Human Resources Committee on Feb. 16th, 2021

[Louise Chabot, Bloc, Thérèse-De Blainville, QC]

Thank you Mr. Chair.

Parliamentary Budget Officer, thank you and your team for providing us with this analysis, this very enlightening report, considering the time you were given. It will greatly assist us in the production of our report. As you said, you are here to enlighten us, as parliamentarians, and to help us make the best possible decisions for the way forward.

You said that at the outset, and your analysis also shows that 124,000 people need housing, and that there is an annual gap of $636 million. You also said in your analysis that indigenous households are one and a half times more likely to be in housing need than non-indigenous households.

From your analysis, are you able to assess the progression of needs in relation to investments? Have you drawn conclusions on these two variables? In other words, can we do it?

[Yves Giroux]

We have not specifically examined the evolution of the programs over time. That would have required a slightly more complete history than we had obtained.

On the other hand, the indigenous population is growing much faster than the rest of the population. That growth not just a little stronger, it's much stronger. As a result, the funding needed to maintain the status quo is expected to grow much faster than for the overall Canadian population, and inflation. If there is no significant investment directed to indigenous Canadians, the problem will certainly not abate, because, as I mentioned, this population is growing rapidly.

In fact, the housing needs of indigenous people are becoming more acute as household size increases. Households with multiple children are in greater need of adequate and affordable housing than the rest of the population. The differences are less pronounced for one- and two-person households, but six- and seven-person households have the greatest need. This indicates that population growth will not cause these needs to diminish, quite the contrary.

[Louise Chabot, Bloc, Thérèse-De Blainville, QC]

On the last point you just raised—the housing needs of the slightly larger families—according to your analysis, does the market play a role in this housing deficit?

[Yves Giroux]

Yes, market prices certainly play a very important role. In some cities, the market makes it very difficult to find affordable housing. However, it is also a matter of the concentration of people of indigenous origin in some cities. Winnipeg and Vancouver are the two cities with the highest number of people of indigenous origin in need of affordable and adequate housing. In Winnipeg, this is not necessarily because of the high cost of housing, but rather because of the size of the population. In Vancouver, it is clearly because of the extremely high cost of housing.

On the other hand, in some areas where the cost of housing is historically somewhat lower, the need is somewhat less acute. The proportion of people of indigenous origin living in unaffordable or inadequate housing is indeed lower.

It is therefore clear that market prices have a significant impact on housing.

[Louise Chabot, Bloc, Thérèse-De Blainville, QC]

Today, we received additional data that bolsters the facts mentioned, particularly with respect to youth—who represent 24% of those in need of housing—single-parent families, and unattached individuals.

These are pretty significant statistics. It would be interesting to break them down them according to the environment, that is to say urban, rural or northern, since this is the subject of our study. There is also the whole issue of homelessness that comes into play, especially when it comes to youth. In urban areas, we know that homelessness is a significant phenomenon.

How can we improve this data to better monitor and show the changes that may be affecting youth who are experiencing homeless, in particular?

[Yves Giroux]

I will ask Ms. Nicol, Mr. Mahabir or Mr. Segel-Brown if they have any suggestions in this regard.

[Caroline Nicol, Analyst, Office of the Parliamentary Budget Officer]

I can say a few words about this.

In terms of data, our main source of information was the 2016 census. We would need more recent data, such as that provided in the next census or from any other more recent source. We need to take into account that the real estate market is changing rapidly. Also, as Mr. Giroux mentioned, demographics are a big factor.

With regard to the detail of the data, an even more precise regional breakdown would allow us to have a much broader picture, particularly in terms of territories and rural areas. These are data that would also be useful in the census.

Census or other available data sources are quite limited in scope due to confidentiality requirements. In my opinion, the picture we have in terms of age is relatively good compared to other aspects, as there are quite a lot of these data. So the picture for young people and older people is good.

[The Chair, Liberal, Sean Casey]

Thank you, Ms. Nicol and Ms. Chabot.

Next is Ms. Gazan, for six minutes.

[Leah Gazan, NDP, Winnipeg Centre, MB]

Thank you, Chair.

I'd like to welcome the witnesses today to our committee. I really appreciate having you here today.

You mentioned Winnipeg. I represent the riding of Winnipeg where we're dealing with a pretty severe housing crisis. We've only had 143 units built since 2017. Unfortunately, we lost another life today at one of the encampments; the individual died in a fire in a makeshift shelter.

Your PBO report mentions that Winnipeg currently has the highest core housing need for indigenous people. Vancouver is second. As the report indicates, there are 9,000 households in core housing need alone; 8,000 in Vancouver.

You spoke about a $635-million gap. What portion of that gap is specific to Winnipeg and Vancouver?

[Yves Giroux]

I don't have that information off the top of my head, the quantified affordability gap for each of these two cities.

If Ben, Mark or Caroline know off the top of their head they can provide that information, or if not, we can provide that in writing to you after the meeting.

[Leah Gazan, NDP, Winnipeg Centre, MB]

I'd appreciate that very much.

There's a severe lack of affordable housing in the country. Clearly, it is targeted more toward indigenous people, and it is a crisis. I've had many discussions with my colleague, Adam Vaughan, about the dire situation in Winnipeg with, for example, trench fever, which popped up in December.

Rental rates are rapidly increasing. Wages are staying stagnant. Unemployment is certainly growing. Would it be safe to say that, without a concerted effort to control rental rates and to build and maintain affordable and accessible housing units, we will see this $635-million gap continue to increase?

[Yves Giroux]

I'm not sure about rent control. That's a decision that would have to be made by governments. I won't pronounce on that. Other jurisdictions have done that in the past, with some different results.

One thing is for sure, without additional investments, and with a growing indigenous population, it's clear that the need for affordable and adequate housing will probably keep on growing. Unless indigenous Canadians are finding high-paying jobs at a much faster rate than the rest of the population, or rental rates go down all of a sudden, which would be very surprising, in all likelihood this issue, without additional investments by governments at all levels, is very likely to continue to increase.

[Leah Gazan, NDP, Winnipeg Centre, MB]

Would you agree that the housing crisis has been even further exacerbated by the pandemic?

[Yves Giroux]

I'm not sure. I know people who are looking for housing at reasonable rates and who are finding it very difficult right now, but that's based on anecdotes. It seems to be the case, for sure, based on people we know, because housing construction came to a standstill in the spring of 2020, which seems to have delayed the construction of affordable units. Whether it will be just a blip or something that will be lasting remains to be seen. Not being an expert in the real estate market, I can only base that on the few anecdotes I've heard.

You're probably much better placed than I am to say that, with the contacts you have in your ridings.

[Leah Gazan, NDP, Winnipeg Centre, MB]

I have just one last question. Today I wrote a letter, along with all elected officials from my riding in the downtown area, calling for immediate government investment to really address this dire crisis.

As I said, we lost another life today. We had somebody freeze to death in a bus shelter. About two weeks ago, we had a woman who preferred to live in a bus shelter rather than go into a shelter, because conditions and the safety issues for women are quite intense in shelters.

Our letter is calling on the government to immediately invest. The government gave our specific riding $12.5 million. We're saying, clearly that is not enough.

Do you believe the $12.5 million that was granted in the rapid housing initiative is adequate, considering the level of crisis we're currently facing in Winnipeg?

[Yves Giroux]

I can't really comment on that because that would venture into the policy world, but I think your question is very valid. However, as I understand it, rapid housing is in the early stages. As I said before, there are many programs, so looking at one program in isolation doesn't give the full picture.

[Leah Gazan, NDP, Winnipeg Centre, MB]

How much more would you—

[The Chair, Liberal, Sean Casey]

Thank you, Ms. Gazan.

[Leah Gazan, NDP, Winnipeg Centre, MB]

Oh, thank you.

[The Chair, Liberal, Sean Casey]

You'll get another chance.

Ms. Falk, please. You have five minutes.

[Rosemarie Falk, Conservative, Battlefords—Lloydminster, SK]

Thank you very much, Chair.

I thank the witnesses as well for being here and for the work they not only have done here but that they continue to do for us across the board.

During this study, we have heard from many, if not most, witnesses that the administrative burden of existing housing programs can be a significant barrier to accessing them. This can be particularly challenging for smaller organizations that don't necessarily have the resources to take on the workload of tackling that burden, and we know bureaucratic red tape is an added cost for the delivery of a program.

Your report has identified some of the administrative costs incurred by existing housing programs. I have noted some significant numbers in your report, including that about 10% of ESDC's total expenses for assisted housing programs are for operating expenses, and that community organizations, through the Reaching Home program, can use up to 15% of the funds they receive for their own administrative costs.

When it comes to CMHC's rental construction financing initiative, the RCFI, and the national housing co-investment fund, the report breaks it down a bit further and estimates that an average administrative cost per single application exceeds $300,000.

I wonder if you could give us some more insight as to how that per application cost was assessed, what specific administrative costs were included in that average, and who incurred those administrative costs. Was it CMHC and the applicant?

[Yves Giroux]

I'll ask Ben, Mark or Caroline to step in to answer what was included in the administrative cost, in order to give you a more fulsome response, if they have the details, but from the outset I'll say that it's data that was provided by government departments. I don't know the level of detail they provided.

Ben.

[Ben Segel-Brown]

With respect to the administrative cost for the financing for housing programs—that's the rental construction finance initiative and the national housing co-investment fund—I estimated that to be over $300,000 per application. That's not a very precise figure because CMHC was not able to provide a breakdown of its administrative costs by function within financing for housing. Those two programs account for the vast majority of budgetary expenditures, so I assumed that the administrative costs are attributable to them.

They also weren't able to provide administrative costs for prior years, so I had to assume that the administrative costs of $36 million in 2019 were typical of 2018 to 2020. I took that total administrative cost and divided it by the total number of applications that have been approved, including those that had received conditional approval, because I assumed that some of those administrative costs were incurred up front. It's dividing it over a larger number of applications than is shown elsewhere in the report.

That's how I estimated the administrative cost per application. It's more to flag it as something that should be considered in the designing of programs like the national housing co-investment fund to monitor the administrative burden and determine whether it's necessary.

[Rosemarie Falk, Conservative, Battlefords—Lloydminster, SK]

For sure. Thank you.

That to me seems like a lot of administration costs, when we're talking in the millions.

I don't know if you can comment on this, but are there similarities to draw between the average application costs for those programs and other existing housing programs?

[Yves Giroux]

I'm not sure about other housing programs, but admin costs ranging at about 10% are not uncommon—I would say unfortunately—especially for programs that disburse millions of dollars to one recipient. It's not atypical to have admin costs of about 10% of total program costs.

For housing programs, it depends on the nature of each program. For example, programs that are capital transfers are a one-off, so there tends to be less administrative burden, if I'm correct, rather than ongoing transfer payments for which there seems to be a need for ongoing monitoring of expenditures.