Human Resources Committee on Sept. 17th, 2024

[Beau Jarvis]

Absolutely, yes. We are already seeing land transactions slow down as a result of the increased capital gains tax.

I use the example of the little strip mall that everybody is familiar with on the corner where a transit station was landed nearby, and it's now a high-density housing site. That family's owned that strip mall for 30 years. They were already struggling with the capital gains equation when selling that land for redevelopment. Now it's a non-starter. We're seeing it happen already. Concerning the capital gains tax, there was no consideration given to the impact of housing or the cost of land for housing in that whole policy framework.

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

How many housing units do you think Canada will be losing out on as a result?

[Beau Jarvis]

It's tough to say. That's a very difficult question to answer because there are so many things that are currently going on that are slowing the delivery of housing.

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

Thank you very much.

I'd like to ask a few questions here of Mr. Marchand.

I want to ask you about funding that may come through the federal government's housing agency, the CMHC. I've heard that in order to access funding through the federal government's housing agency, organizations have to build far in excess of the standard building code, and this can add thousands if not tens of thousands, to any project.

Have you experienced this, and if so, do you have any sense as to how much cost this would add per square foot, per unit or per project?

[Justin Marchand]

That's absolutely true. Not having a number in front of me, I would estimate that it would add in the neighbourhood of, at the low end, probably 7% to 8% of the total cost and, on the upper end, if you were going to a net-zero standard, it could be up to 15% plus per unit.

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

Wow. Thank you very much for that.

[The Chair, Liberal, Bobby Morrissey]

Thank you, Mr. Marchand.

Mr. Collins, you have the floor for five minutes.

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

Thanks, Mr. Chair.

Mr. Marchand, welcome back to the committee.

I was in the riding in March for a funding announcement for the Biindigen Well-Being Centre. That's in my riding, and I think your organization may be attached to that. I think that the new units will be part of what you manage. I think you're at 2,500 or 2,600 units that you manage across the province in terms of social housing. Is that correct?

[Justin Marchand]

It's 3,100 units in total.

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

There you go; I stand corrected.

I was going to ask Ms. Bond this question, and I was intending to ask you as well.

In terms of supportive housing, my community tomorrow will talk about what they're doing with encampments locally. Earlier you referenced housing with supports. I think that is the path forward for many of the challenges that we're facing with our housing crisis, including encampments and those who are living rough. It's not a strictly transactional relationship anymore. When I lived in the social housing units that are directly behind your Biindigen development, I would walk with my mother to the local office for our social housing provider, and she'd provide the cheque. That was our relationship, unless we had a small problem in our unit.

Those times have changed, and landlords are almost social workers for many of their tenants who have life challenges. Your organization, I know, provides those tenant supports to tenants who need them. I raised Biindigen because it is a very unique facility in that it provides health supports. It will provide housing on site for people who are on our social housing wait-list. I think it highlights the intersection between supports that tenants need, not just in my riding of Hamilton East—Stoney Creek but across the country.

I was hoping you could share with us how programs such as the one we've invested in and the project that we've invested in need to support those two areas, knowing that housing providers, especially non-profit affordable housing providers, sometimes struggle with providing those special supports their tenants need.

[Justin Marchand]

Sure. Thank you for that question.

Speaking for those who have the most acute needs, in Ontario there's anywhere from 100,000 to 200,000 people every night who experience homelessness. I'm going to speak to it more from a financial perspective, which may seem odd, than a person perspective. I would think that people could understand the need to have a house. It's the foundation, pun intended, if you will, of Maslow's hierarchy of needs: food, clothing and shelter. Not everyone has that.

From a financial perspective, it is far more costly to deal with homelessness in a reactive manner by using our frontline heroes like paramedics, police officers and firefighters. They're not equipped to deal with homelessness. Our doctors and nurses have people visiting emergency rooms 200-plus times a year. That's an expensive and inappropriate use of services.

The solution to homelessness is housing. We need to build a lot more housing of all kinds. It's not just for those who are homeless. There's a huge number of people who are low to middle income who cannot afford, for many of the reasons mentioned today, housing of any type. Market rentals are out of reach for low- and middle-income people. The cost of inflation, for the reasons that my colleague Mr. Jarvis noted, is very real and impacts the price of housing for the people who want to purchase housing in the market.

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

Many of our programs support not just housing but wraparound services for those people who are either living rough or otherwise. Reaching Home is a great example. We provide that on a portfolio approach. Our encampment fund we've announced will be cost shared by the provinces and territories.

As someone who is helping people sometimes with addictions and mental health issues, can you talk about why our housing investments, and I mentioned a couple of them, more so than ever need to include some of those other services and not just the traditional bricks and mortar that governments have provided in the past?

[Justin Marchand]

Yes, absolutely.

Homelessness is sometimes, but not always, a symptom of other issues or other causes. I say that while also noting that vacancy rates are at an all-time low. You may not have mental health and addiction issues, but you simply cannot find a place to rent or buy.

Those additional supports that you mentioned are absolutely needed. People do fall on hard times sometimes. Sometimes we need to make sure they get the appropriate support to help lift themselves back up again. Often it does not necessarily mean needing a police officer, a paramedic or a doctor at an emergency room to help them with certain needs they might have at a particular point in time in their lives.

We need more than just the bricks and mortar, absolutely.

[The Chair, Liberal, Bobby Morrissey]

Thank you, Mr. Collins.

Ms. Chabot, over to you for two and a half minutes.

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

Thank you, Mr. Chair.

Mr. Marchand, the definition of “affordable housing” is often raised. There is a major distinction to be made between affordable housing and social housing. The term “affordable” has all kinds of definitions, whereas we know that housing is a right.

In your opinion, what definition of “affordable housing” should appear in the federal housing programs?

[Justin Marchand]

That's an interesting question. All housing is affordable to somebody. Otherwise, it wouldn't be sold and it wouldn't be purchased.

I'm going to come back and speak to those people and families with the highest need, and I'm going to refer back to that Scotiabank report. By the way, it hasn't just been Scotiabank. When you have executives from our biggest banks saying to Canada that you need to take care of everyone and you need to double the amount of social housing, or deep core housing, just to get to the G7 average, that means going from 220,000 units of deep core housing to 440,000 units of deep core housing, which will be built and can be financed, by the way, by our private sector partners. It will all be built by our private sector partners. There's an opportunity for it to be financed by our private sector, supported by government and managed by non-profits like ourselves.

We do need that team Canada approach, but we need to double the amount of deep core housing and build another 220,000 units just to get to the average. We need more housing and it needs to be focused based on the needs of the people who are without.

[The Chair, Liberal, Bobby Morrissey]

You have 30 seconds left, Ms. Chabot.

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

Most people say that affordability should be defined not by the median income of a community, but by personal income. Do you agree with that, Mr. Marchand?

[Justin Marchand]

Yes, that has very much been the 60-year definition of deep core housing in Canada, and it's one that's being used by our big banks. This is a cross-sector, cross-political acknowledgement that there is a segment of our population.... It is market economics 101 that not everyone is served by the market.

As Mr. Jarvis indicated, absolutely, the majority of our housing in Canada is provided by the market, and we should absolutely not tax that. We should be out of the way. If we want more of something, we shouldn't add more taxes to it. The market will continue to provide the majority of housing to Canadians, but the market, by definition, does not serve everyone, and [Inaudible—Editor] by our big banks as well.

[The Chair, Liberal, Bobby Morrissey]

Thank you, Mr. Marchand and Madame Chabot.

Ms. Zarrillo, you have two and a half minutes, please.

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

Thank you, Mr. Chair.

My questions are going to be for Mr. Marchand.

Mr. Marchand, almost 10 years ago, Shannon Daub, who co-authored the report “Red Women Rising”, came to see the indigenous relations committee at Metro Vancouver. I remember her saying in her presentation that no woman should be homeless on her own land. The report says, “Nothing changes because our lives are not valued and because people think violence against us is 'normal' and 'how it is'.”

You said in your initial statement that, “Federally, there is no long-term plan to address the end of operating agreements” and that, as a result, “we are witnessing the expected displacement of residents” from their once-stable subsidized housing. I added that piece about “stable” and “subsidized,” because that's what the operating agreements held for. You also mentioned “an increase in homelessness and growing encampments.”

We all knew the operating agreements were coming up for expiration. We all know how long they are and how soon they're coming up for expiration. How did the federal government's walking away from those operating agreements impact indigenous women, and how can the government avoid repeating this in the future?

[Justin Marchand]

Those programs that you referred to were built by the private sector, financed by the private sector, underwritten by CMHC as a mortgage insurer—because that's what they are and frankly in my opinion should be—and managed by the non-profit sector. Those 30-, 35-, 40-year agreements have come to an end and are coming to an end, and it will create more homelessness.

In Ontario, over 35% of urban indigenous deep core housing units have been lost. That means over 2,100 people will end up showing up on the street. The other 65% of those units are at the tail end of their operating agreements with no firm plan in place other than potential year-to-year rent supplements, which is actually not what's needed. It's a band-aid solution in the middle of a housing crisis, and it's decreasing the available supply of the housing that's needed for those most in need.

[The Chair, Liberal, Bobby Morrissey]

Thank you, Mr. Marchand.

I will go to the official opposition for five minutes, and then we will conclude.

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

Thank you, Mr. Chair.

Mr. Marchand, I'll go back to you. I've also heard that, even though a project meets all requirements, has a building permit and maybe even an occupancy permit, the federal government's housing agency then requires an organization to hire a quantity surveyor and/or an energy consultant to test door seals, for example, on already met building code doors. These can cost thousands more, often in smaller and rural communities as well, who don't have consultants readily available in their communities. This will bring in extra costs that are added on for them.

Have you experienced something similar? If so, how much more would this add per project in your estimation?

[Justin Marchand]

Just that one example that you mentioned we've seen add up to six months on top of an already three- to eight-year schedule. Depending on when that six months happens, it might mean that we miss a construction season, which is a full year. In terms of cost, I'm going to say on a typical 40-unit development it might be $100,000 to $250,000, which is a third of a unit. When you start multiplying that over the number of units that we're trying to build, it does mean less supply being built.