Human Resources Committee on Dec. 10th, 2024

[The Chair, Liberal, Bobby Morrissey]

We'll come back to you, and you can request that, Ms. Zarrillo.

Mr. Aitchison, go ahead for five minutes.

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

Thank you.

I'd like to go back to the cost of government and the cost of building homes. You agreed that anything we can do to reduce the cost of building homes is a good idea. We know that the cost of government on every new home is about 30%, on average, across the country. If you agree that we need to reduce the cost of building homes, would you agree with the Conservative plan to eliminate the federal sales tax on all homes under $1 million?

[Coleen Volk]

I haven't studied the proposal in detail, so I can't comment on whether that's a better idea than some other ideas that would be at play. However, it certainly fits with what I said earlier, that anything that reduces the cost of homes is probably a good thing. I don't have the responsibility to balance the federal books, mind you, but in isolation it's—

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

Just so you know, the CEO of the Canadian Home Builders' Association, Kevin Lee, said that the Conservative plan “will help improve affordability and enable more supply.” I'd say that's self-serving, as it's the Canadian Home Builders' Association, but Mike Moffatt, who is a housing economist often referred to by the current government, said, “I admire the boldness [of such a move]. This will get more housing built.” That's not too biased, probably. Tim Richter, who heads up the Canadian Alliance to End Homelessness, called this tax cut “smart”.

You may not have done a thorough analysis, but surely you must agree that reducing the cost of government this way is an important step toward reducing the cost to build homes.

[Coleen Volk]

I believe that any step to reduce the cost of homebuilding is an important step; I'm just referencing that I'm not the one who has to decide which step, which piece is better in terms of the overall fiscal framework of the federal government. However, it certainly would inspire more homebuilding if we could reduce the cost of homebuilding.

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

Okay. Let's go back to something you should have a little more detail on, which is the programs you run. Your organization made some minor changes to the MLI select program that effectively penalize builders for paying out their CMHC loan on multi-unit rentals. It drastically reduces liquidity in the marketplace. Why would you increase the penalty on these loans by almost 300%, to pay them out?

[Coleen Volk]

I apologize, but I'm not aware of the change that you're referring to. I'm very happy to look into it and get back to you, but I'm not familiar with it.

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

It looks like Ms. Leblanc may know. She's the senior vice-president of policy.

[Nadine Leblanc]

I am aware that we made two changes to MLI select last year. One is around the pricing, which we review on an annual basis, overseen by our board—so that's definitely one. You're talking about prepayment penalties, which would be the financial institutions' responsibility, because we deal directly with the banks when it comes to that. I am not aware of any prepayment changes or requirements that we made on this product. We also made some changes to the ranking and scoring of affordability versus energy efficiency.

I will have to get back.... What you're talking about is not something that I am aware of. Only two changes were made to MLI select.

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

I would appreciate your getting back to me on that one because, if we are making it more difficult for builders to pay out CMHC-insured loans on multi-unit buildings, from which they can then reinvest, that's very counterproductive. It makes no sense at all. If that's what's going on, I'd like to hope that you can have that changed, so please do report that back.

I'll go back to my colleague Mrs. Gray's line of questioning. I'm wondering whether you can table for this committee the total number of employees at the CMHC for the last three fiscal years, and also the total amount paid in bonuses or whatever term you use to describe it—incentives or honoraria, whatever you call it—for the last three fiscal years as well, please.

[Coleen Volk]

I believe that is covered in our financial reporting, so yes, to the extent that it's public information, I'm happy to table it here. I mean that it can be public. Provided I'm not breaking any Privacy Act restrictions, we can table it with you.

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

I have to think that a total number shouldn't be a problem.

[Coleen Volk]

I agree.

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

Okay. That's great. Thank you very much.

I'd like you to take a look at cutting the GST, the federal sales tax, on the purchase of a new home. I think that, if you do some analysis, you'd come to the conclusion that it's a really good idea and you could report that positively back to this committee. Thank you.

[The Chair, Liberal, Bobby Morrissey]

Thank you, Mr. Aitchison.

We'll now move to Mr. Long for five minutes.

[Wayne Long, Liberal, Saint John—Rothesay, NB]

Thank you, Chair.

Good afternoon to my colleagues.

Thank you so much for coming in.

I have a few comments before I ask a question.

I was encouraged to hear you say that it will take three levels of government to fix the housing crisis we are in. I took note of the members opposite talking about how housing builds in Toronto and other provinces are down. Let's not forget that Doug Ford is the Conservative Premier of Ontario. We have Conservative premiers across the country—including one who just lost his election in New Brunswick, Blaine Higgs—who have fought every initiative we took forward. Although every federal program can be improved—whether it's the co-investment fund, the rapid housing initiative or the housing accelerator fund—I think they are transformational. I think they're helping. I note that the Conservative Party voted against each and every one of these programs. I believe that, as a federal government, we are standing up, leading and doing a lot of things that are necessary to help build houses right across this country.

Going back to my wonderful riding of Saint John—Rothesay, I was very happy to announce $9 million for the City of Saint John recently, through the housing accelerator fund. The city set a target of 1,100 net new residential units over the next three years. According to the progress report—and the mayor and council I talked to—they're at 37% of that total. A big part of their strategy is zoning bylaw reform to facilitate housing.

From your vantage point overseeing many agreements formed with different municipalities across Canada, can you speak about some of the reforms that cities like mine have already implemented as a result of the housing accelerator fund?

[Nadine Leblanc]

All of these agreements are certainly on CMHC's website. You can definitely see what the cities have committed to.

There is some very transformational.... We talked earlier about AI permitting. Certainly, that's a very good example that is drastically accelerating permitting. We've seen densification to four units as-of-right. That's another one. There are definitely some movements in terms of requirements like parking.

One of the elements of the housing accelerator fund is that everybody signing an agreement through this program has a commitment to build a housing assessment plan, which is something not all cities had in the past. This means understanding the housing needs in their communities and the links to infrastructure needs in their communities, and knowing their forecast for housing based on type and population growth over the next few years. That's something we are gathering through this program and having cities build. That's very transformational in nature—having a bigger picture of the housing needs in Canada.

[Wayne Long, Liberal, Saint John—Rothesay, NB]

Thank you for that.

I asked a question, probably a year back, of the past president Romy Bowers. Mrs. Volk, you were appointed president of CMHC, I believe, in June or July of this year. My question for Romy Bowers was the same question I have for you—and I know MP Zarrillo touched on this. It is on the culture of CMHC.

I'm just keeping it real. Despite the good work you do, there are a lot of developers who just don't have a good experience thanks to bureaucracy—the length of time it takes to get applications through and so on. I know President Bowers committed to trying to lead a change of culture. I have always said that CMHC should be less bureaucratic and more entrepreneurial in its culture and spirit.

Can you talk to me about any changes you've made to increase the entrepreneurial side of CMHC since you've been there as president?

[Coleen Volk]

I find the culture at the CMHC to be fantastic. The staff are incredibly committed to what they do. They're a very dedicated, very passionate group.

We can absolutely do some things to improve turnaround times, and we have. We've implemented some new service standards, and we will continue to study those and make sure that we're hitting those targets.

[The Chair, Liberal, Bobby Morrissey]

Thank you, Mr. Long.

Mr. Seeback, you have five minutes.

[Kyle Seeback, Conservative, Dufferin—Caledon, ON]

Thanks very much.

I want to turn to performance, because you won't give us information about what bonuses are linked to. You've said that's private, so we won't understand the metrics for awarding bonuses at the company.

When I look at your motto, part of it is “Together, we strive to ensure more Canadians have access to what they deserve: a home they can afford that meets their needs.”

When I look at housing starts across the country, the housing start performances are not good. Vancouver received $115 million in housing accelerator funding. Year to date starts, year over year, in October 2024 versus in 2023, are down 15%. Toronto received $471 million. Its housing starts in 2024 versus in 2023 are down 40%. Ottawa received $176 million. Housing starts in 2024 versus in 2023 are down 22%.

When you're paying out almost $30 million in bonuses and you won't tell us what the metrics are for those bonuses, is it pretty safe to conclude that the metrics have nothing to do with actually getting houses built?

[Coleen Volk]

I don't think that's safe to conclude. As I said, the payments aren't bonuses. They are incentive pay. We design our salaries competitively to attract the best and the brightest.

[Kyle Seeback, Conservative, Dufferin—Caledon, ON]

Shouldn't it be linked to performance? You're a housing organization. Shouldn't the bonuses reflect that more houses are getting built or that the process is easier, faster or more streamlined? That's what works in the real world. Real estate agents get commissions based on the number of houses they sell. That's how it works.

Right now, we are experiencing the worst housing affordability in the history of our country. You're a housing agency. You're paying out 30 million dollars' worth of bonuses, and you won't tell us why. It clearly cannot be about getting houses built.

[Coleen Volk]

There are many factors for whether houses get built or not, many of which are outside of the CMHC's control. There's inflation. The cost of building a house has increased, and the interest rate has increased. These are primary reasons for the lack of building and the decline in housing starts.

Our incentive pay, when people are identifying with their managers the ways they can contribute, is related to what an employee can do to influence the outcomes.

[Kyle Seeback, Conservative, Dufferin—Caledon, ON]

What outcomes?