Finance Committee on Nov. 6th, 2023

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

Thank you very much.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Ste‑Marie.

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

Am I to understand that I don't have time to ask another question?

[The Chair, Liberal, Peter Fonseca]

Yes. There is no more time.

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

All right, thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you.

We have MP Blaikie, please.

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

Thank you very much.

Ms. Farha from The Shift, we haven't talked yet today about a non-profit acquisition fund, but we have talked about the importance of access to capital. Of course, that's a big problem for non-profits.

I'm wondering if you could speak a bit to the question of what a non-profit acquisition fund could mean, both...well, I guess specifically for trying to arrest the loss of affordable and social housing.

[Leilani Farha]

Sure. Yes, an acquisition fund would be really important for non-profits in particular, especially those non-profits committed to providing actual affordable housing.

I just want to clarify what we're talking about here. There are about one million renter households in core housing need in this country. Their average earnings are about 25 grand a year: That means they can afford a rent, at 30% of their income, of approximately $550 a month, so there's affordable and then there's “affordable”. Non-profits have been playing that role. They cannot compete in this so-called market against the big buyers in this country.

There are conglomerates, big corporations, that have way more access to capital than do even smaller developers such as Ms. Keesmaat, for example. I'm sure she has come up against this, where it's difficult to compete against a big developer or a big real estate investment trust that has access to more capital.

Those acquisition funds and the right of first refusal for both city governments and not-for-profit corporations are super important and could lead to, yes, less loss of affordable housing, but also the creation of more affordable housing.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Blaikie.

Go ahead, MP Lawrence.

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

Thank you.

My next one is for Ms. Fournier.

We've heard testimony in this committee to the effect that the Liberal government's deficit and carbon tax have caused interest rates to rise.

Would a reversal of those policies resulting in lower interest rates help us build more affordable housing?

[Catherine Fournier]

I repeat, as I said at the start of today's meeting, that the promoters we work with in our municipalities definitely tell us that it's all about the numbers.

Interest rates of course have a major impact on project viability. That's why we're requesting more flexibility in CMHC programs and greater predictability for promoters.

That would enable the federal government to take concrete action and the banks to play a bigger social role.

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

Thank you for your answer.

My next questions will be general, and they'll be for Ms. Toor and Mr. Butler.

We, of course, are undertaking a study with respect to the housing market. You will have a particularly good insight, I would think, or a good sightline into what the housing market looks like right now.

I'll start with you, Ms. Toor, and then maybe go to you, Mr. Butler. Could you give me an overview of what you see in the housing market right now?

[Jasmine Toor]

The one thing we've.... I speak to brokers like Mr. Butler every day—they are our members—and Canadians have shown a tremendous amount of resilience in the face of higher interest rates. Now, will that resilience continue? We see precursors to higher default rates, which are the defaults we've seen in auto and credit card debt. They have also increased, and we're starting to see the defaults rise. That is a growing concern.

Certainly, consumers who are coming up for renewal in the next three years.... I believe 75% of consumers will come up for renewal, and they may have had a rate of 2%. Currently, my interest is 1.69%, so I am one of those consumers. When we experience a rate increase, my husband and I will experience some sticker shock.

Those are two very large concerns.

The other concern is that despite the decrease in housing prices, we actually haven't seen many first-time homebuyers access the market. That, to me, indicates there's a problem with down payments. Saving for a 20% down payment in the greater Toronto or greater Vancouver area is near impossible on a single person's income, which is why we need to have incentives in place that will help first-time homebuyers access the market.

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

Mr. Butler, it's over to you.

[Ron Butler]

Ultimately, I just hope we don't repeat mistakes we made in the past. Ultralow interest rates and stimulus in the demand side create astronomically high price increases. It's not in every part of Canada, certainly, but in parts of Ontario and British Columbia we saw at some points that prices were rising 2% a month, which is something we must guard against in the future.

That's something we can't let happen again, because it's harmful to everyone, particularly the people who bought at those particularly high prices.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Lawrence.

MP Baker, you'll be our final questioner.

[Yvan Baker, Liberal, Etobicoke Centre, ON]

Thanks very much, Chair.

As some of you may have heard at the tail end of question period, my dad's visiting the proceedings in the House today for the first time. He's here with us today in the committee hearing, so, welcome, Dad.

[Some hon. members]

Hear, hear!

[Yvan Baker, Liberal, Etobicoke Centre, ON]

Thank you for that warm welcome, folks. I really appreciate that.

Dad, they always applaud this way when I speak.

[Voices]

Oh, oh!

[Yvan Baker, Liberal, Etobicoke Centre, ON]

As you all know, I represent a community called Etobicoke Centre. We have a relatively small francophone community, but when I was a kid, my parents insisted I learn French, and both my mom and my dad worked very hard to make sure that happened.

Both because I have a question for Madame Fournier and because I want to show my dad that his efforts paid off, I will ask a question in French.

Ms. Fournier, you discussed the rapid housing initiative, the RHI.

What impact is that program having, and what changes are you asking the government to make to it in the next budget?

Please answer me in two minutes because my time is limited.

[Catherine Fournier]

Thank you. Your French is excellent.

The RHI is really having a positive impact in helping developers close their financial packages for many social housing projects. I've seen proof of that in my municipality.

In Longueuil, we have the Un toit pour tous project, which will provide 30 units for persons who are at risk of becoming homeless and others who are transitioning out of homelessness. Ground will be broken on that project in the spring thanks to the RHI. At a time when we're unfortunately seeing exploding homelessness in Quebec, these kinds of projects will definitely provide a genuine response. As we all know, housing is the best response to homelessness.

When we see how urgent the needs are, the fact that we have a fast and effective federal program that's producing results in our communities makes all the difference. That's why we were really disappointed to see that no provision was made for the RHI in the last federal budget. We repeat that this program is extremely important, and we hope it will appear in this fall's economic update or at least in the next budget. That will help us launch new rounds of calls for projects under the RHI.

When a program works, you have to say so and you have to applaud it. That's what we're doing, and we hope it will be sufficiently funded.

[Yvan Baker, Liberal, Etobicoke Centre, ON]

Thank you for your answer and for explaining how important this program is for people. The request you're making to the government is clear.

Mr. Chair, I'd like to give the rest of my time to PS Bendayan, if I may.

[Rachel Bendayan, Liberal, Outremont, QC]

Your French is excellent, sir.

Thank you for your answer, Ms. Fournier.

I want to take this opportunity to thank the witnesses.

I'll try to be brief.

Mr. Chair, I'd like to move the motion that I put on notice last Thursday:

That the chair of the committee immediately report to the House that the committee:

(1) Celebrates the Canada Pension Plan as the foundation of a secure and dignified retirement for tens of millions of Canadians and a pillar of Canada's economy;

(2) Recognizes the important contribution of the Quebec Pension Plan, which was established independently at the same time as the Canada Pension Plan; and

(3) Stands with the majority of Albertans who are opposed to Premier Danielle Smith's dangerous plan to withdraw from the Canada Pension Plan, which threatens the pensions of millions of seniors and hard-working Canadians from coast to coast.

Mr. Chair, in the interests of time, I would like to hear from colleagues and move to a vote as quickly as possible.

[The Chair, Liberal, Peter Fonseca]

Thank you, PS Bendayan.

MP Chambers, go ahead.