Finance Committee on April 20th, 2026

[Jean-Denis Garon, Bloc, Mirabel, QC]

Up until a few years ago, purchasing a property was presented as an important way to build wealth and accumulate capital. For most households, if you exclude defined benefit pension plans, that was the main source of capital accumulation. Do you think that's still true? Do you think we should somewhat reconsider how we see property and view it as a place to live, and invest in more productive assets, for example? Doesn't the high level of household debt, particularly mortgage debt, to some extent eat up savings that should be invested elsewhere in the economy?

[Ronald Butler]

You are absolutely correct. The reality of life is that all of the advice over the last 15 years to run out and create a real estate empire was terrible advice, because it's all leveraged. It is all self-serving and self-fulfilling. You are correct: In reality, people should have bought one home, put money into inexpensive ETFs and just husbanded their resources.

I say this because every time you recommend leveraging investment, you're taking on an outsized risk that you in all likelihood should not take.

[Jean-Denis Garon, Bloc, Mirabel, QC]

Quickly, how important are auto loans to people's financial situation? Does the desire to have a car and dependence on the car hinder access to home ownership?

[Ronald Butler]

I have some expertise in the area. Unfortunately, it's incredibly easy to buy a car—incredibly easy to buy a very expensive car—and it will come back to bite you in the end. That is something we have experienced in our business, where we see huge payments.

[The Chair, Liberal, Karina Gould]

Thank you, Mr. Butler. We're going to have to end it there.

We're going to continue now with Mr. Hallan for five minutes, please.

[Jasraj Singh Hallan, Conservative, Calgary East, AB]

Thanks, Chair.

Mr. Butler, thank you for being here again.

The current Minister of Canadian Identity and Culture, Marc Miller, who used to be the immigration minister, slammed his own government at the time and said that immigration was out of control.

Can you tell us about the impact of the Liberals' out-of-control population growth and the effect it has had not just on housing, but overall on the debt?

[Ronald Butler]

There were three years of extreme immigration, when almost 3.5 million people came to Canada.

Canada itself, the government, has done a fantastic job on immigration for decades. It's one of the most important, possibly one of the best features of our country. However, 3.2 million people coming in an incredibly short period of time created such an impact on housing resources. It also impacted health care resources and education resources, but it absolutely created a devastating impact on housing. New Canadians rent. They don't just appear and buy a home; they rent. The rental rates in Canada soared in every province except Quebec. That has had a really severe economic impact on so many Canadians and, unfortunately, on young Canadians and lower-income Canadians. The rise in rents was so spectacular that it impacted everyone.

[Jasraj Singh Hallan, Conservative, Calgary East, AB]

Is there a long-term effect of this?

[Ronald Butler]

The long-term effect is a slingshot, to the point where now we're going to have excess rental inventory, as the population of Canada reversed by about 65,000 people the previous quarter. We're going to have excess rental inventory, and we have an ocean of unsold dog-crate condos in Toronto that will take a long time to clear.

[Jasraj Singh Hallan, Conservative, Calgary East, AB]

You've seen the RBC report, I imagine, that shows that there's a lost Liberal decade when about $1 trillion of our investment went out. Can you talk a bit about that and the impact it has on housing?

[Ronald Butler]

I would say this. The difficulty was an obsession with investing just in real estate—real estate as a mechanism towards wealth. To a certain extent, the negligence was that, while productive money could have been going to resources, to manufacturing or to other job-creating scenarios, we saw money going strictly to real estate. It's helpful to construction workers, but in the end it creates a glut, and there's no more work for the workers.

[Jasraj Singh Hallan, Conservative, Calgary East, AB]

This Liberal government is known for its massive money printing and massive deficits. In fact, Mark Carney, the current Prime Minister, has now doubled the deficit of even Justin Trudeau. Even I was surprised by that. What do all this money printing and these deficits do to the middle class, and what does that do for taxes later on for young people looking to get into home ownership?

[Ronald Butler]

We've seen the issues of accelerated asset growth and the outcome of much deficit. By the way, this is a problem throughout the world. In the whole Anglosphere, we see where there's been great deficit spending. We've seen asset inflation. That asset inflation aids people who are wealthy or already own homes and harms people who are young and don't have adequate income to buy homes. That's been an obvious outgrowth of what we've seen for the last number of years.

[Jasraj Singh Hallan, Conservative, Calgary East, AB]

Ms. Bednar, I want to get you in as well.

Canadians are taking on more non-mortgage debt than ever before. According to Equifax, the bottom 75% of earners in Canada have a debt-to-income ratio of at least 200%, and it's over 480% for the bottom 20% of income earners. What impact do growing household debt levels have on first-time homebuyers and for young Canadians?

[Vasiliki Bednar]

Maybe I'll speak broadly to young Canadians.

About a decade ago, I was chair of the expert panel on youth employment, and the economy is something I continue to follow. What we're seeing are some of the challenges with accessing affordable homes, and that could just be through affordable rental items that allow people to save money and live. We're starting to see that reflected in happiness surveys and young people's forecasting around their own ability to prosper and succeed. That's why I bring it back to broader, bigger prosperity opportunities, how we're growing the economy, and what other complementary public policy tools we have beyond the negative.

[The Chair, Liberal, Karina Gould]

Thank you, Ms. Bednar. I'm going to have to end that there.

Thank you, Mr. Hallan.

We're going to continue now with Mr. Sawatzky for five minutes.

[Jake Sawatzky, Liberal, New Westminster—Burnaby—Maillardville, BC]

Thank you, Chair.

Thank you to our witnesses for coming in today.

Ms. Bednar, in your opening remarks you were talking about buy now pay later. You mentioned that this has become an increasingly common situation with younger Canadians.

I was seeing a joke about an ad where people could finance a pizza, which goes to show how common this is, even for small transactions. Where does financial literacy come into play here? How can we educate the younger generations about what's in the small print? What would you see? What are the first steps we can take to reduce some of this being such a common occurrence?

[Vasiliki Bednar]

I don't think it's good or bad that we have a lot more people engaging with buy now pay later. I think the failure is in our regulatory infrastructure. You could argue that buy now pay later is a really savvy competitor to the Visa-Mastercard duopoly, where front-loading somebody at zero interest with the ability to break something up into four payments is kind of great. We see this reflected in other policy areas, for example, a dental program we have that allows people to access dental care up front and pay it off in later instalments that are interest-free.

I don't want to discount financial literacy being an element here, but, again, when it's not reflected, when we haven't decided whether we see this as a credit product or a loan product, for young people, buy now pay later could be a vehicle to build credit outside of a credit card in the way we've seen that ability through incredible Canadian fintechs like Borrowell, which allows people to use paying their rent on time as a vehicle towards credit.

I'm more saying that often we talk about sovereignty as a deficit, something that we don't have or we don't do, but if you think of just keeping it in line with young people, like doing a quiz in a magazine, can you govern the markets you have, yes or no? Often we're talking about it on the no side, but on the yes side, the quiz isn't over. The next question is: Are you? I think with buy now pay later, there's a yes-no there. Right now we're on the no side. We need to get to the yes side, because young people, like all Canadians, expect our legislation to reflect the reality they live every day, and right now it doesn't.

[Jake Sawatzky, Liberal, New Westminster—Burnaby—Maillardville, BC]

Thank you.

What would you say are some of the more predatory practices with buy now pay later? Are there certain instances where this is particularly bad? I know you mentioned some good aspects, and that's nice to hear. What would be some negative ones?

[Vasiliki Bednar]

I had a laugh at the pizza one, too. I think I saw it with instalments of a burrito. It was a partnership with Uber Eats, or something like that. It's good to have a laugh but also recognize what's out there in the marketplace and what people are using it for.

Social media is also a vehicle that allows us to have access to how other people live and what their lives look like in a way that we never quite had before. It can also entice and encourage supplementary spending outside of the essentials when you're keeping up with people in your feeds or with algorithms. I would also put that forward, because it's so easy to engage with, and it's just a click away. I understand why people may think, if they see it as an option at a checkout, or something that's simple or traditional, that it is part of the infrastructure we understand. I'm not advocating to hurt people's credit scores but rather to protect young people who may become quickly over-leveraged in a way that they don't realize and that can hurt them later—outside of burritos.

[Jake Sawatzky, Liberal, New Westminster—Burnaby—Maillardville, BC]

You mentioned some further regulations. What could those regulations look like?

[Vasiliki Bednar]

The big question is whether we want to deem this a credit or a loan product in Canada. It seems that other jurisdictions are looking at it more like a credit program. It basically reverses layaway, where you used to be able to pay for something in instalments, but you got the prize—what you were saving for—at the end of that journey. Now we're front-loading it, which does a lot for dopamine and gratification but can feel confusing too. You get something important that you may have coveted or that is necessary for daily life, but it has a longer tail with the payment structure.

Ultimately, it's about asserting the right jurisdiction and recognizing that this product is out there. We've permitted it in our digital economy. That happens more and more, but it's incumbent upon us to respond to it appropriately.

[Jake Sawatzky, Liberal, New Westminster—Burnaby—Maillardville, BC]

What's the best-case scenario? Have we taken all the steps that we should here? How could this look in a good situation?

[The Chair, Liberal, Karina Gould]

I apologize. You'll have to get to that in another response.

That concludes your time. Thank you, Mr. Sawatzky.

We'll continue with you, Mr. Garon. You have the floor for two and a half minutes.

[Jean-Denis Garon, Bloc, Mirabel, QC]

Thank you.

I'm going to continue along the same lines as my colleague.

Ms. Bednar, if we want to understand debt problems, we need to understand the psychology of people who go into debt. For example, some bankers might tell us that the buy now, pay later plan is just a financial product available on the market. Reasonable and rational people use it intelligently. However, when these products are offered to people with self-control issues when they want something right way or when they're hungry and they have no income or are on a tight budget, they can be a tool that makes them even more financially insecure. They could start a cascade of financial events that can potentially lead to bankruptcy.

First, I would like to know how popular this practice is. What does it say about our needs and about how our environment is creating needs for us today? Isn't it also the source of a lot of debt problems?

I would also like to know whether using these products a lot leads to financial problems. Do we know if they indicate that someone will have financial problems in the future? What is the profile of people who use them a lot? Do they tend to be younger people? I can tell you that my grandmother doesn't pay for her groceries in 12 equal instalments. Are they more popular with young people, then? I'll let you comment on that.