Human Resources Committee on May 4th, 2026

[The Vice-Chair, Bloc, Andréanne Larouche]

I call this meeting to order.

Due to a vote in the House, we're running a few minutes late, which we will try to make up. Exceptionally, in lieu of and pending the arrival of the committee chair, Mr. Morrissey, and in my capacity as vice-chair of the committee, I will call the meeting to order so as not to delay our witnesses any further.

Welcome to meeting number 35 of the House of Commons Standing Committee on Human Resources, Skills and Social Development and the Status of Persons with Disabilities.

Pursuant to the motion adopted on Thursday, February 5, the committee is meeting as part of its study on housing starts in relation to federal programs.

Today's meeting is taking place in a hybrid format, pursuant to the Standing Orders. Members are attending in person in the room and remotely using the Zoom application.

Before we begin, I would ask all in‑person participants to consult the guidelines written on the cards on the table. These measures are in place to help prevent audio and feedback incidents, and to protect the health and safety of all participants, including the interpreters. You will notice a QR code on the card that links to a short awareness video.

I believe both witnesses today are joining us by video conference, but this is a good reminder for committee members.

To ensure an orderly meeting, I would like to outline a few rules for witnesses and members.

Please wait until I recognize you by name before speaking. For those participating by video conference, click on the microphone icon to activate your mike and please mute yourself when you are not speaking.

For interpretation, for those on Zoom, at the bottom of your screen you can select the appropriate channel for interpretation: either Floor, English or French. For those in the room, you can use the earpiece and select the desired channel.

A reminder that all comments by members and witnesses should be addressed through the chair.

For members in the room, if you wish to speak, please raise your hand. For members on Zoom, please use the “raise hand” function. The committee clerk and I will manage the speaking order as best we can, and we appreciate your patience and understanding in this regard.

While we're waiting for the chair to arrive, I would now like to welcome our witnesses.

From the Canadian Home Builders' Association, we have chief executive officer Kevin Lee, by video conference. Also by video conference, we have Mike Moffatt, founding director of the Missing Middle Initiative.

You each have five minutes for your opening remarks.

Mr. Lee from the Canadian Home Builders' Association, the floor is yours.

[Kevin Lee, Chief Executive Officer, Canadian Home Builders' Association]

Thank you very much.

Good afternoon, honourable members.

I'm usually in Ottawa. I know that many of you are from Quebec, and I'm in Quebec City today.

Thanks a lot for having me today.

The Canadian Home Builders' Association, or CHBA, represents over 8,500 member firms across the country. Our members build low-rise, mid-rise and high-rise homes for both ownership and rent.

Housing starts are often presented as a single headline number, but the breakdown of that number is important to see the real story. While recent data shows that total housing starts have been above the historic averages, the composition of those starts has shifted dramatically. In a way, that puts long-term affordability, economic stability and home ownership further out of reach for Canadians.

Over the last several years, starts for housing intended for ownership have declined sharply as a share of total construction. In 2021, 69% of housing starts were intended for ownership. By 2025, that share had fallen to 49%, with purpose-built rental housing now accounting for the majority of new housing starts. That's a drop of 50,000 units for ownership per year. In fact, last week's spring economic update acknowledged that while housing starts totalled 260,000 units in 2025, they were driven by record levels of purpose-built rental construction supported by federal measures. Rental supply is needed, and CHBA strongly supports it, along with federal action that has helped projects pencil out in recent years. However, rental housing should not be replacing homes for ownership. We need both, and we need much more on the ownership side.

The federal government has set ambitious targets to double housing starts, yet CMHC numbers show that achieving affordability requires not just more homes but also more homes for ownership. CMHC has stated that 4.8 million homes are needed over the next decade to fill the housing gap. This would mean nearly doubling our starts to between 430,000 and 480,000 annually. However, CMHC also states that, to succeed, 75% of those starts need to be for ownership.

It should also be noted that the increase in housing starts for rental is not the result of consumer preference. CHBA polling with Abacus research shows that 88% of Canadians under 45 would like to own a home one day. It is the outcome of policies at all levels of government that has made achieving this goal increasingly difficult.

Builder sentiment, as measured by CHBA's housing market index, reflects this reality. In B.C., the single-family HMI is 5.8 out of 100. In Ontario, the multi-family HMI is at 3.8. Even Alberta, which has been strong, is seeing a drop in their HMI. Across the country, confidence among builders has deteriorated to record lows, indicating still fewer starts for ownership ahead—a trend that must be reversed.

High sales taxes and development taxes, restrictive mortgage policies, municipal red tape causing delays, excessive building code changes, and escalating material and labour costs have significantly driven up the cost of construction and reduced the viability of ownership housing projects. If buyers cannot buy, builders simply cannot build.

There has been much talk and a study from this committee about Build Canada Homes, which will focus on government-subsidized non-market housing. The development of more non-market homes is indeed important, but it is critical that, in parallel, there is a strong effort beyond BCH to address housing affordability in order to double starts in market-rate housing, where 95% of Canadians reside.

In order to increase housing starts and return to affordability, there needs to be a more comprehensive housing plan, especially for ownership. We saw some movement in the right direction with the spring economic update and recent federal announcements, such as $1.7 billion in funding going to provinces and territories through the improving housing supply act. This includes contributing to the removal of HST on qualifying new homes in Ontario. Other than the deal with Ontario—and even that has stalled due to lack of federal-provincial agreement on who will administer the rebate—

[The Vice-Chair, Bloc, Andréanne Larouche]

Excuse me, Mr. Lee. I've stopped the clock. In the minute and five seconds you have left, I would ask that you please slow down a bit so that the interpreters can keep up with you.

Thank you.

I know you have a lot to say.

[Kevin Lee]

Sure.

I'll also say that no other federal-provincial partnerships have yet been announced. There seems to be no guarantee that provinces will use the funds to reduce the tax burden.

Announcements for infrastructure and to offset DCs through the build communities strong fund will be helpful, too. Again, outside Ontario, no other provincial deals have been signed. It is critical that there be plans for municipalities to find alternative funding models for infrastructure in order to permanently lower DCs once the federal funding winds down.

The spring economic update also made reference to streamlining regulations and addressing affordability issues with regard to building codes and standards. There has been talk of this for a few years now, but no action has really been taken. In the meantime, the 2025 building code was published, increasing the cost of a typical 2,500-square-foot home by an estimated $50,000 to over $100,000. Immediate action is needed to reverse this.

It is positive to see plans to support more construction financing, but what is also needed is fixing the stress test so that well-qualified buyers can better access a mortgage. By the way, that's a no-cost measure.

There are several other recommendations I could go through, but respecting time, I'm happy to take any questions you may have during the Q and A period.

Thanks a lot. I look forward to that.

[The Vice-Chair, Bloc, Andréanne Larouche]

Thank you very much. You're right on five minutes.

I now give the floor to Mike Moffatt, from the Missing Middle Initiative, for five minutes.

[Mike Moffatt, Founding Director, Missing Middle Initiative]

Thank you for having me here today.

The federal government has set an ambitious target of reaching 500,000 annual housing starts by the year 2035. An ambitious target is admirable, but it's no substitute for a goal, because a housing target is a means. It's not an end. It's not a goal. A young family in search of a home does not care how many housing starts there were last year. They care about finding a home that they can afford in their community and that meets their needs.

Canada's lack of a middle-class housing goal creates a policy vacuum that the Office of the Federal Housing Advocate has attempted to fill with a recent report advocating a 2060 target to address the middle-class housing crisis. That goal or target, if adopted, would cement a future of intergenerational inequality for generations Z, alpha and beta, threatening to tear apart the country's social and economic fabric.

The federal government needs a housing plan with a clear goal, a reasonable time frame and a set of quantifiable objectives, such as that every middle-class dual-earner couple in their thirties should be able to afford to purchase or rent a new entry-level home in any community in the country suitable for a household of five by 2035. That's just one example.

There are many goals that the federal government could come up with, but it needs to have one, and we should be clear that the purpose of such a goal is not for the federal government to engage in central planning and deciding where homes are built and at what price. Rather, it is to set up the conditions for success: to understand what is working well in the current housing system and what requires improvements. Defining a clear goal clarifies the trade-offs in public policy, ensuring optimal value for money.

Most importantly, clear goals should be based on the attainability of new housing, with an emphasis on “new”. Governments should not be in the business of trying to manipulate resale home prices. Rather, they should be ensuring that builders can create suitable options that families can afford and that the market can respond to changing conditions, such as unexpected population increases. Then government can fill in the gaps with below market rate housing where necessary.

Multiple objectives with intermediate targets are needed. A simple target of 500,000 homes by 2035 says nothing about the size of those homes or, as Mr. Lee pointed out, whether or not they're owned or rented, where they are located, how attainable they are and what the policy path to get there will be.

That path is important. Achieving that simple 500,000-start target is becoming increasingly out of reach, as the CMHC projects that housing starts will decline over the next three years, falling below 220,000 units by 2028.

Now, this decline can be reversed, but only if the federal government develops a clear plan of how it will achieve that target and links policy reforms to policy outcomes. Take Build Canada Homes, for example. The federal government's flagship program lacks key performance indicators and accountability measures. We do not know or have not been told how many housing starts this program will contribute to each year.

Finally, I want to say a word of caution about the housing start metric. Unlike our global counterparts, the CMHC does not record a project in its housing start data until the foundation meets grade, meets ground level. It is a poor real-time indicator of the health of the housing construction sector, as it fails to reflect investment decisions made anywhere from one to three years before the CMHC records it as a housing start. At the Missing Middle, we've been suggesting that the CMHC should also consider tracking excavations, as the U.S. and Australia do, to provide a better real-time indicator of new construction activity.

Thank you for your time. I look forward to your questions.

[The Vice-Chair, Bloc, Andréanne Larouche]

Thank you very much for your remarks. We all took copious notes.

I want to say that I will keep my turn to speak, that of the Bloc Québécois, if that suits everyone. It's kind of a unique situation today.

I'm going to start with Mr. Aitchison from the Conservative Party for six minutes.

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

Thank you very much.

Gentlemen, thank you for being here, both of you, again.

Kevin, you actually got to speak this time. That's nice, eh?

Dr. Moffatt, at the end of your comments, you spoke a bit about how we count starts. We're talking about housing starts. The minister stood in the House and bragged about how housing starts are up. I'm not suggesting he's lying, but how we count these things matters. There seem to be a lot of different ways to count this.

Can you elaborate a bit on what a start really is, what we're doing in this country and maybe we how can do it a bit better?

[Mike Moffatt]

Absolutely. The common-sense definition of a start might be where the shovel hits the ground. You actually have workers on the site who are starting to build the home, but when it comes to the types of homes we build, which these days are traditionally high-rise units that have underground parking garages, the CMHC doesn't count that as a start until the entire underground parking garage is built. That could be four, five or six layers and then the parking garage basically hits level ground. You start building the apartment structure on top of that.

That's a bespoke Canadian way of doing things. Other countries define a start differently. In the U.K., it's actually when they start pouring the foundation. For other countries, it's when they start actually digging the hole. What we have suggested to the CMHC is that they track excavations. That would give us a better real-time indicator of when a project has actually started and work is being done. We recognize that not all excavations necessarily always turn into housing completions, but at least it gives us a better sense of what's happening on the ground.

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

Thanks very much for that.

Mr. Lee, this is kind of a weird thing to do, I guess, but I'm wondering if you could comment on what Dr. Moffatt said and on whether you agree with that assessment. Then I'll have a follow-up based on what you say.

[Kevin Lee]

Yes, I think that's important too, because one of the things we're not good at tracking is leading indicators. It's why we have our housing market index, which is a sentiment indicator that tracks even ahead of sales. It's what's going on with sales, but more what the traffic is like. We need to be better at what's coming down the pipe.

What Mr. Moffatt is talking about would get us closer to housing starts, which are basically a lagging indicator too. You've already made your sales and you're getting going, but at least you'd be ahead and you wouldn't have the false security that there's a lot of housing starts right now. A lot of those starts were parking garages, as Mr. Moffatt was saying, that started a while ago, so it wouldn't be, yay, we're off to the races here.

I think it's an important distinction that we need to continue to make.

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

Is it fair to say, then, that in some cases we're calling a housing “completion” a start? I understand from some of the larger builders, particularly in larger centres like the Lower Mainland in Vancouver, that probably 40,000 units will come online and 20,000 units will come online over the course of the next year, but those projects were literally started four or five years ago. Nobody's digging any new holes. Is this why this is an important distinction?

[Kevin Lee]

Yes. That's exactly right. I wouldn't say we're counting completions as starts, but we're catching these starts that actually started a long time ago and are calling them starts now, suggesting we're in better shape than we actually are. Those started when the market was completely different, as you pointed out. We're basically seeing nothing going on in many cases right now in terms of legit housing starts.

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

Can you tell us definitively whether starts are up or down? What's going on with true starts? I'm talking about people digging a hole to start building a house.

[Kevin Lee]

Overall, starts would be down. Again, we don't have that exact data because of exactly what Mr. Moffatt was talking about. I can tell you that starts for ownership are way down. They've been replaced by purpose-built rentals. Anything in terms of treading water has been because we've replaced ownership with purpose-built rentals. The ownership side of things is way down.

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

Dr. Moffatt, would you agree with the assessment that rentals are important but cannot supplant the importance of home ownership, which still has to be an important part of the mix in Canada's housing market?

[Mike Moffatt]

Yes. Absolutely. We need both. I think we're also starting to see a slowdown in purpose-built rental construction in some markets. There are concerns that a lot of new inventory is getting built. Many of those decisions were made when Canada's population was growing by 1 million to 1.5 million persons per year. Now the industry doesn't really know the future of immigration policy past 2027.

I think we're also going to start see a slowdown in purpose-built rental construction. It's not even zero sum; I think we're going to see a scaling back of both.

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

We really have only about 30 seconds left, so I think we will continue on to the next questioner. We got started a bit late, so I'll let somebody else go. I may get a chance to talk to you again, so I'll leave it at that.

Thanks.

[The Chair (Robert Morrissey (Egmont, Lib.)), Liberal, Bobby Morrissey]

Thank you, Mr. Aitchison.

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

[Caroline Desrochers, Liberal, Trois-Rivières, QC]

Thank you very much, Mr. Chair.

I want to thank the witnesses for being here with us today, but also for all their commitment over the past few years and months. I know they've been part of the conversations on the housing issue, and I thank them for their ideas and everything else.

Mr. Moffatt, you've mentioned quite a few elements that have been holding back construction and slowing the growth of new housing supply.

I wonder if you can talk to us a bit more about which, of all these challenges, has the biggest impact and particularly where the federal government, in your view, can do something about it.

I'll come back to the municipality and Build Canada Homes, which you mentioned, Mr. Lee.

If you could start, I'd be interested in that.

[Mike Moffatt]

I would say that the biggest challenge right now is the cost of construction. We've seen the price of resale homes fall but, for the most part, the cost of construction hasn't. The materials to build a home haven't gotten any cheaper. In fact, with geopolitical challenges, some of those have gone up. We have seen some land price decreases in certain markets but, overall, it's tough for builders to build something to compete with the resale market.

I think where the federal government can be of most immediate help is doing what they've actually already done on HST. Expanding that to the provinces takes anywhere from five per cent to about 15% off the cost of the new home, depending on the province. Because the HST applies only to new homes, it helps them become cost competitive.

Over the long run, I think you are, then, looking at working with municipalities on issues like development charges and, again, with the Ontario agreement. I think it could be just de-risking. One of the biggest challenges builders and developers have right now, particularly in high-rise, is that they don't know the future of the federal government's immigration policies. When I talk to builders and developers in high-rise, the ones who are going to continue to build right now are the ones who are making a bet that immigration numbers will go up in the future, and the ones who are on the sidelines are thinking that the demand's not going to be there.

It's being able to give industry a 10-year timeline instead of what we have now, which ends in 2027, and nobody's really sure how many homes they're going to need in the future, because we don't know how fast the population will grow.

[Caroline Desrochers, Liberal, Trois-Rivières, QC]

Mr. Lee, I know you've had many conversations on Build Canada Homes. In my unbiased opinion, it's off to a great start. Once we pass Bill C-20, it will become a Crown corporation and, of course, I'll be happy to put forward some KPIs as part of its departmental plan.

We're already seeing that it brings to the table different, more flexible methods of financing and different kinds of capital. I wonder, Mr. Lee, what impact you think it can have on the pace and the cost of building in Canada.

[Kevin Lee]

I think it's going to be important for non-market housing, and we need more of it. One of the things we've talked about is the need to make smart use of federal lands so that we can offset some of the costs of construction, because, as Mr. Moffatt said, the price of building new things is just going up and up. As he pointed out, the way we can deal with that quickly is through taxes and reducing those, but—

[Caroline Desrochers, Liberal, Trois-Rivières, QC]

We keep talking about this five versus 95 and how we really need to also think about the 95. I want to remind everyone that a lot of the programs from CMHC and a lot of the programs in Build Canada Homes will also build market housing. There will be a lot of mixed-use projects. We're seeing a lot of them, even those that we have already announced.

I just want to clarify that conversation a little.

[Kevin Lee]

I haven't seen those numbers.

The numbers that we're looking at are up to 49,000 units on lands that have been identified for the program. That 49,000 is a good number if it's in one year, but it's going to be spread over many years. We were to double housing starts. The number we need is 500,000.

I think that puts it in context, and that's not to say anything bad about Build Canada Homes. I think there's going to be some really good work there, and I think the idea of also helping to create a more steady pipeline for some of our factory-built members can be a good thing. It's a start, but we do have to look at the rest as well. I think Build Canada Homes will have a part, but it's everything else that's going to make up.... We're not going to double housing starts with Build Canada Homes. We're going to have to do it with the rest of the market.