Hello. Thank you for the opportunity to address the committee on this matter.
Maytree is a Toronto-based human rights organization dedicated to advancing systemic solutions to poverty. We believe the most enduring way to keep people out of poverty is to reimagine and rebuild our public systems to respect, protect and fulfill the economic and social rights of every person in Canada.
In 2019, the National Housing Strategy Act declared that housing policy in Canada will be guided by the “fundamental human right” to housing. My remarks today will argue that the establishment of Build Canada Homes will further this important project.
Canada's housing shortage is urgent and systemic and solving it will require more than incremental policy change. However, our history proves that we can act quickly and decisively at scale when there is political will. That's why Canada must treat the housing crisis as a nation-building project comparable to populating the Prairies or to the construction of the St. Lawrence Seaway. Solving big problems requires bold ideas and coordinated large-scale federal leadership. The establishment of Build Canada Homes represents an opportunity to bring this same approach to addressing today's housing crisis.
The past decade of Canadian housing policy has been an attempt to build more housing through a series of subsidies to private and non-profit housing developers. While this has had positive effects at the margins, it has failed to create new housing on a scale commensurate with the magnitude of the crisis.
The reason the government is reluctant to do what is necessary to build at scale is that there are real limits on how much the treasury can afford to spend to incentivize others to build. That's why Maytree has recommended a different approach, based on the simple fact of government accounting. Giving away land and money for housing depletes the treasury. Investing in housing on government-owned land grows the treasury by creating an asset on the government's books that offsets the upfront investment. Government itself does not have to build or operate the housing. This can be contracted to those with expertise.
Consider, for example, if Build Canada Homes were to contract with non-market developers to build on government land, with the resulting housing managed by a non-profit provider. The government would retain ownership of the built asset and depreciation costs would be offset by rental income remitted annually by the operator. Like a toll on a new bridge, those with homes would pay rent to cover the expenses booked by the government over the life of the asset.
By removing or reducing the typical land and financing costs, and by eliminating profit margins through partnerships with non-profit developers and operators, BCH could make these projects viable at rents well below market rates.
Other nations, such as Austria, Demark, Finland and France, have used similar direct build policies to create a sustainable stock of non-market rental housing—