Finance Committee on Nov. 17th, 2023

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you.

The rental protection fund is one way. Another way is to do a rent control on the vacancy rate. I think there are a number of other options as well.

Ms. Anderson, you were talking about a strong workforce. Is there a way for our federal government to maybe incentivize businesses to invest more in training? Our businesses are not investing in training right now. The federal government provides over three billion in skills training and retraining dollars down to the provinces. I'm wondering how we can better incentivize businesses to actually invest in themselves that way and whether or not you're working with the provinces to access some of those funds.

[Bridgitte Anderson]

Thank you for the question.

I would say that this has been a focus of ours and the provincial government's here in British Columbia over the last six months or so. There has been some good action taken on this, but businesses could be further incentivized, such as through an incentivization program for microcredentialling. Microcredentialing is a very easy way to upskill your workers. It's accessible for workers. It is also a quick and fairly easy way, with low barriers, to get your skilled workers trained up even further. As well, through co-ops and a number of different kinds of programs, employers can access the funds they need to get their workers trained.

This is something that will take effort at both the federal and provincial level. The province has moved towards this in some way. I think there's room for the federal government to do this as well.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Dzerowicz.

MP Ste-Marie, go ahead, please.

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

Thank you, Mr. Chair.

Thank you again to all the witnesses for being with us today.

Mr. Armstrong, I personally have a problem with the definition of affordable housing. It seems to me that, often, too many projects fall into this category, but are not really affordable housing for the people who live in them.

I'd like to hear your comments on this.

For my part, that's why I prefer the definition of social housing, which includes housing co‑operatives. We have many such co‑operatives in Quebec, in my city, in Montreal and everywhere else. It seems to be increasingly difficult to launch new co‑operative housing projects. It's taking longer and longer to set up the legal structure and assemble the documentation, and it's getting more and more complex.

Do you have any ideas on what can be done at the federal level in this regard? You've touched on it, but I'd like to hear more about it.

[Thom Armstrong]

I agree with you that the definition of affordability has become a lot more elastic as funds have been scarce to create supply programs for co-op and non-profit housing. The only way to generate deep and continuing affordability is to reduce the capital cost of developing new housing in the first place and reduce the cost of financing that debt over the long haul. That's the source of funds that have become more difficult to access at the federal level under some of the recent programs.

Now, it is true that housing is never more expensive than on the first day it's occupied. As long as it's being run on a not-for-profit basis by a co-op or a non-profit housing provider, it will become more affordable relative to the market over time, but people who can't afford a place to live now don't have 10 years to wait while you pay down the balance of the equity on the loan. They need affordability now. That requires a deep capital and operating subsidy for the development of those homes.

I agree with you that we shouldn't expand the definition of affordability to fit the resources that are available to develop homes. We need to establish that benchmark at 25% to 30% of income and then deliver the subsidies that are required to get homes into the marketplace so they can be occupied by the people who need them the most.

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

Okay. Thank you very much, Mr. Armstrong.

Ms. Anderson, thank you for your presentation.

Your organization and the members you represent are asking the government to postpone for another year the reimbursement of the Canada emergency business account, which was granted during the pandemic?

What is your position on this?

[Bridgitte Anderson]

Thank you for the question.

Given that we represent over 5,000 members, many of which are small and medium-sized businesses, there has been a call for an extension in repaying those CEBA loans. Many of the businesses that speak to us are working in a situation where they're also dealing with public safety concerns and crime. There are extra costs around vandalism, around theft and around keeping their employees safe. For them, the challenges they're facing are economic, but there's also been a significant public safety change over the last few years.

Any kind of additional help for those small and medium-sized businesses...and we're often talking about mom-and-pop operations, whether in hospitality or retail. An extension of the CEBA loan is something that would be very much appreciated.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Ste-Marie.

MP Julian, go ahead, please.

[Peter Julian, NDP, New Westminster—Burnaby, BC]

Thank you very much.

I'd like to come back to you, Mr. Armstrong. You have spoken very eloquently about the financialization of housing. We also know that the CMHC has been participating, supporting our banking sector, with hundreds of billions of dollars in liquidity supports over the last 17 years for Canada's banks to socialize the risk, but of course, the profit is always privatized.

Is the CMHC playing the role, with the significant resources that it has, of actually supporting co-op housing and affordable housing so that we can start to address the housing crisis that we've had over the last 17 years?

[Thom Armstrong]

You've caught me on a day when my frustration with the CMHC is at an all-time high. It's managed to create what I regard, and what many community housing developers regard, as the perfect mortgage product. The MLI select mortgage is flexible in its amortization, its term and its rates. Then the CMHC didn't allocate staff to process applications, and we're told that an underwriting application for the MLI select mortgage product will take eight months to process.

Now, I don't know a real estate deal, whether it's in the private sector or the community housing sector, that can survive an eight-month waiting period. Those deals die on the vine, and we're not able to deliver a new affordable supply with those restrictions in place.

The CMHC was the envy of the world in the late seventies to early eighties in stimulating the construction of purpose-built rental supply and of co-op and non-profit housing. That capacity is just not available to us today.

[Peter Julian, NDP, New Westminster—Burnaby, BC]

It will make you even more angry, I think, to know that the CMHC coughed up $150 billion to the banking sector in liquidity supports, and it took four days—96 hours—for that agreement. When COVID hit, it was $150 billion out the door in liquidity supports for Canada's big banks. I contrast that—four days for $150 billion to prop up our banking profits—with the eight months you're talking about in terms of the timeline for an affordable mortgage.

What recommendations can you give us on how we can use the CMHC, rather than propping up banks, as we have seen under the Conservatives and Liberals, to ensure that we're getting affordable housing for Canadians?

[Thom Armstrong]

The Co-operative Housing Federation of Canada has advanced a model for a new co-op supply program that would involve the CMHC's investing in a community housing sector-controlled facility to get that money where it's needed most, which is with community housing developers so that community assets can be used to build community wealth. If that model were to be implemented today, we could cut the waiting time on financing and capital subsidies by 90%.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Julian.

We go now to MP Morantz, please.

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

Thank you, Mr. Chair.

Ms. Anderson, I want to continue our conversation on the economy.

We have a serious per-capita growth problem in this country. In 2021, the OECD projected that our economy would perform worse this decade than all other member countries, with a per-capita real GDP growth of only 0.7% annually.

Now we have a government that, after eight long years, has doubled our national debt. The national debt in 2015 was $625 billion. Today it's over $1.2 trillion. It has called those things “investments”. In my mind, when you make an investment, there should be a return on that investment. It seems to me that the management of the economy has been nothing short of economic malpractice, but I'm wondering if you could comment on the real problems that are caused when the GDP per capita falls below 1%.

[Bridgitte Anderson]

When we're talking about some of the challenges that we're facing in the business community and in the economy, it's also important to note that Canada's R and D intensity ratio of 1.8% remains below the average of 2.7%, which placed us in 17th position in 2020. When we're looking at it from a business perspective, it is about creating a competitive environment in a global environment, so it is, as I said, the tax and regulatory system that is making it very difficult to get projects built in Canada.

B.C. is a very expensive jurisdiction compared to other jurisdictions in Canada and globally. The layering on of taxes, which I talked about, particularly hurts small and medium-sized businesses. However, it's also the investment. On some of the questions about what would help businesses, what would incentivize them to deal with the increase that they're facing on business inputs and what would incentivize them to get their workers trained for the future for what they need, there needs to be a wholesale look at.... Just like the way governments at all levels have been looking at the affordability crisis in terms of families and individuals, there is an affordability crisis for businesses when it comes to taxes and regulatory measures. Therefore, it really does take a full economic growth agenda to ensure that government is creating the conditions in which businesses can thrive.

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

This government has now been in power for eight years. From your organization's perspective, how confident are you that it can actually get that job done, given its track record?

[Bridgitte Anderson]

What I would point to is the survey we did with our members just prior to our submission. The vast majority of our members are very concerned about their economic outlook and their business prospects in this next year, and that is for a number of factors. It is because of high inflation. It is because of rising costs. It is because of a number of other geopolitical factors.

It is because of these kinds of business conditions that they have been asking for policy changes around the tax and regulatory system.

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

I have a couple of other questions.

Last week, The Globe and Mail's editorial board published an interesting piece. In my time left, I'd like to go over a couple of their comments.

One of the things they said was “the Liberals have governed while Canada's real GDP per capita has flatlined, and their policy choices are making the problem worse.”

Would you agree with that sentiment?

[Bridgitte Anderson]

I would, again, point to the survey results from our members, who are concerned about their prospects in the coming year.

I would again repeat that the government has the responsibility and obligation to create the kind of environment that can help businesses thrive, and in a time when there are significant economic headwinds, there's work to be done.

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

After eight years...that's a pretty good length of time for a government to exercise and accomplish that responsibility.

Do you think they've been successful?

[Bridgitte Anderson]

I think we need a stronger economic growth agenda.

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

Do you think this government could deliver that?

[Bridgitte Anderson]

I think all governments need to work together to deliver a stronger economic growth agenda.

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

Okay.

How's my time, Mr. Chair?

[The Chair, Liberal, Peter Fonseca]

You have 30 seconds.