Human Resources Committee on May 25th, 2026

[The Chair, Liberal, Bobby Morrissey]

Thank you, Mr. Baird.

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

[Brad Jones, Chief Development Officer, Wesgroup Properties]

Thank you, Mr. Chair and members of the committee, for the opportunity to appear today.

My name is Brad Jones, and I'm the chief development officer at Wesgroup Properties, which is located in Vancouver, British Columbia.

Wesgroup is one of Canada's largest privately held real estate organizations and has delivered over 10,000 homes, along with commercial space, across metro Vancouver.

I'd like to speak about a nuanced issue that has become increasingly important in Canada's housing response: the timing of how housing starts are measured and how it impacts policy decisions on housing.

When housing start data, as currently defined, is used as real-time data, it leads to misinformed policy action or inaction. The CMHC considers low-rise construction to have started when the foundation has been poured, such as for a single-family home or a townhouse project. For larger apartment projects with underground parking, it is not recorded until the concrete structure reaches grade. In modern urban apartment construction, that can occur 12 to 24 months after construction activity has begun.

On a real project we've been working on at Wesgroup, sales took place in 2022. Excavation took place in 2023, and the concrete foundation at the bottom of the excavation began in 2024. However, it wasn't until January 2025, when the structure reached grade, that it showed up as a housing start in CMHC data. In practical terms, that activity had been under way for over 18 months before it counted as a housing start.

As our housing supply in Canada has shifted towards urban high-rise construction, the issues become more noticeable in large region statistics. The concern is that delaying this reporting moves construction activity from prior years into today's numbers, creating a misleading picture of current market conditions. These housing start statistics have been used widely by government, economists and the media to assess the health of the housing market and broader economic activity. Whether or not this is the intent of the statistic, this is how it's being used, and it needs to be addressed in the way that it's being used.

Federal housing targets are evaluated using these figures. Ministers have cited them publicly. Economists use them as signals of strength. Provincial and municipal governments rely on these statistics when assessing housing policy change. If apartment projects are only recorded 12 to 24 months after construction begins, policy-makers are responding to outdated conditions.

In metro Vancouver, after adjusting for the differences in private sector tracking methodologies, our findings show that CMHC housing starts in 2025 exceeded actual market activity by more than 5,000 units, which is roughly 24%. I'll put that into perspective. British Columbia recorded 44,000 housing starts in 2025. This issue alone in metro Vancouver represents 12% of housing starts in B.C. This is a significant data gap and leads to many local government officials delaying action—stating we have not seen a decline in housing starts—when considering adjusting policy.

There are broader implications as well. The mistimed data means that $2 billion in economic activity in metro Vancouver and roughly 10,000 jobs are linked to those housing starts, which actually occurred in 2023 and 2024. This is not an accusation that CMHC is reporting inaccurate data intentionally. The issue is methodological timing. It is a combination of the increasing use of the data to measure the real-time health of the housing market and the methodology's no longer reflecting how large urban construction projects occur in Canada's large cities. This should be reviewed and modernized to determine that housing starts actually start at building permit issuance or excavation start to better align with the real economic activity taking place. We cannot effectively manage a housing crisis using data that reflects where the market was 12 to 24 months ago rather than where it stands today.

Thank you very much.

[The Chair, Liberal, Bobby Morrissey]

Thank you, Mr. Jones.

We will now proceed with the first round of questioning, beginning with Mr. Aitchison for six minutes.

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

Thank you, Mr. Chair.

Thank you to all the witnesses who are appearing today. It's great to hear from you all.

I'd like to focus initially on the comments of Mr. Brooks.

Mr. Brooks, you were talking about the number of rental units that have been constructed in Canada and how that number went up significantly. However, at the same time, the government made changes to immigration, so that has affected demand, which means that—I'm assuming—the rate for the rental of these units is starting to come down a bit. Is that fair?

[Michael Brooks]

That is fair.

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

Okay.

You also indicated, though, that as a result, the math doesn't work on new projects anymore, and a number of institutional builders of rentals have decided not to build because the math simply doesn't work. A lot of inputs go into constructing purpose-built rentals. What are the key inputs that are still too expensive to make the math work?

[Michael Brooks]

Let's start with the development charge issue, which we've all brought up over the past several years.

It's heartening to see some efforts to reduce the development charges in Ontario. I think the builders in Ontario are waiting to see exactly what that will look like and how it's going to be implemented. In some ways, it may be freezing current development as people wait to see what the deal is. The City of Toronto and the 905 municipalities have the highest development charges in Canada. That would be one area.

Construction costs have definitely come down a little, according to some general contractors we've talked to and some of our members. Some of our members are going to proceed anyway, even though the returns are fairly skinny on certain projects.

Those would be two key areas to focus on.

There's also the risk piece. What's the risk that immigration stays low for a longer period of time and more people leave the country, such as temporary foreign workers and students? There's your demand. When do we get to an equilibrium on demand, in which you can count on people being interested in renting an apartment?

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

This may be an incredibly unfair question, but how many rentals would we require in a healthy housing continuum if in fact we believe that rentals are often a stepping stone to home ownership one day?

[Michael Brooks]

Enough rentals so that the vacancy rate is between 3% and 5% would tell you that there's a balance between supply and demand. That's an average, of course, and every market will have a different dynamic. To me, that's the goal.

Now, if we ramp up immigration again, we're going to have to either drastically increase supply or hope that the supply that's coming on will soak up the increased immigration.

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

It's safe to say, then, that we need demand, but we need to manage it responsibly so that we can absorb—

[Michael Brooks]

What's coming....

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

—the demand.

You spoke specifically about development charges and some of the other measures that certainly the provincial government in Ontario is taking to reduce the government burden in costs on the construction of new homes. I'm assuming that it's just as it is for somebody who's about to buy a home, a new home, for example. Some measure of confidence in the market is required for that new homebuyer. I would assume that a significant measure of confidence is required for a builder to spend the tens of millions of dollars to build a purpose-built rental.

Is there a disconnect right now between government announcements and action and the reality of the things that are happening?

There have been announcements about cutting the GST on new homes. There's been an announcement about cutting development charges in half. We still don't know how that will happen. For the GST, they say it will be retroactive back to April 1, but there seems to be some uncertainty amongst the people who are looking at buying new homes about how that will happen, and they're not prepared to take that risk. That uncertainty exists in the homes for sale market. Is it impacting the rental construction business as well?

[Michael Brooks]

Yes, it is for sure. The boardrooms of our member companies are focused on the budget for a new project and what the risk factors are.

We've talked about the GST. That will apply to new homes. We've talked about development charges, which will apply to rental properties, and what they look like, as well as the interest rates. Will interest rates be going back up? What's my CMHC loan going to cost me a year or two from now?

What's the cost of equity? When I go out to find some investors, what's the return they want opposite alternatives in Canada and other asset classes? Retail is looking pretty good right now. Will they be taking their money to the U.S. or elsewhere in the world? The relative cost of equity is also a relevant issue. There's oil shock: What's that going to do to my supply chain?

There are a number of risk issues that they're taking into account.

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

I'll ask this quickly, because I'm literally out of time.

Such a thing as cutting or rebating the GST on new homes—I realize that's different from rentals—for only one year strikes me as.... The government describes this as a way to kick-start things, but it takes longer than a year to build a lot of these things.

If taxes are too high, they're too high, are they not?

[Michael Brooks]

We have the new home program going until, I believe, the end of March 2030 for first-time homebuyers. We have the supplemental GST piece that applies to all new homes; it goes until, I believe, March 7, 2027. That's a really short one. It's one year. Is that going to stimulate the market, or has it been counteracted by the prospect of higher interest rates? I don't know the answer. It's too early to tell, frankly.

What I would love to see is a much longer timeline on the additional GST cut, if the government can afford it. I've asked the minister.

Why don't I cut my answer really short? I asked, “How about a 50% off deal?” Right now, if there are no housing sales, you're getting zero, but if you have a 50% off sale, would that stimulate the buyers and the supply?

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

Thank you.

[The Chair, Liberal, Bobby Morrissey]

Thank you.

We now go to Ms. Desrochers for six minutes.

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

Thank you, Mr. Chair.

Thank you to the witnesses for being with us today.

I can move to English.

It's very interesting. We're doing a housing starts study, yet all three of you are telling us today that the measure of housing starts is not serving us well in terms of designing policies. I'd love to hear a bit more on that.

Before we do that, it's definitely timely that we're here, because we are about to begin our consultations on renewing our national housing strategy. Mr. Brooks referred to some of the programs that were part of that, which were very effective in increasing the housing stock across Canada.

Before we get to my question on housing starts and what would be a better indicator or how we could look at this better when we're looking at the national housing strategy, I'd say that the goal of Build Canada Homes is to build more affordable housing. Right now, the affordable housing stock in Canada is 4%. I take your point about immigration levels. Will demand meet supply right now? In many municipalities, including in my own riding, the vacancy rate is about 1.2% or 1.3%. It was 0.8% about two years ago. Some of the investments we've made have really helped with that.

We want to double the amount of affordable housing. We think it's important that people have a place they can afford and that fits their needs. We don't think about it as a government handout. It's important that we do that. There will be many options, not just that option.

I have two questions. For the sake of time, I'll ask my two questions and all three of you can have a go at them.

If we're not doing housing starts correctly—and I take your point that we're building more and more high-rises—what would be a better way of capturing what's happening in the market?

The second piece is on the incentives. Sure, we can continue to increase our transfers to the provinces, but if they're not meeting us and reducing the obstacles to building faster and more efficiently, then we're just going to keep transferring.

I'd like to hear from all three of you on these, if time permits.

Maybe we can start in the room with Mr. Brooks.

[Michael Brooks]

As I've said, a better indicator for policy choices would be sales. They are much more current, as Brad mentioned on the virtual call, as well as relevant to what's happening in the market today; they do not focus on three years ago. When sales fall off a cliff as they did in the GTHA 12 to 18 months ago, we would know that. We would be able to say, “Hang on a second. Maybe we should jump to both GST rebates—as opposed to doing one, waiting for the screaming to subside and then doing the second one.”

I lost track at 30 receiverships in condo projects across Canada. There are probably 40 or 50, and there are a lot more we haven't heard about. A lot of labour has left. One of my major general contractors, whose name you would all know in Canada, said we used to be eighty-twenty, with 80% private sector business and 20% public sector business. Now we're ninety-ten. Ninety is public sector business, hospitals and that kind of stuff. It goes to show you how much construction activity has dropped and how much is left.

The second point is the incentives piece. When we did the national housing accord with Smart Prosperity and CAEH in 2023, we focused on the entire continuum.

I'm a big supporter of the need for government engagement in affordable housing. We need Reaching Home. We need a lot more money. We need to understand that there are trade-offs here. We have a deficit, and you have to decide where the next dollar is going. There are so many needed things, but we definitely need to spend more money on affordable housing. My colleague at TCHC has made really good points about how it has to be equity. It has to be unconditional funding.

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

Thank you.

Perhaps, Mr. Jones, we can start with you. We have about a minute left between the two of you.

[Brad Jones]

Thank you.

To build on what Mr. Brooks said about housing starts, it's probably tracking a number of measures. It's tracking sales. As he mentioned, it would have been quite visible over a year ago that sales and pre-sales of new housing are off 90-plus per cent in Toronto and Vancouver. Then it's tracking excavation start, the actual start of construction activity, as well. Would you see projects get cancelled or fall off the stats? Yes, maybe you would, but that's an important data indicator as well.

On incentives, the active conversation about GST right now is really important for new housing. I would suggest that while federal intervention in rental housing had incredible impacts, with the share of rental housing construction as a percentage of all new homes the highest it's been in probably the lifetimes of most people participating in this meeting, we lost track of for-sale and ownership housing. The GST thresholds have not been updated since 1991, and the price of homes sure has changed a lot since 1991.

Moving on to infrastructure, which has been a focus of this government, municipal taxes were never designed to handle this type of growth pressure on key urban centres. The metro Vancouver region and the GTA attract roughly 40% of the immigration into Canada on an annual basis at a minimum. Their tax structures were never designed to respond to that type of infrastructure demand, so they're using the tools they have, such as putting it on the back of new housing.

[The Chair, Liberal, Bobby Morrissey]

Thank you, Ms. Desrochers.

Now it's over to Ms. Larouche for six minutes.

[Andréanne Larouche, Bloc, Shefford, QC]

Thank you, Mr. Chair.

Thank you to the witnesses, Mr. Brooks, Mr. Jones and Mr. Baird, for being with us today for this important study on housing starts.

It was a prominent theme during my two constituency weeks, when I was out in the community.

It all started two weeks ago today with the screening of the documentary Les héros, les zéros… et les incognitos: Vieillir dans l'ombre, put on by the Association québécoise de défense des droits des personnes retraitées et préretraitées de Granby. At its core, the documentary is about ageism against seniors, but the Granby seniors' rights group actually talked a lot about its desire to stop the commodification of housing.

After that, I went to a meeting in Valcourt, where the housing challenges of seniors sparked just as much discussion. Concerns were even raised about a housing co-op, where people pay just 75% of the regular rent. For the first time in recent weeks and months, people weren't able to pay their rent on time. Seniors can no longer afford the rent in a housing co-op for seniors.

I also heard about a young woman looking for a place to live with her mother. Both of them have health issues. They can't find a place to live, so they're currently staying with an uncle in substandard housing conditions, which neither you nor I would want to live in.

Housing is a matter of human dignity. That's the overarching theme of the two break weeks I've just spent in my constituency.

I'll start with you, Mr. Jones.

What citizens in many cities are saying is that they feel most new housing projects are to build high-end housing. How do we make sure that public funding also helps middle-class and more vulnerable people?

[Brad Jones]

Thank you for your question.

To clarify, are you speaking about government-funded housing in particular or the market more broadly?

[Andréanne Larouche, Bloc, Shefford, QC]

On the whole, what can we do to address the feeling people have that most new housing projects are to build high-end housing? I hear that a lot when I'm out in the community.

From your organization's standpoint, what can we do to address that feeling people have, which is more than just a feeling? We want to make sure that public money is also being used to meet the housing needs of those in the middle class.