Finance Committee on Jan. 30th, 2017

[The Chair, Liberal, Wayne Easter]

Go ahead, Mr. Martin.

[Robert Martin]

High-ratio volumes, we estimate, would be down near about 35% from the last changes. Of course we're not into the spring-time house buying yet, so it's hard to measure, but these are our estimates. That varies across the country: high of course in the Lower Mainland and in Toronto, and in Alberta between about 13% to 46%, depending on the credit union decline in volumes.

Low-ratio transactional insurance, which is used in a lot of rural areas, is down about 50%. Of course there might be some workarounds, but we're pushing those down. Also we estimate some big declines in portfolio insurance because of refinance rules and all of that, even up to 70% at some credit unions. It's just the volume is gone. It's been very big and it's a challenge for our system.

[The Chair, Liberal, Wayne Easter]

Anybody else?

Mr. Hogue.

[Robert Hogue]

Just in terms of total home resale activity, we've seen a little bit of a slowdown since the fall, but it's still very early on for passing judgment on the effect of those changes.

[The Chair, Liberal, Wayne Easter]

We'll turn to Mr. McColeman and then Mr. Whalen after that.

[Phil McColeman, Conservative, Brantford—Brant, ON]

Thank you, Chair.

Mr. Morrison, I want to talk a bit about the provision of social housing. Can you just give us a quick profile of who the members of your association are?

[Jeff Morrison]

Our members are quite varied. We include social housing providers across the country, municipalities, all 13 provincial and territorial housing departments, non-profit associations, and interested individuals.

[Phil McColeman, Conservative, Brantford—Brant, ON]

I had a recent meeting with the Federation of Canadian Municipalities and they were advocating, and trying to see if we would advocate for them, that of the $21-billion social infrastructure fund that was set up by this government in the 2016 budget, they would like to receive $12 billion of it for social housing. If they were to succeed in getting $12 billion, what would they do with the money? Would they build units, projects, and own them? Or would they do projects like you were talking about in your introductory remarks that could lead to the owners eventually owning the unit, like the Habitat for Humanity model? You mentioned a couple of other innovative models that I would like to learn about.

What type of housing do municipalities build?

[Jeff Morrison]

In terms of the FCM request, their precise recommendations are a bit different from ours, but I think overall we both support the notion of increasing supply. Whether that would be owned and operated by the municipality through a municipal housing authority such as, for example, Toronto Community Housing, or whether that would essentially be a non-profit provider operating and owning those units, I think there's openness to both.

What we do agree upon, though, is that, of that $12 billion that they've asked for and as part of the social infrastructure fund that Minister Morneau announced, I believe in the fall, was that concept of an infrastructure bank whereby providers.... By the way, we think that there's some concern with a bank concept for housing. That's why we've argued for a more distinct, specific housing financing authority. That would be essentially a model that could provide low-cost loans to providers, regardless of whether they're municipally owned or on the non-profit side, that would provide essentially ongoing capital for those supply needs.

[Phil McColeman, Conservative, Brantford—Brant, ON]

Do you represent any private providers of social housing?

[Jeff Morrison]

We represent a very small number. In terms of social housing, the private sector is relatively small. There may be a small handful, but for the most part it's the non-profit.

[Phil McColeman, Conservative, Brantford—Brant, ON]

Okay. There are other organizations that represent co-operatives in housing across this country. How many other associations are there?

[Jeff Morrison]

It depends on how you define the space. There is an organization, as you suggest, for co-ops. There is, of course, FCM. There is an organization representing the homelessness sector specifically, but within the social housing space, we are essentially the organization.

[Phil McColeman, Conservative, Brantford—Brant, ON]

Okay.

I have had examples through the years, from being in the industry and leading the industry at one time from a volunteer point of view, that typically the price per door of a social housing project generally runs 30% to 50% more than that of a private provider. Is that accurate?

[Jeff Morrison]

As has been pointed out several times by many speakers, the marketplace is different and costs are different depending on the system. I think overall social housing costs are in line with those in the private market, with the exception that, of course, the purpose of social housing is to provide rent-geared-to-income units, to provide subsidized units at below-market rates for vulnerable households.

[Phil McColeman, Conservative, Brantford—Brant, ON]

No one's going to argue with that. I'm saying that when private provision could provide it for, let's say, $80 a square foot per door and social housing is anywhere from $120 to $150 a door.... This is the kind of analysis I've seen in different markets on different occasions. When the government's paying, it costs more. I think that's the general thinking in the industry.

This was actually recognized in Great Britain, and Great Britain reflected on what would be the best way for the people who need social housing to make sure they have access to the product they need, just as we're doing through, let's say, a $12-billion investment by municipalities. They decided that it's better to give the money to the tenant, to the owner, the potential owner and tenant, and let them seek out in the market the housing. What are your views on that?

[Jeff Morrison]

As you probably know, part of the discussions regarding the national housing strategy has to do with the concept of an affordable housing benefit, which I think gets at the concept you're raising. We have some concerns with the concept. First of all, there is definitely the potential for inflationary pressures, especially in the rental sector. If landlords know that people are essentially getting this personal benefit, there is that potential for increasing rents.

We're concerned with the accountability surrounding the potential concept. How would government ensure that the individual in fact used that portable benefit for the purpose for which it was intended? Frankly, the administrative concern is just how exactly a federal individual portable benefit would work. One of the benefits we've talked about in terms of providing such a portable benefit, but tying it to the unit, is that many of those concerns are allayed. The administrative function is already in place. There's a guarantee in terms of the accountability for what it will be used for, and, really, given the nature of the agreements with the federal government, inflationary pressures can be essentially maintained or contained.

[Phil McColeman, Conservative, Brantford—Brant, ON]

I think I have just a little time left.

Would you agree that home ownership means everything to a person? If they can get into a home and own a home, that just does so much for them as a person in terms of their life, their self-esteem, all of those things. Habitat for Humanity does that. I would like you to share your insights with the government on how you get a model of social housing that does that. I've never seen anything like when the keys are handed over to someone in a Habitat for Humanity home.

[Jeff Morrison]

I don't think there would be any question by anyone in this room that having a roof over one's head is a precondition for just about everything else that you want out of life, whether it's health, education, family or so forth. I don't think there would be any disagreement there.

The reality for many Canadians, though, is that the path to home ownership is not as clear cut or as available as it is for others. When we talk about housing policy, we really need to be thinking from the holistic perspective that, yes, there is the private market but for those Canadians for whom that path is not there, we need to look at the tools and the supports needed. Then, yes, eventually, I think we could agree that having one's own home would be a desired aspect, but can we put in place the policies to provide that bridge to allow people to traverse that path?

[The Chair, Liberal, Wayne Easter]

Thank you.

Mr. Whalen.

[Nick Whalen, Liberal, St. John's East, NL]

Thank you very much, Mr. Chair, and thank you all for coming.

I would like to step back for a second and perhaps challenge some of the axioms that underlie what we're looking at here.

First, I would like to challenge whether or not home ownership is the be-all and end-all. As we heard earlier today, Canada has the highest home ownership rate in the developed world, and I'm wondering whether or not we have a lack of rental units for families outside the social housing space. If someone wanted to rent in that space for a family, could they even find something appropriate in the markets we're talking about, outside of the social housing space?

I'm not sure if anyone has looked at that on the panel, or whether or not we have a lack of affordable rental family homes or affordable homes of a particular quality and style that first-time buyers, or more importantly, second-time buyers are looking at.

[Robert Hogue]

Again, it depends on where. In terms of rental stock, there is a lot more in Montreal or Quebec City than in Vancouver, where it is very scarce. There's a whole spectrum of different circumstances, as much on the rental side as on the ownership side.

[Nick Whalen, Liberal, St. John's East, NL]

Mr. Morrison.

[Jeff Morrison]

It's interesting. In November 2016, I believe, CMHC released their rental market report, which revealed that the supply of rental housing has actually been quite robust, and that rental rates themselves have somewhat stabilized. Again, it is absolutely correct that this differs region by region, but at a macro-national level, in fact, the rental supply has been fairly good.

To your point about whether home ownership is sort of the be-all and end-all, in Germany, I believe the rental rates are at approximately 50%- to 60%, and home ownership is not the be-all and end-all. I think it makes the point—and this is why I try to choose my words very carefully—that at the end of the day, it's the roof over one's head that most Canadians find most attractive or prioritize. It's not necessarily the case that ownership has to be the final solution. For many of our tenants in the social space, it's simply not something they can realize.

[Nick Whalen, Liberal, St. John's East, NL]

Availability is important.

Mr. Levings, did you have a comment?