Evidence of meeting #37 for Finance in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was federal.

A video is available from Parliament.

On the agenda

MPs speaking

Also speaking

Hendrik Brakel  Senior Director, Economic, Financial and Tax Policy, Canadian Chamber of Commerce
Bob Finnigan  President, Canadian Home Builders' Association
Kevin Lee  Chief Executive Officer, Canadian Home Builders' Association
Craig Alexander  Senior Vice-President and Chief Economist, The Conference Board of Canada
Robert Blakely  Canadian Operating Officer, Canada's Building Trades Unions
Aaron Wudrick  Federal Director, Canadian Taxpayers Federation
Carolyn Pullen  Director, Policy, Advocacy and Strategy, Canadian Nurses Association
Martha Friendly  Executive Director, Childcare Resource and Research Unit (CRRU)
Nobina Robinson  Chief Executive Officer, Polytechnics Canada
Patrick Leclerc  President and Chief Executive Officer, Canadian Urban Transit Association
Cindy Blackstock  Executive Director, First Nations Child and Family Caring Society of Canada
Chris Roberts  National Director, Social and Economic Policy, Canadian Labour Congress
Scott Ross  Director of Business Risk Management and Farm Policy, Canadian Federation of Agriculture
Chief Perry Bellegarde  National Chief, Assembly of First Nations
Charlie Angus  Timmins—James Bay, NDP

4:10 p.m.

Conservative

Phil McColeman Conservative Brantford—Brant, ON

On to the Home Builders', you talk about affordability. Can you share with us the load of taxation and regulation from the time an individual, or a company, has a raw piece of land until the time you hand the keys to the owner? Mr. Finnigan you'd probably be good at this because you operate in the GTA. How much of a tax and regulatory load of cost is part of the purchase price of a home in Toronto today?

4:15 p.m.

President, Canadian Home Builders' Association

Bob Finnigan

In Toronto today it would be in excess of 20%. To start with, it would be made up mostly of development charges and levy taxes, which in most municipalities today would make up between $60,000 and $70,000 directly paid by the builder. That's added to the price of the house. On top of that would be the permit fees and charges made during the development process, adding probably another $15,000 to $20,000 and then on top of that there's the final HST figure, which is tax on the tax. In those cases that could be upwards of $100,000.

4:15 p.m.

Conservative

Phil McColeman Conservative Brantford—Brant, ON

I had one builder tell me recently in the Toronto area it was somewhere between 20% and 50%.

4:15 p.m.

President, Canadian Home Builders' Association

Bob Finnigan

That depends on the final price of the house.

4:15 p.m.

Conservative

Phil McColeman Conservative Brantford—Brant, ON

That depends on the jurisdiction?

4:15 p.m.

President, Canadian Home Builders' Association

Bob Finnigan

It's regressive. The smaller and less expensive the house, the larger the amount.

4:15 p.m.

Conservative

Phil McColeman Conservative Brantford—Brant, ON

Exactly. It's not the builders and the developers who are paying that. Who's paying it?

4:15 p.m.

President, Canadian Home Builders' Association

Bob Finnigan

The homebuyer is paying.

4:15 p.m.

Conservative

Phil McColeman Conservative Brantford—Brant, ON

When we talk about affordability, one of the things governments should do at all three levels, I think, is to get a handle on the fact that the cash cow they believe housing is, is stopping the young family from getting their first house.

Would you agree with that comment?

4:15 p.m.

President, Canadian Home Builders' Association

Bob Finnigan

I would agree with that, yes.

4:15 p.m.

Conservative

Phil McColeman Conservative Brantford—Brant, ON

In your presentation, you also alluded to at the end, I believe, although you didn't use these words...but I will because our government went down this road of a renovation tax credit. I believe you tied it to energy efficiency projects, things that would reduce greenhouse gases and things like that. Am I correct in interpreting that as what we had done previously, which provided a renovation tax credit?

4:15 p.m.

Chief Executive Officer, Canadian Home Builders' Association

Kevin Lee

Yes, the previous government did put in the home accessibility tax credit and we would propose that for addressing climate change. Exactly the same thing can be done for energy efficiency.

4:15 p.m.

Conservative

Phil McColeman Conservative Brantford—Brant, ON

That's excellent.

Mr. Alexander, on the fact that we hear statistics of Canadians being at record levels of personal debt, 170% was the most recent number I heard. How does this have a larger effect going forward on economic well-being, and what can governments do about that?

4:15 p.m.

Senior Vice-President and Chief Economist, The Conference Board of Canada

Craig Alexander

The high level of household indebtedness poses an economic risk in that if you had any sort of economic shock that would result in either higher unemployment or higher interest rates in particular, it would create a vulnerability on the household sector.

My understanding and my analysis of the real estate market in Canada suggests that even if you were to have an economic shock, the big risk isn't that Canadians would lose their homes as they did in the United States. I think the greater economic risk is that if you have rising interest rates, a greater share of personal disposable income will go toward servicing the debt and that's money that isn't going into expenditure. Consumer spending is 60% of the economy. The risk from the high level of household debt is that down the road, when we ultimately see a rebalancing of interest rates, it could take a very significant toll on the economy in the sense that even small changes in interest rates will have a bigger impact on household finances than they have had in the past.

This is why I think it's appropriate that the Bank of Canada has been flagging this risk.

4:15 p.m.

Liberal

The Chair Liberal Wayne Easter

Sorry, Phil, you're a minute over.

Mr. Caron.

September 28th, 2016 / 4:15 p.m.

NDP

Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC

Thank you, Mr. Chair.

Thank you to the witnesses for being here today.

I have four minutes, and they will go by quickly. Please keep it short.

Ms. Friendly, I want to talk about your third recommendation.

As you know, child care falls under provincial jurisdiction. However, you're asking the federal government to take the initiative to align the different systems. Some systems, such as Quebec's system, are more elaborate. Other systems are more of a patchwork of child care services.

How can the federal government play this role while ensuring the provinces maintain control and jurisdiction over child care services?

4:15 p.m.

Executive Director, Childcare Resource and Research Unit (CRRU)

Martha Friendly

I think the easiest way to think about that is to think about health care.

The federal government played a role, successively, in ultimately bringing in the Canada Health Act. The federal government plays a major role, although with setting the broad brush strokes, wielding the principles, and essentially providing the glue amongst the provinces and territories and the indigenous communities in the case of early childhood education and care.

There is a patchwork province by province, but there's also enormous patchwork by community and within communities. It's a market.

In order to bring this together, there has to be some kind of glue. There are different opinions about the way the Canadian federation works, but it is definitely within the possibility that a federal government that makes certain commitments to its population.... I mean, children in Quebec are developmentally very much like children in Newfoundland, and so forth and so on.

4:20 p.m.

NDP

Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC

That leads me to a question for you, Ms. Pullen, since your statement on the federal government's role as a leader in integrated health care raises the same issue.

Health care falls under provincial jurisdiction. However, I'm completely in favour of implementing a national strategy and making concrete efforts to address integrated health care. How can the federal government do so effectively while, of course, respecting provincial jurisdictions?

4:20 p.m.

Director, Policy, Advocacy and Strategy, Canadian Nurses Association

Dr. Carolyn Pullen

I mentioned that the CNA has entered national consultations with the Canadian Home Care Association and The College of Family Physicians of Canada. Our specific question was on our recommendations to the federal government around home care and integrated care. We were able, through input in one form or another from over 500 expert Canadians, to come up with specific recommendations in a number of areas.

To be very succinct, the first is that the federal government could have a role, through having an accountability framework or some kind of reporting mechanism around home care, to make sure that the health outcomes we're seeking to achieve are actually achieved. They could be very high-level population health and social outcomes, but nonetheless we'd be ensuring that the money is spent for the intended purpose.

4:20 p.m.

NDP

Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC

Do you see the provinces being open to such an approach?

4:20 p.m.

Director, Policy, Advocacy and Strategy, Canadian Nurses Association

Dr. Carolyn Pullen

I think it depends on how these things are couched, but I can reference similar accountability frameworks being put in place, for instance, in previous budgets around housing, and to our knowledge that was accepted and effective.

I think that since we all have the same goals and taxpayers and patients are looking for these services, they would be supportive of that approach.

4:20 p.m.

Liberal

The Chair Liberal Wayne Easter

A very short question.

4:20 p.m.

NDP

Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC

Mr. Alexander, you were talking about investments and infrastructure.

I don't have your presentation in front of me, but you said basically that we need to invest in those projects that bring the highest rate of return to the economy.

I think we all agree on that, but where we might disagree is on identifying those projects. Which are the ones that bring the most bang for your buck?

4:20 p.m.

Senior Vice-President and Chief Economist, The Conference Board of Canada

Craig Alexander

I agree. It can be problematic, but at the same time there is a lot of expertise in the country and we can identify where bottlenecks are taking place. For example, it is obvious that gridlock in the greater Toronto area actually comes with an enormous fiscal cost. Improved transportation infrastructure in the GTA can have a positive impact both in terms of the short term and creating economic activity, and also helping to facilitate private sector behaviour. We see the same thing in terms of capacity at borders.

For example, the additional bridge at Windsor is a key piece of infrastructure to help facilitate trade. I'm discouraged when I hear about Canadian businesses shipping product in B.C. to ports in the United States in order to then ship abroad because there's limited capacity at Canadian ports.

As a consequence, I agree that the challenge is finding the right projects. Given that the profile laid out in the last budget showed much of the infrastructure spending coming down the road, and that part of the delay was actually to help provide time to identify those right projects, my hope is that.... Only time will tell. The bigger the economic multiplier we get from the infrastructure investment, the better that will inform us as to whether the right projects were done.

4:20 p.m.

Liberal

The Chair Liberal Wayne Easter

Thank you, Mr. Alexander.

Ms. O'Connell.