Evidence of meeting #6 for Human Resources, Skills and Social Development and the Status of Persons with Disabilities in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was million.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Ian Shugart  Deputy Minister, Department of Employment and Social Development
Evan Siddall  President and Chief Executive Officer, Canada Mortgage and Housing Corporation
Kathryn McDade  Senior Assistant Deputy Minister, Income Security and Social Development Branch, Department of Employment and Social Development
Paul Thompson  Senior Assistant Deputy Minister, Skills and Employment Branch, Department of Employment and Social Development
Louise Levonian  Chief Operating Officer, Service Canada, and Senior Associate Deputy Minister, Department of Employment and Social Development
Alain P. Séguin  Chief Financial Officer, Department of Employment and Social Development
Clerk of the Committee  Mr. Michael MacPherson
Brian Naish  Chief Financial Officer, Canada Mortgage and Housing Corporation

3:50 p.m.

Liberal

The Chair Liberal Bryan May

Good afternoon, everybody.

Sorry for the delay. We had a vote in the House as well as a lovely ceremony for the outgoing clerk. If you didn't see it, take a look. It was a really inspirational moment. I thought she was going to break down. Some of us in the cheap seats were holding back some tears as well.

I want to welcome everybody here. I know we were really popular on Monday. I did not expect to be as popular today, so I do apologize for the lack of chairs for those of you in the back. But we welcome large crowds and I understand that many of you here are giant wealths of knowledge that we hopefully will be able to tap into today. Thank you for being here.

Just a couple of points of order and some housekeeping. We are going to carve out about 15 minutes at the end of this meeting to do some committee business. We have some things that have lingered that we want to take care in a timely fashion.

Because I embarrassed him in the House, I'll do so again today. A giant happy birthday to Mr. Wayne Long, who is 63 today, right?

3:50 p.m.

Some hon. members

Hear, hear!

3:50 p.m.

Liberal

Wayne Long Liberal Saint John—Rothesay, NB

Thank you.

3:50 p.m.

Liberal

The Chair Liberal Bryan May

Without further ado, I'm going to ask the deputy minister of the Department of Employment and Social Development, Ian Shugart, to introduce the fantastic panel we have here today.

Thank you, Mr. Shugart, for being here.

3:50 p.m.

Ian Shugart Deputy Minister, Department of Employment and Social Development

Thank you, Chair, and members of the committee, for having us today.

I'll start at my left and just move around the table. Tony Giles is the assistant deputy minister of policy, dispute resolution, and international affairs in the labour program in the department. Next to him is Brian Naish, who is the chief financial officer for Canada Mortgage and Housing Corporation.

You had with you on Monday afternoon, Evan Siddall, who's the CEO and president of CMHC.

On my left is Louise Levonian, who is the chief operating officer of Service Canada. On my right is our chief financial officer, Alain Séguin. Paul Thompson is the senior assistant deputy minister for the skills and employment branch, and Kathryn McDade is the senior assistant deputy minister for the income security and social development branch.

We have other ADMs who I may feel at liberty to call to the table if your questioning gets into their areas of responsibility.

We've come in such numbers, Chair, to support the committee and answer your questions as fully as we can. It's good for the committee to get to know who are the senior officials in the department and for us to get to know the committee as well.

Would you like me to begin with some short remarks?

3:50 p.m.

Liberal

The Chair Liberal Bryan May

Yes, fantastic, if you would.

3:50 p.m.

Deputy Minister, Department of Employment and Social Development

Ian Shugart

As you know, Chair, the 2015-16 supplementary estimates (C) were tabled on February 19 and the 2016-17 main estimates were tabled before the budget on February 23. I'm going to speak just by way of highlights to the main estimates as they pertain to the department.

The main estimates forecast spending for 2016-17 at approximately $61.5 billion. The estimates do not include charges against the Canada pension plan or employment insurance accounts for program benefits, which are about $44 billion and $20 billion, respectively, or for operating expenditures to administer these programs, which are about $243 million and $1.2 billion, respectively. Admittedly, these are very large numbers, and you get used to that with this department in time.

Of this, $59 billion is allocated to statutory programs. This represents an increase of about $7.3 billion over the previous year. This increase is mainly attributed to a forecasted increase of $2.4 billion for old age security pension and guaranteed income supplement payments. That, in turn, is due to the changes in the average monthly rate and an increase in the number of beneficiaries. This increase also includes an increase of $4.8 billion for the universal child care benefit as a result of the 2015 budget.

Operating costs are forecasted at approximately $600 million, a net increase of about $45 million, mainly due to additional funding to administer the temporary foreign worker program, to implement the old age security service improvement strategy, and to address old age security workload requirements.

Finally, an amount of approximately $1.7 billion is forecasted in grants and contributions.

An important consideration for the committee is that many of the budget 2016 items are not accounted for in the main estimates. These projections will be included in supplementary estimates, which will be tabled in Parliament over the coming months. As I indicated, our chief financial officer is here to help the committee with the financial details, if you wish, and my colleagues can also get into substantive issues.

We will make sure that the implementation of these initiatives will be made according to the new operating principles outlined by the government, including providing sound and politically neutral advice based on solid evidence; putting in place mechanisms to track, monitor and report on impacts and results; working with a wide range of partners in the public and private sectors, stakeholders, not-for-profit organizations, and other levels of government; and being transparent in all our operations.

We have several thousand extremely competent and dedicated employees who are deeply committed and proud to serve the public interest and implement the government's agenda.

Thank you, Mr. Chair.

3:55 p.m.

Liberal

The Chair Liberal Bryan May

Thank you, Deputy Minister.

Again, thank you to all for attending today.

Without any preamble, we'll get right into the questions—

3:55 p.m.

Evan Siddall President and Chief Executive Officer, Canada Mortgage and Housing Corporation

I am prepared to make an opening statement, Mr. Chair, if you'd like me to.

3:55 p.m.

Liberal

The Chair Liberal Bryan May

I beg your pardon. Yes, absolutely. Forgive me.

Mr. Siddall.

3:55 p.m.

President and Chief Executive Officer, Canada Mortgage and Housing Corporation

Evan Siddall

Thank you, Mr. Chair.

It is a pleasure to be here.

As the deputy minister mentioned, I am joined by my colleague Brian Naish, chief financial officer.

Some members are new to the committee and to CMHC, so I thought I would take this opportunity to provide a brief overview of the work we do at CMHC to achieve our dual mandate of facilitating access to housing and contributing to Canada's financial stability.

As Canada's national housing agency, our mission is to help Canadians meet their housing needs. When we help low-income households access the housing they need, we are doing more than putting roofs over their heads. We are helping to build a foundation for broader social and economic success for these families.

Good housing cannot take the place of other key ingredients for success—such as family and community supports, education and employment opportunities—but it does provide the stability from which to leverage better social and economic outcomes. And its absence makes it that much harder for vulnerable Canadians to get ahead.

So, clearly, housing matters at a micro-economic level—to individual families and households. It also matters at the macro-economic level—to Canada's broader economic and financial stability.

Overall, housing added $334 billion to Canada's gross domestic product in 2014, roughly one-sixth of the GDP. And the construction sector alone accounts for about 7% of total employment in Canada.

International research confirms that housing security and housing markets play an important role in supporting social and economic stability. It points to the benefits of housing affordability and ensuring stable, secure housing, both rental and ownership. The dignity of housing stability pays.

So what is CMHC's role in Canada's housing system? At CMHC, we help Canadians meet their housing needs in three basic ways.

First, CMHC's housing finance activities—mortgage loan insurance and securitization—contribute to the stability of housing markets and to Canada's financial system. As a crown corporation with a public policy mandate, we serve all parts of the country and support all forms of housing, including home ownership and large multi-unit rental properties, through all economic cycles. Effectively, we act as a shock absorber in the event of housing slowdowns or even crises. This is a fundamental way in which we provide Canadians with access to housing while contributing to Canada's overall financial stability.

Importantly, our commercial programs are operated at no cost to taxpayers. Indeed, over the past decade CMHC has contributed $21 billion in profits and income taxes to help improve the Government of Canada's fiscal position. We also provide market analysis, information, and research to support informed decision-making.

As Canada's authority on housing, we are the most comprehensive and trusted source of information on housing and housing markets in our country. But we also recognize that significant gaps in information on housing markets exist. We're committed to strengthening our analysis and research to better understand these gaps. I'm pleased to say that this year's main estimates include increased funding for this important work, and yes, our research plan includes further work on the magnitude and implications of foreign investment in Canada.

The third way CMHC helps Canadians meet housing needs is by working with provinces, territories, indigenous peoples, and other stakeholders to support the 20% of Canadians whose housing needs are not being met by the marketplace. The federal investment in housing assistance is provided under various programs and initiatives funded and appropriated through Parliament.

For the current fiscal year, CMHC had estimated budgetary expenditures of $2 billion. Most of this funding will be used to provide assistance to over half a million Canadian households in housing need, including low-income families, seniors, people with disabilities, indigenous people, and victims of family violence. Close to $1.7 billion of this amount will be used to support Canadian households living in existing social housing units across the country, including in first nations communities.

As well, the main estimates include some $286 million for new affordable housing, renovations of existing units, shelter allowances, rent supplements for affordable housing, and accommodations for victims of family violence.

The majority of this funding is delivered through the investment in affordable housing initiative, a collaborative initiative with the provinces and territories, which match federal funding and are responsible for program design and delivery, facilitating tailored programs for different housing needs across the country.

Also included in these figures is approximately $156 million to improve living conditions on reserve by building new social housing units, renovating existing homes, and building capacity within first nations communities. We're very proud at CMHC of our ability to have made even better use of these funds on reserve. In 2015, we built 626 new homes on reserve. I know that's a small amount, but that's 26% higher than the year before. This coming year, we will construct over 700 new homes on reserve in places where they're most needed. In addition, our active management and capacity-building activities helped reduce by 12% the number of first nations communities with high-risk housing portfolios this past year.

As I said, this is what's included in our main estimates. Not included in these numbers are the significant investments in affordable housing proposed in budget 2016, most of which will be delivered through CMHC.

As Minister Duclos mentioned to committee members on Monday, the budget proposes to invest an additional $2.3 billion over two years, starting this year, in the following manner: over $500 million to be matched by provinces and territories to build and renovate affordable housing and provide rent supplements to support housing affordability; $200 million to build or renovate affordable housing for low-income seniors; $90 million to build or renovate shelter spaces for victims of domestic violence; $574 million to repair and improve the energy and water efficiency of existing social housing units; $30 million in transitional support to help preserve affordability for low-income households living in federally administered social housing where operating agreements are expiring; $178 million to address the unique housing challenges in the north and in Inuit communities; and $554 million to be delivered by Indigenous and Northern Affairs Canada and CMHC in partnership to first nations communities.

This additional $2.3 billion of federal housing funding, together with provincial matching funds and the $2 billion of existing annual federal commitments, will bring the combined federal, provincial, and territorial investments in housing to at least $7.3 billion over the next two years.

In addition, these planned investments are to be supplemented by the proposed $208 million Affordable Rental Housing Innovation Fund to be administered by CMHC. The fund will be used over the next five years to test innovative financing, partnership and business approaches to encourage the construction of affordable rental housing.

CMHC will also consult with stakeholders on the design of the proposed Affordable Rental Housing Financing Initiative to provide a further $2.5 billion in low-cost loans over five years to municipalities and housing developers during the earliest, riskiest phase of development.

Importantly, CMHC will also support Minister Duclos on the development of a national housing strategy.

The government has announced its intention to re-establish the federal leadership role in housing. As the committee can see, our support for assisted housing, our market analysis and research functions and our significant commercial operations put CMHC at the heart of Canada's housing system.

As a crown corporation with the sacred trust of managing public resources, CMHC is determined to be a high-performing organization: accountable, transparent, efficient and innovative, in order to serve the housing needs of tomorrow.

Thank you again for the opportunity to be here.

My colleague and I would be pleased to answer any questions the committee may have.

4:05 p.m.

Liberal

The Chair Liberal Bryan May

Thank you very much. Now we move on to questions.

I believe first up is Mr. Mark Warawa.

4:05 p.m.

Conservative

Mark Warawa Conservative Langley—Aldergrove, BC

Thank you, Chair. Before the clock starts, I'm going to raise a point of order and then I would like to speak.

What we've heard is very informative and very helpful, but it would have been even easier to digest and make better use of if we had had a copy of these presentations or speeches prior to today's meeting. I have Mr. Shugart's speech today, but I don't have Mr. Siddall's. He has provided a lot of important information, and I think that if, in the future, we can get—

4:05 p.m.

Liberal

The Chair Liberal Bryan May

You should have gotten one. They were distributed today at the meeting. We didn't get them ahead of time. You're getting one right here.

4:05 p.m.

Conservative

Mark Warawa Conservative Langley—Aldergrove, BC

We do not have any on this side.

4:05 p.m.

Liberal

The Chair Liberal Bryan May

You don't? Okay, we'll correct that.

4:05 p.m.

Conservative

Mark Warawa Conservative Langley—Aldergrove, BC

If we can get these before the meeting, all the better, because then we can be better prepared. That's just said as a suggestion on a point of order. Thank you. You can start the clock on me.

I want to thank the witnesses for being here.

Mr. Shugart, you're always known for your riveting speeches, and maybe that's why we have so many people here. I've known you and respected you over the years, and it's good to see you again.

My focus in the questions is going to be on seniors, because I'm the critic for seniors. When the minister was here, I asked him about the splitting of the guaranteed income supplement. I'm glad that the government is increasing the guaranteed income supplement by 10%, but it's only for single seniors. In the consultation I've been doing around Canada, I've met a number of people. There are some very wealthy seniors, but there are many seniors who need that guaranteed income supplement, so increasing it is good.

In a scenario, however, in which you have a single senior who has no assets and is living from what they get month by month—maybe a couple of thousand dollars—in the Vancouver area it's not a lot of money; it's like $24,000 a year. They're relying on that, so the boost up is going to help them with the situation of their drugs, their food, keeping their home warm. That little boost is good.

Another scenario I have also seen, however, is that it may be that $2,000 a month is from two people living together in the same home: spouses together have this combined income of $2,000 a month. I'm using approximate numbers just to make a point. In a situation like this, in which you have double the drugs, double the food, double the need, the advantage in it is that they can take care of one another in a number of wonderful ways. That helps, but if the net income of that family is two people with $2,000 a month or one person with $2,000 a month.... In the new program, the single person would qualify.

I've heard of families for various reasons being split apart because there's an economic benefit to splitting apart. That's my concern. If we are now increasing the guaranteed income supplement if you're a single person in need, but it's based on income instead of on how many people there are, are we possibly going to create a scenario whereby we're forcing people to come apart or we have people who are in dire situations, whose needs are not being met?

I can't ask questions on policy and your advice to the minister, but my question to you is, in the scenario that I present, is it possible that by only including single seniors we are going to miss out on some Canadians who need help through increasing the guaranteed income supplement?

4:10 p.m.

Deputy Minister, Department of Employment and Social Development

Ian Shugart

I'll invite Kathryn McDade to fill in on this.

4:10 p.m.

Kathryn McDade Senior Assistant Deputy Minister, Income Security and Social Development Branch, Department of Employment and Social Development

Thank you, Mr. Chair, and thank you for the question.

Maybe I can give a sense of the rationale behind the choice to move forward on a supplement for single seniors. I think your key point is that the guaranteed income supplement is now available to both singles and couples, and that in the budget initiative announced in the past few weeks, the government made the choice to increase the supplement for singles but not for couples.

As Minister Duclos said when he was here on Monday, the basic rationale is that, of the Canadian seniors who currently live in low-income situations.... As you know, our statistics on the proportion of seniors in low-income situations are quite impressive. The proportion has declined quite dramatically over time. The most recent year for which we have data, which is 2013, tells us that about 3.7% of Canadian seniors are living with income below Statistics Canada's low income cut-off.

Of those seniors—it's about 190,000 senior Canadians—close to 80% are in fact singles, so about 151,000 of seniors who live on low incomes are single. That is the basic rationale for the government's decision to focus on that sub-population.

4:10 p.m.

Conservative

Mark Warawa Conservative Langley—Aldergrove, BC

With respect, and my apologies for interrupting, that is not answering the question. The question was that if we just keep it for single people, and if the combined funding is similar to a single, the situation is even more dire. Is it possible, by making it just singles, that some Canadians in a couple setting, with a similar low income, are going to be missed? Are they going to be left in a worse situation?

4:15 p.m.

Senior Assistant Deputy Minister, Income Security and Social Development Branch, Department of Employment and Social Development

Kathryn McDade

The situation of couples who are currently in receipt of the guaranteed income supplement won't change going forward. I guess the point I was making is that there's a relatively small number of couples who remain low income in Canada, and those would be couples living in very high-cost cities—I think you mentioned Vancouver—where the benefit doesn't meet the cost of living.

4:15 p.m.

Conservative

Mark Warawa Conservative Langley—Aldergrove, BC

Mr. Chair, I've met some of them, and it's a sad story. We need to take care of all Canadians.

4:15 p.m.

Liberal

The Chair Liberal Bryan May

We move on to Mr. Robillard.

4:15 p.m.

Liberal

Yves Robillard Liberal Marc-Aurèle-Fortin, QC

Thank you, Mr. Chair.

Good afternoon, everyone. Thank you for your testimony today.

Let me proceed to my question.

In Mr. Duclos' mandate letter, he is asked to work with the Minister of Infrastructure and Communities to develop a strategy to re-establish the federal government's role in supporting affordable housing. This includes undertaking a review of escalating home prices in high-priced housing markets and considering all policy tools that could keep home ownership within reach for more Canadians.

In my riding, as in those of my fellow members of Parliament, a lot of young families are trying to become homeowners. So would like to know what those policy tools are that could help to bring home ownership within reach of families.

4:15 p.m.

President and Chief Executive Officer, Canada Mortgage and Housing Corporation

Evan Siddall

Thank you for your question.

If I may, I am going to answer in English.