Human Resources Committee on June 6th, 2022

[The Chair (Mr. Robert Morrissey (Egmont, Lib.)), Liberal, Bobby Morrissey]

I call the meeting to order.

Welcome to meeting number 30 of the House of Commons Standing Committee on Human Resources, Skills and Social Development and the Status of Persons with Disabilities.

Today’s meeting is taking place in a hybrid format pursuant to the House order of November 25, 2021. Members are attending in person in the room, as well as virtually. I would ask that all members attending in person respect the pandemic protocols that are in place.

Additionally, to ensure an orderly meeting, I would like to make a few comments for the benefit of the witnesses and members.

Before speaking, please wait until I recognize you by name. For those participating by video conference, please click on the microphone icon to activate your mike—

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

Mr. Chair, there's no interpretation into French.

[The Chair, Liberal, Bobby Morrissey]

That's what I was getting to.

When we have an issue with translation, please let me know.

Madame Chabot, I'm told it has been corrected.

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

Thank you.

[The Chair, Liberal, Bobby Morrissey]

Before the interruption, I was going to advise that you have the option to speak in the official language of your choice. If there's an issue with translation, please get my attention and we'll suspend while it's being corrected.

For those with us virtually, please use the “raise hand” icon on the bottom of your Surface to get my attention.

Pursuant to Standing Order 108(2) and the motion adopted by the committee on Thursday, February 3, 2022, the committee will resume its study of the housing accelerator fund.

I would like to welcome our witnesses to begin our discussion with five minutes of opening remarks, followed by questions.

We have Cathy Heron, president of Alberta Municipalities. We also have Jason Thorne, general manager of planning and economic development, and Edward John, director of housing services at the City of Hamilton. They will both be giving statements, because they were both to appear at two different times on two different issues, but they're both appearing today. From the Regroupement des offices d’habitation du Québec, we have Madame Demers, general director, and Coralie Le Roux, senior adviser.

We will start with the Alberta Municipalities for five minutes. Madam Heron, you have the floor.

[Cathy Heron, President, Alberta Municipalities]

Good morning, everyone. Thank you for having me.

My name is Cathy Heron, and I am the president of Alberta Municipalities, as well as the mayor of the city of St. Albert. We're about 70,000 people, just north of Edmonton.

Affordable housing is obviously a vital issue for municipalities, not just in Alberta but everywhere. I'm so pleased to have the opportunity to share Alberta's municipal perspective as you consider options for the design and rollout of the housing accelerator fund.

Alberta Municipalities sincerely appreciates the Government of Canada's work over the past few years on the housing file, because, as municipalities, we know that adequate housing is essential to our citizens' health, safety, dignity and inclusion and, honestly, to their ability to contribute to the fabric of our communities. We strongly support the right to housing enshrined in the National Housing Strategy Act, and we applaud the federal government's significant investment to make this right a reality.

Municipalities are at the forefront of dealing with social and economic disorder that arises from homelessness and insecure or inappropriate housing. As a result, although housing is a provincial responsibility, when provincial policies and programs fail to resolve local housing issues, municipalities must do what they can to support their community and its well-being.

Alberta is challenged by a high demand for and a low supply of affordable housing, particularly deep subsidy housing. Using the Canada Mortgage and Housing Corporation definitions, nearly 500,000 Albertans are living in unaffordable housing, and about 164,000 households are in core housing need. Only 57,000 households currently live in provincially supported affordable housing, and over 24,000 households are on provincial affordable housing wait-lists. This means that 10% of Albertan households are in core housing need, but only 4% are receiving provincial assistance.

Last year, the Government of Alberta announced a provincial housing strategy that aims to assist up to 25,000 more households in the next 10 years. This will be accomplished by delivering 13,000 additional affordable housing units and providing rental assistance for about 12,000 more households.

While this represents a 44% increase in the number of households supported by the province, it still leaves over 83,000 households in core housing need. Furthermore, the province's capital plan shows investments in affordable housing decreasing by 27% over the next two years, which leaves us wondering how it can achieve the goal of developing 13,000 new units without the appropriate capital investment. Accordingly, the housing accelerator fund represents a tremendous opportunity for Alberta municipalities to help address the urgent need.

Alberta Municipalities believes that flexibility is the key to making this fund as effective as possible. Municipalities are highly diverse in terms of their local housing markets, their local housing needs and their capacity to adjust these needs. Local housing needs run across the affordable housing spectrum, from deep subsidy, permanent supportive housing for people transitioning out of homelessness, to the near-market housing that makes life more affordable for middle-class families.

My first ask is that the housing accelerator fund be as flexible as possible to support municipalities in adjusting their own unique housing needs and priorities. We are the experts in local land use planning and understand the housing needs of our communities as well as the barriers to those housing developments. Granting municipalities the flexibility to spend funds on local priorities will ensure that the goal of the housing accelerator fund can be achieved.

For example, several Alberta municipalities have existing programs designed to increase density and encourage housing development. For these municipalities the housing accelerator fund should permit investment in those existing programs. This will allow municipalities to speed up housing approvals and increase housing supply.

My second ask is that grants from the housing accelerator fund include sufficient funding to allow for the construction of energy-efficient homes and net-zero homes, because the ongoing maintenance and expenses of a house also contribute to its affordability. Having a common net-zero energy and climate-ready standard for all homes funded through this program will enable builders to learn and adopt the new practices needed to meet the future building code requirements designed to help address climate change.

In closing, I would like to thank you once again for the opportunity to present and for your efforts to truly collaborate with municipalities in designing this important program. I can now take any questions.

[The Chair, Liberal, Bobby Morrissey]

Thank you, Ms. Heron.

We will now move to Mr. Thorne for five minutes. Once we conclude with all the witnesses, we will open the floor to questions.

Mr. Thorne, you have the floor.

[Jason Thorne, General Manager, Planning and Economic Development, City of Hamilton]

Thanks for the opportunity to speak to the committee today.

My name is Jason Thorne and I'm the general manager of planning and economic development at the City of Hamilton.

In this role I lead a department that's responsible for all aspects of planning approvals, as well as economic development, administering the city's development incentive programs, and managing the city's real estate portfolio. Increasing annual housing production, addressing affordability, ensuring timely development approvals and building complete livable sustainable communities are all goals that my council has given to me and to my department.

Hopefully some of our experience will be of value to this committee.

I'm going to outline this morning five comments that I hope you will consider as you develop this important program.

First and foremost, I would urge you to be clear in the goals that you're hoping to achieve. In my view, just building more of the same should not be that goal. I do agree with the urgency of increasing overall housing supply, but that alone will not address affordability, and that alone will not ensure that we achieve livable and sustainable communities. It's important not to lose sight of other key policy goals. It's important to increase housing supply in a manner that also meets the climate crisis and does not incentivize energy-inefficient housing or low-density housing in far-flung, car-dependent locations.

It's also important to increase housing supply in a manner that actually targets affordability.

Secondly, I'll talk about development approvals. Much can be, should be, and is being done to streamline the development approvals process, but I caution you to be careful not to fall into the trap of thinking that widespread deregulation will somehow unlock housing supply. Much of the planning approvals process is in place to catch and correct issues with development that, if not caught, could have significant negative impacts.

I can speak to you from the front lines of the planning approvals process, and I can tell you that significant public interest is served in making sure that new development goes through a fulsome review. Even when done expeditiously, faster approvals do not necessarily equal new construction, because municipalities are not able to ensure that approved development actually happens.

In Hamilton, we've already undertaken Lean Six Sigma reviews of our processes, shifted to digital portals for building permit submissions, pre-zoned most of our city and granted “as of right” permissions for secondary dwelling units like basement apartments and laneway housing. We are currently preparing zoning changes to permit the conversion of existing homes into duplexes, triplexes or fourplexes.

That said, there are ways the housing accelerator program could help. It could include funding to enable municipal staff to carry out development reviews; support for digital application platforms, municipal infrastructure and growth modelling; and efforts to expand the labour pool of professionals such as planners and engineers, who are in desperately short supply right now.

My third comment for you relates to an area that I would recommend be a central plank of the housing accelerator program, and that's land and property acquisition. That means funding to support municipalities and non-profit housing providers in acquiring and assembling vacant or underutilized lands, de-risking them, and then getting them onto the market as affordable and mixed-market affordable housing. That also means funding to acquire existing market affordable rental units to protect our existing below-market housing supply.

Fourth, the program could add significant value by partnering with local municipalities in targeted development incentive programs. In Hamilton, we have 20 years of experience and success with using targeted incentive programs to bring housing to market, but right now we're doing it entirely on our own. We offer zero-interest loans, tax grants and development charge exemptions to incentivize development in market-challenged areas, grant programs to clean up brownfields, fee incentives to create laneway homes and basement apartments, and grants for the adaptive reuse of heritage buildings. These programs have been hugely successfully in catalyzing development in our city, but all of them are funded solely by the municipality.

I'll end with a fifth and final comment, and that is not to tie the program, or the federal funding, to arbitrary unit production goals. I would caution you to think carefully about going down a path of what I have heard referred to as “dollars for doors”, and I say this for a number of reasons.

Pure quantity of units is not the only goal. These units must meet the needs of the market. They must provide housing for a mix of incomes, a mix of tenures and a mix of family types and household sizes. They need to be designed and located in a manner that meets those other critical policy goals, like climate change.

Making funding dependent on delivering units could give developers significant leverage over municipalities in the approvals process. This could lead to pressure on municipalities to compromise important matters of public interest, such as environmental protections, in order to get builders to build so that municipalities can access federal funds. A dollars for doors approach would put municipalities in an untenable situation with respect to the public that we serve. Residents would be looking to the municipality to make sound, principled, planning decisions while at the same time knowing that we would, in effect, be getting paid to say yes.

I leave those five comments with you for your consideration, and I'd be happy to take questions at the appropriate time.

[The Chair, Liberal, Bobby Morrissey]

Thank you, Mr. Thorne.

Next is Mr. John for five minutes.

[Edward John, Director, Housing Services, City of Hamilton]

Thank you, and good morning. My name is Edward John. I am the director of housing services for the City of Hamilton, Ontario. I wish to thank you for this opportunity and look forward to continued engagement.

As part of my duties, I am responsible for the housing system and am service manager of the social and community housing portfolio. This includes oversight of the access to housing wait-list, application of provincial and federal funding, and the housing programs and systems that include our shelter and residential care facilities.

I have comprehensive experience with several funding programs, both federally and provincially, including but not limited to the rapid housing initiative, coinvestment, HPP, COCHI and OPHI.

During and following the pandemic, the housing system has witnessed numerous pressures and challenges and has shone a light on the inequity and housing gaps that face the most vulnerable of our community. Support and funding directed to address this increasingly disproportionate impact remain my focus. I am hoping my comments today and my experience can assist in the creation and implementation of this newly developing fund.

With regard to the housing accelerator fund priorities, as with many funding envelopes, I would strongly recommend that the program consider the following aspects.

Flexibility: As a federal program, the program should be allowed to address local priorities and challenges with respect to the market conditions and housing needs of the particular city. This is important. Hamilton still struggles to provide rental housing, with much of our stock built in the sixties and seventies and, as such, at the end of its life cycle and in need of capital repair. Protecting both the quality and the affordability of these units while providing new ones is a key priority for Hamilton.

Predictability: Clearly the intent is for an acceleration of supply and a rapid delivery of units. Therefore, implementation will need to be simple and predictable to ensure that the goal is met locally. Complex legal agreements and program requirements will hinder the speed and efficiency of delivery.

Stackability: With supply being the focus, one can expect per-unit funds to be significantly less than those associated with other funding approaches, such as the RHI. It would therefore be important to contemplate the ability for local municipalities to be in a position to stack programs in order for local priorities and the depth of affordability to be maximized.

Definitions: Careful consideration of what is to be achieved will be a component of how the program defines outcomes such as affordability. Hamilton is in critical need of deep affordability and increased rental tenure. A program that supports and does not limit utilizing these funds for this purpose would be a huge advantage. In terms of where the City of Hamilton could invest such funding, I offer the following. From a policy perspective, updating and informing planning and housing tools to increase and address local need includes supporting housing needs assessments and supporting the right of supply to meet other priorities, such as affordability and climate change.

Land and infrastructure: Land acquisition and land assembly could unlock a number of sites to quickly allow for development and redevelopment. This could also include the ability to address infrastructure limitations that have otherwise constrained development. Hamilton has a number of areas with challenges, including fragmented lot fabric and contamination, that such a fund could overcome. It could liberate lands in key areas close to transit and supportive infrastructure.

In terms of incentives, targeted incentives to overcome local supply gaps in both our housing and affordable housing unit numbers would allow Hamilton to clearly articulate and support the development of the right size, location and cost.

With respect to our housing wait-list, currently supply—which in Hamilton has seen year-over-year growth—has not yet had an impact on reducing our growing access to housing wait-list numbers. Therefore, investments in supply that meaningfully address this growing pressure would result in significant improvements in the household sustainability of families.

Finally, concerning a phased approach, while the intent is to accelerate new supply, a phased approach that allows for existing rental units that are in danger of losing their affordability as a result of investments such as REITs, or as a result of becoming unsafe to live in as they near the end of their life cycle, could see immediate and cost-effective protection and support for the growth in affordable rentals within the initial phase of the fund. Concurrently, new construction could be initiated, as we have seen more recently with supply chain issues, and be delivered in future years in phases of the funding.

In terms of areas of risk and opportunity, I will draw attention to the market distortion. Any program would need to understand and avoid market distortion. Not all supply is good supply, and oversupply of units that do not meet local objectives could have a destabilizing impact.

Targeting: The fund would need to be designed to ensure that it did not reward development that was to occur irrespective of the funding.

In terms of capacity building, a program that improves the capacity of trades and non-profits could result in a sustainable approach to community building, one that could create a long-lasting legacy of supply that goes far beyond the initial investment.

In summary, you should ensure that the program has the flexibility to address local priorities, is simple and predictable and, most importantly, creates a strong, robust platform to address housing gaps and pressures in a meaningful manner.

Thank you. I'll be happy to answer questions at the appropriate time.

[The Chair, Liberal, Bobby Morrissey]

Thank you, Mr. John.

Now we have Madame Demers for five minutes.

[Anne Demers, General Director, Regroupement des offices d'habitation du Québec]

Good afternoon.

Thank you very much.

I would like to thank my colleague, Ms. Coralie Le Roux, who is with me today.

It is a first for us to appear before the committee. We thank you for having us here today.

The Regroupement des offices d'habitation du Québec, or ROHQ, is a non-profit organization founded in 1972 that represents the 158 housing authorities throughout Quebec. The network of authorities includes more than 1,600 directors and 2,000 employees.

In total, Quebec's housing authorities are responsible for more than 52% of community and affordable social housing. They help more than 150,000 low- and moderate-income citizens. As agents and partners of the Société d'habitation du Québec, the authorities represent the municipalities responsible for some 106,000 housing units, including 65,000 low-income housing units and 41,000 social housing units under programs such as the Programme d'habitation abordable Québec and AccèsLogis, to name a few.

The ROHQ has been a major player in social housing in Quebec for 50 years, and it is in this capacity that we are submitting our comments and recommendations to you today. Operating in a business environment governed by standards, laws and regulations, and being public in nature, housing authorities are subject to strict management and accountability rules. The housing services offered to communities are therefore governed by rules that are based on the principles of transparency and compliance with laws, regulations and standards. Each housing authority operates under the guidance of a board of directors, which includes municipal and government appointees. Their governance is strong and rigorous.

Housing authorities actively contribute to economic and social development. As such, we are submitting comments today for a sustainable vision that will respond to today's major challenges in housing renovation and construction. Housing authorities are able to add value by providing a collaborative and integrated approach to their communities, which is notably based on accountability.

We believe that Quebec has a solution to the pressing needs of households. The very low vacancy rate, the rising cost of rent, and the number of households in core housing need—nearly 350,000 Quebec households, according to Canada Mortgage and Housing Corporation data—demand solutions. We feel that identifying federally owned buildings would be an appropriate approach to locating and targeting opportunities for the conversion and construction of social and affordable housing likely to maintain the existing social safety net.

The pandemic has changed the world of work in many ways, but it has also highlighted the importance of housing, and more specifically, social and affordable housing. Identifying federal properties in Quebec and transforming them into social and affordable housing would have the advantage of responding quickly and effectively not only to the critical needs of low-income households, but also to middle-class households, who are increasingly affected by the housing shortage.

Where the conditions for the disposal of federal properties are favourable, they encourage the acquisition of these buildings by social developers. In order to optimize the use of public funds from different levels of government, the transfer of federal property at no or reduced cost to social and community housing developers would be an incredible asset.

In the past, it has been difficult for social and community housing developers and managers to meet the conditions for acquiring buildings for conversion or construction of social and community housing. However, a few projects managed by housing authorities have been very successful in Quebec. These projects have favoured the creation of social and community housing, and they have also allowed the various community organizations to make their contribution and create living environments.

It would be advantageous if these conversion or construction projects related to federally owned buildings were undertaken as part of an approach that includes, among other things, the sustainable use of existing buildings built with public funds, an ecological contribution by avoiding, where possible, new construction, the development of available land into healthy and safe living spaces, and the mitigation, or even a significant and rapid reduction, of the housing shortage.

Social and community housing helps to combat poverty and promote the integration of vulnerable people. It is also a factor in improving—

[The Chair, Liberal, Bobby Morrissey]

You have 10 seconds left.

[Anne Demers]

We recommend that favourable acquisition conditions for organizations be identified and put in place to ensure equity in the housing market and to build social and collective housing projects.

Thank you for your attention.

[The Chair, Liberal, Bobby Morrissey]

Thank you, Ms. Demers.

We will now move to our first round of questioning.

Madam Gladu, you have the floor for six minutes.

[Marilyn Gladu, Conservative, Sarnia—Lambton, ON]

Thank you, Chair, and thank you to our witnesses.

I'm going to start with Mr. Thorne from the City of Hamilton.

I've been to Hamilton quite often. Especially in the downtown area, there seems to be not a lot of vacant space and lots of issues with homelessness, which of course is similar to my riding of Sarnia—Lambton. What do you think the federal government could really do to help create affordable spaces there?

[Jason Thorne]

One, it could partner with the city in one of the most successful programs that we have under way now, which is a fairly robust suite of incentive programs. We found that in our downtown core, and I can imagine Sarnia would be similar, the market is not in a place where it can necessarily create the kinds of residential units we'd like to see. That is why we've tried to incentivize it with our development charge exemptions, with our zero-interest loans, and with our brownfield remediation grants and other types of incentives.

That is very much where we want to see a lot of the new housing happen, but we know that it's not where the market is pushing that housing. That was one of the points I made in my opening comments. Partnering with municipalities on those types of programs, which currently we are funding entirely on our own, would be helpful.

[Marilyn Gladu, Conservative, Sarnia—Lambton, ON]

I fully agree. I feel strongly that municipalities have their plans. Each one is different. They have programs that are working for them. I'd like to see the federal government come alongside in a way that isn't all prescriptive.

You mentioned tax incentives, zero-interest loans, grants to help clean up and all of these different initiatives that are currently funded by the municipality. Would you be open to having the federal government partner and do what it does in a lot of the programs, where the government gives you 50% and you put in 50%, or some mathematical formula like that?

[Jason Thorne]

Yes, I think that would be helpful. Right now the scope of those programs is limited by the funding that's available off the municipal levy. Certainly, if there was more funding available, the scope and the impact of those programs could be expanded.

[Marilyn Gladu, Conservative, Sarnia—Lambton, ON]

Thank you.

Ms. Demers, you were talking about the transformation of federal buildings. I know that there are a lot of vacant federal buildings and that this is a really important opportunity not to miss. How can we best work with Quebec and the various places across the country to accelerate the creation of affordable spaces in those federal buildings?

[Anne Demers]

Thank you for the question.

Projects have already been carried out in Quebec, particularly in the Montreal and Quebec City areas, in which federal buildings have been repurposed—that is, transformed. This was done in partnership with the Quebec government and with cities and municipalities.

To be able to exploit them further and transform them, we need to put in place a solid, simple and accessible program. Of course, funding must also be attached to it in order to foster a collaborative approach in partnership with the various levels of government to meet the needs of the community. This must also be done while respecting the investments made over the last few decades to construct these buildings. It is a matter of giving them a second life and thus responding quickly and effectively to the need for social and affordable housing.

[Marilyn Gladu, Conservative, Sarnia—Lambton, ON]

Do we know how many spaces we think we could create from the buildings that are available in the networks that you're in charge of?

[Anne Demers]

We do not have precise data. However, what the ROHQ has been recommending for a few years now is to quickly provide access to at least 5,000 social housing units per year. We need to provide access or build some over the next five years in order to meet the needs of the clienteles, particularly the vulnerable and low-income clienteles.

[Marilyn Gladu, Conservative, Sarnia—Lambton, ON]

One of the difficulties we are really struggling with in my riding of Sarnia—Lambton is timely approval. There are multiple subdivisions and various builds that are being delayed. Usually it's a lack of coordination, in my mind, between the conservation authority and the municipality, and whether there's environmental permitting that's needed from the province. These things are spinning very slowly.

I wonder, Mr. John, if you would have any comments on what you think is needed there to move these things along more quickly.

[Edward John]

Certainly, coordination is the key when you look to timely approvals. I think Hamilton, in terms of its approach, has really looked at what it can do to have those timelines work together so that we deliver a fast response.

In Hamilton we suffer challenges, particularly with the contamination and the ministerial response on many of our record-of-site conditions, and that slows down the affordable-housing portfolio in particular. Those are the sites that are typically most challenged when it comes to the fact that they are often more affordable for those willing to develop affordability, but, at the same time, present long-term challenges.

Therefore, coordination from a ministerial perspective as well as some internal changes would help deliver that, but I believe that, from Hamilton's perspective, all our time and effort is spent looking at what kinds of approaches can be done concurrently and deliver affordability as well as housing approvals in a very timely fashion.