Finance Committee on June 2nd, 2026

[Isabelle Melançon]

What a great question. That's quite a question, because right now, vacancy rates are around 19% in downtown Montreal. Prior to COVID, they were 8%. So, as you can see, these rates are historically too high.

A return to the office is under way, and I must mention this—I commend the federal government for this, as it has invited its employees back to the office. The Government of Quebec has done the same. Municipalities are being asked to lead by example. Will everyone return to the office in the same way, five days a week? The answer is clearly no, but our downtown cores still need to be able to survive.

Where we have an extraordinary advantage in Montreal is that people live in the city. It's not like Calgary, which was just given as an example a moment ago, where, to put it mildly, the downtown core is uninhabited. People go there to work, but they live on the outskirts.

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

So, beyond returning to work, which won't solve everything anyway, what do we do? Should we make downtown areas even more attractive so that people want to go there in the morning?

[Isabelle Melançon]

I was very pleased to hear fellow witnesses talk about homelessness earlier. We need to address the issue of homelessness as quickly as possible to give people a sense of safety. Cleanliness must be restored. We have to make Montreal appealing again. We need to make people want to come back.

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

Thank you very much.

[The Chair, Liberal, Karina Gould]

Thank you.

Excuse me, I mistakenly said earlier that this was the last speaking turn for this part of the meeting, but we still have 10 minutes left. That leaves the Conservatives and the Liberals with one turn of five minutes each.

Mr. Lefebvre, you have the floor for five minutes.

[Éric Lefebvre, Conservative, Richmond—Arthabaska, QC]

I'm going to continue the discussion on the topic that Ms. Melançon and my colleague addressed. When I was a city councillor, I served as the councillor responsible for my municipality's downtown area. I think that revitalizing downtown areas naturally depends on service-oriented businesses, such as restaurants, so that downtown cores remain dynamic and vibrant with plenty of activity and people are drawn to live there or visit them.

Ms. Melançon, how do you see the importance of densification? We talk a lot about housing, but what about densification in downtown areas, for example?

[Isabelle Melançon]

For us, densification is one solution to the affordability crisis, the housing crisis and the climate crisis, because, wherever possible, we need to make the most of the infrastructure that's already in place. When we densify, we don't need to use as much land. We believe in densification because we look at what's being done around the world—since we're also a research institute. We need to pursue densification primarily in areas with public transit, places where we can transport people, provide them with jobs and support their livelihoods.

Of course, there are downtown areas where, to increase density, building a 40-storey building—like in the heart of downtown Montreal, say—is out of the question. We must, of course, proceed logically. However, for us, densification is the best way to go, and that's how we'll be able to overcome the current housing crisis, because we'll be able to build more housing more quickly. That's exactly what we need right now. We need it in our city centres as well.

[Éric Lefebvre, Conservative, Richmond—Arthabaska, QC]

Earlier, you spoke about types of housing and said that we need all types of housing. However, is there a set percentage for each region? Do you know what's needed most in one region or another?

[Isabelle Melançon]

It's a shame, because we don't yet have an accurate picture of the situation. We know where the vacancy rates are currently the lowest. We know that the housing crisis is particularly severe in areas with universities, such as Rimouski, Saguenay, Trois-Rivières and Sherbrooke. However, we don't yet know exactly what's needed.

We're currently working with the Government of Quebec, in particular, to better identify needs on the ground. We've been asking for this for several years now. However, one thing is certain: We need housing of all types, including non-market housing, of course, and rental housing that meets families' needs and, above all, fits within their budget. Yes, families' ability to pay is at the heart of the affordability issue right now. Families can't afford a two-bedroom apartment on the Island of Montreal right now. Why can't they? There are many factors.

Spoiler alert: We're currently preparing a study on the skyrocketing construction costs in Quebec. We will examine building codes, municipal fees and permit processing times in every municipality in Quebec. We need to look at this carefully, because construction costs have risen by 54% since before the pandemic. That's enormous.

[Éric Lefebvre, Conservative, Richmond—Arthabaska, QC]

It's important to have this accurate picture of the situation you are describing as soon as possible, because it will allow us to determine construction needs so that, at the end of the day, there isn't an excessive proportion of one type of housing compared to a shortage of another type, like more affordable two- or three-bedroom units. So I think having an accurate picture of the situation will be crucial.

How much time do I have left, Madam Chair?

[The Chair, Liberal, Karina Gould]

You have 45 seconds.

[Éric Lefebvre, Conservative, Richmond—Arthabaska, QC]

Ms. Melançon, earlier, we discussed Build Canada Homes, which is being developed on the fly and isn't tied to anything. Do you think this is the right tool we needed, or did we already have the tools in place? Could we have simply transferred funds and delegated authority to the institutions that are already in place?

[Isabelle Melançon]

We're going to give Build Canada Homes time to prove itself. Its representatives came to meet with us and they met with the developers. We understand that there is funding available. We understand that we may have projects that will be funded. We'll be able to judge that once we've tested the system. Right now, it's hard for us to tell you.

However, I mentioned earlier how unpredictable the Canada Mortgage and Housing Corporation is. I think that was the most aggravating factor for that organization.

[The Chair, Liberal, Karina Gould]

Thank you, Ms. Melançon.

Thank you, Mr. Lefebvre.

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

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

Thank you very much, Chair.

Coming back to Mr. Finkbiner with Indwell Community Homes, can we speak for a moment about the barriers supportive housing faces, such as community push-back, health care and staffing costs, and barriers with municipalities? Can you expand on any barriers such as those?

[Chris Finkbiner]

There certainly can be barriers to developing supportive housing in communities. There can be a bias against supportive housing, and push-back.

I think I will go back to what is actually the greatest challenge to creating supportive housing, and that is a consistent and clear pathway to operating funding. That is really the gap that exists in the system. If we want to create homelessness solutions at scale, which we need to do, we have to find a pathway to fund supportive housing.

Within my province, Ontario, there is no ministry, sub-ministry or department that has a funding envelope dedicated to the solution for homelessness. That is a challenge, and that is a problem. That's the biggest challenge.

We definitely do fight Nimbyism. We fight some push-back in communities, but in the communities where Indwell has been long established, we are welcomed with open arms in most cases and are encouraged to expand and continue to grow in most of the communities where we operate.

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

Thank you.

Have you observed cases where stable supportive housing has enabled individuals to re-enter the workforce, pursue education or contribute economically in ways that might previously not have been possible?

[Chris Finkbiner]

One hundred per cent, regularly, all the time, we see what we call “stories of hope”. At every meeting we have, we try to start with a story of hope, of somebody's transformation. We know that people can't move on with their lives when they're living under a bridge. Nobody's substance use decreases and nobody's mental health or physical health improves when they're living in a shelter or on the street or are couch surfing.

When we see people move into supportive housing, where they get a stable apartment that they can afford, with wraparound health and housing supports that provide the stability and the support they need, we see people transform significantly.

Within Indwell, we have a continuum of support. We recently opened what we would call a “moderate level” of support. We saw 25% of people from our first high-support program in Kitchener—25% of those tenants—move to the moderate-support program when we opened our first moderate-support program.

That is evidence that when people coming straight out of homelessness, with active addiction challenges and active mental health challenges, find stability, they are able to move on to more independence. What we see in more independent programs is folks doing exactly what you said: reconnecting with their natural supports and with their families, volunteering, finding employment and going back to school—absolutely.

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

Could you expand a bit in this last minute on wraparound supports and the continuum of care? What does that look like on the ground?

[Chris Finkbiner]

Yes. What we would call our “enhanced support” program, which is targeted at folks coming out of the most precarious situations, would be an apartment building of 30 to 50 units with an on-site team of around 15 to 20 staff and, often, a 1:3 or 1:4 staff-to-tenant ratio. It would include registered practical nurses as part of the health team. It would include addiction support, housing support, a hot meal provided each day and a psychosocial support worker.

It's a multidisciplinary team on site, wrapping support around the tenants and addressing are each of their individual needs. There's a case management plan created for each tenant, which is followed up on, where tenants are setting goals and we're following along with them in enhancing their stability, their wellness and their health. That's what our supportive housing model looks like.

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

Thank you very much, Mr. Finkbiner.

[The Chair, Liberal, Karina Gould]

That's great. Thank you very much to all of our witnesses on this panel.

We are going to take a very brief suspension as we turn over for the final panel of this afternoon.

[The Chair, Liberal, Karina Gould]

Colleagues, we are going to resume our meeting for the final hour. Welcome back.

I'd like to welcome our witnesses for this evening.

We have Éric Pineault, professor of sociology and environmental sciences at Université du Québec à Montréal.

From AIA Canada, we have Emily Holtby, vice-president of government relations. From the Canadian Manufacturers and Exporters, we have Alan Arcand, chief economist. From Canadian Phosphate Limited, we have Daniel Gleeson, chief executive officer.

Before we begin, I would like to remind participants of the following items.

Please wait until I recognize you by name before speaking. For those participating by video conference, click on the microphone icon to activate your mic, and please mute yourself when you are not speaking. For those on Zoom, at the bottom of your screen you can select the appropriate channel for interpretation: floor audio, English or French. For those in the room, you can use the earpiece and select the desired channel.

As you know, members can ask you a question in either English or French. Please be prepared with the appropriate interpretation, should you need it, so that we can take advantage of the time we have.

I will give a reminder that all comments should be addressed through the chair.

You will each have five minutes for your opening remarks.

We'll start with Professor Pineault.

The floor is yours.

[Éric Pineault, Professor of Sociology and Environmental sciences, Université du Québec à Montréal, As an Individual]

Thank you for having me.

I am here as an economist who is interested in the issue of fossil fuels and who works in that field. I want to talk to you today about the advisability, in this situation, of a special tax on oil companies' excess profits. The situation we're talking about is an Iran-United States war that has led to a significant jump in oil prices compared with the historical average—an increase of $30 to $40 U.S. since March—that seems to be holding steady. In the financial press, it's clear that this increase has sparked a discussion around a geopolitical rent. In fact, the entire oil sector is going to benefit—because of the war—from a significant rent.

In Canada, according to Enverus' modelling, we're talking about $25 billion to $30 billion for every $10 increase in the price of oil for 2026. The Financial Times talks about a total of excess profits of about $90 billion. That was a month ago. After an adjustment for current prices, we're talking about $100 billion to $120 billion in excess profits. This is truly a historic price shock and, at the same time, a political opportunity.

I want to talk a bit about where this geopolitical rent is coming from. As we know, only 20% of Canadian oil is consumed here, and 80% of our oil companies' revenue comes from abroad, including 78% from the United States. We can say that North American households and businesses will be the ones paying for these excess profits: for every barrel that's overvalued because of the war.

Regarding the macroeconomic path, what will happen if we do nothing, if we have a status quo and just let the volume of excess profits flow into the economy? When you read the testimony of companies like Tourmaline, Suncor and Cenovus, there's a consensus: to not invest. That means that these are not amounts that will be invested in the Canadian economy. Instead, these excess profits will be passed on to shareholders in two ways: through share buybacks and dividends.

Knowing that around 60% of the capital of Canada's four main oil companies is owned by American interests, we can say that a significant portion of the excess profits will end up in the United States, that 27% will stay in Canada and that it will go into the wallets of the wealthiest households and contribute to the increase in inequality.

There's a debate right now, not only in Canada but throughout Europe and North America, as to whether it might be appropriate to direct those excess profits toward a different macroeconomic path with different effects. The idea would be to introduce a temporary special tax on excess profits. There are three models. First, there's a 15% tax on profits that exceed $1 billion, which is somewhat equivalent to what the federal government did for banks and insurers during the pandemic. Second, Canadians for Tax Fairness is instead proposing a 33% tax on profits that exceed 120% of the profit levels pre-crisis, so it's much more aggressive, and it's based on the European model. That would give us revenue of about $18 billion. Third, we could follow what was done in Canada during the Second World War, namely, to pass a bill on excess profits, which sought 75% of all profits that exceeded the pre-war average. This would split the excess profits in half: $44 billion would stay in the oil companies' pockets, and $46 billion would go to the federal government. This is a temporary measure that makes it possible to redirect this volume of excess profits so that it serves all Canadians and to prevent it from ending up in the United States or in the wallets of the wealthiest households.

Finally, what are the potential macroeconomic effects of the government taking the rent? That depends on what's done with it and how it's spent. The worst solution would be to put it in the government's general fund; that would have no structuring effect. One approach that would be less structuring would be to use it to reduce the impact of rising fuel prices on the poorest households. A slightly more structuring approach would be to use the geopolitical rent as an impact investment to diversify oil-dependent regional economies: examples would be western Canada and Newfoundland and Labrador. Lastly, the most structuring approach would be to invest these excess profits in electrification and the decarbonization policies we already have.

That, in a nutshell, is the proposal I wanted to share with you today. This is a debate that is ongoing and that I think is important, given the circumstances.

Thank you.

[The Chair, Liberal, Karina Gould]

Thank you, Professor Pineault.

We'll continue with Ms. Holtby from AIA Canada.

You have five minutes.