Human Resources Committee on June 13th, 2024

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

Thank you very much, Chair.

Thank you for being here today.

We know that Canadians are in an affordability crisis. Everything seems to be going up, and this is also reflected within housing because the materials that are needed also go up. In April, 70% of the provinces asked to have a meeting because of the carbon tax increase by the federal government. That meeting request was not met, so in my mind it begs the question of how many other things provinces want to have meaningful conversation or consultation with the federal government on, and it doesn't show up or it does what it wants anyway.

We know that wraparound services are very important, and that's what we need delivered in all of our provinces in a way that works cohesively, within all levels of government. You have your municipal level, which is there on the ground and knows what's going on. You have your provinces, which are the ones who are supposed to be distributing these funds, and then the federal government, which is supposed to be there to support if and when needed. If we don't have the ability to fund provinces when they need help, with wraparound services, for example.... Canadians are now spending more servicing the debt of this nation than the provinces are receiving in health care transfers. I see that as money that could be used for wraparound services. That servicing debt money could be used for wraparound services.

Would you agree with that statement?

[Marie-Josée Houle]

I'm sorry. You've caught me like a deer in the headlights. I am not in a position to—

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

The wraparound services are important. Isn't that correct?

[Marie-Josée Houle]

Absolutely, they are.

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

We need those to be able to give a hand-up to those people who need housing. As you mentioned, it's on a continuum. Sometimes it's a little bit more complicated or it's sometimes a little bit easier with just, like you said, setting up a bank account, that type of thing.

Would you agree that with the amount of money Canadians, taxpayers, are spending on servicing debt, that money that's being used to service and pay interest payments on the debt the Justin Trudeau government has created could be used to help people with those wraparound services that are needed?

[Marie-Josée Houle]

I'm not in any position to comment on how tax is done in Canada. That's not my area of—

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

You don't believe that the money that's being spent on interest could be used to help with wraparound services...?

[The Chair, Liberal, Bobby Morrissey]

Thank you, Ms. Falk. Your time is over.

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

Okay. Thank you.

[The Chair, Liberal, Bobby Morrissey]

We go now to Mr. Collins, for two and a half minutes, to conclude this hour.

[Chad Collins, Liberal, Hamilton East—Stoney Creek, ON]

Thanks, Mr. Chair.

My first question is a simple one. I think any serious federal housing plan—let's take the politics out of it in terms of the partisanship—should have affordable housing as its priority, encampments as its priority. Do you agree with those statements in terms of providing support in those areas?

[Marie-Josée Houle]

As Canada's first federal housing advocate, who is here to push government to uphold the human right to housing, those are my two areas of priority—absolutely. There are a lot of other systemic issues at hand, but those are the big ones, so yes.

[Chad Collins, Liberal, Hamilton East—Stoney Creek, ON]

You talked about doubling the stock of non-market housing. Of course, the federal government is not responsible for or in charge of building new supply. Municipalities and the provinces are primarily in charge of that.

Do you think it's important as we try to incentivize new supply and new non-market units that we work with our municipal partners?

[Marie-Josée Houle]

Absolutely. It takes all three levels of government, because you also need provincial funding for much needed wraparound services for supportive housing.

[Chad Collins, Liberal, Hamilton East—Stoney Creek, ON]

I have a quick question about encampments.

Coming out of the pandemic, we're dealing with supply chain issues, we're dealing with an opioid crisis, we're dealing with a mental health crisis and we're dealing with inflation. Many municipalities are struggling to address the encampment issue.

I've read your report twice now. The traditional provider I think would look at your report and ask how they should be looking at providing those services on a go-forward basis.

You've talked about the whole issue of partners. We have a traditional men's and women's shelter system that doesn't accommodate couples that make their way into the emergency system. Pets have become an issue with encampments. Many people say that they're in an encampment because they have a pet and they don't want to visit the emergency shelter. The drug use policies vary. We were able to accommodate these issues prior to the pandemic. Now, coming out of the pandemic, these are some of the barriers that force people to live on the street rather than find those services from a traditional provider.

What advice do you have for emergency shelter providers as it relates to changing their business model to accommodate?

[Marie-Josée Houle]

It's a complex issue.

We need change to meet the needs. We need to consult with people who use these services to know how best to meet their needs.

[The Chair, Liberal, Bobby Morrissey]

Thank you, Mr. Collins.

This concludes the first hour.

I want to thank you, Ms. Houle. You had the full hour to present to this committee and address the members' concerns and questions. Thank you for appearing.

With that, we'll suspend for two minutes while we transition to the next witness list.

[The Chair, Liberal, Bobby Morrissey]

Welcome back.

We will now begin the second hour of the committee's study on housing and welcome witnesses.

From Front d'action populaire en réaménagement urbain, we have Véronique Laflamme, spokesperson. From the Independent Contractors and Businesses Association of British Columbia, we have Jock Finlayson, chief economist. From Abundant Housing Vancouver, we have Daniel Oleksiuk.

Welcome to the committee. You will each have five minutes for an opening statement.

We'll begin with Ms. Laflamme.

You have five minutes.

[Véronique Laflamme, Organizer and Spokesperson, Front d'action populaire en réaménagement urbain]

Good morning, Mr. Chair.

According to the 2021 census, 1.6 million renter households in Canada were already spending more than the standard 30% of their incomes on housing, and 620,000 of them were spending more than 50%, clearly at the expense of their other essential needs. In Quebec, 373,000 renter households are in this situation, earning a modest annual median income of less than $24,000. Many have probably become homeless since then. The situation is probably far worse now since these numbers are based on 2020 incomes, temporarily inflated by special income support measures. Many households have also become invisible in the statistics since homeless persons and those with insecure migratory status aren't enumerated in the census.

Quebec and all the provinces are now experiencing a rental housing shortage, the most severe shortage in 15 years in Quebec and the most widespread the province has ever known.

In the circumstances, in the absence of mandatory rent control, rents are increasing even more quickly, discrimination is on the rise, and the rents of the scarce available apartments are higher.

The affordable housing stock is rapidly declining, and residential insecurity now afflicts increasing numbers of renter households.

Despite the acute shortage, it's impossible to attribute the causes of the crisis renters are experiencing to scarcity alone. High rents and their mismatch with the incomes of a large segment of renters are also signs of a crisis that undermines their ability to pay, which is an essential component of the right to decent housing.

The rental dwellings built in recent years, in many instances by real estate giants, have unfortunately contributed to this rising unaffordability. However, there are very few alternatives to these excessively expensive units, since the private sector owns 90% of the rental stock in Quebec, which is probably more similar to the Canadian situation.

In the circumstances, the shortage of social housing in the form of co‑operatives, non-profit housing organizations and public social housing contributes to the crisis.

In 2016, the UN Committee on Economic, Social, and Cultural Rights acknowledged in a report released in Canada that the social housing shortage was one of the barriers to the gradual implementation of the right to housing in Canada.

This shortage of private-market housing has serious consequences and has clearly contributed to an increase in the number of homeless people in recent years.

For three decades, non-profit and collective-ownership social housing was the centrepiece of federal intervention on housing. The federal government's withdrawal since January 1, 1994 has definitely contributed to the current shortage across the country. It is estimated that, in Quebec alone, we would now have approximately 85,000 more social housing units if the federal government had continued to invest at the same pace as it did during the best years.

The federal government's withdrawal from maintenance of the existing social housing stock, which it had helped to finance, also undermined that collective property. In Quebec, for example, there is the problem associated with the maintenance of low-income housing, whereas social housing units have since been sold in certain provinces. The federal government returned eight years later, in 2002, not directly to social housing, but to so-called “affordable” housing, which also helped maintain a small percentage of social housing units in the rental stock in many provinces, including Quebec.

The federal “affordable” housing initiatives continued year after year for at least 15 years on a share of financing that was already inadequate at the outset. Social housing projects never returned to the level they had reached in the late 1980s.

Canada's national housing strategy, which was introduced in 2017, clearly hasn't helped finance a large number of social housing units intended for low and moderate-income families, as was the original objective, and for good reason: despite the strategy's objectives, those initiatives were poorly targeted, the vast majority of funding intended for housing was used to build apartments at costs that were far too high, and too few initiatives under the strategy were reserved for non-profit housing.

In short, even though our association is delighted that the November update, Canada's housing plan and the April 16 budget have finally restored funding to the non-profit sector, we still have a long way to go. There's still too little social housing funding in the pipeline.

It's essential that the trend be reversed. We have very clear demands to make of the government, and we would ask the committee to consider them to ensure that the billions of dollars that the federal government still needs to invest in housing is put to better use.

It's important that this funding really be used to offset the social housing shortage that, in Quebec and across Canada, is associated with the federal government's withdrawal and that it be used to combat the serious homelessness crisis afflicting the entire country.

[The Chair, Liberal, Bobby Morrissey]

Thank you.

We have Mr. Finlayson for five minutes, please.

[Jock Finlayson, Chief Economist, Independent Contractors and Businesses Association of British Columbia]

It's a privilege to be here this morning with you from Vancouver. I'm Jock Finlayson, the chief economist of the Independent Contractors and Businesses Association, which is actually the largest construction association in Canada. We have about 4,000 or so members and clients, and we also operate a very substantial employee health and benefits business in addition to our work on behalf of the construction sector.

We think construction has an important role to play in moving Canada forward in this fast-changing and increasingly competitive world. It's a big industry, as I'm sure the committee members know, accounting for about 8% of employment across the country—a little bit more than that here in the province of British Columbia. The word “crisis“, I think, is overused in Canadian policy discourse, but in the case of housing, the term is probably warranted given where we're at today.

The Canada Mortgage and Housing Corporation has done some studies suggesting that the last time housing was affordable in Canada, as they define it, was two decades ago. The lack of affordable housing is rooted in insufficient supply relative to population growth and rates of household formation.

It's become an important barrier to improving and even maintaining living standards in many parts of the country, and certainly here in metro Vancouver, which I would describe as ground zero for Canada's housing challenges. The rapid population growth that we've experienced over the past couple of years has played an important role in aggravating the pressures we see in housing markets. It is quite striking to see how quickly Canada's population has been increasing relative to peer jurisdictions. There was 3.2% growth last year, and the number will probably be fairly close to that, I would predict, for 2024.

This reflects Canada's commitment to open immigration and the substantial number of newcomers who have been coming to our country. Indeed, over the last couple of years I estimate that immigration, temporary plus permanent, has dwarfed dramatically the number of new housing units that have come into the market.

For every new unit that we've seen come into the Canadian housing market, we've actually had somewhere between four and four and a half newcomers. That, I think, is recognized as perhaps a little bit excessive, and hence the Government of Canada's move to begin slowly to reduce the number of non-permanent residents living in the country.

We think a realistic goal for housing starts in Canada is not 700,000 or 800,000 a year—which is embedded in the federal government's housing plan and has also been touted by CMHC—but rather probably something closer to 400,000. I say that because Canada has been struggling to build even a quarter-million new dwelling units per year.

The construction industry across the country, and certainly here in B.C. and Alberta, is not overflowing with unused resources. The job vacancy rate in construction remains somewhat elevated. It's down from a couple of years ago, but we simply don't have the capacity in the industry to suddenly and quickly double, or even increase by two-thirds, the number of annual starts, even if all the other barriers to doing that were swept away.

We think the 400,000 number is realistic. It would help, and we can perhaps rally a lot of support across the country behind that. Back in 1972, with 22 million people living in Canada, we built 230,000 homes. Last year, with 40 million, we essentially were in the same ballpark.

That's really a sign of the reality that it's been harder and more expensive to build homes and almost everything else in Canada today than it has been in previous decades. It's a fundamental challenge, and it's not just one for the Government of Canada, by any means. We support many of the measures that the Government of Canada has unveiled over the past 12 to 18 months, including a number that were updated in the budget, and in particular focusing on building more rental housing, which we think is critical. One-third of Canadian households are renters, and I predict the share will go up over time.

In that regard, the accelerated capital cost allowances for new apartment units, the extension of the earlier removal of GST from rental housing to include student housing units, the changes being made to the Canada mortgage bonds program and the increase in funding available under the apartment construction loan program should all help over time to begin to accelerate the supply of new rental housing into the market, which is critical.

Fostering densification in cities and towns is also crucial. Here in B.C., the provincial government is working very aggressively to deliver on that. Earmarking public lands and underutilized public buildings for consideration for housing development also makes sense, but we have to recognize that housing is not a sphere of jurisdiction where the Government of Canada is really the primary actor. A lot of the decisions—or most of the decisions—around new development, zoning, land use, densification, community and the rules that shape community evolution are determined by local governments and the provinces. The federal government can assist. It can create incentives, and it can create sticks and carrots, but it doesn't ultimately have the final authority.

Finally, I will comment on labour supply, Mr. Chair, and then I will finish. We estimate that about 2% of permanent immigrants to Canada in recent years have ended up moving into the construction trades. Construction is 8% of the Canadian workforce. We think the immigration selection criteria for permanent residents in Canada should be tweaked to put a higher priority on skills that are relevant to the construction industry.

Thank you for your patience.

[The Chair, Liberal, Bobby Morrissey]

Thank you, Mr. Finlayson.

We will now go to Mr. Oleksiuk for five minutes.

[Daniel Oleksiuk, Director, Abundant Housing Vancouver]

Thank you very much for the opportunity to speak to you today.

My name is Danny Oleksiuk. I'm here from Vancouver. I'm a writer and researcher with the Sightline Institute and a co-founder of Abundant Housing Vancouver, Canada's first modern YIMBY group, which we started back in 2016.

I think there are some good directions with the housing accelerator fund, but I want to talk about how, in our view, it's not nearly aggressive enough. To do that, I wanted to start with the first house that I—to set the groundwork for that—lived in in Vancouver. I moved into it in 1990 as a small child. My parents bought it for $100,000 [Technical difficulty—Editor].

I had to stop and think about that number for a while when I looked it up. It was $207,000 for a detached house in East Vancouver. I mean, housing being that cheap back then, you could actually afford a lot of it, even if you were poor. It had all kinds of knock-on effects. For example, there wasn't nearly so much public drug use back then. Even broke people could afford housing.

There's a lot of talk today about the cost of new housing. Is it affordable enough? Who is it for? I think these questions miss the point so much as to be almost dangerous and misleading. What happened is not that new housing got too expensive, but that existing housing became a lot more expensive because of a shortage. We have built so little housing since 1990 that the old houses got expensive.

Again, going back to that old house of mine, it's now assessed at $2 million. It's a hundred-year-old house. It's 112 years old. The land under it is now assessed at $1,951,000. The building is assessed at just $90,000. Again, the problem is not so much that new housing is not affordable. It's that old housing, more precisely the land under it, got really expensive because of a shortage.

You can walk down that old street. It's East 11th Avenue. What's remarkable is that it looks almost exactly the same. A couple of the houses have been rebuilt, torn down and replaced with new houses, but there are no apartments. Until recently, the relevant zoning code for what we used to call RS-1 stated right at the top that the main goal was to preserve the single-family character of the neighbourhood, and it does look mostly the same.

What can the federal government do about it? Obviously, as other witnesses have said, the key levers in my view are property taxes and zoning. Although, as Mr. Finlayson has said, there are going to be labour constraints—and that's an important project too—the levers of zoning and property taxes are in provincial jurisdiction. Given that, I think that a model like the housing accelerator fund is a good one for the feds to get some leverage.

That said, I have a couple of points on the HAF that I think would make it better. The first is that it's not nearly aggressive enough. Again, things have gotten so much worse that just fourplexes in central neighbourhoods like Vancouver and Toronto are not really going to move the needle.

I'd suggest something more. What we need in those places is small apartment buildings and not just unit minimums but density minimums. If you don't do density minimums, then municipalities are going to formally legalize a certain number of units but not provide the density when they actually get built. Something like a 2.0 floor space ratio is what we need, especially in the really expensive central cities.

Then finally, property taxes are exceptionally low, especially in British Columbia. Municipalities are begging poor. They're saying that they want more infrastructure funding. I would also propose that the future version of the housing accelerator fund ask provinces for matching contributions for infrastructure from property taxes.

All of this new wealth has been created in land equity. It's just not going to be possible going forward. Most of that's really tax sheltered. Meanwhile, we're trying to run a whole government off of income taxes, corporate taxes and all these other taxes. There's a huge amount of wealth that's been created in property, and we have very low property taxes. I think something like the HAF could double its effectiveness by asking for matching contributions.

I'll just close by bringing us back to the $207,000 house to remind us of how far things have gone and to encourage you to be a little bit bolder, given how far we've gone.

Thank you very much.

[The Chair, Liberal, Bobby Morrissey]

Thank you, Mr. Oleksiuk.

We'll now begin with Mr. Aitchison for six minutes.

[Scott Aitchison, Conservative, Parry Sound—Muskoka, ON]

Thank you, Mr. Chair.

I'll actually start with our last witness, Mr. Oleksiuk.

You mentioned the housing accelerator fund. In terms of your criticisms of it, I probably share most of them, but do you think it makes sense that the housing accelerator fund is sending money to cities that, aside from maybe not doing enough in terms of density, are also in the same step increasing the cost of their development charges, for example, at the same time?