We have Dr. Carolyn Whitzman, housing policy researcher and professor at the University of Ottawa. From the Canadian Housing and Renewal Association, we have Raymond Sullivan, executive director. From the National Indigenous Collaborative Housing Incorporated, we have John Gordon, chief executive officer.

Welcome. Each of you will have five minutes. Please stay close to the five minutes, as we are a little bit tight with this hour.

We'll begin with Dr. Whitzman.

June 3rd, 2024 / 4:55 p.m.

Dr. Carolyn Whitzman Housing Policy Researcher and Adjunct Professor, University of Ottawa, As an Individual

Thank you, Mr. Chair, and thank you for the opportunity to appear today. As someone who is trained as a historian, it's a particular pleasure to uncover with you the roots of Canada's current housing crisis.

The housing supply record from 2006 to 2015 was dire and set the stage for today's housing crisis. Overall housing completions hovered at the 180,000-per-year mark, whereas they were closer to 250,000 in the mid-1970s. Meanwhile, Canada's population grew by 60% from 1976 to 2016.

Purpose-built rental construction aimed at low- and moderate-income households, which was at 40,000 homes per year in the early 1970s, plummeted to near zero during the 2006-15 period. Non-market housing, including public, non-profit and co-operative housing, was over 35,000 homes per year in the 1980s, 20% of all completions, before being reduced to less than 1% of all completions from 2007 to 2015.

Rather than directly speak to the amount of funding and the number of units developed, I want to use my limited time to discuss three underlying problems that were at play during that period and, to some extent, predetermined current problems with the national housing strategy: first, the absence of shared definitions of affordable housing and income categories; second, the absence of federal evidence-based targets and sub-targets for non-market and affordable housing; and third, the inability to scale up some successful pilot projects of that period, such as At Home/Chez Soi and Beaver Barracks. To some extent, those problems have not been solved.

From 1944 to 1992, the federal government used a standard international definition of “affordable housing” that used a percentage of before-tax household income. This understanding of affordable housing was supplemented using income categories, which informed both needs assessments and housing policy.

Low-income households in the bottom income quintile—reliant on seniors or disability pensions or minimum wage—required some form of subsidy to meet their housing needs. Governments, both provincial and federal, responded by directly funding or constructing housing and by providing rent supplements, generally attached to non-market projects. They focused their programs on low- and moderate-income households, the latter representing early-career professionals. The latter might move on to market rental or ownership, allowing units to filter to the next household in need.

However, from the 1990s onward, a pernicious belief that the private sector could provide low-income housing if governments just stepped away from regulation led to a new definition of “affordability” linked to market rents. This might have made sense in 1990, when the average market rent was $672 per month, easily affordable to a moderate-income household, but by 2015, the average market rent had almost doubled to $1,208 per month and was far beyond moderate-income affordability, let alone low-income affordability.

The absence of affordable and adequate market rental and ownership housing means that households can't move on from non-market housing. The fact that new non-market housing wasn't getting built meant long waiting lists and eventually homelessness for those not served by non-market housing supply.

Second, there was the absence of supply targets and sub-targets. During World War II, the federal government knew that rental shortages in Canada's cities where the war effort was concentrated were leading to landlord profiteering. It responded by directly building 46,000 rental units in six years, from 1942 to 1948, as well as commissioning a report on post-war housing needs.

The Curtis report calculated a target that was based on accumulated needs, projected population growth and a desire for higher rental vacancies, much as is the case today. What's more, it called for a third of new homes to be public housing and another third to be rent-regulated, purpose-built rental housing for the middle class.

In 1972, a CMHC report recommended that 45% of new construction be non-market, including 20% public housing as well as scaling up community and co-operative housing by another 25% of total completions.

What this report and so many others had in common was starting from who needs what housing where and at what cost, and then the policy settings worked backwards from that point.

The creation of the core housing need measure by Statistics Canada in the late 1980s was intended to guide provincial government housing policy, but throughout the 1990s, provincial governments proved themselves to be incapable of addressing core housing need and homelessness.

5 p.m.

Liberal

The Chair Liberal Bobby Morrissey

Thank you, Ms. Whitzman. We've gone well over time.

5 p.m.

Housing Policy Researcher and Adjunct Professor, University of Ottawa, As an Individual

Dr. Carolyn Whitzman

I'm sorry. Thank you.

5 p.m.

Liberal

The Chair Liberal Bobby Morrissey

You can capture your final comments when you respond to a question, if you choose.

5 p.m.

Housing Policy Researcher and Adjunct Professor, University of Ottawa, As an Individual

Dr. Carolyn Whitzman

Absolutely.

5 p.m.

Liberal

The Chair Liberal Bobby Morrissey

Thank you.

Mr. Sullivan, you have five minutes or less.

5 p.m.

Raymond Sullivan Executive Director, Canadian Housing and Renewal Association

Thank you very much.

Good afternoon. I'm Ray Sullivan. I'm representing CHRA, the Canadian Housing and Renewal Association. CHRA is the national voice for community housing. We're a membership-based association that represents non-profit, co-op, public and community housing as well as service agencies, advocacy organizations and municipal and provincial governments.

We believe we need to more than double the relative share of non-market community housing. We're not alone. Scotiabank has also called for doubling the supply of social housing. More recently, RBC has called for quadrupling the rate at which we're building non-profit community housing.

Why does it feel like we're playing catch-up? To understand the current housing crisis, we have to go back earlier than 2006, and we have to understand some key economic principles.

One, there is one single housing market. From someone living in a multi-million dollar mansion to someone sleeping on a park bench and all of us in between, the forces that impact one part of that market also impact all the other parts.

Two, housing is directly linked to economic productivity. Specifically, there's evidence that increasing the supply of non-market community housing leads to gains in per capita GDP. It's not a coincidence that our productivity is dropping as our housing crisis is increasing. It's not a coincidence that productivity is declining as the share of non-market community housing is also dropping.

For context, let's go back before 2006. From the mid-1960s to 1993, the federal government directly supported and financed the development of co-op and non-profit housing. We reached points where 7% to 8% of housing supply was permanently affordable outside of the speculative market. We reached points where 15% to 20% of housing starts were non-market community housing. Then we stopped.

Starting in 1993, the federal government downloaded housing to provinces and territories. Because they don't have the same fiscal capacity as the federal government, provinces and territories couldn't, or chose not to, support that continued investment. We faced more than a decade where the new supply of affordable housing was interrupted. To make things worse, with the creation of strata condo title and changes in tax and investment policy, the private market stopped building much rental housing at all. For a whole generation, we virtually stopped building new affordable rental housing. Current generations are paying the price.

By the early 2000s, the federal government started its slow return. By 2005 they dipped their toes back into the water with a cost-shared federal-provincial program, called the affordable housing initiative, or AHI, which was later renamed as investing in affordable housing, or IAH. These federal programs, as well as others addressing homelessness, were sustained from 2006 to 2014. In the first decade of the new millennium, investment was modest. AHI created about 50,000 new homes.

Then it picked up in the next decade. From 2011 to 2019, IAH created 420,000 new affordable homes. In my former roles managing and developing non-profit housing, I was involved in creating a few hundred of those, including the Beaver Barracks project that Dr. Whitzman mentioned.

Those programs had some strengths. For example, they allowed for acquisition and rehabilitation of existing rental housing. They also had weaknesses, such as overlooking the important role of the federal superpower of direct below-market lending. They in fact forced most non-profit developers to go to private banks at market rates.

In 2017, with the national housing strategy, the federal government did more than just dip its toes in the water. It jumped back in with both feet. Significantly, it brought back direct below-market federal financing for affordable rental housing. Timing was good because the private sector was also returning back to purpose-built rental housing.

In 2017, none of us would have predicted the pandemic and the resulting economic shift. Making things a little bit worse, the national housing strategy programs didn't respond quickly enough to that economic shift. We're playing a bit of catch-up now in the last six months. More importantly, and this is what I want to emphasize, we're actually playing catch-up from 1993—from neglecting affordable rental housing, especially co-op and non-profit housing, for a generation.

In the early 1970s, Canadian housing policy was described as “programs in search of a policy”. Fifty years later, this is still the case. We have not adequately connected housing policy to broader economic and social policy. We haven't adequately connected social and community housing policy to objectives in the broader housing market.

The rental market and ownership market are fundamentally connected. We can't have a functioning and fair housing market until everyone has access to a decent, affordable home. This requires a commitment to more than double the share of non-market community housing. This was true from 2006 to 2015, and it is true today.

Thank you for your time and attention.

I look forward to your questions.

5:05 p.m.

Liberal

The Chair Liberal Bobby Morrissey

Thank you, Mr. Sullivan.

Next is Mr. Gordon for five minutes or less.

5:05 p.m.

John Gordon Chief Executive Officer, National Indigenous Collaborative Housing Incorporated

Thank you. My name is John Gordon. I am the CEO of National Indigenous Collaborative Housing Inc. I'm very pleased to be here today to appear in front of the committee and offer my insights into the matters being studied.

NICHI, National Indigenous Collaborative Housing Inc. is a collaboration of 147 indigenous housing providers from across Canada from coast to coast to coast. We support indigenous people living in urban, rural and northern communities. We are built on the principle of co-operation, collaboration and a for indigenous, by indigenous approach. NICHI works to ensure that no indigenous person is left behind due to their residency or geographic location.

While NICHI's governance, management and operational structure may be new, our 147 members are not. They have been around for years. Some of these organizations started in the 1970s and 1980s, collectively providing hundreds of years of experience and ensuring NICHI's direction is informed by urban indigenous realities from the ground up.

In the 1950s, 1960s and 1970s, indigenous people migrated significantly to urban, rural and northern areas, leading to the development of numerous programs and services by the Government of Canada. However, the federal government ceased direct funding for housing in the early 1990s and devolved the delivery, as Ray mentioned, to provincial and territorial governments. This shift led to indigenous housing providers advocating at that time for a for indigenous, by indigenous approach. The national aboriginal housing association was formed in 1994; however, it never took off or received recognition from the federal government.

In 2006, the federal government injection of $300 million for off-reserve indigenous housing through a trust fund was variably effective across regions. It worked well at times in areas where provincial indigenous housing co-operation was already existing, while in other circumstances it did not work well. The key takeaway is there was, and still is, no consistency across the provincial governments of how indigenous housing is delivered in urban, rural and northern settings.

For example, Ontario pulled its $80-million share into a provincial trust fund and did not release those funds until 2009. That resulted in delayed builds for three full years. Those were three cold winters if people were living on the street with no safe shelter or supportive affordable housing. In contrast, B.C. and Saskatchewan took on approaches to enhance capacity funding for urban housing organizations with Métis and first nation affiliations.

What is a more effective approach, and one that NICHI advocates for and recommends, is to work nationally and across the spectrum of distinctions-based allocations while also building local capacities and community-driven approaches to urban indigenous housing, one that is not turning away individuals based on indigenous identities from one or another affiliation, but rather is recognizing the diversity of the indigenous community with urban, rural and northern areas and providing housing first.

Future investments most importantly must be designed and delivered not by provinces, but for indigenous people, by indigenous people. Urban, rural and northern indigenous housing providers must be brought to the same table as provinces and territories and funded as equal partners on a longer-term basis to craft sustainable and responsive and community-driven housing solutions instead of inadequate stopgap measures that leave vulnerable individuals out in the cold.

While 2006 to 2015 saw some funding for affordable and co-operative housing and limited investment in indigenous housing, the same period was marked by significant challenges for housing for indigenous people in Canada. This was particularly true for those living in urban, rural and northern communities who were effectively shortchanged because of where they lived in Canada.

The Government of Canada announced in 2017 its national housing strategy with the glaring omission of a specific approach for indigenous housing in urban, rural and northern areas. Past mistakes of funds languishing in trust funds or slow-moving federal departments are painful and frustrating to the very real and very urgent unmet shelter needs of indigenous people in urban, rural and northern communities across Canada.

In 2022, 20 indigenous housing organizations came together and signed a declaration to create a national indigenous housing organization. In December 2022, National Indigenous Collaborative Housing Inc. was established as a federal non-profit entity.

In June 2023, Indigenous Services Canada entered into a funding agreement to provide $281.5 million to address urgent and unmet needs. Within just over a year and a half, indigenous housing providers and urban indigenous people were able to start their national indigenous housing association and secure the release of almost $300 million.

This is lightning speed when compared to government processes. The entirety of the operation was overseen and well executed by indigenous staff, board of volunteers and contractors. We deserve credit for this.

Census 2021 indicated that most indigenous people across Canada reside in urban and rural communities.

Am I past my time?

5:10 p.m.

Liberal

The Chair Liberal Bobby Morrissey

Yes, you are by quite a bit. Whatever comment you want to make can be done in answers to questions, Mr. Gordon, but we are pressed for time.

Mr. Aitchison, you have six minutes.

5:10 p.m.

Conservative

Scott Aitchison Conservative Parry Sound—Muskoka, ON

Thank you, Mr. Chair.

I'm going to do some very quick questions. My first one is for Ms. Whitzman.

You indicated in the past that the crisis we're currently in today has its genesis in the early seventies, at a time when the government decided to stop incentivizing the private sector to build purpose-built rentals specifically and chose to get into social housing building.

Is that reasonably accurate?

5:15 p.m.

Housing Policy Researcher and Adjunct Professor, University of Ottawa, As an Individual

Dr. Carolyn Whitzman

Well, there were two misses and a hit in the early 1970s. One of them was the end of tax incentives for purpose-built rentals. That's been addressed in the current budget. It took 50 years.

However, part of the reason why developers moved from purpose-built rentals to condominiums is the second problem, which was the creation of a capital gains tax with the principal property exemption. This promoted—it made sense in the early 1970s—housing as an investment rather than housing as a place to live.

A third thing that happened in the 1970s—absolutely, Mr. Aitchison—was a big expansion of co-operative and community housing.

5:15 p.m.

Conservative

Scott Aitchison Conservative Parry Sound—Muskoka, ON

It was Prime Minister Trudeau at the time. Federal investment in housing continued to decline through the Mulroney years and finally ended, I believe, in the Chrétien era.

Is that correct?

5:15 p.m.

Housing Policy Researcher and Adjunct Professor, University of Ottawa, As an Individual

Dr. Carolyn Whitzman

I would say that investment in non-market, low-income housing went up in the 1970s. It started to go down in the 1980s and continued its downward slide after the federal government got out of housing policy in the early 1990s.

I don't think it was associated with a particular party—either the good things or the bad things. It was something that was happening globally, and it's something we need to address.

5:15 p.m.

Conservative

Scott Aitchison Conservative Parry Sound—Muskoka, ON

Okay. Thanks for that.

5:15 p.m.

Housing Policy Researcher and Adjunct Professor, University of Ottawa, As an Individual

Dr. Carolyn Whitzman

Thank you.

5:15 p.m.

Conservative

Scott Aitchison Conservative Parry Sound—Muskoka, ON

Mr. Sullivan, I'm assuming that, in your capacity, you've dealt with the construction of housing and the development of housing. Is that true?

5:15 p.m.

Executive Director, Canadian Housing and Renewal Association

Raymond Sullivan

Yes.

5:15 p.m.

Conservative

Scott Aitchison Conservative Parry Sound—Muskoka, ON

What's the impact of local government delays on the approval process for getting that supportive housing built?