Human Resources Committee on May 7th, 2026

[Raymond Sullivan]

Yes. Thank you, Ms. Desrochers.

The cost of housing is not exclusively based on the cost of producing that housing. It's based on what the market will pay for that housing. When the market price drops too close to or below the cost of producing it, then we have a system failure.

However, the rent of a 20-year-old apartment building down the street from here is not based on the cost of housing, development charges or government taxes. The resale price of a condo three blocks from here is not based on development charges and government charges. It's based on broader market conditions. When those broader market conditions are in misalignment, as they have been increasingly over the decades, and particularly in the past six years, we see this kind of system failure. That's what we need to address.

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

Multiple partners are involved. We will not delude ourselves by thinking that the federal government will fix everything. We can't do it alone; it requires collective effort. You mentioned the role of municipalities.

Would you agree that Build Canada Homes will increase housing supply and accelerate construction?

Mr. Wilkes, earlier, you spoke about the various mechanisms that will be applied to seek funding from various sectors to build houses faster. Would you agree that increasing housing supply will somewhat change market conditions and that Build Canada Homes is an effective tool for that?

[David Wilkes]

Build Canada Homes can't be viewed as the single and only solution to the challenges we have in housing supply. It's an important component, and it's an important component within the mandate that it has. As I indicated, I believe we need to take a whole-of-market approach. We need to look at market housing. We need to look at non-market housing.

We also can't forget the economic impact that the sector has, and the provision of well-paying jobs, in GDP and taxes. I know that's not the focus of this committee, but it is an aspect that I would encourage the committee not to forget.

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

Thank you.

[The Chair, Liberal, Bobby Morrissey]

Thank you, Ms. Desrochers.

Ms. Larouche, you have the floor for six minutes.

[Andréanne Larouche, Bloc, Shefford, QC]

Thank you very much, Mr. Chair.

Thank you very much to the witnesses for being here today to speak to the critical importance of housing, which is a basic need for every human being and every household.

This week, I met with representatives of the Coopérative Holocie. They came to Parliament Hill, and I want to acknowledge that. This organization is from my riding, and it has a well-articulated vision for developing social and community housing. That's what we call this type of housing in Quebec, since we have some concerns about the infamous definition of affordable housing. What does “affordable” mean? That may be open to various interpretations.

The co-op has several ongoing projects, but it's trying to see how to get these projects off the ground within the context of Build Canada Homes. Obviously, they know that they have to engage with the Société d'habitation du Québec, or the SHQ because Quebec concluded an agreement that said that it will have the final say on projects, but nevertheless, it's quite interesting. I want to point out that the co-op contributes to the provision of housing directly, and this has driven up vacancies, particularly in Granby. It had one of the lowest rates in Quebec, but now, projects like those of Holocie are making more social and community housing available for families in need.

Mr. Sullivan, what does that say about the potential impact of Build Canada Homes, for example, on the construction of social and community housing?

I'd also like you to tell me about homelessness, because you spoke about it. Lack of housing can push people into the streets.

[Raymond Sullivan]

Thank you for your question, Ms. Larouche.

Intergovernmental coordination is the key to our success when it comes to housing.

Intergovernmental coordination is absolutely key in this, as are predictability and stability. One of the important innovations in the national housing strategy was that it had a 10-year timeline. We're now reaching the end of that, and we don't have another 10-year timeline.

Build Canada Homes has been capitalized with initial capitalization for a five-year period. You've heard Mr. Wilkes talk about 10- and 11-year planning timelines for housing. We need the stability and the predictability to build the kinds of homes in Granby and everywhere else in the country that Madame Larouche is talking about.

[Andréanne Larouche, Bloc, Shefford, QC]

In your opinion, what steps should the federal government take to prevent chronic homelessness? What type of housing should the government focus on to achieve this? What would that take?

[Raymond Sullivan]

We need specific targets around affordability, as you mentioned. Without a definition, the word “affordability” is meaningless. We need targets based on income. It is a system as a whole, and this is what we're seeing. People are being priced out of the market and rendered unhoused and homeless. We need a healthy system that serves people with low, very low and moderate income and targets to do so.

[Andréanne Larouche, Bloc, Shefford, QC]

Mr. Richter, in your opinion, what type of housing should the government focus on to address this chronic homelessness crisis?

[Tim Richter]

I would agree with Mr. Sullivan that we need to focus on deeply affordable and supportive housing.

I want to build on that point and respond to an earlier one before I get to your question.

Madame Desrochers made a really important point in saying that the federal government can't do it alone. When Ray is talking about doubling the amount of social housing in Canada, that's somewhere in the neighbourhood of 650,000 units of housing, which is about $325 billion in construction at about $500,000 per unit.

The federal government very clearly can't do this alone. Build Canada Homes can't do it alone. I would argue that if we're serious about reducing and ending homelessness, first, we have to start with building a national housing accord and have some agreement between the federal government and provinces on how we're going to set goals as a country of reducing homelessness and core housing need and restoring affordability. Having those targets and deciding you're going to end or reduce chronic homelessness is very important.

Second, you have to coordinate with the provinces. To the questions earlier about costs and the need to reduce them, some of the barriers we're talking about are in provincial jurisdiction, such as development charges, provincial taxes, permitting time and zoning.

We've seen in the past the federal government remove the GST, for example, on rental housing. However, a city will then come in and take up that space and add it to a development charge in order to build water treatment plants, or something like that. Therefore, getting that coordination between the federal government and the province is essential.

The kind of housing you need to build is exactly what Ray says it is: deeply affordable housing. But there still needs to be a federal homelessness strategy. How exactly is the federal government going to end and prevent and reduce chronic homelessness?

[Andréanne Larouche, Bloc, Shefford, QC]

I don't have a lot of time left.

Mr. Sullivan or Mr. Richter, can you tell me, in a few seconds, what the federal government can do to ensure homelessness does not continue to rise, bearing in mind that this area falls under Quebec's jurisdiction?

[Raymond Sullivan]

It should have specific targets for the homes that Build Canada Homes will support, especially focusing on homes for people with low and very low incomes.

[The Chair, Liberal, Bobby Morrissey]

Thank you, Ms. Larouche.

Now we move to Mr. Reynolds for five minutes.

[Colin Reynolds, Conservative, Elmwood—Transcona, MB]

Thank you, Mr. Chair.

Thank you, witnesses, for coming here today. I really appreciate all of the perspectives you bring to this important discussion.

I worked for 20 years in the construction industry as a construction electrician. The construction industry is extremely competitive. Contractors, builders and developers are actively seeking projects to build. It is an integral part of the industry's business model.

When a project comes up, contractors will literally crawl all over and undercut each other to be awarded the job. Often they will work with the developer or the owner of the building—the client—to cut costs or find cost savings.

If there is such a high demand for these building projects—and obviously these contractors are going to be looking to build this housing—what's holding up the flow of projects? If builders aren't building, but they're trying to build, obviously we've got an issue there.

I want to ask that question of all three of you. Mr. Wilkes, I'll ask you first, and then Mr. Sullivan and Mr. Richter. You all have very different perspectives on this.

Mr. Wilkes please.

[David Wilkes]

I think you framed it incredibly well. The need to expedite approvals is almost immune from the competitive nature of the costs you described—the services and materials provided to develop housing from the private sector, the government fees and the taxes levied.

We need to bring that discipline or competitive nature into the discourse as we look at the other side of the costs that are added. I can't underestimate the impact of those costs and the fact they have not adjusted to the demands of the industry as others have, but just gone in that one direction I described earlier.

I think the role the federal government can play in providing incentives to municipalities, through the provinces—to reduce development charges, remove the HST and expedite approvals—is to focus on starts and outcomes, because you can't live in an approval. You have to live in a built house.

That must come with a recognition of the need to change those costs and correct their current upward spiral. My perspective is thus to focus on disciplining the impact of those government fees and taxes on new buildings.

[Raymond Sullivan]

When the non-market community housing sector develops housing, we use the same trades, contractors, builders and architects.

One of the big differences is that we're trying to bring the costs and rents below the market value. The cost of affordability competes directly with the cost of capital. We're somewhat reliant on low and below-market lending from CMHC, Build Canada Homes and grants from government. When those things are not available and not available in a predictable way over a long time period, it makes it difficult to develop the pipeline that we need to ensure that we can keep building for the next decade.

[Tim Richter]

I would quickly build on what Ray has just said.

I note that the physical construction of the unit isn't really the issue in terms of getting things built. Yes, you can do things a bit faster. There are some modern methods of construction the government is talking about, which I think are great.

We also need to look at the friction in the process Ray is talking about. For community housing providers and social housing providers, it's the time it takes to get things permitted and go through all the necessary hoops and over the necessary hurdles to apply for funding and get funding.

I heard—this may be out of date—about a year ago that less than 10% of the housing that was funded in the national housing strategy has been occupied. There have been a bunch of issues where there have been delays in getting the funding, or there have been delays somehow in the process. Because of those delays, the economics of the project have changed, which requires them to go back and make adjustments, which then creates more delays.

We have to be very careful in thinking about reducing the friction for those community housing providers. A big part of that is helping some of Ray's members put together the capital between the federal government, provinces and cities. Think about how we reduce the permitting time to get them there. Again, that's a conversation between the federal government and the provinces.

[The Chair, Liberal, Bobby Morrissey]

Thank you.

Mr. Joseph, you have the floor for five minutes.

[Natilien Joseph, Liberal, Longueuil—Saint-Hubert, QC]

Thank you, Mr. Chair.

Thank you to all the witnesses for coming here.

Mr. Richter, can you share your perspective on the importance of having a construction strategy for the housing continuum?

Ultimately, reversing the trend will mostly involve preventing homelessness through non-market housing and affordable homes. What do you think about that?

[Tim Richter]

First of all, I want to acknowledge and support the government's leadership on housing. The most important thing in the national housing strategy was highlighting and having the federal government take a leadership role, which I want to acknowledge and thank the government for.

When you look at the housing system, this is where having targets, priorities and outcomes is really important. Given the scale of the housing crisis, we're seeing a trillion dollars that we need across the housing system. You have to ask this question: What is the role of government?

I believe—Ray would probably agree as well—that the role of government is to intervene in particular where the market can't support people. The market is clearly not functioning well for those people living in deep poverty in Canada. They cannot access market rent. If I were to prioritize where the first, second and third dollars of federal investment go, I would prioritize deeply affordable, supportive and community housing.

[Natilien Joseph, Liberal, Longueuil—Saint-Hubert, QC]

Thank you.

Mr. Chair, I forgot to let you know that I'll be sharing my time with my honourable colleague Ms. Tesser Derksen.

[The Chair, Liberal, Bobby Morrissey]

Go ahead, Ms. Tesser Derksen.

[Kristina Tesser Derksen, Liberal, Milton East—Halton Hills South, ON]

Thank you so much.

I wanted to note that, in the last round, one of our opposition colleagues was complaining quite a bit about the delays she had experienced at Service Canada locations. I think that's a great example of why we have to be careful about cutting funding to service delivery.

I was a municipal councillor in my riding of Milton East—Halton Hills South. Municipalities depend a great deal on development charges to fund their service delivery to their residents.

Mr. Wilkes, what's your understanding of how municipalities will be made whole through government support, given the reduction in development charges that they're going to be experiencing?

[David Wilkes]

Thank you very much for the question. I see that you're from the GTA, and I'm familiar with some of the challenges that were faced there.

The $8.8 billion that has been made available is meant to do exactly that. It's meant to provide that funding over a three-year period, but as the program is developed and administered by the provincial government, we believe it needs to be a pathway to structural change.

If you look at the current responsibilities that are within the development charges—things like water, waste water, regional roads, bridges and the types of things that have a much greater benefit beyond what the actual development is—you see a disconnect on the payment of those charges or costs for the current new development versus what benefits the entire community and benefits the life expectancy of that asset. We believe the municipality will be made whole through the funding that is available, but it needs to be a pathway to structural change to do what Mr. Richter, Mr. Sullivan and I all consistently agree on.

We have a cost problem in this sector. Without looking at new ways to reduce those costs, we'll do what Einstein famously said: keep doing the same thing and expect different outcomes. It's not going to work.

That's why we're very excited about this program: It addresses the short-term needs but also addresses the long-term need to change the way the tax is applied to new homes through development charges.