Human Resources Committee on June 2nd, 2022

[Ahmed Hussen, Liberal, York South—Weston, ON]

Thank you for your question.

I can confirm that, absolutely, our government is committed to urban, rural and northern indigenous housing strategies, informed by for indigenous, by indigenous principle. The national housing council issued recommendations, as well, and we're fully committed to co-developing and implementing a dedicated urban, rural and northern indigenous housing strategy.

The fact is that $300 million is a start. Let me remind the honourable member that, in a number of our programs for building and repairing deeply affordable housing, we already prioritized indigenous housing projects, including urban, rural and northern indigenous housing projects off reserve. For example, the rapid housing initiative has resulted in 41% of all projects being delivered in indigenous communities, including urban, rural and northern indigenous communities.

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

The funding is sorely inadequate, Minister. It's estimated that the communities in Quebec alone need more than 50,000 housing units. How can we address that need with such little funding?

How can the government claim that it is dealing with the problem, when it is investing so little?

The government is going to have some serious explaining to do as far as this strategy goes.

[Ahmed Hussen, Liberal, York South—Weston, ON]

As I said, it's a question of recognizing, first of all, that this is a start. The national housing council report has a number of really important recommendations. We're fully committed to implementing all of those recommendations. In addition to that, indigenous housing projects and proposals are already prioritized in the $13-billion co-investment fund, as well as in programs like the rapid housing initiative. However, we have to do more. I agree.

[The Chair, Liberal, Bobby Morrissey]

Thank you, Minister.

I remind committee members that we are focused on the housing accelerator fund with this study.

Madam Zarrillo, you have two and a half minutes to end this first round.

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

Thank you very much.

Minister, you spoke of accessibility minimums for housing projects to get federal funding. I'm wondering what the definition of “accessible housing” is in order to meet the criteria.

[Ahmed Hussen, Liberal, York South—Weston, ON]

Mr. Chair, I will turn to Madam Bowers of CMHC to answer that particular question.

[Romy Bowers]

With respect to the accelerator fund, we're still in the process of determining the exact features of the program. At a minimum, the accessibility features will be aligned with the features described earlier by the minister that apply to all our NHS programs.

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

I'm looking for a little bit more definition around what “accessible” means. I have some experience that it's very hard to get the development community to buy into universal design, accessibility features and even amenities in buildings around accessibility. Do you have any other expansion that you could share on what accessibility might look like?

[Ahmed Hussen, Liberal, York South—Weston, ON]

You said that it's difficult to have the development community do those things. Well, it's very simple. If they want to access federal funds to build affordable housing, affordable rental housing and so on, they have to. It's not a choice. They have to meet those accessibility standards. Whether they like it or not, it is a commitment that our government has made, and we've so far kept that commitment in every program of the national housing strategy .

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

Thank you, Minister.

What are those accessible features? The reason I'm asking is that some of those accessible features, even in regard to parking regulations, have been downloaded to municipalities, and then it's a council-by-council decision and bylaw-by-bylaw decision about even the exterior accessibility of the buildings in some areas.

[Ahmed Hussen, Liberal, York South—Weston, ON]

I will turn to Madam Bowers again.

[Romy Bowers]

Mr. Chair, I'll take that question. We can provide the accessibility definitions for each of our programs, and we'll provide that by separate cover. We would be very happy to respond to any further questions that MP Zarrillo has on this matter.

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

That's great. Thank you so much.

I'm going to take this last minute to talk about the GST exemption that was promised a while back. It's my understanding, even from those I've spoken to in the Liberal Party, that this GST exemption was forfeited in favour of lower credit for larger developers. They asked for lower credit. They said that would be more beneficial to them.

I just want to let the minister know that, in my riding, we forgave.... One of the developers came in with a purpose-built rental unit. They owned the land. They asked for some lessening in parking regulations so that they could build a purpose-built rental unit, expecting almost half a million dollars in GST exemption, and it never came.

It seems that, due to the lack of GST exemption for the smaller developers who already own land and for those who have been renting out their buildings for 20, 30 or 40 years, they will immediately owe GST as soon as they rent their first unit. It puts them at a disadvantage to the larger development community that can go ahead and pre-sell units. It's incentivizing market condos over our rental units. I wonder if there is any talk about revisiting this GST exemption to encourage more purpose-built rental and to even save some of the purpose-built rental that we have right now.

[Ahmed Hussen, Liberal, York South—Weston, ON]

I would encourage the member to look at the track record of the rental construction financing initiative, a program that provides 100% financing to folks who are building rental stock. In budget 2022, in response to stakeholders and members of the opposition, we are doubling the affordability of the units from 20% of all the units built through RCFI to 40%. I hope that the member can support that process.

[The Chair, Liberal, Bobby Morrissey]

Thank you, Madam Zarrillo.

Thank you, Minister, for appearing before the committee on an issue that is certainly very much in the forefront today, as well as the officials from the CMHC. You can sense from the questions here that members have a lot of interest in this particular file.

With that, we will suspend for a few moments while we transition to the final round and get the witnesses online.

Thank you again, Mr. Minister.

We'll suspend for five minutes.

[The Chair, Liberal, Bobby Morrissey]

I call the meeting back to order as our time is restricted.

I offer my apologies to the witnesses for the late start, but we were held up with votes in the Commons.

I'm going directly to opening statements.

Welcome to the three witnesses. We have Mr. Éric Cimon, director general, from Association des groupes de ressources techniques du Québec; Jeff Morrison, executive director, from Canadian Housing and Renewal Association; and from the Canadian Real Estate Association, Michael Bourque.

You have five minutes for opening statements. It would be great if you could keep them within that context, to give our members the chance to question you because we will be stopping at about 20 minutes after five.

We'll begin with Mr. Cimon.

[Éric Cimon, Director General, Association des groupes de ressources techniques du Québec]

Thank you, Mr. Chair.

Thank you for the opportunity to appear before the committee to inform its study on the creation of the housing accelerator fund.

I'd like to begin by saying a few words about the Association des groupes de ressources techniques du Québec, or AGRTQ. The association represents 25 technical resource groups, TRGs, serving all of Quebec. What are TRGs? They are social economy enterprises that, for over four decades, have contributed to the creation of more than 86,000 co‑operative and not-for-profit housing units, equivalent to over half of Quebec's social housing stock.

TRGs have also been involved in numerous real property projects that are community-oriented, including multi-purpose community centres and child care centres. For more than 40 years, TRGs have played a central role in developing housing projects at every stage of the process. TRGs are catalysts for housing projects that meet the diverse needs of the most vulnerable segments of the population.

The creation of a fund to support the development of housing projects is wonderful news given the critical need and enormous challenges. I want to point out that the government's role in developing these projects should, first and foremost, be to support the construction of housing units for people who are vulnerable and have low incomes. With resources being limited, the government has to set priorities. I would even say that the investment should help structure the sector and support its sustainability, and that social and community housing should be prioritized. That is the only model that provides for sustained affordability throughout a building's life cycle.

Supporting private for-profit affordable housing is not a sustainable solution. All that does is kick the can down the road. The thing that is needed most is, of course, money, but not in the form of a new program or support for a complementary program. Only a stand-alone program will work, one that can deliver projects to completion on a self-sustaining basis. We started with a single source of funding for carrying out projects, and now we have four or five. That has led to increased requirements, more work and longer construction times.

Yes, it's important to build housing units quickly, but it's also important to do things right. In the best-case scenario, a construction project takes three years from start to finish. In some cases, the time frame can be four or five years, and for projects that lack funding, it can stretch beyond six years. Setting unrealistic deadlines not only affects the manner in which the project addresses the need and the quality of the project, but also puts pressure on developers and the vulnerable populations the project is meant to help.

The needs are extensive. Within our network, a total of 10,191 housing units had yet to be built or were in development as of December 31, 2021, mainly because of insufficient funding. That is for Quebec alone. This year, some 10,000 housing units are in development across our network, without any funding. The key to success hinges on one thing. To achieve its objectives, the federal government must take into account the specific needs of regions. That means a one-size-fits-all approach will not work in all regions of the country.

Regions each have their own needs and realities, so the approach has to be adapted accordingly. Quebec has a strong housing ecosystem where stakeholders and complementary organizations work together in a coordinated way. The manner in which the national housing co‑investment fund has been administered in Quebec, in recent years, has met with a great deal of support. The alignment between the co‑investment, the rapid housing initiative and the priorities of the Quebec government has helped unblock many AccèsLogis projects that did not have adequate funding from Quebec. Those projects have been able to go forward.

The ability to apply federal funding to existing programs has proven effective. However, the process of negotiating the terms for use of the funding must not drag on for years. Some elements still need to be aligned, but agreements are being reached more quickly because the objectives and target populations line up.

One of the factors that has helped projects move along more quickly—besides money—is support for, and the creation of, project development groups like TRGs. Thanks to them, any community group, not-for-profit organization or housing co‑operative can access the assistance it needs. Many regions of the country used to have TRGs, but very few TRGs remain.

In Quebec, the entire jurisdiction is served by one TRG in our association. Social economy enterprises that represent their communities treat housing like a place to live, not a commodity. By supporting this type of network and helping it take root across Canada, the government can meet housing needs more effectively and ensure that projects are tailored to communities.

I should note that, throughout Quebec's housing history, the best programs and initiatives have been based on co‑investment in construction. Local organizations and the Société d'habitation du Québec, the SHQ, have worked hand in hand to come up with effective, realistic and achievable programs.

Similar partnership with the CMHC could also help to fast-track projects.

Thank you.

[The Chair, Liberal, Bobby Morrissey]

Thank you, Monsieur Cimon.

Now we'll go to Mr. Morrison for five minutes or less.

[Jeff Morrison, Executive Director, Canadian Housing and Renewal Association]

Thank you, Mr. Chair, and thanks to the committee for the invitation.

For those unfamiliar with the Canadian Housing and Renewal Association, we are the national voice for the social, non-profit and affordable housing sector in Canada. Our members include social supportive housing providers, municipal housing organizations and 12 of 13 provincial and territorial housing departments.

The committee's study is based on two programs that we believe are important components of the national housing strategy. Briefly, I'd like to say a few words about how the two programs could be set up and improved to boost the affordable housing supply.

For starters, the $4-billion accelerator fund was introduced in budget 2022 with a promise to fund changes to the municipal systems and policies that are preventing more housing from being built. In January 2022, in anticipation of this announcement, CHRA held a consultation session with our members to get their input on the most effective uses for this fund. We captured these ideas in a letter to Minister Hussen, which was sent in February. We've provided a copy of that letter to the clerk.

I'll highlight just a few of the recommendations contained in that letter.

First, a lack of human resource capacity within municipal planning and approval departments is one of the biggest local barriers to housing development. Housing providers told us that applications often take so long to get approved simply because there aren't enough trained people to evaluate them. We'd recommend that one of the uses of the fund be to increase the number of staff in municipal approvals and planning departments and actually fund training and accreditation programs for them.

Second, we know that Nimbyism can be a huge hurdle in developing new housing, particularly community and social housing. Some municipalities have taken steps to combat Nimbyism by putting in place anti-NIMBY campaigns or by providing more information to local communities on the impacts of social housing or reforming public consultation processes, such as what they've done in Victoria, B.C. These efforts take resources. We would recommend that initiatives designed to address Nimbyism also be eligible under the fund.

Third, one of the most onerous aspects of affordable housing development is the misalignment between housing programs and policies between different orders of government. Oftentimes, community housing providers are forced to navigate between multiple programs at different levels of government, each with their own application criteria, timelines, funding levels and so forth. It's a situation that one of my members actually said was like trying to organize the world's worst Tinder date.

The accelerator fund could be used to provide the human and technological resources to allow orders of government to create one-stop shop approaches, where program criteria and application processes are aligned. Models such as this actually exist, for example, between the City of Calgary and CMHC. Again, these approaches require resources to implement. By including such an activity as eligible under the fund, the accelerator fund could accelerate more aligned, streamlined processes to be put in place.

The last thing I want to say about the housing accelerator fund is this.

We recommend that, under the fund, priority be given to projects aimed at fast-tracking and streamlining the construction of community and affordable housing units. Since non-market housing providers tend to have to rely on more complex municipal partnerships as compared with market housing providers and given Parliament's stated objective of prioritizing housing for vulnerable segments of the population, as set out in the 2019 right-to-housing legislation, all proposals to fast-track the construction of community housing units should be given precedence.

The other program you are examining is the federal lands initiative. In the lead-up to the 2017 national housing strategy, we had identified this program as holding great potential for incentivizing affordable housing development for the very simple reason that all housing projects start with land. Following the announcement in the 2017 national strategy that the program would be expanded to $200 million over 10 years, CHRA has provided additional recommendations in terms of how this program could be strengthened.

Notably, we have argued that the federal lands initiative could be dramatically improved if its mandate were to be expanded to include acquisition of provincial, territorial, municipal and even private sector lands, which could be subsequently transferred to affordable housing providers or land trusts, just like federal lands currently are.

In other words, the federal lands initiative could be styled almost as a mirror to the rapid housing initiative, which allows for the acquisition of existing properties, only in this case it would be for land. Given that a great deal of surplus federal lands are not conducive to building affordable housing—for example, they may not be located near mass transit—expanding the mandate of the federal lands initiative is a logical means to making the program more meaningful.

Mr. Chair, in conclusion, these two programs are not silver bullets. They won't solve the housing crisis, but they are welcome tools in that they are proverbial tools in the proverbial tool kit.

Thank you very much.

[The Chair, Liberal, Bobby Morrissey]

Thank you, Mr. Morrison.

Mr. Bourque, you have five minutes.

[Michael Bourque, Chief Executive Officer, Canadian Real Estate Association]

Thank you, Mr. Chair.

On behalf of the Canadian Real Estate Association's some 150,000 members, I want to thank the committee for the opportunity to provide our thoughts on the government's housing accelerator fund. I'm delighted to be here with Jeff and Mr. Cimon, because I think it's vital to hear from advocates from across the housing spectrum.

Housing is a long-term asset that provides a safe, sustainable and quality environment for families. Beyond the physical importance of housing and shelter, it is equally important to recognize the social, psychological and cultural value of housing. Significant research exists today as evidence that secure housing positively impacts a person's social and mental well-being, resulting in broader benefits to society.

With our over 70 years in the housing market, we have seen first-hand that stable and affordable housing has a positive impact on families and communities. However, as we are all aware, Canada is currently experiencing a housing crisis due to a lack of adequate housing across the housing spectrum. Given our role in the housing industry, we believe our members are in a position to help advocate for families and communities to find housing solutions and, ultimately, fulfill the dream of home ownership.

Our organization is encouraged by the government's response to the housing crisis by creating the housing accelerator fund. It will provide cities with tools to speed up housing construction, which is needed. CREA would like to see the housing accelerator fund being used in part to promote innovative residential construction, to encourage infrastructure bilateral agreements and to provide incentives for local communities to boost supply.

First, we recommend that the federal government prioritize research that would lead to a better understanding of the precise nature of the supply problem in Canada. There is no one housing market in Canada, and the issues facing people in remote areas are very different from the ones in the greater Toronto area. We have significant data and expertise that we are willing to share as part of an effort to identify housing needs across Canada, but we cannot do this alone. We need to understand the problem in greater detail before we can be successful in introducing solutions and allocating capital and other resources.

Data can help identify relevant neighbourhoods and types of housing needed to introduce housing options that are compatible in scale with single-family homes, which we often refer to as the “missing middle”. Data can also help identify skills and labour gaps, so that appropriate strategies can be deployed to address them.

Second, we recommend that innovative development be used as a criterion for support from the housing accelerator fund. By innovative development, we mean innovation in construction methods and materials that allow homes to be produced more quickly and cost effectively, and with greater resiliency and energy efficiency that will contribute to Canada's climate goals.

We need innovation in the way the workforce and businesses involved in home building are organized to make the industry more efficient. There should be greater use of manufactured homes that are factory-built using advanced technologies and materials, computer-assisted design and robotics. These are needed if we hope to reduce the time to market, enhance quality and increase productivity. The federal government can play a role in fostering this innovation and, ultimately, producing an exportable suite of products.

Finally, cities and municipalities must be incentivized to address Nimbyism, to streamline planning and approval processes and to reduce fees and charges that are impediments to increasing housing supply. That's why this fund is so important. I agree entirely with Jeff and I think they have some great ideas.

I also believe we need to radically alter exclusionary zoning. Restrictive zoning drives all of the other barriers to renovation and new building. We need to allow for “missing middle” housing in areas traditionally zoned for single-family housing, especially in high-demand urban neighbourhoods. This is urgent.

When the federal government invests in the infrastructure needed to build housing units, including telecommunications, roads, sewers and water, it enables new housing but also paves the way for enhanced business productivity more broadly.

It seems well understood that a lack of housing supply is the problem facing policy-makers. The role of innovation, I believe, is less understood, but it offers the opportunity to significantly improve the way we deploy scarce resources to address our housing needs.

Once again, thank you for the opportunity to be here. I look forward to your questions.

[The Chair, Liberal, Bobby Morrissey]

Thank you, Mr. Bourque.

We're going to have one round of five minutes each, beginning with Mr. Dalton.

You have the floor.

[Marc Dalton, Conservative, Pitt Meadows—Maple Ridge, BC]

Thank you to the witnesses for their very informative remarks.

I'm from the Vancouver area, and one of the challenges there is that we have a lot of old-stock rental apartments. Actually, very little has been built since the 1970s. They are purpose-built rentals. In the private sector it seems as though there has been a real tension among those who have invested, who have made the buildings, with rent controls, so they're not willing to do maintenance or improvements. Very little stock has been built since then.

I know there is that tension between those who build it for the private sector and also affordable housing. How do we navigate this tension between providing the affordable housing and at the same time having incentives for the private sector to be involved and to actually invest?

It's easy to say, “The government can do this. The government can do that,” but we want to get the private sector involved and individuals involved in investing, so how can we do that as far as some of the rent controls go and at the same time really incentivize individuals to make affordable housing?

Do you have any ideas? Nobody is jumping in.

[Jeff Morrison]

I think it's a question of doing both and then some and all of the above. The fact is that, as Michael alluded to, housing is in a state of crisis across the spectrum, from homelessness right through to affordability in the market space. It's not a matter of choosing either-or, of choosing market or non-market. It's really a function of all of the above.

We hope the accelerator fund that you're studying will help improve some of those processes designed to get the construction started. As I mentioned in my remarks, we hope it prioritizes the affordable sector because that does have more complex needs than perhaps market housing does. At the end of the day, it really has to be an all-of-the-above situation because the crisis we're in simply requires all hands on deck. Making choices is difficult. It really has to be an all-of-the-above mechanism.

[Marc Dalton, Conservative, Pitt Meadows—Maple Ridge, BC]

Does anybody else want to step in?