Public Accounts Committee on June 16th, 2022

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

Thank you very much, Mr. Chair.

I'd like to thank all of the witnesses for being present today and I apologize. I understand it's been difficult to get your whole statements in. I just want to appreciate your time here today.

I'd like to direct my first question to President Bowers.

I was pleased to hear the stories of success you noted in your statement on the Canada Mortgage and Housing Corporation's work, but I was reminded of another story from my own city of Edmonton that paints CMHC's progress in a very different light.

Despite heavy winds, grey skies and a steady drizzle on Wednesday, June 16, just yesterday, dozens of Edmontonians gathered downtown to remember those who died due to homelessness between 2019 and 2021. The service, which was attended by the mayor of Edmonton, much of the city council and many of the province's MLAs, was organized by the Edmonton Coalition on Housing and Homelessness, a group that does incredible work fighting the housing crisis that is gripping our city.

What we hear from them is that they still lack the kind of funding and support necessary to ensure that we continue to have a compassionate and strong approach to ending homelessness in my city.

There's another number that I'd like to cite in relation to CMHC's work, which is 453. There were 453 people who died from complications in the city of Edmonton due to houselessness in just the last three years, ranging between 2019 and 2021.

I quote from the statement we heard this morning that according to the Auditor General, “We also found that funds were not being spent as quickly as expected and, as a result, federal partner organizations moved planned spending each year to later years.”

My question to the president is this: How much legacy program funding from CMHC has yet to go out?

That's one of three questions to the same witness.

[Romy Bowers]

I want to start off by saying that the CMHC recognizes that there is a homelessness crisis in Canada and that there's more the federal government and all orders of government have to do to support housing for those most in need.

CMHC was very pleased to be involved in the development and now the implementation of the national housing strategy, which is a $72-billion plan to address the housing needs of Canadians with a focus on those with the greatest levels of housing precarity.

There's no question that CMHC can do more and needs to do more. I just want to say that I'm very committed to doing what I can to address the issues that the member may be hearing on the ground in Edmonton. We have staff in Edmonton. I'm very happy to address any specific concerns they have.

With respect to the spending of the national housing strategy, I want to point out that we have very specific commitment numbers that we try to hit on a yearly basis. When the national housing strategy was first implemented, it did take some time for CMHC to develop a pipeline and there were delays in getting the money out to proponents, but I'm very pleased to report that, subsequent to that, we have made very significant improvements. As of right now, we are on target in terms of making the commitments to the funding that's been allocated to us.

When there are allocations from one fiscal year to the other, it's not because we have not made the commitments but because of the nature of housing as infrastructure. We provide the funding to proponents as the construction is completed. Oftentimes, it's very difficult to predict how that construction life cycle proceeds. That really is what's driving the transfer of funding from one year to the next.

One of the things we are observing recently is that there has been an impact on the pace of housing development because of certain supply chain disruptions caused by the pandemic, but there's also great pressure in the construction industry, given the huge demands that are on construction workers due to the ambition of infrastructure programs and the need to create a greater housing supply in Canada.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

That pretty well exhausted my entire time there, but I'll follow up, hopefully, with a few more questions on that fact, so just hold onto that.

Thank you very much, Mr. Chair.

[The Chair, Conservative, John Williamson]

You have another minute.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

I have a whole other minute—excellent.

This is the second part to that question.

In relation to the experiences, I was really happy to hear your comments, and I would agree with you that we are experiencing a national crisis. People are dying, as I just mentioned, 453. We have to move faster. In her opening remarks, the Auditor General made it very explicit that things can be faster.

For Canadians' benefit, particularly those who are facing a crisis in just a few months from their own paycheque, how much faster will the commitment of CMHC be to building houses? Can we expect those targets to continue to be on track?

[Romy Bowers]

We have different service-level standards depending on the type of program, but maybe I could just provide it at a very high level. We've recently made a commitment that, if we have programs where it's 100% grant or contributions, we can get the funds out the door and the agreement signed within a four-week period. There are longer time frames for loans because of the due diligence we need to do to make sure the credit underwriting process is done, so that varies. We are always trying to improve our turnaround times and always very happy to receive feedback from our clients.

[The Chair, Conservative, John Williamson]

Thank you, Ms. Bowers.

That concludes our first round. We'll now move into our second round.

Mr. Duncan, you have the floor for five minutes, please.

[Eric Duncan, Conservative, Stormont—Dundas—South Glengarry, ON]

Thank you very much, Mr. Chair.

Thanks to our witnesses for being here.

Ms. Bowers, I'll direct my questions to you in your leadership role with the CMHC.

Your website quotes your goal and the reason you're there. It says, “CMHC exists for a single reason: to make housing affordable for everyone in Canada.” I don't need to go through the statistics over the course of the last couple of years. In my neck of the woods in eastern Ontario, housing prices have doubled in the last five years. In the last year, we've seen an increase of about 26%. More people than ever before are discouraged in the market and have actually given up on home ownership entirely.

At the same time, your organization gave out, in 2020 and 2021, $48 million in performance bonuses to your staff. That averaged $12,000 for each employee and 94% of employees received a bonus. I think many Canadians, seeing that, would be very frustrated. For an organization that's mandated with affordable housing, seeing the report that was issued from the Auditor General 15 months ago about performance issues, delays and actually keeping to commitments that had been made by the government in your organization, there would rightfully be a lot of frustration there. Even some partner municipalities in my region continue to be frustrated with the application process, the delays and some of the extra red tape and extra things that are required to get a simple approval on an application to even build affordable housing in our region.

I want to ask you this from a change management perspective. You've had 15 months to reflect on the Auditor General's report that unfortunately concludes for CMHC a lot of what we see in other departments. Spending money is not a result. Actually, while money is being spent, fewer results are being achieved.

I won't ask you to detail the $48 million and how it's done. Since the last Auditor General's report, which concluded in quite damning performance issues and delays in processes, could you advise me, in your management role and working with the minister, if you've made any single change to how performance bonuses are issued within your department and organization?

[Romy Bowers]

Thank you very much for that question.

As I mentioned earlier, CMHC is very committed to continual improvement in our processes. We have made significant improvements to improve the client experience. Again, if there are any specific concerns that you have from proponents in your riding, we're very happy to respond to those on a one-by-one basis.

We continue to improve our processes and the application timelines. We try to establish very good relationships with proponents on the ground to make sure that their needs are addressed in an expeditious manner. We're always very happy to respond to any specific questions on individual projects that exist.

On the subject of CMHC's compensation philosophy, CMHC runs a government appropriations operation, but we also have a commercial business where we compete with private sector competitors. We're very conscious that we need to manage our expenses in line with government guidelines. We conduct benchmarking on an annual basis to ensure that our compensation is aligned with peer institutions in the private sector as well as the public sector.

I'm quite comfortable that the level of compensation we provide is reasonable—taking into consideration the need to make sure that we conserve taxpayer resources—but at the same time is sufficient to attract employees because we have a very important role in providing services to Canadians.

[Eric Duncan, Conservative, Stormont—Dundas—South Glengarry, ON]

I have about a minute left here. I'll take that as a no, that there haven't been any changes since the Auditor General's report. I'll just respectfully note that there is a difference between compensation of employees and performance bonusing.

I would argue that, particularly after the Auditor General's report and conclusions—and at a macro level I appreciate the offer to look at any specific inquiries—which speaks to several delays and process issues, data transparency and so forth, those changes are not about changing the base compensation but how performance bonuses are awarded. I'll just use as an example your opening comments, which we were able to hear you deliver. We heard that you “collaborated to commit” to build more new units. If you were tying the performance bonus in with actually delivering results, I think we can get a better result.

I'll leave it at this: Unfortunately, we're not seeing change in terms of those issues where performance bonuses should be tied to results. Perhaps that may achieve some better results, so we'll continue to follow up on that.

[The Chair, Conservative, John Williamson]

Thank you, Mr. Duncan.

We turn now to Ms. Shanahan.

You have the floor for five minutes.

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

Thank you very much, Chair.

Thank you to the witnesses as well for appearing here today.

I want to point out that this is a follow-up on a previous Auditor General's report. I think this is important for those who are watching this committee today. This is the kind of work that public accounts does. We work with the Auditor General's office and we call to account deputy ministers and public servants in following the recommendations that the Auditor General puts forward. Indeed, we are happy to see this, because it's one thing, as my colleague likes to point out, to throw money at a problem, but it's another thing to ensure that the process allows for deliverables.

In that line of thought, the Auditor General did find that the programs contributing to the investing in Canada plan were not spending their allocated funding on projects as quickly as planned. That's something that we often see. Funds can lapse. This is important because, when spending is delayed, then there's a risk that the objectives in the plan will not be met.

Following this finding, the Auditor General recommended that Infrastructure Canada work with its federal partner organizations to improve monitoring, tracking and reporting on progress. We heard something about the horizontal table tool.

I'm looking to Deputy Minister Gillis. Could you talk to us about that tool and how to ensure that spending is not delayed in the future?

[Kelly Gillis]

The horizontal initiatives table, which is published on our website, is a tool that we have augmented and improved following the Auditor General's report and recommendations. It includes all 90-plus programs from the 21 departments. It has been regarding the flow of funds. We have a particular segment and report on the cumulative flow of funds, as well as the expected reimbursements that would be made in the 2022-23 fiscal year, which is $18 billion. That information is available and easily found.

At the end of the 2022-23 fiscal year, we will show what the actual reimbursements were. That is, I think, a way to have easily understandable information to be able to attract the flow of funds.

One context piece that is important to note on infrastructure is that we move money at Infrastructure Canada to allow for the payment and reimbursement of commitments we made over multiple years, but the delays in the construction of infrastructure projects are not within Infrastructure Canada. They're often with municipalities, provinces and territories, and non-profit organizations. When they're building a particular piece of infrastructure, if there are, such as Ms. Bowers mentioned, delays because of supply chain issues, they only get reimbursed after they've built and incurred expenditures. The flow of funds happens after the fact, after construction, after the expenditures. Those delays are often with proponents for a multitude of reasons and that's what each department tracks within their own estimates process, and within their own departmental accountabilities. Then they report to us on a cumulative basis and now we are providing that on our website, showing what the cumulative is, as well as what the annual plan is. Then against that, we show what the annual actual will be.

One point of note, I think, with infrastructure as well, is that, when we look at last year compared to this year, last year the overall for the plan was $48 billion that was claimed and reimbursed. At this point in time, it's about $67 billion, so there was a 41% increase in one year. Also, with infrastructure the flow of funds also is more back-ended than front-ended. When you do an infrastructure project, there's often planning and design, and that happens in the first months or years. The heavy construction, where the more important costs are often involved, is often in the later years. Therefore, you often see later spending rather than earlier spending in types of infrastructure programs.

I hope that provides some context on delays and also what's available in the reporting.

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

Thank you. That's a very fulsome answer.

Do I have time?

[The Chair, Conservative, John Williamson]

You have a hard 30 seconds.

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

I have a question for the CMHC representatives.

The rapid housing initiative has helped a lot in my riding of Châteauguay—Lacolle. We've had some great projects.

Tell me about this initiative, please.

[The Chair, Conservative, John Williamson]

You have 20 seconds to respond.

[Romy Bowers]

Thank you very much for the question.

The rapid housing initiative was a very successful program that was launched during the pandemic to provide immediate housing for those experiencing homelessness or at risk of homelessness.

The government made an investment of $2.5 billion, resulting in 10,000 housing units being created and funded within a very short period of time. It was a very successful program that really helped those most in need.

[The Chair, Conservative, John Williamson]

Thank you.

We're going to have to move on.

I now give the floor to Mr. Therrien for two and a half minutes.

Mr. Therrien, your time will pass very quickly. In the previous round, you asked a question to which you did not get an answer.

[Alain Therrien, Bloc, La Prairie, QC]

Indeed, Mr. Chair. I will therefore let the witness answer. I hope she remembers my question.

[The Chair, Conservative, John Williamson]

Who did you ask the question to?

[Alain Therrien, Bloc, La Prairie, QC]

My question was addressed to the representative of Infrastructure Canada. I will repeat it.

When a department has a budget of nearly $200 billion, it must be as transparent as possible about how it spends that money. We know that it is very difficult to check what is going on at Infrastructure Canada and to obtain details about delays, the achievement of objectives and the tracking of expenditures.

Why did you wait for the Auditor General to tell you that there was a lack of transparency before you realized that this was indeed the case? Had you taken action before that? It seems to me that it was obvious that you were pretty much in the dark.

[Kelly Gillis]

An audit like this is very important to help us understand where we need to improve on Infrastructure Canada and the investing in Canada plan. We had a lot of information on our website about the plan, but there's always room for improvement.

Among the more specific things, the Auditor General mentioned that the information on the old programs should be more clearly described in the plan and added to the horizontal initiative table. I think we need a complete picture of the different programs we have.

Before the audit, we also had a lot of information on the plan, but it was an area for improvement, and we fully accepted the Auditor General's recommendations.

[Alain Therrien, Bloc, La Prairie, QC]

Thank you, Ms. Gillis.

You're talking about the horizontal initiative table. That's public service jargon. Can you summarize what it's about in 10 seconds?

Why didn't you put that in your report? It sounds like a nice invention, but we didn't see it in the report.

[Kelly Gillis]

We had the table, but it didn't show the information for the old programs, as the Auditor General mentioned. The table included all the new programs that were launched in the context of the 2016 and 2017 budgets. Earlier programs were not included, because they existed before the plan was created and they already had their own table showing performance results.

As a result of the audit, we have added the earlier programs to the existing table.