicing a mortgage. The incentive allows you to decrease the size of the insured mortgage without commensurately increasing the down payment, as you would have to do without the incentive.

In doing so, it would lower a monthly borrowing cost and could allow you, for example, to use those extra monthly funds for something else.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

So it doesn't increase access to ownership; it makes it less costly.

[The Chair, Liberal, Wayne Easter]

Thank you.

That's division 18.

We'll go to division 19. If we could get through the national housing strategy act before we have to go and vote, it would be great.

Mr. Tremblay.

[Michel Tremblay]

Thank you, Chair.

I won't introduce myself, because I've already been introduced.

I'm accompanied by Mark Young, director of our legal service.

We are here to provide an overview of the proposed national housing strategy act. The Government of Canada has taken significant strides to advance the progressive realization of a right to adequate housing with the launch of the national housing strategy in 2017 that prioritizes the needs of the most vulnerable. The proposed national housing strategy act would further this advancement by requiring the government to develop, maintain and report on a national housing strategy, and by creating new accountability and participatory mechanisms.

The bill underscores the importance of housing for the dignity and welfare of people living in Canada. Under this bill, a national housing council with diversified representation, including persons who have experienced housing-related needs and who have previously been reduced to homelessness, would be established. The council would make policy and research recommendations to the minister responsible for housing.

The bill also contemplates the creation of a federal housing advocate position the incumbent of which would be appointed by the Governor in Council. The housing advocate would commit, to individuals and households representing vulnerable groups, to respond to systemic housing issues. The advocate would prepare an annual report, including recommendations, on the measures necessary to address those issues. The minister would be required to table the advocate's report and a response to Parliament within a prescribed time frame.

That concludes our presentation, Mr. Chair. It will be our pleasure to answer any questions the committee may have.

[The Chair, Liberal, Wayne Easter]

Are there any questions?

Mr. Dusseault.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Thank you, Mr. Chair.

Mr. Tremblay, does this bill establish that housing is a right?

[Michel Tremblay]

Thank you for the question.

This bill acknowledges the importance of housing for the dignity of Canadians, and that is a fundamental step toward the gradual realization of the right to housing, as agreed upon in the economic, social and cultural commitment that Canada has observed since the 1970s. As I mentioned, it establishes participation processes and significant accountability mechanisms that Canada previously didn't have.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

That right isn't yet established; it will be established gradually, is that it?

[Michel Tremblay]

That's correct, yes.