Debates of Nov. 8th, 2006

Canada Mortgage and Housing Corporation Act

[Louis Plamondon, Bloc, Bas-Richelieu—Nicolet—Bécancour, QC]

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.

[Mark Warawa, Conservative, Parliamentary Secretary to the Minister of the Environment]

Mr. Speaker, I welcome the opportunity to speak to Bill C-285. I followed the debate with interest and I am pleased to have the opportunity to contribute to the discussion.

I share the views expressed by my Conservative and Liberal colleagues, who argue that the Canada Mortgage and Housing Corporation should stay the course in terms of prudently managing its self-sustaining commercial activities.

As the House has heard before, 100% of CMHC's surplus relates to the self-sustaining activities and CMHC has a mandate to operate its insurance and securitization activities in a commercially viable manner. To do that, it sets aside capital reserve to ensure that sufficient capital is available to meet future risks.

Let me illustrate this with actual figures. In 2005 CMHC capital reserve was 1.2% of the outstanding mortgages it had insured. More specific, that is $3.4 billion against $274 billion in insured mortgages. This is consistent with directions set for private sector insurers by the Office of the Superintendent of Financial Institutions.

Also, CMHC's surplus, including amounts set aside for capitalization, forms part of the Government of Canada's accounts and is included in the calculation of the government's surplus or deficit position. This means that both budgeted and actual federal annual surplus figures include CMHC's net income. CMHC's retained earnings have serviced to reduce the government's accumulated deficit over time.

Beyond the arguments regarding prudent financial management, Bill C-285 would also mandate a rigid approach to housing policy, an approach that would not serve the interests of Canadians as it would legislatively mandate housing investments without regard to the current need of Canadians and how those needs may evolve.

Moreover, the bill would distribute funds to provinces on a per capita basis, thus ignoring the needs of aboriginal people, whose housing conditions remain well below those of most Canadians. Housing supply shortfalls, crowding and inadequate housing on reserves in the north and remote communities are of particular concern.

Our first budget recognized these needs and investments in a $300 million northern housing trust and a $300 million off reserve aboriginal housing trust. This new funding will be a source of housing solutions for aboriginals and will address the cost of housing and extent of housing needs in the far north. In addition, the budget also included an investment of $450 million over two years for education, water services and housing on reserves, as well as to generally improve social economic outcomes for aboriginal women, children and families.

Most Canadians never have to wonder whether they have a safe warm place to come home to. However, many segments of our population are in need of safe and adequate housing.

Let me take this opportunity to highlight some of the innovative ways the Government of Canada through CMHC is dealing with some of the issues addressed in Bill C-285.

Imagine, for example, a single mother who is fleeing from domestic violence, trying to raise three small children in a shelter or cramped studio apartment. CMHC's shelter enhancement program assists in repairing, rehabilitating and improving existing shelters for women and their children, youth and men who are victims of family violence. Through its assisted housing programs, CMHC can provide people affected by violence a way of transition out of the shelters when they are ready.

Seniors are a fast growing segment of the Canadian population. Many senior citizens want the simple dignity of being able to stay independently in the house that they have come to call their home for over 30 years. CMHC home adaptations for seniors independence program helps homeowners and landlords pay for minor home adaptations. This means that seniors with low to medium incomes can continue living in their homes longer.

These are just a few examples of how the Government of Canada, through CMHC, is already tackling the issues addressed by Bill C-285.

Moreover, I would like to remind the member for Québec that we also are taking concrete action on housing renovations. Our housing strategies seek to maintain the existing affordable housing stock in addition to creating new units. In this regard, funding for the residential rehabilitation assistance program and several related housing renovation and adaptation programs has been renewed for 2006-07 at a cost of $128.1 million.

Using these figures once again to illustrate the impact of these programs, in 2005-06, 12,150 units were rehabilitated, close to 3,000 units were repaired on an emergency basis, some 1,220 shelters for victims of family violence were renovated, and 1,945 seniors were helped to live independently.

The Bloc Québécois has suggested during this debate that spending approximately $2 billion per year primarily in support of some 644 households is not good enough. I would like to remind the Bloc that we are in fact in the process of delivering on the $1 billion affordable housing initiative in collaboration with provincial, territorial and local partners. Thanks to that funding, new affordable housing is being created in communities across this country as we speak.

As of June 2006, over $659 million has been committed or announced to create a total of over 27,000 new units of affordable housing. Through agreements with each province and territory, this funding is being used to create affordable housing for a wide range of Canadians, including seniors, persons with disabilities, new immigrants and low income families. Recognizing the importance of affordable housing, the 2006 federal budget also provided for an investment of $600 million to help increase the supply of affordable housing.

These are all examples of programs and investments that meet the changing housing needs of Canadians. They are in place because, as parliamentarians, we have the ability to ensure that our housing investments do in fact respond to the changing housing needs over time while delivering results and targeting those most in need. In contrast, Bill C-285 would force CMHC and future Parliaments into a rigid, inflexible stance on the question of budgetary reserves.

I have to say that I agree with the Liberal member for Cardigan who stated during the first hour of debate that this bill is problematic from an accountability perspective, noting that it would eliminate parliamentary review of housing expenditures. The hon. member for Cardigan also briefly highlighted the fact that Bill C-285 is problematic in terms of equity of distribution, as he put it.

The federal government has an important role to play in ensuring that the housing needs of Canadians, which are so different from region to region, are adequately met. How would an automatic annual per capita distribution of funds to provinces and territories ensure that federal housing dollars are delivering results where they are most needed? Clearly Bill C-285 would take away the government's ability to be responsive to the changing and diverse housing needs of Canadians. We would not only in effect be tying the hands of future governments, we would also be weakening CMHC's ability to adapt to changing market conditions and to address the true needs of Canadians.

It is for the aforementioned reasons that I urge all hon. colleagues to join me in doing the right thing and voting against Bill C-285.

[The Acting Speaker, Andrew Scheer]

The hon. member for Québec has five minutes to conclude the debate.

[Christiane Gagnon, Bloc, Québec, QC]

): Mr. Speaker, five minutes is not much to talk about the issue of social housing. I can see that the Conservative Party and the Liberal Party have more or less the same view on this issue, which is nevertheless important for the Canadian and Quebec population as a whole.

When I am given the list of repairs that have been done in social housing that already exists, I have to believe that there have been some. Still, what we want to deal with in this bill is not only the renovation and restoration of already existing housing, which dates to before 1994. Of course attention is required when roofs leak, hot water heaters have to be replaced and windows are broken. So 1% of expenditures for all government programs, or $2 billion, goes to pay social housing mortgages that already exist, as well as repairs.

What Bill C-285 is seeking is new social housing. When we look at the situation, there are 450,000 households in Quebec that need social housing and $1.7 million in all of Canada. Why? Because families are living below the poverty line. Families are living with annual incomes of $10,000, $15,000 and $20,000. We know there has been an increase, in all the large Canadian cities and in Quebec, in the cost of housing and rental housing. Rents are higher. So families cannot find affordable housing, social housing.

The Conservatives share the same view as the Liberal Party. They say that we cannot go looking for money from the CMHC in spite of its surpluses because, we are told, it needs its reserves.

I think that the Bloc Québécois is responsible enough to recognize that reserves are necessary. Even the Office of the Superintendent of Financial Institutions says that it could keep 1% of its capital. If the CMHC has $233 billion in loan guarantees, there could be 1%, which would mean over $2 billion in reserve. The $2 billion remaining could be transferred to social housing.

They try to pass us off as people who lack common sense, who wanted to strangle CMHC, while it could also have a reserve.

I believe that there are urgent needs. We know that CMHC is not a private business but a crown corporation. It must return to its social mission. That is what we are asking for.

To respect its social mission, CMHC could ensure that more Canadians have access to decent housing with the money available in their budgets, which is often very limited.

Often, when a person does not have much money, housing is too expensive; if you earn a low salary and are not able to pay for it. Living accommodations cost at least $450, $500 or $600. Many people living alone cannot afford that on their salary or pension. They need help. In any case, there must be a sense of sharing, a feeling of community, and a social sense to be able to help all the people in that situation get decent housing.

I think it is a slight exaggeration when people say that the Bloc Québécois wants to take all the money, all the assets of CMHC, for affordable housing. I would like to bring CMHC back to a more social vision. I am not surprised by the position of the Conservative party. As for the Liberal party, when they were in power they did nothing; they ignored the problem.

I remind the member who just spoke that 1.7 million people in Canada need social housing. I ask the member who just spoke to lean a little more to the left, to have a heart that is a little more sensitive to the reality of people who often live in housing that is not only unaffordable but also unhealthy because they cannot get anything better.

In looking at my colleague, I realize that what I am saying does not arouse in him the least sensitivity toward the situation. I have the feeling that I am talking to a blank wall.

[The Acting Speaker, Andrew Scheer]

The time provided for debate has now expired.

The question is on the motion. Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

No.

[The Acting Speaker, Andrew Scheer]

All those in favour of the motion will please say yea.

[Some hon. members]

Yea.

[The Acting Speaker, Andrew Scheer]

All those opposed to the motion will please say nay.

[Some hon. members]

Nay.

[The Acting Speaker, Andrew Scheer]

In my opinion the nays have it.

And five or more members having risen:

Pursuant to Standing Order 93, the division stands deferred until Wednesday, November 22, immediately before the time provided for private members' business.

It being 7:38 p.m., the House stands adjourned until tomorrow at 10 a.m., pursuant to Standing Order 24.

(The House adjourned at 7:38 p.m.)