Evidence of meeting #23 for Human Resources, Skills and Social Development and the Status of Persons with Disabilities in the 43rd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was homelessness.
A recording is available from Parliament.
Liberal
Adam Vaughan Liberal Spadina—Fort York, ON
But not surrender their current goals or refuse to participate...?
Coordinator, Front d'action populaire en réaménagement urbain
No. In fact, those objectives should even be enhanced.
As I understand it, in various areas, the federal government generally requires provinces and territories to fulfill certain conditions when they are allocated money, failing which, penalties can be imposed on other activities.
Liberal
Adam Vaughan Liberal Spadina—Fort York, ON
Right. For example, would it be a reasonable request by the federal government that it should be spent on rent supplements and should be new money?
Liberal
Coordinator, Front d'action populaire en réaménagement urbain
I agree with that, but—
Liberal
Adam Vaughan Liberal Spadina—Fort York, ON
—if we're expending federal dollars on capital programs, is it reasonable, based on your assessment of people with disabilities, to ask for new housing to meet minimum standards around accessibility? For example, the national housing strategy requires all new builds to be 20% accessible. Is that a reasonable social goal that a province could sign onto?
Coordinator, Front d'action populaire en réaménagement urbain
That approach actually does not work. That's an example of a situation where Canada is too specific in its judgment.
Personally, I would really like the government to determine that the money it is giving must be spent on households that have a core housing need or must increase the number of households receiving assistance. What does not work in what you are describing is that, currently, there are municipalities and territories where the needs are much greater than 20%, but there are others where the needs are less than 20%. Are we going to start building adapted or adaptable housing for communities that do not need it, whereas elsewhere we do not have enough money to build enough of it? Each situation is best placed to provide us with that information.
Liberal
Adam Vaughan Liberal Spadina—Fort York, ON
You do know that someone without disabilities can live in accessible housing. It doesn't require a person with disabilities to live there, but if it's purpose-built from the start, it's there in the future to be used. It's reasonable to set social parameters around social spending, especially when it's addressing people's charter rights. Wouldn't you agree?
Coordinator, Front d'action populaire en réaménagement urbain
I agree in principle, but there is not enough money to meet all the needs. Do we agree on that? As I understand it, the federal housing allowance program is looking at 300,000 households. But right off the bat, we know that 1.7 million households have core housing needs. So we are in a deficit situation.
Would it be possible, in the period that we hope will be short, for rules of that kind not to be imposed, so that the needs expressed on the ground can be met? Additional conditions can then be imposed once a sufficient number of units has been reached.
I just want to point out that, according to that logic, housing has been built in some communities that does not meet the needs. I am sorry to say this, but adapted or adaptable housing is a little more expensive than other kinds because they are a little bigger and the costs are calculated by square-footage. We absolutely must not get into that kind of discussion. Currently, the greatest urgency is to get projects done, to build housing that is truly affordable and to subsidize it with an eye to the household income.
I am not saying that we should not have objectives, but could we please not fit them into too tight a framework?
Liberal
The Chair Liberal Sean Casey
Mr. Vaughan, you're out of time. Thank you.
Colleagues, we have about four minutes left, so we have time for one more round of questions.
It's the Conservatives' turn. Is there someone on the Conservative side who would like to take up the last four minutes?
Conservative
Dan Albas Conservative Central Okanagan—Similkameen—Nicola, BC
Thank you.
Mr. Taylor, I appreciate the explanation you've given. Obviously COVID-19 has created a lot of challenges for policy-makers. You've talked a little bit about the Office of the Superintendent of Financial Institutions and about making some minor changes to allow for banks and other mortgage carriers to have a 5% pocket, or a set-aside, so that it doesn't affect the overall amount of the mortgages they have under deferral.
Could you maybe elaborate on that, why that would be important for offering some flexibility not only for those borrowers but also for the institutions?
President and Chief Executive Officer, Head Office, Mortgage Professionals Canada
Yes, I'm certainly happy to.
Quite simply, when the mortgage deferral programs were first created, all banks and lenders, as regulated by OSFI, have to retain additional minimum capital for any loans that are non-performing. It's prudent, of course. They need to have a stockpile of cash in the event that the loans that are currently in arrears don't ever actually find their footing and make their way to repayment.
Therefore, as a means to assist with the liquidity of the banks and allow them to continue to extend credit, OSFI agreed to allow deferred loans, specifically, not to be considered non-performing, which means that the banks do not have to set aside that additional minimum capital.
As reported at the beginning, the CBA says that somewhere around 16% of mortgage holders have deferred their mortgage at some point. We're actually seeing that number reduce, which is great to see and what we would hope to see as the economy comes back, but we do expect there will be pockets, which will be quite industry-specific, that are going to take a little more time.
If OSFI were to allow for an extension of the deferral program with some parametered constraints—and here I think that a 5% as a maximum allowable target within a mortgage portfolio is quite reasonable—to allow the banks themselves to set parameters around how they're going to means test, or who is actually going to be eligible to enjoy a continued deferral, there will, of course, be assessments of expected future earning capacity for the folks the banks would extend this to. It would be a nice accommodation for the folks who are likely still going to feel the effects of COVID for a little while longer, and for the banks to have the financial flexibility or freedom to be able to provide that extension as well.
Conservative
Dan Albas Conservative Central Okanagan—Similkameen—Nicola, BC
This brings up two points. First, the banks would not have to immediately foreclose and put a lot of people in a lot of stress trying to go through the system to recover their mortgage. Second, it would also ensure that there would not suddenly be a lot of homes going on the market at reduced rates. Obviously, that might please some people, but again, that could be factor, especially if you're in a particular neighbourhood that is dependent on one mill or a large factory.
President and Chief Executive Officer, Head Office, Mortgage Professionals Canada
Very much so. You hit both nails on the head there.
No lender wants to have to liquidate a whole bunch of properties. It's quite an expensive and labour-intensive process, and you really do create dislocations for families, which nobody really wants.
You also don't want to create a glut of inventory in any given market. House price erosion is actually really poor for the local economy. We talked about the wealth effect, or the psychology of people's expectations as their own financial security starts to reduce.
It's in everybody's best interest, frankly, especially given that we are at historically low interest rates at the moment, to allow folks the opportunity to be able to capitalize whatever the deferred portion of their mortgage would be. It would probably be quite a small long-term additional interest cost to them, frankly. The financial institutions would be far happier to be able to see that loan return to being a performing loan rather than to have to go through a foreclosure process and actually liquidate the property.
Conservative
Dan Albas Conservative Central Okanagan—Similkameen—Nicola, BC
Great. I'm glad to hear that.
Thank you, Mr. Chair.
Liberal
The Chair Liberal Sean Casey
Thank you, Mr. Taylor and Mr. Albas.
Thank you to all of the witnesses for being with us twice and for being so patient and so thorough in your responses. The testimony today will be very helpful to the work of the committee.
I also want to offer a sincere thank you to the interpreters and IT people. They were able to work through fairly significant challenges to have the meeting run flawlessly today. To one and all, thank you so much.
Colleagues, we'll see you next week.
The meeting is adjourned.
