Human Resources Committee on Oct. 30th, 2023

[Scott Aitchison, Conservative, Parry Sound—Muskoka, ON]

Would you be able to table those action plans with the committee?

[Romy Bowers]

As I said, we've only finalized agreements with seven municipalities. We will make these public as the applications are processed.

[Scott Aitchison, Conservative, Parry Sound—Muskoka, ON]

Then there are seven municipalities whose action plans we can see. Could you table those with us?

[Romy Bowers]

I'll have to take that away. I'm not sure of their status in terms of public distribution, but I will get back to you on that.

[Scott Aitchison, Conservative, Parry Sound—Muskoka, ON]

Okay. I just want to clarify that municipalities are public bodies looking for public money from the federal government, so I would think we should be able to see those action plans.

[Romy Bowers]

Yes, absolutely. Transparency is very important for this program and for all programs.

[Scott Aitchison, Conservative, Parry Sound—Muskoka, ON]

Okay.

The Bank of Canada has made it clear that there are a number of challenges we're facing in Canada related to affordability. Tiff Macklem said, “Inflation in shelter prices is running above 6%. Part of this is due to...mortgage interest costs following increases in our policy interest rate. It also reflects higher rents and other housing costs, and these pressures are more related to the structural shortage of housing supply.” He also said, “All of this is making underlying inflation more persistent.”

I know you're a former banker. Would you agree that inflation is causing some of the problems here?

[Romy Bowers]

I can't comment on the state of inflation or the policies related to it, but I can comment that CMHC has done an extensive study of the housing supply gap that exists in Canada. We estimated there is a need for 3.5 million additional housing starts than are currently planned for in the next 10-year horizon. It's of utmost importance for Canada to really double our construction capacity in order to meet the needs of our growing population.

[Scott Aitchison, Conservative, Parry Sound—Muskoka, ON]

That's all well and good, but would you agree in general that inflation is making it harder to get more homes built?

[Romy Bowers]

When we look at the projects that CMHC finances, we have seen increases in construction costs. Because real estate development tends to be a very interest-rate-sensitive sector, there has been a slowdown in construction activity, given the high interest rate environment.

[Scott Aitchison, Conservative, Parry Sound—Muskoka, ON]

The governor also said, “It's going to be easier to get inflation down if monetary and fiscal policy [of the government] are rowing in the same direction.”

I ask you this: Would it be easier to build more homes if fiscal policy here at the federal level and monetary policy were rowing in the same direction?

[Romy Bowers]

This subject matter is outside my area of expertise.

One thing I can note is that at CMHC it is a very challenging environment for housing construction, given the interest rate environment and also the inflationary impact on supply chains. Through our low-cost financing and other programs, we're trying to support the construction sector to the best of our ability.

[Scott Aitchison, Conservative, Parry Sound—Muskoka, ON]

Thanks, Ms. Bowers.

[The Chair, Liberal, Bobby Morrissey]

Thank you, Mr. Aitchison.

Mr. Van Bynen, you have six minutes.

[Tony Van Bynen, Liberal, Newmarket—Aurora, ON]

Thank you, Mr. Chair.

It's good to have you back again. I look forward to an opportunity to update some additional information from our earlier discussions.

Through the housing accelerator fund, we're encouraging local governments to think big and to be bold in their approaches, which could include accelerating project timelines, allowing increased housing density and encouraging affordable housing units.

Can you discuss the best practices you've recently published on your website that municipalities can look to when making decisions to legalize housing and to maximize density at the local level?

[Romy Bowers]

As I mentioned, we have received over 600 applications from various municipalities across Canada. Based on our initial review of the applications, we have published a list of the 10 strongest practices that we see in the municipalities. This information is available on our website.

I'm not going to go through all of them, but some of the things I would like to highlight are things like, one, getting rid of practices like exclusionary zoning and building as-of-right housing. That's a great practice. A second practice is intensification of high-density housing around transit nodes. A third one would be the active support of affordable housing creation in municipalities. This can be done through things like property tax waivers and special treatment of development charges.

I can continue, but I really encourage the committee to look at the 10 items on our website. We will keep updating them as more applications are processed, but we are very excited by the activity and the enthusiasm of municipalities in adopting some of these best measures.

[Tony Van Bynen, Liberal, Newmarket—Aurora, ON]

Great. I'm looking forward to making an announcement in our own riding. It's coming up this week, I think.

One of the issues I often hear about from not-for-profit organizations in my riding is that the ones that are interested in applying for funding through the national housing strategy program lack the administrative capacity to complete the application process and in some cases actually invest a substantial amount of money for consultants to see them through that process. What is CMHC doing to help not-for-profit organizations get through the administrative burden?

[Romy Bowers]

This is something I think about quite a lot in my job. When you look at the programs CMHC offers, you see that the vast majority of them are loan programs. I recognize that it is a challenge for many smaller non-profit organizations to go through the loan underwriting process. CMHC has worked very hard to simplify our processes and to make the application process as easy as possible. We created a grant-only stream in some of our programs, which allows a simpler application route and processing within four to six weeks. That's been a great improvement.

With respect to use of our loan programs, I think one of the best tools we have is what we've called a seed funding program. It's a very limited fund of money currently, but it's a way we have of paying for some of the costs that non-profits have to incur to actually get some of the documentation assessments done to prepare for real estate development. I feel there is much more room for expansion of that program.

Also, I want to call out the work of the Community Housing Transformation Centre. This is a group that was funded by the national housing strategy program. Its function is to provide capacity support to non-profits. Unfortunately, the demand for their services is very large and their resources are limited, but they've done some great work to develop the capacity of non-profits, and we feel that there is a lot of work that can be done in this area.

[Tony Van Bynen, Liberal, Newmarket—Aurora, ON]

Since you last appeared at the committee, what progress has CMHC made in speeding up the application processes and their timelines since the launch of the national housing strategy? Is CMHC implementing lessons learned and best practices when it comes to application processing and funding rollout from the rapid housing initiative to other national housing strategy program?

As I recall, the last time we were here, we had a recent report from this committee that identified the need for an end-to-end process review with specific milestones and a request that specific goals be established to improve those processes. Have you made any progress in that?

[Romy Bowers]

We at CMHC look at our processes on a continuous basis. We survey our clients, whether they're successful in getting funding or not, to get their feedback, so we can actually improve on a continuous basis.

In terms of progress, since the start of the national housing strategy we have decreased our processing times by more than 50%. With respect to programs that involve grants or contributions only, we can get the money out the door within 60 days.

You mentioned the rapid housing initiative. That is a 100% grant program. We've been very successful with that in terms of getting the money out the door. Unfortunately, the demand for that program is very large, so there is probably one successful application for six that are submitted, but in terms of getting money out the door, it's very quick.

In terms of the loan-based programs, we survey our clients and we try to do a readiness assessment of the clients at the very start of the process. We find that if the clients have their documentation in order and if they have arrangements with other funders in place, we can process their applications much more quickly. We're trying to do a better job of doing that assessment first and to do a bit of a triage so that clients are provided with a realistic view of how long it takes.

[The Chair, Liberal, Bobby Morrissey]

Thank you.

Ms. Chabot, the floor is yours for six minutes.

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

Thank you, Mr. Chair.

Ms. Bowers and Ms. Gillis, thank you for being here this morning.

The housing crisis concerns us all, and I think that everyone recognizes that there is one. Today, I don't want to talk about the causes but rather the solutions.

We had the opportunity to meet the new minister in charge of the file. You were also kind enough to make yourself available to meet with us. I remember having told you already that we were halfway through the national housing strategy, since the plan runs until 2027, if I'm not mistaken. The strategy has been in place for approximately five or six years now.

CMHC acknowledges that there will be a shortfall of 3.5 million housing units by 2030, or more given the federal government's immigration targets, with over one million immigrants slated for Quebec.

What is CMHC's strategy to tackle the housing crisis?

Will we be able to identify measures that will help us resolve the housing crisis?

[Romy Bowers]

As I mentioned in my opening remarks, we feel there are two crises in Canada. There is a crisis in affordability for the most vulnerable populations. The reason for this crisis is that for the last 20 to 30 years, we as a nation have underinvested in social or community housing as an important part of our social infrastructure. We have some of the lowest rates of community housing in the G7 or the OECD.

One important part of the solution is for the federal government to work with all other levels of government, including Quebec, and the non-profit sector, to expand the social housing stock. We estimate there are about 650,000 units of social housing in Canada, and some experts feel that we need to double that to be at the G7 average. That's one part of the solution.

The national housing strategy represents an $82-billion investment in housing. Halfway through the program, we've committed about half the funding. We've repaired 130,000 units of aging social housing infrastructure and we've committed to the creation of about 60,000 additional units. As you can see, much more needs to be done, and this needs to be an all-of-society endeavour.

With respect to the second part of the crisis, this involves—

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

I need to interrupt you, because my time is limited.

There's something wrong here. For example, you're saying that you're focusing a lot on the global supply of rental housing units and that the private sector is the main partner. I don't want to demonize the private sector, which can contribute to the rental housing supply. However, Montreal has adopted what is known as the 20‑20‑20 bylaw, to force developers to build 20% social housing and 20% affordable housing, but they'd rather refuse and pay fines instead.

Should we continue to provide our support if there are no conditions attached to this commitment to build?

In fact, inevitably, it falls to non-profit organizations or housing cooperatives, who can also be part of the solution to this crisis.

What do you think about that?

[Romy Bowers]

I don't believe that the private sector is the sole solution to the housing crisis. I actually believe that to create deeply affordable units for those most in need, the government has to play that role of creating the housing. There is no way that the private sector can provide housing units at rents that are low enough for those most in need.

Having said that, I am very cognizant of the fact that 96% of the housing in Canada is created by the private sector. The private sector has not responded to the need that exists for housing. I think it's the role of government to create the conditions for the private sector to create the market housing that Canadians want.