Thank you very much.
On behalf of the Canadian Home Builders' Association, representing some 9,000 member companies in residential construction from coast to coast, thank you for the opportunity to speak with you today. Our membership includes home builders, renovators, developers, trade contractors, manufacturers, suppliers and various service providers, and all of these members are being challenged by labour and productivity issues.
I would like to start by first speaking about the top issue our association is always concerned about, and that is housing affordability. This is, of course, directly affected by labour and material shortages and resultant price increases, but the biggest driver of house prices in recent times has been the lack of housing supply. The basic economics of housing supply and demand imbalances have been the key driver of accelerating house prices in recent times.
Fortunately, Canada’s housing deficit of some two million homes is now widely accepted, and the federal government has now rightly identified that we need to build some 3.5 million homes over the next decade to catch up. To do so will require a doubling of our annual pace of housing starts. The big questions are how do we get there, and do we have the labour to do so?
I'll start by saying this. To get more supply online, labour is not our number one issue. Yes, labour is a challenge, but municipalities are actually at the nexus to unlock the ability to bring more housing supply online. They need to accelerate and streamline municipal processes, update municipal policies and zoning and combat Nimbyism. All of these municipal affairs are the top issues we need to address to get our housing starts up to where they need to be. We're hopeful that the new housing accelerator fund will help to start to address these issues.
Related to these bottlenecks is labour, not only for the construction industry but for municipalities as well. Our construction industry is facing the challenge of about 22% of our labour force retiring over the next decade. Municipal building officials are retiring at an even faster pace. As many as 50% of officials are set to retire in the next 10 years, so part of the solution to labour is also ensuring that municipalities can replace departing employees and increase staff to be able to do more.
Regarding workers who build more homes, we recommend a three-pronged approach.
Firstly, we must continue all efforts to promote to Canadians careers in skilled trades. This includes promoting them to young people, their parents, teachers and guidance counsellors. CHBA asks that the government continue all actions to promote careers in skilled trades, including financial supports to companies to support apprentices, like the new Canadian apprenticeship service. Our association is continually working to address the trades gap, and government supports of this nature are very beneficial.
Secondly, we need to update our immigration system for skilled workers and target permanent immigration solutions. Skilled labour allocations for immigration must be increased, and pathways for temporary workers to become permanent workers are needed. We know ESDC is looking at such solutions now, which is critical.
Thirdly, and in the direct portfolio of this committee, we need to focus on increasing productivity in our sector. We need more innovations that will enable us to build more houses more quickly and with fewer people. Site-built construction is extremely efficient and cost-effective, but we need to make it more productive, with better technologies that require less labour. We also need to increase the amount of factory-built systems we use, be they modular, panelized or other emerging technologies. This is something government investment can help accelerate, especially since it is capital-intensive.
Regarding regulatory requirements and bureaucracy, there is a huge burden on our industry, and there is no doubt that it needs to be streamlined to allow the housing construction process to move more quickly. This must be improved at the municipal level, but there are also elements at the federal level that can help. Many political drivers are now putting pressures on the national building code, causing accelerated change and risking causing unintended consequences if not properly vetted. There are also code change adoption challenges for industry, and almost every code change increases construction costs.
We need to ensure that affordability is enshrined as an objective of the national building code and all of the standards it references, so that all regulatory changes that are considered look at their impact on construction costs. While the system is continually looking to make codes more stringent, a look at outdated regulations that could be eased is also needed.
Regarding supply chain constraints, I’m sure you're well aware of the issues across all industries. Residential construction is no different. I’m happy to talk more about those affecting our industry in the Q and A, but I’d like to point out one emerging issue, which is that a questionable drywall duty is up for renewal again in western Canada and it stands to increase yet again the cost of drywall for western Canadian homebuyers and homeowners when they can least afford it. We need to get our international trade issues in order to ensure they don’t make matters worse.
Thank you for the opportunity to join you today. I look forward to answering any questions you may have.