Public Accounts Committee on May 11th, 2021

[Christiane Fox]

Absolutely.

[Kelly Gillis]

There are 93 programs and 21 departments. There are seven departments and 17 programs that are legacy. Each one of them had approved reporting frameworks, and each department and ministry is reporting on those programs and is accountable for the delivery of those programs with the frameworks that were in existence at that time.

Now, when we're looking at the broader reporting of the investing in Canada plan, which has a certain framework in place, they don't perfectly align. If I go back to the gas tax program, for example, in our programming—in our reporting right now—we divide out the program among green, public transit, trade and transportation, and social, rural and north. The gas tax program reports in all of those categories are available within that particular program and do not segregate between them, because it is a transfer payment to municipalities for them to have the flexibility to invest in the infrastructure they need.

We know it's audited. We know there is reporting after the fact. We just don't have the same data points to report the exact same way, so those are the—

[Matthew Green, NDP, Hamilton Centre, ON]

The reason I interject—and I know you guys have been in front of committee before—is that, after I get to the answer, I have to get to my next question, and I have a limited amount of time. Please don't take my curtness as a personal dismissal, but I have to get to my other questions.

Paragraph 9.3—

[The Chair, Conservative, Kelly Block]

Mr. Green, I am so sorry.

[Matthew Green, NDP, Hamilton Centre, ON]

This is a good example.

[The Chair, Conservative, Kelly Block]

Your time is up, but I want to apologize for not realizing you were back at committee. You will have another opportunity to ask your questions.

We will now move to our next round of questioning, which is a five-minute round starting with Mr. Scheer.

[Andrew Scheer, Conservative, Regina—Qu'Appelle, SK]

Thank you very much, Madam Chair.

I have a few questions for, I believe, Ms. Bowers from CMHC.

What would you say is the largest demographic in terms of income of Canadians who use the mortgage insurance that CMHC provides?

[Romy Bowers]

With respect to our mortgage insurance business, for homeowners, the largest demographic would be first-time homebuyers. Again, there's a range in ages, but I would say in the low to mid-thirties.

[Andrew Scheer, Conservative, Regina—Qu'Appelle, SK]

In terms of income, would you say that it skews towards the lower and middle brackets than wealthier Canadians, first-time homebuyers who can afford to put down more than 20% and therefore don't require the products you offer?

[Romy Bowers]

With respect to our mortgage insurance business, it is for high-ratio mortgages, so, by law in Canada, you have to purchase mortgage insurance when you don't have the 20% down payment.

[Andrew Scheer, Conservative, Regina—Qu'Appelle, SK]

First-time homebuyers who can't afford to put more than 20% down on the mortgage are the people who pay CMHC premiums.

Now, Canada Mortgage and Housing Corporation, you fund housing programs and various social benefit programs within your own agency. Is that correct? Do you manage and fund your own programs?

[Romy Bowers]

Canada Mortgage and Housing Corporation is Canada's national housing agency, and we have a variety of programs that support Canadians across the housing continuum.

With respect to our commercial businesses, which Mr. Scheer mentioned, we consider those commercial businesses whereby we generate revenue to self-sustain those programs.

With respect to affordable housing programs that support Canadians of lower income and who are perhaps more vulnerable, those are the programs that received appropriations from the Government of Canada.

[Andrew Scheer, Conservative, Regina—Qu'Appelle, SK]

This year, on March 31, Canada Mortgage and Housing Corporation, CMHC, announced a special dividend payment of $3.5 billion to the Government of Canada; that is, a transfer from CMHC directly to the Government of Canada. This means the premiums of those first-time homebuyers, who are low- and middle-income Canadians who can't afford to put more than 20% down on their mortgage, went to pay a $3.5-billion dividend to the government. Is that correct?

[Romy Bowers]

It is correct that in March of this year we issued a special dividend. The circumstances for that dividend were quite unique. Typically, we issue dividends on a quarterly basis, as do many commercial entities, based on the revenues we earn from our commercial businesses. With the onset of COVID over a year and a half ago, we suspended our dividend because of the uncertainty of the economic conditions, so that we could preserve capital in the event of unforeseen circumstances. During this period, our revenues accumulated and our capital levels accumulated as well. We chose to issue a dividend as economic conditions became better with the alleviation of some of the COVID pressures, and that's the reason the dividend was a large amount.

[Andrew Scheer, Conservative, Regina—Qu'Appelle, SK]

It says here on CMHC's website that that quarterly dividend is $250 million, so that's exactly a billion dollars a year if it's $250 million a quarter. That's off the backs of premium payers. That special dividend that goes into the government's coffers is directly on the backs of low- and middle-income Canadians and, as you just mentioned, first-time homebuyers. The federal government has scooped up the profits made on the backs of hard-working first-time homebuyers. Is that correct?

[Romy Bowers]

It is correct that we pay about $250 million in dividends on a quarterly basis, and that's a result of the risk-based premiums that we charge for our mortgage insurance and securitization businesses. That's in line with the mandate that we have to support financial stability as part of the National Housing Act. We are also bound by the dividend framework that implicates all financial Crowns, and we make an effort to make sure that any excess capital or revenue that we earn is returned to our stakeholder, the Government of Canada.

[The Chair, Conservative, Kelly Block]

Thank you very much, Mr. Scheer. I'm sorry; your time is up.

We will now go to Mr. Blois for five minutes.

[Kody Blois, Liberal, Kings—Hants, NS]

Thank you, Madam Chair.

Thank you to the witnesses. I would ask that you keep your answers as succinct as possible. I'll start with Ms. Hogan.

One of the key findings from your report was that the Government of Canada, specifically Infrastructure Canada, was not able to show that the spending that was happening is tied to, of course, the outcomes and results it's hoping to find. Is it your understanding that the objectives and results from Infrastructure Canada would be highlighted in 9.4 and 9.5 of your report, which are long-term economic growth and resilience of the communities? Is that fair? Is that your understanding of the objectives and results of the program?

[Karen Hogan]

Yes, paragraph 9.4 is the three objectives, and 9.5 is the seven expected results of the program.

[Kody Blois, Liberal, Kings—Hants, NS]

My understanding is that when you analyzed Infrastructure Canada's reporting in this regard, there was very little delineation to be able to show where the spending resulted in these types of objectives and results?

[Karen Hogan]

That's correct. It was difficult to compare progress across the seven results year over year, because there was inconsistent reporting against them. That would be an example.

[Kody Blois, Liberal, Kings—Hants, NS]

Is it project per project, or on an aggregate basis on the overall program? Surely there would be some type of results to say if we're going to make an investment in transit, this is going to improve one of the results, but you're talking more on an aggregate level.

[Karen Hogan]

We absolutely sat back and looked on an aggregate level, while we also looked at 32 specific programs. We noted in our audit report that we found that in less than 20% of those did their strategic documentation even mention the investing in Canada plan. When we sat back to look at measurement against expected results, it was the information that was included in a supplementary table in Infrastructure Canada's departmental results report, so it was much more global reporting.

[Kody Blois, Liberal, Kings—Hants, NS]

I think that's fair from the report. The challenge I have is when I look at these results, one is around urban mobility improved and environmental quality improved. These are quite broad metrics in terms of the results. How far would you like to see Infrastructure Canada get into that very detailed analysis, given that there are other causal factors that could improve some of these results beyond investing in Canada? How deep and how far do you need the government to illustrate?

[Karen Hogan]

Well, I acknowledge that they are very broad results and it's likely hard to put your finger on a very clear and measurable target.

However, I would offer up, as an example, that some of the sustainable development goals could have been used in order to establish some of these outcomes or results that would then infer that you've had an increase in economic growth or seen an improvement in social inclusion.

We were just looking for the department to be able to demonstrate that its own expected results were clear and measurable. That goes to making this really clear at the outset of a plan, so that you've thought it all through and don't try to adjust as you go.