Finance Committee on Feb. 15th, 2024

[Marie-Josée Houle]

Absolutely not.

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

I quite agree with you.

In your report, you talked a lot about housing being a right. You're right.

You also talked about encampments. I did a tour of Quebec from one end to the other. There are encampments in large cities such as Montreal, Quebec City, Saint-Jérôme and Rouyn, but they are now appearing in small rural areas, particularly in the Lower St. Lawrence and Lac-Saint-Jean. There are even tent parks in small villages in the Laurentians, where we did not see that before. What measures do you think should be put in place?

There are two trends in homelessness. On the one hand, we can continue to fund emergency housing. On the other hand, we can invest a lot of money in social housing.

There are currently far too many people in intermediate homelessness resources. There are emergency resources, but there are also intermediate resources where people can live for one to two months, the time it takes to start a social or professional reintegration. In the past, this reintegration process could lead people to social housing. But there is no more social housing. Intermediate resources have become overwhelmed.

Should funding for emergency and intermediate housing be prioritized, or should investments be focused in social housing so that people can lead a normal life, in a home?

[Marie-Josée Houle]

First, an inn is not housing. That's not a solution. This type of housing exists to respond to emergencies. We really need to focus on investments in housing.

In the regions you mentioned, a lot of housing has been converted to Airbnb rentals. This is more financialization. Measures must be put in place to stop or slow down investments in housing in order to make a profit. Financialization must stop.

In the Gaspé, there is not even a place to house employees working in tourism because all the housing and houses that belonged to families have been bought or converted to short-term rentals. We see that everywhere, but especially in the regions. During the pandemic, it was a good place to invest because it was a very stable industry during a period of economic instability. Again, this is financialization.

When we talk about expenditures, we absolutely have to target affordable, permanent housing that will be accessible to the people who need it most.

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

Thank you, Mrs. Houle.

Mr. Cimon, you did a tour of Europe. You mentioned Vienna, Denmark, France. In Vienna, 60% of the housing stock consists of social housing. What can Vienna teach us? What are they doing there that we have not understood here in Canada? What can we do to get closer to what they are doing in terms of social housing?

[Éric Cimon]

Recognition of social housing as a development tool and a way to uphold the right to housing, but also as an economic response so that people can have access to housing, is huge. That is why what we call affordable housing here does not correspond to that definition. Affordable housing is affordable for whom? We always talk about affordability for low-income and vulnerable people. This is important. When you go to social housing, you create an asset whose objective is to help people, and the resulting wealth is reinvested.

To give you an example, just in Vienna, the organizations have 1 billion euros a year that they reinvest in renovations and new construction. I repeat, they have 1 billion euros a year, just for that city. This billion euros is not government money. This is the surplus of groups that, to meet their needs, do construction or renovation to ensure that the housing stock is in good condition.

Consequently, by investing in social and community housing and ensuring the value of that stock and the organizations that take care of it, the government creates additional wealth. Instead of prioritizing emergency assistance for the homeless, we are prioritizing housing to ensure that there will be no more homeless people.

In the beginning, we have to get out of this vicious circle by saying that we're going to build housing and that the value of that housing will be reused to create others, accelerate the pace and move to large scale. At the moment, we go by program, by small achievements, and we think that the private sector will create affordable housing. However, the individual will sell their home or turn it into an Airbnb. So we have to make sure that we have a long-term system.

It's 100 years of history in Vienna. This is a story that we have to start here now. Because of the crisis, we have to realize that it takes a big project and the ability to achieve our ambitions. We have to set a target.

We have the number of people in core housing need. How long will it take for us to be able to build and how will we be able to give ourselves the tools to multiply that money through the involvement of social and community housing? Social and community housing players must ensure that this money always stays in the system and that it does not end up in profit, or in a sale or a transformation.

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

Thank you very much, Mr. Cimon.

[The Chair, Liberal, Peter Fonseca]

Now we go to MP Blaikie.

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

Thank you very much.

Thank you to all our witnesses for being here today. There has been some great testimony.

One of the things I'm hearing is that one of our problems when it comes to the housing space is we have a government that still really only measures value in the housing space through profit, so a lot of the programs we're seeing always ask the question of how people who invest in housing make profit. If the answer is that they don't, there's very little investment. If there's a mechanism that somehow includes profit—as it did in the RCFI, as an example—the government seems to appreciate the value of the program more than when there isn't profit.

We talk about productivity and we talk about access to housing for workers and all of the more indirect points, which are perhaps harder to measure, although a lot of folks have shown they're pretty easy to measure if you have the conceptual tools at your disposal.

One thing we've talked a bit about here today is a non-profit acquisition fund to ensure that community organizations that are competent housing deliverers have the access to capital they need to compete with the corporate landlords that are otherwise coming in and scooping up those buildings. That's something New Democrats have supported for a long time. We're very happy to see the B.C. NDP move ahead on that in its own way.

One of the questions that come up in the context of a non-profit acquisition fund is how to make sure it doesn't simply become a tool for divestment by REITs and corporate landlords who have bought up some of these buildings and done what they're going to do in terms of evicting tenants and jacking up rents, and now see more value in selling the buildings than continuing to operate them.

I'm wondering, Ms. Houle and Mr. Sullivan, if you might have some thoughts on what kinds of guardrails can be put in place to ensure that a non-profit acquisition fund delivers benefits to Canadians and to people who need access to affordable housing, and doesn't simply become a divestment tool for larger landlords.

Maybe we could start with Mr. Sullivan and then come to Ms. Houle.

[Ray Sullivan]

What we need to focus on is interrupting that cycle you described, in which especially large financialized landlords are purchasing properties and often displacing the tenants who are there so that they can raise the rent, thereby raising the value of the asset, and then selling that asset and returning the profit to their shareholders and members.

Moving that building into non-profit and co-op control interrupts that cycle. That's why we're focusing on acquisition. It protects those tenancies, because we know that in that transaction in the private sector, those tenancies are at risk. There's a strong motivation for a new owner to increase the value of their assets by displacing those tenants and changing those rents.

The longer someone has been in that home, the more they're a problem on the balance sheet for that new owner. Grandma, who's been living there for 20 years at $800-a-month rent, is vulnerable in this situation, but no longer will be when that property is owned by a non-profit, a co-op or a community land trust. That's the outcome we need to protect.

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

Ms. Houle, do you have anything to add to that?

[Marie-Josée Houle]

First of all, the committee has already heard from Maureen Fair, the executive director of West Neighbourhood House, about the need for maybe considering tax forgiveness for private firms that sell their buildings to non-profit and public entities. Also, according to Jill Black, a housing researcher, owners of rental buildings should be allowed to maybe defer taxes on capital gains and CCA recapture if they sell to non-profit...or buy another building within a year.

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

Mr. Cimon, do you have anything to add?

[Éric Cimon]

Yes. I just want to say that laws matter. When the Quebec government invests in a co-operative or a non-profit organization, certain obligations are imposed by legislation, in particular the Cooperatives Act and the legislative provisions for non-profit housing organizations. They were recently amended to give the minister the right to intervene in the purchase of a building that is put up for sale. A fund's investment must serve the public good and stand the test of time.

I'm not familiar with all the provincial legislation, but when you amend legislation that governs investment in a co-operative or a non-profit organization, you have to make sure that, under the relevant legislation, the co-operative is not allowed to sell its building to the private sector without the agreement of the minister.

The idea behind having a fund that pays for these measures is that money invested in social and community housing will ensure sustainability and guaranteed affordability over time. That is the only way we have found, in Canada and elsewhere, to ensure housing affordability, because no one is out to make a profit. People will still apply a minimal rent increase to keep their rental unit in good condition. There's no other way around it. The private sector will always be profit-driven. A new owner will be profit-driven. No one has found a different way to keep housing affordable.

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

Thank you very much.

Mr. Sullivan, on the topic of guardrails, you talked a little bit about the use of federal land. You mentioned that there's been an announcement about ensuring that 20% of units built on federal land are affordable. New Democrats would agree that this threshold should be higher. However, I wonder if there are other guardrails that you think the federal government should be looking at putting in place around the use of federal land for housing to ensure that Canadians get the maximum value in terms of addressing the housing crisis with the use of that land, as opposed to developers maximizing value through profit.

[Ray Sullivan]

I think that all public land—federal, provincial and municipal—should be set aside for community housing development in any residential context. This can be a mixed-income community, which allows a non-profit developer to leverage the value of market rents to provide even deeper affordability to a portion of the neighbours who are there. To me, dedicating 20% is nibbling at the edges. We need to change the mandate of the Canada Lands Company completely so that it's not driven toward a return on investment or a return on the value of the land from property, but on the social return of creating more affordable community housing.

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

Thank you.

[The Chair, Liberal, Peter Fonseca]

Members, I'm just looking at the time. We lost a little bit of time, so we're going to give each party two minutes to ask our witnesses a few more questions.

We're starting with MP Chambers for two minutes.

[Adam Chambers, Conservative, Simcoe North, ON]

Thanks, Mr. Chair.

Mr. Sullivan, do we have a good enough database on existing federal land stock across the country that someone could look at and say, “You know, that might be an interesting parcel”?

[Ray Sullivan]

Yes. The Treasury Board keeps an inventory of all federal real estate assets. More important, I think, for what you're asking about are lands that are suitable for residential development. The housing assessment resource tools, HART, project, out of the University of British Columbia has actually been building an online inventory of those lands and scoring them on their suitability for affordable housing and residential development, city by city.

[Adam Chambers, Conservative, Simcoe North, ON]

Thanks. That's very helpful.

You mentioned the impact of interest rates and the fact that higher interest rates mean less money, that a project has to shrink. This is why it's important for the federal government to take as many steps as it has in its control to bring down inflation so that interest rates can come down. Would you agree with that position?

[Ray Sullivan]

I agree that interest rates make all the difference when it comes to developing rental housing.

[Adam Chambers, Conservative, Simcoe North, ON]

So lower interest rates are better for housing and better for everybody.

Ms. Houle, I have 30 seconds left, I wish I had longer, but if there's anything else you'd like to add from your testimony you haven't gotten to yet, in the last 30 to 40 seconds you can do so.

[Marie-Josée Houle]

Thank you for that.

I think when we're talking about an acquisition fund as well, we really need to expand it to non-profit seniors' apartment buildings. Seniors' housing and the financialization of seniors' housing and long-term care is something I'm really concerned about. We've seen really high rates of morbidity and mortality in seniors' housing that is for-profit and this too needs to be addressed. Thank you for the opportunity to speak about that today.

[Adam Chambers, Conservative, Simcoe North, ON]

Thank you for coming.

[The Chair, Liberal, Peter Fonseca]

Now we go to MP Thompson for a couple of minutes.