Finance Committee on April 20th, 2026

[Vasiliki Bednar]

My grandmother pays for her groceries in cash, too.

The information that's available suggests it is younger Canadians, 30 and under, who tend to turn to buy now pay later. Because we don't integrate it into our ledger of global household debt in Canada, which, as you've heard, is already quite high and rising, it's invisible to policy-makers. It's also invisible to the various buy now pay later programs. They have a harder time deciding who's creditworthy, unless you've been with one of the giants, a firm, and you've defaulted on that buy now pay later option, in which case they'll understand and be able to make a decision that this option may not be available to you. Because there are many of these products in the marketplace, that's how people can stack that debt.

In terms of the key indicators, I think what also matters is when and where people are using it. Again, if you move somewhere, you need a couch, you need a mattress. This makes sense in a particular way. The concerning element of it being used for groceries and other everyday essentials is symptomatic of the affordability problem and the broader prosperity problem. It's not that buy now pay later is bad.

[The Chair, Liberal, Karina Gould]

I'm sorry, Ms. Bednar. I'm going to cut you off there.

[Vasiliki Bednar]

I'm so sorry. I'll speed it up next time.

[The Chair, Liberal, Karina Gould]

It's a condensed round.

We're now going to continue with Ms. Cobena for five minutes, please.

[Sandra Cobena, Conservative, Newmarket—Aurora, ON]

Thank you, Madam Chair.

My question is for Mr. Butler.

In your opening remarks, you talked about how you would love to go back to seeing more ordinary Canadians making an ordinary income be able to afford a home. We used to see 27 as the average age when one would acquire a home, and now the average age is about 40. Clearly, there's a problem here that we need to address.

We have seen the government respond with a fourth housing bureaucracy, yet we continue to see reports that there are still even 100,000 construction workers who are at risk of facing layoffs, and we are still seeing Canadians struggle to enter the housing market.

What are your thoughts about this fourth housing bureaucracy as a solution to the problem?

[Ronald Butler]

It's no secret that I never understood Build Canada Homes or why the agency was created. I don't understand how it's going to move forward to accomplish very much in the end, because we had existing bureaucracies that could do the same thing. We had Canada Lands Company, and we had CMHC, which runs splendid programs in those areas.

We have to also understand really clearly that there's absolutely no home that Build Canada Homes will develop that will ever be sold to a Canadian. This is social housing and purpose-built rentals. There's never going to be a home for sale that comes out of Build Canada Homes, and that's my entire critique.

The greatest thing we could do in Canada is make it possible for more younger, middle-income people to buy homes in places they want to live. It is a good idea to develop smaller centres, but why would we want to insist that young Canadians move far away? You can't live in Burnaby anymore. You have to go way the hell to somewhere else. You can't do it, because it's just too expensive, and it will be too expensive forever.

That's my problem with the whole approach. Yes, more social housing is a great thing, because people who have problems need housing, but it's not helping young people buy homes.

[Sandra Cobena, Conservative, Newmarket—Aurora, ON]

It's interesting, because there was a recent MNP consumer debt index report that found that young Canadians are actually the most likely to feel financially paralyzed.

Do you see that in your line of work as well?

[Ronald Butler]

We don't see it too much, because the truth is that they've given up. They don't call a mortgage company. They know they can't get a mortgage. Probably the most tragic element is that we don't get those calls. We don't get the calls from young people who say, “Hey, I think I can buy this house in Vancouver, Markham or Oakville.” We don't get the calls, because they know they can't buy it unless they have massive parental assistance.

[Sandra Cobena, Conservative, Newmarket—Aurora, ON]

You have 30 years of experience in the mortgage market. Is that correct?

[Ronald Butler]

I'm very old, yes.

[Sandra Cobena, Conservative, Newmarket—Aurora, ON]

That's a good thing.

What would be your recommendation for how the government could better address the housing market problem that we have?

[Ronald Butler]

The recommendation is one that is unlikely to occur. It is to let nature take its course and continue to allow house prices to fall.

More than anything else, the government needs to find a way to re-energize investment in Canada for high-paying jobs or better-paying jobs and avoid any type of wage suppression; I don't think that is the intention of the government, but it's certainly been the outcome we've seen for the best part of a decade. Wage suppression has gone on to the point where young people can't afford homes and middle-income people can't afford homes.

[Sandra Cobena, Conservative, Newmarket—Aurora, ON]

Thank you, Mr. Butler.

Ms. Bednar, you mentioned that, obviously, there are some Canadians who are paying for burritos in instalments. Even though there may be a deal and it may be an alternative to using a credit card, it is a sign of a cash flow restraint.

This is a household debt study, but you mentioned something that I found interesting. You said private debt is compensating for public policy failure. Could you expand on that?

[Vasiliki Bednar]

The public policy failure is the prosperity one. Our wages have not kept up. Our economic growth is so slow that people are constrained when it comes to wage growth and the cost of living, which is why it's so connected to all these other policy levers.

[The Chair, Liberal, Karina Gould]

Thank you very much, Ms. Cobena.

Mr. MacDonald, you have five minutes.

[Kent MacDonald, Liberal, Cardigan, PE]

I'll question Mr. MacKenzie first.

Mr. MacKenzie, we've heard a lot of testimony here at committee arguing that many owners of households may appear to be stable because of their accumulated home equity, but in practice they could be short on liquidity, and they're vulnerable to refinancing challenges and rising mortgage payments when they refinance, as well as the cost of insurance, taxes and maintenance.

My question for you today is this: Are you seeing more homeowners who are asset rich but cash poor? I thought that was always a farming term, but I guess it's spread to home ownership as well.

What specific mortgage market changes, whether around underwriting, refinancing flexibility or product design, would you recommend to help stabilize these issues?

[Peter MacKenzie]

You're right in that there is a segment of homeowners coming up to refinance who is asset rich, because the price of their home has increased, but they don't have the money to pay that higher mortgage rate. Refinancing and temporary payment relief are some policy levers, but it's hard, in the short term, to really fix it.

When you look at the debt service ratio, it's going to be a systemic problem across Canada. When you look at bigger centres, such as Toronto and Vancouver, that's definitely a concern.

As far as a policy lever is concerned, it's not completely obvious what it would be, besides some temporary payment relief.

[Kent MacDonald, Liberal, Cardigan, PE]

I'll stick with you, Mr. MacKenzie.

Budget 2025, which we passed in the House, offers tax relief, but it also offers first-time homebuyers a GST rebate.

Which of those measures do you think will help affordability the most?

[Peter MacKenzie]

I think both can help affordability, but to me, both are more demand-side measures.

The way to fix the housing supply problem in Canada and get people out of having to take these oversized mortgages they won't necessarily be able to afford in the future is to build more housing. The supply side is where it has to come from.

As my friend Ron talked about, in Toronto there are many condos sitting unsold, and the condo market is in a big downturn there. The demand is really for single-family homes and not condos, for the most part, at least. Giving the market time to fill that demand and having the government help them do that would be ideal.

[Kent MacDonald, Liberal, Cardigan, PE]

In my region of the country, Atlantic Canada, we've seen post-COVID housing prices driven up by out-migration from Toronto and other large centres. They took advantage of the equity in their homes and purchased less expensive homes in rural regions. Maybe they wanted to live in a less dense population and COVID made them make that decision. I don't know what their decision-making process was.

What we do know in Atlantic Canada now is that we are seeing rentals coming down. We're seeing the price of homes at least stabilizing and not escalating anymore. If you talk to real estate companies, their sales have slowed down considerably. With the right type of building going forward, we should see home ownership for young Canadians become more affordable.

Would you agree with that? Can you speak to that?

[Peter MacKenzie]

Yes, generally, I would agree with that.

I actually lived in Atlantic Canada during COVID. I followed that movement out east. Certain factors, like working from home, enabled people to live in different areas.

The type of housing offered is a major consideration when looking at this. People want different types of housing. The demand across the board seems to be for detached single-family homes, but there are different density considerations as well.

[The Chair, Liberal, Karina Gould]

Thank you, Mr. MacKenzie.

Thank you, Mr. MacDonald.

That concludes the time we have for this hour. On behalf of the committee, I would like to thank our witnesses for their time today.

We're going to now briefly suspend as we change over for the next hour.

Thank you very much.

[The Chair, Liberal, Karina Gould]

Welcome back. We will resume the meeting.

I'd like to welcome the witnesses.

We have, from the Canadian Association of Insolvency and Restructuring Professionals, Mr. André Bolduc, licensed insolvency trustee, as well as Wesley Cowan, another licensed insolvency trustee.

We also have Maude Pugliese, associate professor at the Institut national de la recherche scientifique at Université du Québec.

We have as well Douglas Hoyes, the licensed insolvency trustee for Hoyes, Michalos and Associates Inc.

I would like to remind participants of the following points.

Please wait until I recognize you by name before speaking. For those participating by video conference, click on the microphone icon to activate your microphone, and please mute it when you are not speaking.

For those on Zoom, at the bottom of your screen you can select the appropriate channel for interpretation: the floor audio, English or French.

As a reminder, all comments should be addressed through the chair.

As you just heard, all of our virtual witnesses have conducted a mandatory witness onboarding test.

Let's get started. Each witness will have five minutes for their opening remarks. Afterwards, we will proceed with a round of questions.

We will begin with the Canadian Association of Insolvency and Restructuring Professionals.

[André Bolduc, Licensed Insolvency Trustee, Canadian Association of Insolvency and Restructuring Professionals]

Madam Chair and members of the committee, thank you for the opportunity to appear today.

My name is André Bolduc, and with me virtually is Wes Cowan. We are both licensed insolvency trustees, federally regulated by the Office of the Superintendent of Bankruptcy, and we appear on behalf of the Canadian Association of Insolvency and Restructuring Professionals, or CAIRP for short. I am the immediate past chair, and Wes is the current vice-chair. CAIRP represents nearly 1,400 members and associates working in consumer and commercial insolvency and restructuring across Canada.

As frontline professionals, we work directly with Canadians in financial distress and, as the only professionals authorized to provide formal legal debt solutions to Canadians, we see first-hand the consequences of household debt.

I will now turn things over to my colleague, Wes Cowan, on the trends we are seeing.

[Wesley Cowan, Licensed Insolvency Trustee, Canadian Association of Insolvency and Restructuring Professionals]

Thank you, André.

We are seeing several consistent trends.

First, many Canadian households remain under significant financial pressure due to increasing debt levels. With little savings and many living paycheque to paycheque, even a modest shock can quickly lead to a financial crisis.

Second, we are seeing longer-term and riskier debt products, especially in auto lending. The combination of higher vehicle prices, loan terms stretching over seven to eight years and consumers carrying negative equity is a problem for households.

Third, alternative and digital lending, including buy now pay later products, have expanded rapidly. Once used mainly for small purchases, these products now finance everything from travel to major household expenses. These lending products are easy to access, but they are expensive and difficult to exit.

Fourth, the costs of housing pressures are increasing. Rents are higher, and many preconstruction buyers are losing deposits and walking away from contracts as falling property values make financing harder to secure. Longer mortgage amortizations may delay distress, but they can also mask underlying affordability problems.

Finally, income volatility is becoming more common. Irregular earnings in gig work and self-employment can leave households struggling to match tax obligations and cash flow, often increasing reliance on credit.

We believe there are four areas where targeted action could improve the resilience of Canadian households. At this point, I'll turn it back to André to expand on these areas.