Finance Committee on Feb. 6th, 2020

[The Chair, Liberal, Wayne Easter]

Thank you. We are out of time.

I'll just say on this one that Mr. Blaikie is not on the finance committee regularly, but the finance committee recommended two years ago—and followed up with Finance again last year—that the recommendation of the Canadian Cardiovascular Society be adopted in the budget. It's a simple $7.5 million over three years to mean better health care and measured results.

It sounds simple enough to me, but Dr. Krahn mentioned silos. Well, somewhere within the silos of government—and it's not in the Department of Finance—there's a problem with getting this solved. I'll just put that on the record. It needs to be solved, and the recommendation needs to be adopted.

Mr. Poilievre, we'll go to three and a half minutes each, and then we'll go over to Madam Koutrakis.

[Pierre Poilievre, Conservative, Carleton, ON]

The question is for Mr. Lancastle.

Your members are responsible for appraising the values of properties. Is that correct?

[Keith Lancastle]

That's correct.

[Pierre Poilievre, Conservative, Carleton, ON]

Do you spend any time or do any research on the composition of those values—what leads a property to go up in price, go down in price, or be the price that it is—or do you simply evaluate the property and say what it is worth?

[Keith Lancastle]

Our members consider any number of factors in arriving at an opinion of value.

[Pierre Poilievre, Conservative, Carleton, ON]

Right.

[Keith Lancastle]

Clearly, there are varying inputs that will contribute to value. There was an article this morning in New Brunswick that talked about green renovations to homes, and it suggested that appraisers were diminishing those. In fact, the response is that the “greenness” of a home, if you will—the fact that this is a net-zero home—is one contributor to the value. Other things are very contributory as well, but at the end of the day, our members are largely commenting on what is happening in the marketplace at any given point in time.

[Pierre Poilievre, Conservative, Carleton, ON]

The reason I ask is that, in certain markets, prices have risen much more quickly than incomes.

[Keith Lancastle]

Yes.

[Pierre Poilievre, Conservative, Carleton, ON]

Low interest rates can explain some of that, but rates have been low for a long time now. The increases have happened subsequent to those drops, and they continue to happen.

To my knowledge, materials have not gone up that much. The labour compensation has gone up, but not dramatically. What is the leading cause of increases in housing prices, particularly in large metropolitan centres like Toronto and Vancouver, in the view of your members?

[Keith Lancastle]

I would suggest to you that many in organized real estate would agree that supply side constraints in both the GTA and the GVA are probably the number one contributor to the escalation of value.

[Pierre Poilievre, Conservative, Carleton, ON]

Which constraints?

[Keith Lancastle]

It's just the mere fact that there is not an increasing amount of housing units available at a time when more and more people are moving into those cities or those areas.

[Pierre Poilievre, Conservative, Carleton, ON]

When prices go up, though, surely the profits of building housing go up, and so the market has a massive incentive to build housing. What's standing in the way of these profit-seeking builders building?

[Keith Lancastle]

Certainly the cycle time to bring new properties or new developments to market varies widely across municipalities across the country, but it is not an insignificant period of time.

I recall a couple of years ago when Bombardier left the former Buttonville site and relocated to Pearson. They talked there about that creating the potential for several hundred new housing units but in the same breath discussed the fact that it would probably be five or six years before those housing units could, in fact, be brought to market, by the time all of the development processes had taken place.

[Pierre Poilievre, Conservative, Carleton, ON]

Which processes? Is that municipal processes?

[Keith Lancastle]

It's municipal approvals, environmental assessments as required, construction of the infrastructure, and so on.

[The Chair, Liberal, Wayne Easter]

You have one last question.

[Pierre Poilievre, Conservative, Carleton, ON]

Again, I keep coming back to this. Everyone who's in this business says that the number one driver for higher prices is supply constraints imposed by municipal and provincial governments. These increased prices then affect the entire market. They affect people who are lower on the economic scale the worst, because they don't yet have property. Those who have property are better off, because their main asset increases in value.

We keep hearing from municipal leaders that they need more money for social housing, but at the same time municipal and provincial regulations are making housing more and more expensive. Do you see anything inconsistent about these two simultaneous phenomena—requests for more housing and restrictions on more housing?

[Keith Lancastle]

I think it's important to remember this. Toronto gets approximately 100,000 new citizens every year. These are people who want to come, and they're at the household formation stage. They want to get into the housing market. In fact, you're not seeing 100,000 new houses brought on year over year, so you're getting that disconnect between what is available on the supply side and the increased demand solely as the result of people moving into a community. Then you overlay that with the fact that people are urbanizing; they want to remain closer to the downtown core and not deal with the commutes that they deal with in some cities.

I think you have that collision between supply and demand.

[The Chair, Liberal, Wayne Easter]

We will have to cut it there. It's a good discussion. I let it go considerably over.

Ms. Koutrakis and Mr. McLeod are going to split about four minutes.

Go ahead, Annie.

[Annie Koutrakis, Liberal, Vimy, QC]

Thank you. In the interest of time, I will be very quick.

I have one question for Dr. Krahn. Thank you again for being here today.

I would also like to thank the chair for his comments and for indicating what, in the past mandate, the recommendation was. I echo his comments, and I will be one of those people who strongly advocate for that.

What is the level of support for your proposal? What is the kind of support that you see among the provinces? It seems to me that the provinces would be on board, as it leads to healthier citizens. Perhaps you can expand on that, please.

[Dr. Andrew Krahn]

Part of our hallmark has been to connect with all the ministries. I'm also a senior medical adviser at home for our cardiac branch at the ministry. We have letters of support from the ministries across the country to say that this is a good idea. They don't have a federal lens from the standpoint of comparative information or the utilization of their data to compare. Part of it is the anecdote of New Brunswick. With no one to compare with within their province, part of it is New Brunswick wanting to know how things turn out in other places.

The ministries of health are very supportive of this notion but don't have, if you like, the collective federal view to be able to put it together. We believe that's our role in conjunction with CIHI. There is already the federally mandated data collection system, but they lack the budget or infrastructure to then transform the data collection process into analysis, policy changes, practice changes and so on.

[The Chair, Liberal, Wayne Easter]

Thank you, both.

Mr. McLeod.

[Michael McLeod, Liberal, Northwest Territories, NT]

Thank you, Mr. Chair.

I have one question for Mr. Obed. Thank you for your presentation.

I hear from all jurisdictions in the north about the housing situation. People claim it's a housing crisis. Could you talk a bit about how that impacts the indigenous people in all of the north?