Human Resources Committee on Feb. 7th, 2017

[Pierre Poilievre, Conservative, Carleton, ON]

I felt bad that Mr. Moore was not able to finish his answer to my earlier question, so I'll open the floor to him.

[Jeff Moore]

I have to remember what my answer was now.

[Pierre Poilievre, Conservative, Carleton, ON]

All right.

[Jeff Moore]

I think the key thing with the bank will be balancing how you're going to attract the private sector to some of these projects versus what the public benefits are that we're trying to address with some of these projects, and ensuring that the projects are sustainable as well. You want to make sure that you're not pricing people out of a public transit system with the private sector's being involved. So there are checks and balances that will have to be in place with the bank and with the minister or ministers responsible for the bank, including asking whether we are addressing the right policy issue here, knowing why we are bringing the private sector on board, and making sure that the returns the private sector is hoping to achieve through this project don't make some of these assets unattainable for those who need them, particularly those who are in a low-income situation, where the only opportunity they have for mobility is through public transit. Those are some issues that we need to make sure we approach in a balanced way.

[Pierre Poilievre, Conservative, Carleton, ON]

The concern I have is not that the investors will make a return. I think all of us believe that, if an investor takes a calculated risk, he or she should have the opportunity to make a return. What I'm worried about is that it will be the taxpayers taking the risk and not the private investor. The public gets the risk, the private sector gets the profit, and we know where this is coming from. It used to be that pension fund managers had rocking chair money. They'd buy government bonds, they'd sit back, and they'd get 7% or 8%. Now they can get maybe 2%, if they're lucky. So they're pressured to find guaranteed returns with no risk, and they're trying to convince governments to take the risk off their balance sheets and provide them with investments that give them a near guarantee of 6%, 7%, or 8%. That's not how the free market is supposed to work.

I'm very concerned that this policy is being driven by those investors who are seeking risk-free rewards at the expense of Canadian taxpayers. What is your department doing to avoid those kinds of moral hazards?

[Jeff Moore]

I think it's a bit early to tell. In terms of the bank, there's still a lot of policy work that needs to be done: what the operations of the bank are, what kind of risk framework it's actually going to use, how it's going to select projects, what the risk exposure would be to not just the federal government but other levels of government, and how we would deal with the private sector investment part of it, as well. That's going to come, but it would be pretty hard for me to comment on that right now. Hopefully I'll be able to comment later.

[The Chair, Liberal, Bryan May]

You have about 20 seconds.

[Pierre Poilievre, Conservative, Carleton, ON]

I think it's good. Thank you very much for your answers; I appreciate it.

[The Chair, Liberal, Bryan May]

We'll go over to Dan.

You were going to share your time.

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

I'm going to share my time. Thank you.

Can you tell us how small towns were helped with the cost-sharing agreements?

[Jeff Moore]

Sorry, can you elaborate a bit more or...?

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

What is the cost sharing right now, or what was it a couple of years ago? I think it was a third, a third, a third. Has that changed now?

[Jeff Moore]

Normally it's a third, a third, a third. Under budget 2016, we went up to 50% cost sharing: 50% being provided by the federal government for public transit, and our investment in water and waste water as well. As for what the cost sharing will look like for phase two of the plan, we're still working out some of those policy questions. I can tell you that certainly for phase one, it's been fifty-fifty with our department, but other departments may have different arrangements with respect to cost sharing.

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

Are they looking to help the municipalities even more? I guess you can't comment on that at this point, but municipalities were helped by being able to access lower costs on that.

[Jeff Moore]

Yes, or actually by the federal government's providing a higher costing share, and then it's really up to municipalities, working with provinces and territories, as to how the rest of that cost sharing is sorted out.

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

All right, thank you.

[The Chair, Liberal, Bryan May]

Go ahead, Mr. Sangha.

[Ramesh Sangha, Liberal, Brampton Centre, ON]

Thank you, Mr. Chair.

We have seen that many northern indigenous communities are struggling from a shortfall of housing and with substandard living conditions. What steps have been taken to improve existing infrastructure and to construct new housing units for indigenous peoples?

[Jeff Moore]

Going back to my earlier remarks, we're providing quite a bit of funding for indigenous communities, $3.5 billion. A lot of that will be invested in core municipal infrastructure—water and wastewater systems, solid waste management, getting rid of your garbage—as well as health facilities on reserve. It's a lot of critical infrastructure that we'll be supporting.

On the housing side of things, we're making some significant investments on the repair and renovation of existing units and the construction of new units, and looking at elements like shelters for victims fleeing violence. There are a lot of different components to the investments we're making for housing, as well as core infrastructure on reserve.

[Ramesh Sangha, Liberal, Brampton Centre, ON]

Next, according to the 2006 census, the average annual income on reserve is $16,160. As a result, many indigenous people will not be approved for a mortgage. What steps are you taking to assist the indigenous people living on low income to get affordable housing?

[Jeff Moore]

I can only speak to those investments that we've announced in budget 2016, which were quite substantive. If there are questions around mortgages or any other support for housing on reserve, I would defer to either my colleague or representatives from the Canada Mortgage and Housing Corporation. They would have a good deal more to say about housing on reserve.

[Ramesh Sangha, Liberal, Brampton Centre, ON]

Okay.

Going back to the question that my colleague Mr. Ruimy asked earlier, 90% of the public funds go to the municipalities, territories, and provincial governments. As it is, funding is regularly distributed to emergency housing shelters, such as the Salvation Army's Wilkinson Road Shelter in my riding of Brampton Centre. How is Infrastructure Canada working in various levels of government to ensure that emergency housing infrastructure is in place, not only for my constituents for but the whole of Canada?

[Jeff Moore]

With respect to the Department of Infrastructure, we're a coordinator more than anything else. The funding that is received for housing and indigenous communities would normally go to the Department of Indigenous and Northern Affairs and/or to ESDC, whose minister is Minister Duclos, and/or CMHC. Those entities would normally have agreements in place. They could be at the local level. In the case of Indigenous and Northern Affairs, they would have agreements in place with the communities themselves to flow the money for housing. In the case of CMHC, they would have agreements in place with the provinces and territories to flow the money.

They have a mechanism in place, I'm sure, to determine how they invest in priorities. CMHC would be best placed to respond to those questions.

[Ramesh Sangha, Liberal, Brampton Centre, ON]

Again, is there any mechanism in place to have checks and balances on the provinces, territories, and municipalities to see how they are spending the money that is being allocated by the federal budget, by you?

[The Chair, Liberal, Bryan May]

Please be very brief.