The management team at CMHC—after looking at the past few years, seeing housing starts go down, hearing stories about 35-year-olds moving back into their parents' basements, and seeing seniors being forced into homeless shelters and students having to live in their cars—looked at the housing landscape in Canada and said, “Let's pay ourselves a big fat bonus.” Your government said, “No problem.”

6:15 p.m.

Liberal

Sean Fraser Liberal Central Nova, NS

That's not how the process works. I think we both know that.

6:15 p.m.

Conservative

Andrew Scheer Conservative Regina—Qu'Appelle, SK

You and your government had the opportunity to ensure performance from the officials who report to you, so this is a simple question. Going forward, will you demand to see any bonuses proposed by the CMHC? Answer yes or no.

6:15 p.m.

Liberal

Sean Fraser Liberal Central Nova, NS

Will I demand to see...?

6:15 p.m.

Conservative

Andrew Scheer Conservative Regina—Qu'Appelle, SK

Any proposal that requires your sign-off going forward. That money was already paid, despite the fact that CMHC did not make housing more affordable for all.

Will you take any steps to ensure that performance bonuses are linked to performance targets and actual results?

6:15 p.m.

Liberal

Sean Fraser Liberal Central Nova, NS

I'm happy to review the process by which bonuses are provided. I am very hesitant to have elected officials interfere with the independence of the public service when it comes to the appropriate compensation for public servants.

6:15 p.m.

Conservative

Andrew Scheer Conservative Regina—Qu'Appelle, SK

You don't believe that the minister has any oversight role in bonuses paid out to people who don't do their jobs.

6:15 p.m.

Liberal

The Chair Liberal Bobby Morrissey

Your time has concluded.

We'll go to Mr. Van Bynen for five minutes.

6:15 p.m.

Liberal

Tony Van Bynen Liberal Newmarket—Aurora, ON

Thank you, Mr. Chair.

I don't want the conversation to focus solely on the CMHC. I do know that we have arranged for the CMHC to come back to this committee one more time. We did have a study, and there were some recommendations that I hope we can discuss at that time when the CMHC comes back. One of those was the efficiency of the application process and the responsiveness to the clients. I think that's an important question that we should be hearing about when we come back to that.

I'd like to go back to the fact that we have a number of approaches to solving the affordability issue. In my riding of Newmarket—Aurora, because of the GST waiver that is currently under debate, I had a developer contact me and say that he was going to go ahead with 390 new rental units that had been in the hopper for over two years now but the business model didn't work. Now, with the GST waiver, the business model does work, and my community's going to have 390 new units.

I want to go beyond that and talk about an example of collaboration between governments and how important that is. In 2020, through the rental construction financing initiative, the government was able to advance a $79-million construction loan that resulted in 216 units in my riding. In 2023, we also announced a $77-million loan under the same program to finance an additional 175. This emphasizes that it isn't always giving money away, in terms of the reduction of the CMHC. It's also working together with the developer, with the municipality and with the financing organization to cover and manage the risk during the construction period.

Can you explain how the funding of the rental construction financing initiative will help families and build more housing?

6:15 p.m.

Liberal

Sean Fraser Liberal Central Nova, NS

It's important to understand that these policies don't operate in isolation. They work in parallel and one on top of the other. Your citing of the GST, I think, provides a good example.

Everything we can do to change the financial equation to make it more likely for a builder to go ahead is going to help address the supply challenges that we're facing. The GST, obviously, knocked several percentage points off overnight and even more so in jurisdictions where provincial governments have followed suit.

If you piggyback programs like the rental construction financing initiative on top of that now more attractive financial landscape, you're going to see that more people are going to be building homes but also building particular kinds of homes. The rental construction financing initiative operates, essentially, by giving a lower cost of financing, typically in exchange for some kind of a commitment that you'll offer a certain number of units at a particular percentage of market rates.

We made a recent announcement in Vancouver that's going to make available $500 million in financing that's going to 11 different projects, I think it was. It could be nine different projects; I'm testing my memory here. They are typically close to transit or post-secondary institutions. They're typically offered at a fraction of what the market would bear, and because we've changed the equation by offering competitive, low-cost financing in a high-cost financing environment, we're seeing more developers who are interested in building the kinds of homes that will be offered at lower prices because they have access to financing that allows the projects to go ahead.

With everything that we do—whether it's making more low-cost financing available through the RCFI, cutting the GST for apartments that will be built or expanding access to low-cost financing by growing our insurance programs through the Canada mortgage bonds—we're going to see more competitive rates for people who have the capacity to build homes.

Although I'm very encouraged, I'm entirely unsurprised to hear that your community is seeing more people announce that they will go ahead with projects, because I'm hearing it in every community in Canada.

6:20 p.m.

Liberal

Tony Van Bynen Liberal Newmarket—Aurora, ON

In my community, we're looking at close to 2,000 new units. For a community that has 24,000 homes, I think that's quite substantial. I believe that we need to have the building community and private markets participate in solving this. We'll never be able to borrow our way out of this, so we need to rely on that collaboration.

A lot of conversation has been going on about a number of the programs, but can you tell me more about the co-investment fund and how well that's working? What is the target market for the co-investment fund?

6:20 p.m.

Liberal

Sean Fraser Liberal Central Nova, NS

Yes, the co-investment fund is a terrific program. It provides opportunities, and can sort of be a mix of grants and loans, that will allow people to build more affordable housing stock.

Since you've cited your own community, I'll cite mine. The Antigonish Affordable Housing Society is a group of volunteers who decided that they wanted to do something about affordable housing, given some of the challenges in a university town in Nova Scotia. They hopped online and started working with people in the space. They learned about the co-investment fund. They now have navigated what can be a complex system, and there are members of my community who now have a place to live.

The stories that you hear are life-changing for people. There's a young woman who has been able to return to school. She told me that her son is able to now take part in elite basketball camps because she can afford to take him because she's not spending all of her money on housing.

I've run out of time, but it's a perfect example of just how powerful this fund is to build more units at prices people can afford. It's meaningful stuff.

6:20 p.m.

Liberal

The Chair Liberal Bobby Morrissey

Thank you.

Mr. Trudel, you have two and half minutes.

6:20 p.m.

Bloc

Denis Trudel Bloc Longueuil—Saint-Hubert, QC

Minister, unfortunately, I haven’t heard anything from you in the past two hours that will enable the construction of affordable housing and social housing.

The financialization of housing is one of the major problems of the current housing crisis that we haven’t addressed. Recently, the committee conducted a study on the subject. Even the Federal Housing Advocate, who is supposed to be working with you, conducted a study on the subject. It defines the financialization of housing as the “fact that housing is increasingly treated as a commodity—a vehicle for wealth and investment—rather than as a fundamental right and social good for individuals and communities.”

It’s estimated that, when the federal government withdrew from the housing sector in 1993, close to 0% of the market was owned by large real estate investment trusts or public funds investing in housing. Today, it’s estimated that between 20% and 30% of the housing stock is owned by these large real estate empires, which couldn’t care less about the right to housing; all they want to do is make money.

What’s your position on this? Do you intend to legislate to prevent the financialization of housing from increasing in Canada?

6:20 p.m.

Liberal

Sean Fraser Liberal Central Nova, NS

First, let me just address your preamble. I'll acknowledge that you recognized that some of the programs are effective in terms of delivering housing for low-income families. You specifically mentioned the rapid housing initiative.

On the financialization of housing, there's no one policy that will completely cure the circumstances. We need to continue to do more. There's no one level of government, by the way, that with the stroke of a pen can solve all of the challenges such as, for example, dealing with people who may be buying up homes and evicting tenants so they can increase the price. There could be mixed jurisdictions from different levels of government, but there are some things we have done—and I acknowledge that we could do more—things around additional taxation on the flipping of homes, things around additional taxes for foreign-owned unoccupied homes or changing the tax rates for short-term rentals like Airbnb. These are all things we have made progress on, but that, I would argue, we need to continue to do more on. Housing, to me, cannot be a commodity. It has to be a place for families to live in real communities.

If you have advice on further areas we can tackle that don't interfere with the ability to continue to grow the supply, that's something I think we could co-operate on.

6:25 p.m.

Liberal

The Chair Liberal Bobby Morrissey

You had two seconds left, Mr. Fraser.

Ms. Kwan, are you taking the question?

6:25 p.m.

NDP

Jenny Kwan NDP Vancouver East, BC

Yes. Thank you.

I want to follow up with the minister on the question around co-op housing and urge the minister to reconsider. As he knows, many of the co-ops are non-profits. It's not like they're actually making money in the share system he mentioned, so it's important that the co-op sector be exempted from GST as well.

He actually talked about the importance of co-ops. Budget 2022 did make an allocation for a co-op program; however, to this day not one dime has actually rolled out for the program. There hasn't even been an agreement signed with respect to that. What's the holdup, and when will Canadians see the money roll out the door to build the housing that's desperately needed?

6:25 p.m.

Liberal

Sean Fraser Liberal Central Nova, NS

Thank you, Ms. Kwan.

I don't have a specific date, but rest assured that, as soon as we're ready to launch, we'll be broadcasting broadly. The ordinary process for us, too, as I described in response to Mr. Scheer earlier in this meeting, is that after we have budgeted we have to go through the appropriate cycle before I have access to administer a program we design. However, my hope is to move these programs as quickly as possible, because I don't think there is time to waste.