Finance Committee on Jan. 17th, 2022

[Anil Arora]

I'm not going to speculate, because it's not a “one dimension” reason. There are multiple reasons, as we've discussed before, of which transfers are certainly one of the stimulants, if you like, of consumption. I'm not going to speculate because I don't have that, and maybe others are better positioned to do the what-if scenario than we are.

[Heath MacDonald, Liberal, Malpeque, PE]

Thank you.

I'll go back to Mr. Peterson, if I can. He was talking earlier, and I don't think he had an opportunity to finish the question on goods.

Can you provide any insight as to why, for the past 20 years, our goods inflation rate was at about 2.1%, but in 2021 went to 4.4%? I think it relates to the question that maybe you haven't answered, Mr. Peterson.

[Greg Peterson]

I think that if you take a look over the course of the pandemic, over the course of the past two years there has been a range of factors that have led to changes in prices in a range of different commodities.

As Mr. Arora mentioned earlier, in May of 2020, crude oil prices went negative for a period. If we follow the supply chain through, this of course had an impact on our raw material prices index and our industrial product price index, through to the price we're seeing at the pump. As Saudi Arabia and Russia cut back on oil production, demand for oil shot up. Prices go up, and ultimately that leads to an increase in prices at the pump.

Through a range of different commodities, we've been seeing a larger number of sharp price movements. Lumber has had an impact on the price of residential construction. It's had an impact on sales in hardware stores, with factors driven not only by demand for lumber in Canada but also a demand for lumber in the United States. It's almost like every commodity has a story.

[Heath MacDonald, Liberal, Malpeque, PE]

Thank you.

I have another question. I know that it's going to be a quick one, but on demographics—basically, aging in place—what effects do aging in place and national migration have on our housing supply?

[The Chair, Liberal, Peter Fonseca]

You have about 20 seconds, Mr. Arora.

[Anil Arora]

It does have a factor, for sure. More people come in and they want to have places to live, and home ownership in Canada is a desired effect.... Just to give you one example, in eastern Canada, we've seen a disproportionate increase, as was mentioned earlier as well, because of the higher demand and people moving out. Migration, immigration and growth are all factors in this story.

[Heath MacDonald, Liberal, Malpeque, PE]

Thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you.

Now we're moving to the Bloc.

We have Monsieur Ste-Marie for two and a half minutes.

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

Thank you, Mr. Chair.

Since we are beginning a new round of questions, I think I have about two and a half minutes.

[The Chair, Liberal, Peter Fonseca]

I apologize. I have two and a half minutes here as our third round. Is this...?

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

Okay, Mr. Chair. I just wanted to make sure.

Mr. Arora, I want to come back to the issue of inequalities.

This issue was addressed a little earlier. The pandemic is creating greater inequalities. You presented the data by income distribution quintile.

What about the impact of inflation, which is currently higher than expected? Does that have an impact on the inequalities for each quintile, depending on the household or category of people? I am thinking of retirees, students and small business owners, for example.

What about the inequalities caused by a higher rate of inflation than expected?

[Anil Arora]

Thank you for your question.

The short answer is yes. If a person has a certain amount of money to spend and prices have gone up in one category or another, it is definitely going to affect that person's purchasing power. However, the formula contains several elements. More transfers were made to households, which increased their purchasing power. That also increased demand.

However, as has been mentioned several times, when prices go up, in theory, that increases the value for households, so there are two ways of looking at this.

Finally, in many cases, substitutions are possible, so if something costs too much, a household will have to find an alternative, for example.

There are many factors to consider, but you are basically right.

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

Thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you. We're moving now to the NDP.

Mr. Blaikie, you have two and a half minutes.

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

If the government were to set the objective that no Canadian household would find itself in core housing need, do you think, at Statistics Canada, the information you currently are able to collect and analyze and report on would be sufficient in order for the government to build a plan like that, or are there certain important datasets on the housing market, both the rental and the owner markets, that Statistics Canada would like to collect, either from industry or from government, to make it possible for the government to produce a better plan for meeting the needs in the housing market?

[Anil Arora]

We're always looking for new sources of data to make the indicators even stronger. As I said, it's a bit of a team sport. We work with our colleagues at CMHC. We work with organizations like CREA. We work with the MPACs.

Yes, sometimes it can be a little bit challenging to get good sources of quality data that we can count on month to month on a comparable basis, so that we can turn it into statistics. The volume of data does not automatically convert itself to good quality statistics that one can then count on.

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

I'm just wondering for this committee, which may well be able to make some recommendations, are there particular datasets you think we should be recommending Statistics Canada have access to in order to produce better information on the housing market and better housing policy?

[Anil Arora]

I'll just get Greg to give you a very quick summation of a couple of those points, because there are a couple of points where it could be helpful.

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

Thank you.

[Greg Peterson]

What we would find really helpful is the ability to draw stronger linkages between the indebtedness of households and other financial characteristics of households and home ownership. Essentially, having that better linkage would be good—

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

Does that data tend to live in the private sector, with banks and other financial institutions, or does it already reside somewhere in government?

[The Chair, Liberal, Peter Fonseca]

Give a very short answer, please.

[Greg Peterson]

Largely it resides in financial institutions.

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

Thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Blaikie.

We're moving now to the Conservatives for five minutes.

Mr. Poilievre, you have the floor.