Human Resources Committee on May 27th, 2024

[Tracy Gray, Conservative, Kelowna—Lake Country, BC]

Thank you very much.

[Richard Lyall]

There are some good things for PBR, but the main part of the market is owner occupied. That's the bulk of it. So, no.

[The Chair, Liberal, Bobby Morrissey]

Thank you, Ms. Gray. You were right on time.

Mr. Fragiskatos, you have five minutes.

[Peter Fragiskatos, Liberal, London North Centre, ON]

Thank you, Chair.

Thank you to the witnesses for being here today.

I don't want to get buried in the numbers here, because I'm sure the debate will continue on that from the Conservatives, but let's keep in mind that measures introduced by the federal government, if matched in terms of ambition by the provinces and municipalities, will get us to where we need to go, that is, much more homebuilding to address the crisis at hand.

We can talk about the problems at hand and simply identify what those problems are. We shouldn't sugarcoat it, because this is a housing crisis, but I think if we're going to be serious as a committee but also, more broadly than that, as parliamentarians, we should be engaged in a discussion on the policy changes that will incent a much better situation.

Mr. Lee, I'd like to thank not just you in terms of your leadership but also the organization writ large on calling for foundational change. I think zoning is an example of that. Zoning is fundamental to the discussion.

Mr. Aitchison, when he opened things up, talked about the housing accelerator fund. It is certainly the signature program of the government on this, as it should be. It's addressing a foundational problem. But with all due respect to him, I think he has misunderstood what the HAF program is all about. If you look at it as he does and ask how many homes we've seen built, this is not the right way to approach it. I think the right way to understand it is in the changes it leads to at the municipal level in return for federal funding for transit, infrastructure, affordable housing and all sorts of things. Cities can benefit if they make those zoning changes, as mine has, in the city of London.

Mr. Lee, what do you think about something like the housing accelerator fund as incenting change on such a fundamental issue as zoning?

[Kevin Lee]

I think the approach that was taken to really attack zoning, permitting and that sort of thing is really important. It's equally important because those monies were promised based on housing outcomes and housing numbers, so I think it's also going to be important that we make sure the municipalities that were granted the funding successfully achieve those numbers through the course of the program, as was its intent.

To go back to the question of whether zoning change is hugely important, it absolutely is. Do municipalities need some help to get there? Evidently, because two, three or four years ago, municipalities were not even agreeing that supply was an issue. I think there has been a lot of change in the conversation through a lot of work by a lot of people. That's critical, and upzoning is essential if we're going to meet our housing goals.

[Peter Fragiskatos, Liberal, London North Centre, ON]

Thank you very much.

Mr. Hogue, I'd like to ask you the same question.

Sir, you wrote the report “The Great Rebuild: Seven ways to fix Canada's housing shortage”, which colleagues on the other side will quote from quite openly, and that's their right. I would advise them, again, in a very professional way, to actually read it. My colleague Mr. Lawrence is showing me the report. That's great. You're appearing virtually, sir, so you can't see it. I'm sure he has looked at the section on recommendations that talks about the importance of zoning changes. You wrote about easing zoning restrictions.

Can you talk about the housing accelerator fund and how it's important to achieving that goal?

[Robert Hogue]

I think it's one of the measures that have been put out there to incentivize municipalities to adopt more efficient, quicker and less expensive ways to approve projects. I think what has been said so far has made it very clear that the length of time and the expenses involved in putting forth new housing projects in many parts of Canada, particularly in Ontario, is a big part of the problem. Therefore, any measures like the affordable housing fund that incentivize municipalities to expedite their processes and make them less cumbersome are definitely steps in the right direction.

[Peter Fragiskatos, Liberal, London North Centre, ON]

I have 20 seconds left, so I won't have time to get into the discussion, but, Mr. Lee, if at some point we can go off-line on this, I would love your thoughts on the freezing of development charges as a condition for provinces receiving federal infrastructure support.

Very quickly, what do you think of the conditionality aspect of that measure?

[Kevin Lee]

Like we said earlier, development taxes are out of control, and every measure that can help get them back under control is going to be essential moving forward.

[Peter Fragiskatos, Liberal, London North Centre, ON]

Would you say that any party with a serious housing plan would offer that conditionality? Give me a yes-or-no answer.

[Kevin Lee]

I expect all parties will want to do something about development taxes.

[Peter Fragiskatos, Liberal, London North Centre, ON]

Does that include conditionality?

[The Chair, Liberal, Bobby Morrissey]

Thank you, Mr. Fragiskatos.

Ms. Chabot, you have the floor for two and a half minutes.

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

Thank you, Mr. Chair.

Mr. Lee, thank you for being here.

You're the chief executive officer of the Canadian Home Builders' Association. How do you contribute to building affordable housing?

I know that there are different definitions of affordable housing. However, we should have a common definition. According to the Canada Mortgage and Housing Corporation, affordable housing costs less than 30% of a household's before‑tax income.

Do you have any public policy recommendations for the government that would help build more affordable housing?

[Kevin Lee]

Thank you for the question.

In terms of the Canadian Home Builders' Association, we principally build market-rate housing. The job of our association and our members is to make sure that market-rate housing is available, and we do what we can to make sure that it is affordable for middle-income families.

In terms of affordable social housing, our members do get engaged with that as well, typically with not-for-profit partners that are focused on this. They'll partner in a variety of ways to help make this happen. There are certainly ways to lower the cost of housing through finishes and that sort of thing, but, in general, the cost to build housing is the cost to build housing. I would suggest that social housing, affordable housing, is a societal problem. I think it's really important that we not expect developers to pay for that kind of thing, because developers don't pay for that; it just becomes the buyers of other houses who end up subsidizing the costs of social housing.

When we look to solutions, I think it's really important. Let's take the example of inclusionary zoning. Inclusionary zoning is very popular with municipalities right now, where they are going to require developers to have a certain number of units be below market rate and be affordable. That can only be done if some sort of public subsidy is provided, because if it's not, then the existing units and the units that are going to be built for market rate become more expensive because they're paying for those.

I think there are some very good public policy measures that can be taken. For example, providing subsidies on land, reducing development taxes and those types of things can make the cost of those affordable units less expensive. I don't think we can require people who are trying to make a living building housing or the people who are trying to get into their first home be the ones who have to subsidize social housing.

[The Chair, Liberal, Bobby Morrissey]

Thank you, Ms. Chabot.

Mr. Boulerice, you have the floor for two and a half minutes.

[Alexandre Boulerice, NDP, Rosemont—La Petite-Patrie, QC]

Thank you.

Mr. Hogue, at a previous meeting, the Parliamentary Budget Officer came to talk about an assessment of something he called—if memory serves—invisible homelessness. He was talking about people who, for example, live in their cars, or people forced to live three or four to an apartment to share the cost of rent, when this may not have been their game plan. In addition, let's not forget the French film Tanguy. Many young people are still living at home at the age of 25, 30 or 35. This seems to be a growing phenomenon. These young people don't have the means to buy their first home.

In your study, did you also observe or assess this phenomenon of children no longer leaving home?

[Robert Hogue]

Honestly, we would like to carry out this type of study. However, it's hard to know who is staying at home for economic reasons and who is staying at home for other reasons. It's about data, and to my knowledge, I haven't seen any data of this nature yet.

[Alexandre Boulerice, NDP, Rosemont—La Petite-Patrie, QC]

People around the table often talk about affordability, affordable housing and houses that people can afford. In your opinion, what conditions would give a young couple the opportunity to become home owners and buy their first home?

We often hear that the cost of rent or housing shouldn't exceed 30% of gross income. However, this applies only once the property has been purchased. It's becoming increasingly difficult to buy a first home. In your opinion, what are the solutions?

[Robert Hogue]

The affordability issues vary in severity depending on the part of the country. In Vancouver, the bar is extremely high for young families who want to settle there and buy their first home. They must make many compromises with their choices. In other small municipalities across the country, young couples may have a somewhat more realistic chance of buying a condo or a family home at some point in the future. Conditions and solutions in this area vary greatly across the country.

[Alexandre Boulerice, NDP, Rosemont—La Petite-Patrie, QC]

Thank you.

[The Chair, Liberal, Bobby Morrissey]

We agreed to go one hour and 15 minutes, which would be 5:05.

We'll conclude with Mr. Lawrence for five minutes and then Mr. Collins, if that's that agreeable.

Go ahead, Mr. Lawrence.

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

Thank you very much.

My colleague was indeed prescient.

I wanted to spend a little bit of time on “The Great Rebuild: Seven ways to fix Canada's housing shortage”. I will be talking about the recommendations in there, as well.

We'll just set the stage here. The story is as old as time in that we have an imbalance in the market where we've had demand outstripping supply. This has led to price shocks from oil to consumer goods to now housing.

I want to start on page 6. You point out in a great chart that the number of households, which has increased from 2015 to 2019, has greatly outstripped the housing stock. In the rest of Canada it appears as though the number of new households is at 400,000 while the housing stock is a little under 300,000.

Have I relayed that chart correctly, Mr. Hogue?

[Robert Hogue]

I believe so.

I'm just scrambling very quickly here to find it in the print version.

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

While you look that up, I'll fill in a bit of air here and say I think we can all agree that the problem over the last nine years has been that the amount of demand for housing and new household formation has dramatically outstripped the number of houses.

Then we can talk a bit about what that has translated into. As my colleague said, we've seen that the average home, as percentage of median household income, has gone from 39%, in other words, four-tenths of a paycheque of an average Canadian, to now six-tenths. That's a rise of almost 50%.

As worrying as that definitely is, I am perhaps most troubled—and I've certainly seen this in my community. We've actually seen the rent increases go from an average in 2015 of about $20, to an unbelievable average increase of $100 in 2023.

Mr. Hogue, are you as concerned as I hope all Canadians are at this dramatic increase in the rise in rent for Canadians?