Human Resources Committee on Oct. 8th, 2024

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

Thank you, Chair. I would also like to direct my questions to Mr. Lapointe and Mr. Trudel.

I really appreciated the introduction of the deadly health impacts of asbestos on workers when thorough investigation and regulation was not in place, and in 2024 we can definitely do better than that. I think about my community of Coquitlam, where, at the end of last year, there was a catastrophic shoring fail at the site of one of the towers that was being built, and the next day there were still rock-slinging trucks on site, even though they were not supposed to have any workers at the excavation site.

Mr. Lapointe, what federal policies can be put in place to ensure that workers are safe now and as new technologies come in the future?

[Philippe Lapointe]

I had the good luck to be at COP26 and COP27 with the Canadian delegation, where I saw different materials proposed for housing. The question we asked was, how was it tested? This is something that is always really important. How do we get from this proposition of a new material to getting it onto the work site?

For asbestos, it got in really quickly. Quebec is the only province where we used it in concrete, and we used it everywhere. Across all public services, we have this material that is just lying there where the public can be infected, and workers can be affected by it too. What we need to do is have a material thoroughly tested beforehand. We have all the resources for this, but sometimes we let materials onto the work site too quickly.

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

Thank you.

You mentioned that you were at COP, which is great.

In my riding of Port Moody—Coquitlam, they just in the last week forged ahead on some new efficiency and emissions requirements for any new builds.

I wonder if you could share how you would see federal policy being able to influence these environmental and emissions requirements for new builds and retrofits.

[Philippe Lapointe]

Across the hierarchy of who gives orders in the construction sector, obviously the provincial level is the first one. After that, it's mostly the federal, which is a large work giver. After that, you get to the municipal level.

The federal level, just as an employer or as a client of construction, could really be one of the big changes.

I'll switch to French. It'll be easier.

The federal government, as a source of work, can also establish benchmarks for everything that affects public infrastructure, such as highways or ports. Because any federal public infrastructure can become a site for experimenting and implementing new technologies, this requires that the workforce be trained so they can use them. Once the workers have done that on a federal project, they are able to do it on other projects after that.

So we could follow that example and get infrastructure of the highest environmental quality at the federal level. There is also a federal program for new materials already in place. One more thing that can be done is to include requirements in the National Building Code relating to energy-efficient construction.

That said, we still have to make sure there are workers who are able to keep up with these changes. A lot of researchers have told us at FTQ-Construction that even though they had good proposals, when they got to the site, the contractors were not able to read the plans or do the work requested because they had not been trained to do it. So there was a request, but it was not filled, because people had not been trained.

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

Thank you so much.

I want to revisit workers. I'm thinking about B.C. right now, where many workers that are working in construction are of retirement age. It's an aging workforce, just like any other.

Also in B.C., the opioid crisis is over-indexing and over-impacting people in trades. Deaths by drug poisoning are over-indexed. Some of this is just based on the pressure that is on these workers to build, build, build.

I wonder if you wouldn't mind sharing how the federal government can help save workers' lives in the construction industry.

[Philippe Lapointe]

In fact, there are two problems. The first is the precariousness that results from the difficulty of holding a job on a continuous basis. We need stability in the supply of contracts. In a majority of cases, the various orders of government prefer to advertise on an ad hoc basis, rather than planning to stagger workforce supply and demand over 12 months of the year. That means that construction peaks and then supply falls. At that point, people find themselves unemployed and are looking for another job. So there is strong competition and that is when they get injured, because they are so anxious to prove they are the most productive, so they will get called back to work on the next project when the supply of jobs falls.

So governments, which are major sources of construction contracts, should be planning the demand for labour, to make sure people are offered a minimum number of jobs so they have something to eat year-round.

The second thing is that employment insurance has to be reformed, obviously.

[The Chair, Liberal, Bobby Morrissey]

Thank you, Mr. Lapointe.

We'll go now to Mrs. Falk for five minutes, please.

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

Thank you very much, Chair. I'd like to thank the witnesses for giving their time to our committee today.

We know that to achieve housing affordability, we need to build and we need more housing supply in Canada. That's something this committee and the House have definitely acknowledged.

Mr. Lee, I'd like to start with you if possible, regarding your earlier comments about small businesses not adopting new technology due to the risk of it.

I'm just wondering how the current economic climate is impacting the willingness of businesses to take on the risk related to new innovations and technologies.

[Kevin Lee]

Certainly higher interest rates are making it harder to invest. That's been a big challenge. Actually, just construction financing has become more difficult.

In terms of innovation and willingness to adopt, we have a lot of leading-edge builders from coast to coast that are always looking to try new things and always looking to address energy efficiency, climate change, etc. When the market is tough, you tend to concentrate on other things, though. It's a little bit more difficult to be looking at those innovations and that sort of thing when you're really having to deal with cost all the time.

The tougher the market, the harder it is to adopt innovation.

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

Would you say that there was maybe a time in recent history when builders were more inclined to invest in new technologies, as opposed to today?

[Kevin Lee]

Yes. I would say again that when things are going well, when the market is a little stronger, it's a little easier.

Also, as I mentioned in my remarks, there's so much code change going on right now that there are not a lot of chances to try to innovate and find your own solutions to the challenges that you see. You're really just dealing with all of the code changes, which are happening really fast, and you're concerned about that. Most of those code changes are also driving up prices, unfortunately, so again it becomes more difficult to innovate and look at other technologies. If we can be a little bit wiser about what we do on the regulatory side and give the industry a chance to innovate according to its priorities, I think we'll be much better off.

It's the same with pushing on affordability. If we were pushing affordability through the code, we would see more innovation, because people would be not saying that they'll just do this to this degree, and it doesn't matter how much it costs. No, you can't do it unless it's cost-effective. That's a totally different game, and that's when you really start to see innovation.

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

I know there's been a lot of conversation about municipal fees, for example, even just with the code. How much of those excess fees are getting passed on to the homeowner?

[Kevin Lee]

It's 100%, and more. All of those are input costs for the home, so they have to be passed on. The reason I say “and more” is that those costs are financed. If you're paying hundreds of thousands of dollars on development fees early on in the process, you're financing that cost over years, so you have to pass the interest charges on to the client; otherwise, you're going to go out of business.

So yes, all the taxes, all the fees and all the delays unfortunately end up in the price of a home. They have to.

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

Yes, that's unfortunate.

Mr. Chair, I'm going to pass my remaining time over to MP Aitchison.

[The Chair, Liberal, Bobby Morrissey]

You have one minute and 20 seconds.

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

Thank you.

Following up on what you just said, this is not what I want to ask, but it's important to point out that those fees and charges at the local level are financed by the developer, but then they go on the cost of the mortgage for the homeowner and they get financed again. It's an important point to make.

I wanted to speak specifically, though, to financial system and policy recommendations that the Canadian Home Builders made in their report on sector transition strategy.

You mentioned a number of items. One thing wasn't mentioned in there, though: We basically need to attract roughly $3 trillion of investment in the housing space over the next few years to build the homes we need. Do you think the government's most recent changes to the capital gains tax are helpful to attract that investment or not?

[Kevin Lee]

I think that's more on the personal income tax side. It can definitely present challenges, because the more taxation there is on individuals, the harder it is to be able to afford and invest, be it in your own home or in purchasing another unit that can become an important part of the rental supply. It can definitely be a challenge.

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

Thank you very much.

[The Chair, Liberal, Bobby Morrissey]

Thank you, Mr. Aitchison.

We will now conclude with Mr. Fragiskatos for five minutes.

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

Chair, thank you very much.

To both of you here today and to Monsieur Lapointe, thank you very much for taking part in today's meeting. It's an important topic, to be sure.

Mr. Lee, I want to ask you a question that is maybe indirect to the topic at hand, but I think still relevant. With the amortization changes announced recently going to 30 years for new builds and for first-time buyers, you could have homes built using innovative technologies that would apply to buyers in both categories. What do you think of that particular change?

[Kevin Lee]

Yes, obviously we've been calling for the change to amortization rules for a long time, because we need to get more supply, and if we can enable more people to enter the market, it will create a better market. It goes to the previous question: If you are having a tough time just selling any house, you're not concerned about innovation.

If I could add something, just today more announcements were made around the insured mortgage space to allow refinancing to then create secondary suites. Enabling secondary suites, laneway suites, etc., speaks directly to what we're talking about today. We have a lot of opportunity to increase density gently through laneway housing and that sort of thing. Financing has been a big barrier to that, so enabling Canadians to find ways to finance a secondary suite, be it for their own family or rentals to others, is a huge opportunity.

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

It's great to get your perspective, considering that you represent so many homebuilders. Adding supply is so critical in the discussion about the housing challenges and the crisis we face.

To go back to the direct topic, though, I want to ask if you are aware of any examples internationally of countries that have really focused in on innovative technologies in housing?

I know that Japan is frequently mentioned. I think some of the Scandinavian countries are mentioned. Can you add anything on that, Mr. Lee?

[Kevin Lee]

Yes. I'm very involved with the International Housing Association. I'm a past chair.

In other countries, I think some of the world leaders have done it because of crises of their own. Japan is definitely a world leader in terms of automation and factory-built housing. Why is that? The reason is that they have an incredibly aging population and they've lost half of their carpenters over the last decade. They've really moved to more automation, and they're very much leaders and a country that we can look to. The rationale was the same one that we're facing, but much more extreme.

Germany is another world leader in terms of robotics, automation and technology, and there's a little bit in Scandinavia. Largely, everybody's looking at the same challenges around the world. I wouldn't say that we're really far behind the eight ball; we're all facing similar challenges.

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

I ask that as a way of understanding the wider global context and what we can learn from the experiences of other countries.

Ms. Lavoie, can I ask you about the turn that Habitat has made towards 3-D printing? You and I were talking before the meeting about some of the work that Habitat has taken up. Can you go into that? How did that all come about?

I think that when people think about organizations like Habitat for Humanity, they have great respect for organizations that focus on compassion and that focus on helping to provide a roof over the heads of people in need, of members of our communities, and certainly in London, where I'm from, Habitat has done incredible work in that regard.

You're now looking at things like 3-D printing. That's really impressive. How did that all come into being?

[Alana Lavoie]

Well, I believe that a witness will be speaking later specifically about a project in Leamington, Ontario, that was done with Habitat. Basically, it was a question of flexible financing through CMHC's innovation fund, which functions differently from the way our core funding agreement does. It was about collaboration with an academic institution and a technology company that came together and the opportunity to do something a little differently in terms of providing a shelter space for a third party.

There was time enough, money enough and financing enough to allow for that experimentation. There were some false starts, there were some restarts and there was some learning; fortunately, the learning is actually going to continue as a result of the partnership, which, again, you'll hear more about later.

From our perspective, for any of these kinds of projects, whether it's 3-D printing, modular construction or incorporating more panelized housing or mass timber, for us it's going to be about finding the right partners and having the financial opportunity and support to even partner with an organization that is applying this technology.