Human Resources Committee on June 10th, 2024

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

Can I ask, on the market side, is that stable housing? Is market rental housing stable and reliable housing for people?

[Steve Pomeroy]

We have a system in this country where provinces regulate rents, and we have various degrees of regulation across different provinces. I think, in terms of security of tenure, we have a reasonably good system that protects tenants and puts in place mechanisms to protect them.

Having said that, those mechanisms also allow for evictions for various reasons, which are that you want to use the property for a family member or you want tenants to leave so you can renovate. Our rent deregulation mechanisms, when that happens, allow rents to go up massively.

There is an unintended consequence of that regulation that does allow nefarious landlords to significantly raise rents, which contributes to these 20% increases in rents, so it's not working very well.

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

Do you think there's a place for federal regulation there in securing tenure and stability for renters?

[Steve Pomeroy]

I think that it's a difficult thing for the federal government to do. This is clearly an area of provincial jurisdiction, but I think Tim Richter made the point that we need a much more co-operative federalism, with the federal government working with its provincial partners and saying, “Look, this is your jurisdiction. You are all saying that we have an affordability crisis, so let's work together on this”.

There certainly was a precedent in 1975, as I mentioned in a previous committee appearance, in the anti-inflationary mechanisms. The federal government asked the provinces to bring in rent controls, and they all did. I think if we now have a crisis, there's nothing stopping the federal government from using its moral suasion and working in collaboration with the provinces to change the regulations and remove or soften the vacancy decontrol mechanism, which is what's causing these massive increases in rents.

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

Could you share from your experience what some of the key factors were in making that provincial-federal relationship and the ability to work together? Is there something we should be doing more of here in the federal government to make sure that provinces are onside? Is there something that we should stop doing federally to make sure that provincial governments are onside?

[Steve Pomeroy]

Yes, well, the mid-1970s were a different time. Many of the provinces had only just gotten into the housing business. They created ministries of housing in Ontario, for example, only in 1974, so you had very relatively young provinces, and it was a much more collaborative set of arrangements, so I think it's that collaboration.

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

On that front, do you think it was a good idea for housing to go out to provinces in the 1970s, or should it be more federal?

[Steve Pomeroy]

I think we had a period when the provinces did a very good job in this country, and, certainly, from 2001 to 2019, when the provinces were delivering the affordable housing program, many provinces did very good work.

In what we have seen in the national housing strategy, the federal government is becoming re-engaged. It became re-engaged when it had been out of the business for 20 years, and it really didn't have the capacities that it used to have, so I think that working in partnership with the provinces that have 20 years of experience in delivering those programs might create better outcomes than we're seeing with very heavily weighted, unilateral federal initiatives.

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

Thank you for that.

The CEO of CMHC has come to this committee multiple times and did say that they had lost a lot of their expertise there. If I think about the fact that we're in a crisis and that we need to get housing, not necessarily built but certainly subsidized—maybe some housing that's already been built—what could you advise the government to do to get that skill set into CMHC and remove some of those, I think you were saying, multiple 20-page documents that folks need to fill out to get programs done?

[Steve Pomeroy]

Certainly federal spending powers are a very important tool, but we have now got to the point of the national housing strategy where less than 10% of all the funding is going through the provincial mechanisms where the expertise largely was. Ninety percent is going through the federal mechanisms where they really do lack that capacity.

I think rebalancing that and ramping up some of the programs that are funded under the bilateral agreements, particularly the Canada housing benefit, one of the bilateral programs that Tim Richter alluded to for homelessness prevention, would go a very long way to helping much more quickly address the affordability crisis than the federally focused loan-based programs that predominantly supply without any affordability criteria or very minimal affordable criteria.

[The Chair, Liberal, Bobby Morrissey]

You have five seconds, Madame Zarrillo.

Thank you.

Committee, before we move to the next round, it's my intention to conclude the second round as scheduled with turns of five minutes and five minutes, and then two and a half and two and a half minutes before we go into committee business. We have Mr. Morrice in the room, so if the committee agrees, I would give him two and a half minutes as well, but we'll see.

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

Sorry, can I raise a point of order, Mr. Chair? I didn't hear what you were saying.

We're getting five and five and then two and a half and two and a half, and then what did you say about Mr. Morrice? What is there an agreement on?

[The Chair, Liberal, Bobby Morrissey]

I will go to Mr. Morrice for a question as well.

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

Okay. Was that approved by the committee?

[The Chair, Liberal, Bobby Morrissey]

No, I'm suggesting it as chair. If the committee objects, the committee controls its own domain.

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

I object, Mr. Chair.

[The Chair, Liberal, Bobby Morrissey]

Okay. We'll conclude with the round as scheduled. Thank you.

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

I have a point of order. This is just a question: Do we vote on it to see if he gets time? I'm okay with his speaking.

[The Chair, Liberal, Bobby Morrissey]

No, you need unanimous—

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

Do we need unanimous consent?

[The Chair, Liberal, Bobby Morrissey]

I'll move to the speaking list as it's scheduled.

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

I have no time.

[The Chair, Liberal, Bobby Morrissey]

Any member can share as they choose, but I'm reluctant to allocate without the consensus of the committee.

With that, we'll begin.

Madam Falk, go ahead for five minutes, please.

[Rosemarie Falk, Conservative, Battlefords—Lloydminster, SK]

Thank you very much, Chair.

We know, as we've heard over and over in this committee and from our constituents, that we're in a housing crisis. We know that having a place to call home should not be out of reach for Canadians, and we know that after nine years, and after this Trudeau government promised to lower the price of housing, rents and mortgages have doubled instead of going down.

CMHC has said that to maintain current home prices, which are already too high, Canada has to increase homebuilding by 50%. There have been lots of announcements and photo ops, but the reality is that housing starts are down across this country and, and according to RBC, the housing crisis is only on track to get worse and not better.

Mr. Horwood, if I could please start with you, I was just wondering if you could speak to the residential rental vacancy rates in the properties that Effort Trust manages. Are vacancy rates lower than usual? Has there been a trend in recent years? What does that look like?

[David Horwood]

I can confirm that the vacancy rates in our properties have typically been in a relatively narrow band between 4% at the high end down to as low as 1%.

We have seen over the last two years that the vacancy rate has been fairly consistent between 1% and 2%. I see that on the low end and on the dangerously tight end, in the sense that I'm advocating for more supply and more choices for customers, and I would be pleased to compete with others in my industry to attract tenants to our properties. My sense is that we are within the lower end of the vacancy band that we have seen.

One other point I would make is that we are noticing that our residents, our renters, are moving out with far lower frequency. We used to see turnover of people moving out of their apartments in a range between 20% to 30% of the units every year. What we're finding at the moment is that it's at or around the 10% range, which is the lowest I have seen in 27 years in the business.