Finance Committee on May 19th, 2020

[James Cumming, Conservative, Edmonton Centre, AB]

Who's the third party provider?

[Evan Siddall]

I'm not sure we've really said publicly, so I'm not sure I can share that with you right now. As you would imagine, it's done through a procurement process. Details are emerging on the 25th of this month. We will get you that answer separately, though.

[James Cumming, Conservative, Edmonton Centre, AB]

Could you follow up with details on that?

Then, because rent abatement is backdated, what type of process do you have in place to make sure that those funds flow back to the tenants?

[Evan Siddall]

There has to be an agreement, that we have to see, that the money flows to the tenants. It's a requirement.

[James Cumming, Conservative, Edmonton Centre, AB]

I'll give you an example.

I have a wellness clinic in my constituency. By the time this is all said and done, they will have had to pay four months rent on 11 days worth of income. Their landlord is refusing to apply for CECRA. They also use subcontractors and they can't apply for any other Government of Canada programs, although there might be some relief with CEBA now.

What would I tell this tenant, Tami, about what the prospects are for her with the rent relief program?

[Evan Siddall]

We believe there's some misinformation about the program. As I've said, we will be releasing details on May 25.

I've just approved the text of that release myself, and it's now going through other processes. In the text there is information as to what a tenant can do to talk to their landlord about why....

The alternative is very expensive litigation and collection from people. In a healthy business, it would be irrational not to support a tenant.

[James Cumming, Conservative, Edmonton Centre, AB]

We've heard from a lot of landlords and from tenants around this program. Now, both levels of government will provide a 50% rent subsidy. Within that, 25% is picked up by the landlord and 25% is picked up by the tenant. I understand the landlords could pick up more. There is a complexity in it, in that there are common area costs, there are utility costs and a lot of things that landlords do.

Wouldn't it make more sense to be able to say, “Listen, we'll pick up 50% of the rent, given the situation that people are [Inaudible-Editor],” and allow the landlord and the tenant to come up with their own agreement as to what the other half looks like? It could be a blend and extend. It could be a variety of things. Really, at the end of the day, as long as they attest that they have an agreement, they should be able to go forward.

[Evan Siddall]

We designed these programs in a highly multiple-constrained environment. One of the things we didn't want to do was to overly interfere with negotiations between landlords and tenants. We didn't want to be bailing out failing businesses, and we wanted to make sure there was skin in the game on the part of landlords.

The nature of the rent relief agreement is a matter between the landlord and the tenant. We wanted to make sure that it was clear to the landlords that, in order to help these tenants, we'd be willing to cover more than just the net rent, but the gross rent, as you said, including property taxes, common area costs and utilities.

[James Cumming, Conservative, Edmonton Centre, AB]

On the enforcement side, can you elaborate? How are you going to be able to enforce this? How are you going to make sure that the tenants receive this money that's been owed to them?

[Evan Siddall]

Thank you. That's an important question.

This is a forgivable loan. The only way the loan to the landlord is forgiven is if the landlord plays by the rules and passes the savings on to the tenant, and it has to be done through an agreement. That's the mechanism we'll use.

[The Chair, Liberal, Wayne Easter]

Is that all cleared up, James? You're over time, but if you have a supplementary to finish this round, you're okay.

[James Cumming, Conservative, Edmonton Centre, AB]

No, I'm good, thanks.

[The Chair, Liberal, Wayne Easter]

Ms. Dzerowicz.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you so much.

Mr. Siddall, thank you for being here, and thanks to Ms. Bowers for being here for a very important discussion.

This won't surprise you: the number one issue during the last campaign was affordable housing. With this pandemic, coming out of it, it will continue to be a top issue for the residents in my riding of Davenport.

We've had a number of non-profit organizations want to help build some affordable housing options in the riding, but they have found the process a little bit onerous, a little bit long and not easy to engage in.

I heard you say we're trying to create 125,000 new units over the next 10 years. I know our need is substantially higher than that.

We're now in the era of agility and flexibility and trying to do the impossible. What can the federal government do at this point to help CMHC accelerate more affordable housing options?

[Evan Siddall]

I want to give Romy an opportunity to brag about your properly pointed criticism about how hard it was to deal with us in the first instance. It's not Romy's fault, it's my fault. We designed a program that I insisted we launch quickly and as a result, it was a little clunky to start.

Romy, could you just talk about what we've done to speed those processes up and then perhaps answer the question, if you wish?

[Romy Bowers]

To put it simply, we've become a much more client-centric organization. I think before what we were trying to do did not consider the needs of the client, but tried to fit people into different programs that we have.

The first instance is to understand what the needs of the client are and then try to find a solution for them.

I apologize to your constituents who have had difficulty with our programs. I can assure you that there has been an effort under way for the last eight months to really look at our processes and to make significant improvements, starting with having detailed discussions with the clients before they even start the application process.

I hope the fruits of that effort are slowly being felt. We're always very happy to have discussions with you. We have staff across all regions of Canada, and we're very happy to engage in these kinds of discussions to make sure the money is getting to the people who need it most.

As you probably know, recently the mayor of Toronto announced some modular housing units that are being built in response to the COVID crisis. Again, that's an example of CMHC staff working very constructively with municipal leaders to make sure that money is going where it's needed most.

[Evan Siddall]

I'll just add that certainly more money is needed, but because the federal government has made substantial investments by the national housing strategy, our plan is to make sure that provinces and territories are doing their part with matched funding, and that municipalities are helping us by speeding up approvals.

[Julie Dzerowicz, Liberal, Davenport, ON]

You made a comment that home ownership is lower in high-income countries. Is that because there are more affordable rental options available?

[Evan Siddall]

It is partly that. Of course, many of them are older economies than ours. The other thing is that in newly developed economies there seems to be a rush to ownership and that skews the data in a different way.

[Julie Dzerowicz, Liberal, Davenport, ON]

That gets me back to your comment around municipalities and provinces also having to step up if we want more affordable housing options moving forward.

You made a comment that municipalities can continue to help by accelerating the affordable housing approvals, waiving fees and a bunch of things. One of the things you don't mention is gentle density. Is that also a solution that should be put on the table?

[Evan Siddall]

Well, I'd say “rough” density. What I mean by that is, because the supply function is so slow, the better way to attack affordability is densification. The levels of density we have in this country are very low by comparative standards. I know that the pandemic will cause people to be worried about densification. So far, there seems to be no evidence that density is correlated with higher infection rates, other than, of course, in long-term care facilities, which is a different case. People live separately, after all.

I live in an apartment building in Ottawa. In my building, there are steps to clean common areas. Therefore, I would say densification, and frankly, aggressive densification, not gentle densification, although that too is really what's required.

[Julie Dzerowicz, Liberal, Davenport, ON]

What does that look like? By that, do you mean we should encourage more building of rental units or make it easier to have four-storey buildings of just rental apartments? What do you mean by that?

[Evan Siddall]

That's what I mean: frankly, attacking Nimbyism and people complaining about higher density. It comes with a cost of very expensive housing.

[Julie Dzerowicz, Liberal, Davenport, ON]

I want to ask a question around the modular housing, because to me, that was an excellent announcement. It is fast housing that's apparently coming on stream in September for homeless and the most vulnerable who don't have housing.

Moving forward, is that a model that we need to be investing more in?

[Evan Siddall]

Romy, I'm going to give that one to you.

The answer is yes.