Transport Committee on Oct. 4th, 2023

[Sean Fraser, Liberal, Central Nova, NS]

Yes.

[Kyle Seeback, Conservative, Dufferin—Caledon, ON]

What you're saying to me is that these signature programs, which you're touting to Canadians are going to solve the housing crisis as you've described it, will provide about 600,000 units. You're aware that CMHC put out a report that we need to build three million more houses than we normally build. Normally, from now up to 2030, we're going to build two million houses. We need to build three million more than that, and the signature program that you are saying is going to solve the housing crisis is going to provide 600,000 units. How can this program have such an absolute lack of ambition?

[Sean Fraser, Liberal, Central Nova, NS]

There are a couple of really important points to understand. First of all, it's about 3.5 million additional homes that we expect we need to build.

The GST removal on apartment construction is an essential ingredient to solving the housing crisis. It won't do it on its own. You've left out, as well, the recent change to the Canada mortgage bonds program, which, in theory, should result in about 300,000 units over the next decade, given that it accounts for about 30,000 additional homes every year.

[Kyle Seeback, Conservative, Dufferin—Caledon, ON]

Now we're at 900,000.

[Sean Fraser, Liberal, Central Nova, NS]

Here's a key point: No one of these policies is going to solve the housing crisis. We need to pull every lever that we have. There's going to be more to come, but this is also ignoring programs that exist that we've advanced over the past couple of years, such as the national housing strategy.

[Kyle Seeback, Conservative, Dufferin—Caledon, ON]

You said the housing crisis is now. Why aren't you pulling all the levers now? If the housing crisis is now—and we know it is—why are you saying that we have to pull all the levers, but you haven't pulled them? You, yourself, said it's a crisis.

[Sean Fraser, Liberal, Central Nova, NS]

By your own analysis, in the past few weeks we are responsible for nearly a million new homes, given the math that you've just laid out before the committee.

If I keep up that rate of productivity, we're going to be able to get there.

[Kyle Seeback, Conservative, Dufferin—Caledon, ON]

That's your estimate over 10 years. They're hypothetical homes. People can't live in hypothetical homes.

You just said that we need to pull all the levers. How are all the levers the sum total of 900,000 homes, when we need to build 3.5 million?

[Sean Fraser, Liberal, Central Nova, NS]

I don't believe we have yet pulled all the levers.

It turns out that when you try to develop a handful of new policies that are going to make a meaningful difference and unlock hundreds of thousands of homes for Canadians, it takes a few days.

[Kyle Seeback, Conservative, Dufferin—Caledon, ON]

The crisis isn't weeks old. The housing crisis is years old.

Why has it taken you so long to find these levers?

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mr. Seeback.

Thank you, Minister.

Next we have Ms. Koutrakis.

Ms. Koutrakis, you have the floor for five minutes.

[Annie Koutrakis, Liberal, Vimy, QC]

Thank you, Mr. Chair.

Thank you, Minister, for joining us at this late TRAN committee. I'm sure you've had a pretty busy day, as we all do on Wednesdays.

I'd like to talk a little about the Canada Infrastructure Bank and how important it is to leverage the dollars, such as those through the CIB and other government programs, to accelerate infrastructure projects.

[Sean Fraser, Liberal, Central Nova, NS]

One of the things that we have to come to grips with is that we have an infrastructure deficit across Canada. Despite making record investments as a federal government over the past eight years, there is more to do. This applies equally to housing and to infrastructure. We should be looking at new ways to pull capital into the Canadian economy that is going to achieve the social and economic outcomes we want to see.

The Canada Infrastructure Bank is a very good idea. In fact, different parts of the world have advanced similar kinds of ideas, some of which are playing copycat, so to speak, after the development of the Canada Infrastructure Bank.

The strength that the bank has, in my view, is that it's able to identify revenue-generating projects that provide some public good. It's able to tap into different sources of investment to fund those projects, which then create revenue that allows the proponent to pay back to the bank over time.

When we start with an initial amount of capital in the bank, this allows it to become self-sustaining. When they earn revenue with interest on loans that they make on commercial terms, they're able to protect the initial investment that the federal government makes, but in perpetuity continue to fund infrastructure that would not have been built but for the creation of the bank.

If we want to pull in big investors, pension funds and private developments that otherwise would not come, we need to create incentives that allow them to do that. When the bank can put competitive financing terms on the table, often for projects that could not get financing through conventional means, then we can actually see projects go ahead that otherwise would not have come to fruition in Canada.

[Annie Koutrakis, Liberal, Vimy, QC]

Do you have any examples, Minister, that you could speak to?

[Sean Fraser, Liberal, Central Nova, NS]

Yes, there are a number of projects.

I'd suggest that if you want technical explanations of individual projects, we're going to have the department stick around for the second half. They can really dig in as granularly as you'd like.

The kinds of projects that are starting to go ahead now include water and waste water, which we've discussed as having the potential to unlock housing. They also include small modular reactors, which could be part of the solution to generate non-emitting energy that's going to help power the Canadian economy and potentially create export opportunities down the road. The technology is not here today on a commercial basis, but making these big investments could actually create the opportunity to develop an industry that doesn't exist at scale.

The electrification of transit is a tremendous opportunity. We have connectivity, with a major fibre project in Manitoba that is going ahead. We have energy retrofits, as was discussed earlier. There's potential for the bank to deal with projects that improve energy transmission across provincial boundaries in my region of Canada, with projects like the Atlantic Loop or components of it.

There's no shortage of these kinds of projects. I actually would value the perspective of committee members as to what other kinds of projects we might be able to use the bank to fund, including those, for example, that might unlock a potential for more housing to grow the impact of the measures that Mr. Seeback has drawn attention to during his line of questioning.

[Annie Koutrakis, Liberal, Vimy, QC]

Do I have one minute left?

[The Chair, Liberal, Peter Schiefke]

Yes, you have one minute left.

[Annie Koutrakis, Liberal, Vimy, QC]

Thank you.

In your opening remarks, and throughout your testimony, you've touched upon public transit. I'd like to know, in your opinion, what role you see the federal government playing when it comes to public transit, keeping in mind that there is always a jurisdictional challenge when it comes to public transit.

[Sean Fraser, Liberal, Central Nova, NS]

Communities are going to know their priorities best when it comes to what kind of transit system they need. Local governments are very good at understanding where the bus station goes, what kind of mode of transportation people need and the appropriate place for an active transportation lane to allow people to move through their community in a sustainable way that promotes healthy living as well.

The role of the federal government is not going to be to go in and start dictating where projects go; it's going to be to fund good ideas. If we actually come up with programs that communities can apply to and we can partner with provincial governments to leverage additional investments, we can grow the overall ability of people to move throughout their communities, which will help promote healthy, livable communities.

The short answer to your question is that the role of the federal government is to fund good projects. My sense is that on an individual level, as local representatives, we can work to understand what kinds of projects will work for our communities, but as a government we should fund good projects when it comes to transit.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Minister.

Thank you, Ms. Koutrakis.

Mr. Barsalou-Duval, you have the floor. You have two and a half minutes.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

Thank you, Mr. Chair.

Minister, I had the opportunity to ask your predecessors, Ms. McKenna and Mr. LeBlanc, about a fund that might have helped a riding such as mine, which was planning a bicycle path to link the Boucherville islands on Montreal's south shore. We could have used the Active Transportation Fund for that project, which was so important to the City of Boucherville. Just recently, however, I looked into the funding allocated under the Active Transportation Fund and discovered that, with a budget of $400 million, 453 projects received federal funding. Quebec received $1.7 million. That is just $1.7 million out of $400 million, roughly 0.4% of the total.

Can you explain why Quebec received so little under the Active Transportation Fund?

[Sean Fraser, Liberal, Central Nova, NS]

Thanks for the question.

I know it was an extremely competitive fund, but I'm going to have to dig into the details just to make sure I have the numbers correct. The fund took applications on a competitive basis and made different kinds of awards. Until you phrased it in your question, I was not aware of the particular percentage. If you'd like to send a follow-up question, I would happily offer a more fulsome response.

Perhaps I could signal to officials in the room that we could provide clarity during the second half of the meeting. I think that would be appropriate.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

I have to say that I find it absolutely scandalous that we received just $1.7 million out of $400 million. On numerous occasions, I asked your predecessors whether a portion was set aside for Quebec since there was no agreement with Quebec for the awarding of that funding.

Your predecessors never gave me an answer on that. Even when the deadline was reached for funding applications, there was still no agreement with Quebec. Yet it looks as though you decided to award funding to the other provinces and leave Quebec out. As a result, we did not receive our share. This is unfortunate.

I hope I have misunderstood and that you will tell me that in the end there is some money hidden away for Quebec. If not, this is just scandalous, sir.

[The Chair, Liberal, Peter Schiefke]

Unfortunately, we have run out of time for an answer.

Thank you, Mr. Barsalou-Duval.

Next we have Mr. Bachrach.

Mr. Bachrach, the floor is yours. You have two and a half minutes.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

Thanks, Mr. Chair.

I'd love to fit in two questions in my 2.5 minutes, so I'll go as quickly as I can.

I'd love your thoughts on how your government plans to address the issue of construction cost escalations for projects that see a long time period between application and award.