Finance Committee on May 4th, 2021

[Julie Dzerowicz, Liberal, Davenport, ON]

I just want to say, Mr. Easter, I don't want anybody to think that I was saying, “Well, it's all their fault.” It's a complex issue, and I think we have to appreciate that.

Thank you.

[The Chair, Liberal, Wayne Easter]

Okay, we got that.

We'll go to about four minutes each to Mr. Ste-Marie and Ms. Kwan.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Thank you, Mr. Chair.

I will begin by addressing a comment to Ms. Farha.

I am a member of the Bloc Québécois, and my party is committed to the full autonomy of Quebec and the provinces with respect to their jurisdictions. With respect to health care, we are asking the government to do what it did before, which is to fund health care within its means and to let Quebec and the provinces make their own decisions.

When it comes to joint projects, regarding roads and infrastructure, for example, it takes two or three years for a framework agreement to be established, regardless of which party is in power. Then it takes one, two or three years for the project to be implemented. Once the money is voted in, it's a slow process. This is really why we value Quebec and provincial autonomy.

I'll come back to my questions.

Mr. Tremblay, I would like to know your reaction to the measure included in the government's budget with respect to the 1% tax imposed on vacant residential properties owned by foreigners.

Has CMHC looked at this issue? I know that British Columbia is doing this for some areas and the City of Vancouver has adopted this measure.

What does CMHC think this measure can do to help bring down the price of rents, among other things?

[Michel Tremblay]

Thank you for the question.

It was the Finance Minister who decided to impose this tax. This will have an impact, but I don't think it will necessarily be significant. If the property is owned by a foreign person or company, but that company or person rents the residence, we don't have a problem with that. We all know that any supply is good.

Of course, the type of housing has to meet the needs and fit the cities' plans, but an investment is not necessarily a negative. In fact, I would say that there are many more Canadian investors, that is, people who have acquired properties and are renting them, than there are foreign investors.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Thank you.

If I'm not mistaken, the measure is for vacant housing.

Ms. Farha, did you want to respond to that? I saw that you raised your hand.

[Leilani Farha]

I could see that Mr. Kershaw was nodding the same way I was.

I shouldn't speak for Mr. Kershaw, but I agree with what Mr. Tremblay said, which is that I thought this tax was an interesting little move. It was a little thing, just a tinkering. I think it's maybe a bit of a red herring.

I don't think it's going to generate much. Even the government itself said it wouldn't generate that much money over five years—$700 million or something. That's not a lot, and really, I've seen those moves. The government of New Zealand did that, for example. Singapore has a similar thing in place. It's not that effective for curbing the über-commodification or financialization of housing.

As I said in my comments, there are other threats, and they're domestic threats. It's the pension funds and the real estate investment trusts and the big asset management firms that are really putting pressure on renter households. I thought it was interesting, though, because it shows that the government is willing to look at some fiscal policy. It's a beginning of looking at fiscal policy and its implications for the housing prices.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Thank you.

Mr. Kershaw, did you want to add a comment?

[Dr. Paul Kershaw]

To learn from B.C., one of the things that the B.C. government does, to contextualize our speculation of vacancy tax here, is to point out that it applies to well under 1% of homes in the province. It is a tool and it should be used, but let's be clear that it's not a particularly large signal to the housing market, as we have a much broader problem of home prices leaving earnings behind.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Thank you very much.

Mr. Chair, I have no further questions.

[The Chair, Liberal, Wayne Easter]

Ms. Kwan, you have about four minutes, followed by Mr. Falk.

[Jenny Kwan, NDP, Vancouver East, BC]

Thank you.

Ms. Farha, you wrote to the government back in March 2020, calling on them to create an acquisition fund to support community housing providers in acquiring properties at risk of being bought up by REITs and large capital funds.

Have you received a response from the government?

[Leilani Farha]

I wrote that correspondence in my capacity as United Nations special rapporteur on the right to housing, and no, I did not receive a formal response.

[Jenny Kwan, NDP, Vancouver East, BC]

I see, and we didn't see any action from the government in the upcoming budget with respect to that as well.

[Leilani Farha]

Well, wait; actually, I think the rapid housing initiative was somewhat related to that. That is my understanding.

It's not what I had envisioned. I actually thought national level government should....

I actually felt that the government and CMHC should do the acquisitions, and then, because they have the fiscal power—and the know-how, in CMHC's case—they would have this body of public assets and they could then determine what to do with them. They could work with community organizations and figure it out. Not all of them would have to remain public assets, but that was what I had proposed.

No, it's true that I didn't hear back directly on that.

[Jenny Kwan, NDP, Vancouver East, BC]

Right, and what the government did with the RHI does not allow for the acquisition of existing housing. Therefore, it's a bit different in terms of what I'm talking about.

[Leilani Farha]

Yes, that's correct. It has to be repurposed.

[Jenny Kwan, NDP, Vancouver East, BC]

Exactly.

As you noted in your presentation, 250,000 rental households are in arrears and at risk of evictions.

Do you think the federal government should develop a national eviction standard that reinforces the right to housing and provides rental supports, as has been done for commercial rent?

[Leilani Farha]

There is the National Housing Strategy Act, which says that the federal government's housing policy recognizes that housing is a basic human right as defined under international human rights law and that the government will do what it must to progressively realize that right. I don't see how they can get around not doing something to protect renter households.

I actually put that in the letter of March 2020, right at the beginning of the pandemic. I thought the federal government should have come out very strongly and clearly in calling for an eviction moratorium. They said, “Well, that's provincial jurisdiction.” I still think the federal government could have shown leadership and should still be showing that kind of leadership.

What's happening in this country right now around rental arrears is very scary. Those 250,000 households, you have to understand, are at least 500,000 people. That's many children and that's single mothers. That's indigenous peoples, persons with disabilities, newcomers and refugees. We do not want those people on the streets of Canada or living in cars or parks.

This is very serious stuff, and in light of the pandemic and the health risk to the individual, the family, and then the broader community, I think the federal government has no choice but to do something if they really want to breathe life into the National Housing Strategy Act and their commitment to the right to housing.

[The Chair, Liberal, Wayne Easter]

Jenny, this will be your last question.

[Jenny Kwan, NDP, Vancouver East, BC]

Thank you very much, Mr. Chair.

Yes, and of course to protect people from actually ending up being homeless.

My last question will be for Ms. Zoe and Mr. Mehaffey.

It was shocking in terms of the exchange we heard, and of course we saw the lack of priority from the government in providing the absolutely necessary resources to support indigenous housing, particularly in the urban, rural, remote and northern communities.

One of the issues that has been brought up to the government over and over again is the lack of an urban, rural and northern indigenous housing strategy, for indigenous by indigenous. When you raise this issue, they point to the idea that somehow 40% of the RHI went to indigenous housing, and therefore it's all good.

Could I get you to comment on that and what you need the government to do? Do we need an urban, rural, northern, indigenous strategy, for indigenous by indigenous, for example, and along with it, the necessary funding to back it up so that we can actually see real change in meeting the housing needs?

[Matt Mehaffey]

There are a whole bunch of issues, right?

It goes back to previous comments. Significant percentages of these funds do oftentimes make their way to indigenous communities, but the gap is so large and, as you mentioned, if you don't make a meaningful change in the housing stock and the infrastructure that supports it, what happens is that you end up just patching over holes. You're spending all of your resources and all of your capacity basically trying to prevent the problem from getting worse instead of fixing it, and that's the challenge.

From a self-government standpoint, what we would say is that we need a strategy that specifically targets self-governing communities, because, as I said, we have a very different legal context from reserve communities. We often have jurisdiction that extends beyond just our treaty lands and covers our citizens throughout a far broader geographic area. For example, in Yukon, most jurisdiction is for citizens wherever they are in Yukon territory, not just within the community or within treaty lands.

We've started to see some success in working with Crown-Indigenous Relations to collaboratively develop solutions, and I think when it comes.... I can't speak to what the answer is for the on-reserve communities and non-self-governing urban nations, but for the nations that we're working with, I think we need a specific strategy that's collaboratively developed with Canada and the various departments and parties.

[The Chair, Liberal, Wayne Easter]

Thank you all.

We'll go on to Mr. Falk, followed by Mr. Fragiskatos.

[Ted Falk, Conservative, Provencher, MB]

Thank you, Mr. Chair.

Thank you to all of our witnesses for coming to committee again.

Mr. Kershaw, I'd like to begin with you. I'm looking at the executive summary in your project charter, and there you talk about the playing field being inequitable and uneven.

Can you tell me what you mean by “inequitable”?

[Dr. Paul Kershaw]

There are a few ways in which the inequitable theme plays out. On the one hand, a range of public policies subsidize homeowners to accumulate wealth, and we don't have the associated corresponding subsidies for renters. That is an inequality in society.

The degree to which we have been recognizing that home prices have been leaving earnings behind and that we've been slow to address that it's a concern or a problem reflects an inequity. We're not keen to tell people who've made gains in their homes that we might want to slow that down because it's hurting their kids and grandchildren. That would be another kind of problem.

Of course, these intergenerational tensions and tensions between owners and renters also intersect with a range of other power dynamics related to class, race, newcomer status, gender and so on. Again, that would be another range of inequalities.

[Ted Falk, Conservative, Provencher, MB]

I often have discussions with my kids, and I'm always perplexed that they have this assumption that when they leave my home and are no longer under my roof, for some odd reason they can maintain the same lifestyle that I've accustomed them to after being in the workforce for 40 years and accumulating a degree of wealth and income.