Public Accounts Committee on March 9th, 2026

[Paul Halucha]

Can you provide a bit more detail on which programming you're talking about? Are you just talking about the lapsed money overall?

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

My question concerns the discrepancy between the approved budget that you're authorized to spend and the money that's actually spent. I'm asking this question because we're seeing, from the perspective of those on the ground, that delays in responses result not only in additional costs and delays for developers, but also that all the pressure falls on a non-profit organization. A project approved by CMHC in 2025 was supposed to receive final approval so that work could begin in April or May, but the final approval never came. On the other hand, the letter from CMHC stating that it would intervene if construction had not begun by June did arrive. Why wouldn't construction begin before June? It's because CMHC did not provide the authorizations on time.

So why is CMHC taking so long to meet its deadlines, and why isn't it spending all the money it's allowed to spend on projects?

[Paul Halucha]

For a specific case like that, I can't give you an answer today. We would be glad to come back to you with answers.

In general, you lapse money because either projects are not completed or, in the case of our department, we don't receive receipts to pay. That typically results in money lapsing.

I know they work hard to spend their money on an annual basis, but I'm not aware of a lot of lapses in CMHC's funding.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

There are many examples. I can provide some.

[Paul Halucha]

I'd just like to add something important.

The money is re-profiled from year to year. The money may lapse in one year, but it is typically added to the expenditures for the year coming up. That's one of the advantages of Build Canada Homes versus CMHC.

CMHC has their money in program allocations on an annual basis. If they don't spend the money in that year because the deals are delayed—it could be as simple as permits not getting done; there are lots of things that happen at municipal levels—they must have that money re-profiled to another fiscal year for them to be able to spend it.

This is exactly why we moved Build Canada Homes to a statutory authority. That allows them to carry forward money, year after year, and avoid the sorts of lapses that attract a lot of questions and seem very damaging and negative, but that are often a transaction cost of how the money is set up in program authorities.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

One of the problems with that is that we get the impression that the costs carried over from year to year are as significant as what is actually spent. At the same time, the problems remain.

I do want to give a very concrete example, that of the Maison d'hébergement l'Émeraude, a shelter in La Sarre for women who are victims of domestic violence. Seven similar shelters had issues with the disbursement of funds, but also with last-minute conditions added by CMHC, once the letters of agreement and approval had already been issued. CMHC doesn't take Quebec's reality into account. Non-profit organizations are being asked to pay a consultant to analyze the work, when the Régie du bâtiment du Québec already inspects it. Responsibilities continue to be duplicated because Quebec has a different Civil Code.

Why isn't CMHC adapting its programs to Quebec's reality? Will Build Canada Homes finally take that into account or, once again, will Quebec be penalized?

[Paul Halucha]

I mentioned, when I was responding to another question, that a lot of things we had on the table were challenges with the business model at CMHC. One of them was the fact that program authorities dictate what CMHC is required to necessitate by way of reporting in.

Build Canada Homes, to answer your last question, doesn't have program authorities in the same way. They have a lot more flexibility, and the federal and provincial governments have entered into a positive agreement about how Build Canada Homes will operate in Quebec. The intention of that is to create a table where issues like this can be discussed. It avoids duplication, and it will hopefully put us in a situation where some of the provincial issues around M-30 that can sometimes make it challenging to deliver programming are being dealt with at the outset.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

In some cases, non-profit organizations had obtained a funding agreement from the Société d'habitation du Québec, or SHQ, if they obtained an agreement from CMHC by a specific date. However, CMHC did not respond within the required time frame and even exceeded the deadline granted by the SHQ, which prevented some projects from being completed.

Another example is that CMHC has problems paying developers on time. People at CMHC are looking at the money sitting idle in their coffers.

Why is CMHC making non-profit organizations wait, leading them to then have to pay interest charges that inflate their bills and make additional requests, instead of being reliable and complying with agreements? Why are these problems recurring at CMHC?

[The Vice-Chair, Liberal, Jean Yip]

Give a short answer, please.

[Paul Halucha]

The short answer is that every time you look at one of the cases, you see that there are issues, often on both sides of the table. CMHC often tends to get blamed for things that are beyond their control, like capital structures or the level of risk that a not-for-profit is putting forward.

There are a lot of dynamics in putting a transaction together. It's very hard for me to answer at that level. Specific cases have specific answers.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Thank you.

[The Vice-Chair, Liberal, Jean Yip]

We will now move to the second round of five minutes each, starting with Ms. Kusie.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Thank you.

Mr. Halucha, in volume III of the 2025 public accounts, under the category of “Losses of public money and property”, the public accounts show that your department, specifically CMHC, lost $231,840 in a single case of fraudulent claims of grants and contributions. Are you familiar with this case?

[Paul Halucha]

I'm not familiar with it, and just to clarify, CMHC is not my department.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Okay, so then you wouldn't know if any of this money has been recovered from this fraudulent claim.

[Paul Halucha]

I wouldn't know. I'd be very glad to follow up with CMHC and, if allowed, provide that answer.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Was your department captured under the comprehensive expenditure review?

[Paul Halucha]

Yes, the department was captured.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

It was communicated that one of the ways the government would meet the CER was by reducing reliance and spending on professional services. Did your department receive instructions to cut spending on consulting?

[Paul Halucha]

As part of the expenditure review, that was not a specific direction we received.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Why do the main estimates propose an increase of $62 million on consulting for 2025-26 at HICC?

[Paul Halucha]

Basically, we are a small department. A lot of our expenditures are temporary, so we use consulting, especially on the IT side, to avoid having to take on long-term obligations by way of employees we're not able to reduce or have to reduce at a great cost. It's a way of managing uncertainty. That's how I would describe it.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

This is something we've seen quite continuously with the Liberal government over the last 11 years. They indicate that they're going to spend less money on consulting, and that is never the case. We saw this with ArriveCAN, for example. We saw this with the previous Treasury Board's objective to cut spending on consultants, which didn't occur. The current Prime Minister has indicated that he will try to spend less money on consultants, yet there is this increase of $62 million.

How can you expect Canadians to believe that your department will actually reduce spending, as the government has promised, if, at the first opportunity to spend, you're increasing the amounts on consulting?

[Paul Halucha]

We are reducing expenditures in the department. The savings will be $2.9 billion over four years. We've reduced approximately 190 FTEs, and those account for real reductions.

On our consultant envelope, Michelle, can I ask you to add on?

[Michelle Baron, Assistant Deputy Minister and Chief Financial Officer, Corporate Management Sector, Department of Housing, Infrastructure and Communities]

We've been trying to change the ratio of employees to consultants. Back in 2024-25, our ratio was about fifty-fifty, and now we're at sixty-forty—60% employees and 40% consultants. We rely on consultants mainly for research and information technology as well.