Thank you very much, Mr. Chair.
As was mentioned, my name is Scott Fash. I'm the executive director of the Building Industry and Land Development Association of Alberta, and on behalf of BILD Alberta, thank you for the opportunity to discuss the impacts of COVID-19 on the construction sector in Alberta.
We represent about 1,700 member companies in the residential construction and land development industry. For clarity, we're the Alberta provincial arm of the Canadian Home Builders' Association, which I'm sure you're familiar with at the national level.
At BILD Alberta, much like you, we've largely been focused on public safety, preserving jobs and helping businesses weather this crisis. Prior to COVID-19, the industry within Alberta supported about 118,000 jobs, paid $8 billion in wages and generated $17.7 billion in investment value annually. Through significant collaboration between the Government of Alberta and municipalities and our industry, we have established modified practices and procedures that have allowed construction to continue.
That said, the industry still has been significantly harmed in both the new construction and the renovation sectors. This harm is a result of cancelled contracts and sales, extremely slow or non-existent sales and indefinitely delayed project closings. This has created a situation where cash flows have stopped or deteriorated rather quickly, resulting in rather significant layoffs.
Even as the pandemic starts to subside, we anticipate that the loss of sales and secured contracts will severely affect cash flow for the coming months and potentially for years. The scale is not yet known in totality, obviously, but anecdotally, our member companies are indicating that they've laid off between 30% and 50% of their staff to date. The timing of if or when these people will be brought back is largely going to depend on the timing of the recovery, which we can't really control; on incentives brought forward; on consumer confidence; and then, obviously, on the overall employment levels within the province of Alberta.
We've yet to see any significant dips in housing starts, but that's largely due to the lagging nature of the statistics within our industry. We know from our members that their sales have declined rather severely. We anticipate seeing some rather significant reductions in housing starts in the latter half of this construction season.
Most of the companies I've talked to are focused predominantly on just fixing the projects that they either had already started or had already put a significant amount of investment into, with most putting any future projects on hold indefinitely. That raises, I think, a lot of concerns moving forward about the health of the industry and its over 100,000 employees.
We do want to commend the federal government and all elected officials for the speed at which you brought in emergency relief and for the credit programming you've brought forward. The approach of implementing tools quickly and then making adjustments along the way was an incredibly prudent decision. We really appreciate the willingness of the government and of all elected members of Parliament to adjust the tools as needed as we've moved through this challenging time.
Particularly, our members in Alberta have been really pleased to see the collaborative work between the CHBA, which is our national association, and the federal government. Some of the adjustments you guys have made initially have indeed helped a lot of our member companies to qualify for the wage subsidy, which they wouldn't have qualified for otherwise. However, the nature of the residential construction industry has still left a number of our member companies struggling and unable to qualify, particularly for the wage subsidy benefit.
We know that the CHBA recently provided some recommendations to the Department of Finance and this finance committee to try to address these issues, and we fully support those recommendations. In particular, one of the major items was allowing for fair value of contracts signed to be permitted, as either an interpretation or a special case when calculating qualifying revenue. That will help a number of companies better quantify and demonstrate the steep decline in sales that's being experienced currently within their sector.
The other item that we were really pleased to see, and that a lot of members are pleased to see, is the Canadian emergency commercial rent assistance program, which I think is going to be an important complement to help address the fixed operating expenses of a lot of these companies. I know that it's still in its early days and that we're awaiting all the details, but we hope that, as with the other programs, the federal government will work closely with CHBA and other partners to make sure that we include as many of these companies as possible.
Moving forward, as we begin to transition from this crisis response to recovery, we in our association look forward to our continued partnership with the Government of Alberta, and I'm sure that's just as the CHBA will collaborate with the federal government. Residential construction has long served as an important economic driver and a source of high-quality and high-paying jobs for thousands of Albertans and millions of Canadians.
At the federal level, we support CHBA's recommendations, which include reintroducing a 30-year amortization period for insured mortgages and adjusting the stress test to encourage seven- and 10-year terms.
At least in the interim, we would recommend reassessing how to or whether to apply GST on sales of new homes. If we consider the use of it, we could potentially use some of the money collected to focus on infrastructure spending that fuels growth, construction and employment.
We would support the introduction of a home renovation tax credit for all types of renovations. Such a tax credit would help stimulate investments and support the renovation sector.
We would love to see you work with provinces and municipalities to ensure regulation and red tape do not excessively delay the supply of new housing or add excessive costs to construction, thus reducing affordability.
Finally, a really big item is to work with financial institutions to ensure access to flexible solutions to manage defaults, credit needs and other financial challenges in the coming months. I know access to liquidity and banks' getting aggressive in calling in debt will be a huge concern for a number of our member companies in the coming weeks and months.
Provincially, we're going to be collaborating with the Government of Alberta on some of the items I listed, with a focus on removing regulatory red tape that is adding unnecessary costs and burdens to business owners as they try to navigate this tough time.
I thank you, again and sincerely, for inviting me to speak. I am happy to answer questions to the best of my ability.