Human Resources Committee on Feb. 17th, 2023

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

Thank you, Mr. Chair.

I thank the witnesses for participating in these very important discussions on the National Housing Strategy. Let us remember that the goal of this strategy is to provide affordable housing to meet the growing need. There is talk of a housing crisis. I will not ask for a definition, but we know that demand is high and that, for many people, it is a challenge to find housing.

My first question is going to be about the definition of affordability. According to the National Housing Strategy, housing is affordable if a household pays less than 30% of its income on rent. However, there are other definitions of affordability, depending on the program. For example, the National Housing Co-Investment Fund, whose mission is to build, renovate or repair affordable and community-based housing, defines affordable housing as having a rent that is less than or equal to 80% of the median market rent. The Parliamentary Budget Officer says this creates confusion, as a household can still spend more than 30% of its income on such housing.

Why is it that all programs do not use the same definition of affordability to start with?

[Paul Mason]

Thank you for the question.

I would like to say that we at CMHC do believe there's one single definition of affordability, which is that is an individual spends less than 30% of their pre-tax income on lodging.

The NHS programs have different criteria associated with them, depending on the groups targeted and the policy intent of the program itself, as well as the level of grant contributions, which directly affects the level of affordability that could be achieved.

I would say that we do have one single definition of affordability, but there are different criteria depending on the different programs.

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

Having different criteria for different programs creates problems, even if you say there is only one definition of affordability in the entire strategy.

If you use different criteria, including the 30% of tenant income threshold, how can Canada Mortgage and Housing Corporation demonstrate concrete results on affordability?

We have read that housing in Montreal is considered affordable even if the rent is over $2,000. Do you agree with that statement?

[Paul Mason]

Thank you again for the question.

Again, we have one single definition of affordability. However, we do have different criteria depending on the program.

We have actually pretty significantly exceeded those affordability requirements across the majority of our programs, including the national housing co-investment fund and the rental construction financing initiative. For example, under the national housing co-investment fund, we are achieving rents for affordability in the range of $650 a month. It does vary across the country, but that's much lower than the minimum criteria that are established in the program. As applications come in, we prioritize those that achieve the greatest outcomes, particularly affordability, but others as well. We work very hard within those programs to exceed the criteria that were set.

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

We are halfway through the planned duration of the Strategy. From 2017 to 2022, that is now five years. At the halfway point, do you think it would be important to make adjustments or to make sure, as you say, that there is a single affordability criterion that is being used in the Strategy and that we should all focus on?

You say that is correct and that you are meeting the affordability targets. However, we have two reports from the Parliamentary Budget Officer, who says that this is causing problems. Even though there is only one definition of affordability, there are different criteria, which makes it difficult to really account for the number of units built that meet those criteria.

In addition, affordability needs to be sustainable. Maybe a unit is affordable in the first year, but then it becomes not affordable because of the numerous criteria.

Is having a single definition of affordability part of your thinking?

[Paul Mason]

As I indicated earlier, we do have an evaluation of our programs every three years. Right now, we are delivering those programs and the definitions as they are within our authorities.

As I said earlier, we are achieving much lower rents. For example, in Montreal, the average affordable rent right now coming out of the co-investment fund is $513 a month. For us to achieve deeper levels of affordability, it's not simply about changing the criteria. It's also the structure of the program and the amount of grant contribution available to achieve those deeper levels of affordability.

Again, CMHC does conduct an evaluation of our programs every three years, and then recommendations flow out of that.

[The Chair, Liberal, Bobby Morrissey]

Thank you, Ms. Chabot.

We'll go to Ms. Kwan for six minutes.

[Jenny Kwan, NDP, Vancouver East, BC]

Thank you, Mr. Chair.

Thank you to the officials for being here today.

Just building on the affordability question, could officials table for the committee a breakdown of all the units that have been funded by CMHC, broken down by stream, then broken down by province and municipality and the rent for each of the projects to which funding has been allocated? There are issues of affordability. They vary from program to program, and while rent as 30% of total income is what CMHC has stated as affordability, its application is simply not there. We see that very much so on the ground.

When asked the question about affordability, CMHC has formally responded that, I'm sorry to say, they don't actually look at affordability. So if you do look at affordability, I would like to actually see the rent all the way from its inception for all of the units that have received CMHC program support.

The other thing I want to raise is on the co-investment fund. Eighty-seven per cent of the units that are receiving funding or under construction are in Ontario, despite Ontario representing only 39% of the population. Other provinces—Alberta, B.C., Quebec, Saskatchewan and Manitoba—are grossly under-represented. Why is there such a disparity?

[Paul Mason]

The national housing co-investment fund is an application-based process, so we don't have specific carve-outs or allocations based on region. We look at the applications coming in and we prioritize areas of greatest need and those of greatest outcomes within those applications.

What I would say is that across all of our programs, we are, to some degree, oversubscribed in terms of the number of applicants we have. In other words, we have more applicants coming in than we have funding to commit at this point, and we have been committing our full budgets as they are allocated to us.

[Jenny Kwan, NDP, Vancouver East, BC]

No doubt. What's interesting is that it sounds as though it is first come, first served.

There are 4,499 units pending in B.C. They have yet to receive funding. Could you advise and table for the committee the dates on which these projects applied for the co-investment fund? In fact, if we could get that information for all of the co-investment fund applications, per Mr. Aitchison's request, that would be helpful.

For these projects that are pending, for which funding has not rolled out, will the $25,000-per-unit limitation apply to these pending projects?

[Paul Mason]

We disburse our funding as the construction progresses in our programs. Any project that was committed prior to any cap on the funding should not have that cap applied. Those should proceed as planned if they were already committed by CMHC. Once an agreement is signed, we disburse the funding in alignment with the construction schedule, which unfortunately can sometimes take time due to construction delays.

[Jenny Kwan, NDP, Vancouver East, BC]

Thank you.

It will also be useful, in the data that you will provide, to advise when the approval was provided for these projects, when did the money actually flow and the amount of dollars broken down on a unit basis, as opposed to the overall amount.

When did the cap come in, the $25,000 cap?

[Paul Mason]

Last year, in the fourth quarter, we put the cap into place. We put it into place in order to preserve the amount of contributions we have and make that go as far as we can in terms of helping as many people as we possibly can.

We did this at the same that we had a contribution-only stream as well, which was not subject to that cap and could go up to $125,000 a door for those particular projects.

[Jenny Kwan, NDP, Vancouver East, BC]

Maybe we can get the information on with the application. Are you saying that people now can actually apply for the $125,000 contribution stream?

I got three letters from the minister, signed pretty well all on the same day, saying, one, that the co-investment fund had been depleted—go somewhere else. Another was telling another MP to go and apply for money under the co-investment fund. Then, in response to my letter, the minister said that the money will go only to projects that really essentially are shovel ready.

There are different applications depending on who asks the questions, I guess, but it would be really good to actually get the honest truth of what the state is of the co-investment fund. Can you advise the committee how much money is left in the co-investment fund?

[Paul Mason]

There is approximately $150 million of contribution room left in the co-investment fund. That's for new construction. There's about $900 million in contribution room left for the repair stream of the national co-investment fund. For each of the streams, we have a little over $2 billion in loans left to be allocated.

[Jenny Kwan, NDP, Vancouver East, BC]

There are 115,000 units that have received a commitment from CMHC but have not received the money. For those 115,000 units, can you confirm that none of them will have the $25,000 cap applied to them?

[Paul Mason]

I can confirm that any project that was committed to in advance of the cap would not be subjected to the cap.

[The Chair, Liberal, Bobby Morrissey]

Thank you Ms. Kwan. Your time has concluded.

We have Ms. Ferreri for five minutes.

[Michelle Ferreri, Conservative, Peterborough—Kawartha, ON]

Let's see what I can do in five minutes.

Thank you so much.

[The Chair, Liberal, Bobby Morrissey]

I'm sure you'll accomplish a lot.

[Michelle Ferreri, Conservative, Peterborough—Kawartha, ON]

Thank you so much for being here. I really appreciate it.

I'm wondering if I could start by really quickly talking about my own riding of Peterborough—Kawartha.

There is a major housing issue in my riding. Homelessness is obviously significantly on the rise. Two applications that came from our city in the last couple of years were denied, but they don't know why. Can you tell me as quickly as possible—because I have so many questions—what the process is? What do you do for follow-up? How can people figure out what they've done wrong and follow up on that application that was denied?

[Paul Mason]

We do have client service people across the country. We should be explaining why an application was denied. I'm happy to look into these specific circumstances, but we do have client service folks, who not only should be communicating this but also should be working with our clients in terms of the application process.

[Michelle Ferreri, Conservative, Peterborough—Kawartha, ON]

Thank you so much. I would love if you could follow up with that. Is it the responsibility of the city to follow up? Or will your client services do that?

[Paul Mason]

We should be proactively following up when an application is not approved and explaining why it isn't. In most cases, we actually go back and try to work with the client or the proponent to let them know what wasn't working and try to work with them to see if it can work.

[Michelle Ferreri, Conservative, Peterborough—Kawartha, ON]

If I may, we've heard about a lot of obstacles and a lot of negatives around CMHC. I know that you're trying to provide the best service possible. I guess what I'm asking about is in terms of coming back to that—service standards, rolling out the programming and helping those in need—as we do have a housing crisis.

Do you feel that you've been supported by the minister? Do you feel that you were given clear directions and clear communication on how the program should operate? Do you feel that you were sort of left to do it on your own? Or do you feel that there has been very good direction and management from the housing minister?