Thank you very much, Mr. Chair.
For the residential construction sector, building back better is something we do every day. As we look towards recovery from COVID, several things are clear. A home is more important than ever to Canadians, and we've seen that through the extensive activity in renovations, new construction, DIY activity and home resales. Through these challenging times, Canadians have looked to their homes to be their workplaces, classrooms, gyms, places to relax, and hopefully, for most, places to feel safe.
New construction and renovation are providing much-needed jobs and economic activity during economic recovery.
When we talk about housing these days, though, of course affordability is top of mind, both in the cost of housing and in the cost of materials, particularly lumber, and more supply is the key to both. Starting with affordability, a housing supply lens is required to truly address escalating prices. This was clear prior to COVID, and the pandemic has accentuated that further. There is much that can be done through concerted efforts of all levels of government to increase supply, and there are important leadership levers available to the federal government to help make that happen.
At the same time, while it may be tempting to try to cool the market with demand-side measures, such activity only creates pent-up demand and limits supply. Band-aid demand-side measures cause rapidly increasing house prices when conditions change and demand outstrips supply again, as we are seeing right now. The use of blanket macroprudential or policy changes that could further disproportionately affect first-time buyers in the absence of sufficient action on new housing supply will only exacerbate the problem.
As OSFI considers changes for uninsured mortgages, it is important that consideration of any such changes by the Department of Finance to the insured mortgage stress test be approached with caution. First-time buyers who are extremely well positioned financially and are very low risk would be locked out through such measures, further building up demand and crowding the rental stock.