Human Resources Committee on Feb. 17th, 2023

[Simon Lahoud]

The majority of files that are withdrawn, either by the proponents or by us, are generally withdrawn because of viability reasons. There is either a funding gap in the project, or the project is not viable, based on the rents and the cost of construction.

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

What is the delay in that? We heard during questioning earlier in this meeting about the delay that CMHC has had. There's the affordability, the cost of living and these taxes that keep increasing on the goods and services that Canadians are needing and utilizing. Does the delay at CMHC at all affect that ?

[Simon Lahoud]

Generally speaking, when we evaluate a project we provide a conditional commitment, if it's a viable project, within 100 days. Once a project receives a conditional commitment, we work with our clients to move them to a state where they are ready for funding.

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

But 100 days is a long time, isn't it?

[Simon Lahoud]

If we are looking at contribution-only files, these are done within 30 days. For files where there is a loan component, we work with our clients very closely to try to give them that answer as quickly as possible. Currently we do that within 100 days.

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

In the remarks that were provided to us for this meeting, it's mentioned that CMHC regularly surveys clients for feedback and that client satisfaction was at 82% last year. Does CMHC measure client satisfaction with every individual or organization that interacts with CMHC?

[Paul Mason]

Yes. We survey all our clients, including those who were not successful. This is not just a statistic of those who were successful in getting funding—

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

Sorry, but 82% is quite high. With the number of problems that we have heard about at this committee, and specifically at this meeting and the previous meeting with CMHC, I have a really hard time believing that clients are 82% satisfied with the services they're receiving from CMHC.

[Paul Mason]

What I can tell you is that we survey all our clients and we do it in an unbiased way. We send out surveys to all our clients and ask for feedback.

[The Chair, Liberal, Bobby Morrissey]

Thank you.

I'll now return to Mr. Long to see if his audio is able to be efficiently translated.

Mr. Long, you have the floor for five minutes.

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

Thank you, Chair.

I certainly don't want to test the interpreters, but hopefully things are better.

[The Chair, Liberal, Bobby Morrissey]

Mr. Long, unfortunately, the interpreters are advising me that they cannot translate your audio.

I will now go to Mr. Collins for five minutes.

[Chad Collins, Liberal, Hamilton East—Stoney Creek, ON]

Thanks, Mr. Chair.

I'd like to follow up on the federal lands initiative. In the early days after my election, I asked about the process, and it seems like a very complicated one in terms of having to go through different ministries to make the lands available in order to even get an application into CMHC to apply for the resources.

Can I ask you for your professional advice as it relates to improving that program? You are one part of what many would consider a long process. What changes do you believe we need to make internally to make lands available in order for them to become eligible for the federal lands initiative money?

[Paul Mason]

We're actually quite happy with the progress on the federal lands at this point. As I said, we've committed over half the money, and it looks like we're likely going to exceed our unit targets through that program. In the program, we rely on other departments to make lands available. That is the element we need in order to execute on our part of this. Anything that can make that easier would make more lands available.

As I said, it looks like we're going to fully commit the money that we have, so it's not that we're lacking lands to be made available to achieve our targets in that program.

[Chad Collins, Liberal, Hamilton East—Stoney Creek, ON]

My next question is around the accelerator fund. Everyone's anxious to see what that involves. Of course, this committee undertook a study on the accelerator fund. We heard lots of expert advice. I had the opportunity, when Ms. Bowers was here, to raise that with her in terms of some of the recommendations.

One key recommendation that flowed through that report was an acquisition fund for municipalities. In some of the witness testimony that we heard during the committee study, there was some consternation around what the housing industry looks like right now. Most municipalities will start to receive fewer applications from a development perspective, so I think the thought process was.... You're investing in technology to increase applications and supply, obviously. You may be supporting staff to assist municipalities in processing those applications, but if developers across the country are by and large scaling back their applications, it's hard to count net new units when the trend is going in the opposite direction.

Can I get your advice on that? Will you take that into consideration when you unveil the program at some point in time?

You're supplying resources to an area where you may not see the results that you want. I think it was 25,000 units a year for four years.

[Paul Mason]

It would be a little premature for me to comment specifically on the requirements of the housing accelerator fund.

I can tell you that the intent is to work with municipalities to speed up development and increase the supply of housing being delivered in those communities. That may look different from jurisdiction to jurisdiction depending on the municipality. Some of the work we would do there is to assess what would be the right level of development that we would expect in these different municipalities.

The program isn't fully defined or approved yet, so it's a bit difficult for me to comment on the specific requirements. The ultimate intent is to remove barriers that may exist for development in municipalities.

[Chad Collins, Liberal, Hamilton East—Stoney Creek, ON]

Will you be giving serious consideration to an acquisition strategy as part of that program development?

I ask that because I think it was the top recommendation from all stakeholders in the study. Of course, those stakeholders are the ones you're going to serve in that program. They were municipalities, not-for-profits and others associated with development files at municipalities.

[Paul Mason]

We'd be happy to consider any program of that nature from an implementation perspective, if that was the case.

British Columbia has recently introduced a program like that at the provincial level.

[Chad Collins, Liberal, Hamilton East—Stoney Creek, ON]

My next question is related to real estate investment trusts. You may be aware that we're undertaking a financialization of housing initiative, probably within a month's time.

Real estate investment trusts have played an increasingly large role in the rental housing market across the country. In some markets, they're more prevalent than others. Certainly in large municipalities across the country, we see REITs all over the place. I happen to reside in a REIT here. It's a hotel that's been converted into rental, which I think is great. I honestly believe that there is room for REITs in the rental market. They can play a role in assisting just as the private sector does in many areas.

However, there's definitely been an impact in terms of rent increases as a result of their presence in the market. That is having a negative impact on tenants. I won't go through those issues because I think you're very well aware of what they are.

Can I ask what kind of support you've provided to REITs through the national housing strategy? In all the programs that you offer, have REITs received assistance from you in the form of loans or grants?

[Paul Mason]

I believe REITs account for about 10% to 15% of the total housing market in this country. I can tell you that 98% of the money provided through the national housing co-investment fund has gone to either not-for-profits or other levels of government.

[The Chair, Liberal, Bobby Morrissey]

Thank you, Mr. Collins.

Mrs. Gray, you have the floor for five minutes.

[Tracy Gray, Conservative, Kelowna—Lake Country, BC]

Thank you, Mr. Chair.

Thank you to the witnesses for being here today.

I'm trying to better understand the governance structure of CMHC. Is it a fair assessment to say that the government may come up with funding and housing initiatives, as you've talked about today, and then it comes to CMHC to administer and come up with the staffing, resources, policies and processes to deliver and operationalize that initiative?

Would that be a fair assessment?

[Paul Mason]

Yes, that is fair.

I apologize if I missed the first part of that comment. We work with the government and provide advice, and then we implement and administer the programs as given to us through the authorities of central agencies.

[Tracy Gray, Conservative, Kelowna—Lake Country, BC]

Thank you.

Your board of directors would sign off on those internal policies and processes to implement those government initiatives. Would that be correct?

[Paul Mason]

We have a pretty significant governance process within CMHC. The board does not necessarily sign off on all of the policies and procedures that happen at the program level. It provides oversight for the overall corporation.