Evidence of meeting #2 for Government Operations and Estimates in the 45th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was going.
A video is available from Parliament.
Conservative
Tamara Jansen Conservative Cloverdale—Langley City, BC
Is that coming out of some of the CMHC's reporting about how it's already cutting forecasts? Is that part of your analysis?
Interim Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
Yes, we incorporate.... We work closely, I should say. From a technical perspective, we definitely share information with respect to our modelling and the CMHC's modelling.
We have a bit of a difference of opinion. I noticed that nobody from the political side of the government came out when we published our housing report and said, “These numbers are awful.” Senior officials from the CMHC came out and said they didn't like our numbers. They disagreed with them for persnickety technical reasons.
We're very aware of what the CMHC is doing and what its numbers look like, and we're in regular contact.
Certainly, at our end, when we publish something, our objective is to enhance transparency, and we're not enhancing transparency if we're not accounting for the numbers the government is publishing in the announcements it's making. If we're publishing something and it's already stale-dated and doesn't incorporate the new directions the government's going in, from our perspective it doesn't serve parliamentarians particularly well.
Conservative
Tamara Jansen Conservative Cloverdale—Langley City, BC
That's fascinating information. We know that starts are down. Toronto is dropping from 37,000 starts to as low as 23,000, I think, in 2027. Vancouver will be down 26% next year.
Are you saying that this “build big, build bold” is maybe more than we're going to need?
Interim Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
That's if they're able to achieve it. The key finding of the paper was that if they were actually able to achieve the 500,000 housing starts per year, we would end up in a very odd place in the housing market, with incredibly high vacancy rates. In terms of the policy objective they're trying to achieve, based upon our modelling, they don't necessarily need to hit such a high target. It's not to say that everything's going to be affordable and people are going to be able to afford the homes they want or that we're going to return affordability to where it was in the 1970s, but in terms of the immediate policy objective identified by the government, potentially, you don't need to be at the 500,000 level.
Conservative
Tamara Jansen Conservative Cloverdale—Langley City, BC
They could use some of that $4 billion that they were going to use for their new bureaucracy towards some savings.
Interim Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
Or investments in something else.
Interim Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
This is why we're waiting for a budget, because a budget gives you those trade-offs.
Conservative
Tamara Jansen Conservative Cloverdale—Langley City, BC
Excellent. Yes.
I really appreciate your frankness, because it's extremely helpful for us. We are seeing housing starts coming down. I'm hearing it from my own constituents. We were told that we don't want house prices to come down, but if we continue on the path you're suggesting, we may well see that happening.
Okay. Thank you.
Conservative
Bloc
Marie-Hélène Gaudreau Bloc Laurentides—Labelle, QC
Thank you very much, Mr. Chair.
I have two questions.
First, I would like to come back to the new way of showing how the budget is built. As you probably know, this is very similar to what is done in Quebec.
The government has two fundamental missions: to support the economy and, as you have stated several times, to support jobs. However, based on the new way of presenting the figures and having them speak for themselves, as I would say to my daughters, we are now told that there will be a projected $100‑billion deficit. They may surprise us by announcing a $90‑billion deficit and telling us that they have saved money. So be it.
Nonetheless, from that perspective, how can the Canadian government support its two fundamental missions?
Interim Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
To my mind, that's the budget's goal. Determining how much money to collect from Canadians is among senators' and MPs' primary responsibilities. The House of Commons must then determine how to spend that considerable sum. It's important to have a budget, so the money is invested to increase economic growth, while ensuring a certain fairness. It's also about supporting and upholding certain important Canadian principles, including environmental and social principles. That's why I've already expressed some impatience about the tabling of a budget. Obviously, the government has already made a number of spending decisions, but there is no budget or clarity on patterns and structures.
With respect to Quebec and the example of Toronto mentioned by the other member, I completely agree. It is in our interest to identify projects that can provide long-term benefits. In my opinion, it would be incredibly simple for the government to announce that it will adopt a system used by the United Kingdom, for example, which resembles the one in Quebec or Toronto. I recognize that it is beneficial to hold consultations and to hear a number of opinions. At the same time, when we are acting very quickly, it is much easier to simply announce, for example, that we are going to adopt the way Toronto, or Quebec, manages their budget and communicates with people. It's clear and simple.
In the future, it might be beneficial to implement a few small changes, given some of the idiosyncrasies that exist in the federal government. But why not start with something clear and simple whose benefits have already been demonstrated?
Bloc
Marie-Hélène Gaudreau Bloc Laurentides—Labelle, QC
Since we're talking about simplicity, I'll ask my last question, which is also simple.
You announced the tabling of the report on Thursday. I now know what I'll be doing next weekend. This will be my first analysis, and I would like your advice as a financial analysis specialist.
What should I analyze, understand, or try to identify in the report that will be tabled on Thursday?
Interim Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
Each economic and financial outlook report contains, in the first few pages, two tables showing forecasts for the next five years for economic growth and government deficits, respectively. I'll begin with those two topics.
Then, towards the end of the document, there are details about households, businesses, and all sectors of the economy, as well as our forecasts. The details are important. For most people, a simple forecast of 1% growth is not very high and is rather abstract. However, to better understand, it is important to look in detail at what has happened in businesses and households, and the level of debt people have. With such details, we have a better understanding of what has happened in Canadian communities.
Bloc
Marie-Hélène Gaudreau Bloc Laurentides—Labelle, QC
Mr. Chair, thank you for granting me a few extra moments.
Conservative
Conservative
Kelly Block Conservative Carlton Trail—Eagle Creek, SK
Thank you, Mr. Chair.
I want to circle back to some of the questions my colleague was asking about the projections set out in your report with regard to housing stock. You've indicated that they don't need to build 500,000 new homes in order to close the gap. Your number is quite a bit lower: 227,000 that could be built.
Do you think they're going to be able to achieve that, given what's happening across the country with housing starts?
Interim Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
The short answer to the question is that we don't know.
The most recent announcement on housing was made on Sunday. Yesterday morning, when the office opened up at 7:45, we drafted an information request to the government to ask it for details on exactly how it's planning to spend that $13 billion to transform the housing market. As soon as we have details with regard to how it's planning to do it, then we will be in a much better position to assess what it looks like. As soon as we hear something back, I'll endeavour to get back to you to give you an update on that.
Conservative
Kelly Block Conservative Carlton Trail—Eagle Creek, SK
We would appreciate that.
Your office references “units” as its model for housing, but I have some questions about what “units” means. Do the units also count for varying space, variety and the needs of families?
Interim Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
I would have to get back to you on that in terms of the definition of “units”. I think I know the answer to that, but it would be better for everybody if I got back to you with a precise definition on that one.
Conservative
Kelly Block Conservative Carlton Trail—Eagle Creek, SK
My concern is that there is a way for the government to ensure that families will be able to afford homes that actually meet the need and size of a family. We see a lot of multi-family dwellings being built. Rather than a one-size-fits-all approach to housing units, we're looking to see whether the needs of families will be taken into consideration.
Interim Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
That's something we pointed out in previous reports: that the housing being created isn't necessarily affordable housing as defined by CMHC, based upon the government's own definition. That's definitely a concern.
I would note, based upon Sunday's announcement—don't believe everything you read in press releases—that there seemed to be a focus on affordable housing and social housing. Again, I'm not a press-release guy; I'm a numbers guy. Until we receive the numbers from the government and details with regard to how it's planning to spend the money and to organize itself, I'm not in a good position to comment on it.
Conservative
The Chair Conservative Kelly McCauley
I mentioned that we were going to finish up here, but Mr. Patzer has expressed interest.
Does anyone on this side wish to intervene? Otherwise, we'll skip right to Mr. Patzer.
Go ahead, Mr. Patzer. I think you're sharing your time with Mr. Gill for a question.
Conservative
Jeremy Patzer Conservative Swift Current—Grasslands—Kindersley, SK
You betcha. Thank you very much.
Building off that, do you have any projections for the next five years for housing? Is housing going to decline? What are we looking at here?