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.
