Finance Committee on Nov. 20th, 2023

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

You think this discussion is relevant to Bill C-56.

[The Chair, Liberal, Peter Fonseca]

I believe it is relevant, yes.

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

You're kidding.

[The Chair, Liberal, Peter Fonseca]

Yes, I do.

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

It is directly relevant, Mr. Chair.

[The Chair, Liberal, Peter Fonseca]

We will allow the minister to continue. I believe it is relevant.

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

As G7 finance ministers agreed, Putin's illegal war is raising global food prices. It is raising global energy prices. It is directly hurting every single Canadian we represent here.

Also, we all had an opportunity last week to stand with Ukraine, say no to Putin and tell him to end his costly war.

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

I have a point of order, Mr. Chair.

[The Chair, Liberal, Peter Fonseca]

There's a point of order.

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

It's okay. We'll let it go this time.

[The Chair, Liberal, Peter Fonseca]

Okay.

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

We had that opportunity. The Bloc took that opportunity to tell Putin to end his war, make life more affordable for Canadians and stop killing Ukrainians. The NDP took that opportunity to say no to Putin, support Ukrainians and, by the way, bring down food and energy prices. The Liberals did too.

One party voted against it and I'm appalled. I'm appalled the Conservative finance critic, who represents the province of Alberta.... More than 8% of the population of Alberta is Ukrainian Canadian. MP Morantz represents the great province of Manitoba. More than 12% of the population of that province is Ukrainian Canadian. Not much astonishes me anymore about this Conservative party, but that action really does.

[Yvan Baker, Liberal, Etobicoke Centre, ON]

Thank you, Minister.

Over the last few years, Canadians have lived through more uncertain times. When I say that, I'm talking about things like the global pandemic, its aftermath on our economy, the effects of climate change and so much more. It's in these tougher economic times that I think Canadians hold dear and focus on their financial security and savings. Part of that is their retirement.

That's why I found it quite puzzling—and I think many colleagues found it puzzling—to hear calls by Premier Smith to break up the Canada pension plan, a move the Conservatives at this very committee have yet to condemn. Over the last few weeks, rather than standing up for Canadians' pensions, the Conservatives have preferred to filibuster at this committee as we've been debating that very issue.

I'd like to hear your thoughts on this, Minister.

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

I have also been very puzzled by that Conservative behaviour, particularly since the Conservative leader did, after a long delay, come out with a statement speaking up for the Canada pension plan, which provides security and dignity for all Canadians in their retirement. There is a real contrast between what the leader said when asked and the behaviour of his members of Parliament when it comes to acting.

It's something this committee could do to support Canadians in having a safe and dignified retirement. Also, it is very much a part of the cost of living, which this bill is addressing.

[Yvan Baker, Liberal, Etobicoke Centre, ON]

Thank you very much, Minister.

That's it for me, Mr. Chair.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Baker.

We'll now go to MP Ste-Marie.

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

Thank you, Mr. Chair.

Good afternoon everyone.

Good afternoon, Minister. Thank you for being here.

I'm going to have questions about the competition aspect of Bill C‑56 for Mr. Champagne, your fellow minister. My questions for you pertain to the GST rental rebate.

When we were briefed on Bill C‑56 at the beginning of the process, we were told about studies that included numbers, projections or forecasts for the GST rebate. We still haven't gotten that information. It's tough for lawmakers to make decisions without the numbers.

What are your projections when it comes to the GST rebate? How many more buildings or units will it generate, do you think?

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

I see that Mr. Jovanovic would like to answer, but I'll start, Mr. Ste‑Marie.

First, I want to say how much I appreciate the fact that you are wearing the Ukrainian colours, as I am. I know that the Bloc Québécois understands the significance of the war. Not only is it a fight for democracy, but it is also a fight that is having a serious economic impact on each and every Quebecker. Thank you for that.

On the subject of housing and the GST, I want to first say how pleased our government is to have signed a $900‑million housing agreement with Quebec. We are going to build a lot of housing units, thanks to the agreement.

With respect to the GST, I'll refer to the estimate by Professor Mike Moffatt, who projected that between 200,000 and 300,000 more apartments would be built in the next seven to 10 years thanks to this measure. I repeat, that's his assessment. As you know quite well, many macroeconomic factors come into play. That's why Professor Moffatt said that his assessment is based on a lot of variables, but we can say with certainty that the measure will encourage the construction of rental housing.

That is the view of economists and home builders, and I think we all realize that Canada needs more rental housing units. We need to build a lot of them, and that's what this bill will help us do.

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

Thank you.

Professor Moffatt estimates that, with this measure, it will be possible to build 200,000 to 300,000 more units. I take it that is the figure you and your department are using.

Would the bulk of those 200,000 to 300,000 units have originally been condos that are being shifted over to the rental market instead?

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

I think that reflects a portion of the new units.

In the past two weeks, I've made two announcements in places where rental units were being built, and the builders told me two things. First, as you suggested, by removing the GST on the construction of rental units, we have created an economic incentive to build rental housing as opposed to condos, because we need more rental units. Second, the whole housing construction sector is facing economic challenges, including those that build rental housing exclusively. It's hard for them to obtain financing.

This measure will really encourage the construction of rental housing on two levels. Other measures include $20 billion in additional funding for the construction of rental housing, which was announced before the fall economic statement. Some people want to build housing units, but can't because of a lack of financing.

A third, very important, factor is that municipalities have to create opportunities to build housing. That is why our government is signing agreements directly with municipalities to support those opportunities.

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

How much time do I have left, Mr. Chair?

[The Chair, Liberal, Peter Fonseca]

That is the time. We're a little over, MP Ste-Marie.

Thank you.

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

All right. Thank you.

[The Chair, Liberal, Peter Fonseca]

We'll go to MP Blaikie, please.

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

Thank you, Mr. Chair.

Thank you, Minister. I'm pleased to have you at the committee.

I'm glad to be able to amend the bill to ensure that housing co-operatives are also captured by the GST rebate. I think that's an important improvement, and it's one I'm looking forward to making in legislation soon.

One of the other concerns that New Democrats have with respect to the GST rebate—we haven't been able to reach an agreement so far, but I'm hoping it may yet be within reach—is applying the GST rebate to non-profit housing projects that either began construction or began in some other significant way prior to September 14 this year. I don't have complete numbers and we'd be very happy to have complete numbers. Please send those along to the committee if you have them. I suspect that the government has them somewhere.

There are a number of non-profit housing projects that the federal government is funding through the national housing strategy that aren't proceeding because the increase in interest rates has meant that the original business case for the housing when it was approved for financing, grants or whatever the support from the government is.... Because of rising interest rates, the projects haven't been able to proceed. For those projects, applying the same GST rebate can be the difference between moving ahead or not.

I'm wondering if you have those numbers and if you'd be able to provide them to the committee, either here today or promptly after this meeting.

Are you concerned about projects that the federal government has approved funding for that aren't proceeding because we're in difficult times and interest rates have been going up? What do you say to non-profits that are waiting to hear if the GST exemption is going to apply to them, so they can move forward with the projects they thought they had a financial basis to proceed with until the ground shifted?