Transport Committee on Oct. 4th, 2023

[The Chair, Liberal, Peter Schiefke]

You have 20 seconds.

[Leslyn Lewis, Conservative, Haldimand—Norfolk, ON]

Do you agree that affordability should be a core principle of the national building code?

[Sean Fraser, Liberal, Central Nova, NS]

There's more to it than that, but I think anything we can do to promote affordability is important.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Dr. Lewis.

It is Mr. Iacono's turn now.

Mr. Iacono, you have the floor for six minutes.

[Angelo Iacono, Liberal, Alfred-Pellan, QC]

Thank you, Mr. Chair.

Good evening, Minister.

I'm a little puzzled with the questioning, and I'd like you to clarify something, because I don't think it's what my friend across is stating with respect to the role and responsibility of the Infrastructure Bank. Can you please clarify that so that we know what limits the government has with respect to the bank?

[Sean Fraser, Liberal, Central Nova, NS]

Sure. We as the Government of Canada created the Canada Infrastructure Bank. The purpose was to find new sources of capital that could be invested in infrastructure or in projects that generate positive social outcomes, whether they are building out communities, creating economic opportunities in growing industries or making our communities more energy-efficient.

Perhaps I'm oversimplifying, but those are the kinds of priorities that the bank would be reflecting upon. It operates independently of government. I don't have the ability to say, “Pick this project, and give them x dollars.” We can flag the priorities for the government that they can then invest in.

What we've seen is that the bank has actually attracted billions of dollars in capital that otherwise would not have been invested to make our communities more vibrant, prosperous or environmentally friendly. There is not necessarily an exact limit on the nature of projects, but there are priorities that they will pursue.

For what it's worth, I don't personally drive the investment decisions of the bank—I think that would actually be very dangerous—but its ability to operate independently on commercial terms is proving to be very successful. Despite a slower start, they've really accelerated the pace of investments, and I think it's going to have a very positive impact for the long term for Canadians.

[Angelo Iacono, Liberal, Alfred-Pellan, QC]

Thank you, Minister, for that clarification.

Also, you must agree that it is important that housing and infrastructure files be linked under your mandate.

[Sean Fraser, Liberal, Central Nova, NS]

That's a good question.

I do agree. I think it's very important, and I think it's something that's going to create new opportunities. It's really obvious when you sit down and look at the opportunities to fund projects of the nature that we have funded over the last eight years or so in government. I look at the water and waste-water investments that we've made, which unlock housing. I look at public transit. We don't just move people around communities. We move them from the places where they live to the places where they work and receive services, whether it's taking their kids to soccer practice or whether it's taking a bus to a medical appointment and then getting back home.

When we actually think holistically about where we're investing money in infrastructure, we can make better decisions about how we're going to either unlock more housing or make communities more livable for people. I think combining housing and infrastructure into a single ministry is going to allow us to be more efficient with the decisions we make, and we can squeeze more productivity out of every federal dollar as a result. That is my view.

[Angelo Iacono, Liberal, Alfred-Pellan, QC]

Minister, what advantages can be attributed to allowing federal regulatory agencies to respond more swiftly to housing cost fluctuations in Quebec in order to promote greater stability in the province's residential market?

[Sean Fraser, Liberal, Central Nova, NS]

Which regulatory agencies are you referring to?

[Angelo Iacono, Liberal, Alfred-Pellan, QC]

I'm referring to the ones that...federal regulatory agencies.

[Sean Fraser, Liberal, Central Nova, NS]

Responding quickly to changing dynamics when it comes to housing is extremely important. It's probably more important now than it has been in a very long time, given the rapidly shifting landscape around the need to build homes.

I should point out that province to province, there are also rules that protect the ability of people to remain in their homes in different ways. With maybe a bit of ambiguity built into the question—and direct me if you want me to be more specific—my sense is that when you're dealing with a rapidly changing landscape when it comes to the cost to builders to build, as a result of materials, supplies, land, or interest going up, when you're dealing with an increasing pattern over the last number of years where people are displacing individuals from homes that were previously affordable, having the ability to act nimbly and respond quickly to a changing landscape for whatever reason is very important.

To answer with a greater degree of specificity, we can dig in, perhaps off-line, on the specific agencies that you're most interested in.

[Angelo Iacono, Liberal, Alfred-Pellan, QC]

Thank you.

What specific actions were implemented to boost investments in affordable housing within Quebec, and what advantages does this bring to the province?

[Sean Fraser, Liberal, Central Nova, NS]

There's a lot to chew on, and I think we'll have insufficient time to get through it, so I apologize in advance for an incomplete answer.

We have a number of different programs that directly fund affordable housing units. We've had the rapid housing initiative. We've had bilateral agreements with different provinces. We're working now to secure an agreement with the Province of Quebec on the housing accelerator fund. There are other programs, as well, all of which can contribute to building out more affordable housing stock.

Quebec has actually, in many ways, done a good job over the course of the last number of years. This is really important, because essentially my entire lifetime, up until 2017, the federal government—and I should say different governments, both Liberal and Conservative—has really stepped away from its role as a funder of affordable housing in this country.

In working with provincial governments—and Quebec is unique, because we don't deal directly with municipalities as well—we usually try to work out an agreement where we can participate as a funder in different housing projects that will allow more people to have access to a home that they can afford, whether in the market or outside of the market, if their income doesn't allow them to find a home they can afford the way many people can.

[The Chair, Liberal, Peter Schiefke]

Thank you, Mr. Iacono.

Thank you, Minister.

Mr. Barsalou-Duval, you now have the floor for six minutes.

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

Thank you, Mr. Chair.

Congratulations, sir, on your new appointment as Minister of Housing, Infrastructure and Communities. I am very pleased to see you here among us.

Throughout the summer, I was approached by municipalities in my riding and from all over Quebec. I received copies of resolutions from municipalities regarding the Canada Community Building Fund, which used to be the Gas Tax Fund. You might know where I'm going with this. This fund expires in 2023. It is now October, it will soon be 2024, and we still don't know if there will be any money for Quebec municipalities in 2024 under the Canada Community Building Fund.

Can you assure us that there will be money for our municipalities next year under this fund?

[Sean Fraser, Liberal, Central Nova, NS]

There are certain challenges right now. The situation in Quebec is different from that in other provinces. It is difficult for me to make a direct commitment to municipalities. In accordance with Quebec's Act respecting the Ministère du Conseil exécutif, for instance, matters cannot be handled the way they are in Nova Scotia, for example.

If you'll allow me, I'll continue in English for more precision.

We are currently re-examining what's now called the Canada community-building fund, previously the gas tax. We're looking to make certain shifts to ensure that we're not just transferring money without having an understanding of what outcomes may be generated. In fact, we want to build in a stronger link with unlocking more housing potential within cities. We are working to establish a flow of money that municipalities can still rely on. Of course, it's typically through agreements with provinces that it goes to municipalities, but my expectation is that we're going to be able to continue to fund, through the Canada community-building fund, with some extra details of that—

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

Thank you.

Since I became the critic on this issue, the committee has heard from representatives of many municipalities. It became very clear, particularly during our infrastructure study, that the Canada Community Building Fund was in fact the one that the municipalities liked the most. According to the municipalities, this fund is simple and easy to use, without complicated conditions. They say it is accessible to small and large municipalities alike, without excessive paperwork.

I think you said that you intend to add a housing component to the Canada Community Building Fund, which is not the case right now.

I am trying to understand what that entails. Will you be adding funding for housing to the Canada Community Building Fund, or will you simply add conditions?

The municipalities have said that there are already too many conditions attached to this funding. As it is, they would like to be able to fund more things than they are currently able to do.

[Sean Fraser, Liberal, Central Nova, NS]

We're in active discussions now with different provinces, including Quebec, about what will come next for the Canada community-building fund. My view is that across different programs, we need to do more to leverage the social outcomes that we want to see, including unlocking more housing. I do not want to compromise the simplicity of the program, because that is a great strength. I represent small towns and rural communities, and I've heard loud and clear that this program is something that they very much appreciate. It has flexibility and it allows them to focus on priorities.

I don't necessarily envision that the Canada community-building fund will go to constructing new homes with the cash that will be used—in fact, I question how far that would go on its own—but it's about making sure that we're using the fund in parallel with initiatives that will result in more homes and more livable communities. I don't expect that we will further complicate the administration of the fund as a result.

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

Yes, regarding new home construction, the mayors who appeared before the committee, and even the ones in my riding that I am in touch with, have all said that they often wish they could build new housing and launch new developments, but cannot do so because their water infrastructure is at maximum capacity.

In my view, the best way to help municipalities facilitate home construction is not by adding conditions, but rather by improving funding for water infrastructure. Right now, it appears that Quebec has a deficit of $38.2 million for the maintenance of water infrastructure. That is a huge gap that prevents us from building the housing we need. Furthermore, the fund I was talking about, the former gas tax, does provide funding for water infrastructure, among other things.

Can that funding be released as quickly as possible to help our cities and get housing built?

[Sean Fraser, Liberal, Central Nova, NS]

I completely agree. Investing in municipalities' waste water treatment systems is very important to allow for the construction of new housing for communities.

If we actually look at all of our policies and figure out how we can better use them not just to build homes but to build the infrastructure that will allow more homes to be developed in communities that already want to build them, I think there's a gold mine there when we're trying to achieve the goal of making sure that everybody in Canada has a place to live.

These are the kinds of discussions that we're having, not just on the Canada community-building fund but as we develop future infrastructure programs as well.

Thank you.

[The Chair, Liberal, Peter Schiefke]

Thank you, Minister.

Thank you, Monsieur Barsalou-Duval.

Mr. Bachrach, the floor is yours. You have six minutes.

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

Thank you, Mr. Chair.

Thank you, Minister, for being with us this evening.

I really appreciate your taking the time to meet with me and the mayor of Prince Rupert to discuss his city's infrastructure challenges. I know you're aware of the specific challenge that city faces: mainly, the aging condition of their drinking water infrastructure, especially their water mains. The fact is that last Christmas they had to declare a local state of emergency due to several water main breaks. In fact, officials fear the catastrophic failure of the entire system if something isn't done as soon as possible.

The province has come in with an investment of $65 million to help fix the problem, and the city has applied to the disaster mitigation and adaptation fund for a similar-sized contribution from your government.

I know that ministers don't typically make funding announcements at committee meetings, but I wonder if you could share with the committee and with me your government's posture on the project, how you understand the problem and what's at stake in Prince Rupert.

[Sean Fraser, Liberal, Central Nova, NS]

Thank you for the question and for arranging the meeting with Mayor Pond as well. I very much enjoyed the conversation. As I shared with you earlier today, I again had the chance to speak with him, as well as with my provincial counterpart in British Columbia, about this project and other infrastructure priorities.

This is a great example of how what seemingly looks like a small project on paper can have an immense economic impact. Prince Rupert, as I'm sure everyone around the table knows, is home to a major port that the entire Canadian economy depends upon. To the extent that we have a disaster in the water or waste-water systems in Prince Rupert, it's not just the residents—the residents are important in their own right—but the entire supply chain across the Canadian economy that could be impacted if people who work at the port can't live in the community.

The disaster mitigation and adaptation fund was designed with projects like this in mind, where, if something is to go wrong, we want to protect against the economic consequences that would follow a disaster of the kind you've explained. I won't create a new pattern of ministerial announcements in the middle of a process that's playing out, but my sense is that the fund was designed with projects like this in mind, and I hope to work towards a solution with you as the local MP, as well as Mayor Pond and the provincial government, because I believe that something of national importance, such as the Canadian supply chain, demands the attention of all levels of government.

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

Thank you, Minister.

Moving on to some other issues that face communities in the riding I represent, we've had Environment Canada and Fisheries and Oceans Canada express concern about communities' waste-water effluent, which is discharged either into the ocean or into rivers, and meeting various federal regulations. Of course, with climate change, this becomes even more of an issue, because we're seeing lower flows in our rivers during drought periods.

The community of Smithers, where I live, applied for a waste-water infrastructure project in 2020. They were denied. They went back to the drawing board, revised their proposal, reapplied in February 2022—over a year and a half ago—and they still haven't heard back with a response on their application. Meanwhile, they're struggling to meet the federal regulations when it comes to discharging effluent into a wild salmon river that is home to a world-renowned steelhead fishery. This is a really treasured waterway, and of course they want to upgrade their infrastructure and do what's right to maintain the environment and treat the sewage properly.

The village of Port Clements has a similar situation with their waste-water project. This is a community of between 300 and 400 people. What they've seen over the years is that the construction cost escalation while they wait for approval of their grant applications has skyrocketed. A project that in 2021 cost $2.5 million is now estimated to cost $4.5 million, so they're struggling. I believe that in the case of Port Clements they've been granted a portion of the project.

The problem we're seeing here is that communities are applying to do these projects, but the timeline for getting them done and the construction cost escalations are making it very difficult. I wonder how your government sees that problem and what it's doing to correct it.