Public Accounts Committee on March 9th, 2026

[Tom Osborne, Liberal, Cape Spear, NL]

Supply and demand play a large part in this, and you mentioned that. Getting homes built will increase supply, lowering demand and lowering costs. We hope that formula works.

How do you balance the important goals of affordability, the speed of delivery and encouraging...? You've already spoken two or three times today about innovative housing solutions.

[Paul Halucha]

Luckily, I don't think you need to balance them, because they all push in the same direction. We need affordable housing, and we want to deploy capital in a way that maximizes the return. A really strong way to do that is to help build the modern methods of the construction sector and improve demand. Because those methods are more affordable—you see different modelling results—there's 20% to 30% less waste. They're faster in terms of the speed at which projects can be done. You can obviously build off-site, so you can build 12 months a year. In Canada, often you can't build for many months. There are many advantages that are simply built into that model.

One of the challenges is going to be acceptance by Canadians as they see this deployed more frequently across the country. I don't know if it's going to be a challenge, but we saw this on zero-emission vehicles for a number of years. There wasn't a familiarity with the product, and that led to reticence to purchase, but now I think people are on the other side of that. I think the same thing is going to happen with modular homes and off-site construction, because they're not just cheaper; they're in many cases better, because you have some uniformity to the product standards that exist on that type of product.

There are a lot of positives, and there's a lot pulling in the same direction. What Build Canada Homes tries to do is bring all of those things together. The investment policy is the guidance for how they're going to make these decisions, but it's really the investment committee and the deployment of capital that will tell the story of how they've managed this.

[The Vice-Chair, Liberal, Jean Yip]

Thank you.

There is one more round left. I am planning to end the meeting at 1 p.m.

The Conservatives have given their five minutes to Monsieur Lemire.

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

Thank you, Madam Chair.

I'd like to thank the Conservatives for that pass.

Mr. Halucha, in the Public Accounts of Canada 2025, page 386 of the French version says that the Canada Mortgage and Housing Corporation had $2.1 billion for housing funding. However, it spent only $1.3 billion. On the same page, your financial statements also indicate that 500 million available dollars were not spent on your various programs in 2025. That means that, in total, your 2025 departmental portfolio did not spend $2 billion that were available to you for infrastructure and housing.

I hinted at this during my first turn. This time, I'll give you time to answer properly. Why wasn't that money spent? It's not because there aren't needs on the ground.

[Paul Halucha]

As I mentioned, we have a prediction challenge every year in terms of how much money we're going to spend, because it's based on how many receipts we receive. For example, we are in the month of March right now. We're probably going to do about 35% to 40% of our expenditures for the year, and we will know between now and the early part of April how much money we're actually spending.

The good news is that our lapse as a department has reduced significantly. Last year, we lapsed $2.5 billion, and this year we are expected to lapse under $500 million. We're using predictive modelling to predict things, but for some major projects—for example in transit—we don't know when they're going to begin to send us requests for payment. They happened this year, and we've worked some of them in, which is why we're expecting to have about $10 billion in cash flow this year versus about $7 billion last year, but we won't know until probably January or February of next year the extent to which we are getting those requests to come forward.

This goes back to the point I made around programs. In terms of program money, you have to show the money in a certain year. If you don't spend it that year, then you go through re-profile requests to move the money to future years. It's not lost when it's not serving the need; it's simply an accounting treatment below the surface around when the money shows up in the public accounts. We do our best to predict it, but we don't control it. That is the key message that I would give.

Going back to Build Canada Homes, it's why the statutory authority works so well. CIB, you will note, doesn't lapse anything because CIB has a statutory allocation of money. If they don't spend the money this year, then it simply stays in their statutory envelope and they use it next year. For infrastructure, it's a much better way to account for the dollars, and it's why we've done that for Build Canada Homes and given them that same kind of capacity.

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

I imagine you will say the same thing about the fact that there was a significant decrease in infrastructure expenses between 2004 and 2005. We're talking about a decrease of $300 million. In 2024, the amount was carried forward to the following year, but the next year, it became apparent that $300 million less had been spent.

Obviously, infrastructure and housing should have been this government's political priority for at least two or three years. It seems to have become the priority in the House of Commons. What the figures are revealing is that less and less money is being spent. Is that because the approval times at the Canada Mortgage and Housing Corporation are too long?

When I go out in the field, that's what I am told. There are always some nice surprises in store, such as the efficiency of an energy program. That's a major issue. Quebec's housing codes aren't recognized, and further delays are added. People go and check approvals. That's the case for the Maison d'hébergement l'Émeraude, in my region of Abitibi-Témiscamingue. When construction began, an authorization had to be redone to say that the site did in fact comply with environmental standards. Why didn't that happen earlier, when the time was right?

All of that adds delays. All of that adds costs and pressure for the organizations that have to manage this. I think you have a responsibility there. Why did things end up like this, and why isn't this money being spent? Is the reality of regions' northernness being taken into account? Does that add constraints that increase bureaucracy and make it harder to establish projects in the regions?

[Paul Halucha]

I'll give you a two-part answer.

First, on the infrastructure side, I think you have it exactly right. I'm looking at our grants and contributions flows by fund category. What you have is a positive trend. In 2022-23, we spent $4.3 billion. It went up to $4.9 billion. Then it went up to $5.3 billion. Then it went up to $6.2 billion. Now it's going up to $7.5 billion. As projects are moving forward, we have much more clarity on how much they're spending every year, and we are spending more.

Your second point around delays at the CMHC is a question probably best answered by them.

I would say that these are due diligence projects. They have underwriters that have to say the risk is warranted for the expenditure of public funds. They have program criteria they need to meet. There are reporting requirements. There's a lot that weighs on the CMHC as they're making decisions that can sometimes push them from one year to the next.

There are also things like interest rates. Often a proponent will wait for an interest rate change, or their cost of capital might have gone up. There are a lot of things that affect a specific transaction that I think often get pinned on the CMHC as delays on their part, and I'm sure there are some delays on their part.

[The Vice-Chair, Liberal, Jean Yip]

Thank you.

Mr. McKinnon, you have five minutes.

[Ron McKinnon, Liberal, Coquitlam—Port Coquitlam, BC]

Thank you, Madam Chair.

I want to switch, at this point, to homelessness.

I understand that Reaching Home is being renewed. I'd like you to speak a bit about the successes of the program in the past and how we are going to build on those to continue supporting Canadians experiencing homelessness.

[Paul Halucha]

I'm so very pleased to do so.

Reaching Home has invested about $1.16 billion since 2019 to support about 3,500 projects across the country, and it has helped more than 40,000 people achieve more stable housing in just the last two years. It invests about $700 million per year through a network of municipal not-for-profits across the country that are really the front line in working with homeless people to provide supportive and transitional housing. It's the key part of the Government of Canada's contribution to what is a national problem.

In keeping with my past comments, I want to underline the role played by provinces, municipalities and not-for-profits. Obviously, there is a lot of philanthropy that takes place to support this across the country, but it is our flagship.

In addition, we have a veteran homelessness initiative, which is in its second year now and showing very positive results. This committee and others along the way noted the significant challenges that our veterans were facing. This program was designed to specifically deal with them and to help meet their needs. We do that in close contact with the veterans department as well.

[Ron McKinnon, Liberal, Coquitlam—Port Coquitlam, BC]

One of the keys, I understand, around dealing with homelessness is that homeless people have a requirement for wraparound support from the provinces for mental health and so forth. How does Reaching Home facilitate working with the provinces to make that happen?

[Paul Halucha]

Again, I would point to the network of partnerships. Provincial governments obviously provide significant resources as well. If you look at many of the provincial accounts, they now have partnerships with Reaching Home, with the federal government, as a key aspect of the delivery mechanism. It's undertaken in partnership with those groups and through a significant number of agreements directly with providers at the local level.

[Ron McKinnon, Liberal, Coquitlam—Port Coquitlam, BC]

Thank you.

I want to speak to a few of the points Mr. Lemire made.

The fact that you've allocated a certain amount of money to different projects is not an absolute requirement that you spend that money in a given year. It's available to be spent, but it requires that the application for different projects be made, approved and so forth. The fact that you may or may not have spent exactly that amount of money is not a deficiency of the department. Would you agree with that?

[Paul Halucha]

Absolutely. As I noted, any number of things can make it more complicated to deliver an infrastructure project than is envisioned at the point where the commitment of resources is made, usually by the federal government, province or municipality, including things like manpower and getting people to the site. That can cause delays. There can be supply chain issues. It's all the things we have heard that the private sector has been challenged with since the pandemic.

Things play out in projects as well. We see projects getting descoped. We see projects that are being substituted out. One of the things our framework agreements allow for is that we allocate money to provincial governments. Projects sometimes don't work out. They sometimes have projects that they decide they're not proceeding with. The resources stay with them, and then it takes them time to come back with additional projects.

I would agree with you. There's an intention. Most of these projects are done over a 10-year period of time, which I think is an acknowledgement of the fact that some planning challenges happen in the life of infrastructure projects. It's the same thing with the build Canada strong fund. It is a 10-year program precisely to allow for planning and execution to take place and for the resources to get done.

I would say, at the end of these programs, all of the money is spent. It's very rare to have lapses at the very end. I don't know if there are any. Michelle, who's been around a lot longer than I have, is saying no, so I think that's the real positive—and flexibility. If we were dogmatic and we said, “Sorry, but you told us you were going to spend it in this fiscal year and you didn't do it, so now we're taking the money back”, this would create a massive problem in infrastructure planning and our ability to have partnerships that are, as I mentioned, so critical.

The flexibility we have through being able to carry it forward—money re-profiled, money forward—is really central to our ability, working with our partners, to deliver major infrastructure projects.

[Ron McKinnon, Liberal, Coquitlam—Port Coquitlam, BC]

Thank you.

I think that's my time.

[The Vice-Chair, Liberal, Jean Yip]

Yes, that is your time. Thank you.

Next, for two and a half minutes, is Mr. Lemire.

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

Thank you again, Madam Chair.

Based on your answer, Mr. Halucha, I understand that it's not your fault if the amounts are carried forward to later years; it's because of a number of other factors. Obviously, there's no guarantee that the additional amounts received from one year to the next will be spent. In fact, if we look at the numbers, we can see that this isn't the case. The agreements also aren't announced publicly. If it's not your fault, then whose fault is it?

How are your relations with the Government of Quebec? What we're seeing is that, year after year, it's clearly difficult to reach an agreement with the Government of Quebec. However, housing should be exclusively under the provinces' jurisdictions. The expertise is in Quebec City. It's the province that has ties with the communities and municipalities, because the cities are creatures of the Quebec government. It's the Quebec government that knows the reality on the ground and that of its people. The federal government sets criteria that put obstacles in Quebec's way. However, those same criteria don't exist in Ontario. Why?

[Paul Halucha]

Thank you for your question.

I would say we have very good relationships with the Province of Quebec, and we were, as I noted, very successful in getting a CHIF agreement done with the province quite recently. That was very positive. I would also note the work that has been undertaken with Build Canada Homes.

I would say there's nothing exclusive or specifically challenging about Quebec. When we're doing agreements, we—

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

I'll stop you there.

How can we know that this agreement is constructive if it isn't public? How can we know that, in Abitibi-Témiscamingue, I'm going to be able to contribute to projects to relocate neighbourhoods like the one in the buffer zone, if the funds aren't made public?

We know that the value of sports infrastructure applications in Quebec is $3 billion. The Quebec government made a $300 million program available, but the federal government didn't participate in that program. What can be done to ensure that this money is paid to Quebec within a reasonable time frame that's at least compatible with Ontario's?

[Paul Halucha]

The agreement we just did was almost $1 billion with Quebec. That money will flow into a program that the province will run with very minimal interference—I'll use that word—with Ottawa. Very good collaboration happened in pulling that agreement together, and I think it will result in no delays.

With every provincial government, we go through a negotiation process. Our agreements are made public at a point. We will make our agreements public with each of the provincial governments. It happens once we conclude the last one.

To your point—and I'm not trying to remove myself from any responsibility for it—in terms of the re-profiling of the money, it is truly beyond anybody's control. I don't blame the provinces for it when it happens on their projects. It's just like costs going up. We've seen that on a lot of projects, costs have gone up, and that has resulted in renegotiations.

Usually our principal position is that we don't pay for cost overruns. In practice, sometimes there are extenuating circumstances that result in those kinds of discussions happening. There's a rescoping of projects. There's a lot that goes into that.

We maintain very good discussions and good relationships with the province. I would note that the one under CHIF where we didn't get an agreement was with the Province of Ontario. We did not get an agreement with Ontario under the CHIF. In that case, we got one with Quebec, but didn't get one with Ontario.

[The Vice-Chair, Liberal, Jean Yip]

Thank you.

For the next five minutes, do we have somebody from the Conservatives, or are you taking time from the Conservatives, Mr. Lemire?

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

We'll give the time back to the Bloc.

[The Vice-Chair, Liberal, Jean Yip]

Okay.

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

Thank you very much, Mrs. Kusie.

Thank you, Madam Chair.

I look forward to next year, because with the transition and creation of Build Canada Homes over the past year and all the confusion with the Canada Mortgage and Housing Corporation, or CMHC, what we actually experienced back home was a ping-pong game in which the Société d'habitation du Québec was waiting for guarantees from Ottawa.

Nobody cared whether that letter was sent by Build Canada Homes or CMHC. What people wanted was a guarantee that the money could be spent.

Meanwhile, the pressure was put on the organizations on the ground, which had deadlines to meet. Additional funding had to be exceeded, and mortgages had to be taken out, but when it came to building the projects, the funds weren't there because the federal government hadn't met the deadlines.

When questions were put to the office of the Minister of Housing and Infrastructure, Mr. Robertson, he showed no interest in answering our questions. I didn't have any discussions with him, despite repeatedly asking to have one. The buck was being passed: it wasn't CMHC's responsibility, but that of Build Canada Homes; the funds were available, and then they weren't anymore.

What's the situation this year? What direction was given? Can CMHC spend money by drawing on the guaranteed funding?

Organizations like the Maison d'hébergement l'Émeraude received a letter in March telling them that they could spend. However, when the time came to actually go ahead, they were unable to do so. They had to wait until the very last minute to put shovels in the ground, in September, before the snow arrived on our doorstep and it was no longer possible to build.

That project was saved at the last minute, but we know that there are shelters for abused women that couldn't be saved. The main reason for that was the confusion between what is clearly the responsibility of Build Canada Homes and what is the responsibility of CMHC.

What direction was given this year?

[Paul Halucha]

There's a lot in the questions you just asked.

Build Canada Homes does not have provincial allocations for resources. It has a capital allocation. It is deploying that capital across the country. It is not guaranteed that any province will receive any percentage share of it overall. Build Canada Homes will, I'm sure, watch and keep detailed data around how its capital allocation is being spent, but it is not a given at the outset that any part of the country will receive a certain amount.

It's the same thing under the transit programming as well. It's based on percentages of ridership, not on population. Where we have population as the determination for our formula—