Human Resources Committee on May 27th, 2021

[The Vice-Chair, Conservative, Raquel Dancho]

Thank you, Ms. Bowers, for your opening remarks.

We'll go to questions now.

First up are the Conservatives, with Mr. Vis, for six minutes.

[Brad Vis, Conservative, Mission—Matsqui—Fraser Canyon, BC]

Thank you, Chair.

Thank you, Ms. Bowers, for appearing today. Congratulations on your new role.

You packed a lot into your opening eight minutes and I don't think I'll be able to cover everything I want to talk on today, so I'm just going to jump right to it.

Living in the Fraser Valley, one of the most common questions I get from regular Canadians is on foreign buyers' effects on the real estate market. Recently, we heard from Mr. Vaughan that sometimes our system works better for foreign investors than for Canadians. What data is CMHC collecting right now on foreign buyers? Does CMHC backstop the mortgages of foreign buyers?

In 2016-17, there was CMHC data that outlined that in Metro Vancouver, one in five buyers of condos was in fact a foreign buyer. What does that look like today?

Thank you.

[Romy Bowers]

Thank you very much, Chair.

I'd like to thank Mr. Vis for his warm words of congratulation.

On the subject of foreign buyers, CMHC collects information on this through our rental surveys. We can provide you access to our rental surveys after this meeting.

With respect to just the topic of foreign buyers, I believe there were actions in the recent budget to address this issue. Of course, CMHC monitors this issue. However, we don't think this is the most critical issue affecting housing affordability in Canada today. We believe the issues that are giving rise to house price escalation in the markets today are driven by supply factors. For a number of years—and this predates the pandemic—the pace of housing supply creation has not kept pace with demand. From our perspective, that is the single most important factor that has contributed to escalating housing prices.

Our recommendation to the committee and to Canadians at large—this was outlined in a 2018 paper that our housing economists provided—is to put the focus on the barriers to housing supply. Again, this is a complex issue that involves action by many levels of government. It's our view that of course it's important to track—

[Brad Vis, Conservative, Mission—Matsqui—Fraser Canyon, BC]

Thank you, Ms. Bowers.

I would agree with you. In my assessment, and from what I've been hearing from experts too, supply is the number one factor related to affordability in Canada.

You mentioned in your opening remarks that the federal government can work more closely with other levels of government to address the supply challenges we're facing. Can you give some concrete examples of what we could be doing better at the federal level to get more supply built?

[Romy Bowers]

Thank you, Mr. Vis.

There are a number of programs under the national housing strategy, and most are supply-based programs. We have a number of programs in place that promote the creation of supply. The tools are there at the federal level to create supply, especially supply directed towards the most vulnerable elements of our society.

When you look at the housing market as a whole, though, most housing in Canada is provided by the private sector. What prevents supply from being created, especially in our large cities, are things like the development life cycle, zoning, permissions at the municipal level and Nimbyism in many neighbourhoods, which prevents dense housing from being created.

[Brad Vis, Conservative, Mission—Matsqui—Fraser Canyon, BC]

Thank you.

On that point, on municipal bylaw processes, could the federal government play a role in incentivizing municipalities to get through that backlog and adopt policies that are more inclusive, allowing for densification where we need it to get more housing built? Can the federal government play a role there, in your opinion?

[Romy Bowers]

Yes, I think that would be something that is definitely worth pursuing. Ultimately, the decision is at the local level, but I think there is merit at the federal level in thinking about what types of incentives we could create to create alignment at the municipal level.

[Brad Vis, Conservative, Mission—Matsqui—Fraser Canyon, BC]

That's very helpful.

Earlier in your remarks, you touched upon the budget line item regarding the 1% non-residents tax. I don't think I got that completely right, but you know what I'm referring to. In CMHC's market analysis division, have they done a study of the impact of the proposed 1% non-resident tax and the impact it would have on the Canadian housing market?

[Romy Bowers]

No, we have not.

[Brad Vis, Conservative, Mission—Matsqui—Fraser Canyon, BC]

Would CMHC be open to doing an analysis on the 1% tax?

[Romy Bowers]

I have to point out, Mr. Chair, that anything related to tax regulation is the responsibility of the Department of Finance, so it may be better to direct this question to the officials there.

[Brad Vis, Conservative, Mission—Matsqui—Fraser Canyon, BC]

Okay. That is duly noted.

In my neighbourhood, and where you live in Toronto—

[The Vice-Chair, Conservative, Raquel Dancho]

Mr. Vis, your time is up. I apologize.

[Brad Vis, Conservative, Mission—Matsqui—Fraser Canyon, BC]

Thank you, Madam Chair.

[The Vice-Chair, Conservative, Raquel Dancho]

Now it's on to the Liberals, with Mr. Dong.

Go ahead.

[Han Dong, Liberal, Don Valley North, ON]

Thank you very much, Madam Chair. You're doing a great job, by the way. I also want to offer my congratulations to Ms. Bowers. Thank you very much for the presentation.

With the release of the national housing strategy in 2017, CMHC has become increasingly involved in the financing of affordable housing with the aspiration that by 2030, everyone in Canada has a home that they can afford and that meets their needs.

In your opening remarks, you mentioned the inclusion of the not-for-profit sector. I'm a big fan of co-ops and not-for-profit senior residences. Could you talk a bit more about not-for-profits accessing capital under CMHC?

[Romy Bowers]

Again, Madam Chair, I'd like to thank MP Dong for his warm words of congratulation.

In terms of the national housing strategy, when you look at what is perhaps the flagship program within the national housing strategy, the national housing co-investment fund, that's a program that provides financing, primarily to the non-profit sector, to promote the creation and repair of affordable housing.

We have had great success in the take-up of that. The program is a 10-year program. We're about three years in. We're exceeding our annual targets every year in terms of supporting the financing of affordable housing by many non-profit organizations across Canada.

[Han Dong, Liberal, Don Valley North, ON]

Thank you very much for that.

I've had conversations with not-for-profit stakeholders in the long-term care or senior home sector. Their feedback is that they feel that the restrictions on them in terms of getting loans from CMHC pose a great challenge and sometimes put them at a great disadvantage compared to the for-profit sector.

It's not a criticism, or even a suggestion. I'm just making an observation.

Are you confident that CMHC will provide more opportunities to the not-for-profit sector to access low-interest loans from CMHC?

[Romy Bowers]

Thank you, Madam Chair, for that question.

There's no doubt that there's more that CMHC can do to improve our client service and ensure that our non-profit clients have access to the NHS programs. I welcome any type of feedback that you may have from your constituents, and we can definitely look into that in terms of things we can do to improve.

With respect to the national housing co-investment fund, for example, we have taken many of the criticisms we received about the delivery of the program in the early years, and we have acted on them. We are very pleased to say that we have reduced our turnaround times by about 50% over the past year.

Long-term care is a very specific challenge because, as you know, CMHC's mandate is to finance housing, and long-term care often involves a housing-related component but also facilities that are more linked to...let's call it health care. It's possible to use our national housing strategy programs for that, but in cases like long-term care, we often have to involve provincial health authorities in looking at the various aspects of the services that are provided in those facilities, and that creates complexity.

I don't know if your constituents are perhaps referring to that—

[Han Dong, Liberal, Don Valley North, ON]

I appreciate the difference between the health sector and the national housing strategy. What I'd like to see is overlap of public policies as opposed to creating gaps between public policies.

Yes, they fall under the purview of health care; however, at the end of the day we're talking about dwellings for seniors. They live there with additional support. I'm talking about creating more units that will be able to house more seniors. That's how I see it.

You mentioned that housing affordability for all by 2030 is your key goal. What are the greatest challenges you face in pursuing that goal?

[Romy Bowers]

You asked that question at a very interesting time. Our 2030 goal was challenging prior to the pandemic, and I think the challenges are greater now. The pandemic has had a disproportionate impact, as I said in my opening comments, on the most vulnerable in our society. When you look at how the pandemic has impacted Canadians, you see that homeowners have in some cases done better economically than renters, and our most essential workers are in the lower levels of our income distribution.

I think the slogan is to build back better. Post-pandemic there's a great opportunity to really address some of the socio-economic divides that exist in society and make the necessary investments so that Canada is truly equitable. The COVID crisis has exposed some of the inequities and inequalities in our society, but I view that as a great opportunity to address those going forward, and housing is a key component of that.

[The Vice-Chair, Conservative, Raquel Dancho]

Thank you, Ms. Bowers.

Thank you, Mr. Dong.

Now we will go to the Bloc, with Mr. Trudel.

[Denis Trudel, Bloc, Longueuil—Saint-Hubert, QC]

Thank you, Madam Chair.

Ms. Bowers, thank you for being here today. Congratulations on your important appointment. As you mentioned earlier, during this pandemic, CMHC is playing a crucial role in the way out of the crisis.

In your introduction, you talked about the rapid housing initiative, a $1 billion program launched in October. It's not a bad program per se. Actually, I think it's very interesting, but I want to talk a little about how the money is being allocated.

The first component of $500 million, intended for large cities, allocated only $63 million to Quebec, or 12.8% of the money. As for the second component, there was an agreement with Quebec, we received $116 million, and a project was accepted in the north for the Cree. On balance, however, Quebec, which represents 23% of the Canadian population, has not received its fair share of the $1 billion distributed under this program.

When you decide how to distribute the funds, do you take into account the demographic weight of Quebec, for example, which represents 23% of the Canadian population?

[Romy Bowers]

I would like to thank MP Trudel for his kind words of congratulation.

In terms of the first round of the RHI, the province of Quebec, including all the projects, received approximately 18% of the funding. When you look at how we distributed the funding, you see that there was $1 billion in funding available, and $500 million of that was provided for the major cities. We identified the major cities, and we looked at the level of severe housing need that existed in those cities, as well as accounts of homelessness. We based our allocation of the $500 million on those statistics.

The other $500 million was under what was called the project stream. Quebec received a special allocation, but when you're thinking about our methodology, it was for projects other than in the province of Quebec. It was based on the merits of the strength of the various projects that came in.

[Denis Trudel, Bloc, Longueuil—Saint-Hubert, QC]

We may not have the same figures. In the first component, money was given to Montreal and Quebec City, for a total of $63 million out of $500 million. According to my calculations, this amounts to 12.8%. There seems to be a shortfall both in the first component and in the total amount of $1 billion.

That's a little sad, because a lot of people submitted projects, but few were accepted. Yet, as we know, the need for housing is dire. In Quebec, 40,000 households are waiting for low-cost housing.

This brings me back to the fact that the federal government abandoned housing in Quebec 25 years ago. Fortunately, the Société d'habitation du Québec, the SHQ, took over. We set up programs like AccèsLogis, which is a very good program. We developed a social and community approach that is praised across Canada. I have already discussed this with Mr. Vaughan, who sits on the committee. However, it seems that Quebec, because of its successful approach, is penalized in the way CMHC distributes the money.

What are your thoughts on that?