Human Resources Committee on Sept. 17th, 2024

[Justin Marchand]

Okay. Thank you.

In terms of public lands, as an indigenous organization, we believe in planning seven generations out. The public lands that have been offered have been offered on a leasehold basis, which is quite ironic, offering that to a number of non-profits but particularly to indigenous organizations. Ninety-nine years is not seven generations.

It's also, as I said, a very ironic thing to do from a very practical perspective and from a financing perspective. The last thing we want to do is set up future generations for failure. We also want to set up future generations for opportunity.

What I mean by that is this. Let's say if they were on fee simple lands, using that British legal terminology, after about 15 to 20 years of paying down a mortgage, there would be substantial equity in that development and non-profits would be able to access that equity. Either with or without government funds, or with very minimal government funds, we would be able to self-service new units after just one generation. If the federal government is beholden to a leasehold situation, we will not be able to access that equity, and that equity will sit dead, not allowing us to add future units.

I would suggest that the federal government look at a transfer of land, in particular to indigenous non-profit groups. That will set us up for the best opportunity to improve self-reliance over time and allow us to use Canada's financial institutions as a tool to help us do that in a way that is not always using government funds, frankly.

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

Thank you.

I have about a minute and a half left.

Mr Jarvis, you know that the federal government some time ago now went forward with lifting GST from the construction costs for purpose-built rentals. Some have suggested—not outright, but omission is a suggestion of a particular type—that they would reintroduce the GST. What would be the effect of that on building?

[Beau Jarvis]

First of all, GST should be removed on all housing. We shouldn't be charging that tax there. As I said earlier, you're charging GST on other levels of governments' taxes.

The removal of GST on purpose-built rental was an extremely positive step in the right direction. Unfortunately, you missed including the exemption of GST on existing projects that have been struggling through the pandemic and the financial crisis to get delivered, and most of the capital is trapped in those projects. We advocated for this in a significant way, and it was missed, so this benefit really isn't coming to fruition until three to four years from now, when projects are complete.

Again, it is absolutely a step in the right direction, and if it was reinstituted, it would be absolutely detrimental to the development, construction and delivery of new purpose-built rental housing.

[The Chair, Liberal, Bobby Morrissey]

Thank you, Mr. Fragiskatos.

Now we have Madame Chabot for six minutes.

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

Thank you, Mr. Chair.

Thank you to the witnesses for being here. As we know, their participation in our committee ended abruptly last June. We now have a chance to ask them questions about the thorny issue of housing.

Mr. Marchand, in your testimony about the communities you represent, you referred to two very important reports. One of them, “Indigenous Housing: The Direction Home”, was produced by our own committee. The report aimed to establish a national urban, rural and northern indigenous housing strategy, with projects led by and for indigenous people.

In fact, the Canada Mortgage and Housing Corporation, or CMHC, was to report to us on the progress of this strategy for indigenous communities.

To your knowledge, does the strategy that was to be implemented meet the current needs of your communities?

[Justin Marchand]

No, that strategy is not meeting the needs of our communities. As I mentioned earlier, the previous housing minister's national housing council identified a $63-billion need, and $300 million of that has been committed—actually $285.1 million, because CMHC took $18.5 million off the top of that and we're not sure for what—so it's less than 0.5% of the identified need.

I'll speak to numbers in Ontario. Fewer than 3% of the population are indigenous people, yet in southern Ontario 20% to 30% of those experiencing homelessness are indigenous. In northern Ontario, that climbs to 90% to plus 99% of people experiencing homelessness, yet the pro rata share of existing federal housing investments is almost negligible compared to that total investment.

It behooves me to ask why. In the very first part of that national housing strategy, Prime Minister Trudeau said that there is no relationship more important than our relationship with indigenous people, yet it took seven years after the beginning of that strategy to even acknowledge one of the highest-need demographics out there, that being the 86% of indigenous people who live off reserve. That direction has been extremely slow and extremely painful, while we continue to see people on the street—and overwhelmingly those people are indigenous.

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

Thank you, Mr. Marchand.

I'm going to use the six minutes I have to ask you another question.

Like you, I find the situation deplorable. Our committee felt that our “Indigenous Housing: The Direction Home” was a flagship report that strongly supported the reality of urban, rural and northern indigenous people. Please know that you can count on us, or at least me, to get a follow-up.

In your testimony, you also said that, under the rapid housing initiative, or RHI, of the 10,000 units in the first two rounds, only 12 had been allocated to indigenous providers.

What's the explanation for that?

[Justin Marchand]

That's a good question, but probably one that you'll have to ask CMHC. We explained to them on multiple occasions why that rapid housing initiative would be exclusionary to urban indigenous housing providers, and it very much was. I just want to be clear that there were 12 units that were provided to urban indigenous housing providers. There were other units that were funded on reserve, but as I mentioned, 86% of indigenous people live in urban and rural areas. They are looking for employment, education, safe drinking water and opportunities for their children, but overwhelmingly, that population is disproportionately represented in need in a number of different metrics besides homelessness.

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

Many witnesses who have come to share their recommendations have told us that, in order to eliminate both homelessness and the housing crisis, we need to invest enough to increase the number of social and community housing units by 30%.

Do you agree with that, Mr. Marchand?

[Justin Marchand]

Actually, in 2023, last spring—and by the way, we absolutely believe that this is going to have to be a multi-stakeholder approach, including private investment, as the federal government is not going to be able to do this on its own—Scotiabank issued a report that indicated Canada is at the bottom of G7 countries in terms of a pro rata share of social housing. Canada will need to double the amount of social housing to over 400,000 units just to be average.

I find it very disturbing that other countries, including the United States, invest more dollars in the populations that are being left behind than Canada.

[The Chair, Liberal, Bobby Morrissey]

Thank you, Mr. Marchand.

[Justin Marchand]

For Scotiabank to set a goal or make a suggestion for Canada to be “just average” does not seem particularly inspirational, but here we are, at the bottom of the G7 in yet another measurement.

[The Chair, Liberal, Bobby Morrissey]

Thank you, Madame Chabot.

Ms. Zarrillo, you have six minutes, please.

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

Thank you, Mr. Chair.

I thank Mr. Marchand for his most important testimony today. My questions will also all be be directed to Mr. Marchand because the testimony that he is bringing forth today is the most important testimony I've heard in this study so far.

I'll make a note before I ask Mr. Marchand some questions: Shame on the Liberal government. Shame on the Liberals for coming to this committee and trying to take a victory lap on their investments when we can see that they're holding back money that's already been allocated for indigenous housing. They're holding it back. We heard testimony today that less than 10%, around 5% of that money, is going out.

My own colleague Jenny Kwan was working on this file. I mean, this “for indigenous, by indigenous” money needs to go out the door. As I sit in committee today, I say to the Liberals, as they sit there, smug—

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

No one is smug.

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

—making comments about how awesome they are, that the money needs to go out the door.

I have the floor. Thank you so much.

Now they're offended. They feel insulted.

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

I'm not offended. Who's smug?

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

Guess what. Housing was mentioned 299 times in the murdered and missing indigenous women and girls report, and the federal government is trying to come to this committee and take a victory lap on the little amount—the dribbles of money—that has come out.

I apologize, Mr. Marchand. I really appreciate your testimony today. In your opening remarks you discussed the hollowing out of federal investments and the lack of proactive commitment to an urban indigenous housing policy. This may be a difficult question, but I'll ask you this: How has racism against indigenous people affected the federal investments by the Liberal government and the Conservative government before them?

[Justin Marchand]

I think perhaps the way to answer that question is by speaking to the data and to the need.

As I mentioned, if you look at the people experiencing homelessness in southern Ontario, 20% to 22%—at the low end—of the people experiencing homelessness are indigenous. If we're quoting an $80-billion or a $90-billion housing strategy and we've committed $300 million to that strategy, that's less than 0.2% of resources being allocated, at the low end, to a population of people that represents 20% to 22% of the homelessness.

If you look in centres like Winnipeg, Vancouver, northern Ontario and various other parts, it's easy to get to two-thirds or to 90% of the people experiencing homelessness being indigenous. Even among those who are currently housed, the need among indigenous people is twice that of the mainstream.

According to the government's own stats, about 13% to 14% of people experiencing housing needs are.... I'm sorry; that's the population of people experiencing housing need in the mainstream. Indigenous people have twice the incidence of need, yet here we are with a 0.2% allocation.

The resources unfortunately are disproportionately allocated to need, or they're not allocated to need at all. I don't understand why that's the case. To me, if there was any group or population of people that was in need, you would allocate your resources there, particularly in an era of truth and reconciliation and the missing and murdered indigenous women and girls report that you mentioned.

We know housing is both a preventative measure and a solution to ending violence, yet we aren't allocating existing resources, never mind what's actually needed above and beyond that. For some odd reason, we don't allocate resources according to need. It befuddles me.

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

Thank you so much, Mr. Marchand.

I did want to reflect on your testimony. You talked about the murdered and missing indigenous women and girls inquiry where housing was mentioned 299 times and 10 of those calls for justice referred to housing.

Can you tell me how many of those 10 references to housing in the calls for justice have been completed by either a Liberal or even a Conservative government?

[Justin Marchand]

It was this federal government that put the national housing strategy in place and that supported the murdered and missing indigenous women and girls report.

I am not aware of any specific housing allocation to specifically address housing needs for indigenous women and girls in a meaningful way. Here again it's an opportunity to reverse that very real reality for our urban, rural and northern communities. We know that if people don't have safe, affordable housing, they will be put or put themselves in very tenuous situations or they will continue to be in tenuous situations.

We know that it is much more cost-effective to help people from a preventative viewpoint, rather than a reactive viewpoint. If we can provide—

[The Chair, Liberal, Bobby Morrissey]

Mr. Marchand, your time is up. Thank you.

Thank you, Ms. Zarrillo.

Mrs. Gray, you have five minutes.

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

Thank you, Mr. Chair.

Thank you to all the witnesses for being here today. My first questions are for Mr. Jarvis.

In your opening statement, you mentioned that even though Canada is in the midst of a housing crisis, large home developers are building much more housing now outside of Canada and that is driving home builders out of Canada.

Is this due to higher construction costs, which include the lower Canadian dollar and high lumber costs due to Canada not negotiating a softwood lumber agreement and increasing carbon taxes on transportation; higher government taxation; more government bureaucracy and red tape; or all of the above?

[Beau Jarvis]

I'd say it's a little bit more complicated than that. It's kind of all of the above, but in general I think that the narrative in this country.... First of all, I think that we need to understand the fact that 95% of all housing, including much of the non-market portfolio of housing in our country, is delivered by the private sector, including private capital, and there's this general narrative that this is wrong or that developers are evil.

It demonstrates to me that there's a complete lack of understanding by our government, our policy-makers and our politicians as to how housing is delivered in Canada. We can have a separate conversation about how appropriate that is or not, but that's how it is today and we're in the midst of a housing crisis.

You ask why large Canadian home builders, in the midst of a housing crisis in our country, are building more housing in other countries or in the United States than they are in Canada. The answer is simple. They don't feel very invited here. The risk-reward conversation has completely flipped. We are not attracting capital. We are not an attractive place to do business. Building housing is one of the riskiest businesses on the planet, and the risk-reward has completely flipped.

I point you to the national housing council, a pretty important body. On their website, it says, “Shaping the future of housing in Canada through inclusion and participation”.

Among the members of the council, there's not one single private sector developer, notwithstanding that 95% of housing is built by the private sector. It says, “The strength of the Council comes from its members' diversity, experience, and expertise”, and this is the same council that put out a report that is titled “The Financialization of Purpose-Built Rental Housing”.

One of their key recommendations was that transactions involving the purchase or refinancing of existing purpose-built rental between private sector entities should not be eligible for federal funding, lending or support, which is entirely contradictory to what CMHC is doing right now with the RCFI and ACLP program, which has stimulated the most amount of purpose-built rental supply, including non-market, in the last several decades.

This demonstrates to me that nobody knows what's going on here.

Thank you. I'm sorry—

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

Thank you very much. I really appreciate that. I want to get through a few more questions here.

To you as well, are the Liberal capital gains tax increases going to make investment in building houses go down?