Finance Committee on Nov. 20th, 2023

[Chrystia Freeland, Liberal, University—Rosedale, ON]

There are lots of elements to that question. I will try to take them in turn.

Let me start by talking about new co-op, purpose-built rental housing. I very sincerely want to thank you for the conversations we've had and for really focusing on that issue. I am glad to be very clear that our intention, with the support of all MPs who agree with this step, is to eliminate the GST on the construction of new co-op, purpose-built rental housing.

I am also happy to be very clear, Mr. Blaikie, that working with you has helped have that measure included, so thanks a lot. I think we agree that co-ops are a great form of housing in terms of affordability but also in terms of building community. We'll talk about the FES later on, but as per conversations you and I have been having, there is additional support for co-ops, so that's good.

On the September 14 point, we were very clear in the announcement on September 15 that it was for new projects going forward, and I think the rationale is clear. Our purpose was to encourage the building of additional rental homes rather than to create more support for stuff already in the system. We wanted to have the most additional building we could in exchange for this measure. That is why it made sense to say we were improving the terms and that now is the time to get in and build stuff that wasn't previously planned.

I'll say two things quickly to your broader point about affordable housing and construction outside of the market sector.

First, as you know, in the fall economic statement we have provided more financing specifically for affordable housing, and I think that is a good thing. I said two things, but I'm actually going to say three things.

Second of all, I think this measure in the market space is helpful to people in the affordable space too. Not the only challenge but a big part of the challenge is simply a lack of supply. Creating more market supply is going to ease pressures for everybody in the economy. I hope you agree with that. I think that is what this measure absolutely does.

This is my final point. You spoke about the macroenvironment. I agree with you that the macroenvironment is very challenging for Canadians right now. It is also challenging for not-for-profit housing builders and for for-profit housing builders. That is why I was glad to have the opportunity to cite the comments of the Governor of the Bank of Canada last week about the fall economic statement and more broadly his comments about where he sees the macroenvironment going.

[The Chair, Liberal, Peter Fonseca]

MP Blaikie, that is your time.

Members, we don't have time for a full round, so we're going to divide the time equally. Looking at the time, I think we have about five minutes per party.

We will start with the Conservatives for five minutes.

MP Lawrence, go ahead, please.

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

Thank you very much.

At the last meeting, you were kind enough to stay for a little extra time. Maybe you'd indulge us again, Minister.

I thought our last exchange was respectful and I was proud of it. I hope this one will be as well. I would ask you to keep your responses as brief as you can so that Canadians can get full responses to their questions.

The first question I'm going to ask you is relatively straightforward. Could you please tell me what the growth rate per capita in real GDP in Canada was in the first quarter of this year?

[Chrystia Freeland, Liberal, University—Rosedale, ON]

The IMF predicts that Canada next year will have the highest growth rate in the G7. That is very positive.

As I said in my opening remarks, Canada attracted, on a per capita basis, more foreign investment than any other G7 country in the first six months of this year. In total dollar terms, Canada is the third-most attractive destination for foreign investment.

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

I appreciate that, Minister.

[Chrystia Freeland, Liberal, University—Rosedale, ON]

That's relevant to GDP per capita, because if we—

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

I don't disagree. I would just like an answer to my question, if you would be kind enough to respond—just a number.

[Chrystia Freeland, Liberal, University—Rosedale, ON]

I've responded with where Canada's GDP is, and I think Canadians should take comfort in the fact that we are predicted—

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

GDP per capita—

[Chrystia Freeland, Liberal, University—Rosedale, ON]

—to have the strongest economic growth in the G7.

We've been talking about debt and deficits, and the overall growth of GDP is the relevant number there.

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

With respect, there is an issue here and you aren't responding to it. I think it's important to have intellectual honesty in this conversation.

I'm asking you about GDP per capita. Canada's population has swelled in recent years. It has masked our GDP per capita, which is per individual. Each Canadian is getting poorer. They're getting poorer, Minister. This is an issue.

I'm asking you again for just the number. What was the GDP per capita in the first quarter, the second quarter or the third quarter?

[Chrystia Freeland, Liberal, University—Rosedale, ON]

Mr. Lawrence, you and I have had very respectful exchanges, and I'm grateful for that, but I have to say, after your leader's performance last week when he jumped to accusations of terrorism, alarming all Canadians, and after your party's vote to fail to support Ukraine, it is a bit rich to take this tone.

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

I have a point of order, Mr. Chair. You laid out at the beginning of the meeting that we should give time to answer the questions. That had nothing to do with the question. I would ask you to take a look at what kind of relevance her answer had to the question at hand.

[The Chair, Liberal, Peter Fonseca]

Thank you for that point of order.

Yes, Minister, please be relevant.

MP Lawrence, go ahead.

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

Thank you.

I'll answer my own question since unfortunately you're unwilling to. I say that with the greatest respect.

For the first quarter, it was -0.6%. For the second quarter, it was -0.28%. RBC predicts that per capita, it will be -0.31%.

Canadians are getting poorer, Minister. In the U.S., the average GDP per capita is about $80,000. In Canada, it's a little over $50,000. That's a $30,000 gap. That gap has never been bigger.

GDP relates directly to the wealth of the nation, and it's not the superwealthy, not the Trudeaus and Morneaus, who get hurt. It's the people at the lowest end of the spectrum. When you lose 10% of your wealth and you're a Morneau, that hurts a bit, but when you're a single mom just trying to get to the end of the month, that means you don't get to feed your kids.

With the greatest respect, Minister, could you please comment on per capita GDP? Tell the constituents in Northumberland—Peterborough South that what they're experiencing is real and that when they're going to food banks and struggling, you have some concern for that.

[Chrystia Freeland, Liberal, University—Rosedale, ON]

I have a great deal of concern for Canadians who are struggling in a very challenging economic environment right now. That is why we should be debating the measures in the bill. Other parties have put questions specifically about the measures.

This bill is about getting more housing built, and building more housing is a direct answer to affordability challenges. This bill is about creating more competition in the grocery sector. That is also a direct answer to housing challenges.

With due respect, Mr. Lawrence, speaking about struggling single mothers in your riding, they are helped by our early learning and child care program. That has cut the cost of child care by 50%. Your party voted against it. They are—

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

Thank you.

[Chrystia Freeland, Liberal, University—Rosedale, ON]

—helped by the Canada child benefit. Your party is proposing to cut all of these measures.

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

Thank you, Minister. I'm at the end of my time. I appreciate that.

We voted for that. Mr. Chambers, you're absolutely correct.

I want to repeat something you said in 2015: “the OECD has cut its 2015 GDP forecast for Canada to a dismal 1.5%.” By the way, that is now predicted to be 1.3% this year. “By way of excuse, the minister today claimed, ‘We are doing better than most developed countries’. That is simply not true. The OECD puts us behind Australia, Germany...Israel, the Netherlands, South Korea, Sweden, the U.K., [and] the U.S.” In per capita numbers, we're behind all those countries today. “This is no global problem, as the government likes to pretend to excuse its shoddy management. This is a made-in-Canada runway to recession.”

Do you still agree with that?

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Lawrence. That's the time.

Now we're going to MP Dzerowicz, please, for five minutes.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you so much, Mr. Chair.

Deputy Prime Minister and Minister of Finance, thank you for being here today to talk to this very important bill.

I was very happy over the weekend to get a chance to go to my first tree lighting. I had a chance to meet and talk to a lot of Davenport residents, who talked to me about what was top of mind for them. Affordability and economic issues were top of mind for them.

My first question to you is this: How does the bill we're talking about, Bill C-56, alleviate some of the economic difficulties that Canadians, such as those in my riding of Davenport, are facing today?

[Chrystia Freeland, Liberal, University—Rosedale, ON]

Thank you for the question.

It does so very directly. I think two of the challenges that Canadians are facing in their lives today most directly are housing and the cost of everything else they need for their regular life. This bill addresses those very specifically.

On housing, we had a good conversation with MP Blaikie and with MP Ste-Marie about the GST. That is very clearly a measure that has already increased the number of rental units being built in Canada.

I'd like to elaborate a bit on what Mr. Blaikie and I spoke about. We definitely believe we need to put measures in place to encourage specifically the construction of affordable housing and to be sure that affordable housing stays in that space. However, we also believe a big part of the housing challenge is supply. Canada has the great advantage of being a country with a growing population. That is one of our economic strengths. To be sure that this strength is sustainable and is a true strength, we have to build more homes faster. Lifting the GST on purpose-built rentals is a really big part of that.

A second area—I think you'll have a chance to discuss it with François-Philippe further but I'm happy to talk about it too—is the truly historic changes to Canadian competition law. We all know that more competition is good for Canadians. It helps them have more choice and better prices. These measures are truly a once-in-a-generation transformation that will help stabilize prices, ensure that Canadians have more choice and ensure that, particularly in the grocery sector, local grocers are not elbowed out.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you for that.

One of the other topics, of course, is housing. You've been talking to that. I know you've been talking about adding a lot more supply. This bill would help do that. There have also been structural issues within the housing market and issues around getting more housing done.

Can you speak to how our government is addressing the structural shortage of housing supply?

[Chrystia Freeland, Liberal, University—Rosedale, ON]

Yes, 100%. Mr. Ste-Marie is on the screen, and he touched on this in talking about how lifting the GST on purpose-built rentals creates an incentive for builders to choose to build purpose-built rentals rather condos.

Very close to your riding and my own, two weeks ago I was at a construction site just north of Yonge and Eglinton. There are 2,600 purpose-built rental homes being built right now in the Toronto area using our apartment loan financing initiative, to which we're adding $15 billion in the fall economic statement. The builders behind that project said to me that by lifting the GST, we have changed the math for them and made it more appealing for them to be building purpose-built rentals rather than condos. I think that is a very important element.

Looking ahead to the no doubt deeply informative conversations we'll be having about the fall economic statement, I would say that one of the measures that I think will immediately help Canadians is cracking down on short-term rentals on Airbnb in provinces and municipalities that require registration. I like that measure because I think we all agree that it is about supply, supply, supply. We need more homes built faster, but it would also be good to have more homes right away. Economists estimate that about 30,000 homes that are currently being used for short-term rental could immediately be turned over to Canadian families to live in long term.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you so much.