Human Resources Committee on June 4th, 2026

[The Chair, Liberal, Bobby Morrissey]

Thank you, Ms. Falk.

Mr. Lyall may want to comment on that in response to another question.

We'll now move to Ms. Harrison for five minutes, please.

[Emma Harrison, Liberal, Peterborough, ON]

I will actually follow up on the comments of my colleague, Ms. Falk, about the different needs of housing across the country.

Mr. Lyall, how does the cost of homebuilding differ for rural and remote communities? How should federal policy and programming account for this?

[Richard Lyall]

That's a really good question. It's a relative basis and it depends on incomes, too.

For example, if you go to Alberta, it doesn't have a provincial sales tax of 8%, but Ontario does. Why? If you compare Alberta and Ontario right now, you'll see that average incomes are a little higher in Alberta and the per capita GDP is a little higher. Then you get to housing. For a single family home in Alberta, you're looking at $550,000, and in Ontario, it's $850,000. Explain that away.

When you look at the differences there, it's that their system is much more efficient. They produce more, and their taxes, fees and levies are lower, and so on. All of these things come into play, so we just have to do things better, and we have to implement.

We're good.... I think what happened, too, was that all these targets were set and then weren't being met, so now there's a rush to make.... Look, it's welcome. We'll take what we can get. The DC move, the HST move and those kinds of things are great, but they're band-aids right now. They're not permanent solutions.

When you talk about growth-related infrastructure for housing, that needs to be managed properly, where all three levels of government have a fair and reasonable share in what that looks like. That burden should not be put—as has happened, certainly in Ontario—on the backs of new renters and new buyers, because it's just killed them.

[Emma Harrison, Liberal, Peterborough, ON]

Do you believe that factory-built housing could help with the cost of building in rural and remote communities, Mr. Lyall?

[Richard Lyall]

Well, yes, absolutely, because if you look at the history, modern methods of construction are nothing new in Canada. We have some very good success stories here. We know that it just doesn't really work within our environment—other than for years we've had things like modular units that have been produced for rural environments.

Sometimes, in rural environments, especially up in the north, you don't have the trades and the construction companies that can actually do this work. I'm not saying in all cases, but this is where modular and panelized housing comes into play. If you look at the Canadian context, it's about 2% to 6% of the market across Canada. In the best-case scenario, we might get that up to 10%, so it's not your solution to the housing crisis. The big problem we have is all the mess we've created in doing things the way we've done them before.

In terms of modern methods, Bonneville, a company I visited in Quebec, is fantastic. They produce a beautiful product, including apartments. They've been doing it for 70 years, so that's a rebranding that's a bit of a marketing gimmick. As to why we haven't advanced that further, the reasons are much more complex. I'll talk about that some other time. It doesn't mean to say that there aren't other opportunities. I've been to Japan. I was in Germany twice last year, and Switzerland and Austria, looking at their off-site facilities, manufacturing equipment and so on. Once you really get into it, you understand what our limitations are there.

It's not the answer. It's a direction that we have to go in, for sure, but it will take a long time. You have to build factories. How long does that take? You need to have the investment for that. Then you need to have the market for the product that comes out of it. The only companies that are successful are really the ones that build for their own use primarily and then sell to others. We've had massive failures there. For Katerra in the U.S., $2.5 billion went up in smoke. There was no market for these beautiful factories that were built to produce this housing.

[Emma Harrison, Liberal, Peterborough, ON]

Thank you very much.

In the spring economic update, the government committed $4.19 million for, among other things, updates to national model codes and regulatory streamlining. You just mentioned that we set targets, but we don't really track whether we're hitting the performance indicators of the targets we're setting. Do you believe the modernization of collecting and tracking and sharing housing data will improve the responsiveness of the Canadian housing market?

[Richard Lyall]

Yes. When you have an announcement like the one we had, the first thing you really need to do is model what you think the impact will be. That modelling is largely absent from what we do. We do have sophisticated modelling that can do that. Then, with respect to the targets, you actually need to have a plan to get there. We set these targets without any real plans and without a measurable prospect of actually hitting them. In business, you'd be out of business pretty fast if you did that.

That's not to take a shot at government, but the thing is that there needs to be a much more disciplined process here, with KPIs and accountability. If this is the target, is it a real target? Is there a reasonable expectation that we can hit that? The second question is, what do we have to do to get there? You have to model that. This is advanced modelling.

[The Chair, Liberal, Bobby Morrissey]

Thank you, Mr. Lyall.

Thank you, Ms. Harrison.

Ms. Larouche, you have two and a half minutes.

[Andréanne Larouche, Bloc, Shefford, QC]

Thank you very much, Mr. Lyall, for raising the issue of prefabricated homes in Sainte-Anne-de-la-Rochelle. There is a company in my region that manufactures them, in the riding of Shefford. This is promising. Thank you very much for mentioning it.

Ms. Demers and Mr. Goulet, I'd like to come back to the specific circumstances in Quebec. Many witnesses have spoken about the differences between the provinces. We know that the situation is not the same in Quebec, Ontario and Alberta. What specific obstacles do Quebec developers face when they try to access federal programs?

[Isabelle Demers]

Thank you, Ms. Larouche.

I don't know if Mr. Lyall will agree with me, but the challenge isn't so much access to federal programs. In fact, many developers say that if federal programs hadn't been in place, it would have been much more difficult for them. Federal programs have certainly been an important driver of development for projects and for many builders and developers in Quebec. That aspect itself isn't really the challenge. However, there are other challenges.

As Mr. Lyall also mentioned, if we want to enter the prefabricated housing market, for example, most of the time developers or construction contractors will produce for their own use, because the market isn't there yet. However, the predictability needed to bring products to market and operate on a larger scale is not yet in place. That is one of the challenges.

There is also the issue of supply. We've talked about modular homes, but when we talk about prefabricated homes, we're not necessarily referring to complete homes. We're talking about construction components, but it's not always easy to access these components. That's where it gets interesting: certain components aren't eligible for federal government programs. For example, when you want to build with prefabricated materials and need access to components that aren't managed on-site but are managed off-site, you aren't eligible for certain federal programs.

Do we want to speed up projects and have access to programs and use prefabricated materials that reduce cost, save time and ensure quality? If so, however, we are not eligible for certain programs. So we're asking contractors to choose between visions for the future, by opting for prefabricated components, or gaining access to programs. That's the main example of this dichotomy that I can give you.

[Andréanne Larouche, Bloc, Shefford, QC]

Thank you, Ms. Demers.

[The Chair, Liberal, Bobby Morrissey]

Thank you, Ms. Larouche.

Mr. Reynolds, go ahead for five minutes.

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

Thank you, Mr. Chair.

Thank you, witnesses, for being here today and giving us your time. We really appreciate it.

Mr. Lyall, it's nice to see you again. Thanks for coming back. My first question is for you.

I'm not sure if you remember this, but I spent 20 years in construction myself. As recently as 2021, we built a 16-storey residential building. In my experience, general contractors and subcontractors in the construction industry are all trying to build things the most efficient way they can. They're constantly seeking out new technologies to build things faster and cheaper.

There has been a lot of talk about modern methods of construction. What modern methods are there that contractors wouldn't, just by nature, be actively seeking out for themselves? If prices typically go to the lowest bidder—therefore, “cheaper and more efficient” is obviously what they're all seeking to be—what types of modern methods of construction are there that contractors aren't using already?

[Richard Lyall]

To a certain extent, there's a systemic connection in terms of how we do things. In other jurisdictions, governments have mandated certain things, like modular—things like that. This has had some success, but the fact is that our industry is the last bastion of capitalism, right across the country. You can even go to Quebec. It's a very competitive industry. Yes, our companies do adopt new technologies, and so on and so forth. You're correct.

We measure productivity badly. I've talked to the CMHC about this. They don't really know how to get at this question. How do you measure the fact that, systemically, we've gotten more gummed up by more regulation and more inefficiency? If you're measuring something, for example, by “per unit produced”, but it takes three times longer to produce those units and costs have gone right through the roof, guess what's going to happen to your productivity numbers? They're going to look terrible. I'm not saying that we have it right, but I think there are huge systemic opportunities here—proptech, AI and so on—to accelerate and streamline the approvals process.

That creates transparency and accountability. Of course, transparency is risk abatement. What's risk abatement good for? It's good for investment. At the beginning of a project, if you can know exactly how long it's going to take to get something approved and built, it's a lot easier to raise the money to do that. If you're in an environment where things are uncertain, or if you have to play all kinds of games and there are all kinds of site-plan approval problems and things like that, guess what? You're going to kill new projects.

In jurisdictions where they have accelerated and modernized, the number of projects and proponents coming forward with ideas has actually increased, because it's easier to predict where you might go.

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

Okay. Thank you.

There's been a lot of talk about building code obviously not compromising safety, ever, and building code changing rapidly and regularly. My question is this. In your experience, have you seen building code added that has been costly—because obviously the end-user is going to pay for it—and that has not necessarily been safety-oriented and may be ideological or not necessary?

[Richard Lyall]

One hundred per cent. I'll be blunt here. I think the national building code process got hijacked. They started to pursue a whole bunch of things, such as some of these net-zero targets that weren't really understood based on building science—or so-called building science; I don't know what to call it sometimes—that weren't subject to cost-benefit analysis.

I, for one, was in favour of the harmonization of building codes across Canada, but because of that, we went to the Ontario government and said that, nationally, they were just jacking up the cost so much that people couldn't afford it. There was no sense of priority.

There's some great research that's being done connecting social housing, well-being and so on and so forth. What is the priority here? Is housing the number one priority or not? Is it some kind of esoteric, ill-defined effort by a national code, or is it a municipality declaring a climate change emergency and then introducing their own standards for things? That's being tamped down now in Ontario. We have to be really careful with that.

We have to set our priorities, though. Is it more important to have some pure version of net zero, or is it more important to house a family in a decent, modern home that's built according to our current very good standards? You're not going to save the climate on your own. What's more important here?

When you look at the consequences of inadequate housing, people have to go somewhere, so they go into substandard occupancies that are inefficient and unhealthy. Kids don't learn well. People get sick more, and that puts a burden on the health care system. That's all measured, but it's not taken into consideration on these things.

I'm in favour of harmonization, ultimately, but I don't like what has happened at the federal level.

[The Chair, Liberal, Bobby Morrissey]

Thank you, Mr. Reynolds.

Thank you, Mr. Lyall.

You have five minutes for your closing remarks, Ms. Desrochers.

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

Thank you, Mr. Chair. I would like to express my sincere gratitude to the witnesses for being here this morning.

We've had several conversations in the past. It's good to continue these conversations in the context of a committee meeting and the ongoing study.

I just want to say that we did have a great announcement this week in Ontario on development charges.

I hear you about the uncertainty, but I'm sure that my colleagues are very keen, just as we are, to work swiftly to pass Bill C-26, so that money can flow to provinces to support the HST rebate and other measures that are going to accelerate housing solutions.

I'm very glad we have the opportunity this morning to discuss at length the issues around harmonizing building codes because I truly understand the frustrations regarding the accumulation of regulatory processes at all levels of government.

My questions are directed at you, Ms. Demers and Mr. Lyall. You mentioned reducing bureaucracy. That's a very broad term. What does it mean in practical terms?

Do you have any specific recommendations for advancing the harmonization of codes while respecting the areas of jurisdiction of the various levels of government?

We're talking about codes, but there's also the issue of inspections and how inspectors interpret them, as well as the role of compliance, which Ms. Demers mentioned. So, what role does this play beyond what's written in the codes?

Finally, based on your respective experiences—Mr. Lyall in Ontario and Ms. Demers in Quebec—is there a genuine willingness to act? What are the barriers? I think the federal government has been very clear and has sent very clear signals. It wants to move forward and see change. It established Build Canada Homes precisely to move forward quickly. So, where's the problem?

I'd like everyone to answer these questions quickly, in about a minute and a half. I'll start with you, Mr. Lyall.

[Richard Lyall]

One thing I'd say is that it's a very difficult challenge for the federal government, because it doesn't control a number of the factors here. For example, Ontario has its own building code, the Planning Act and the Development Charges Act and so on and so forth. They're Ontario statutes, so it's the Ontario government that needs to get involved.

As you mentioned, the development charge announcement is great, but that's dependent on municipalities getting involved. What if they don't? How long is that going to take? How long are these deals going to take to get sorted out?

This is where, at a provincial level, for example in Ontario, sometimes the province has to step in and say to the municipalities, “You're going to do this,” because those municipalities are creatures of the province. Politically, that's very difficult, and I understand that.

Bill 98 just received royal assent the other day in Ontario. It's very good. There are significant reforms to planning, zoning, the rights of professionals and recognizing those rights and site plan approvals. There are things happening there at the provincial level that are very positive.

The big challenge here is that we need to be a little more nimble, we need to measure things better, and we need to set real targets with a plan and hit them. That's a technocratic challenge. I think we're getting there, but it's still taking too long, especially if you look at that incredible disconnect between the targets that were set by the federal and provincial governments and where we are now, which was pointed out in my opening statement and by my fellow panellists. We're not hitting those targets. In fact, we're going in the opposite direction. That's a fire alarm that gets set off, in my mind.

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

Thank you.

Ms. Demers, it is your turn.

[Isabelle Demers]

Thank you, Ms. Desrochers.

We face the same challenges in Quebec, so I won't repeat what my colleague said. However, I'd like to add one point, and that is the concept of zero risk. We're currently in a situation where we're piling on additional layers to the code because we want to limit all risks—whether it's because insurance companies won't underwrite those risks, because municipalities want to ensure compliance, or because we want to meet very important requirements. This sometimes leads to over-regulation, whether regarding seismic risks or fire hazards, for example. I say this treading carefully, because far be it from us to suggest that we should not pay attention to these issues. We must be mindful of these risks, but the accumulation of standards—

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

Are there ways to do that?

In a tiered system, you're talking about de-risking. We cannot de-risk everything, but is it possible? Do you think it's possible, knowing what you know about the provincial...?

[Isabelle Demers]

It is absolutely possible. It is also a technocratic issue, but it is absolutely possible.

What is the overall objective? Is it to build housing? If it's to build housing or to reconvert an already built building—

[The Chair, Liberal, Bobby Morrissey]

Thank you, Ms. Desrochers.

I thank the witnesses.

That concludes the second hour.

Before we leave, all committee members received two budgets that we have to approve. One was $21,950 for the homelessness study, and the other was $1,000 to cover the main estimates.

Do I have agreement to approve those two budgets?

[Some hon. members]

Agreed.