Finance Committee on Jan. 21st, 2022

[Pierre Poilievre, Conservative, Carleton, ON]

So for 5% down, you have to pay 4% in mortgage insurance fees, which means that once you subtract the mortgage insurance from your down payment, you actually only have 1% net equity in your house, then, don't you?

[Peter Routledge]

All else being equal, everyone is different and I wouldn't want to make a broad statement—

[Pierre Poilievre, Conservative, Carleton, ON]

So if someone has—

[Julie Dzerowicz, Liberal, Davenport, ON]

Point of order, Mr. Chair.

[The Chair, Liberal, Peter Fonseca]

Point of order.

[Julie Dzerowicz, Liberal, Davenport, ON]

Point of order.

[Pierre Poilievre, Conservative, Carleton, ON]

This is getting very.... I can understand why these Liberals don't want these questions asked.

[The Chair, Liberal, Peter Fonseca]

There's a point of order, Mr. Poilievre.

Ms. Dzerowicz.

[Julie Dzerowicz, Liberal, Davenport, ON]

I actually think these questions are very important, but I also think the answers are very important and I feel as though Mr. Routledge isn't being allowed to fully answer the questions. I would ask that he be allowed to do so.

[Pierre Poilievre, Conservative, Carleton, ON]

I wanted—

[The Chair, Liberal, Peter Fonseca]

I have been timing this, and Mr. Poilievre had 14 seconds, and for the last one, he had seven seconds and cut off Mr. Routledge who had 1.41 seconds to answer.

So Mr. Poilievre, please give the witnesses equal time to answer those questions.

[Pierre Poilievre, Conservative, Carleton, ON]

That's a fair point. I do want to thank Mr. Routledge because he has actually been offering direct answers to the questions.

So if ultimately you have one per cent net equity in your house and house prices go back just to 2020 levels—we're just talking about going back to where they were a couple of years ago—and prices drop by 25% then, you're 24 percentage points under water on your mortgage.

Now, if you can't make your mortgage payments because you're on a variable rate mortgage—and you've just acknowledged that half of new mortgages are variable—and you default, then you hand your house over to the bank in a 24% loss position, and the bank hands the bill over to Ms. Bowers over at CMHC, who then passes it on to taxpayers in the form of mortgage insurance payment. That is the risk we're facing now.

I want to know what immediate action you're taking, Mr. Routledge, to address the—

[The Chair, Liberal, Peter Fonseca]

Mr. Poilievre, you've gone well over your time. Thank you.

We're now moving to the Liberals with Mr. Baker for five minutes.

[Yvan Baker, Liberal, Etobicoke Centre, ON]

Thanks, Chair.

I'd like to take this opportunity to thank our witnesses again—Ms. Bowers, Mr. Routledge and Mr. Dugan—for being here today, and I apologize on behalf of my colleagues for some of the belligerence you've experienced today from some of the members.

[Pierre Poilievre, Conservative, Carleton, ON]

Point of order, Mr. Chair.

[The Chair, Liberal, Peter Fonseca]

Point of order.

[Pierre Poilievre, Conservative, Carleton, ON]

We had agreed that witnesses should have a chance to answer if a question was asked before the clock ran out.

[The Chair, Liberal, Peter Fonseca]

The clock had long run out, Mr. Poilievre. That is debate.

Mr. Baker, you have the floor.

[Yvan Baker, Liberal, Etobicoke Centre, ON]

This is the second time, Chair—I think it's important to note—that in the first five seconds of my period of questioning, Mr. Poilievre has deliberately intervened on a point of order that wasn't a point of order. I think he is disrupting the productive work of this committee on this important topic, so I would ask you, Chair, to do what you can in that regard. I know it's not easy.

I'd like to apologize, on behalf of the members of the committee, to our witnesses for the treatment you've received from Mr. Poilievre. I think it's completely unfair and I think it's really important that we hear the answers to the questions because these answers are helping to inform us and inform our report and any advice we give to government on how we should proceed to address the challenges that Canadians are facing in terms of increasing prices of housing and inflation and everything else under the scope of this study.

I also think it's interesting that Mr. Poilievre was speaking about the concern he has about the risk of housing prices coming down and people not being able to afford to pay their mortgages. I find that interesting, because for those folks who've been watching this committee and the previous day of hearings and testimony, and not just the previous day but many days when this committee has met, Mr. Poilievre has argued vociferously against programs like the CERB and the wage subsidy and other programs that have allowed Canadians to put bread on the table and probably, in many cases, I suspect, that allowed them to continue to make payments whether rental or mortgage.

So on the one hand he's expressing concern about what would happen if people weren't going to be able to make those mortgage payments and, on the other hand, he's been arguing against the government supports that in a global pandemic and a crisis have allowed people to make those payments. I just want to point out that contradiction.

I'd like to come back to you, Ms. Bowers, if I may. In my last opportunity to ask you questions, we were talking about supply, and you spoke about how lack of supply is the primary reason for the increase in housing prices. Can you talk about what steps are being taken, if any, by other levels of government to help deal with supply issues? As you pointed out, this is a multi-jurisdictional challenge. You talked about provincial and municipal governments. What steps are those other levels of government taking to boost supply?

[Romy Bowers]

Again, that's quite a complex question to answer, because there are so many actions being taken across various levels of government. I think just this week there was actually a housing summit in Ontario that brought together many municipal leaders to address housing challenges. There are many programs available at the municipal and provincial levels across the country to address this issue.

I did highlight in my remarks that problems were at the local level, but I want to highlight that there are many great local leaders who are trying to address the supply challenges. I really would like to commend them for that.

I think where there is an opportunity, it's for everyone to be around the same table and for the federal government's programs to be aligned with provincial and municipal programs and to work with the private development community as well as non-profits to accelerate housing development. CMHC is very happy to play a convening role in this.

[Yvan Baker, Liberal, Etobicoke Centre, ON]

I appreciate that.

A lot of the challenges around building more homes, I believe, revolve around municipal zoning bylaws and regulations, etc. What steps are CMHC and the government taking to work with municipalities in this regard?

[Romy Bowers]

Thank you very much for that question.

Again, municipal zoning requirements are not within federal jurisdiction. I think what CMHC and the federal government can do is to provide information and insight about how some of these zoning rules impair the fast supply response that we need to that demand.

One statistic I always like to provide people is that compared with other international cities, Canadian cities are not very dense. In Toronto, for example, there are about 480 people per square kilometre. That's the density of that city. For New York, the density figure is 1,700, and in London it's 1,800. In Tokyo it's 4,200. That gives you a sense of how zoning decisions around density can impact the number of homes we have in our cities.

I find that creating that kind of discussion is really important.

[The Chair, Liberal, Peter Fonseca]

Thank you, Ms. Bowers.

Thank you, Mr. Baker.

That does conclude our third round, members.

We are now going to suspend to take a health break for five minutes and to allow the witnesses to stretch or whatever they like.

Thank you.

[The Chair, Liberal, Peter Fonseca]

Welcome back, everyone.

We are now moving into our fourth round of questions. We will start with the Conservatives and Mr. McLean for five minutes.

[Greg McLean, Conservative, Calgary Centre, AB]

Thank you, Mr. Chair.

I'll go back to Ms. Bowers here.

Some questions came up from the answers you gave me in the last round about how Generation Squeeze actually got a contract with CMHC through the ideas lab. You said it didn't have to do with their study on the shifting of generational taxes between house owners to new homeowners, a problem that came up during the pandemic and with this government's mismanagement of the housing market. Can you tell us how they were qualified to give other advice when this is the only thing they're really known to have any expertise in?