Human Resources Committee on June 4th, 2026

[Richard Lyall]

At the federal level, code is not the provincial code, of course, in Ontario. It is in certain other jurisdictions, so it's not necessarily that. It's the alignment that's the problem. At the provincial level, which picked up part of the federal code and then developed its own provisions and so on, that building code became a lot thicker. Then we had duplication on a massive scale. We have architects and engineers who are trained and certified to do the work they do, yet we have another group that's redoing their work, in effect, and we didn't need that.

Now that's being changed in Ontario. In fact, a lot of things are being changed, which is good, but it takes time. Systemically, we're very good at policies, but we're not that good at implementation, and that's why you've seen the lack here. A lot of the problems and solutions were identified years ago, but it has just taken this long to get where we are now, and we still have a long way to go, because a lot of the measures being introduced are temporary measures for a year, like the enhanced rebate on the HST. It needs to be a permanent reduction, because we have all the analysis showing that taxes, fees and levies on new housing—not including the cost of an inefficient approvals process and so on—have grown exponentially, right through the roof, with no relation to where incomes have gone.

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

I'll jump in there.

That's an interesting point that you raise. I agree with you, and I've made the comment myself. In fact, the Province of Ontario is the one that's actually cutting the PST—the provincial portion of the HST—on a new home. The federal government has actually not cut the tax at all, but it's going to cut a cheque to Ontario so that Ontario can rebate it, although that isn't in place yet. You've written an article about how that was supposed to be April 1, yet it's still not in place. It's actually causing more uncertainty.

This is part of the challenge. There are a lot of announcements, and then when it comes to the delivery and the results, we're waiting and waiting and waiting.

[Richard Lyall]

Yes. For example, the rebates were announced over a year ago. We're still lacking some regulations. In Ontario, we still don't have the Ontario regulatory part of the first-time home buyers' rebate.

For the enhanced rebate, it's exactly as you say. The federal government has said, “Look, we have $870 million for Ontario, $1.7 billion in total. That's the budget. Just send us a bill and cut your stuff, and let's get it done.” That actually kind of makes sense. At the provincial level, we have a lot of reforms in place. There are things that take months and years now that can be done in days and weeks. In fact, Jeff Bezos said the other day that you should be able to get a building permit “in 10 seconds”.

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

I agree.

[Richard Lyall]

Technically, it's possible, because there are all kinds of proptech and contact reforms that are available. Other jurisdictions are way ahead of us on this stuff.

Thank you.

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

Thanks, Richard.

[The Chair, Liberal, Bobby Morrissey]

Thank you, Mr. Aitchison.

We'll go to Mr. Villeneuve for six minutes.

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

Thank you, Mr. Chair.

To the witnesses, welcome and thank you for being here.

I want to start with you, Ms. Demers and Mr. Goulet. I'll let you decide which of you will answer the question.

Ms. Demers, I listened to your presentation. Let me say right off the bat that I have five grandchildren who are about to buy their first home, so I'm also very concerned about these challenges.

From the beginning, we've been mostly talking about the big cities. My riding, Brome—Missisquoi, is made up of small towns. You probably know the area.

Our government is aware of the problem right now and is making historic investments, particularly in real estate.

I wonder if you could talk to us about the role that you think public lands and prefabricated housing could play as solutions for addressing Canada's housing supply challenges. How could these approaches alter both the pace and cost of building new market housing?

[Isabelle Demers]

Thank you, Mr. Villeneuve. That's a wide-ranging question, and there isn't one single answer.

Obviously, there will need to be multiple solutions, multiple projects and multiple direct interventions.

What we need is simplification. I completely agree with my colleague Mr. Lyall, who said that no one was looking at the overall picture, which means no one was considering how moving forward on one thing would contradict another program later on and that this would interfere with or limit the ability to move faster.

Substantial efforts will definitely need to be made to harmonize the provincial, federal and municipal processes. As you know, there are 1,100 towns and municipalities in Quebec, so there are 1,100 different interpretations of ways to build and interpret the Construction Code. Sometimes the opinions really are subjective and differ from one place to another, and that obviously interferes with or limits our ability to move forward.

In addition, there are significant technological challenges. In Quebec and Canada, many companies in the construction industry are small businesses. Small businesses sometimes have a limited capacity to take on larger-scale projects, especially in recent years, with costs skyrocketing. That automatically limits their capacity to launch projects and be shovel-ready in order to qualify for programs, because ultimately, for technological reasons, not that many players qualify.

Going back to one of the other things you mentioned, prefabricated housing is definitely one of the avenues or ways of moving forward to speed things up, but certain important conditions would have to be in place. One of those is predictability. You can't ask people to industrialize their methods if they don't know what's coming down the pipe, what they need to produce and what they need to keep in stock based on future projects, when right now, construction methods are essentially at the discretion of each town and each contractor.

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

I hear you on that, because I was mayor of Bromont for eight years, and I dealt with these challenges too.

In its 2026 spring economic update, the government announced that it would be accelerating over $7 billion in low-cost loans under the apartment construction loan program. What impact do you think this program has had on apartment construction over the past few years, and what effect will accelerating that financing have?

[Isabelle Demers]

Thank you.

Mr. Goulet, do you want to talk about the impact of this program? I'll let you go ahead.

[David Goulet, Economic Director, Association des professionnels de la construction et de l'habitation du Québec]

Thank you, Ms. Demers.

Mr. Villeneuve, this program is very popular with some developers, such as non-profit developers, but also with many contractors that have shifted from condo construction to rental housing construction in the last few years.

However, since these are often businesses that have a lot of assets and need a lot of loans, the challenge is that they now need to be assessed for financial viability by the Canada Mortgage and Housing Corporation, or CMHC. What we're hearing from our members and partners is that there's very little transparency, that it's opaque and unpredictable. That's limiting these businesses' capacity for growth at a time when we need more housing both in Quebec and in the rest of Canada.

We do appreciate these efforts. This program keeps project financing costs from getting too high, because CMHC provides funding during the riskiest phases for lenders. However, long-term predictability is a challenge, because for many contractors, it's very hard to know whether they're going to qualify or what they need to do to qualify.

For that reason, there's a lot that CMHC needs to do to offer builders more predictability.

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

Thank you very much.

[The Chair, Liberal, Bobby Morrissey]

Thank you, Mr. Villeneuve.

Ms. Larouche, you have six minutes.

[Andréanne Larouche, Bloc, Shefford, QC]

I would like to thank the witnesses very much for their participation in this important study on housing starts. This is such a crucial issue. We need to see how it fits into the framework of federal programs.

Mr. Lyall, thank you very much for your expertise.

My first questions are for you, Isabelle Demers or David Goulet from APCHQ.

My first question will focus on the surge in costs, which you actually mentioned in a previous response, Ms. Demers. I would like to fully understand the surge in construction costs, given the interest rates, the labour shortage and the tariff crisis. What impact is this having on housing starts in Quebec?

[Isabelle Demers]

Thank you for the question, Ms. Larouche.

As my colleague Mr. Goulet rightly pointed out, what we're seeing right now is rental housing starts. Supply is down because there is not enough demand for housing or private residences due to the excessively high costs.

What we're also hearing on the ground is that the cost of new construction, even in the rental sector, has become so high that the ability to rent out these units is also limited. In some parts of the region, when a new apartment is listed for rent at $1,400 or $1,800 a month, that doesn't necessarily mean there are people who can afford to rent it. Obviously, to meet these needs, this puts a lot of pressure on the construction of subsidized or affordable housing.

What concerns us right now, and what may not be discussed enough, is the situation facing Quebeckers and Canadians who are not necessarily eligible for subsidized or affordable housing, but who are equally in need of a place to live. These are people who sometimes have children and a family, and who need a certain amount of space and a certain number of bedrooms. Historically, these people would find homes and manage to move from one to the next, but today they face a very limited supply, since new construction is often unaffordable for them, and the rental market does not necessarily meet their needs. This is concerning.

Mr. Goulet can attest to this. In the analyses we conducted at the APCHQ, we found very strong demand for subsidized and more affordable housing. However, at the same time, the cost of other types of housing is too high to meet people's needs.

Mr. Goulet, is there anything you'd like to clarify?

[David Goulet]

Yes.

I'd like to add that we can't forget that Quebec's population is aging significantly. This is a housing crisis that isn't fully apparent yet, but one that is on the horizon. Seniors won't be able to stay in their homes forever. Eventually, they will have to turn to the rental market or senior living facilities that offer services. There is also a very low vacancy rate in this category, which is another challenge to anticipate. Homeownership is important for young people, but more and more seniors will face this crisis as well.

[Andréanne Larouche, Bloc, Shefford, QC]

What you're saying is so important. Right now, the statistics confirm that seniors are no longer able to find housing and are losing their homes. We're seeing an increase in the number of seniors turning to food banks. They're facing eviction and can no longer pay their bills. This is extremely concerning.

Ms. Demers, I'd like to come back to that with you now. You'll have one minute left to answer my two questions.

In your opening remarks, you mentioned one of the challenges we also hear about in connection with Build Canada Homes: the much-discussed definition of affordability. What is affordable housing? In Quebec, we actually prefer to use the term “community-based social housing,” because the term “affordability” can mean so many different things. Would you like to discuss this further?

In addition, in your opening remarks, you also mentioned a five-to-one difference in retirement assets. I quickly took note of that. Could you come back to that and give us some details?

[Isabelle Demers]

Certainly.

For the first point—the definition of affordability—there are the general definitions provided by the Canada Mortgage and Housing Corporation and Statistics Canada. Quebec uses other definitions, including from the Société d’habitation du Québec. Currently, we have cases where projects would struggle to qualify because we are not using the same definition. We are not investing the time or doing the work required to adjust and develop projects that do not qualify under one standard or another, but which should be harmonized. This is a very clear example of the lack of harmonization among the different levels of government. That is my answer to your first question.

For the second question about retirement assets in a five-to-one ratio, this is what we are seeing. As a result of how our economic structure is built, most Canadian households accumulate assets through real estate. Some of us might set aside the cost or profit from renting and invest it in the stock market, but that's not the case for most Canadians. As a result, we see a five-to-one decline in wealth upon retirement.

[The Chair, Liberal, Bobby Morrissey]

Thank you, Ms. Larouche.

Next, we have Ms. Falk for five minutes.

[Rosemarie Falk, Conservative, Battlefords—Lloydminster—Meadow Lake, SK]

Thank you very much, Chair. I'd like to thank the witnesses for being here today, sharing their expertise and testimony.

For the duration of this study, I am learning and understanding that this seems to be a highly complex and compounded issue that did not just start yesterday. Based on the testimony we've already heard today, this has been happening over the years and maybe even generations.

Mr. Lyall, I'd like to start with you. Just to piggyback off something you said to my colleague during his round, you said that this process has become more complex. How and what needs to be done to simplify this process in order to get housing started and finished?

[Richard Lyall]

We need to streamline the system. Compared to other advanced jurisdictions, we have two to three times as many bodies—government bodies, agencies, whatever—involved in the approvals process. It's completely unnecessary. What happened over time was that you had this sort of layering with no one really paying attention to the overall impact on the ratio of housing cost to incomes.

If you look at that ratio, it's gotten way out of whack. In fact, I would argue that since we have an inflation target with the Bank of Canada, we should have a housing affordability target. By the way, CMHC has a long-standing definition of affordability that still applies today. However, we should have a housing affordability target where that ratio of housing cost to income shouldn't exceed a certain level. Of course, we blew way past that in less than a generation.

This is one of the crazy things that's happening right now, and I'll just say it very quickly. The young people today, young millennials, gen Z, are not experiencing what their parents experienced. That's happened in less than a generation. For example, the City of Toronto, over the last 20-odd years, increased its development charges by 5,000%. The development charge is really a consumer tax. How is that rational in any way whatsoever?

[Rosemarie Falk, Conservative, Battlefords—Lloydminster—Meadow Lake, SK]

Yes, that's crazy.

My riding is rural. I am on the cusp of northern Saskatchewan. I border Alberta. I was at a small-town graduation a couple of weeks ago. In his speech, the valedictorian actually made a joke that his graduation class won't be able to afford a house until they're 50. I thought that was so sad. Even in a small, rural community, these young people of 17 or 18 years old are having this realization that they may never be able to purchase a house.

You also said earlier today that we're good at policy and not so great at implementation. What do we have to do to become better? Is it just cut red tape? Is it downsize bureaucracy? What do we need to do to actually move into action and get stuff done?

[Richard Lyall]

You have to cut the taxes, fees and levies, cut the red tape and do things faster. This is complex. I think my fellow panellists understand this, too. It's become a very complex environment. All those things need to be done.

I don't think Build Canada Homes plays this role, but there really needs to be somebody tasked with looking at the overall picture and recognizing that it's different in different parts of the country. Quebec does things very differently from Ontario, and that's okay. Neither one is right or wrong. We really need to pay attention to this.

I think we really need to have some kind of housing affordability index that's no less important than an inflation index or target from the Bank of Canada. That's what really got out of control. If people had been looking at the ratio of housing cost to incomes over time, they would have seen that, wow, we have a huge problem here. As you said, the disastrous effect is that young people and young families.... We're seeing it in our reproduction rates. People aren't having families. Why would they?

[Rosemarie Falk, Conservative, Battlefords—Lloydminster—Meadow Lake, SK]

I think that even when we look at the stress test, which we heard about earlier in the previous panel, a failure of the Liberal government at the time, and maybe still—I don't know; time will tell.... We can't put this one lens on the whole country. There are different regional aspects in each province and territory, and it's not just Toronto, Vancouver and Montreal. There are other places in this country where, when something is implemented by the federal government, it can have adverse, negative effects on the market they might be trying to help.

Thank you.