Human Resources Committee on May 7th, 2026

[Louis Villeneuve, Liberal, Brome—Missisquoi, QC]

Thank you.

[The Chair, Liberal, Bobby Morrissey]

Thank you, Mr. Villeneuve.

I'd also like to thank the new members.

This concludes the first hour.

Thank you to the witnesses, Mr. Groen and Mr. Hickey.

We'll suspend to transition to the second hour.

[The Chair, Liberal, Bobby Morrissey]

We're back.

Members, please take your seats. We will resume with the second panel.

I won't go over all the points again, but please ensure that you're on the proper channel for interpretation. It allows you to participate in this meeting in the official language of your choice. Witnesses who are appearing virtually have been sound-tested and approved. Please direct all questions through the chair and wait until I recognize you before proceeding.

We're going to move quickly to our second panel on housing starts in relation to federal programs.

We have three witnesses today.

From the Building Industry and Land Development Association, we have David Wilkes, president and chief executive officer. From the Canadian Alliance to End Homelessness, we have Tim Richter, president and chief executive officer, by video conference. We also have Raymond Sullivan, executive director of the Canadian Housing and Renewal Association.

You each have five minutes for opening statements.

We'll begin with you, Mr. Wilkes.

[David Wilkes, President and Chief Executive Officer, Building Industry and Land Development Association]

Good morning, Mr. Chair, and thank you for the invitation to appear today to share our organization's perspectives on how federal government policies affect housing starts.

As the chair noted, my name is Dave Wilkes. I am the president and CEO of the Building Industry and Land Development, BILD, Association. It's a pleasure to be back in front of the committee today. I appreciate the opportunity as well to address you not only in the role that we have as BILD, but as the co-facilitator of the large urban centre alliance, a coalition of leading developers and builders from Canada's major metropolitan areas.

I provided the clerk with a more detailed copy of my remarks that includes recent sales data from across the country, which I shared and discussed in my appearance here last week.

Federal policies, institutions, regulatory requirements, programs and other factors that influence access to capital have a direct and significant impact on the types of housing that come to market.

As this committee looks forward and adjusts to shifts in the new home supply market and how the federal government influences that market, it is very important to do so in the context of a number of key federal programs that are reaching their maturity. These include the expiration of the foreign buyer prohibition and the end of the housing accelerator fund at the end of this year; the ending of the Ontario HST relief that was introduced in April for a period of one year; the ongoing need to look at greater flexibility for the stress test; and the need to update Canada's immigration policies, particularly in the context of the foreign buyers' ban.

Within this context we would encourage the committee to consider the following five points.

The first point is the need for improved national data on the new housing market. It's a common mistake to consider that Canada has a single monolithic housing market, and this tends to lead to the desire to focus on single national solutions rather than those tailored to market conditions and needs for specific geographies. CMHC does an admirable job on housing statistics, but we recognize it's the best we have rather than simply the best. We are pleased to see the commitment that the government has made within the spring economic statement to direct resources to address this issue.

The second point is a better understanding of the interplay of housing and immigration. This not only encourages ensuring the adequacy of housing supply to meet the immigration targets the government has set, the real timelines that are required to grow this housing supply, but also the impacts of immigration on the skilled labour force. I encourage the committee to take a look at models that are existing internationally such as in Australia, and how the balance between foreign buyers and domestic needs is met.

The third point is the need to support capital requirements to build necessary housing. Currently CMHC estimates that $2 trillion in capital deployment over the next five years is required to meet Canada's housing objectives for both ownership and rental, while ensuring affordability and adequate supply. Enabling this requires a strategy to attract private capital along with a review of government financing and loan programs to ensure that they are well resourced and enable loans of significant size and stability to meet the required demands. We also were encouraged to see the commitment to review these funding mechanisms once again in the spring economic statement.

For the fourth point, I'll reference a long-held issue. In the GTA, it still requires 10 years to complete a low-rise project and 11 years to complete a high-rise one. A significant portion of that measured in years is the development approval process at the municipal level. Each month of delay adds thousands of dollars to the cost of the end product, as this committee recognizes. The federal government can play an enabling role by providing incentives through the provinces to work with municipalities to expedite approvals, but I would stress that those approvals must lead to the delivery of new homes.

Lastly, the time has come to be transparent with new homebuyers on the level of government fees, taxes and charges on new homes. Until recently, in the GTA, fees and taxes collected by all levels of government constituted 25 % to 30% of the cost of a new home. We believe that these costs should be declared and defined to the buyer when they're purchasing a new home and declared both at the time of purchase and upon closing.

Mr. Chair, thank you again for the opportunity to appear today. I always enjoy the discussion with this committee. The federal goal of doubling housing construction is an important one. Our recommendations build on those we saw in the Senate's “Out of Reach” report. We encourage this committee to consider these and those of other witnesses, as well as the compendium of information that is available as you develop your report.

I look forward to your questions.

[The Chair, Liberal, Bobby Morrissey]

Thank you, Mr. Wilkes.

We're going to go to Mr. Richter.

[Tim Richter, President and Chief Executive Officer, Canadian Alliance to End Homelessness]

Good morning.

Thank you, Mr. Chair, for the opportunity to speak with you today.

I'm going to start by echoing Mike Moffat's testimony to you from the other day. He said:

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.

A fundamental flaw in the federal government's approach to housing policy is a lack of clarity on their priorities and the outcomes that they want to achieve. Most governments tend to view success in policy through the outputs of that policy, such as the amount of money they spend and the number of units started, not whether or not affordability has improved for people.

Not to put too fine a point on it, but housing affordability in Canada has deteriorated for nearly every income quintile in the country over the course of the first national housing strategy. Something clearly isn't working.

In addition to leading the Canadian Alliance to End Homelessness, I also co-chair the National Housing Council. The council published a report proposing an outcomes framework for federal housing policy and also sent a letter to Minister Robertson framing an outcomes-focused approach for a new national housing strategy. I'm happy to send copies of these documents to the committee, if you wish.

In both of these documents, the council argues that housing policy focused on outcomes allows the government to target policy more precisely and have greater clarity on which options they have available to them. The kind of housing supply and policy needed to improve affordability for the young family in Mike's example will be different from the measures needed to deliver supportive and deeply affordable housing to people at risk of experiencing homelessness. In both cases, there can be both demand- and supply-side measures governments can take. Reducing core housing need, for example, could be accomplished with enhancements to the Canada housing benefit or new supply, or a combination of the two. Reducing homelessness will require deeply affordable and supportive housing, along with enhancements to the Canada housing benefit in alignment with the provinces.

Given many competing demands on the federal treasury, it's also critical for the federal government to have clear priorities. I'll remind the committee that the housing policy of Canada is laid out in the 2019 National Housing Strategy Act. That act says the “progressive realization of the right to...housing” is the housing policy of Canada. That commitment requires that the Government of Canada prioritize reducing homelessness and core housing need as outcomes of its policy.

In my view, this prioritization should not be read as the federal government focusing exclusively on deeply affordable and non-market housing. Housing is a system and what happens for the family in Mike's example will eventually impact what happens for a family in core housing need. Housing is a system and needs to be treated holistically.

In my view, getting precision on the desired outcomes and priorities for housing policy is the most important decision for government to make in housing policy. Speaking with federal officials, it's becoming clear their mandate and direction are to get money out the door. I fear the federal government is in danger of repeating the mistakes of the first national housing strategy in rushing to get money out the door without clarity on what the investment is supposed to achieve.

Success in housing policy is not going to be measured by how much money is spent or how many units are started. Success will be measured by the number of families finding housing that meets their needs, and that they can afford, in their communities. It will be measured by reduced homelessness and improved community safety. It will be measured by the number of families who aren't worried at the end of every month about whether or not they'll be able to pay their rent.

The expiry of the national housing strategy and the upcoming federal budget create an opportunity for the federal government to stop and take a beat to be clear about the outcomes they want to achieve, to set clear priorities and to design the new national housing strategy and related housing programs around the outcomes they want to achieve.

I'll close with a mantra I picked up in the army: Slow is smooth and smooth is fast. Rushing leads to mistakes that will slow you down. By moving more deliberately and focusing on precision, you'll ultimately move faster and more effectively. This advice is every bit as applicable to federal housing policy as it was to me as a young soldier.

Thank you all very much. I look forward to your questions.

[The Chair, Liberal, Bobby Morrissey]

Thank you, Mr. Richter.

We'll now go to Mr. Sullivan for five minutes.

[Raymond Sullivan, Executive Director, Canadian Housing and Renewal Association]

Mr. Chair and members of the committee, thank you for the opportunity to be here this morning.

My name is Raymond Sullivan, and I'm the director of the Canadian Housing and Renewal Association, or CHRA.

CHRA, the Canadian Housing and Renewal Association, represents the non-market community housing sector.

Housing starts are not the right metric. We can have high housing starts and a worsening housing crisis at the same time, and we know this because, up until recently, that's exactly what was happening: record-breaking housing starts and, at the same time, rising homelessness and housing unaffordability. How is this? Higher rents and higher purchase prices fuelled more construction.

Two years ago we had a labour shortage. We couldn't find enough skilled tradespeople to work on construction sites. The cost of materials was rising for the same reason: We could not meet demand.

Where are we now? Well now, in a lot of markets, we actually have an oversupply of housing at the high end, yet still a desperate shortage at affordable rates. Housing starts are dropping precipitously in some parts of the country.

I want to note that housing starts are a lagging indicator. Projects that are starting right now were conceived of and initiated years ago. There are even fewer projects being initiated now. Why? It's because rents and purchase prices have levelled off, and that was the intended outcome of government interventions.

However, here is the unintended consequence: Construction of new supply dries up, industry can't make as much money so it slows down, and the market self-corrects. Eventually, the cycle will turn around and begin again, but housing needs are not cyclical; they're constant. Where does that leave us? Well, in the upswing, we saw rising homelessness as more people were completely priced out of the market, and that hasn't gone away. The social, economic and human cost of being unhoused is long-lasting.

We now see construction workers going through an employment roller coaster. Three years ago, it was hard to keep trades on sites because they kept getting better offers from other contractors, and now only the A-list is working because the B-list and the C-list got laid off.

Developers are losing money, sitting on unsold inventory and failed projects, and we still have high rates of homelessness and core housing need. Is that any way for an economy, for a society to manage a basic need and a human right like housing? No.

What is the solution? A big part of the solution is to stabilize the housing market, particularly for the 50% of Canadian households that are most vulnerable to these swings. Households earning median income and below need access to housing that operates outside of the speculative market, non-market housing.

In the 1980s and early 1990s, 15%, 16% or 17% of all housing starts were non-market community housing; today, it's about 3% or 4%. At our peak, non-market community housing represented over 5% of Canada's housing stock. In the mid-1990s the federal government withdrew from this priority, and the share of non-market housing has been slowly declining ever since.

Housing unaffordability has been rising. Rates of homelessness have also been rising. Currently, less than 4.5% of housing is non-market community housing, and it has actually been slipping and dropping, despite investments from the national housing strategy, because those investments were not targeted to housing need and affordability.

We aren't even keeping up with population growth. Non-market community housing is falling behind, at less than 4.5% of the housing stock, yet an additional 15% of households are in core housing need. Add those together, and you get the target we need to aim for: 20% of housing supply as non-market, mission-driven, affordable housing.

We can start by setting a goal to more than double the current share of community housing in the next decade, and to quadruple the stock of indigenous-led community housing. This will protect a significant number of households from the boom-and-bust cycle of the housing market.

Non-market housing does something the private market cannot reliably do: It delivers homes that remain affordable, regardless of interest rates or market cycles, and it is, in effect, the stabilizing backbone that our system currently lacks.

If you're just focusing on housing starts—the number of homes that get built—you're not asking the right questions: For whom do these homes get built? Who can afford to live in them? Whose housing needs are not being met? When government intervenes, is it to produce the right housing starts?

Thank you.

[The Chair, Liberal, Bobby Morrissey]

Thank you, Mr. Sullivan.

We'll begin the first round of questioning with Mr. Aitchison for six minutes.

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

Thank you, Mr. Chair.

Thank you to the witnesses. It's good to see you all again.

I want to start with Mr. Sullivan because you were making an interesting point. You started off with a fairly bold statement, which was, “Housing starts are not the right metric.” That's in part because, like you said, it's a lagging indicator and that, sometimes, how we're counting starts is actually not quite the most correct way to do it, either.

I think you all made a valid point: We need to make sure that we have the right type of housing as well.

I'd like to start with you, Mr. Sullivan. Build Canada Homes is a new agency that was created, and it's supposed to focus on non-market housing very specifically. It has no targets in its creation, and maybe that's because it doesn't know what the targets should be. If you were to give them targets, what would those targets be?

[Raymond Sullivan]

Build Canada Homes was designed to be nimble and responsive in ways that, perhaps, the CMHC couldn't be, but you can't be nimble and responsive unless you know where you're going. This is why setting targets is very important. Build Canada Homes has set an affordability framework: median, moderate, low and very low incomes, as well as above-median incomes. They should be setting targets for how many homes they will support in each of those income bands.

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

Thank you for that.

Mr. Wilkes, what remains the biggest barrier to starting to dig holes for homes? Let's use that as our definition of a “start”. What's the biggest barrier, still, to this day?

[David Wilkes]

I think it's overall cost.

I will bring a perspective different from that of my fellow witness Mr. Sullivan here.

From an overall housing perspective, we need to adjust the costs that have led to some of the affordability challenges in our ability to bring starts online. In particular—as I indicated in my remarks and shared with the committee—there's the fact that sales have really reached historic lows across large urban centres.

I think that is all a combination of the cost to build. We are seeing the private sector adjust in those areas it controls, like land and materials. We are just on the cusp of seeing governments recognize that the 25% or 30% they add to the cost of a new home has to be reduced, whether that's through HST adjustments, development charge adjustments or expediting approvals. It's an overall bucket of looking at how much it costs to build and how long it takes, then addressing this in a fundamental way.

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

Thank you for that. It's a perfect segue to Mr. Richter, who very eloquently described housing as an entire system, not just one piece of the puzzle. No one part or element of the continuum is necessarily more important than another. I agree with that.

Would you agree, Mr. Richter, that all housing needs to be more affordable?

[Tim Richter]

Yes.

If we look at housing as a system, we now see a lot of families stuck at the bottom end of that system, as Ray pointed out quite clearly. One thing we need to be mindful of is the transitioning people are able to make through that system. We need a healthy community housing system, but if the rental housing market isn't functioning, more people are going to rely on that community housing system. If the ownership market isn't functioning, more people are going to rely on the rental housing system. These, respectively, create a housing traffic jam in the middle of the housing system.

Yes, we have to think about supply and housing for whomever—I think Ray is exactly right—but we also have to be mindful of how people can or can't transition through that system.

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

Thank you for that.

I want to continue with that train of thought for a bit longer.

If we were to make all housing more affordable...since 95% of housing in this country is, in fact, market housing. If 30% of the cost of market housing wasn't from government taxes, charges and fees, would that relieve some of the burden on—and need for more—social and supportive housing, rent geared to income and those kinds of things?

[Tim Richter]

It might, potentially.

However, I think those taxes, fees and costs from delays apply every bit as much to community, social and supportive housing as they do to anything else. In fact—Ray can correct me if I'm wrong—the time it takes to get things permitted has a dramatic impact on the cost of building new community and social housing.

I would say that taxes, fees, the time it takes to get things built and the cost of construction are factors across the housing system.

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

Thank you for that.

I'll go back to Mr. Sullivan.

Some of your members are trying to build this non-market housing, whether it's social, supportive or whatever.

What do local government delays cost? What does it take?

[Raymond Sullivan]

Many of the drivers behind the cost of building housing are the same, whether you're building non-market housing or market housing. The cost of labour and supplies, the delays involved when getting projects approved and the land transfer taxes are all things the community housing sector is subject to as well. They affect the health of the system as a whole.

We need market-based housing to work well. We also need non-market housing to work well.

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

I'm going to say this quickly because I'm out of time. Maybe one of the targets for Build Canada Homes should be about not just the number of units that get built but how quickly we speed the process up.

[Raymond Sullivan]

Yes.

[The Chair, Liberal, Bobby Morrissey]

Thank you, Mr. Aitchison.

You have the floor for six minutes, Ms. Desrochers.

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

Thank you very much, Mr. Chair.

Thank you again to the witnesses for being here today and for their input on government strategies and programs over the past few years. It's very helpful.

You spoke about Canada's national housing strategy and programs that are about to expire. We're preparing the launch of consultations on renewing the national strategy and to that end, obviously, our conversation today will be very helpful.

You spoke about indicators at length. There is a bill under consideration to establish Build Canada Homes as a Crown corporation. When that is done, there will be plans with indicators and very clear objectives. However, we have clearly said that at a minimum, we want to double the non-market housing supply.

Mr. Sullivan, I think you spoke about a 20% target. We're looking closely at what is happening in Europe to see how we can achieve that target.

What is clear—you were all spot on—is that we need to increase the supply of all types of housing to deepen affordability and drive down the cost of renting and construction. We've heard that 25% to 30% of costs are connected to various levels of government, but that is for new homes. However, some homes were built many years ago and have been fully paid off.

According to the three of you, what else, aside from these costs, is driving today's high housing prices?

Mr. Wilkes, you can go first.

[David Wilkes]

I think there are several factors leading to challenges with housing affordability. Our industry association focuses on the new home side, so I'll restrict my commentary and observations to that.

I can't stress enough that the costs that are built in through government fees and taxes are some of the key drivers. We've seen some municipalities increase those costs over the last several years by 1,000%. That's well beyond what inflation factors would be. Also, there are delivery time frames, as all the witnesses before you today have indicated, and the costs to finance those. That's why we think some of the changes, both on the rental side and on the private equity side, to look at how government programs can finance that development are important.

Let me focus on some of the work that is currently being done on the costs around development charges, for example. The current agreement between the Government of Ontario and the federal government to lower those costs by 50% is a fundamental one. We think that's an opportunity to look at what goes into those development charges, like water and waste-water programs, the types of roads and infrastructure, and how land is calculated. That all will bring structural changes to lower those costs and address overall affordability.

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

Thank you.

Mr. Sullivan, do you have anything to add?