Finance Committee on Nov. 9th, 2023

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

To be clear, we can step outside right now. I just think it's better for us if, when we're negotiating, we have more time to negotiate. In that time, we can get testimony in and also have more time to discuss any amendments or come to a conclusion on Ms. Bendayan's motion. I think that's fair for everybody. We get testimony, and we get to discuss at the same time.

I don't think I ever said I didn't want to step out now.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Hallan.

Go ahead, PS Bendayan.

[Rachel Bendayan, Liberal, Outremont, QC]

Thank you, Mr. Chair.

I suggest we continue with this current round, and my colleague and I will get back to you with the results of our discussion with respect to the second round.

[The Chair, Liberal, Peter Fonseca]

Thank you, PS Bendayan.

Members, we still need to deal with this motion.

[Marty Morantz, Conservative, Charleswood—St. James—Assiniboia—Headingley, MB]

Let's have a vote.

[The Chair, Liberal, Peter Fonseca]

Are there any other speakers? I see none.

(Motion negatived: nays 6; yeas 5)

That is defeated. We are back to our witnesses.

We have MP Thompson, because MP Morantz is finished.

We'll have MP Thompson, please, for six minutes.

[Joanne Thompson, Liberal, St. John's East, NL]

Thank you, Mr. Chair.

Welcome to all the witnesses.

I'd like to begin with you, Mr. Blair, if I could, and then, hopefully, have time for Mr. Cooper.

I have a question for you, Mr. Blair. I was researching your work, and I noticed that on your website you reference that “Climate Change is the defining issue of our time”. Thank you for being so definitive on that. I agree. I was also very pleased to hear you reference in your opening statement the need to understand that private capital can link to social responsibility.

I know you have a project that you've completed or that is about to be completed in Saint John, New Brunswick—I believe it's called Portland—and you have connections with Nova Scotia and, I'm proud to hear, with St. John's, Newfoundland, my province.

Would you speak to your model and how you've been able to move those projects forward with the links with government, not-for-profits and private investment?

[Tim Blair]

Thank you very much for that question.

Absolutely. I think that when we're looking at building rental housing, we need partnership with all levels of government. I think it starts with the federal government and CMHC. Absolutely, the low-interest rate loans, either through RCFI or through co-investment, are critically important.

The project in Saint John that you referenced is a bit of an outlier in our world to this point, but we're hoping it will be funded through co-investment with the grant portion. It has been delayed because of the changes within the co-investment funding requirements; both the social requirements and the forgivable loan portion go up and down quite regularly.

When you're going through planning, designing and building, that's many years, and we're making multi-million dollar commitments. Having the security of knowing earlier in the process what the funding is going to look like when we go to put a shovel in the ground is really important. CMHC doesn't allow us to even submit our funding application until we have all municipal approvals in place in a class B, which means that I need 50% of my building designs, so I've sunk substantial costs into design.

To get to a level of affordability that's really below moderate income, you need investment with multiple provinces, and when you're working outside the major markets like Toronto, you really need the provincial government at the table. Saint John has been successful because the Province of New Brunswick has come to the table with a capital grant. It's the same in Nova Scotia. The provincial government is coming to the table with capital dollars to help fund those affordable units.

For our communities, we believe very much in the mixed-income model. Our goal is to combine market rent, which provides a sustainable cash flow, with affordability. We talk a lot about the core housing need metric, and I think the housing assessment resource tool is a great way to assess and benchmark whether you're meeting the affordability in your market.

[Joanne Thompson, Liberal, St. John's East, NL]

Thank you.

Mr. Cooper, if I could, I'll move to you. I was really interested in your model and the work you're doing, and also in the reference to integrated communities. Quayside is an example.

Would you speak to why that's important for you and your company and why it is the model that you want to bring forward as part of ensuring that affordable housing is incorporated into your housing mix?

[Michael Cooper]

We all live together, and I think there are so many people who don't feel that they belong. We're talking about housing now, and I think housing is the hardware. We need people to have respectful housing.

However, we've gone a step further and really focused on the soft part of it, which is how you create places where people feel that they're fortunate. We have a foundation. We send kids to camp. We had haircuts for kids before going to school. It's amazing when the people say that's the first time their kids have had a professional haircut, and they felt really special. We try to do lots of things so that people in our communities—people who live in our buildings, plus the people from the surrounding area—feel good. I think one thing that's not focused on as much is what it feels like when you're a resident or you live in an area. When we do our designs, we really try to focus on what it's going to feel like for the people who are living there as well as in the adjoining areas.

Quayside is a 4,300-unit development on Lake Ontario, right at the base of the city. It's going to have 800 affordable housing units. We're working with between 15 and 20 not-for-profits, including aging in place, and we are working with the hospital and George Brown College to create medical care right in the community.

It's really difficult to deal with the soft side and think about what everybody needs. I think what we're really missing in a lot of this is that people have to feel good about their lives, and I think it's the shared responsibility of all of us to do that.

[Joanne Thompson, Liberal, St. John's East, NL]

Mr. Cooper, could you elaborate on the importance of moving beyond the idea of just an isolated unit to the concept of a neighbourhood that takes on the broader space in terms of how someone is able to access what they need, and the idea of that linked to well-being? I think you referenced that.

Then I'll go to Mr. Blair on the same thing.

[Michael Cooper]

Harvard came out with a study last year. They measured people in the lowest quintile of income and compared their success 20 years later depending on how much time they spent with people in other quintiles. It's a massive thing that people intermingle and get to see what other people's lives are like. I think that helps people think about the different choices they have in their life and that they have the same chance as other people.

If you have all affordable housing in one spot, there's not enough diversity of thought. People don't see what their lives could be like. I think the movement towards market and affordable housing together is much healthier.

[The Chair, Liberal, Peter Fonseca]

Time goes quickly here. Thank you, Mr. Cooper.

Now we're off to MP Ste-Marie, please, for six minutes.

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

Thank you, Mr. Chair.

Greetings to all the witnesses.

I'm genuinely sorry we'll only have one round of questions because that really limits the discussion. We bring in experts to help us determine what can be done to resolve the housing crisis, and instead we're going to discuss routine business amongst ourselves. I'm really sorry, but we're going to retain the information provided in the presentations and the documents provided, and we're going to draw inspiration from it. I really want to thank the witnesses for being with us.

Ms. Demers, greetings to your colleagues who are in the room. Your first recommendation is to provide better financing for the construction and renovation of social and affordable housing. As we all know, an agreement was finally reached between Quebec City and Ottawa to transfer $900 million. Even better, Quebec City has matched that amount, and $1.8 billion will now be allocated to that file. We're really pleased about that, and you are as well, but is it enough to meet the needs?

[Isabelle Demers]

Thank you for that question.

I'll be answering in French.

We're obviously very pleased with that announcement, just as we were when it was announced that the GST would be eliminated on rental housing construction. However, according to CMHC, there will be a shortfall of 1.2 million units in Quebec by the end of 2023. That's pretty far off the mark.

For us, every gesture counts. We have to promote access to ownership to enable people to become owners if they wish to do so and to prevent people from only being renters out of obligation, not by choice. We also need to make every effort to spur construction and renovation of the housing stock, which in some instances is in very poor condition. Quebec has a very poor housing stock balance for the moment. Every unit that's removed from that stock now is one unit fewer. The most affordable housing is housing that's already built.

We need to promote renovation, not just new housing construction. We should also enhance certain CMHC programs, particularly for energy-efficient projects, and not just introduce measures such as eliminating the GST on new housing construction. That would help promote renovation and, consequently, maintenance of the existing housing stock.

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

Thank you very much.

You mentioned one of your proposals: eliminating the GST on new housing construction. I'd like you to explain that at greater length and to hear your opinion on the subject, Ms. Demers. Then I'd like to hear that of the CFIB people, if they have any further comments.

[Isabelle Demers]

Thank you. That's an excellent question.

We know that bread and butter generally aren't taxed because they're viewed as basic goods. However, housing, for a first-time buyer, is a necessity. So it should also be considered a basic good, and first-time buyers should be exempted from paying the GST on a new home.

A measure is already in place, but the value of the home can't exceed $225,000 for people to access it. There are no longer any homes valued at $225,000 in Canada, and the average price of a home in Quebec is $350,000. Outside Quebec, in two thirds of British Columbia and all of the greater Toronto area, for example, no buyers would qualify for the measure, as a result of which first-time buyers can't access it.

Incidentally, 5% of the price of a house is a large amount. It's $50,000 in many cases. That would be enough to pay the notary and the transfer tax and to buy a house. So we think it's necessary to eliminate the GST or to raise the upper threshold associated with these kinds of measures so they're accessible to more people.

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

Thank you.

Mr. Guénette or Ms. Santini, would you like to comment further on the subject?

[Jasmin Guénette]

Very briefly, I'd say that CFIB supports the idea of granting tax relief measures to people for ownership purposes and to businesses that build houses so they have the resources to build more.

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

Thank you.

I'll go back to you two, but I would ask you to be brief because I have virtually no time left.

APCHQ is requesting that the home buyers' plan, or HBP, and the first home savings account, or FHSA, be turned into intergenerational plans so that funds saved by parents can be used as down payments for their children.

Would you please explain that to us? I'd also like to know if CFIB is in favour of the measure.

[Isabelle Demers]

Thank you for your question.

Yes, it's one of the existing measures, but it isn't the only one. It shouldn't be viewed as the only measure. We need many measures to promote housing construction and home ownership. We want there to be an intergenerational plan enabling parents to help their children access ownership.

We're concerned about the fact that we're creating the first generation that won't have access to housing. Furthermore, given the discrepancy between the equity of a retired homeowner and that of a retired renter, we're also putting the next generation in a financially vulnerable position.

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

Thank you, Ms. Demers.

Mr. Guénette, there are 30 seconds left. Would you like to say a few words?

[The Chair, Liberal, Peter Fonseca]

We don't have enough time for that.

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

All right. Thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Ste-Marie.

Now we go to MP Blaikie for six minutes.

Go ahead, please.