Evidence of meeting #6 for Finance in the 45th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was cities.
A recording is available from Parliament.
Liberal
Ryan Turnbull Liberal Whitby, ON
You don't really care what mechanism is used in order to solve that problem as long as you get the result you're looking for. Is that right?
Chief Executive Officer, Inclusion Canada
That is true.
I would say that the solution put forward, the solution that we've recommended, is the one that we believe will future-proof it as it goes up or as it goes down. Hopefully it won't go back up, but we don't know what will happen in the future.
Having said that, the outcome is the main focus, and the outcome should be that there would be no disproportionate impact on people with a disability or on their families. If finance has another way of doing that, one that gets the same outcome, then we would certainly be happy with that.
Liberal
Ryan Turnbull Liberal Whitby, ON
I appreciate that. Thank you very much. That was the clarity I was looking for.
Ms. Lavoie, I am going to you now.
I want to shower you with praises for Habitat for Humanity's work. I've been able to make announcements in Peterborough and Haliburton, and there's a project of 48 units that will be under construction in 2026 in my community of Whitby. I've been to key ceremonies that your organization does, which are literally the best thing. If anybody hasn't been to one of those, I highly recommend, if you ever have a chance, to go to a ceremony where individuals get the keys to their new home.
I also want to acknowledge your work on Habitat ReStore, which is a social enterprise and is part of my background and my experience from my past life. I really love that you're generating revenue in a charitable business that essentially provides revenue to help you do the great work that you do, making dreams of home ownership a reality for people.
Your model of second mortgages is really unique. I've studied that. I've had lots of conversations. I think replicating that throughout.... In some ways, I think the federal government's initiative of Build Canada Homes is looking at organizations like yours as the innovators who have paved the way to understand how we can do deeply affordable home ownership in non-market housing, so I want to thank you for all of that leadership.
I also want to mention the housing accelerator fund in Whitby. I've heard other parties sometimes criticize that and say that it's just adding bureaucracy. It has actually helped to build housing in Whitby. I know the GST rebate that we've proposed is something Habitat for Humanity actually advocated. I wrote a letter advocating it to the former minister of finance on your behalf, so it's great to see our government, under this iteration of Parliament, moving forward with it.
With all of that said, I want to ask you now about your specific change, which is very surgical in allowing you to build even more housing. I know you advocated the GST cut because it will allow you to build a lot more housing. I think you mentioned that in your opening remarks. However, I want to ask you to go over it, because it's a bit of a technical shift to move to.... What are you proposing?
National Senior Director, Public Policy, Habitat for Humanity Canada
Essentially, with the GST rebate, it will potentially reduce the overall total mortgage that a family has to carry or that Habitat has to absorb. By not having—
Liberal
The Chair Liberal Karina Gould
I'm sorry, Ms. Lavoie. We have only a few seconds. Could you wrap up quickly?
Thanks.
National Senior Director, Public Policy, Habitat for Humanity Canada
Yes.
Essentially, we'll be able to put that fund into building and we will translate taxes into a home.
Liberal
The Chair Liberal Karina Gould
I would like, on behalf of the committee, to thank our two witnesses for joining us today and for their testimony.
We are going to briefly suspend while we change over to the next round of witnesses.
Thank you, everyone.
Liberal
The Chair Liberal Karina Gould
Colleagues, welcome back.
We'll resume the meeting now. I will ask folks to please take their seats.
A mandatory witness onboarding test has been conducted for all virtual witnesses. I would like to make a few comments for the benefit of the new witnesses.
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 floor, English or French as the appropriate channel for interpretation. For those in the room, you can use the earpiece and select the desired channel. I'll give a reminder that all comments should be addressed through the chair.
To our new witnesses, welcome. You will have five minutes for your opening remarks, after which we will open the floor to questions.
I'd like to introduce the three witnesses we have for the second hour of the study of Bill C-4.
We have Ian Lee, who is an associate professor at the Sprott School of Business at Carleton University. We have Carolyn Whitzman, senior housing researcher at the University of Toronto School of Cities. Joining us online is Amanda MacKenzie, director of public affairs, advocacy and strategic communications at March of Dimes Canada.
Mr. Lee, we will begin with you. You have five minutes. Thank you.
Ian Lee Associate Professor, Sprott School of Business, Carleton University, As an Individual
Thank you very much, Madam Chair.
First are my disclosures.
Number one, I don't belong to or donate money to any political party, nor do I allow any lawn signs during any federal, provincial or municipal political campaigns.
Number two, I was a commercial banker in the last half of the 1970s and the early 1980s, working as a mortgage manager at the BMO main branch, just across the street, except it's now part of the parliamentary precinct, I believe, the Macdonald building. I worked there for many years. Then I became a commercial credit officer and lent millions to homebuyers to buy houses and SMEs.
Number three, I don't consult to the housing construction or financial services industries at all.
Finally, number four, I've taught the strategy and policy capstone course for 35 years.
As with many Canadians, I have a deep personal interest in the question of affordability, which I believe is primarily an issue of housing affordability. I do not see affordability as an issue of marginal tax rates for the bottom quintile, who have mostly been removed from the PIT, the personal income tax, rolls by successive federal governments going back many years. It's difficult empirically, in my opinion, to argue that there's a lack of social program support for the bottom quintile in Canada, given the very sharp progressivity in our tax and redistribution system, documented repeatedly by the C.D. Howe research institute and the Fraser Institute.
In my judgment, based on my decades-long review of StatsCan income statistics and the Gini coefficient of income inequality, which has flatlined for decades per the OECD, the affordability problem is not a tax issue or an income redistribution issue. The evidence suggests to me that some municipal governments—not all—have created higher barriers to new housing construction and especially to single-family home construction in the suburbs.
The reason this is critical is that for 2,000 years, cities in Europe—which I have visited over 100 times over 40 years of teaching, and I later visited many of the cities in the U.S. and Canada—grew in concentric circles at the edges. However, in the past 20 years, a new critical vocabulary was created that pejoratively characterized the urban growth of the last 2,000 years as “urban sprawl”, suggesting that creating new suburban projects on the edges of cities was poor public policy.
However, throughout Canada's history, young people typically bought their first home on the very edge of the city, because land values and home values were much cheaper in the burbs than in the urban core.
I did it myself. I bought my very first townhouse in 1976 on the very last street at the very edge of the southern part of Ottawa. It's called Hunt Club, by the way. I couldn't afford to buy anywhere else. There was literally nowhere else. Forget Toronto, I couldn't afford to buy in Ottawa. I was just tapped right out.
Having lived in Ottawa all my life, but having visited many large American cities and many mid-sized Canadian cities over the past 40 years and having studied average housing prices and municipal permitting data by city, I know there are significant differences in average housing prices between cities.
Restating it to be a bit provocative, perhaps, I do not believe there is a national Canadian housing crisis, but there is, I assure you, a housing crisis in Canada's 10 largest cities—the GTA, Vancouver, Ottawa, etc.
By contrast, when one examines Moncton, Winnipeg or eastern Ontario—where I grew up as a boy, in Lanark County—or the rural Maritimes or rural western Canada, the data reveal prices at or often well below $500,000, in the $300,000 or $400,000 range. I can drive 20 minutes from here and show you houses in Kemptville for half a million dollars, but if I go down to Prescott, Ontario, which is 60 minutes from the national capital of this country, they're $250,000 to $300,000.
As lumber and building materials are national prices set in national markets, this suggests there's something else causing the differences. Indeed, the CHBA, the Canadian Home Builders' Association, provides excellent data on average timelines for housing development by cities. What the trend data revealed—and I've studied it intensively, because I'm so fascinated by this—is that the worst record for municipalities in our country for delays in permits and higher development charges are the largest cities, the Torontos, the Vancouvers, the Ottawas and so forth.
Before anyone leaps to the conclusion, “Well, of course; these cities are bigger and more complex”, I've also examined permitting averages and housing prices in some large American cities, such as Phoenix, which is comparable to Toronto, and southern U.S. cities of equal size to our larger cities, and they build houses far more quickly and far less expensively.
My very own sister, who's an American, just bought a house in Omaha, Nebraska. It's a four-bedroom house on a corner lot. It's a beautiful nice big house of 2,500 square feet. It cost $350,000. You can't buy an outhouse in Ottawa for that.
What must be done to address the housing shortage of over four million homes per CMHC? I urge that the Government of Canada develop a policy of a fiscal clawback of the annual transfers to the community-building fund if the cities fail to approve an agreed-upon number of homes.
Liberal
Associate Professor, Sprott School of Business, Carleton University, As an Individual
Okay, I'll just wrap up.
Then we have to reform the zoning laws, slash development charges and try to address the deep generational discord and deep anger felt by our young people towards us older people.
Thank you.
Carolyn Whitzman Senior Housing Researcher, University of Toronto School of Cities, As an Individual
Thank you for the opportunity to speak today as a housing policy analyst on Bill C-4.
Finance mechanisms, and not only taxation, but affordable housing financing, are key to the goal of the “progressive realization of the right to adequate housing”, with an emphasis on persons with the “greatest need”, as outlined in the 2019 National Housing Strategy Act. I'll be focusing on part 1 of the bill, reducing the income tax on the lowest marginal rate, and on part 2, implementing a temporary GST rate rebate for first-time homebuyers.
As my colleague said, the biggest expenditure for most households is their housing. The housing assessment resource tools project, with which I was affiliated, has developed household income categories to analyze core housing need across Canada. In fact, this has been adopted by the federal government.
Core housing need means that the household is spending more than 30% of their income on housing costs and/or are overcrowded and/or are in homes in a state of substandard repair. Ninety per cent of households in Canada in core housing need are in unaffordable housing. Almost four of five households in core housing need have low household incomes, below 50% of the median in their area. Almost all of the remaining households in core housing need have moderate incomes, between 51% and 80% of the median in their area.
A taxable individual income of $57,375 would be in the low-to-moderate range in most parts of Canada, so a tax deduction at that lowest rate would primarily assist low- and moderate-income households at most likelihood of core housing need. So far, so good.
A single person earning $57,375 could afford $1,434 in monthly housing charges. However, in most large cities across Canada, the average monthly asking rent for a one-bedroom apartment as of October 2025 is well above that amount. In Vancouver, the asking rent for a one-bedroom apartment is over $2,500, and in Toronto the asking rent for a one-bedroom apartment is $2,300.
Even though rents have dropped 6% and 5% respectively in those markets over the last year, a small tax decrease will not make up for rents that are over 50% too expensive. If that individual earning $57,375 is a single parent requiring a two-bedroom apartment, she—and in most cases, it is a she—would have to pay an average of $2,600 in Halifax or $2,300 in Montreal.
The most likely type of household to be in core need is the single mother, according to the HART data, and there's no city across Canada where an average rent is affordable to a household reliant on one full-time minimum-wage job. The measure proposed in part 1 is not unhelpful, but it is insufficient to the goal of making life more affordable for Canadians.
This brings us to part 2, the proposal to remove the GST for first-time homeowners. The average price of a home in Canada as of August 2025 is a little over $664,000, which is a 2% increase over the previous year. The traditional measure of ownership affordability is the median multiple, which means that the median home price shouldn't be more than three times the median household income.
Canada's median multiple was between 2.5 and 3 until about 1985. It's now close to 8 across Canada, to 12 in Toronto and to almost 15 in Vancouver. For a household to afford an average home, they would require a household income of over $220,000, which is about 2.6 times the average household income, as well as a down payment of over $100,000, so a million-dollar home is unaffordable to any household other than ones in the top income decile.
A 5% discount on a home that is 260% too expensive for a median-income household is probably an ineffective measure to the goal of making life more affordable to Canadians, so the measure that is proposed in part 2 isn't particularly helpful for the goal of making life more affordable to Canadians.
What tax measures would help make life more affordable for Canadians?
Well, it's a perfect time to strengthen the new rental housing protection fund—
Liberal
The Chair Liberal Karina Gould
Ms. Whitzman, you have about 15 seconds, if you could wrap up, please.
Senior Housing Researcher, University of Toronto School of Cities, As an Individual
Okay. I'll stop with the measures that might increase affordability and leave that for the question period.
Thank you.
Liberal
The Chair Liberal Karina Gould
Thank you, Ms. Whitzman.
Now I'm going to Ms. MacKenzie, please, who's joining us online.
You have five minutes.
Amanda MacKenzie National Director, Public Affairs, Advocacy, and Strategic Communications, March of Dimes Canada
Good afternoon, Chair and members of the committee. Thank you for the opportunity to speak about Bill C-4 today.
I'm Amanda MacKenzie, the national director of public affairs, advocacy and strategic communications at March of Dimes Canada.
March of Dimes Canada is a leading national charity committed to championing equity, empowering ability and creating real change that will help people with disabilities across the country unlock the richness of their lives. Together with our partners, we serve, connect and empower people with disabilities to participate fully in life and in their communities on their own terms.
I'm here to address the impact of Bill C-4's proposed 1% reduction in the lowest federal personal income tax rate on people with disabilities in Canada and specifically those who rely on the disability tax credit, the DTC, and the medical expense tax credit, the METC.
I very much want to thank Krista Carr, Kurt Goddard and the team at Inclusion Canada for their leadership on this file. Inclusion was the first to identify this issue in our community, and their analysis has been widely referenced, including in my own notes. I've also included with my notes a recent analysis of this issue by the Library of Parliament.
Bill C-4 will reduce the lowest federal tax rate to 14% over two years. Everyone loves a tax cut, but the problem is that it actually results in an effective tax increase for those who receive federal non-refundable tax credits, including the DTC and METC, due to the method of calculation for both credits.
The DTC and METC amounts are calculated as eligible amounts multiplied by the lowest federal PIT rate. Thus, a 1% decrease in the PIT rate would directly lower tax savings by approximately 1% of the claimed amount per claimant.
For people with disabilities, this means that the very benefits designed to offset the additional cost of living with a disability are eroded. For example, the value of the DTC will drop by approximately $51 in 2025 and by $101 in 2026 per claimant. The METC will also see a proportional reduction.
This is not just a technical adjustment. It's a real loss for nearly one million people with disabilities in Canada who depend on these credits to help make ends meet. While all recipients of non-refundable tax credits will see their effective value reduced, people with disabilities are disproportionately impacted. They rely on additional disability-specific credits to offset the cost of being a disabled person in Canada, estimated by the UN to add 30% to the cost of living. The Library of Parliament's analysis shows that a parent with a disabled child is the most impacted, with the DTC value eroding by $79.90 in 2025 alone as a result of the lower DTC base amount.
I'm here today to ask you to amend Bill C-4 to increase the base amounts of these tax credits to ensure their value is protected and that people with disabilities across Canada are not paying more to get a tax cut. This erosion of disability supports is not just a matter of fairness. It has broader policy implications. The DTC is a gateway to other federal and provincial and territorial benefits, including the Canada disability benefit, the child disability benefit and the registered disability savings plan. Reducing the DTC's value risks undermining access to these essential supports.
At March of Dimes Canada, we're particularly concerned with benefit take-up. We know that DTC uptake rates are low because of how barriered the process is. We're working with our partners, like Inclusion and others in our community, to spread awareness about the DTC and how to access it through benefit navigation services the federal government is funding. We're also working on projects to train frontline service delivery staff and caregivers in the basics of the DTC, how to access it and how to talk about it.
People with disabilities need to know what they're eligible for, like the DTC and other important benefits that Parliament decided they should have. Anything that puts a barrier in the way of this must be rectified. The solution is straightforward and affordable. Our preferred option is to amend Bill C-4 to increase the base amounts for the DTC and related credits, offsetting the reduction in the tax rate.
In closing, Bill C-4 as currently drafted provides less help to those who need it most, delivering a quantifiably smaller benefit to people with disabilities. We urge the committee to amend Bill C-4 to restore the value of disability-related credits and ensure all Canadians benefit equally from tax relief.
Thank you.
Liberal
The Chair Liberal Karina Gould
Wow, Ms. MacKenzie. That's a perfect five minutes on the dot.
Now we're going to have the first round of questions.
I'm going to turn it over to you, Mr. Kelly, from the Conservatives.
Conservative
Pat Kelly Conservative Calgary Crowfoot, AB
Thank you to all the witnesses for those opening statements.
I'm going to begin with you, Professor Lee, and allow you to perhaps finish your thought. At the very end of your opening statement, when you ran out of time, it sounded like you were beginning to talk about how the federal government ought to claw back transfers to municipalities that fail to issue permits and approve development, which is something that we ran on in the last election.
This was something that was quite dear to us, so I'll let you finish your thought on that.
Associate Professor, Sprott School of Business, Carleton University, As an Individual
Yes. Thank you.
The reason I've come to that conclusion—and this isn't something I'd advocate, you know, like I just woke up one morning and said “this is a cool idea”—is that I was in mortgage lending a long time ago, and believe me when I say that I lent millions and millions of dollars. I've refinanced probably one-third of The Glebe—home renos, gut the house and rebuild it—so I'm very aware of the municipal level.
Maybe I'm flattering everyone here, I don't know, but I don't think the federal government is the problem. I don't think the provincial government is the problem. I didn't say that they can't change and can't do things that are better, but I think the fundamental problem in municipal housing shortages is, in the largest cities, the municipality.
I urge every one of you to read that annual report. It's produced by a consulting firm on behalf of the Canadian Home Builders' Association. The numbers are subject to audit. They're using a lot of CMHC data. The numbers on the average days to permit and so forth just leap off the page.
To me, they're really the block. The block is the 10 largest. It's not all the cities. I think StatsCan says there are 27,000 municipalities in Canada. We're talking about the 10 that are the problem. They happen to be the biggest.
Conservative
Pat Kelly Conservative Calgary Crowfoot, AB
Okay. On the affordability crisis, the local crisis of affordability you spoke of, you said that it's not national because it's not in every single community in Canada, that it is in primarily the largest cities, but we also see it really in almost the entire interior of British Columbia, which would include cities outside of that, and we also have southern Ontario.
Really, is it perhaps fair to say that the only places not affected by this housing affordability crisis are generally places that have very limited economic opportunity, places that people have to move from to access employment or business opportunities?
Associate Professor, Sprott School of Business, Carleton University, As an Individual
That's a very good point. You're right. In the smallest towns.... There's very little opportunity in Prescott. I grew up outside of Carleton Place, in Beckwith Township. There weren't a lot of jobs there in those days.
If you look at the map that's published by WOWA, it really is instructive to look at the average house prices across this country. Winnipeg's is $400,000. This is 2025 data. Hamilton's is $775,000. They have them for every city in Canada. There are profound differences. The differences are there and, of course, Toronto, the GTA and Vancouver are by far and away the worst.
Conservative
Pat Kelly Conservative Calgary Crowfoot, AB
Let's talk about those two places.
We had testimony on Monday that suggested housing starts are in free fall, that there is a 90% collapse in condo pre-sales and a 70% collapse in single detached home pre-sales.
Today's non-pre-sale is, two years from now, a housing start that doesn't happen. What does this say to you about the future of the affordability crisis in these large cities?
Associate Professor, Sprott School of Business, Carleton University, As an Individual
As you know, I am a numbers person. All I do is eat data all day long. That's all I do. I study StatsCan and CMHC data because, I guess, I'm old enough. That's my kick.
I study this data, believe me, and two years from now it's going to be much worse. The situation in the GTA, in Vancouver and in Ottawa is going to be much worse, because there's a lag effect. It's a pipeline effect. What's going into the pipeline now is far below what we need.
Conservative
Pat Kelly Conservative Calgary Crowfoot, AB
All right. Inaction by policy-makers at all levels, including the federal government over the last 10 years, has brought us here.
I have one last point. We'll see how much I have time for.
You've said that the lowest-income quintile is not helped by the reduction in taxes. We support the tax measures contained in this bill, but agree that they will not provide affordability relief for all Canadians and that much more needs to be done. I'd like you to comment on that.
For the people who need help the most, is there any help in this bill?