Finance Committee on Nov. 15th, 2023

[Darlene Jackson]

I'll do it. I am a long talker.

The first thing we have to do is ensure that we are retaining nurses with experience in the health care system. Those are the mentors and preceptors we need for young nurses. We're having a lot of young nurses jump ship. They're in first-year nursing and there's no support. It's so important.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Blaikie.

Now we'll go to MP Morantz or MP Lawrence.

You have five minutes.

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

That's great.

Mr. McInnes, there are a number of recommendations in your report that I wanted to touch on around what types of things we could do to incentivize new home builds. Actually, I'm sorry, this was in the report of the Canadian Home Builders' Association, which I think you're familiar with.

You mentioned in your opening testimony that we need to be building about 400,000 homes a year, basically, to get back to market equilibrium by 2030. One of the recommendations was that the government should “[d]efer Capital Gains Tax and Recaptured Capital Cost Allowance on the sale of rental housing if reinvesting in rental housing.” I wonder if you could comment on why that's such an important change.

[Lanny McInnes]

Incentivizing investment in rental housing is key to meeting the federal goal of doubling housing starts in Canada. For Manitoba, that means going from between 7,000 to 8,000 on an annual basis, depending on the year, to 16,000. It's a significant increase, and it will require a significant investment in housing stock in our province. Looking at ways to mitigate the tax implications of reinvesting in the housing stock both here and across the country is important for facilitating that investment.

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

Another one was to increase the threshold for the GST exemptions on new builds. Could you comment on how that would spur new development?

[Lanny McInnes]

The current thresholds have been in place since the GST was introduced in 1991. The lowest threshold is, I believe, $350,000, which, for a new construction on a single-family detached home, makes it fairly irrelevant. There aren't any homes being built at that price point.

It's well overdue. We've been calling for those thresholds to be adjusted for longer than I've been around as part of the association. Our members, especially for the single-family detached, would love you to go a step further and maybe remove it altogether.

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

On the issue of another tax, in a prior meeting we had, both the Business Council of Manitoba and the Manitoba Chambers of Commerce called for a carve-out of the carbon tax on home heating for Manitoba, similar to what was given to Atlantic Canadians.

Would you agree with that statement? Do you think it would be fair for all Canadians to have a carve-out on the carbon tax when they're heating their homes?

[Lanny McInnes]

In Manitoba, the dominant form of home heating is natural gas, followed by electricity. There are few other options, really. We would certainly agree that the principle of fairness should be applied here.

As to the impact on construction, Manitoba's a bit of an outlier from other provinces in terms of when homes being built are electrified. That means that more diesel generators, fuel generators and propane heat are used during our construction process than in other provinces. That definitely has an impact on our members.

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

Thank you.

Quickly, I'll go to Ms. Verwey on the same question. Do you think, in the interest of fairness, that Manitobans should have a carve-out for the carbon tax on home heating, just like Atlantic Canadians got because of the Liberal MPs in Atlantic Canada?

[Jill Verwey]

Yes, I agree that in the essence of being fair, it shouldn't be a regional application. It should be applied [Inaudible—Editor].

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Morantz.

We'll go to MP Baker.

[Yvan Baker, Liberal, Etobicoke Centre, ON]

Thanks, Chair.

Ms. Jackson, I don't know that I have another question for you, but I want to say that you and I are simpatico today. You and your organization were completely supportive of national standards for long-term care and their implementation at the provincial level. You also spoke about something unprompted, at least not prompted by me. It was federal funding for health care tied to results and outcomes, which I think is so important. We should be doing it in health care, and we are doing it in health care to a great degree now. I'm very proud of that.

We should also be doing it for other types or categories of funding the federal government provides to the provinces. That's to ensure both that we get the results and that the funding isn't spent on other things, whatever those things might be. That's a fiscally responsible thing to do. It's the right thing to do by the taxpayer. If we're going to say to the taxpayer that we're going to spend x billions of dollars on an initiative, we need to ensure that's the outcome it delivers.

Thank you for that. That's just a thank you.

I want to come back to Mr. McInnes, if I could. You had a number of interesting suggestions. In my prior intervention, I asked you about one of them. Can you talk a bit about the recent change to remove the GST on purpose-built rentals? What is your point of view on that? What is the impact of it?

[Lanny McInnes]

Our industry certainly supports the move by the federal government to remove the GST on purpose-built rentals. The newly elected Manitoba government has indicated that they're going to follow suit and remove the PST.

We believe this should lead companies that are looking at making this type of investment in our province to look much harder, as a project instantly becomes much more viable than it would have been if they had continued to pay the tax.

[Yvan Baker, Liberal, Etobicoke Centre, ON]

As I mentioned earlier, this committee is doing a housing study separate from our pre-budget consultations, and we've heard from a lot of folks—some of them from your sector, but others as well—on the issue of housing and how to make it more affordable.

One of the things folks have come forward to say—especially the mayors of mid-sized municipalities who have come to see us, but there are others—is that the federal government.... They offered their ideas and talked about the GST rebate and a few other things, but they also talked about some of the things they're experiencing at the provincial level and the municipal level. I think somebody mentioned—whether it was in this panel or the prior panel—the importance of all three levels of government working together.

A significant portion of housing is within the jurisdiction of provincial and municipal governments, and I recognize that every province is different. I'm from Ontario, so I'm not going to know what's happening here in that regard in great detail, but could you speak to what your organization, your members, would like to see and not just what the federal government's asks are? Are there stats at the provincial and municipal levels that we all need to pull together on to make sure we get the results we need in order to increase the housing supply?

[Lanny McInnes]

I think you heard from Mr. Barletta earlier this morning, who was talking about the importance of all three levels of government collaborating and being on the same page when it comes to incentivizing, encouraging and facilitating more housing stock. I think we've seen some movement on that over the past few months.

For the housing accelerator fund application that the City of Winnipeg has put in, they're debating their response to the federal government's recommendations and amendments. We presented yesterday that we felt those recommendations aligned with what the city had already approved in terms of their application. We see that as a way for the federal government, the provincial government and the municipal governments to align their policy directions and funding priorities to help facilitate housing starts.

In Manitoba, one of the biggest constraints we have is water and waste-water capacity. Strategic investments in that type of infrastructure are critical for allowing and facilitating residential growth in Winnipeg, around Winnipeg and across the province.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Baker.

That is the end of our session.

We want to thank our witnesses for their testimony in this pre-budget consultation.

We want to thank Winnipeg and all Winnipeggers, and of course our members from Winnipeg, Daniel Blaikie and Marty Morantz.

We were delighted to be here on our cross-country tour for our pre-budget consultations in advance of the 2024 budget.

Thank you so much, everyone.