Thank you, Mr. Chair.
Thank you for the invitation to speak to this committee once again on behalf of Canada Mortgage and Housing Corporation.
CMHC is pleased to offer the committee its trusted expertise, experience and knowledge on the housing market.
As this committee certainly knows, Canadians are struggling to pay their mortgages or rents. Housing prices have been escalating for some time. Now, inflation, higher interest rates and record levels of household debt are making matters worse.
More potential homebuyers are staying in the rental market. This has led to extremely low vacancy rates in most cities and towns and, as a result, a significant rise in rents.
There are many factors leading to Canada's housing affordability challenges. But the single biggest factor is a severe housing shortage.
Right now, we have a shortage of about two million homes across Canada. Basic economics of supply and demand are coming into play here and are driving the house prices and rents higher. Our studies show that to reach affordability by 2030, we need an additional three and a half million more homes than we are currently on track to build. Building that many homes would cost at least a trillion dollars. That's more than governments could ever hope to spend.
Yes, the federal government can continue to play a major role in supporting more community or social housing for low-income Canadians. However, we need private sector capital, so governments need to create the conditions necessary to attract that investment into housing.
There are some federal programs in place to incentivize this. For example, the rental construction financing initiative provides low-interest loans for developers at the early stages of the project. New measures like the housing accelerator fund, the new GST exemption for the construction of purpose-built rentals and the unlocking of new financing for this through the Canada mortgage bonds program are examples of such initiatives.
Still, we need to do much more, and we must do it in collaboration with the private sector, which currently provides more than 96% of rental housing in Canada. There are certainly challenges faced by some renter households, such as renovictions and security of tenure. We can't minimize these or suggest that they're just the cost of doing business; they aren't. Every one of those cases is a personal crisis for a real household.
These are all symptoms of a larger problem of supply shortage. What we truly need is for all levels of government to come together around a policy framework, one that encourages the private sector to produce the right kind of supply while also respecting tenants' concerns and best interests. These policies also need to address other barriers to supply. For example, they can encourage the construction sector to innovate better building techniques, to make supply chains more reliable and to address labour shortages in the trades.
As many people have said, housing affordability is a complex problem. Targeting the investors who provide the overwhelming majority of the housing stock in Canada is not a solution; rather, we need a comprehensive and coordinated effort that combines private investment, social responsibility and government solutions. The perfect storm of these three elements can bring about transformative change and improve housing affordability for everyone living in Canada, now and in the future.
Now I would be happy to answer any questions from the committee.