Human Resources Committee on June 3rd, 2024

[Leah Zlatkin]

In my career...yes.

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

Wow.

As well, Liberal budget 2024 claimed that they were going to build 3.87 million homes by 2030, which is roughly 550,000 homes per year. Do you think that the Liberals will meet this goal?

[Leah Zlatkin]

I do not believe so. In terms of completions, my numbers state that there were 187,000 houses completed in 2023. I know that there's a really aggressive plan to build more homes in regard to the housing accelerator fund, but I think that, in the majority of the municipalities that I looked through, those are more welfare programs than actual building programs.

I would like to see more building happening and fewer restrictions on developers so that they can actually help us build those homes, because we would like to house everyone.

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

Thank you.

The Bank of Canada stated in their financial stability report on May 9, 2024, stated that “smaller mortgage lenders have seen a sharp uptick in credit arrears.” They also had figures showing that the median monthly payment may increase by more than 60% by 2026 for Canadians who have a variable rate mortgage.

How are individuals like you in your firm seeing this affect people?

[Leah Zlatkin]

Variable rates have been really scary for many Canadians over the last little bit. For many of my clients, we have counselled them as they go through this. While their rates are going up and their payments are increasing, we have recommended switching products to them, so a lot of people have actually moved away from variable products into fixed products over the last two years in order to help them with that payment pain.

When it comes to renewals, it's going to prove challenging for people at renewal. For many clients, unfortunately, we have done refinances over the last year or two to help them to consolidate some of the debt they have brought on during COVID.

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

Even with your best efforts to help clients, are you concerned that many of them won't be able to afford their mortgages?

[Leah Zlatkin]

With the help of a professional, most people can still afford their mortgage. When it comes to going to private lenders or alternative lenders, that's where the challenges become more prominent, when somebody may no longer qualify and their mortgage rate is excessive.

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

Thank you very much for your very impactful statements today.

[The Chair, Liberal, Bobby Morrissey]

Thank you, Mrs. Gray.

Mr. Long, you have five minutes.

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

Thank you, Mr. Chair.

Good afternoon to my colleagues.

Thank you, witnesses, for your testimony.

I have just a few comments first. I recognize that we have a housing crisis across the country, but let's also give some credit where credit is due. I'd say that for decades we saw the federal government take a back seat on housing and on building more affordable homes across the country. We know that from 2008 to 2015, 800,000 affordable homes were lost.

In 2017, we got back into the business of housing. We came forth with the national housing strategy. That national housing strategy, which has been unfolding over the last several years, has included the co-investment program, the rapid housing initiative, the housing accelerator and the apartment loan program. There have been many federal initiatives.

I know that my esteemed colleague across with the Conservatives talked about all the tools in the tool box and whether municipalities should have more tools in that tool box. Do you know what? I wouldn't want to be a contractor or somebody grabbing from my tool box what the Conservative Party gave me, because that tool box would be empty. There wouldn't be any tools in the tool box. They've come forth with no programs and no real suggestions except to vote against the tools that we would put in our tool box, including all the programs I just mentioned. The Conservative party voted against every one of those.

Of note, I just want to talk here about the GST removal, and I'm going to quote an article here from the CBC nationally. The headline says, “Housing starts in New Brunswick”—my home province—“lagging further behind Maritime neighbours in early 2024”.

The New Brunswick government missed its target for new housing starts in 2023 by a wide margin but says it's still not interested in cutting sales taxes on new apartment builds....

That's despite provinces like Nova Scotia having far outpaced New Brunswick in home builds.

I know, Mr. Wvong, that you talked about the removal of the GST. The Conservative leader's private member's bill actually would put the sales tax back on.

If you will, Mr. Wvong, talk to me about the importance of the removal of the GST in spurring new apartment builds. Also, please comment on why some provinces, including my province of New Brunswick, have failed to do that. Thank you.

[Russil Wvong]

I think reducing costs is definitely important. If we want to have housing that's less expensive, it doesn't make sense to replace older housing with new housing that, after you subtract all the costs of constructing it, including taxes and development charges, is worth less than what was there before.

If we want to replace houses with apartment buildings, for example, which provide more housing for people, or even replace houses with multiplexes, we should be looking seriously at the whole list of costs. Those include everything from materials and labour to things that are directly under the control of governments at different levels federally, provincially and locally.

I think Mike Moffatt's kind of back-of-the-envelope estimate was that removing the GST from new rental housing would, over 10 years, result in 200,000 to 300,000 additional homes being built on top of what would be built under business as usual.

As I said, there definitely are strong incentives for local governments to keep pushing up development charges.

Another change in the recent budget was accelerating depreciation on new rental housing so that it could be depreciated over 10 years instead of 25 years. What I've heard from people who work in the industry is that this is also really helpful. What's even more helpful is that it's the kind of thing that cannot be easily just taken back by other levels of government.

In terms of how to convince New Brunswick to remove the HST on new rental housing, again, I guess it comes back to persuasion and kind of pointing the finger. I mean, how do you say we need more housing...? I think, in New Brunswick, the situation is pretty bad. There's no rent control, and people are moving there.

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

It's frustrating for us, because we have a premier and an ideology that doesn't want to step up and help with affordable housing.

Mr. Wvong, I want to talk—

[The Chair, Liberal, Bobby Morrissey]

No, thank you, Mr. Long. Your time has gone over the five minutes.

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

Thank you.

[The Chair, Liberal, Bobby Morrissey]

Thank you.

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

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

Thank you, Mr. Chair.

Mr. Wvong, I have a question for you.

You introduced yourself by saying that you have read many reports. The Office of the Federal Housing Advocate released a disturbing report on the financialization of housing and its impact on market forces and tenants, particularly the poorest.

Do you have an opinion on the federal housing advocate's vision?

[Russil Wvong]

Think of the housing system as a ladder. When we don't have enough housing at whatever level of the ladder—when we have this overall housing shortage—it's definitely going to be worse for people near the bottom of the housing ladder. You get trickle-down evictions as people are looking for a place to live. If you don't have enough market housing, they move down the ladder. I heard a terrifying quote: “Shelters are gentrifying.” It used to be that shelters were for people who were indigent or not employed. Now we have people with jobs who are sleeping in their cars. This is in the Vancouver area. I think it's definitely a problem.

I would say that B.C. is pursuing an all-of-the-above approach, and the federal government has also been helping. B.C. takes the lead, and the federal government then supplies funding. There's a B.C. builds program that B.C. is doing, using public land to provide middle-income housing, with 20% lower-income housing. The federal government is matching it. It's $2 billion from B.C. and $2 billion from the federal government.

There's a complex care housing program aimed at people with the most need. They might have drug addiction, mental illness or brain injury. They don't just need housing. They need wraparound supports.

B.C. is also acquiring older, cheaper rental housing that will be operated by non-profits. This is basically turning market housing into non-market housing at the lower end. The federal government has set up a program similar to B.C.'s

[The Chair, Liberal, Bobby Morrissey]

Ms. Chabot, you have 10 seconds left.

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

I didn't hear you, Mr. Chair.

[The Chair, Liberal, Bobby Morrissey]

Your time is now up.

Thank you, Ms. Chabot.

Ms. Zarrillo has two and a half minutes to conclude this hour.

[Bonita Zarrillo, NDP, Port Moody—Coquitlam, BC]

Thank you, Mr. Chair.

I have a motion, Mr. Chair, that I'd like to put on the floor today. Everyone has received it in French and English.

I'll go ahead and read it, if that's all right.

Given that Starlight Investments, one of Canada's largest landlords, is seeking to evict its tenants at 71, 75 and 79 Thorncliffe Park Drive, while receiving federal loans to purchase rental properties, pursuant to Standing Order 108(1), the committee call on the CEO of Starlight Investments, Daniel Drimmer, to appear before the committee by June 14, 2024, to testify in relation to the study on federal housing investments for a minimum of two hours and to answer questions about his decision to evict Canadians from their affordable housing during a housing crisis.

[The Chair, Liberal, Bobby Morrissey]

Thank you, Ms. Zarrillo.

Committee members, the motion moved by Ms. Zarrillo is in order and therefore takes precedence.

We'll move to discussion on the motion by Ms. Zarrillo. I have Mrs. Gray, and then Madame Chabot.

Mrs. Gray, go ahead on the motion.

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

Thank you, Mr. Chair.

I know we'd like to get back to the rest of our witnesses and our study here today. We're in the middle of this housing study right now, and we certainly don't want to take time away from the witnesses who are scheduled and will be coming to this.

Based on that, I would like to move an amendment. It would read, at the end of Ms. Zarrillo's motion, “and that the committee either find additional resources in order to facilitate this meeting outside of the committee's scheduled meeting times or add this meeting as the eighth meeting for this study.”

[The Chair, Liberal, Bobby Morrissey]

Okay—

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

Mr. Chair, just to finish speaking on this, I'm not sure whether Ms. Zarrillo's intention was, whether this is as part of this study or a separate motion. Without knowing that, this gives the option of either having an additional meeting to address this or tagging this on after this study.

Thank you, Mr. Chair.