Finance Committee on Nov. 13th, 2023

[Guillaume Tremblay]

As you know, under the TECQ program, municipalities are required to develop infrastructure action plans. Honestly, I think that in Quebec, we should move this idea forward so that cities can better plan measures for their territory. I agree with you on that.

In addition, once the plans have been made, funding must be secured. On that score, the clock is ticking.

I'll say it again: If all the cities submit proposals for 2024, you have to understand that costs will rise considerably, in a context where there is a labour shortage.

The message from the municipal world today is that the federal government must come to a swift agreement with the Government of Quebec and the municipalities. They are in dire need of funding.

There needs to be predictability. It's a bit like money for housing construction, where agreements are made every year, or every two or three years. If there's no predictability for cities, how do you expect them to be able to apply to a program and then plan housing measures with community organizations? They always have to wait for decisions to be made at higher levels. The municipality is the final level of government, so to speak.

If you could provide a little more predictability, that would be a great help to the municipal world, I guarantee you.

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

I understand. Thank you, Mr. Tremblay.

Mr. Fortin, you talked about the costs associated with housing construction and the high borrowing costs preventing developers from building more housing.

Witnesses who have appeared before our committee have told us about the need to adapt existing programs, such as the rental construction financing initiative, in order to provide long-term loans. I'm also thinking of the role of CMHC, which is really a major player in the construction of affordable housing.

Do you agree with those comments? Do you have any other solutions to propose?

[Paul Cardinal]

We tend to agree.

With respect to individuals, for example, the Canada Mortgage and Housing Corporation plays a major role in reducing, if not virtually eliminating, the risk of anything that can be described as an insured loan. It eliminates the risk faced by financial institutions. It's also what makes it possible to obtain better financing conditions.

As for rental housing construction, CMHC does indeed have some interesting programs. They could possibly go a little further. For example, the latest program to be launched, called APH Select, offers amortization of up to 50 years under certain conditions, which is interesting. If that could become a little more standard in the products offered by CMHC, that would be good.

The issuance of Canada mortgage bonds is another positive initiative. It allows access to funds at a lower cost. These funds can then be loaned for residential construction at lower costs than those charged by financial institutions.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mrs. Shanahan.

Now we'll go to MP Desbiens, please.

[Caroline Desbiens, Bloc, Beauport—Côte-de-Beaupré—Île d’Orléans—Charlevoix, QC]

Thank you very much, Mr. Chair.

I will once again address the representatives of the Union des municipalités du Québec.

I'd like to address the issue of the conditions that the federal government often attaches to the funds it releases. Obviously, this slows down access to these funds. These conditions are not always appreciated by people in the field, I think.

Also, I'd like to know your opinion on the TECQ. Some mayors have told me that they'd like to be able to use this program, but for purposes other than those set out in this framework. So there needs to be greater openness and flexibility in the use of funds.

I'd like to hear your comments on these two issues.

[Guillaume Tremblay]

I'll answer your second question first.

Mr. Roy, you'll tell me if I'm wrong, but I seem to recall that 20% of the TECQ performance grant can be used for a project of a more municipal nature, such as a community centre. I don't believe that the UMQ, which I represent today, has taken a position on this issue. On the other hand, as we've been saying all along, the municipal world certainly needs a diversity of programs. Consequently, new programs should be created that would respond more to other realities.

To answer your question indirectly, let's say that, if the municipal world is considering using the TECQ, which is intended for investment in underground infrastructure, differently, it's because in reality, we have a lot of catching up to do. On the other hand, it also shows how little room for manoeuvre the municipal world has. So we sometimes try to be imaginative. Let's be honest, investing in pipes isn't really fashionable. People would much rather have a nice community centre or a beautiful brand-new arena.

As I mentioned earlier, the federal government has made massive cuts to all sports and recreation programs. In the municipal world, we're trying to put forward projects and ideas that relate a little more to what's being asked of us in the field. But we have no room for manoeuvre. So investing massively in sports and leisure programs could give that opportunity to local governments.

[Caroline Desbiens, Bloc, Beauport—Côte-de-Beaupré—Île d’Orléans—Charlevoix, QC]

Could you quickly give us your opinion on the conditions the federal government is imposing?

[Guillaume Tremblay]

As we were saying earlier about the climate, if we impose countrywide conditions, it's obvious that this program won't be able to respond to the realities of each municipality.

[Caroline Desbiens, Bloc, Beauport—Côte-de-Beaupré—Île d’Orléans—Charlevoix, QC]

So we need predictability.

[Guillaume Tremblay]

Absolutely. In this respect, I think we need to leave some latitude to local governments, and perhaps a little more to the provinces.

[Caroline Desbiens, Bloc, Beauport—Côte-de-Beaupré—Île d’Orléans—Charlevoix, QC]

Thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mrs. Desbiens.

Now we'll go to MP Paul-Hus, please.

[Pierre Paul-Hus, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

Thank you, Mr. Chair.

I'd like to return to the first point raised by the APCHQ, to the effect that we are living in a perfect storm. What we're trying to find now is the perfect solution.

You were saying that municipalities are the last level of government. What I would like to know is whether the federal, provincial and municipal governments are working together to deal with the situation or rather just talking without achieving any outcomes. From where I stand, I believe it's extremely urgent to address the situation, just as urgent as it was to manage the pandemic, for which measures were taken and everyone worked intelligently to move things forward.

Do you think progress is being made on housing, or that we are simply spinning our wheels?

[Guillaume Tremblay]

From where I stand, I can say that the municipal sector is clearly ready. However, funds are needed quickly. Whether for our own organizations or private developers, I believe the municipalities are ready.

I don't know how long it has taken Quebec City and Ottawa to sign the agreement, but to be perfectly frank, it's been rather long. Abnormally long. When it takes that much time and there is no predictability, the situation is rather difficult for municipalities.

We are ready now. We're hoping that the funds will arrive quickly so that we can get projects underway.

[Pierre Paul-Hus, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

The word “predictability” came up often today. It was also discussed with the first group of witnesses, including the representatives of the Fédération des chambres de commerce du Québec. I believe that the absence of predictability has been a major factor in the problems being experienced.

Let's talk now about federal interference in the municipal sector. In Quebec, things are different than elsewhere in Canada. There is a housing problem across Canada, but here in Quebec, there's a major difference, which is that the Quebec government intervenes directly with the municipalities and the federal government less so.

Be that as it may, can something be done to improve the system? I don't want to take away any of the rights that Quebec has acquired over the years. Is there anything we can do simply to improve the system, or are we stuck with existing ways of doing things?

[Guillaume Tremblay]

I believe that the municipalities are in the best possible position to know their own environment. I believe that the federal government needs to trust elected municipal officials. We were elected democratically, just as you were. We too make commitments to our residents.

I'm going to give you a very concrete example of how things are done in the municipalities. The example I'm going to give you has made the national news. A developer bought some land to build some high-density housing. Unfortunately for that developer, I had made a commitment to set aside this land for commercial use. I was elected with 83% of the votes, and so believe my mandate was pretty clear in my community. Now, the developer is unhappy because he wants to build what are called affordable housing units.

Situations like that sometimes come up. Nevertheless, no one is in a better position than the mayor and the municipal council to know how things work in their community.

[Pierre Paul-Hus, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

I agree with you, but my question was more about ties between the provincial government, the municipalities, and sometimes the federal government. Elsewhere in Canada, things are done somewhat differently in terms of funding: it's more direct.

Let's get back to the UMQ. We spoke earlier about infrastructures. I find it very interesting that we should be raising the fact that some municipalities can't handle more construction because they don't have suitable infrastructures.

Are there any assessments or analyses of small or medium-sized municipalities like Blainville, which we discussed earlier, specifying that certain cities can't handle more than 10,000 new units, let's say, because their infrastructures can't service them?

[Guillaume Tremblay]

No, there aren't any documents of that kind.

But I know that the UMQ set up best practices housing committees for all the municipalities. There may already be some in the larger municipalities, but not in the smaller ones. It's a mentoring service available to these cities through the Union des municipalités du Québec.

Mr. Roy may have something to add.

[Samuel Roy]

That's it exactly. For the time being, we don't have an overview for Quebec as a whole. On the other hand, what we are seeing increasingly is municipalities raising their hand to say they have to put the brakes on development because they don't have the required capacity to do so.

So there's a major barrier preventing a response to the crisis you're talking about. We need to be able to invest.

And that's without factoring in the shortfall in maintaining our existing infrastructures simply to keep providing current services to the population. The water infrastructure deficit is a huge $38 billion. Municipalities don't have the means to deal with the burden on their own.

[Pierre Paul-Hus, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

I think I've run out of speaking time.

Thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Paul-Hus.

Now we'll go to MP Scarpaleggia for five minutes, please.

[Francis Scarpaleggia, Liberal, Lac-Saint-Louis, QC]

Thank you very much, Mr. Chair.

Mr. Tremblay, if I've properly understood the discussion on this topic, you believe that the gasoline excise tax reimbursement program doesn't give you the latitude you need to spend the money where you would like to spend it. In other words, you're forced to spend that money on certain identified infrastructures, when you would really like to spend it elsewhere.

Is that correct?

[Guillaume Tremblay]

At the moment, each city can use 20% of the contributions provided under the TECQ to invest in specific projects. However, based on my understanding of the question asked by your colleague earlier, some cities would prefer to invest these contributions elsewhere.

In my opening address, I mentioned that the federal government had stopped contributing to a financial assistance program for recreational and sports infrastructures, to which it had been contributing jointly with the Government of Quebec. In an attempt to partly answer the question, I was saying that if some cities wished to use the TECQ to invest elsewhere, it was perhaps because there were not enough subsidies. So if the federal government were to reinvest in the Quebec government's program for recreational infrastructures, it would certainly make it possible to take on a few more projects, rather than seeing five out of every six being turned down.

[Francis Scarpaleggia, Liberal, Lac-Saint-Louis, QC]

I'm trying to understand. So the funds from the gasoline excise tax have to be spent only on certain types of infrastructure projects.

[Guillaume Tremblay]

That's correct.