Finance Committee on Feb. 18th, 2016

[The Chair, Liberal, Wayne Easter]

This afternoon's session is meeting number six of the Standing Committee on Finance. Pursuant to Standing Order 108(2) we are continuing our pre-budget hearings for budget 2016.

I welcome the witnesses here this afternoon. I certainly thank you for putting your presentations together on substantially short notice. We've been having a lot of good information brought forward to the committee this week and we appreciate your doing your part.

We'll start with Mr. Brault from the Canada Council for the Arts.

[Simon Brault, Director and Chief Executive Officer, Director's Office, Canada Council for the Arts]

Good afternoon.

I thank you for having invited the Canada Council for the Arts to take part in your consultations.

As you know, the council is an autonomous arm's length Crown corporation whose mandate is to foster and promote the study and enjoyment of, and the production of works in, the arts. It is active regionally, nationally and internationally.

There is no need today to list all of our achievements of the past 60 years. The vitality and diversity of the Canadian artistic scene bears witness to that, as does the recognition it has garnered. The Canada Council for the Arts has a proactive attitude and is committed to innovating to respond to demographic, economic, technological and social change. This means that we choose to direct our investments toward the two great natural and inexhaustible resources of innovation and creation.

Eighteen months ago, the council began a major transformation. We made the decision to scale up our impact for artists, arts organizations, the general public, and our current and potential partners to better fulfill our mandate.

Our transformation is designed to be results-based. Over the past year, the council has undertaken numerous consultations and it puts us in a position today to deliver a strong and effective model for funding and supporting the arts.

The first steps in the ongoing transformation are to implement: first, an overall way of operating that focuses on maximizing our impact; second, a new model for program and service delivery; third, improved productivity in the workforce and improved knowledge sharing; and fourth, a new five-year strategic plan. The core of this transformation, our new funding model with its six programs, is simple, flexible, responsive to change, and results-based. Our strategic plan will be released in April 2016. All of the components of the transformation will be operational as of April 2017.

We have been transparent in sharing our improvements on traditional and social media, and reaction has been overwhelmingly positive. We are looking to increase our impact immediately and for the future, and we are acting quickly and strategically in several ways.

For example, our new program dedicated to indigenous arts and cultures is designed with an entirely indigenous perspective. This long-standing priority has been made a policy instrument.

Our new funding model gives the organizations we support the responsibility for reflecting the diversity of their community, practising equity, and supporting linguistic duality. The flexibility of the model responds to the realities of new generations and youth. Our new program dedicated to international activities will consolidate the cultural presence of Canada on international markets.

The economy is difficult to predict, because of globalization in particular. Innovation and creation are essential resources to create a solid and ever-renewed economy. Internationally, many countries have placed culture and the arts at the heart of their economic development. The benefits of that choice are many—financial, social, educational and human.

The cultural sector provides 624,500 jobs. That represents 3.7% of all jobs in Canada. Culture and the arts contribute $47.7 billion to our gross domestic product, according to the Canadian Culture Satellite Account of 2015.

The arts sector, which we support directly, is an essential driver of our cultural industries and of the broad cultural sector, since that is where the talents, knowledge, innovation and content without which the cultural economy would be idle, are largely developed.

The arts and artists must be included in the discussions that determine our present and future since they stimulate the imagination, creation, and innovation that are necessary to our well-being and our sustainable development.

The Canada Council is ready to invest in the economy of the future, an economy based on rich diversity and creativity, an economy supported by the intelligence, skills, and engagement of Canada's artists and all citizens.

Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you very much for being a little ahead of time.

Turning to the Canadian Council for Public-Private Partnerships, we have Mr. Bain.

[Mark Bain, Vice-Chair, Canadian Council for Public-Private Partnerships]

Thank you, Mr. Chair, the clerk, members of the committee, and staff.

Established in 1993, the Canadian Council for Public-Private Partnerships is a national, not-for-profit, non-partisan, member-based organization with broad representation from across the public and private sectors. We're not a lobby group. We have government as our members and as our partners.

Our mission is to promote innovative approaches to infrastructure development and service delivery through P3s with all levels of government.

On behalf of the council, I'm pleased to appear before this committee for pre-budget consultations.

We have submitted a fulsome brief to the committee with our recommendations. Given the tight schedule, I'll just touch on a few high-level points and look forward to your questions later.

When we talk about P3s, we're generally referring to a single, fixed-price contract where the private sector designs, builds, finances, maintains, and sometimes operates infrastructure on behalf of the public sector over a long-term contract, typically 25 to 35 years.

It's important to note in these contracts that the ownership and control of the asset always remains with the public sector. P3s tend to be most suitable for complex projects that carry a significant risk and are of a large size, greater than $50 million or $100 million.

We will be the first to say that P3s are not a panacea. At present they account for approximately 10% to 15% of public infrastructure projects, but when the right project is done for the right reasons, P3s are proven to lead to higher quality infrastructure that is delivered on time, on budget, with savings to taxpayers. The transfer of risk to the private sector, putting private capital skin in the game, and taking a life-cycle view of an asset leads to significantly better results.

The Canadian P3 sector has been active and continues to grow and is now recognized as a best-in-class model worldwide. We now have 236 projects under way in Canada, either in operation, under construction, or in procurement, and the value of projects reaching a financial close is now over $93 billion. An independent economic impact assessment completed by InterVISTAS demonstrated that in the last decade, P3s created over 290,000 direct jobs, added over $25 billion to direct GDP, and saved governments $9.9 billion in measurable results.

Looking to this budget, we know, as you know, that the economy is in need of a boost, and we know that all levels of government are facing large infrastructure deficits. We support the need for short-term stimulus, and we believe a focus on infrastructure will be your best investment, even if that means running modest deficits. Our recent public opinion research confirms the vast majority of Canadians support this position.

It is likely that P3s will only play a role in short-term stimulus spending where major infrastructure projects are already in the P3 procurement pipeline. Those projects should continue moving ahead under the P3 model.

The council is primarily focused not on the short term, though, but on how the government can benefit from P3s under its long-term infrastructure plan. To that end, we support the government's focus on economic, social, and green infrastructure. I believe you'll find that P3s do have a strong track record of success in each of those sectors. Public transit, broadband, social housing, first nations infrastructure, and water and waste-water facilities are just some of the priority areas within those three categories. Our submission goes into greater detail with examples of P3 success stories across those sectors.

We believe there is an opportunity with this budget to set out a long-term infrastructure plan that addresses the needs of municipalities, provinces, territories, indigenous governments, and of course, the federal government.

With decision-making on projects moving to the local level, our preference is to keep the P3 screening for projects over $100 million, but in lieu of that, if decision-making is going to a local level, the federal government ought to ensure that due diligence is happening within other levels of government, and assisting with resources of that capacity does not currently exist.

It is important that communities have the capacity to make fact-based decision-making around procurement options as time delays and cost overruns can have a significant operational impact on local governments. One needs to look no further than the traditionally procured York to Spadina subway in Toronto, which is now delayed and running $400 million over budget, leaving York Region and the City of Toronto to make up that shortfall.

We know that P3s will be one of the critical tools at the government's disposal to ensure its infrastructure plan is successful, and we know Canadians understand the importance.

Just last month we commissioned a study by Nanos Research which found that two-thirds of Canadians support P3s, more than a 5% increase from our last study in late 2013. The results are not surprising. Increasingly, the successful track record of the P3 model is recognized.

Our council looks forward to working with the government over the coming years to help maximize its returns on its long-term infrastructure plans.

Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Mr. Bain.

Turning to the Canadian Housing and Renewal Association, we have Mr. Morrison.

[Jeff Morrison, Executive Director, Canadian Housing and Renewal Association]

Good afternoon, Mr. Chair. Thank you for the invitation to appear. By the way, congratulations on your election as chair.

For those of you unfamiliar with the Canadian Housing and Renewal Association, CHRA is the voice of the affordable housing sector in Canada. Our members range from large and small social housing providers, all 13 provincial and territorial housing departments, municipalities, housing organizations, and supportive individuals.

During last year’s election campaign, members of this committee may have heard of and even participated in, our Housing For All campaign, where CHRA and supporters from across the country made an impassioned plea for greater federal investment in social housing. We were very pleased to see that our messages did not fall on deaf ears, and that as demonstrated by the deliverables contained in the Prime Minister’s ministerial mandate letters, the current federal government has made investing in social housing a top budgetary priority.

To be clear, Mr. Chair, the needs are great. Over 235,000 Canadians will experience homelessness at some point this year. One in four Canadian families cannot afford the housing they are currently in. In the past 25 years, federal investment in affordable housing has decreased by 46%. Most current social housing stock is 40, 50, 60, and in some cases, even 100 years old, and there has not been the investment necessary to renovate that existing stock. We are now at the point where the federal operating agreements are already expiring. Over 800 agreements have already expired, and by 2040, the federal investment in social housing is set to reach zero, putting over 300,000 households at risk of eviction.

Consequently, there is an immediate need for federal leadership in the renewal of social housing.

Within a well-thought-out, long-term strategic framework, it is clear that investment in social housing contributes to reaching government policy objectives in several related areas, including meeting the challenges faced by off-reserve aboriginal peoples, stimulating the economy, reducing poverty and greenhouse gases, and helping with the settlement of refugees.

Two weeks ago, a coalition of seven national and provincial housing associations released a paper identifying our recommendations for the three areas of focus for new federal investment. These three areas include: first, retrofit and rehabilitate existing social housing assets that currently provide safe and affordable homes to over 600,000 households in Canada; second, commit to building 100,000 new social and affordable homes to reduce core housing needs and homelessness; third, support innovation in social housing by allowing such things as refinancing of housing provider mortgages, expanding the homelessness partnering strategy, and encouraging social entrepreneurship. By using this new federal funding to invest in these key areas, the federal government would go a long way toward addressing the deficiencies that have built up in the sector.

In addition to these three areas of focus, I’d add just three policy principles that CHRA feels should guide policy-making when investing in social housing.

Firstly, although the federal government should establish key principles and guidelines, funding decisions have to be made at the local level. Social housing policy is not a one-way street. Investment has to take local needs into account.

Second, we’ve heard a lot of talk from the Minister of Finance about funding for “social infrastructure” under which housing is generally included. The catch is this term has come to mean many things to many people. We’re concerned that if the federal government does not provide dedicated housing funding for social infrastructure within the broader envelope, funding will be split so many ways that its impact on social housing may be negligible. We’re therefore looking for a commitment to dedicated social housing funding in the budget.

Last, a long-term housing investment framework must be developed in a collaborative fashion. Social housing is a big tent. A long-term policy framework must be developed with the participation of all stakeholders at the table. This is where our association, CHRA, is ready and willing to work with the federal government in playing a bit of a convenor role across the breadth of the social housing sector so that we can develop a collaborative, sector-wide, long-term policy approach.

We hope this committee will support this need for a multi-stakeholder forum to flesh out a responsible, effective, long-term housing policy.

Mr. Chair, social housing policy in Canada is at a crossroads. By working together and investing judiciously and comprehensively, we can make a positive difference in the lives of millions of Canadians who depend on social housing.

Once again, thank you for this opportunity to testify before you today.

[The Chair, Liberal, Wayne Easter]

Thank you, Mr. Morrison.

I turn now to Mr. Lavoie of the Canadian Manufacturers and Exporters.

[Martin Lavoie, Director, Business Tax and Innovation, Canadian Manufacturers and Exporters]

Mr. Chair and members of the committee, it was with great pleasure that I accepted your invitation, on behalf of the Canadian Manufacturers and Exporters, to submit our recommendations to you in the context of your 2016 pre-budget consultations. I want to wish all of you an excellent first parliamentary session.

First of all, may I express our appreciation to all of the political parties and all of the members of the committee for the support they expressed for the manufacturing sector during the last electoral campaign. It was very clear, and it was appreciated by everyone.

I will take a few minutes to introduce our association and the Canadian manufacturing sector.

Our association represents more than 10,000 manufacturing and exporting companies in Canada. For those who remember, it was created in 1971 and was the first industrial association. In the 1990s we merged with the Canadian Exporters Association because manufacturing companies were responsible for the majority of exports, and that is still the case today.

What is the manufacturing sector and why is it important?

The manufacturing sector comprises a variety of subsectors, from natural resources to aeronautics, the automobile sector and food processing, and accounts for 10% of the Canadian gross national product. Canadian-manufactured products make up two-thirds of Canadian exports.

The Canadian manufacturing sector is responsible for approximately 42% of the private sector's total investment in research and development. The manufacturing sector employs 1.7 million people throughout Canada. They earn an average yearly salary of $72,500, as compared to the average for all industries, which currently stands at $57,900. The sector has a positive impact on a multitude of other sectors, including logistics, transportation, finance, services, and more.

Over the next few years, we will be facing many socioeconomic challenges. We formulated our pre-budget recommendations with those challenges in mind.

The first major challenge is the aging of the population, combined with the decline of the workforce in certain Canadian provinces, including Quebec. These factors will exacerbate the skilled labour shortage. This is already being felt in several manufacturing sectors.

The second challenge involves investment in research and development, which is decreasing, especially since the last severe global financial crisis. This decline is due, among other things, to the large cuts in the research and development tax credit program, in the wake of the Jenkins report released a few years ago.

The third challenge is poor productivity, which affects the competitiveness of our businesses, especially when it comes to exports to countries that have a better productivity rate than ours.

The fourth challenge is the slow rate of adoption of cutting-edge technology, in particular automation, robotics, additive technologies, 3D printing, and many more.

We are proposing solutions to overcome these challenges.

Implement a national advanced manufacturing network of excellence in the fields of automation robotics and additive manufacturing similar to the United States' National Network for Manufacturing Innovation.

Simplify and extend the tax credits and investment incentives to reduce risk and accelerate the adoption of new technologies. This would have a positive impact on productivity and economic growth, including the reinclusion of capital expenditures under the scientific research and experimental development tax credit.

We think it's time for Canada to look at the potential implementation of a patent box tax regime which would improve commercialization of technologies developed in Canada. As we say, Canada is very strong at turning money into knowledge, but weak at turning knowledge into money.

We strongly recommend the government task a parliamentary committee to undertake a full review of Canada's research and development framework with particular focus on the modernization of the SR and ED legislation with its scientific research and experimental development tax credit.

Finally, we urge the federal government to adopt a strategic procurement policy for all federally funded infrastructure projects, which would emphasize the need to maximize domestic economic benefits for the manufacturing sector—in particular, I'm thinking about fabricated steel products—while respecting our current international trade obligations.

I would be happy to respond to your questions. Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Mr. Lavoie.

Next is Mr. Calver from the Centre for the Study of Living Standards. The floor is yours for five minutes.

[Matthew Calver, Economist, Centre for the Study of Living Standards]

Good afternoon. I thank the committee for inviting me to speak today on behalf of the Centre for the Study of Living Standards.

Our organization researches trends in living standards and their determinants. We advocate policies which we think will improve the quality of life of Canadians.

We believe that economic growth is essential to improving aggregate well-being. Unfortunately, economic growth has been slowing in Canada. Between 1961 and 2000, Canada's real GDP grew at a rate of about 3.7% annually. From 2000 to 2014, it grew at a rate of only 2.3%. Over the next two decades, we project that growth will proceed at an average rate of just 1.6%, based on Canada's dismal productivity performance in recent history and slowing employment growth as the population ages.

It is critical to raise labour productivity and employment in Canada if we are to maintain the growth in our standard of living to which we have become accustomed.

Last September, the Centre for the Study of Living Standards released a report offering a series of recommendations for governments to promote economic growth in Canada. I will briefly discuss the three central themes of our proposed growth agenda.

First, growth should be inclusive. By this we mean that living standards should rise for all Canadians and not only for a select few. Governments should take action to ensure that as the cake gets larger, everybody gets a bigger slice. We believe that inclusivity is not only a desirable policy goal, but also a potential driver of growth.

Segments of the population which are currently underutilized in the labour market represent opportunities to increase output. In particular, the government can take action to remove barriers to the successful economic participation of women, older workers, aboriginal people, persons with disabilities, and recent immigrants.

For example, policies such as boosting the flexibility of parental leave, subsidizing child care expenditures, neutral taxation of second income earners, and encouraging young women to pursue careers in science, technology, engineering, and mathematics could raise female employment rates. Similarly, attacking the social issues plaguing aboriginal communities, closing the aboriginal education gap, and assisting firms in engaging the aboriginal workforce would strengthen aboriginal labour market performance.

Our second theme is that growth should be environmentally sustainable. Economic growth is important, but we shouldn't forget that it is a means to an end, and not the end itself. We must satisfy our material desires in a way that protects our environment for future generations.

Fortunately, there are green ways to achieve growth. We endorse Canada's Ecofiscal Commission's recommendations for introducing carbon pricing throughout Canada. Substituting taxes on fossil fuel consumption for growth-retarding corporate and personal income taxes would promote economic activity while simultaneously addressing an obvious market failure.

The budget should offer incentives for Canadian firms to develop and adopt green technologies, and support the development of emerging green technology manufacturing industries in Canada. Investments should be made in green infrastructure projects, such as clean energy generation, interprovincial energy grids, public transit, and waste-water treatment facilities.

Our third theme is that the government should take on a more active role in the economy.

Over the last several decades, governments in Canada have implemented a series of market-oriented reforms. Barriers to trade have been reduced, regulations slashed, tax rates on capital and corporate income lowered, and government ownership reduced. Most economists agreed that these reforms would generate economic growth in Canada, but the results have been disappointing. This is not to say that the reforms were ineffective, or that similar efforts along these lines are not worth pursuing. In fact, we endorse further market-oriented reforms, particularly with regard to improving taxation and lowering internal and external barriers to trade.

However, the weak growth in recent years suggests that it's insufficient for the government to create a level playing field and passively wait for growth to happen. To foster growth, the government may need to augment markets by supporting individuals and firms in making optimal decisions. For example, the government has an important role to play in providing timely, accurate, and high-quality labour market information to students, workers, and firms.

The government can also serve a mentorship role to small and medium-sized businesses by providing advice on investment and technological adoption, or by assisting businesses in navigating complex international trade rules, and securing deals with foreign firms and clients.

In conclusion, encouraging growth which is inclusive and sustainable should be a priority for the 2016 budget. I thank all of you who are present for your attention and look forward to any questions you may have.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Mr. Calver.

Next we have Ms. Ballantyne from the Child Care Advocacy Association of Canada.

[Morna Ballantyne, Member of the Board of Directors, Child Care Advocacy Association of Canada]

Thank you very much for the invitation to be here. We will be forwarding a written submission in French and English early next week to expand on my brief remarks this afternoon.

For 30 years our association has called on our Parliament to commit federal funds to build a comprehensive, high-quality, universal, and inclusive child care system. We're appearing once again before you, this time with renewed hope that this newly reconstituted House will answer our call.

For 2016-17, we're looking for a modest federal investment in child care.

We're looking for $100 million for indigenous communities to design, deliver, and govern early childhood education that meets their needs and that's consistent with related recommendations from the Truth and Reconciliation Commission.

Also, we're requesting $500 million as a federal transfer to provinces and territories for targeted child care initiatives. In future years, and in order to meet the government's election platform commitments, federal transfers will have to increase. All federal transfers, whether they're short term or long term, must be spent in ways that are evidence-based and publicly accountable. We distinguish between short-term funding and increased funding over the longer term because we want the federal government to move along two tracks simultaneously.

We want the government to take immediate steps to address urgent child care priorities, such as affordability, developing the child care workforce and meeting the needs of harder-to-serve populations, such as rural communities. At the same time, the federal government must collaborate with other levels of government, indigenous organizations, and child care organizations to develop and implement a robust shared policy framework that would guide increased public investments over time.

The Prime Minister has mandated the Minister of Families, Children and Social Development and the Minister of Indigenous and Northern Affairs to develop such a national early learning and child care framework. Our organization and three other important national organizations have developed a vision for this framework, a vision that has already received widespread support and endorsement in the child care sector. It's our proposed framework that guides our thinking about federal child care investments. We have given copies of this shared framework to this committee for your consideration.

There's no time now to elaborate on our proposed framework. I'll just say that if our proposed approach is adopted, Canada can achieve within one decade an ECE, early childhood education, system that provides affordable access to a high-quality space for every child whose parents choose such an option.

I'll use my remaining time to highlight three reasons for prioritizing child care funding in this year's budget.

First, taking action in child care is broadly supported. In the 2015 federal election, most political parties made child care commitments in their platforms. The Truth and Reconciliation Commission recommends culturally appropriate early childhood education programs for indigenous families as part of healing and reconciliation. The recent meeting of the federal, provincial and territorial ministers responsible for child care has also created important momentum. It's clear that new federal child care transfers will be welcomed.

Second, action in child care is urgently needed. Families across the country, and by extension their employers and also their communities, are struggling. Parent fees are unaffordable, and they're increasing at rates that outpace inflation. Child care is not available. More than 70% of mothers are employed, but only 24% of children in the ages up to five years have access to spaces in centres. The quality of care is inconsistent, and there's limited integration of care and education.

Full schoolday kindergarten in several provinces has important benefits. All children in those provinces have the legislated right to participate. They're taught by teachers who are educated at post-secondary levels and who earn decent wages. Also, there are no direct parent fees.

But a full-day kindergarten does not address child care needs outside of school hours or those of children under the age of five. We also have the problem of low public funding. Canada's public spending on child care expressed as a percentage of GDP is extremely low by OECD and other international standards.

Finally, action on child care has important social and economic benefits. Child care promotes social inclusion, combats child and family poverty, and promotes women's equality. But child care spending also provides important economic stimulus by creating jobs, allowing parents, particularly women, to work, and supporting local economies through local spending.

Importantly, the failure to address families' child care struggles will limit the reach of other federal economic initiatives. For example, job creation initiatives will be hampered if workers don't also have access to affordable child care.

The urgency of acting decisively on early childhood education and care cannot be overstated. We urge you to recommend that the federal government take action in the next budget.

Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Ms. Ballantyne.

We'll have a seven-minute round.

Mr. Grewal.

[Raj Grewal, Liberal, Brampton East, ON]

Thank you, Mr. Chair, and thank you to all the panellists for your testimony today.

I'm going to start with Mr. Bain. I really appreciated your testimony.

Concerning the focus on public-private partnership, it's been said that many of the Fortune 500 companies in Canada are sitting on a lot of cash and are not spending it. Can I get your perspective on how we can get that money into financing more infrastructure projects as the government is set to announce this massive infrastructure investment this year?

[Mark Bain]

Thank you for the question.

You're right. There is a lot of private capital available. The Fortune 500 companies, of course, have a lot of it. I think they are likely more inclined to reinvest in their own enterprises, but there are many natural infrastructure investors, and those would include the major Canadian pension funds as well as the specialty equity investors. I think they are really just looking for an opportunity to invest. They like the asset class; they like dealing with government, and they particularly enjoy the long-term, stable cash flow that is associated with these projects. So it may come from different sources, but I think we are not currently short of capital; we're just short of meaningful opportunities into which it can be deployed.

[Raj Grewal, Liberal, Brampton East, ON]

This committee has heard a lot about shovel-ready and shovel-worthy projects, and there is a debate going on about how important infrastructure investment is and the impact it will have on the economy in the long term. It is other people's opinion that infrastructure investment is a very short-term-oriented stimulus to the economy.

What's your perspective on that?

[Mark Bain]

Well, of the three priorities that you have for economic, green, and social infrastructure, clearly all have short-term economic benefits in terms of construction activity and other activity to get the infrastructure prepared.

The long-term benefits, I think, are proven as well, certainly in the case of the economic infrastructure bringing goods, ideas, and people to market. It really is an incredibly important economic activity, and it is beyond stimulus, that is, long-term economic health.

[Raj Grewal, Liberal, Brampton East, ON]

Thank you.

Mr. Morrison, concerning affordable housing, and so again, on infrastructure and the government's commitment on social infrastructure in particular, the Minister of Infrastructure has made a point of saying that this year, retrofit projects such as affordable housing will be the number one priority. I know that in the GTA there's a big shortage, and the minister has been down there to talk to the local mayors to ensure that they are applying for the funding and that we're getting these projects in time for the 2016 construction season.

What is your perspective on how that will alleviate some of the pressures in that area?

[Jeff Morrison]

Let me first of all say on the question of shovel-worthy, shovel-ready projects that we've been asked whether the social housing sector has those types of projects ready to go. Let me state unequivocally, absolutely yes, si, oui, ja—however you want to say it.

The social housing sector is ready to retrofit. They are ready to rehabilitate. We understand there is possibly going to be an angle regarding green infrastructure and energy retrofits. Absolutely, we are ready to work with governments in that area.

Regarding that stimulus impact, you mentioned the GTA. Just in the city of Toronto right now, there is a waiting list for affordable housing approaching 90,000 households—not individuals, but households—so clearly, the need is great. And that's for new builds.

There are still 600,000 households in Canada that live in the existing social housing sectors. As I said, many of those buildings are more than 50 or 60 years old. I toured one building here in Ottawa that's over 100 years old. There has simply not been the level of retrofit investment necessary to keep those buildings up to code. Frankly, I would just ask anyone here, for example, who own their own homes, what if they went 50 years without putting any money into the rehabilitation of that home. It wouldn't be a very good place to live.

Clearly, that's money that is necessary. It will have a stimulus effect. The projects are ready to go. Again, we look forward to working with government to make them happen.

[Raj Grewal, Liberal, Brampton East, ON]

Thank you, Mr. Morrison.

As a follow-up, given the short supply of affordable housing across the nation, from your perspective, what are the macro effects on the economy that flow from that if the government doesn't make this investment?

[Jeff Morrison]

There have been all kinds of socio-economic studies showing the impact on the economy, on individuals, and on families of a lack of affordable housing. It goes to the heart of the inability to have an education, the inability to hold a job, family breakups, obviously, impacts on poverty, and so forth.

When we look at the waiting list by municipality—Toronto 90,000, Montreal approximately 25,000—these are people who are either living in substandard housing or who simply do not have housing whatsoever.

It's pretty hard to get a job, or to train for a job, or to get an education when you're, frankly, just worried about where you're going to be sleeping that night.

The impacts are very clear and measurable. We would be happy to provide the committee with some of those examples, but as I said, the return on investment of housing goes well beyond the bricks and mortar. It goes to the very heart of the economy and social benefits.

[Raj Grewal, Liberal, Brampton East, ON]

Thank you, Mr. Morrison.

Flipping right back to Mr. Bain, from your perspective how can the P3 formula be improved?

[Mark Bain]

It's a good question. We're very happy with the success we have had. In order to achieve dramatic expansion, meaning, if to improve is to get more infrastructure delivered, I think we need more private capital at work. That probably means increasing the role of the active repeat members in the community, such as Infrastructure Ontario, Partnerships BC, and the equivalents in Saskatchewan, New Brunswick and Quebec, to get them moving. That probably means a more predictable deal flow.

For the sectors that are quite under-represented, for example, the indigenous communities, I think that means establishing a stable, long-term funding flow, which to date has been piecemeal, intermittent, and short term. Long-term commitment to these projects will be met with long-term delivery of infrastructure.

[Raj Grewal, Liberal, Brampton East, ON]

Thank you very much.

[The Chair, Liberal, Wayne Easter]

Thank you, Mr. Grewal.

Turning to you, Ms. Raitt.