Finance Committee on Oct. 12th, 2023

[Paul MacLean]

Trent covered the question well. While, initially, we were very much export-focused for our project, we're also working with companies in Nova Scotia to help develop a hydrogen economy here at home. It's not only an environmental benefit for us as a company; there's also an economic benefit.

The more hydrogen we don't have to convert to ammonia and ship abroad, the greater the economics for us.

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

You said so in your presentation, but I thank you very much.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Ste-Marie.

Now we go to MP Blaikie for six minutes.

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

Thank you very much.

Certainly, one of the messages we've heard for a while now—really, since the announcement—is that there is a need for government to develop the regulations that will explain to folks exactly how they're going to work, so they can incorporate those important details into their business model and see what's possible.

I'm curious to know from you, Ms. Paul, the mechanics of the exclusion of indigenous organizations from that tax credit. Do you think that's something that might be able to be fixed in that regulatory process? How exactly do you imagine that solution unfolding?

That's a specific mechanical question, and then there's a larger question of how ensuring that the government performs that work and includes indigenous organizations is important for economic reconciliation.

If you would like to take some time to give the committee some more insight into that, I would be grateful for it.

[Rose Paul]

Definitely, having active players in industry and really utilizing the investment tax credits for first nations.... We are taxpayers, but we are not fulfilled the same way with our equitable or equal opportunities. We could be in major projects such as this.

My first nation, Paqtnkek Mi’kmaw Nation, and Bayside Corporate have developed a lot of procedures, policies and frameworks that support us in having tax power in our first nation and actually exercising and utilizing it in our jurisdiction. We have already developed a framework whereby we feel the government could support and further advance this opportunity for us to participate in this world economy of green hydrogen ammonia and work together as a team.

When we look at the tax incentive plan, it's very vague on the indigenous participation in how these are going to be applied in Canada. My question is why. Why is it not exclusive, or why isn't it more exclusive to first nations, especially where the first nations are very proactive in that area?

To your question, Mr. Blaikie, that would be something I would really like to see the House of Commons review. We are ready for business. We are equity owners. We are open for partnerships. These are all key elements of what we're trying to achieve in economic development for our nation and being able to exercise energy sovereignty for Paqtnkek.

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

Thank you very much.

Mr. Kabalen, we've talked about the importance of building new housing, but one of the other things that have been going on in Canada for some time has been the loss of existing affordable units. I wonder if you're experiencing that here in Nova Scotia, and if you could explain a little about the impact of losing existing affordable and social housing.

Actually, sometimes I think it's happening more with the social housing, particularly after the expiration of operating grants that were tied to 40- and 50-year mortgages.

[Michael Kabalen]

In Nova Scotia, the provincial government is committing to maintain what they call their “baseline” of 11,200 units. They're building more public housing for the first time in a long time.

It's still a small investment relative to what's needed, but the NOAH, the naturally occurring affordable housing, is disappearing at a rate...and that's probably what a lot of the students are experiencing. A lot of the housing down around the universities is also in the most attractive service core, and that's right across the province and in other towns outside of Halifax as well. We're seeing that disappear to higher-end development, so those sites are off-line for a period. That's initially impacted. From a supply perspective, if you're a free market economist, eventually you'll have more housing responding, but it likely won't be leased to students. It won't be attainable for students from a price perspective.

I think the things that Dr. Summerby-Murray was speaking about around student housing and the strategy are necessary. I think the universities are going to want to take care of their own, but the naturally occurring stuff in other regions is also kind of.... I don't want to say it's under attack, but there's nothing to support our retaining it, and I talked about the community-led initiatives and things that don't cost money, as Mr. Blois said. It takes a long time for federal dollars to flow to not-for-profits through CMHC.

That's not meant to criticize the good people who work there. The process is the underwriting that's required. It doesn't take as long for Reaching Home dollars to get out the door to resolve and respond to homelessness, so one thing we would advocate is that if the federal government is looking to promote more investment in not-for-profit housing, let's duplicate what has been successful with Reaching Home and put those dollars in communities.

Let communities decide where they want to invest to buy things like the naturally occurring affordable housing, because we don't have what the private sector has. We don't have equity, or if we do, it's encumbered. It's limited by the previous existing programs. I can't mortgage an old building to go and buy another old one that I can keep. The provincial program requires a 20% down payment even if it will write the mortgage up to $10 million. There is no federal program that exists today that allows us to purchase those, so for coinvestment and a lot of the financing programs that exist, if we could make those community led, that would be better.

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

Very quickly, because I know I'm running out of time here, one of the things in the national conversation is about a non-profit acquisition fund to try to create ready access to capital for non-profits that want to preserve existing affordable...or buildings with affordable units when they go on the market. Do you think that's something that would have application here in the Nova Scotia context?

[Michael Kabalen]

If I have to wait seven months for the loan from CMHC, like I do for coinvestment, it will be ineffective. It needs to be community led. Give the money to organizations like ours to go out and purchase the buildings ourselves, as opposed to my bringing you the building and then your taking seven months to decide if we can buy it or not.

Yes, it's needed, but it needs to be different from how the current programs are structured.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Blaikie.

Witnesses and members, we're moving into our second round. We are starting with MP Duncan.

You have five minutes.

[Eric Duncan, Conservative, Stormont—Dundas—South Glengarry, ON]

Thank you, Mr. Chair, and thank you to our witnesses who are here today.

As a Carleton University alumnus, I feel outnumbered here this morning. Nevertheless, I will try to proceed to maximize my time here.

I want to pick up on what you said there, Mr. Kabalen, about the CMHC. Please be harsh on them. They deserve that, I think, frankly, for the service standards that we have seen from them in the last couple of years. We hear endlessly about where there are dollars here for programs, and they're flowing through either not at all or not in a timely manner.

I'll go to Dr. Summerby-Murray. I take the point on affordable housing. I appreciate the suggestion on the expansion of eligibility.

The other part, I think, builds on exactly what needs to be repeated by partners over and over again, and I'll go to that fund you specifically mentioned on the housing accelerator fund. That was announced in December 2021 to accelerate housing being built in every part of this country. Not one single unit has been completed in this country, two years later.

I've always said as well, on advocacy, that it's A for an announcement about programs all the time, and availability and funds, and then an F for follow-through, for actually going through. Eligibility is a problem, but it's the actual follow-through. You could do the same thing for converting federal buildings. There has been a commitment for the past eight years to convert some of the 37,000 federal buildings we have, with 6 million square metres of space and land available. We asked the question: In the last eight years, how many have been converted and new homes built as part of that priority? It's 13. It's not 13 in Halifax or 13 in Nova Scotia. It's 13 in the entire country over eight years. Again, I think the delivering aspect of this is equally important on a lot of these programs.

Could I ask this on trying to quantify some of the numbers? You've mentioned the percentage of units that are available on campus or by the university. Are you trying now to follow up to quantify the number of people who are in precarious housing and perhaps what they're actually paying? I believe that students are probably paying even more than the average doubling of rent in this crunch situation that we have. Are you going to be providing any data or looking at that data in the network that you have?

[Dr. Robert Summerby-Murray]

We are certainly pulling that together across the region. I know that in the Halifax data we are seeing that. There are quick surveys of students that are being undertaken by Students Nova Scotia here in the province. Dalhousie University is in the middle of a survey process. We are pulling that data together. I think that your assessment is probably correct—that the almost doubling of rates has had a tremendous impact.

I want to pick up on a point that my colleague Michael Kabalen made, and that is the relationship between university housing and the rest of the housing stock. Our goal is to ensure that universities are providing solutions for housing for students, yes, but that by doing so we take the pressure off the, as you put it, naturally occurring affordable housing in our region. We see a partnership there to deliver.

I think the point on speed is vitally important as well. That's why eligibility for programs is important for us, but so is partnership. We will be working increasingly with the private development industry to access funding to support affordability. We see it as a partnership that's emerging at multiple levels of government and in the private development industry.

[Eric Duncan, Conservative, Stormont—Dundas—South Glengarry, ON]

With regard to statistics and numbers, I also think about the story from CBC Nova Scotia about the university food bank and the demand. The article was published just less than a month ago. It was overwhelming. Fifteen volunteers couldn't keep up with the demand a few days into the school year. There are statistics there as well. You mentioned needing partners. Obviously, it's a volume.... Hearing that students are having to ration their food is depressing—the interviews and the context that many students are facing, having to ration food themselves. Now even the university food bank has to do the same thing.

Do you have data you can share with the committee in terms of the increase of usage, the volume of usage, and perhaps even things like the number of international students or the percentage versus Canadian students, so that we can get a better idea?

Is there any comment that you might have at a high level or that you could provide to us?

[Dr. Robert Summerby-Murray]

Yes. I'll answer very quickly.

I don't have that data with me, except to say that more than 50% of the usage of the food bank at Saint Mary's University is by international students. I can get a more detailed number to follow.

Certainly, we also partner with other organizations. We do research work, working with Feed Nova Scotia, for example, to focus in on where the food insecurities lie in the province. We're doing that, on the one hand, from a self-interested perspective—to know more, as you are suggesting—and also to see what the solutions are for our region and for our city, etc.

[Eric Duncan, Conservative, Stormont—Dundas—South Glengarry, ON]

If that could be tabled through the committee or whatever, that would be great to have, so that we can follow up. It would be good to have those numbers.

[The Chair, Liberal, Peter Fonseca]

Thank you.

Now we're going to MP Diab, please.

[Lena Metlege Diab, Liberal, Halifax West, NS]

Thank you very much, Mr. Chair.

I just want to thank very much the panellists who are with us today. You are all truly economic drivers here in Nova Scotia and in Atlantic Canada. Thank you very much. We really do have a diverse panel this morning.

I know that my colleague Kody Blois asked quite a bit about EverWind and Bear Head. Certainly, both of you have presented to us at one point or another. Keep doing what you're doing, and we want to thank you.

Certainly, for you, Madam Paul, and the Bayside Development Corporation, Membertou First Nation in Unama'ki, Cape Breton, is really the role model for all first nations to follow in Canada and throughout. Thank you very much to Chief Paul for everything he's done, and thank you for everything that your group is doing across our province on economics and also on reconciliation. The two go hand in hand. I don't think you can have one without the other.

I want to speak about housing. I think my colleagues have done a pretty good job around the table. However, with regard to housing, obviously, the international student side is one that.... When I was a minister in Nova Scotia for eight years, certainly international students and immigration.... You're right; we've come a long way in the last 10 years. We are facing challenges just like everywhere in the country and, I would say, everywhere in the world. We are here to figure out what we can do.

Thank you to the finance committee for coming to Atlantic Canada and specifically here—Halifax, Nova Scotia—to hear from our community first-hand.

Mr. Kabalen, I know you've been involved in housing and in development in many ways. It is a passion of yours. I know there were a few more things that you—certainly as the executive director now—wanted to share with us on numbers and on housing. What else can we do that you have not yet been able to tell this committee about? What can we as a federal government do, obviously also collaborating with other levels of government, your group, developers and anyone else who can help us deliver on housing?

[Michael Kabalen]

First of all, the reason I spent most of my remarks talking about Reaching Home or the homelessness strategy is that this is community led. The federal government identifies organizations across the country and gives them a block of funding to respond to the crisis of homelessness.

I would suggest that we do the same to facilitate not-for-profits in rapidly developing affordable housing that can stay that way forever. You pay for it once with us and then you're done. We're not coming back every time for additional subsidies. It's not a set term, like the other agreements that exist with the private sector. When a coinvestment loan expires with a private developer, after 10 or 20 years they can up the rent. We're not interested in doing that. We want to maintain forever affordable housing. Our challenges are that we don't have the capital; we rely on the government programs, and the timelines are too long. They'll always be too long when we're competing with the private sector for the same opportunities and they want to demolish the naturally occurring affordable housing or build higher-end or more expensive housing.

We're losing our competitive advantage. We didn't pay HST for a long time. It's great that the federal government...and the provincial government in Nova Scotia followed and extended that to the private sector. However, it's another loss for the not-for-profit sector. We've never paid the HST. We could compete with the private sector and use that as our equity, in a sense.

I think the new competitive advantage needs to be unencumbered capital and more grants in the coinvestment program as opposed to loans in the coinvestment program. I would design it as we've designed Reaching Home, which, as we've demonstrated, is successful. If you were to give us a block of funding, we could go out and buy buildings with that block of funding. Those programs are well overseen by good civil servants at Infrastructure Canada. They're smart. They know what they're doing. They don't have to mitigate the same risks that the civil servants at CMHC do, because they're taking that risk themselves.

I think there's an opportunity there to create more community-led initiatives around affordable housing supply and affordable housing investment by the not-for-profit sector. That would be one thing to take away that would actually cost you less, probably, because you wouldn't need all the underwriters to oversee these deals.

[The Chair, Liberal, Peter Fonseca]

That is the time, MP Diab. It goes very quickly, but there will be another round after this.

We're off to the Bloc and MP Ste-Marie, please.

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

Mr. Summerby-Murray, you talked about the obstacles associated with the Department of Immigration, Refugees and Citizenship. I think all my colleagues experience all kinds of difficulties when it comes to representing their constituents when it comes to this department. Quebec universities and colleges have talked about the systematic rejection of French-speaking African students. We've reported that.

I'd like you to tell us more about the hassles associated with the department. From your point of view, does it lack resources, organization or will?

[Dr. Robert Summerby-Murray]

Thank you for your question.

Yes, the challenges of study permit processing and concerns about disproportionate success rates were certainly highlighted in the House of Commons report last year, as were the particular challenges for students applying from the Francophonie, with the therefore particular negative impacts on universities in Quebec. I think that is important to recognize.

Some of those same challenges exist in other jurisdictions, and I would suggest also here in Nova Scotia. It's not only because our universities recruit heavily from the Francophonie.... I'm speaking of colleagues at, for example, Université Sainte-Anne and Université de Moncton. Those challenges are here in our region as well.

We appreciate very much the importance of the House of Commons reporting on that and also the steadfast response of the then minister that these issues need to be addressed. I believe 32 or 34 recommendations were accepted. I would suggest that it is the responsibility of the federal government going forward to continue to address those. That includes the need for more resources and study permit processing. We are seeing some of that. It also includes the importance of working with institutions across Canada, in what is being described at the moment as a “trusted partner” or “trusted institution” model, to ensure that all those parameters are in place to support international students globally.

Again, to your earlier point, this is something that affects all our universities and is part of ensuring greater competitiveness of our universities across Canada, including Quebec and francophone universities.

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

Thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you, Monsieur Ste-Marie.

Now we'll go to MP Blaikie.

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

[Technical difficulty—Editor] and ask specifically about social housing. There's not a ton, actually, in the national housing strategy that provides for the creation of properly social housing, in which rent is calculated as a function of the tenant's income. I'm wondering whether you have some ideas about the best way for government to do that, whether it's through ongoing operating grant arrangements or through a larger infusion of granted capital at the beginning of the project to create room in the financing model for lower rents. I'm wondering whether you could talk a bit about developing social housing, the challenges and how government can best do it.

[Michael Kabalen]

The struggle with current social housing is that we haven't built much of it in a long time, so people see it as a cash suck, in a sense. It's expensive to maintain, and it always will be.

The federal government, under the rapid housing initiative, is essentially creating social housing. You have to have rent geared to income. That has been a strategy to create more of it.

Any construction has its problems. I think a lot of the delays in the rapid housing initiative are misconstrued. It takes time. You're dealing with multiple jurisdictions all at the same time to build stuff.

That was a good program to kick-start how the federal government could create forever rent-geared-to-income housing.

I wouldn't recommend, necessarily, that that's what we continue to build. First of all, if you had a piece of land where you could build all the supply you need for RGI or rent-geared-to-income housing—say that you need 6,000 units in Halifax—the outcomes for individuals who live in that community would be very poor if they're surrounded only by other rent-geared-to-income individuals. If you create mixed-market housing where some tenants are paying RGI, some are paying affordable rents and some are paying near-market rents, you actually have way better outcomes in that community, and you end the dependence on rent-geared-to-income housing generationally.

The challenge, though, is that government hasn't done a great job of managing the stock it has. That's not a Nova Scotia problem; that's a Canada problem. It's because you don't fix things. All of you in government don't really attack things until they become really expensive. That's why we advocate for the non-profit sector. We'll manage the housing with capital reserve. We have good governance with independent boards made up of volunteers who are committed to it, and we have professional property management that fixes things when the problems arise.

I would suggest that we make more investments in mixed-market housing. You'll add supply. You'll add sustainable financial housing. You'll also create capacity for rent-geared-to-income housing. It takes longer, but it will solve the problem more permanently as you invest in it.