Finance Committee on Dec. 9th, 2021

[Greg McLean, Conservative, Calgary Centre, AB]

Thank you.

[Stephen Saretsky]

Downtown Vancouver, I think, is 60% renters.

[Greg McLean, Conservative, Calgary Centre, AB]

Thank you very much.

Give us some perspective on why you think Canada's housing prices have increased at a level so much higher than that in the U.S.

[Stephen Saretsky]

I think what is really huge is, number one, that we haven't been building enough. Number two is that we certainly have a lot of immigration in our country. Number three, I think, is that the bank lending is a big thing. I think there has been a lot of credit growth. All you have to do is look at household indebtedness in Canada, right? That basically tells me that people are taking on a lot of debt, and most of that debt is in the form of mortgages, so the banks are obviously lending a lot of the mortgages.

[Greg McLean, Conservative, Calgary Centre, AB]

Yes. Okay. Thank you.

So it's low interest rates that are causing a lot of this. These low interest rates are non-market mechanisms right now because of the Bank of Canada's policies of keeping interest rates low with quantitative easing.

What would happen, once we return to a market mechanism for setting interest rates, if those mortgage interest payments increase, as they surely will?

What will happen to both the payments that are due from the homebuyers plus the actual ownership of those units? Will they switch over to investors even more?

[Stephen Saretsky]

Yes. You will have a substantial repricing in home prices, so if mortgage rates rise—I need to remind people some times that in 2018 mortgage rates in Canada hit 3½%. Everybody thought they were going to go to 4%.

During that year, in 2018, greater Vancouver home sales dropped to an 18-year low and in the greater Toronto area, they dropped to a decade low, so if we get any sort of repricing in the mortgage market, what we will see is a repricing of homes. For example, in 2018, Vancouver home prices dropped about 10% as a result. Then at the same time, you will see more investors, I think, hitting the sell button. For sure you will see that, and that will, obviously, add to supply in the market and will probably weigh on prices as well.

[Greg McLean, Conservative, Calgary Centre, AB]

Thank you very much.

My final question here is for Ms. Kobluk.

Ms. Kobluk, some of these programs the government has put out have been rather haphazard. I'm speaking directly to the $500 that was given as a gift in recognition of what was happening at times to people 75 and over. Unfortunately, that caused some other effects, because there are all kinds of follow-on implications including rental payments, which for some lower-income seniors take up a portion of their income.

I know you mentioned that as well, as far as the social programs available to seniors below a certain level go.

How many seniors are affected by these haphazard programs that the government has put forward?

[The Chair, Liberal, Peter Fonseca]

Mr. McLean, that's a great question, although it may have to wait until we get into our final round. I have Ms. Dzerowicz up next for the Liberals for five minutes.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you so much, Mr. Chair, and thanks to everyone, because I think this is an important conversation this afternoon.

My first question is for Ms. Kobluk from the Income Security Advocacy Centre. As I was hearing your earlier exchange with my colleague Mr. Blaikie, I just wanted to reiterate a couple of the things that our Deputy Prime Minister and Minister of Finance indicated this morning.

I think there was a very clear commitment made by our Deputy Prime Minister that we're working on the GIS/CERB issue. We're aware of the issue, we're concerned about it, it's a priority, and stay tuned for some news. I wanted to make sure that this was reiterated, because I think there is a lot of compassion from all sides of the floor on the issue.

I think the other point I want to make is around the audit around CERB. The CRA is actually coming before this committee tomorrow, so I think the committee members can actually ask more specific questions then, but I do know that the CRA and Service Canada have made it very clear that when they're doing their audits, they're flexible, they're empathetic, they're compassionate and they are not out in any way to try to harass our vulnerable Canadians to repay money that they're not able to.

As for how this emanates for me in my riding, originally when there was some concern, particularly from some of my artists, to be honest, around the auditing of the CERB benefits, I had a lot of calls to my office. I will say to you that a number of them have been audited, and I'll say to you that I've literally received zero calls right now about the auditing around CERB and any of their concerns. It's gone from a bit of a crescendo around emails and calls to literally zero right now. For me and my riding, I have a working-class riding, and it's definitely something that I'm always concerned about in terms of how the people of my riding are being treated. I did want to relay that to you.

My question to you, though—and this is something I brought up to our Deputy Prime Minister and Minister of Finance this morning—is the importance of national child care. I wonder if you could maybe comment on the importance of the Ontario government signing on to the child care plan.

[Devorah Kobluk]

Sorry, but I just would like to first address some of your comments.

I did watch the minister this morning. We are very glad that this is on the radar. We've been working on our advocacy since August.

I've also traced some of the comments from this government, and what I've heard Minister Qualtrough say is that they have to look at “fairness and equity”. I put that in my statement. Let's talk about which seniors we're talking about. These are the poorest seniors, who are living near or around the poverty line. These are not OAS-receiving seniors who did not have a clawback until they hit $80,000. These are the seniors who, once they get one dollar of CERB, are clawed back at 50%, and they are already on the poverty line.

My fear is that what will be corrected is that we're going to have a one-time payment. That's what I meant by this needing to be systemically addressed. There's an easy way to fix this—

[Julie Dzerowicz, Liberal, Davenport, ON]

Look, I'm very sorry. I do want to ask you about the child care question, just because I only have a limited time to ask all of my questions, but I appreciate your comments very much.

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

I have just a quick point of order on that.

[The Chair, Liberal, Peter Fonseca]

We have a point of order.

[Devorah Kobluk]

We need a minister's exemption on earnings for CERB for seniors.

[The Chair, Liberal, Peter Fonseca]

We have your point of order.

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

I have just a quick point of order.

Earlier today, we had a long conversation about the right of witnesses to be able to answer questions to their own satisfaction, and I think—

[Julie Dzerowicz, Liberal, Davenport, ON]

I didn't ask a question about that.

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

Well, you did make a number of comments about it.

[Julie Dzerowicz, Liberal, Davenport, ON]

I know, but I didn't ask a question on it.

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

I know, but look—

[Julie Dzerowicz, Liberal, Davenport, ON]

I asked about child care.

[The Chair, Liberal, Peter Fonseca]

I'll allow the member to continue and the witness to answer.

We have Ms. Dzerowicz.

[Julie Dzerowicz, Liberal, Davenport, ON]

Yes. I asked a question about child care and the importance of the Ontario government signing on to it. That was my question.

[Devorah Kobluk]

In income security, we work for low-income Ontarians. Children are poor if their parents are poor. There are seniors who are also taking care of grandchildren.

I would be remiss if I didn't mention some of those comments, because until we see something, we're going to continue to feel the urgency. Seniors cannot wait. Every day that they do not have that GIS restored, there's an increased risk of homelessness, and we are very strongly urging the government to put something into this bill to address that.

I would also let you know that some people are not coming forward to your office, potentially—

[Julie Dzerowicz, Liberal, Davenport, ON]

I'm just not going to get an answer to my question, so thanks very much.