Public Accounts Committee on Sept. 25th, 2025

[Jean Yip, Liberal, Scarborough—Agincourt, ON]

Mr. Halucha, how will you take some of the progress that was made by the Treasury Board in managing the real properties as you develop Build Canada Homes?

[Paul Halucha, Deputy Minister, Department of Housing, Infrastructure and Communities]

Thank you very much for the question.

Build Canada Homes, the new agency that was recently announced by the Prime Minister and Minister Robertson, will have as one of its key functions—different from what Mrs. Volk just outlined—building on federal lands. There were a number of properties identified or announced at the time of the announcement. That's obviously a key difference between the two organizations.

There's a lot we can do to improve the speed at which surplus lands are made available for public policy purposes, including housing. I think some of the innovations that the Auditor General pointed out Treasury Board has made will help to assist, but there's still a lot to do to improve how quickly lands are made available and, in particular, I think, some of the targeted lands.

Another point that was made by the Auditor General in her report was the selection of properties. In fact, right now what occurs is that surplus lands are what's made available. Lands are made surplus when it's determined by departments or custodians that they're not needed anymore, and those are the lands that become available. We need to move to a system where properties are identified and utilized based on the value they can bring to solve public policy issues like housing.

[Jean Yip, Liberal, Scarborough—Agincourt, ON]

Are we on track?

[Paul Halucha]

Do you mean, on track in terms of making improvements?

[Jean Yip, Liberal, Scarborough—Agincourt, ON]

Yes.

[Paul Halucha]

Yes. I think there's been a lot of progress made in the last two years. I would note the federal land bank that was completed at the end of last summer. That was a very important step forward to actually assess all of the surplus properties, identify what their potential was from a housing perspective and put them out to the market for assessment.

As you know, one of the challenges is that the value of property is not the same in every market, and bringing surplus property into a transaction can sometimes make a large difference and sometimes less of a difference. It's not always the case that it alone unlocks housing, and that's certainly been our experience over the last couple of years. What CMHC does through the FLI program is to actually bring the subsidy that is still necessary, especially in order to get to affordable and deeply affordable housing. I think that is a key component going forward.

[Jean Yip, Liberal, Scarborough—Agincourt, ON]

Thank you.

My next question is for Ms. Volk.

The audit found that while CMHC “was on track to meet the Initiative's 2027-28 target to secure commitments to build 4,000 new housing units”, the target was “based only on commitments” and “only 49% of the new units will be ready for occupancy by 2027-28.” Could you explain why that is?

[Coleen Volk]

Certainly. This is a construction program, and construction takes a long time. I think that's the short answer to your question.

Essentially, what the program does is bring properties to market, and we negotiate with the proponents for them to acquire the property. Then they need to repair, rebuild and construct, and that is a process.

At the time they've won the parcel, won the property—when there's a tender for the process and they're the successful proponent—they probably haven't yet done all of their planning, their design work and their work with the city on zoning and everything. They still have a full construction cycle to come. It does take a while between the winning of a tender through the FLI system and the actual construction or development of the units.

[The Chair, Conservative, John Williamson]

Thank you very much, Ms. Yip.

Mr. Lemire now has the floor for six minutes.

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

Thank you, Mr. Chair.

Ms. Volk, what do you think of the Auditor General's analysis of the fact that affordability criteria are not designed to maximize access to affordable housing? Is there a clear definition of “affordable housing”?

[Coleen Volk]

Thank you for the question.

I just want to make sure I correctly understood it, because I can't hear the interpretation right now.

You're asking about affordability and whether we have the right definition of “affordability” to ensure that we're getting the right objectives in affordability.

Is that correct?

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

Yes, but what is your reaction to—or criticism of—the Auditor General when it comes to the affordability issue?

[Coleen Volk]

Okay. Thank you. I understand your question.

The program was designed in such a way that the properties are selected when the custodians offer their properties. The program doesn't seek out properties in specific areas. It accepts the properties that custodians have identified.

Those properties may be in the areas that are in the highest core housing need, or they may not be. They're certainly in communities with housing need, because every community has some amount of core housing need, but are they in the communities with the highest core housing needs? That's not necessarily the case, because they're supplied by the custodian. That is a fact of the way the program was designed.

On the definition of affordability that's used, there are different definitions of affordability used in different government programs. I agree that it would be ideal if there was one common definition of affordability, but you have to think about it in the context of what the program is trying to accomplish in terms of affordability and whether it's trying to get at the deepest affordability or something that's more affordable. Depending on the program objectives, you may find that there is a different definition.

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

One of the first considerations for affordability is the way it's established for different regions. At Canada Mortgage and Housing Corporation, or CMHC, I often see that the criteria don't apply in remote areas. So that's another aspect we'll have to define, namely what constitutes a rural region. Gatineau—a bedroom community near Ottawa with a population of 1.6 million—is often considered a rural region in Canada. This presents a huge problem when it comes to channelling CMHC funds to truly remote regions. Just think of a region like the one I represent, Abitibi-Témiscamingue. I'd like to see the development of an accurate definition of a rural region.

Another problem is that very few federal buildings are available for transfer in the regions. Once again, the entire program is geared towards the major centres.

The housing shortage has been a reality in Abitibi-Témiscamingue for over 20 years. One concern is that, even though the last waves of housing construction took place between 1990 and 2000, the median price of construction in Abitibi-Témiscamingue is based on old rates. That doesn't account for the fact that, nowadays, trees from my region are shipped out for processing before coming back, so transportation costs will be charged for two-by-fours, even though the resource comes from my region. It costs between 30% and 40% more to build a home in Abitibi-Témiscamingue. As a result, we can't adapt to CMHC programs, which is a major problem. It's all very well to say that we're going to rent apartments and make them affordable, but construction costs have skyrocketed, which is becoming a problem.

How will CMHC manage to tailor its adaptability programs to the reality of resource regions? How can we ensure that we are reaching all populations across Canada?

[Coleen Volk]

Thank you for the question.

It is true that some of our programs are more difficult, as you said. With the federal lands initiative, we don't have very many Canadian office buildings in rural parts of Canada, so the federal lands initiative is not one that's likely, proportionally anyway, to have great benefits in the rural areas of Canada. There are issues in other programs as well.

At CMHC, we are administering programs as designed by the government, so we follow the rules of the programs that we're designing. If your question is about how we can adapt our programs in the future so that they are more appropriate, the policy lead on that has been transferred to Housing, Infrastructure and Communities Canada, and they may have some thoughts about how they would want to address that going forward.

I can assure you that I am aware of the issues you've raised. We are administering the programs that we have to the fullest extent that we can, but I acknowledge that they don't all work well.

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

I'd like to use the remainder of my time to address a few aspects.

According to housing policy, renting an apartment in Rouyn-Noranda should cost $660 per month. However, since construction prices have skyrocketed, the median price of an apartment in Rouyn-Noranda right now is $850. Trying to find an apartment at this price is impossible, as rents are typically around $1,250 and much higher. Housing has been bought back by mine workers, but it's not the same thing when it comes to affordable rental needs.

I have one last question, which concerns the creation of Build Canada Homes. The agency seems to reflect a certain disavowal of the Canada Mortgage and Housing Corporation's work on housing construction programs. Do you think a structural change will really transform the housing supply on the ground in a region like Abitibi-Témiscamingue?

[Coleen Volk]

I can't speak for Build Canada Homes.

Paul may have something to say about that, but in terms of CMHC and our programs, we are, as I said, aware of the concerns you've raised, and we'll be working with HICC as future programs are designed by HICC that we can deliver.

[Le président, Conservative, John Williamson]

Do you have a brief comment to add?

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

Ms. Volk, I'm glad you're aware of the situation. This is a problem that I will repeatedly raise, because it is a recurring one for us. I think one of the issues is the adaptability of programs.

Thank you.

[Le président, Conservative, John Williamson]

Thank you very much.

We're beginning our next round, which will consist of five members and various times.

Leading us off is Mr. Kuruc.

You have the floor for five minutes, please.

[Ned Kuruc, Conservative, Hamilton East—Stoney Creek, ON]

Thank you very much.

I will be asking Ms. Volk questions.

StatsCan and the national housing strategy's definition of affordability is 30% of a family's income. If we use Ontario as an example, that's about 750 bucks, give or take a few dollars. However, CMHC has it as 80% of the median market rate, which is $1,200. That's a massive disparity. This means that your so-called affordable housing has actually become unaffordable for a lot of Canadians.

Would you commit to changing your metric to that of StatsCan and the national housing strategy?

[Coleen Volk]

It's a great question. CMHC isn't in charge of that in the programs we deliver on behalf of government. The government establishes the criteria we use, and then we administer the programs accordingly.

It may be a more appropriate question for Paul in terms of going forward, but what I will say is that, absolutely, if you use the definition of 30% of income, you get a lower number in most cases than you would if you used our 80% of median market rate, the median market rent. It does drive a different result, and it doesn't drive to the same level of affordability, but it does drive affordability. If this is the market rate, it drives it down a little bit, though not as much as if we used a different number. We are still getting a benefit. In some programs, that may be the benefit you're looking for. You may not need to go all the way—it depends—and it costs more if you drive it down further.

[Ned Kuruc, Conservative, Hamilton East—Stoney Creek, ON]

That's fair enough, but in the housing crisis we're in, I would hope.... Your organization, as we've seen today, is at the top of all the other organizations. I would hope that, with your influence, we could actually meet that lower rate in the current state that Canada is in. That would be a pretty good goal. I think everyone would agree with that. Would you?

[Coleen Volk]

There are certain programs that are definitely geared towards more affordability. I would say that I don't want to be that categorical about it, though, because there is a trade-off between the number of units you can support with a given set of money and the affordability target. If we make them more affordable, we can do less with the same amount of money. Also, in a supply crisis, the number of units that are supported is actually an important factor too.

[Ned Kuruc, Conservative, Hamilton East—Stoney Creek, ON]

Okay. Thank you.

My recommendation would be that we use StatsCan's rate. That would be my recommendation moving forward.

Now I would like to go back to what my colleague touched on, the bonuses. We're here in this committee to represent the taxpayer. That's what we're here to do. I want to touch on this. You mentioned that it's about $30 million in bonuses, but you said that it's not necessarily a bonus. Can you elaborate on that? What I'm seeing here in my notes is that there are no real guidelines or that the workers are working at their own pace. Can you give me clarity on that?