Finance Committee on Nov. 6th, 2023

[Ron Butler]

Sure. You're looking at 100,000 units immediately, at least. This would come on stream within the course of one year.

Let's face it. If you can't make money on your short-term Airbnb, you're going to find a way to get out of it. They will come on the market just that quickly.

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

Do you have a sense of what that might do to prices in the market, if you had that much inventory come on the market at one time?

[Ron Butler]

The fear of it is actually causing reductions in Toronto pricing right now, as we speak. The prices of very tiny condos have started to drop as people unload them because their belief is there will be further restrictions on Airbnb. The City of Toronto developed restrictions, and the response to that has been the sale of these units. As we've observed in the last six months, the prices of those microunits have come down steadily.

This is a very immediate and very effective tool that can be used.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Blaikie.

Witnesses and members, we are moving into our second round of questions. The timing is a bit different in this round.

We're starting with MP Lawrence for five minutes, please.

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

Thank you.

I'd like to start by sharing my time with Jasraj Singh Hallan.

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

Mr. Chair, I just wanted to put a motion on notice.

We know that after eight years of this Liberal Prime Minister, Canada has a cost-of-living crisis. Life is more unaffordable than ever before.

Given that the Governor of the Bank of Canada confirmed that the carbon tax is inflationary.... We know what makes food more expensive. If you tax the farmer who makes the food and you tax the trucker who ships the food, ultimately the person who buys the food gets that tax passed on to them. We also know that it makes the cost of gas and home heating more expensive.

The Prime Minister just did a massive flip-flop, giving 3% of Canadians a pause on the carbon tax on home heating in Atlantic Canada, where his poll numbers were tanking.

Given that, I want to put this motion on notice:

That the committee immediately undertake a five-meeting review of the federal carbon tax and its impact on affordability; and that the committee invite the Minister of Finance to appear on this matter.

Thank you.

I'll turn my time back over.

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

Thank you.

I'm going to start my questions with Ms. Keesmaat.

We had the Governor of the Bank of Canada. We've also heard other testimony that the fiscal policy of this Liberal government is driving up inflation.

We also heard that the carbon tax, as my colleague just mentioned with the motion, is driving up inflation. Actually, a third of inflation above target he attributed directly to the impact of the carbon tax.

If we were to get back on target and bring inflation back down to 2%, and if interest rates were to return to what they were prepandemic—let's say to 2% as the bank rate—would that help you build more affordable housing?

[Jennifer Keesmaat]

Through the chair, yes, absolutely. Many of the projects that are currently on hold are on hold precisely because of inflation and the cost of borrowing. Undoubtedly, those projects would be viable once again if inflation were reduced.

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

Thank you very much.

I'm going to ask some questions of Ms. Toor as well.

You began your discussion talking about the lack of supply and taxes, and then you had some recommendations.

I want to ask the same question that Mr. Chambers asked of Mr. Butler. If we were able to allow electronic verification—for example, having the CRA verify, with the permission of the taxpayer—would that be helpful to you?

[Jasmine Toor]

Certainly, it would be. That is actually one of the requests that we submitted in our pre-budget submission to this committee.

We are in discussions with the Canada Revenue Agency. To my understanding, the department is already working on a solution that we would support across the industry. Interestingly, the Office of the Superintendent of Financial Institutions recently indicated its support for independent income verification, as well, on mortgage applications.

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

Thank you.

Because you brought up the regulators, are you finding that the regulators are working together and making it easy or cohesive, or do you see any issues with the regulation in the mortgage industry?

[Jasmine Toor]

I would say that, at least at the federal level, the regulators speak to one another on a regular basis.

Currently we are aware that the Competition Bureau is doing a study on the stress test and the impact on transfers, switches and renewals. We have also been in touch with the Competition Bureau and OSFI on this matter. Interestingly, they recently clarified, in a publication on October 16, that for insured mortgages, the stress test is not required for transfers, switches and renewals. As Mr. Butler mentioned, we'd like to see the same for homeowners in the uninsured space.

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

Thank you for that. That was exactly my next question. You answered two questions in one, so that's great.

[The Chair, Liberal, Peter Fonseca]

That's your time.

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

Okay, that's fine.

Thank you very much to the witnesses.

I really appreciate all your testimony.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Lawrence. We were just coming up to the end of your time.

We'll go over to MP Weiler, please, for five minutes.

[Patrick Weiler, Liberal, West Vancouver—Sunshine Coast—Sea to Sky Country, BC]

Mr. Chair, I think PS Bendayan will be taking the slot.

[The Chair, Liberal, Peter Fonseca]

PS Bendayan.

[Rachel Bendayan, Liberal, Outremont, QC]

Thank you very much, Mr. Chair.

Thanks to my colleague Mr. Weiler.

I have a few questions for the representatives of the Union des municipalités du Québec.

Ladies, welcome to the committee.

Thank you for being here and for the information you've already given us.

I would have liked to hear what you had to say about Mr. Fraser's recent announcement about the agreement reached with Quebec regarding the housing accelerator fund.

We're obviously eager to know the details of that agreement.

Do you already have any comments on the $900 million transfer and how useful it will be for housing construction in Quebec?

[Catherine Fournier]

Thank you very much.

Yes, as I said at the start of our remarks, it's obviously excellent news that an agreement has been reached between the federal and Quebec governments. The amounts were much anticipated by the municipalities, and we hope they'll help us complete a lot of projects. It definitely proves that this is a successful collaboration.

We would note that, when programs are flexible and discussions between the two levels of government are effective, that has a direct impact on the communities we represent.

[Rachel Bendayan, Liberal, Outremont, QC]

Thank you very much, Ms. Fournier.

You said in your statement that approximately 4,500 social housing units have to be built in Quebec every year. Is that the desired number per year?

[Catherine Fournier]

Absolutely, it's per year.

[Rachel Bendayan, Liberal, Outremont, QC]

Last Friday, the minister responsible for Habitation du Québec and I went to the CAP Saint‑Barnabé centre, where we toured some new social housing units intended for homeless persons.

Do you know the number of social housing units or affordable units in Quebec?

Where do we stand?

[Catherine Fournier]

We would need 4,500 social housing units and 12,400 affordable units to meet the annual demand. That's the minimum. We would obviously like a large number of those units to be set aside for people emerging from homelessness or who are at risk of becoming homeless.

[Rachel Bendayan, Liberal, Outremont, QC]

As regards land purchases, I understood that this request came from both the municipalities and the Quebec government. Our programs make it possible to buy land using federal government money.

Do you have any recommendations or comments regarding the way land purchases work?