Mr. Speaker, the Bloc Québécois proposes that the Canada Mortgage and Housing Corporation transfer any surplus from its reserve fund to the provinces for them to provide social housing. The Canada Mortgage and Housing Corporation must respect its mission, which is to help Quebeckers and Canadians purchase safe, affordable, quality housing, as mentioned in the activity report. To do so, the corporation must first stop accumulating its undistributed profits and setting them aside for capitalization. That is the crux of the matter.
I was talking with my colleague from Vaudreuil-Soulanges and she told me that ordinarily in her riding there is always an accumulation of 30% that is kept with a view to a second phase for housing. There are now accumulations of 75% because this money cannot be used to carry out a second phase. It is actually kept and controlled by the Canada Mortgage and Housing Corporation and consequently transferred to capitalization. This is not the role of the Canada Mortgage and Housing Corporation. Its mission is clearly defined. Its primary role is to provide affordable housing.
For example, in the riding I was talking about a while ago, housing is required so that workers can live near their work. In that region, the cost of a house or a condo is so high that workers cannot afford them. In such places, the search for skilled middle-class workers is difficult for these companies because there is no easy access to housing. This is the problem the Bloc wants to fix.
First, the corporation must stop accumulating these undistributed profits for capitalization, as it has been doing since 1998, and promote investments in social community, and affordable housing. These surpluses now account for $5.3 billion. The needs are obvious, in both Quebec and the rest of Canada. In Quebec, there are 450,000 households with pressing housing needs, while for Canada as a whole, there are 1.7 million such households.
The Bloc is calling for negotiations to resume for the compete transfer of responsibility and funds for housing, because, as it correctly says, this is a matter under provincial jurisdiction, and this transfer must take place as soon as possible and as smoothly as possible so that Quebec and all of the provinces are able to direct the construction of this housing, making sure that the cost associated with renewing the housing stock is included.
The purpose of this bill is therefore to limit the capitalization capacity of the Canada Mortgage and Housing Corporation, for the reasons I have stated, and to reinvest those undistributed profits instead of systematically capitalizing them when the need is so urgent. The bill will limit the potential equity of the Canada Mortgage and Housing Corporation to 0.5% of its loan portfolio, or over $1 billion, which is really very reasonable. This will also enable it to establish an annual reserve of about $100 million. Those amounts are more than enough to cover any eventualities, particularly if we consider the fact that this is a crown corporation and not a private insurance company.
In more specific and more concrete terms, this bill will limit the power of the Canada Mortgage and Housing Corporation to capitalize, by limiting the amounts that can be retained in the reserve fund to 0.5% of the housing loans for which the corporation insures against risks, and to 10% of its equity. What these measures will do is ensure that anything in excess of the mandated amounts in the reserve fund and in equity will be returned to Quebec and the provinces so that they can invest the money to meet what is becoming an increasingly urgent need, as I said earlier.
If we look at the balance sheet for 2006, 0.5% of $264 billion amounts to $1.3 billion. That is the maximum amount that the Canada Mortgage and Housing Corporation may retain in equity, and 10% of $1.2 billion is $132 million, the maximum amount that the Canada Mortgage and Housing Corporation may retain in its reserve fund.
The surplus equity, which is nearly $4 billion, and any surplus in the reserve fund, there being none at present, will go directly to Quebec and the provinces.
The Bloc Québécois believes that the federal government, which has the resources, must invest massively in social and community housing. The reinvestment must ultimately amount to the equivalent of 1% of government program spending, or nearly $2 billion per year at the end of three years. However, as I said earlier, the provinces, and Quebec in particular, must be the ones in charge of all of these reinvestment efforts.
As well, the Bloc Québécois believes that the housing market is a matter within the prerogative of the Government of Quebec. It is important that this transfer carry with it full financial compensation to remedy the historic injustices that Quebec has suffered in respect of social housing.
We would point out that this is not inconsistent with the mission of the Canada Mortgage and Housing Corporation, whose statutory mandate is to encourage residential construction and the repair and modernization of existing housing; to help provide access to a wide choice of affordable homes; to improve housing conditions; to ensure that low-cost financing is available; and to sustain a vibrant housing market. It must therefore stop capitalizing and put the money to work in order to fulfil its own mission.
At the same time, this mandate will be reflected in the corporate plan through the objectives that CMHC has set for itself as the main instrument of the federal government’s housing policy. Its objectives will therefore be to improve housing choice and affordability for Canadians and Quebeckers, improve housing and living conditions for Quebeckers and Canadians, support market competitiveness, job creation and housing sector well-being, and be a progressive and responsive organization. Be progressive says it all. That does not mean become a capitalist business. Quite the opposite, it is about social investment with limits, as provided by the parameters in this bill.
Canada Mortgage and Housing Corporation has an accumulated surplus of $4.4 billion, which will reach $7 billion by 2008 if current trends continue. These surpluses are due primarily to the fact that, since 1998, almost all the retained earnings from its insurance activities have been devoted to capitalization.
Liberal critics said at the time all over the place that they were already spending 1% of the government’s program expenditures on social housing, except that these expenditures went mostly to paying mortgages on social housing built before 1994. There was nothing new, no new construction.
After that, the federal government completely withdrew from building new social housing units, at least until 2001. Needless to say the federal government’s 11-year withdrawal from the building of social and community housing had a devastating effect on moderate-income households in Quebec. Now that the Conservatives have been elected, they remain silent, which is hardly any better.
The Conservative position was very clear during the election campaign. They promised $200 million a year and federal tax credits administered by Canada Mortgage and Housing Corporation to encourage developers to build and restore affordable rental housing. The funding would be distributed among the provinces on a per capita basis but minimum funding would be guaranteed to the smallest companies. That is what the Conservatives promised. But now they remain silent.
What I find even more scandalous is the fact that these MPs from the Quebec City area, the 10 Conservative members from Quebec, remain completely silent, not only in this regard but in regard to Kyoto as well. The Kyoto protocol is simply being killed, and they remain silent. They remain silent too on the purchase of military equipment to the tune of $17 billion without consulting the House. On this social housing project, which is essential to the Quebec City area and all regions of Quebec, they remain silent. Not one of them has risen to defend Quebec’s interests. I want to ask them, therefore, if they were really elected to defend Quebec and not just their extreme right-wing party, to rise and defend this bill in the interests of their fellow citizens.