Finance Committee on Sept. 21st, 2023

[Véronique Laflamme]

Thank you for the question.

I didn't mention the federal surplus land initiative. Unfortunately, that initiative was also used mainly for private housing projects. So we can see the negative effect of not targeting investments enough to ensure that initiatives serve the non-profit sector first. Today, we heard a great deal about fiscal instruments used to encourage the private sector, but we mustn't forget that we're depriving ourselves of these public funds, which provide many tax advantages, and that private developers already enjoy them.

The Federal Land Initiative could also be improved. In Quebec, there are federal lands, notably in the Bridge-Bonaventure sector, that should be used for social housing, as requested by the community. So not only should this initiative be improved, but it should also be more targeted.

What do we mean by a "comprehensive, sustainable program"? It's a program that stands on its own. The federal government did this, prior to 1994, through programs targeting housing cooperatives, non-profit housing organizations and low-income housing. So, in our view, we need a program that stands on its own.

That said, a new co‑op program was announced two years ago in the budget. That program was welcomed. In fact, Quebec had said that the money could go into the Quebec program, which at the time was called AccèsLogis and provided funding for housing cooperatives. But in the end, we heard nothing more about the project. The program has yet to materialize. The federal government must have a greater sense of urgency, so that budget announcements come to fruition more quickly, even if that means setting up programs. The sector must be consulted, as it has proposals to offer.

I hope that answers your question, Mr. Ste‑Marie.

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

Thank you so much.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Ste-Marie.

MP Blaikie, you have two and a half minutes.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Thank you very much, Mr. Chair.

I want to start by thanking all our witnesses. I do think it's been a very productive conversation. It's the kind of conversation that I think we would do well to have more often around this table. I apologize, because I think the next item of business will probably take up what remaining time we have.

There was some discussion in the summer about how the committee should structure its work over the fall. To that effect, I gave notice of a motion a couple of days ago that I'd now like to move, Mr. Chair.

The motion reads as follows:

That the committee recognize and express its concern at the fact that consumer and business insolvencies are on the rise in Canada, as well as the fact that two-thirds of mortgage holders are having trouble meeting their financial commitments, including the nearly 40% of mortgage holders that are borrowing just to pay for daily expenses; and that the committee undertake a study of the public policy decisions and market forces that have led to steep increases in the cost of buying or renting a home in Canada, including but not limited to the acquisition of buildings with affordable units by large corporate or institutional investors mandated to maximize shareholder profit; the acquisition of residential properties for the purpose of running a short-term rental business; the acquisition of multiple residential properties for the generation of passive income; the tax treatment afforded to entities that buy, sell or lease residential properties; the rules governing the provision of mortgages for the purchase of residential properties in Canada; the terms and conditions of Canada Mortgage and Housing Corporation mortgage insurance and the funding of new social and affordable housing by governments in Canada; and that the committee dedicate its regular meetings on September 25, October 2, October 16, October 23, October 30 and November 6, 2023, to witness testimony on this study, as well as any other meetings the committee deems necessary; and that the committee include evidence from its March 23, 2023, meeting on “Inflation in the Current Canadian Economy” and its June 15, 2023, meeting on “Impact of Inflation and Interest Rates on Mortgages in Canada” in the evidence for this study; and that the list of witnesses for this study include, but not be limited to, the Governor of the Bank of Canada; the chief executive officers of Canada’s largest commercial banks; the superintendent of financial institutions; the federal housing advocate; the Canadian Federation of Municipalities; the Canadian Alliance to End Homelessness; the Minister of Housing, Infrastructure and Communities and the Minister of Finance; and that the committee report its findings to the House no later than February 9, 2024; and that the committee dedicate its regular meetings on September 28, October 5, October 19, October 26 and November 2, 2023, to witness testimony for pre-budget consultation; and that the balance of the committee’s regular meetings from November 9 to December 14, 2023, inclusive be used to examine legislation, prepare a report for the committee’s pre-budget consultation and prepare a report for the study initiated by this motion.

That motion having been moved, I'll just say that we did have some discussion this summer about the importance of what's happening in the housing market and the significance of the financial squeeze Canadians find themselves in, for all sorts of reasons, including higher interest rates and the effect they have had on mortgage payments. I think this committee has an important role to play, given the nature of a lot of public policy that comes out of the Department of Finance and influences the housing market.

I know that some members might wonder at particular dates or want to change some of the specific dates. I'm not closed to those ideas, but I do think it's important that we report out on this issue by February so that this committee's recommendations—I hope we will find our way to some recommendations in common and I expect we will—can feed into the budget process for 2024. I think that if we were to put off reporting our findings past the beginning of February, we may well do a great report, and it might even be better than it would be if it were issued at the beginning of February, but it would not be timely.

I think it's important that we.... There are always a lot of demands at this committee table. I know that we have some open studies. I really think there's an opportunity here to pronounce on the issue of housing and to try to provide some meaningful direction in terms of policy. We shouldn't waste that opportunity.

I would also say that not only should we adopt this study but that we should also be disciplined in our work. We've had a lot of extra meetings and a lot of extra time around this table that I would say that has produced very little value for Canadians. I think we should undertake this study. I think we should work hard on our pre-budget consultation and on making sure we have a timely report for the first time in a long time on that front as well. That should really be the focus of our work this fall.

If we do it well and if we don't needlessly delay the examination of other items, like the legislation that may come before this committee, I'm optimistic that we can make a valuable contribution to the policy debate around housing, that we can do a proper job of our pre-budget consultation and that we can do our duty in respect to the legislation that's sent here for examination by the House.

Thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Blaikie.

I do have a running list of those who would like to speak to your motion. I have MP Hallan and MP Dzerowicz.

Just before MP Hallan speaks, I would like to say in regard to the dates that I did ask the clerks about Monday, because they need the time to secure witnesses for our PBC, our pre-budget consultations. We'll be doing PBC on Monday, the 25th.

Did you want to say something about that?

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Yes. Maybe what we could do, then, Mr. Chair, in light of that, if we have the unanimous consent of the committee, is switch the placement of September 25 and September 28, which would make Monday a PBC day and Thursday a housing study day. If we could do that by unanimous consent, then we could address that issue right off the top.

[The Chair, Liberal, Peter Fonseca]

Okay. I see a thumbs-up for that. I do see all thumbs up. That's great. We do have UC.

I have MP Ste-Marie.

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

Point of order, Mr. Chair.

Can we excuse the witnesses, since we're now discussing upcoming committee business?

[The Chair, Liberal, Peter Fonseca]

Yes. That's a good point, MP Ste-Marie. I think they're very interested in what we're talking about, but yes, the witnesses are free to go.

Thank you very much.

We want to thank our witnesses for the amazing testimony. You gave us a lot of food for thought in terms of housing and in terms of many of the other issues that we are dealing with. It will inform our pre-budget consultation and the report, as you heard MP Blaikie say, that hopefully we will get out by the end of this year.

Thank you.

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

They might have suggestions for some agendas.

[Voices]

Oh, oh!

[The Chair, Liberal, Peter Fonseca]

We'll go to MP Hallan and then MP Dzerowicz.

Is there anybody else? Please raise your hand if you would like to get on the list.

[Jasraj Singh Hallan, Conservative, Calgary Forest Lawn, AB]

Thank you, Chair.

I also would like to take this opportunity to welcome all the new members to the committee and to welcome back all the old ones.

Thank you to Mr. Blaikie for bringing this forward. I think it's well in line with the mortgage study that I had wanted to get started as well. Given the risk of a mortgage default crisis in Canada, according to the IMF, and a serious risk of even negative amortizations, I think this is a very important study right now, and very timely.

I want to suggest two things with this study. One is that because of the crisis we're in right now, I don't know if we can have as many witnesses within the dates given. I would propose that we extend the dates to November 20, November 27, December 4 and December 11. In our discussions, Mr. Blaikie wanted to make sure we had a report at least before the next budget. I think that still gives enough time to the clerks, given their okay that they could have something ready for us, to at least get a report ready by then.

I also want to see if we could add to the witnesses included here. I know the motion says “not limited to”, but I would add the CMHC, the Canadian Real Estate Association, others in the real estate industry and, although I know the motion says “banks”, any other related people who can talk about some of the real risks in mortgages today.

Those are the things that I would like to propose. I don't have anything fully prepared in writing. Those would just be added through a friendly amendment.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Hallan.

I have MP Dzerowicz on the list next.

MP Bendayan, you have a point of order.

[Rachel Bendayan, Liberal, Outremont, QC]

I simply wanted to know whether we would receive these amendments in writing.

[The Chair, Liberal, Peter Fonseca]

I believe they are not in writing.

[Jasraj Singh Hallan, Conservative, Calgary Forest Lawn, AB]

I can get them in writing.

[The Chair, Liberal, Peter Fonseca]

Okay.

We'll go to MP Dzerowicz, who's on my list, and then MP Lawrence.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you so much, Mr. Chair.

Thank you to Mr. Blaikie, who sits very close to me in the House. I'm sure we're going to have many discussions on this in the near future.

Look, housing is a huge issue. I know that anything we could do to address this issue would be appreciated by the residents of my riding of Davenport as well as all Canadians.

The focus for me, Mr. Blaikie, is that this is largely on the financialization of the housing market, which is fine. We need to get to the bottom of what's happening here. What do we need to change? What do we encourage and what do we discourage? I wholeheartedly agree with the study. I don't have an issue.

We might want to leave it up to the clerk to determine the dates. I think October 2 is a statutory holiday because of truth and reconciliation. On October 30 we have the bank governor. I would love to see an even balance between our pre-budget consultations and this study. I don't have all the dates right now, but I wanted to point that out to you.

I would also say to you, and I would like this on the record, that I have met with a number of non-profits in my riding that have been trying to build deeply affordable housing, not only within my riding but also across Toronto, and every single one has literally come up with a list: Here's what's stopping us at the city level, here's what's stopping us at the provincial level and here's what's stopping us at the federal level. Literally, I'm starting to come with that list, so my only comment around it is this: If it's only limited to federal agencies, which I know we have the authority to be able to change, we might want to have some provincial or municipal representation whereby people can speak to that as well. We can incentivize as well what happens at the municipal and provincial levels as we are moving forward, whether it's on regulations or on law.

I just wanted to make sure we articulated that. That came across very clearly over the summer. It was very useful information for me.

Thank you so much, Mr. Chair.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Dzerowicz.

I have MP Lawrence next, but I just got a note from our other clerk that we're coming up to a hard stop here....

We've been able to secure another 15 minutes.

I have MP Lawrence and then MP Blaikie.

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

I'm going to provide you with a rebuttal of my argument before I give it.

[Voices]

Oh, oh!

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

In Mr. Blaikie's motion, it says “including but not limited to” in discussing potential areas with respect to housing. The one thing that I would like to see specifically added, and I think it's actually very similar to what Ms. Dzerowicz was talking about as well, is that we include here explicitly that we are going to review and study barriers to the construction of new homes, or barriers to the creation of new supply, regardless of government level.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Lawrence.

We'll go to MP Blaikie and then PS Bendayan.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

I would thank Phil for offering such an excellent rebuttal to his own argument, but I think “rebuttal” is not quite the word, because it implies that there's a difference in opinion or that there's some kind of antagonism, when there simply isn't.

The reason I said “not limited to” is exactly because it's hard to come up with a comprehensive list. I think today was a good example.

When you start getting experts in, if we're not listening to just ourselves at this table, which I would say we have too often done, new things come up and we learn things, and then we find out that not all of our preconceptions are true or that there are other things that we left out in our analysis. It's very deliberately constructed to allow us some flexibility as new issues come up or to be able to pursue existing issues as they are articulated.

To Ms. Dzerowicz's points, I hear you, and that's why it's not a limited witness list. We should think about who else we want to invite. However, notwithstanding Ms. Bendayan's point about some of these dates, the idea was to have enough dates that we have room for extra witnesses and to get input from the committee on who those witnesses should be.

I will note that the Federation of Canadian Municipalities is one of the named witnesses. That's exactly because I recognize that municipalities have an important role to play and that sometimes barriers to being able to create more supply happen at the municipal level. I think that is also Phil's point.

What I want to say is that I think, even as it's written, there is room for all these things.

Given that we're up against some time constraints, if the committee knows it wants to proceed with the study, my suggestion would be to pass it today, because that empowers our clerk to be able to start going after some of the witnesses and scheduling them. If we then want to formally amend the study motion to include some of these things or if we find that we're able to work it out at the operational level, it's all the same to me, but I would say let's pass it today. That empowers our clerk to be able to get our work together for us and bring people together.

I certainly hope that this won't be the last time we discuss how to proceed with this study, who we should hear from and what the important issues are.