Human Resources Committee on Sept. 17th, 2024

[The Chair (Mr. Robert Morrissey (Egmont, Lib.)), Liberal, Bobby Morrissey]

Committee members, I call this meeting to order.

Welcome to meeting number 122 of the House of Commons Standing Committee on Human Resources, Skills and Social Development and the Status of Persons with Disabilities.

I will begin by reminding members to avoid audio feedback for the benefit and protection of our interpreters. Please follow the instructions you were given a while back. If you're not speaking, keep your mic shut off and located away from the boom. Also, avoid tapping the boom while you're speaking because it gives an echo or a noise to the interpreters. If you could follow that, please, it would be great.

Today's meeting is taking place in a hybrid format according to the rules adopted by the committee. This means that members and witnesses are appearing virtually and in the room.

I would advise those in the room to please wait until I recognize you by name. To do that, please raise your hand, and I will recognize you before giving you the floor. To those appearing virtually, please use the “raise hand” icon on your screen and wait until I recognize you.

As well, you have the option of choosing the official language of your choice. Use the interpretation services available from the headset in the room. If you're online, simply click on the globe icon on the bottom of your screen and choose the official language of your choice. If there is a breakdown or disruption in interpretation, please get my attention, and we will suspend while it is being corrected.

Those are the procedures of the committee today.

As you are aware, committee members, when the committee concluded its last meeting, it was in the process of votes in the House. I must remind members that members in the committee have the right to choose to participate in person in the chamber to vote. If they choose to do so, I will not resume the meeting until 10 minutes after the vote is completed in the House.

With that, we did not get to question the witnesses who were present. They all have been reinvited and although four did confirm, as of now, the clerk has advised me we only have two.

We have Abigail Bond, executive director, City of Toronto housing secretariat. We have Beau Jarvis, president and chief executive officer of Wesgroup Properties. We're trying to connect with Mr. Marchand from the Ontario Aboriginal Housing Services. Those are the ones who indicated they would come back.

There are no opening statements because they were able to do that at the last meeting. We'll go directly to the questioning round in this first hour of the committee.

Mr. Aitchison, I have you listed as the first questioner today. You have the floor.

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

Thank you, Mr. Chair.

Thank you to the witnesses for coming back. We really appreciate that. I hope you enjoyed your summer as much as I did.

I want to start with Ms. Bond.

Ms. Bond, in your testimony, you spoke at length about the lack of investment in housing, particularly rental housing, and that the privately and publicly owned rental homes in the city, in Toronto, were mostly built 35 years ago. I'm wondering if we could get to that and what it costs to build in the city of Toronto. We know that housing starts have dropped about 10% this year over last year in the city of Toronto, while development charges have gone up about 42%.

I'm wondering if you could speak to the committee about the cost of local fees and charges. When they go up like that, what does that mean for the construction of new units?

[Abigail Bond, Executive Director, Housing Secretariat, City of Toronto]

Thank you for the question.

There are a number of things that are affecting the cost of building in the city of Toronto, including the increase in labour costs, inflation and land costs as well. You are right to identify that there are development charges.

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

Mr. Chair, I have a point of order. The interpreter says that the equipment used is not adequate for interpretation. There is no French interpretation at the moment.

[The Chair, Liberal, Bobby Morrissey]

Excuse me. We'll suspend while we get this corrected.

[The Chair, Liberal, Bobby Morrissey]

Mr. Marchand, you may want to get back to your seat because we're going directly to questions, and we will resume with Mr. Aitchison.

Mr. Aitchison, we'll start with a full six minutes for your line of questioning to the two witnesses who are now approved to participate.

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

Thank you, Mr. Chair. I'm going to go to Mr. Jarvis.

Mr. Jarvis, thank you for coming back as well. We appreciate it.

Mr. Marchand, it's good to see you again as well.

I want to start with you, Mr. Jarvis, though. It's kind of in the same line of the questioning I was asking Ms. Bond of the City of Toronto about development charges and the costs and fees of government. In terms of the cost of getting homes built and the speed with which we build them, can you speak to the cost of government at all levels and what impact that has on the construction of housing units?

[Beau Jarvis, President and Chief Executive Officer, Wesgroup Properties]

Yes, I can.

Thanks for having me back today, and thanks for the question.

It's having an extremely detrimental impact right now. There are many reports—including from CMHC and the Urban Development Institute, to name a couple—that have concluded that various forms of fees, levies and taxation from all levels of government are up to 30% of the cost of new housing. In some cases, this is now three times what the private sector is making in taking the risk and trying to build new housing. These new costs are absolutely stifling our industry right now. They are curbing new starts, which are notably down.

We are calling for an analysis of how government is taxing new housing. We're also calling for in-stream protection from new fees and charges. We don't understand. There's no business in the world where it would be acceptable to have fees and charges rising after you've made an investment decision based on all of the information when you make that decision, including what the taxation regime is, what the development fees are and community amenity contributions. It's something that has become increasingly alarming.

We're looking at Metro Vancouver, which is our regional government here. They've increased their fees 1,900%. You probably saw the current federal housing minister Sean Fraser come out on Twitter against that. This was unprecedented and quite welcome in our industry. These fees are absolutely, totally killing development right now.

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

Mr. Jarvis, how much do those fees in metro Vancouver add to the cost of every single unit you build?

[Beau Jarvis]

They will be rising to $23,000 a unit on average. That's just one level of government.

What we do is borrow money to pay those fees at today's interest rate, carry that to the end of the project and end up trying to pass that cost on to the purchaser. Then the federal government comes and adds GST or HST to that cost, so the federal government is taxing other levels of government's taxes. This whole set-up is just entirely egregious.

We need to have an honest conversation about this. I think we've been talking about this now for almost a decade. It's great that it finally has the lens on it that it does, but what are we going to do about it?

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

I know this might be difficult to quantify because not every application is the same.

When you start the process, you purchase a piece of land, then have to go through the municipal zoning and approvals process, which can often take five or six years. Can you quantify for the committee how much that adds to the cost of every single unit?

[Beau Jarvis]

Is that the processing time?

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

Yes.

[Beau Jarvis]

It adds a ton of cost to the unit.

We buy land, and we take the risk on that. We borrow money to pay for that land and carry that land through that process. In this time, along that continuum, we pay various fees to the cities. We pay for consultants to develop drawings for us, including architects, structural engineers and landscape architects. All along that timeline, we are incurring carrying costs. The cost of time today is greater than it ever has been. Obviously, we're in a high interest rate environment. We're seeing those interest rates come down, but that carrying time is still absolutely contributing to the cost of new housing.

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

Is it fair to say, then, that governments make more money on housing than anybody else in the mix?

[Beau Jarvis]

I would say it's absolutely fair to say that. That is an entirely accurate statement right now.

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

Thank you very much.

Mr. Marchand, I don't have a lot of time—just about a minute—but I'm wondering if you could speak about that. I know the Ontario Aboriginal Housing Services has over 3,000 units.

How many of those units are you building now, under construction, and what's the greatest impediment to getting those units built?

[Justin Marchand, Chief Executive Officer, Ontario Aboriginal Housing Services]

Thank you, MP Aitchison.

Yes, we have about 1,700 units under various stages of construction.

In terms of timelines, it takes anywhere from three to eight years for the planning portion of development, and only about 12 to 18 months for construction. Probably 80% of the time is spent on planning and approvals. As we know, time is money—actual money—and that leads to higher rents or prices at the end of the day.

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

Okay. I think I'm pretty much out of time.

I'll come back around, hopefully. Thanks very much.

[The Chair, Liberal, Bobby Morrissey]

Thank you, Mr. Aitchison.

Next I have Mr. Fragiskatos for six minutes.

[Peter Fragiskatos, Liberal, London North Centre, ON]

Thank you very much, Chair.

It's good to be back in Ottawa with colleagues. I hope everybody had a good summer.

I'm going to begin with Mr. Marchand.

A major investment was recently announced, sir, in co-op housing, the largest investment the country has seen in the past 30 years. I wonder if you could talk about the importance of that, but more to the point, how you, with your background and with your expertise, would want to see that invested.

[Justin Marchand]

Unfortunately, truthfully, I'm not overly familiar with co-op housing, but I can comment on the urban, rural and northern indigenous housing plan that the previous housing minister put forward. His national housing council called on the federal government to invest over $63 billion in urban, rural and northern indigenous housing. About $300 million, or less than 0.5% of the need identified by the minister's housing council, was put forth two budgets ago, and I believe we're waiting for the rest of those funds to roll out.

There was also $4 billion. That was part of the $4-billion announcement two federal budgets ago. About 7% of that funding has been committed.

[Peter Fragiskatos, Liberal, London North Centre, ON]

Thank you very much.

Mr. Jarvis, I know that strategy is one that has the potential to be quite transformational, and a lot of work has been done on it, including from stakeholders such as yourself.

Can I ask you about public lands? The federal government recently announced a list of 56 lands that are owned by the federal government that have real potential for housing. Affordable housing in particular would be the focus. What do you think about that? How do you think public lands should be used?

Some have suggested they should be sold outright. The view of the government is, wherever possible, that those lands be leased in order to ensure affordable rates of rent. I'm wondering what you think.

[Beau Jarvis]

I'm just confirming this was a question for me.

[Peter Fragiskatos, Liberal, London North Centre, ON]

I'm sorry. It is for Mr. Marchand.