Finance Committee on March 21st, 2022

[Andy Yan]

It has made a pre-existing condition worse. You have properties wherein, depending upon when they were built and what they are, upwards of 20% of certain stocks are owned by folks who don't live in Canada. That really has another distortive effect, which various policies at the provincial level in British Columbia have attempted to address.

Now there's evidence that it has actually moved eastward, particularly to markets like Toronto, which I'm happy to talk about later on. Some of my latest research has shown how it has spread out into the rest of the country.

[Heath MacDonald, Liberal, Malpeque, PE]

Yes, certainly. We're even seeing it as far east as Prince Edward Island, so it's very interesting.

How many years does this go back? When did this start? How many years have we actually been dealing with this problem, though it's really surfaced in the past 10 to 15 years?

[Andy Yan]

That's precisely it, Mr. Chair.

It's an issue that has a particular timeline and it started approximately 10 to 15 years ago. My existing research talks about how it has accelerated. It's fundamentally not only about foreign money, but how foreign capital has mixed in with local lending practices. The issue isn't only about foreigners per se, but about foreign capital and how capital from around the world is landing in Canada for safety. In that type of safety, it's distorting property values.

[Heath MacDonald, Liberal, Malpeque, PE]

Do you have any examples you could share with us, where you know first-hand of the consequences of this?

[Andy Yan]

I think, fundamentally, you can see it in Vancouver. The speed of this type of increase in housing values—compared with local incomes—has been most acute in the city of Vancouver. Through certain policies at both the local and provincial levels, we've seen at least some staunching of that. At the same time, of course, other factors have now replaced that, which are also drive up housing values.

It's really about how we've dealt with the issue of foreign capital. It still remains a sizable challenge when looking for policy and leadership at the federal level.

[Heath MacDonald, Liberal, Malpeque, PE]

How much time is left?

[The Chair, Liberal, Peter Fonseca]

You have a minute and a half.

[Heath MacDonald, Liberal, Malpeque, PE]

The government of the day introduced the underused housing tax. What are your thoughts on the taxation of underused homes?

[Andy Yan]

I think it is a policy that can be directed into particular markets. The issue of underused homes mixes in with the emergence of disruptive technologies and the role of property technologies, or prop-tech, whether short-term rentals through Airbnb to.... These platforms are distorting the rental expectations of prospective landlords in terms of faulty algorithms that really maximize the amount of rents, as opposed to connecting up with those who need rental housing.

[Heath MacDonald, Liberal, Malpeque, PE]

I see in an article from CBC that you were supportive of B.C.'s new cooling-off period. Do you think this practice would work elsewhere across the country?

[Andy Yan]

I think it goes directly to transparency, consumer protection and the role of the federal government to produce a level of leadership in terms of ensuring that Canadians are protected in the biggest purchase of their lives.

[Heath MacDonald, Liberal, Malpeque, PE]

Thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Yan and MP MacDonald.

We are moving now to the Bloc and Monsieur Trudel for up to six minutes.

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

Thank you, Mr. Chair

I thank all the witnesses for being with us today.

Ms. Cyr, thank you for your presentation. I'd like to begin by asking you to explain the particular features of technical resource groups, or TRGs, for the benefit of our friends in English Canada. Your organization, Bâtir son quartier, is one of them. Twenty years ago, I think there were TRGs all over the country, but now they only exist in Quebec.

What is the importance of TRGs in delivering community and affordable housing projects?

[Edith Cyr]

Thank you for the question.

Technical resource groups are instruments, tools for the development of cohousing. We are on the lookout for needs, and based on an expressed need, we accompany the groups to carry out projects aimed at building housing, whether it is a question of finding a plot of land or a building, putting together the financial package, coordinating all the professionals or providing training in property management.

This is the tool that has allowed Quebec to develop just about everything related to community housing over the years.

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

Thank you.

The federal government invested a lot in social housing before the 1990s, in the 1960s, 1970s and 1980s. There was a pause in investment around 1993, hence the national strategy that was launched five years ago. Indeed, it had been 25 years since the government had invested in social housing.

According to a report by the Front d'action populaire en réaménagement urbain, or FRAPRU, in Quebec, with which you are no doubt familiar, if the government had not stopped investing, we would have 80,000 more social housing units on the market in Quebec alone right now. We can certainly say that we would have fewer problems related to the scarcity and affordability of housing in Quebec if these units had been built.

Isn't this precisely proof of the importance of the federal government's commitment to the construction of social and affordable housing in Quebec?

[Edith Cyr]

Yes, you are absolutely right. It is absolutely necessary for the federal government to maintain its investments and redirect them. The programs were designed and thought out in a specific context. Beyond the evaluation that can be made of them, at present, if we want to achieve the targets set in the strategy, we have to review the programs in certain cases. Sometimes adjustments have to be made. We need to refocus the support measures.

I agree with Mr. Sullivan that, given the rising costs, additional subsidies are needed. In addition, there is a need to improve the support measures for individuals. We also need to intervene on what exists, save the affordable housing stock and create tools to acquire new ones.

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

Federal programs such as the National Housing Co‑Investment Fund and the Quebec Low-Rental Housing Program are generally based on the median market rent. As a result, a rent of $2,225 per month in Montreal, for example, is considered affordable, which does not make sense.

Don't you think that the ability to pay of households should be the basis for federal government subsidies instead? After all, it is public money.

[Edith Cyr]

There are indeed two issues with the National Housing Co‑Investment Fund.

Part of this fund is to help the lowest-income households, and the rest is to help finance that part. Rents can be very expensive to help finance about 30% of the housing that is a bit cheaper.

You are right. For some time now, we've been talking about affordable housing all the time, while the price of what is considered affordable is increasing as the average price of housing increases. However, incomes do not increase accordingly. The definition of affordable housing should be reviewed in relation to the ability to pay of tenant households.

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

As you said earlier in your presentation, according to the most recent data, material and labour costs have caused maintenance and renovation expenses to jump by about 25% in Quebec this year, in the rental sector, for example.

Do you have any projects that have been put on hold due to current inflation?

[Edith Cyr]

Yes; Bâtir son quartier has had to put approximately 1,460 housing units on hold. These are projects that were well advanced but stalled because the funding was not indexed. In addition to these units, another 5,000 were put on hold. Real estate is not developed one year at a time; it is prepared and worked on in the long term. So we need predictability.

The projects we have been working on are therefore at different stages of completion. The 1,400 units I was talking about are at a very advanced stage, but there are another 5,000 that are expected to follow. When I was talking about 10,000 units in Quebec, I wasn't even counting the ones that are in development or in preparation. The cohousing field needs predictability.

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

In Quebec, the Réseau québécois des OSBL d'habitation, FRAPRU, which was mentioned earlier, and the federations of housing cooperatives think that, in general, the federal government's programs are far too oriented towards private developers. They believe that more trust should be placed in organizations such as technical resource groups, for example, which are more aware of the needs of the community. They therefore suggest that funds should be redirected to groups that really know the needs of the community and are also able to ensure long-term affordability.

What do you think?

[Edith Cyr]

What I have always said is that all Canadians should be able to afford decent housing. However, if a government is going to make budgetary choices, it needs to target its assistance and provide it to the poorest, those who need it most.

When I talk about helping the most needy, we have to be careful, because the current trend is to target what I call clienteles, such as abused women or people experiencing homelessness. This is a good thing, because we need to address the needs of these groups, but we must never forget the people who have no particular need other than the essential need to have affordable housing that is large enough not to be overcrowded.

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

Thank you, Ms. Cyr.

[The Chair, Liberal, Peter Fonseca]

That is the time.

We're moving to the NDP.

Welcome, MP Garrison, to our committee.

You have six minutes.