Human Resources Committee on Feb. 17th, 2023

[Paul Mason]

I feel that our authorities, the direction of these programs and the definition of them are very clear.

As we operationalize them, there is some flexibility that CMHC has in how we implement the programs. The processes and so forth are put into place by us, but in keeping with our authorities and the intent of the program in delivering it, but also in being good stewards of the government's money.

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

Are you happy with how the minister is running the housing program? Answer yes or no.

[Paul Mason]

Yes.

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

Thank you.

The Parliamentary Budget Officer released an updated assessment yesterday on the national housing strategy.

I want to talk about this, if I can. Last night, I had a very emotional conversation with a man. His kids are adults and living at home. He's really scared. This is a conversation I have a lot with parents. They're really worried their children are never going to be able to afford homes. It's a genuine fear.

What are we going to do for our children?

I see a lot of things that have come out of this. It's $7 billion more than CMHC had forecasted. There's no standard definition of affordability, which is a major issue, as we know. However, the thing that really jumped off the page of this assessment is that:

While federal investments in addressing affordable housing and homelessness have increased, so too has the cost of residential construction, reducing the real purchasing power of federal spending.

What I'm trying to tie in here, if I may, is we've been adamant about the carbon tax and inflation. I feel like this shows this vicious cycle.

You're at $7 billion more than intended. If you continue to spend more and things keep going up, you're never going to meet that demand. We're caught in this vicious cycle. If the purchasing power doesn't have the power it needs and we have inflation constantly going up, but you're spending more and you're not getting more, how do you stop that? How do you reconcile being able to meet the demand and having that purchasing power?

Do you think carbon tax is an issue in all of this?

[Paul Mason]

I would have to defer, personally, on the carbon tax. It's not my area of expertise.

What I will say is that the increased cost of construction is definitely having an impact. We at CMHC have reported ourselves and analyzed that we need to build about 3.5 million more homes over and above what we were planning to build between now and 2030. There is definitely a supply-driven affordability issue in the country.

This is not an issue that can be solved alone, either by CMHC or by the federal government. I'd say it's a bit of a team sport. We have our role to play. I think if the programs were not operating, things would likely be worse, but it takes partnering with municipalities, with provinces and with the private sector in order to really drive up the supply in this country.

[The Chair, Liberal, Bobby Morrissey]

Thank you, Ms. Ferreri.

Mr. Long, you have five minutes. The floor is yours.

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

Thank you, Chair.

Good morning to my colleagues.

Thank you to our CMHC witnesses. Thank you for what you do for Canadians.

Quickly on the carbon tax, I was thrilled to see Conservative Premier Blaine Higgs openly accept the federal backstop yesterday and openly acknowledge that it's the way people in New Brunswick will get support to help them fight inflation and other costs. I was happy to see that.

Going back to CMHC, Mr. Mason, I thank you for being forthright. I thank you for your answers so far.

I want to talk with you about how you ramped up. Certainly, we recognize that before 2017, there was little investment in housing. We also recognize that housing is provincial jurisdiction, but we recognize, as the federal government, that we need to step in. We have a role to play and we need to help.

Obviously, we rolled out the $82-billion housing strategy. CEO and president Romy Bowers reminded us that, again, before 2017, CMHC really wasn't into dealing with proponents, non-profits and residential housing.

Can you talk to us very briefly about how [Technical difficulty—Editor]?

[The Chair, Liberal, Bobby Morrissey]

Mr. Long, would you raise your boom and try it again?

Can you speak for a few moments?

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

Testing, 1, 2, 3.

[The Chair, Liberal, Bobby Morrissey]

We'll just suspend for a few moments.

[The Chair, Liberal, Bobby Morrissey]

Excuse me, Mr. Long, we will have to come back to you at a later time, because the interpreters cannot translate your comments.

Which member of the government side would like to continue with the three minutes left?

Mrs. Martinez Ferrada, you have the floor for three minutes.

[Soraya Martinez Ferrada, Liberal, Hochelaga, QC]

Thank you, Mr. Chairman.

Mr. Mason, thank you for being here with your team.

There were some good questions asked this morning. As our chairman said at the beginning of the meeting, you feel and understand the frustration about the situation, which we agree is difficult. There are huge challenges, and the current context does not make this easy.

What more can you do to speed up the creation of the housing units we need across the country? How can the programs we have now be enhanced to help you implement the National Housing Strategy?

[Paul Mason]

Thank you for the question.

It's a great question. As I said earlier, we are constantly trying to improve our processes and speed up our processing, but what we've seen on the ground is that there have been a lot of delays on the construction side. Right now, about 20% of the projects that are funded have completed construction up to this point. That's a part of the process that is out of our control in terms of how quickly those can be built.

When we look at projects and applications that come in, as I said, we try to prioritize those that have the most in terms of their outcomes and those that look like they're viable and can be completed relatively quickly.

Those things help us move along the whole process end to end. I would say that, outside of the national housing strategy, it can take anywhere from eight to 10 years to get multi-unit housing developed.

The government is considering a housing accelerator fund right now, and the intent of that is to look to remove any barriers that may exist at the municipal level in terms of development. That's another area that I think can be helpful.

[Soraya Martinez Ferrada, Liberal, Hochelaga, QC]

Thank you.

In her report, the Auditor General analyzed a portion of the National Housing Strategy program. Can you tell us about other programs that may not have been reported on by the Auditor General?

Also, I know that you have put in place a client service for non-profit organizations in particular. I would like you to tell us about this service and whether it is going well. Can you tell us about the results of that?

[Paul Mason]

Thank you for the question.

As I said earlier, we're taking feedback seriously from our clients and looking at, not just how we improve our processes, but also the types of resources that we have on the ground working with proponents and with clients to help them complete the application process. If an application comes in that isn't quite ready or isn't quite at the point where the project is viable, we have staff across the country who work with proponents to try to help make those projects viable.

We definitely want any project that we fund to have a high likelihood of success. We talk a lot about numbers, but, at the end of the day, this affects real people, and we want these projects to be successful on the ground.

When we look at the work we do, we take that feedback, build those relationships with those groups and work hard to deliver.

[The Chair, Liberal, Bobby Morrissey]

Thank you.

Ms. Chabot, you have the floor for two and a half minutes.

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

Thank you, Mr. Chair.

Mr. Mason, this is all very interesting. You just said that without the National Housing Strategy, it would take 10 years. But it looks like it takes 10 years to have housing that meets affordability criteria. The issue of construction is being debated everywhere, but it is not being built unless there is demand. How can we speed up the process to get more affordable housing?

That is my concern. We are halfway through the strategy. I understand that every three years you reflect on the situation. From a strategic point of view, you ask what is going well, what is not going well and what could be improved so that things change?

Here is one program, for example. A decision was made to move forward with a third phase of the Rapid Housing Initiative. In general, this program has received good feedback from everyone for its agility and responsiveness.

In British Columbia, there are some interesting initiatives. I do not know if they all work. For example, a system has been put in place to allow non-profit organizations to purchase housing so that affordability is maintained, on a sustainable basis.

So there are many programs, some of which are more burdensome. New money has been added. Midway through the strategy, what recommendations would you make to at least give the impression, based on the numbers, that it is making a real difference to people looking for housing?

[Paul Mason]

Thank you for the question.

When we look at the success of the national housing strategy so far, we are getting very close, in terms of both repairs and new units, to the initial targets laid out in the national housing strategy.

The rapid housing program, which is in its third round, is delivering deep affordability as quickly as possible. We have streamlined both the application and the approval processes, as well as looking for proponents to commit to timelines. We have had lessons learned through that program, so we've allowed those timelines to increase a bit, realizing the challenges on the ground with construction and so forth, but it's still very rapid in comparison to normal housing development.

Again, the rapid housing I think is a good example of taking lessons learned from the first few years of the program and applying them to this new program.

[The Chair, Liberal, Bobby Morrissey]

Merci, Madam Chabot. You'll be getting another round.

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

Do I have some time left?

I want to talk about...

[The Chair, Liberal, Bobby Morrissey]

Merci, Madam Chabot.

Ms. Kwan, you have two and half minutes, please.

[Jenny Kwan, NDP, Vancouver East, BC]

With the 115,000 units that are still waiting for the funds to flow from the co-investment fund, are the remaining funds in the co-investment stream then spoken for?

[Paul Mason]

I think I would like to pass this question on to my colleague, Mr. Lahoud.

[Simon Lahoud, Director, Financing Solutions, Canada Mortgage and Housing Corporation]

Thank you very much, Mr. Chair.

For any projects that have funding committed to them, the funds are there for them. With regard to the spending, we actually advance funding as the projects build—

[Jenny Kwan, NDP, Vancouver East, BC]

I'm sorry. I'm going to cut this short because I have only two and half minutes.

My question is, are the remaining funds with the co-investment fund spoken for?