Human Resources Committee on Oct. 4th, 2011

[Marie-Geneviève Mounier]

I'm not sure I have this information with me today. I'm sorry about that.

[Carol Hughes, NDP, Algoma—Manitoulin—Kapuskasing, ON]

Someone mentioned, I believe it was Mr. Butt, with respect to the intervention that was done, sticking our noses into collective bargaining when the collective bargaining isn't quite done. How could introducing multiple back-to-work legislation impact the federal private industries, considering what was found in the report “Work stoppages in the federal private sector: innovative solutions”?

[Marie-Geneviève Mounier]

To come back to your point on asbestos, I'm told it's a DFAIT-led file.

[Carol Hughes, NDP, Algoma—Manitoulin—Kapuskasing, ON]

Thank you.

[Marie-Geneviève Mounier]

To come to your second point, I would say that legislation would be the last resort, because there's this whole process that I needed to--

[Carol Hughes, NDP, Algoma—Manitoulin—Kapuskasing, ON]

I understand it's a last resort, but the fact that the legislation gets inputted prior to the negotiations not failing, or should I say they're still at the bargaining table.... Is there something in the Canada Labour Code that allows that to happen, that the government could start putting back-to-work legislation in place without the collective bargaining having ended? Does that not favour a side?

[The Chair, Conservative, Ed Komarnicki]

This is the position to answer that, but legislation is what it is, and the government can act on it. I'm not sure if you want to make a general comment on that or not.

[Marie-Geneviève Mounier]

No, not really. Thank you.

[Carol Hughes, NDP, Algoma—Manitoulin—Kapuskasing, ON]

If there's time remaining, Jean will speak.

[Jean Crowder, NDP, Nanaimo—Cowichan, BC]

I would like to follow up on the asbestos question for a second, because I'm not clear.

On page 7 of your deck you talk about the fact that--this is in the context of unfair competition--you represent Canada at the international labour organizations and when there are labour cooperation agreements, LCAs, and in the context of free trade agreements your department clearly has a role in international affairs.

I just want to be clear, when DFAIT was providing advice on the Rotterdam convention on asbestos, you're saying your department was not consulted even though in Canada we have a fundamental right to know about every known or foreseeable health or safety hazard in the area where we work. What I'm understanding you to say is that in Canada we have that right, but you're not consulted by DFAIT when it's talking about workers' rights in other countries.

[Marie-Geneviève Mounier]

Thank you for that.

First, I should say that in the deck, instead of saying that we represent Canada, we should have added something along the lines of saying that we contribute to developing labour standards, because we're not the only ones involved in the ILO.

Canada does comply with the ILO convention on asbestos. DFAIT is the lead for positioning Canada on the asbestos file.

[Jean Crowder, NDP, Nanaimo—Cowichan, BC]

Is your department consulted, given that we have a standard in Canada on the right to know? We have a Canadian standard, and we're saying that Canada would support a different international standard on the right to know. Is your department consulted, because you are the Canadian expert?

[The Chair, Conservative, Ed Komarnicki]

She can answer, but your time is up.

[Marie-Geneviève Mounier]

I can say that participation in the ILO forum is done in consultation with the various departments that are involved, and yes, DFAIT does work in consultation with us.

[The Chair, Conservative, Ed Komarnicki]

Okay. Your time is up. Also, the time is up for this segment, so we will suspend for five minutes and introduce a new panel.

Thank you very much for appearing before us. We appreciate it.

[The Chair, Conservative, Ed Komarnicki]

We'll get back to order here.

We'll commence with the presentation with regard to Canada Mortgage and Housing Corporation. We have Karen Kinsley, the president; and Debra Darke, director of community development.

Before you commence, I have one order of business. On Thursday, we have HRSDC and CIC. We've also asked Health Canada to be included, because they have an issue to deal with, foreign credentialling, and we will want to question them about that. That is just so you know.

With that, we'll carry on. I understand you have a presentation that will include a deck we will go through. Commence when you're able to.

Thank you.

[Karen Kinsley, President, Canada Mortgage and Housing Corporation]

Thank you, Mr. Chair. It's a pleasure to be here with my colleague.

Canada Mortgage and Housing Corporation is celebrating its 65th anniversary this year, and I certainly appreciate the opportunity to discuss how we contribute to a strong and stable Canadian housing system.

CMHC is Canada's national housing agency and the Government of Canada's advisor on housing policy matters.

Looking at slide 2, as a federal crown corporation, CMHC's mandate is to improve housing quality, affordability, and choice for Canadians. With the exception of temporary shelter for the homeless, which falls under the mandate of Human Resources and Skills Development Canada, CMHC's activities touch on all parts of the housing continuum.

For the 20% of Canadians in housing need, CMHC uses a number of tools and programs to deliver more than $2 billion a year in federal housing assistance.

We also support the 80% of Canadians whose housing needs are met by the market. CMHC's commercial activities are cornerstones of Canada's stable and well-functioning housing finance system.

In short, CMHC is a single window for federal housing products and services off reserve.

Turning to slide three, the housing assistance programs delivered by CMHC are funded through appropriations voted by Parliament. As I noted a moment ago, our main and supplementary estimates A provide for slightly more than $2 billion in spending in fiscal year 2011-2012. These investments support some of the most vulnerable in society: low-income families, seniors, persons with disabilities, aboriginal people on and off reserve, and victims of family violence.

The commercial side of our business, mortgage loan insurance and securitization, operates at no cost to taxpayers. The premiums we collect pay for any claims incurred. CMHC's annual net income and our consolidated retained earnings are in fact reflected or consolidated with the Public Accounts of Canada.

At the end of 2010 CMHC had total assets of $293 billion and capital of $11.4 billion.

The corporation employs a total of about 2,100 people at our national office here in Ottawa, five regional offices and 19 points of service across Canada.

Turning to slide four, mortgage loan insurance is mandatory for federally regulated lenders when the homebuyer's down payment is less than 20% of the value of the property. The insurance is paid for by the borrower and allows them to access the housing market at interest rates comparable to those with larger down payments. Mortgage loan insurance can be purchased from CMHC or from private insurers.

However, unlike private insurers, CMHC has the public policy mandate to provide mortgage loan insurance to qualified borrowers in all parts of the country, including rural and smaller communities, and for all forms of housing. Close to 45% of CMHC's high-ratio insured business in the first half of this year was in areas of the country, or for housing options that are less well-served, or not served at all, by the private sector. For instance, CMHC is the only mortgage loan insurer for large rental housing projects, as well as retirement and nursing home accommodation.

CMHC's insurance business is strong. We consistently apply prudent underwriting standards to help ensure a stable housing finance system in Canada.

CMHC tracks the risks carefully, and it is well capitalized. We have more than twice the minimum capital required by the Office of the Superintendent of Financial Institutions.

Turning to slide 5, you can see that the other side of our commercial business is securitization. Securitization, simply put, is the process by which banks package up mortgages that have already been insured and sell them to investors, thereby gaining access to new funds that they can in turn loan to consumers.

CMHC's securitization programs support a well-functioning housing finance system by helping to ensure that financial institutions, both large and small, have access to funds for lending and are able to serve the needs of Canadians through competitive prices and products.

The value of our securitization programs was particularly evident during the recent economic downturn. These programs, together with the temporary measure called the insured mortgage purchase program, ensured that financial institutions continued to have access to a steady flow of low-cost funds for mortgage lending. As a result, during the downturn qualified Canadians were able to secure mortgage funds to buy homes, and financing continued to be available for the construction of rental housing.

For the 20% of Canadians who are not able to meet their housing needs independently, the federal investment in housing assistance takes a number of forms. For example, on behalf of the federal government, CMHC provides $1.7 billion each year in ongoing subsidies so that almost 615,000 families living in existing social housing can continue to afford their homes.

In addition, in September 2008, the Government of Canada committed to investing $1.9 billion over five years to renovate existing social housing, build new affordable housing, and help the homeless. In July 2011, a new affordable housing framework agreement was announced with all the provinces and territories, which will guide how these funds will be spent over the next three years.

The overall objective of the framework is to reduce the number of Canadians in housing need by improving access to affordable housing. The framework recognizes that provinces and territories are best positioned to design and deliver affordable housing programs to address housing needs and priorities in their jurisdictions. The framework agreement is being implemented through bilateral agreements signed with each province and territory, which will cost-match the federal investments.

Slide 7 notes that CMHC is also working in partnership with the Department of Aboriginal Affairs and Northern Development to address the housing needs of first nations people living on reserve. Of the total federal investment of approximately $400 million per year for housing on reserve, CMHC is responsible for delivering approximately half. This funding supports the construction of new homes each year and the renovation of existing homes, as well as providing ongoing subsidies for close to 30,000 existing rental housing units on reserve.

CMHC also played an important role in delivering stimulus funding to the economy under Canada's economic action plan. The economic action plan included more than $2 billion in new spending over two years to build new and to renovate existing social housing across Canada. As reported in March 2011, more than 14,000 social housing and first nations housing projects have been completed or are under way with the economic action plan funding.

As part of Canada's economic action plan, CMHC funded a further $2 billion in low-cost loans to municipalities for housing-related infrastructure projects. More than 270 loans were approved under the municipal infrastructure lending program.

Underpinning CMHC's housing finance and assisted housing programs are a number of other activities that support a well-functioning Canadian housing system. For example, CMHC is an important source of information on housing markets. Reliable market information helps industry, governments, and consumers make informed housing decisions and also helps ensure that housing-related issues are considered in the context of broader policy discussions.

CMHC also works with housing exporters to build markets abroad, which in turn boosts the Canadian economy by creating jobs.

I'll turn to slide 10. CMHC's annual report provides a description of the key initiatives and performance measures for 2011. Some of these initiatives include working with provinces and territories to deliver the next three years of federal investment in social housing; working with Aboriginal Affairs and Northern Development Canada and first nations to improve the delivery of housing programs on reserve; continuing to apply prudent underwriting standards to ensure that only qualified borrowers are approved for mortgage loan insurance and that homebuyers will be able to meet their mortgage obligations into the future; and focusing our research on understanding housing need and policy responses as well as the implications of an aging population on the existing housing stock.

As I hope the committee can see, Canada Mortgage and Housing plays a key role in providing leadership, coordination, and support to the Canadian housing system.

Thank you again for giving me the opportunity to speak to you.

I would be very pleased to accept any questions the committee may have.

[The Chair, Conservative, Ed Komarnicki]

Thank you very much for that presentation.

We will turn to five-minute questions. Ms. Morin.

[Marie-Claude Morin, NDP, Saint-Hyacinthe—Bagot, QC]

First, I would like to thank you for your presentation. It was very interesting.

I have a quick technical question. In your presentation, you did not speak about the residential rehabilitation assistance program (RRAP). Could I ask you some questions about this program?

[Karen Kinsley]

Certainly.

[Marie-Claude Morin, NDP, Saint-Hyacinthe—Bagot, QC]

How are the maximum amounts granted under the RRAP determined and allocated among housing structures?

[Karen Kinsley]

Thank you.

It actually varies across the country. Maybe I'll turn to Debra, who's responsible for the program delivery, to elaborate on the determination of the amounts.

[Debra Darke, Director, Community Development, Canada Mortgage and Housing Corporation]

In her presentation Karen mentioned that we have been talking to provinces and territories about new arrangements and a new framework for affordable housing. Provinces and territories going forward for renovation programs will have the flexibility to determine those maximum levels of assistance themselves. They will presumably be taking into account the specifics of the market, perhaps the nature of the repairs required--a variety of different circumstances that will be particular to their jurisdictions.

[Marie-Claude Morin, NDP, Saint-Hyacinthe—Bagot, QC]

In short, the provinces are responsible for implementing this program and determining how the amounts will be allocated.

Under this same program, is there anything specific planned in terms of modified housing for seniors and people with disabilities?

[Karen Kinsley]

Yes, in fact today there are two programs that are specifically targeted to renovations for people with disabilities, and there's a separate program for home adaptations for independent living for seniors.

Again going back to Debra's point, going forward under this new framework I talked about, which we have negotiated and was recently announced, provinces and territories again will determine not only the qualification criteria but also the nature of the services or the programs they want to deliver. Up until now we have had two streams of work that addressed those areas.