Finance Committee on May 8th, 2019

[Matthew Thornton]

Oh, goodness. Currently, it's over $800,000 in the city of Toronto.

Yes, there are some challenges there, and there are a lot more details that need to be worked out on that program. We haven't seen full details yet on that CMHC program.

Is a program like that going to work in a market like Toronto? Maybe not quite as well as the government intended. However, with regard to Karen's market, Owen Sound, for example, I think that buyers there are going to benefit from it.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

What has been the impact of B-20 in the smaller regions? I'm talking about the smaller towns and smaller cities outside of the GTA.

[Karen Cox]

Outside of the GTA, it has had an impact for sure. First-time home buyers are finding it harder to qualify because of that stress testing on there, so they're not getting into the market. They have to go back and get a larger deposit to put down to buy, so they're not getting into the market.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

What's the hardest thing—you've probably done a lot of survey work and polling—for first-time home buyers, young people or people in their forties and fifties who are looking at buying their first home? What is the hardest thing beyond just the stress test? Is it the down payment that they're having the most difficulty obtaining? Is it proving income? Is that the difficulty? What is the hardest part of getting that first home?

[Karen Cox]

I wouldn't say that it's proving the income because they have good jobs—both spouses or both partners have good jobs—and they have some down payment. It's having enough down payment and meeting the stress test for financing.

[Matthew Thornton]

I would say that the top two outside of the stress test itself—that is, qualifying for a mortgage—are the following. Number one is the down payment. Getting 5% or 10% together on homes now, particularly in those urban markets like the GTA, is a real challenge for families, and for young families in particular.

The second is closing costs. In the city of Toronto, for example, you're paying a double land transfer tax. That can amount to $15,000 or $20,000 for a young couple. So in addition to what they need to pull together for that down payment, those closing costs can really hurt as well.

[The Chair, Liberal, Wayne Easter]

You have time for a very quick one, Tom.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

A very quick one? Okay.

With regard to the market segments, just in the greater Toronto area, where has B-20 had the biggest impact? Is it on single-family detached houses? Is it on condos, row houses or townhouses? I've seen data showing double-digit increases in that mid-level market and that prices have come down for single family homes. Am I judging this correctly, or has it been the same type of impact from B-20 all across the board?

[Matthew Thornton]

It's across the board in terms of what we're seeing. The demand among the millennial generation, which I think is the generation that's been impacted the most by B-20, for single family homes continues to be strong, but a lot of them are moving into condos as well. I think it continues to be across the board in terms of impact.

Karen, I don't know if you have—

[Karen Cox]

I would say that it's across the board.

[The Chair, Liberal, Wayne Easter]

Okay. Thank you all.

Ms. Duncan.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

Thank you very much, Mr. Chair. It's a pleasure to join you at the finance committee.

I'm particularly interested in the testimony of Mr. Richter and Mr. Morrison, and I want to thank you both for your submissions.

I have two questions, and I will let each of you respond to them. Of course, our party is deeply disappointed that the government rejected the bill we presented that would have created and enacted a binding right to housing, which would have delivered on our international commitments. Thank you for raising that again.

Mr. Richter, two reports have come out recently. One is by Jan Reimer's organization on shelters in Alberta for women and children. When our housing critic and I met with her, she said very clearly that the crisis they're facing is not only the creation of the shelters and the fact they're having to turn away so many people, but also that the costing and the monies coming over are not sufficient to cover the additional counselling and assistance they need. It isn't just a case of providing housing; there are those additional needs.

Mr. Morrison, thank you very much for your comments on indigenous housing. Frankly, I see no reason why UNDRIP cannot be specifically put into that bill. I have brought forward those amendments to two federal laws and they have been rejected. UNDRIP needs to be made legally binding, not just in the preamble—so thank you for raising that. Nothing is stopping the government from doing that, despite the fact that Romeo Saganash's bill has not gone through yet.

I think they're all really excellent suggestions. Thank you for raising the issue of the need for urban indigenous housing. There has been a consistent attitude of federal governments, both Liberal and Conservative, to deny their obligation to indigenous people living in urban areas, which of course constitutionally.... You don't suddenly not become the responsibility of the federal government because you're living in an urban area.

I would like to hear a response from both of you on what you might have to say about both the Alberta and the national reports that have come out on shelters for women and children, and a little more about the need for greater attention to urban indigenous people. I know that in my city, a huge percentage of the population is urban aboriginal, and there's a great dearth of housing.

[The Chair, Liberal, Wayne Easter]

We can start with Mr. Richter. Please keep your response to about 40 seconds, or Jeff will have no time.

[Tim Richter]

Okay. On the urban indigenous housing, to keep it short, I agree with what Mr. Morrison said, and I think that's a big missing piece.

It's interesting, because Alberta is a living case study of the effectiveness of the right to housing. Alberta has seen province-wide reductions in homelessness. The City of Edmonton has reduced homelessness the most of any city in Canada: 43% in nine years. That's by taking a rights-based approach to housing. It treats people as rights holders so they don't need to transition through a bunch of different steps to get into housing. They're given an apartment and provided the important supports they need, so a rights-based approach has been proven to be the most effective approach in reducing homelessness.

When it comes to women fleeing violence, many of the same principles apply. Housing policy is necessarily a partnership between the federal and the provincial governments. In most cases, provincial governments can provide the supports, and Alberta has done that really well. You do need housing specifically targeted to women fleeing violence and people who are experiencing homelessness, and the supports have to be there. In a rights-based approach, you would prioritize those populations for housing, which would free up provincial dollars, frankly, to provide those necessary supports.

[Jeff Morrison]

First of all, on the support services that essentially augment what social and supportive housing does, I couldn't agree more. By pure coincidence, earlier today we released our pre-election campaign website called ahomeforeveryone.ca. In it, one of our three key asks of all political parties will be to increase social supports so that supportive housing providers such as women's shelters can better deliver those services.

On urban indigenous housing, again, we think that it absolutely needs to be within the national housing strategy act. The fact that UNDRIP has not yet been officially ratified—it's waiting for royal assent—as I said, is probably a technicality. I'll run over to Rideau Hall and ask the Governor General to sign it if that's all it takes to ensure it's put in there. I think that can easily be overcome and a recognition not only of the right of indigenous housing, but the necessity of developing a distinct urban indigenous housing strategy, which of course is what the act does, needs to be an added complement.

[The Chair, Liberal, Wayne Easter]

I'll have to cut you off there.

Mr. Fragiskatos, we'll go with this round of questions.

Then we might have time for one question from you, Blake.

[Peter Fragiskatos, Liberal, London North Centre, ON]

Thank you to the witnesses.

Mr. Richter and Mr. Morrison, I'm quite intrigued by your testimony on the rights aspect of housing. If legislation were to align with Canada's commitments in our international obligations, the international covenants that we're responsible to, would that satisfy you?

[Tim Richter]

Yes. I think there have to be three or four really key things included.

It has to be consistent with those international covenants.

You have to have the advocate, and there has to be this independent monitoring and oversight of the implementation. It can't be CMHC watching over CMHC's implementation of the national housing strategy. I think that's a key piece.

The other part is that if you give people rights, there has to be a process for them to claim those rights. There has to be a hearing process, so that if they are somehow excluded from those rights or they are not being met, they have a place to go to have those rights fixed.

There also has to be reporting that's independent and public.

[Peter Fragiskatos, Liberal, London North Centre, ON]

What you're saying, sir, is that there has to be a housing advocate who would be independent of the minister, and certainly of the government, and a reporting mechanism that is predictable all the way through.

[Tim Richter]

Right, and that the advocate and the council be charged with monitoring implementation of the right to housing, and also that the minister and the government be required to respond to remedial recommendations from the hearing process and recommendations from the advocate.

[Peter Fragiskatos, Liberal, London North Centre, ON]

Amendments to that effect would satisfy some of the concerns you have.

[Tim Richter]

Yes.

[Jeff Morrison]

I would add only, as mentioned in my statement, that having that advocate and all the accountability measures contained within the bill reporting directly to Parliament, rather than a political body, eliminates any potential partisanship or political considerations within those positions.

[Peter Fragiskatos, Liberal, London North Centre, ON]

Thank you very much.

Ms. Cox and Mr. Thornton, it's nice to see you again.

Just for context, Mr. Chair, he chaired a discussion between me and my colleagues in the NDP and the Conservatives just recently. It was amicable, so it was fine.

There's a question I have for you. I'm intrigued by what you say about the stress test, but the Bank of Canada, while not dismissing that the stress test has had impact on buying patterns in Canada, has said the following on their website:

...the significant drop in the number of mortgages...indicates that other factors, such as provincial and municipal housing policies, are playing an important part. Most notably, a foreign buyers' tax for Vancouver was announced in July 2016....

In Ontario, a similar policy came about in April 2017. The bank continued:

Other regional policies include an empty house tax, restrictions on short-term rentals and measures to increase affordable housing. These measures helped change market sentiment, which in turn has slowed activity and price growth.

While I acknowledge that you're concerned about the stress test, would you acknowledge that there are other policies that have been introduced by other levels of government that are having an impact on buying patterns? That's the first question.

The second question is, was the Bank of Canada wrong to advise? This wasn't the Government of Canada's policy, this stress test. I think we took our cue as a government to put in place measures that corresponded with a real fear among economists, specifically the Bank of Canada—

[The Chair, Liberal, Wayne Easter]

We're going to need time for an answer here.