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.