Finance Committee on Feb. 13th, 2024

[Sean Fraser, Liberal, Central Nova, NS]

Yes. We need to build a lot of homes. I think my opening statement, though—I have it written down—was that we need to build homes and build them by the millions. The scale of the challenge is not lost on me. Despite the enormity of that challenge, I believe we can solve the housing crisis.

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

I have one last question, Minister—

[The Chair, Liberal, Peter Fonseca]

Time is up, MP Lawrence.

We'll now go to MP Dzerowicz, please, for five minutes.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thanks so much, Mr. Chair.

I want to say thank you to you, Minister Fraser, and to housing officials for being here today.

Housing affordability, affordable housing, co-op housing, deeply affordable housing and rental housing are top of mind for the residents in my riding of Davenport.

Last Friday, I was with Deputy Prime Minister Freeland and the mayor of Toronto. They were making a huge announcement about asylum seekers. The Deputy Prime Minister mentioned that since 2015, the federal government has provided a historic amount of funding to the city of Toronto. She mentioned $5.79 billion. She also indicated that at the federal level, we have committed $6 billion for housing to support the people of Toronto. I was really pleased that the mayor agreed by saying that the federal government had delivered for the city of Toronto.

Minister Fraser, can you talk in a bit more detail about what funding we've provided to the city of Toronto on housing? I know that Davenport residents want to know.

[Sean Fraser, Liberal, Central Nova, NS]

Certainly. I don't have an exhaustive summary in front of me today, but perhaps off-line we can share some of the details.

Just to draw into focus the scale of what we're doing in Toronto, keep in mind that in addition to housing, enormous infrastructure investments have been made to support the water and waste-water capacity that allows us to build more homes and the transit systems that will allow people to access the opportunities that exist within the city. That's in addition to the direct support for housing.

The marquee fact that I would point you to with respect to the investments we're making in Toronto is the investment through the housing accelerator fund, which will result in the acquisition of non-profit homes and in a fundamental change in the zoning practices, with a huge focus on transit-oriented development. That is going to focus on digitizing and speeding up the permitting process to get more homes built.

This single investment is worth over $470 million just in the city of Toronto. Within the GTA, of course, there are other communities that benefit. I think about those across southern Ontario: Kitchener, Guelph, Waterloo and Richmond Hill. A number of other communities have benefited.

In addition to the housing accelerator fund, which is permanently changing the way Toronto will have homes built, we've had a series of direct investments and affordable housing projects through the affordable housing fund. We've had an extraordinary number of investments made for purpose-built rentals through the apartment construction loan program, which provides low-cost financing.

Depending on how you count the dollars and whether you ascribe financing the same way as you do grant contributions, we're in the many hundreds of millions or billion of dollars, and certainly billions if you include the housing enabling infrastructure.

[Julie Dzerowicz, Liberal, Davenport, ON]

I know that Davenport residents will be very happy to hear that.

The second question I have for you is on young people. Whether they're in their mid-twenties, late twenties or early thirties, they approach me and say, “MP Dzerowicz, will I ever be able to afford continuing to live in the city of Toronto where I grew up? Will I ever be able to afford a condo or home?” How would you respond to them, Minister?

[Sean Fraser, Liberal, Central Nova, NS]

Hardly anything is more important.

Forgive me for exploring some of my own reasons for getting involved in politics, but my community dealt with a very different challenge eight years ago than the one today. Growing up, I had five sisters. If you'd asked any of us 10 or 12 years ago what we wanted to do, none of us would have known. However, we all wanted to live in the community we came from. That wasn't an option for us at the time, not because of the housing market but because of the job market.

Things have changed now in small communities like mine, and big cities have been wrestling with this for a long time. People are being priced out of the communities they love and where their families live. It's where they want professional opportunities to grow, thrive and contribute. We have to succeed, because the cost of failing to build enough homes so people can live in the community they want is not just consequential for the person who can't find a home to live in, though it's worth doing for that in and of itself. There's also an economic impact for the country as a whole when young people can't move to the cities where opportunities are or remain in the cities where they grew up and where they have other opportunities. That has an impact on all of us.

Let the people you're dealing with know that despite the significant challenge we face, I am filled with a sense of hope that over the next number of years, things are going to get better, because I'm seeing the work being done to make them get better. I spend all of my time dealing with the people doing good things to build the homes we need so young people can afford a place to live—whether that's a place to rent today or an opportunity to save up to buy a place a few years from now.

We have to do everything we can to reduce the cost of building in order to get more supply on the market. We also have to look at measures to allow people to save up so they don't have to give up on the idea that they may own a place to live in one day.

Despite the challenge, I remain hopeful and optimistic. However, we have a lot of work to do to get to a place I want to get to.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you so much.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Dzerowicz.

MP Trudel, please go ahead. Welcome to our committee.

[Denis Trudel, Bloc, Longueuil—Saint-Hubert, QC]

Thank you, Mr. Chair.

Minister, I would have liked to give you a break, but my questions are addressed to you.

As has been mentioned, the current situation is quite dramatic. According to the Canada Mortgage and Housing Corporation, CMHC, 3.5 million homes need to be built. According to CIBC, the figure is closer to 5 million. It's a colossal undertaking. Last year, 40,000 homes were built in Quebec. According to CMHC, it should have been 200,000. In Quebec, 70,000 homes were built during the year in which we saw the highest number of new homes. To reach the CMHC target of 3.5 million homes, Quebec would have to build three times as many as it has ever built. Personally, I don't see how we can envisage such a thing.

Over the past year, I've toured Quebec and spoken to many organizations. That said, let's concentrate on the not-for-profit sector. Housing and condos are built. If you earn $200,000 a year, you don't have a problem, you don't experience a housing crisis. In Longueuil, we've built a lot of housing. Right now, families, single mothers and seniors are being evicted from their homes. We need to help the non-profit sector and build social housing.

At the moment, organizations are telling us that zoning and municipalities are creating all kinds of obstacles to construction. What's more, they tell us that Quebec and federal housing programs don't meet or overlap. In fact, the criteria are different. Non-profit organizations can't count on the help of 500,000 public servants to fill out their applications; often there are only two or three people in a small office. They try to meet the requirements of all the programs. The federal government has money, but the municipalities do not. Quebec, for example, has little money.

Before the national housing strategy was launched, we had to negotiate with Quebec for three years before a single penny was spent. However, money was spent in the rest of Canada. The measure to launch the housing accelerator fund was passed as part of the 2022 budget. We had to negotiate with Quebec for a year and a half before agreeing on the famous amount of $1.8 billion, of which Quebec is investing $900 million and the federal government $900 million. The current delays are not in the municipalities, as the Conservatives claim, but in Ottawa.

Minister, I'm going to ask you a question that many people have asked us. Instead of setting up programs, could Ottawa consider the idea of a single window approach, as in the health sector? The federal government could give Quebec a cheque. That would save us time. Then there would only be two levels of government dealing with housing: municipal and provincial. This would speed up housing construction, reduce delays and cut costs. So we could build more housing.

Could Ottawa be humble enough to stop worrying about housing and send cheques to Quebec?

[Sean Fraser, Liberal, Central Nova, NS]

Thank you for your comments, Mr. Trudel.

It's also important to recognize that we have an agreement with the Quebec government on funds to accelerate housing construction. It's a unique idea.

We are working together to meet the priorities that the Quebec government outlined to us. We've invested $900 million and the Quebec government has invested the same amount. It's incredible.

Organizations that want to build affordable housing are using a single program that combines federal and Quebec government funding. This will encourage more jurisdictions to use a similar strategy.

It won't be the exact same solution for every program we use. However, we're making changes to our housing programs, both for supply in the market and for affordable housing, so we can work with other jurisdictions or potentially organizations that have the capacity to build a large number of homes and do it with a portfolio approach. This way, we can say to a provincial government, for example, that we'll use some of our funds to flow them through a program where they attach theirs to the same opportunity for people who will build the houses. We're making program changes to that effect now.

I don't know that it will be appropriate with every single program—it depends on what complementary programs provincial governments have in place—but with both the housing accelerator fund in Quebec and our other programs designed to boost supply, we're moving toward a portfolio approach to unlock the complementarity that exists when we have that strategy.

[The Chair, Liberal, Peter Fonseca]

Thank you, Minister.

That is the time, MP Trudel. Thank you.

We're going to MP Blaikie now. Usually, I would say this is the last questioner, but I understand there have been some discussions to allow MP Morrice to have two minutes right after MP Blaikie at the end.

Do we have UC for that?

[Some hon. members]

Agreed.

[The Chair, Liberal, Peter Fonseca]

Great.

It's over to MP Blaikie, please.

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

Right on.

I'll come back to the question of a non-profit acquisition fund. In part because the previous Conservative government—and now this government as well—did not renew operating grants that were tied to mortgages for affordable housing as they came up for expiration, corporate landlords and real estate investment trusts have purchased those buildings and squeezed tenants. In some cases, they have evicted them. Now they want to let those buildings go all over again.

I think there is a concern in the conversation on a non-profit acquisition fund. It should not be set up in a way that it becomes a divestment tool for some of these larger landlords that have acquired buildings with affordable units and then branded them upscale.

I am wondering what kinds of guardrails you think should be in place for a non-profit acquisition fund to ensure that it doesn't become a divestment tool for the large financial interests that own those properties and is properly focused on ensuring that money spent is in the public interest and taxpayers are getting the maximum value.

[Sean Fraser, Liberal, Central Nova, NS]

I think whenever you're dealing with a new program design—and this is not specific to an acquisition fund, but generally—you want to understand for what purpose the program is in place and whether you are going to achieve that purpose. Right now, the purpose, in my view, of considering an acquisition fund or other measures designed to create more non-market housing is to increase the overall stock of housing in Canada that exists outside of the market.

I think you know this, but for the benefit of the committee, we're at a bit less than 4% of the total in Canada. The OECD average is closer to 8%. If we put measures in place, my goal will be to increase the proportion of homes that exist outside of the market. By the way, about 10% of Canadians, or a bit more, fall below the low income metric. I think we should be aiming to make sure they have a place they can afford.

In terms of the program that I would look at, my focus, if we're trying to support acquisition by non-profits, would be on making sure the building is held by someone who exists for the purpose of keeping it out of a market setting. I don't want to create a scenario where we put public resources on the table to eventually enrich a private investor who could be investing in the market themselves.

Long story short, we just want to make sure that the ultimate recipients of the funds we put in place are held outside of a market context so that 10 years from now we're not in the same place.

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

In a similar vein, there has been a lot of talk about using federal land to build new housing of various kinds. We saw recently in Ontario how wrong the release of protected land can go when there aren't safeguards in place to make sure that what's going to be done with that land is actually in the public interest.

We talk about the use of federal lands. Mr. Poilievre has talked about it. He has not proposed in his bill any safeguards of that type to ensure that public land is actually being used, as the New Democrats have proposed, for affordable housing and social housing.

What are some of the guardrails you think need to be put in place around the release of federal lands to ensure that those lands are properly used for the public interest and increase our affordable and social housing stock, instead of just being a boondoggle for investors?

[Sean Fraser, Liberal, Central Nova, NS]

First of all, you have to identify parcels of land that are appropriate for housing. If you're dealing with areas protected for agricultural or environmental reasons, that is, in my view, a complete answer to the question. You should not use those lands for housing developments.

When it comes to the other elements, you want to look at guardrails being put in place to ensure you're getting a good return on affordability, because the purpose of putting federal lands on the table is to reduce input costs. It's not just to build more homes but also to offer them at a better price. I believe we should insist that a significant portion of the homes be affordable.

However, on the flip side of the coin, I want to be careful and try to build affordability from inclusionary zoning. We talk about ending exclusionary zoning an awful lot. I believe more neighbourhoods should include a mix of affordable housing and market-based housing. I'm not a purist in the sense that every single housing unit has to be owned by a non-profit just because it was once public land. A significant portion of it should be, but I also want the people living in the housing designed for low-income families to feel part of a neighbourhood, not segregated from people who live in market housing in the same building or the neighbouring building.

It's a bit of an art, but I think you have to put guardrails in place to insist that a minimum level of affordability is achieved. When I say “affordability” on public lands, I'm talking about affordability for low-income families, not just homes at and below market.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Blaikie.

For the final two minutes, we have MP Morrice.

[Mike Morrice, Green, Kitchener Centre, ON]

Thank you, Mr. Chair.

Thank you, colleagues.

Minister, I want to start with some items we agree on.

We are in a housing crisis. I appreciate that you have been very clear about this. It is a crisis 30 years in the making. We need to legalize more gentle density, including fourplexes, for example. In fact, you have been making some excellent progress on that with the housing accelerator fund. Kudos on that.

My concern is over the number of builders I'm hearing from who are looking to build fourplexes. They look at what the federal government has available in terms of loans and contributions to make that happen. There's an irony there in that with the ACLP, which you spoke about this morning, if you go through the list, many...are five units and higher.

In advance of budget 2024, can you comment on efforts you're in the midst of to open up funding opportunities for those who want to build the very fourplexes you're having success in getting municipalities to begin legalizing?

[Sean Fraser, Liberal, Central Nova, NS]

Thanks for this question. It's timely. I will risk getting ahead of government policy in the spirit of candour.

This is an issue I'm looking at. We're figuring out whether we can adjust the rules now, but we have to do our homework to make sure we understand the consequences of the policy, both positive and potentially worrisome. Right now, my instinct is to err on the side of the positives, and not just because it will create financing for people who want to build four units. It could also potentially open up opportunities to convert existing single-family homes into multiresidential buildings. That's the style of most apartments in my community. They look like houses but have been divided to provide homes for different families.

The other piece is that if we are to make a change like this, it will coordinate the four-unit “as of right” zoning we embedded in our housing accelerator fund agreements with CMHC financing opportunities, as well as with the catalogue of pre-approved designs we're working on. This is so you have a line of financing for manufacturing with pre-approval at a municipal level. If we do all those things, we can shave many months off the process of getting something built, reduce barriers for new entrants in the homebuilding sector and put roofs over the heads of a lot more families at better prices than those that currently exist on the market.

Looking at it, the work isn't done.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Morrice.

We thank Minister Fraser and officials for coming before us today for this housing study. Thank you for your testimony.

Members, shall we adjourn at this time?

[Some hon. members]

Agreed.

[The Chair, Liberal, Peter Fonseca]

The meeting is adjourned.