Human Resources Committee on May 27th, 2024

[Kevin Lee]

I think the most important way it's going to have an impact on the renter is by actually having units to rent. We have a huge supply issue, so right now what you see is increased rental rates. It's costing people more because of the lack of supply. It's very expensive to build right now. I don't think that, thanks to some savings on GST, all of a sudden you're going to see plummeting rental rates. However, what will happen if we get enough purpose-built rentals is that, overall, we're not going to see those accelerating rents like we've seen, because we'll have many more purpose-built rentals, which are exactly what we need.

[Michael Coteau, Liberal, Don Valley East, ON]

This morning I was in the House, and there was a debate around Bill C-356. It's the Leader of the Opposition's bill, which would actually essentially put a tax, the GST, back on apartment building homes. Would that have a negative impact on the sector if it does pass?

[Kevin Lee]

Yes. I mean, I really do think we need all forms of purpose-built rentals, not just those that are sort of in the below-market-rate space. We need many more.

[Michael Coteau, Liberal, Don Valley East, ON]

Have you spoken to any provinces that.... Well, let's stick to Ontario. Has there been any discussion around removing their portion of the GST from new builds?

[Kevin Lee]

Yes, there has been.

[Michael Coteau, Liberal, Don Valley East, ON]

Do you think that's going to go through?

[Kevin Lee]

That I can't say. You'll have to ask them.

[Michael Coteau, Liberal, Don Valley East, ON]

Thank you for your time. Thank you for being here.

I'll turn it over to Mr. Long.

[The Chair, Liberal, Bobby Morrissey]

You have three minutes and 10 seconds.

[Wayne Long, Liberal, Saint John—Rothesay, NB]

Thank you, Mr. Chair.

Good afternoon to my colleagues.

Thank you to our witnesses for coming today. It's a very important subject.

The Canadian Home Builders' Association was just in my riding of Saint John—Rothesay for its conference. Thank you for that. It was wonderful. I'll give a shout-out to Brad McLaughlin, a local representative there who does a great job.

My first question, Kevin, is for you.

One thing that does frustrate me, looking across the House at times, is the criticism that we get from the other side on what we've done or what we haven't done. We look across, and whether it's our national housing strategy, the program, the co-investment fund, the rapid housing initiative, the housing accelerator fund, or the fact that you could argue that the jurisdiction for housing is provincial and not federal, I think we stepped in in a very big, important and meaningful way. That's despite the fact that the Conservatives, of course, have voted against every one of those programs.

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

It's true. We did.

[Wayne Long, Liberal, Saint John—Rothesay, NB]

I think that, to be straight, we've made historic investments in housing, investments that the country's never seen.

What do you think the housing space would actually look like if some of these changes had been enacted 15 years ago?

[Kevin Lee]

That's a good question. If we would have had all of these actions on housing supply....

The new federal plan has some potential. I hope everybody keeps building on that moving forward because they're the types of actions and holistic approaches that need to occur if we're going to get more supply on board and get affordability under control.

What would have happened 15 years ago, I don't know, but I'm hoping that we're building from here going forward. Certainly, if we had it back at the time when we were all...the industry was talking about lack of supply at that time and development taxes and all those things. That's not new, so we're hoping that we'll keep moving forward.

[Wayne Long, Liberal, Saint John—Rothesay, NB]

Thank you for that.

Mr. Lyall, in my riding of Saint John—Rothesay, we had a wonderful announcement on the housing accelerator plan. Grand Bay-Westfield had a great announcement on the accelerator. Through the accelerator fund, 179 agreements with communities across the country have been secured. The accelerator fund is there to cut red tape, get homes built faster.

Mr. Lyall, how important is it that we work with municipalities to cut that red tape?

[Richard Lyall]

I think it's important for all levels of government to work with each other on this particular issue. I don't really have a comment on that. For me and for our group, it's whatever works. We need to put things in perspective. The construction industry in Canada, the housing industry, is the number one industry. For construction overall we're talking tens of billions of dollars, $160 billion a year, half of which is pretty much residential, so we need to put some of these measures in perspective.

The fact is that, right now, by and large the market is dysfunctional, so housing accelerator funds and encouraging municipalities to modernize and improve things are good. I think there are things that are related to standardization, which is important. Think of our building codes: This is how you have to build a building across this particular jurisdiction. We have a national building code. In Ontario we have a provincial building code. They were introduced to create those standards, which are important, and I think we need the same types of standards for some of our processes, because part of what we're dealing with is systemic.

[The Chair, Liberal, Bobby Morrissey]

Thank you, Mr. Lyall.

Ms. Chabot, you have the floor for six minutes.

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

Thank you, Mr. Chair.

I'd like to thank our witnesses.

Mr. Hogue, to begin, I'd like to thank you for your analysis of the budget. In your testimony, if I understood correctly, you stated that the imbalance between supply and demand was one of the main causes of the housing crisis. We're quite familiar with the principle of supply and demand, which is part of the laws of the markets. Even if I don't know much about economics—I'm not even sure I know the basics—I understand it. Here, we're talking about housing that is on the market.

However, a lot of studies have been done on this, and when we talk about affordable housing and social housing, the supply of non‑market housing becomes important too. For example, projects focused on housing affordability and social housing must be carried out in conjunction with community groups and housing co‑operatives. Don't you think that this too could help solve the housing crisis?

[Robert Hogue]

Yes, absolutely. That's what I was saying earlier. We need to expand the housing stock as a whole, including social housing and affordable housing.

As I noted earlier, the pressures on housing affordability associated with home ownership are driving many people back into the rental market, including social housing. It is therefore important to tackle this problem by increasing the supply of all types of housing, including, of course, affordable housing and social housing.

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

Thank you.

However, when it comes to affordable housing and social housing, there was a crisis long before the current home ownership crisis. There was a fundamental problem that has yet to be resolved. In my opinion, what you're describing is a consequence of this.

Among the seven measures you have outlined to fix the housing shortage, you propose changing the mix of housing produced. You state that “responding to growing rental demand requires a shift in the mix of housing Canada has been producing”, and that “past completions for rental units where demand is poised to skyrocket are way off”.

What are you referring to when you say that the mix of housing units produced needs to shift?

[Robert Hogue]

This relates to what we just said. In the past, many single‑family homes, for example, and an increasing number of condos were built. It's now necessary to provide a variety of housing. The trend is increasingly shifting towards rental housing as well, because more and more people will be able to afford it. This also includes social housing.

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

Thank you.

Both the Conservative and Liberal parties tend to point fingers at our municipalities. However, both large and small Quebec municipalities are the prime movers responsible for zoning, urbanization and identification. Do you think that penalizing them will help achieve the objectives?

[Robert Hogue]

I think that it's better to take a more positive approach towards municipalities, to encourage them and to reduce barriers to construction, especially for affordable housing.

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

Social groups, community groups, housing co‑operatives and the federal housing advocate argue that we need to definancialize housing and invest in the capacity to bring projects to fruition. The creation of more affordable and social housing will alleviate some of the burden on the public.

[Robert Hogue]

The construction of more rental units, even at today's prices, could also benefit some people living in social housing. We're talking about a whole range of possibilities here.

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

I don't mean that everything is connected. However, we're talking about different things. The problem is getting worse. One thing remains unaddressed: Housing is a right.

Normally, the amount allocated to housing shouldn't exceed 30% of income. Your studies show that, in some large cities, mortgage payments can amount to over 60% of a homeowner's income. This may even be the Canadian average. Is that right?