Human Resources Committee on Feb. 2nd, 2017

[The Chair, Liberal, Bryan May]

I call the meeting to order.

Good morning, everybody. Seeing that it is past 11 o'clock, we need to get started here.

Pursuant to Standing Order 108(2) and the motion adopted by the committee on Monday, June 13, 2016, the committee is resuming its study on poverty reduction strategies. We are currently in the housing component of this study. The committee has agreed to study affordable housing, housing strategies, homelessness, Housing First initiatives, and other new and innovative approaches.

First of all, thank you all for being here today. From the Department of Employment and Social Development, we have Catherine Scott, director general of the community development and homelessness partnerships directorate. From the Canada Mortgage and Housing Corporation, we have Charles MacArthur, senior vice-president of regional operations and assisted housing, and Michel Tremblay, senior vice-president of policy, research, and public affairs. From the Department of Indian Affairs and Northern Development, we have four representatives: Lynda Clairmont, senior assistant deputy minister of regional operations; Allan Clarke, director general of economic research and policy development at lands and economic development; David Smith, acting director general of community infrastructure, regional operations; and Daniel Leclair, director general of regional infrastructure delivery, regional operations. Thank you all for being here.

We're really looking forward to getting into this component of our study, and the timing of your being here is really good. We're going to start travelling next week, so the information we get to prepare us for that travel is critically important.

We're going to allow all groups to present to us today, so we're going to keep presentations to seven minutes if that's possible. We're going to start with the Department of Employment and Social Development. Catherine Scott, you have seven minutes.

[Catherine Scott, Director General, Community Development and Homelessness Partnerships Directorate, Department of Employment and Social Development]

Thank you. It's a pleasure to be here before you today, to speak on behalf of the Department of Employment and Social Development Canada to discuss the homelessness partnering strategy.

Homelessness affects a diverse cross-section of the population, from single adults to youth, families, women with children, veterans, and seniors. In 2014 approximately 136,000 Canadians used an emergency shelter across the country.

Compared to the housed population, homeless individuals are far more likely to experience mental health or addiction issues, be victims of assault, and suffer from a variety of physical health ailments, including tuberculosis, HIV, and the effects of inadequately controlled diabetes and hypertension.

As a result of related public spending on health, social, and judicial services, the economic costs of homelessness are high. Some estimates indicate that it costs Canadians as much as $6 billion annually. The homelessness partnering strategy is a community-based program that provides direct financial support to 61 designated communities across the country, as well as to aboriginal and rural and remote communities, to allow them to address their local homelessness needs.

Through this strategy, qualified organizations may receive funding for projects to help prevent and reduce homelessness in Canada. These projects are funded through both regional and national funding streams. The program's formal adoption of the Housing First approach in 2014 represented a departure from more traditional approaches of addressing homelessness primarily through emergency shelters and services.

The focus of Housing First is to provide clients with access to independent and permanent housing as quickly as possible, without having to meet any preconditions. This model focuses on clients who are either chronically homeless, meaning individuals who are currently homeless and have been so for six months or more in the past year, or episodically homeless, referring to individuals who are currently homeless and have experienced three or more episodes of homelessness in the past year. Once housed, these clients receive tailored, wraparound supports to ensure long-term housing stability.

We are only now beginning to receive data to measure the impact of the shift to Housing First. With the full five-year implementation, we will have a much better sense of the effectiveness of this approach for communities.

At the same time, communities moving to the Housing First model continue to have the flexibility to support other proven approaches and to support priority populations, such as youth homelessness and homelessness within the seniors' populations.

The Homelessness Partnering Strategy is a unique program. Our community governance model plays a significant role in the successful implementation of projects at the local level. A community advisory board exists in each of the 61 designated communities and is made up of a wide range of stakeholders. It is responsible for setting the direction for addressing local homelessness issues and recommends projects for funding. A community entity, normally an incorporated organization such as the community's municipal government, is responsible for the implementation of a community plan and the administration of funds.

Budget 2016 announced an additional $111.8 million in funding for the Homelessness Partnering Strategy over two years. This builds on the program's existing five-year investment of nearly $600 million over five years, from 2014 to 2019.

Additional funding has therefore been provided to the program's three original funding streams. Approximately $54 million in additional investments over two years have been made to the designated communities stream. The Aboriginal homelessness funding stream doubled, receiving an additional $29 million over two years. The rural and remote homelessness stream funding also doubled to $11.2 million per year over two years.

In addition to the three regional funding streams, there are also three nationally delivered funding streams.

The national homelessness information system is a partnership model designed to facilitate data collection from homeless shelters and other service providers.

The surplus federal real property for homelessness initiative is delivered by our department in partnership with Public Services and Procurement Canada to transfer surplus federal lands and buildings to stakeholders for $1 to create affordable housing for those who are homeless or at risk of homelessness.

Budget 2016 also announced $12.5 million over two years for the innovative solutions to homelessness funding stream. This stream tests innovative approaches to prevent and reduce homelessness, particularly with respect to indigenous and Inuit peoples, young people, women fleeing violence, and veterans who experience homelessness.

Two calls for proposals were launched in the fall of 2016 to solicit new projects. One call was for larger contribution projects and the other was for smaller-scale experimental projects requiring grants under $25,000. These project proposals are now being assessed, and an announcement is expected in spring 2017.

Over the course of the next year ESDC will have the opportunity to engage with provincial and territorial partners, municipal representatives, and communities, as well as with indigenous stakeholders and others to seek their views as we prepare for program renewal in 2019.

This engagement will include the work of the advisory committee on homelessness, to be chaired by parliamentary secretary Adam Vaughan. The nomination process to seek members for this advisory committee was launched yesterday, February 1, and is open until February 20.

Thank you. I look forward to answering your questions.

[The Chair, Liberal, Bryan May]

Thank you so much.

I will now turn it over to the Canada Mortgage and Housing Corporation. Mr. Tremblay, the next seven minutes are yours. Go ahead.

[Michel Tremblay, Senior Vice-President, Policy, Research and Public Affairs, Canada Mortgage and Housing Corporation]

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

We welcome the opportunity to contribute to the committee's study of poverty reduction strategies.

We note that housing is one of the four main areas the committee is focusing on, and for good reason. Research has shown that good housing provides the stability from which families and individuals can leverage better social and economic outcomes—better health, better education and better employment prospects. In short, it can help break the cycle of poverty for low-income households.

Conversely, high housing costs can contribute to poverty. Nationally, we estimate that about 1.8 million Canadian households are currently in core housing need, spending 30% or more of their pre-tax income on housing. That means less money is available for other necessities like food, health care, and education. This makes it harder for families to stay healthy and to support their children's education and development, thus perpetuating the cycle of poverty from generation to generation.

As Canada's national housing agency, CMHC has an important role to play in reducing poverty through better housing. As Evan Siddall, our president, said when he appeared before the committee last April, helping Canadians meet their housing needs is our raison d'être.

One way we do this is by working with the provinces, territories, indigenous communities, and other stakeholders to ensure that vulnerable Canadians have a place to call home. Each year CMHC provides federal funding of approximately $2 billion to help meet the housing needs of low-income families, seniors, people with disabilities, indigenous people, and victims of family violence, among others. Most of this funding is used to support more than 500,000 Canadian households living in existing social housing units across the country, including in first nations communities.

Significant federal funding is also provided through the investment in affordable housing, a collaborative initiative with the provinces and territories. Provinces and territories match federal funding and are responsible for program design and delivery in their jurisdictions.

CMHC also provides funding to help improve living conditions on reserves by building new social housing units, renovating existing homes, and building capacity within first nations communities.

As the committee knows, budget 2016 included a significant boost to this annual funding, providing for $2.2 billion in new investments over two years to give Canadians greater access to affordable housing. The government has made it clear that housing is an important component of its overall approach to strengthening the middle class, promoting inclusive growth for Canadians, and helping to lift more people out of poverty. Most of this new funding is flowing through CMHC and is being used to address pressing housing needs in the short term: for example, federal spending under the investment in affordable housing has been more than doubled, with an additional $504 million over two years to support new construction and renovation of affordable housing, as well as measures to foster safe, independent living, and housing affordability.

Budget 2016 also provided more than $200 million to build, repair, and adapt affordable housing for Canada's growing senior population, allowing them to stay in their homes. Nearly $90 million is earmarked to build or renovate shelters for victims of domestic violence. Close to $574 million is being invested to renovate and retrofit existing social housing units, making them more affordable to operate and reducing their impact on the environment. Some $554 million is being invested in improving housing and living conditions in first nations communities. The immediate housing needs of people living in the north and in Inuit communities is also being addressed, with new funding commitments totalling $178 million. Up to $30 million is available to help preserve affordability for low-income households living in federally administered social housing where long-term operating agreements are expiring.

Budget 2016 also included two new initiatives aimed at supporting the construction of affordable rental housing, an important option for many Canadian households. The $200 million affordable rental innovation fund was launched by CMHC in September 2016, and offers financial support for ideas and new funding models and innovative building techniques that spur the rental housing sector. The fund is expected to help create up to 4,000 new affordable housing units over the next five years.

CMHC is also finalizing the design of a new affordable rental housing financing initiative, which will provide up to $2.5 billion in low-cost loans to municipalities and housing developers during the earliest and riskiest phases of development. Further details will be announced in the near future.

Importantly, the budget committed the government to consult Canadians and housing stakeholders on a national housing strategy. In our role as housing policy advisers to the government, CMHC has been supporting our minister, the Honourable Jean-Yves Duclos, in this process.

Last summer and fall, we led a national conversation on housing, reaching out to Canadians and a broad range of stakeholders to help identify innovative new ways to improve housing outcomes for Canadians. The consultations confirmed that this is a top-of-mind issue for many Canadians. A number of clear messages emerged. Canadians want better housing outcomes, especially for those who need the most help. They told us that housing solutions need to be people-focused, so that individuals and families have access to jobs, schools and supports in order to participate in their communities and help improve their life opportunities.

CMHC continues to support Minister Duclos in the development of the national housing strategy for release later this year. Among other objectives, the strategy will help guide and promote greater alignment among policy areas, including poverty reduction, and among various orders of government and other participants in the housing sector.

That concludes my opening remarks, Mr. Chair. Thank you again for the opportunity to be here. My colleague and I would be pleased to answer any questions from the committee.

[The Chair, Liberal, Bryan May]

That's fantastic. Thank you very much.

Now, from the Department of Indian Affairs and Northern Development, we have the senior assistant deputy minister of regional operations.

Madam Clairmont, the next seven minutes are yours.

[Lynda Clairmont, Senior Assistant Deputy Minister, Regional Operations, Department of Indian Affairs and Northern Development]

Thank you very much.

Mr. Chair and honourable members, merci et meegwetch for inviting us to appear before the committee today, here on traditional Algonquin territory. We welcome the opportunity to talk a bit about what the department is doing with respect to housing.

I want to begin by acknowledging the committee's work on poverty reduction strategies, affordable housing, homelessness, mental health, Housing First initiatives, and other innovative approaches. This work contributes to our broader knowledge of these issues and will help inform our work.

Housing and community infrastructure are fundamental needs for indigenous people on reserve, in rural and urban areas, and in the north. They are a vital part of healthy and safe communities and are at the heart of well-being, economic prosperity, and sustainability.

There is a large body of research that has looked into the linkages between the physical environment in which people live and their social, economic, and health outcomes. Improvements in housing can support the overall well-being of community members and, more specifically, help them perform well at school or engage in employment.

The government is moving forward to more effectively support indigenous communities on the issues most important to them. As you are aware, budget 2016 provided $4.6 billion over five years to support community infrastructure in indigenous and Inuit communities, and we are working with communities and partners to deliver on those commitments.

Of that amount, INAC received $416 million over two years to specifically address immediate housing needs on reserve to support the construction, service, and renovation of over 3,000 units. To date, $267 million or thereabouts has been allocated for about 965 housing projects that will address immediate needs on reserve. Our regional officials are working closely with communities to implement these projects.

Budget 2016 investments are in addition to an average of $146 million provided directly to first nations to support a range of housing needs, including new construction, renovations, operations and maintenance, technical support, and capacity development.

With respect to northern and Inuit communities, budget 2016 provided $156.7 million to address Inuit housing and the acute need in three of the northern regions, with $50 million for Nunavik, $15 million for Nunatsiavut, and $15 million for the Inuvialuit settlement. We will continue to work with CMHC to address the needs of Inuit housing.

Our partnership with CMHC also extends to working with the Métis organizations to engage on distinct Métis housing issues and develop options that will address their unique needs. In the interim, Métis can access funding under CMHC's indigenous off-reserve funding program.

Communities are already starting to benefit from the 2016 infrastructure investments. For example, in October of 2016, $800,000 was provided to the Munsee-Delaware first nation in Ontario for the construction of six new housing units in the community. We also funded three duplexes in Elsipogtog in New Brunswick. We had pre-manufactured duplexes, which allowed for quick and efficient construction, helping this first nation to begin to address its housing shortage. To reduce overcrowding in Barrens Lands First Nation in Manitoba, we invested in the construction of four housing duplexes to be completed this spring.

The budget 2016 investments are also starting to address the broader infrastructure gaps in indigenous communities. For example, 88 projects are under way to help communities update and connect to energy systems and to have Internet access, which is pretty fundamental.

While funding is part of the solution, we are also working with partners to reform our housing policy and programs, support community capacity, and establish a new fiscal relationship with indigenous peoples. We have provided funding to support community planning, and this is a priority for the department as well.

Through the national housing strategy, the government is working with indigenous communities to develop an effective long-term approach to support planning, construction, financing, and maintenance of housing on and off reserve. As part of the national housing strategy, the department, with support from CMHC and indigenous representative organizations, engaged communities and other partners on the reform of housing programs, Inuit housing, and longer-term investments. CMHC will publish a report on this first phase of engagement, and we will continue to engage with indigenous partners as we launch a second phase of engagement this spring.

The second phase will lead to the development of a distinct indigenous on-reserve housing strategy and options for on-reserve housing reform that will support a broader spectrum of housing approaches and solutions. It will also highlight specific needs in northern and Inuit communities and for the Métis.

While homes are at the centre of any community, improving the quality of life for all members must be supported by other community infrastructure, including water, schools, community centres, and more.

We are currently working in close partnership with indigenous organizations and other key partners on how to implement the government's long-term infrastructure investment plan. The goal is to ensure that community infrastructure on reserve and in northern communities is well planned, effectively managed, and comparable to the rest of Canada.

We will continue to encourage community-driven planning as one of many tools for capacity-building. Interest in community planning as a process that promotes healing and identifies community priorities and aspirations is gaining momentum.

We have engaged with indigenous mentors who have experience working with other first nations communities to create community plans. This has supported the development of an indigenous community development national strategy that will impact all areas of governance capacity, transparency, and accountability. It will support indigenous peoples in building a path forward and improved outcomes in areas such as health, education, and good government.

The government is also working to establish a new fiscal relationship with indigenous peoples that will provide sufficient, predictable, and sustainable funding. We will work in partnership with indigenous organizations to design this new fiscal relationship, enabling indigenous communities to develop long-term strategies and plan for their future.

I want to thank you again for your work on poverty reduction and for equipping all partners with better information, advice, and evidence.

We will continue our discussions with indigenous leaders and communities and other key partners. We will work together to support the implementation of poverty reduction strategies. It will help all of us move along the path of reconciliation toward a renewed, nation-to-nation relationship with indigenous communities.

I look forward to our discussions here today.

Thank you, merci, and meegwetch.

[The Chair, Liberal, Bryan May]

Thank you very much.

Thank you to all of you. You've been fantastic about keeping to the time, actually coming in under time in most cases.

Right off the bat, we're going to go to MP Poilievre for the first six minutes of questions.

[Pierre Poilievre, Conservative, Carleton, ON]

Thank you very much to all of our witnesses.

I heard a lot in the testimony about all the things the government can and is trying to do to help, but I didn't hear anything about all the things the government is doing to harm. Increasingly, it's becoming clear that government policies are the driving force behind the inordinate increase in the cost of housing for Canadians.

I have in front of me right now an affordability report produced by the Canadian Home Builders' Association. It's on housing and the provision thereof. This report shows that the cost of housing construction has barely increased at all since 1995. Based on the chart in front of me, that increase is probably about the same as the overall cost of living—very modest. Meanwhile, the cost of land on which to build has tripled.

The Canadian Home Builders' Association, joined by many others who work in this field, attribute this increase to a mountain of red tape, to restrictions on land development, and to development charges that are far in excess of the real cost associated with providing infrastructure to the new housing being built. This level of provincial and municipal interference in construction of new housing is the major driver behind the cost of owning one's home. It stands to reason that this analysis is correct. It is true that land costs go up with time—as the old saying goes, they're not making any more of it—but it is impossible to believe that the increase in land costs is simply a function of market economics.

Our population in this country has been growing less than 2% over the last two decades. It's not as though we've had a 250% increase in Canada's population, which would lead to such increases in land costs. What we have had is a massive increase in the cost of bringing a home to development: the permitting that must be achieved, the transaction costs, the consultants that are required in order to win approval at city hall, the subsequent fees and charges that are applied to that construction. All of these are limiting supply and, in so doing, increasing cost.

My question is for CMHC. Is your organization keeping track of the costs of government for each unit of housing that is built in the various markets across the country?

[Michel Tremblay]

Thank you for the question.

At the moment, we are not, but we are in the process of completing a study on the escalating home prices in major urban centres in Canada. You are correct. Obviously, economic factors such as population growth, the average income in these areas, and low interest rates also contribute to rising prices in certain areas, but land accessibility restriction has also been identified as a driver of prices, so we are in the process of trying to collect more data on this information to try to get to the bottom of some of these things.

Obviously, cities such as Toronto and Vancouver in particular have finite land availability, as you mentioned. There are also all sorts of development restrictions placed by municipalities, but we don't have figures on how much that contributes specifically to cost.

[Pierre Poilievre, Conservative, Carleton, ON]

The land restrictions that exist in markets like Toronto and Vancouver are a major reason for the lack of availability of building. These kinds of zoning restrictions have been proven to drive up housing costs. A recent paper by the Brookings Institution that was co-authored by a Harvard-trained economist showed that these kinds of restrictions are particularly hard on impoverished minorities, who, over decades, moved towards greater social equality by migrating to where job opportunities were—big cities, where there was lots of employment. Building restrictions imposed by municipal and state governments have made housing unaffordable for such people, and therefore they are shut out of economic opportunities. It's very good for the wealthy, of course, because their home values are inflated by government restrictions on supply, but very damaging for low-income people who are not yet in the housing market.

Would CMHC commit to studying the impact of excessive government restrictions on housing construction on the social mobility of low-income people in pursuit of opportunity?

[The Chair, Liberal, Bryan May]

We're actually past time, but I'm going to allow for a quick answer.

[Michel Tremblay]

As I mentioned, we are committed to doing additional research on the availability of land, land restrictions, and so forth. We are looking at performing studies over the next year or so.

[The Chair, Liberal, Bryan May]

Thank you very much.

It's over to MP Ruimy, please.

[Dan Ruimy, Liberal, Pitt Meadows—Maple Ridge, BC]

Thank you very much, everybody, for being here and presenting.

I'm going to start my questioning with the Canada Mortgage and Housing Corporation as well.

I grew up in Montreal. We were a large family of five boys and my mom and dad, and all our lives we were in apartment buildings. I don't think home ownership was ever a big issue for us. Like a lot of Canadians.... Not everybody is into home ownership. In places like my riding, one of the challenges we have is that there are not a lot of apartment rentals. There is not a lot of opportunity for young single people to even be able to afford an apartment, because there's not a lot of supply there.

In budget 2016, there was talk about $2.6 billion to encourage builders to build more rental inventory. Could you tell us a little about that?

[Michel Tremblay]

Yes, there was. We are just putting the final touches on this program, so I can't speak to a lot of the details, but we are going to be launching it in the near future. It is with the purpose of increasing the supply of rental housing, by up to 10,000 units.

[Dan Ruimy, Liberal, Pitt Meadows—Maple Ridge, BC]

Okay, good. Thank you.

I also know that in subsidized housing, co-op housing, a lot of those contracts were expiring. Mortgages were expiring, and the federal government gave enough money to cover the subsidies until 2018. What happens to those subsidies after 2018?

[Charles MacArthur, Senior Vice-President, Regional Operations and Assisted Housing, Canada Mortgage and Housing Corporation]

As you say, we've been given the money up until 2018, and this was given for the short term, between 2016 and 2018 and the national housing strategy, so we look forward to the national housing strategy to provide further direction.

[Dan Ruimy, Liberal, Pitt Meadows—Maple Ridge, BC]

Then is the onus on the federal government?

[Charles MacArthur]

We also work with groups that are expiring. At our affordable housing centre, we have folks on the ground who go out and work with groups that are approaching their expiry to try to help them work toward sustainability after the agreement. We try to develop financial plans and work with them on sustainable models through which they can thrive after the end of their agreements.

There are a variety of subsidies. The agreements usually are timed so that they end when the loan that was in place ends. Many of the subsidies are for the loan amount, so when the loan's gone, the expense of that loan will also come out of the bottom line of the expenses of many of the groups that have agreements in place.

[Dan Ruimy, Liberal, Pitt Meadows—Maple Ridge, BC]

Yes, I'm still concerned about what happens after 2018, but we'll leave it there.

This is to Catherine Scott. I know that you're getting applications in right now for the innovative solutions to homelessness project. Can you share anything that you've seen so far?

[Catherine Scott]

It's fairly early. The application process closed just before Christmas, and we're in the process of assessing the applications. We had, I would say, an overwhelming response, which was fantastic. We received project proposals from across the country, so we're just now in the process of assessing them and hope to be able to make some announcements about the projects that will be receiving funding in the next few weeks.

[Dan Ruimy, Liberal, Pitt Meadows—Maple Ridge, BC]

Along that line, how are you planning to measure some of these? Once you pick them, are there measures in place? What's your action plan to measure the outcome of this so we know what's going to work, what's not going to work? What's in place, or is there something in place?

[Catherine Scott]

This is part of our innovative solutions to homelessness stream. We had set some priorities in terms of looking at projects, for example, with indigenous stakeholders or projects that addressed youth homelessness or veterans. As we decide which projects we're going to be funding, we will be looking at what impacts we're achieving with some of those subgroups, with some of our investments over the next couple of years through that stream.

[Dan Ruimy, Liberal, Pitt Meadows—Maple Ridge, BC]

Will those be made public, do you think?

[Catherine Scott]

Likely we'll report through the departmental reporting process on the results of those investments.