House of Commons Hansard #79 of the 39th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was cmhc.

Topics

(The House divided on the motion, which was agreed to on the following division:)

Vote #60

Income Tax ActPrivate Members' Business

6:05 p.m.

Conservative

The Acting Speaker Conservative Andrew Scheer

I declare the motion carried. Accordingly, the bill stands referred to the Standing Committee on Finance.

(Bill read the second time and referred to a committee)

The House resumed from November 2 consideration of the motion that Bill C-283, An Act to amend the Food and Drugs Act (food labelling), be read the second time and referred to a committee.

Food and Drugs ActPrivate Members' Business

6:05 p.m.

Conservative

The Acting Speaker Conservative Andrew Scheer

The House will now proceed to the taking of the deferred recorded division on the motion at second reading stage of Bill C-283 under private members' business. The question is on the motion.

Before the Clerk announced the results of the vote:

Food and Drugs ActPrivate Members' Business

6:15 p.m.

Conservative

The Acting Speaker Conservative Andrew Scheer

Could the hon. member for Surrey North please clarify which way she voted on the bill?

Food and Drugs ActPrivate Members' Business

6:15 p.m.

NDP

Penny Priddy NDP Surrey North, BC

Mr. Speaker, my vote was yes.

(The House divided on the motion, which was negatived on the following division:)

Vote #61

Food and Drugs ActPrivate Members' Business

6:15 p.m.

Conservative

The Acting Speaker Conservative Andrew Scheer

I declare the motion lost.

The House resumed from November 1 consideration of the motion that Bill C-222, An Act to recognize and protect Canada’s hunting, trapping and fishing heritage, be read the second time and referred to a committee.

Heritage Hunting, Trapping and Fishing Protection ActPrivate Members' Business

6:15 p.m.

Conservative

The Acting Speaker Conservative Andrew Scheer

The House will proceed to the taking of the deferred division on the motion at second reading of Bill C-222 under private members' business. The question is on the motion.

Before the Clerk announced the results of the vote:

Heritage Hunting, Trapping and Fishing Protection ActPrivate Members' Business

6:25 p.m.

Conservative

The Acting Speaker Conservative Andrew Scheer

Could the hon. member for Edmonton—Sherwood Park please clarify to the House which way he meant to vote on the bill?

Heritage Hunting, Trapping and Fishing Protection ActPrivate Members' Business

6:25 p.m.

Conservative

Ken Epp Conservative Edmonton—Sherwood Park, AB

Mr. Speaker, I am incredibly embarrassed. I voted yes and then I went to work. My colleagues were all standing up and in a moment of sleepiness, I stood again. I voted yes.

(The House divided on the motion, which was negatived on the following division:)

Vote #62

Heritage Hunting, Trapping and Fishing Protection ActPrivate Members' Business

6:30 p.m.

Conservative

The Acting Speaker Conservative Andrew Scheer

I declare the motion lost.

The House resumed from November 6 consideration of the motion that Bill C-269, An Act to amend the Employment Insurance Act (improvement of the employment insurance system), be read the second time and referred to a committee.

Employment Insurance ActPrivate Members' Business

6:30 p.m.

Conservative

The Acting Speaker Conservative Andrew Scheer

The House will now proceed to the taking of the deferred recorded division on the motion at second reading stage of Bill C-269 under private members' business.

(The House divided on the motion, which was agreed to on the following division:)

Vote #63

Employment Insurance ActPrivate Members' Business

6:40 p.m.

Conservative

The Acting Speaker Conservative Andrew Scheer

I declare the motion carried.

Consequently, the bill is referred to the Standing Committee on Human Resources, Social Development and the Status of Persons with Disabilities.

(Bill read the second time and referred to a committee)

It being 6:42 p.m., the House will now proceed to the consideration of private members' business as listed on today's order paper.

The House resumed from October 3 consideration of the motion that Bill C-285, An Act to amend the Canada Mortgage and Housing Corporation Act (profits distributed to provinces), be read the second time and referred to a committee.

Canada Mortgage and Housing Corporation ActPrivate Members' Business

6:40 p.m.

Conservative

The Acting Speaker Conservative Andrew Scheer

Order. I would again ask all hon. members who need to carry on conversations with their colleagues to use the government lobby or the opposition lobby so that the House can get to the rest of private members' business.

Resuming debate, the hon. Parliamentary Secretary to the Minister of Citizenship and Immigration.

Canada Mortgage and Housing Corporation ActPrivate Members' Business

6:40 p.m.

Souris—Moose Mountain Saskatchewan

Conservative

Ed Komarnicki ConservativeParliamentary Secretary to the Minister of Citizenship and Immigration

Mr. Speaker, Bill C-285 seeks to require CMHC to transfer funds from its reserve to provincial governments. There is no question that the objective of the bill is laudable in the sense that it encourages social housing. This is something that is already being done by this government and the Canada Mortgage and Housing Corporation.

However, a simple mechanical formula, as that expressed in Bill C-285, is in isolation and without regard to all of the factors that must be taken into consideration and without regard to all the players involved in Canada's housing system.

Canada's housing system involves many players working together to help meet the housing needs of Canadians. The federal government itself, through the auspices of CMHC, is a key player in the system, providing funding and working to promote partnerships that will increase the supply of affordable housing.

Additionally, the federal government helps maintain the existing housing stock and supports research that helps identify new ways to ensure the housing and support requirements of those in need are met.

However, the government does not act in isolation. Provincial governments play a pivotal role in providing housing, funds for housing and support services. Furthermore, municipal governments, community associations and others help with the on the ground delivery and management of housing and associated services. Working with these partnerships is at the core of CMHC's mandate. Through active involvement with partners and stakeholders, CMHC has been serving Canadians for the past 60 years. Beginning in 1946, CMHC was given the job of helping to house more than one million returning war veterans and to lead Canada's national housing programs.

There is also another function of CMHC and that is the insurance and securitization component. In that respect, it is meant to be a commercial enterprise that operates in the private market with others that provide mortgage insurance. With respect to the introduction of mortgage insurance by CMHC relating to building or house loans, it operates as a business, a business that earns its income from insurance premiums and fees but at rates that are competitive with and on a level playing field with other business enterprises offering a similar service.

This bill essentially requires, in accordance with an inflexible formula, the transferring of CMHC's mortgage insurance profits to the provinces for social housing purposes. This initiative would not require further parliamentary debate or approval where all parliamentarians would have the opportunity to examine and put the initiatives to the test. It plans to have an arbitrary formula based on specific percentages without regard to those items that might essentially cause a need to have a greater reserve. The bill proposes to have the transfer made automatically without any parliamentary consultation whatsoever.

The clause, as it now reads, intends to amend section 29 that establishes a reserve fund. It states that moneys get placed to a reserve fund after taking into account a series of events like bad debts, depreciation and anticipated future losses. I find that some of those are calculable but the anticipated futures losses are dependent, in a large part, on the economy, on interest rates and a whole series of factors. To arbitrarily fix it at a specific rate, as being proposed in this bill, does not bear relationship to those factors and certainly is not something I could support.

While CMHC is not a private insurer, it is subject to the same risks and follows the same guidelines set by the Office of the Superintendent of Financial Institutions for capitalization for prudent management and in order to maintain a level playing field with private mortgage insurers. The reserves required by the OSFI serve to protect the Canadian taxpayer from potential future costs arising from mortgage defaults. If, indeed, the interest rates were to go up substantially, there would be a significant claim on the reserve fund. If that fund were transferred out according to an arbitrary formula and without regard to potential loss, it could have significant effects on the Canadian taxpayer because, in the end, it is the Government of Canada that guarantees the due performance of the mortgages.

In order for CMHC to be competitive with other institutions that are operated privately to provide the same services, it needs to establish a reserve to properly capitalize its assets to ensure that if there is an economic downturn it can cover those losses.

Currently, to purchase a home in a low equity ratio of say 95% or 5%, those loans are insured by CMHC, which is backed by the Government of Canada that has a stake in this matter. It can provide housing to first time homebuyers at a very low down payment of 5% in this case and interest rates that generally would not be available unless one had a 25% down payment. This insurance is financed by premiums that go into the CMHC revenues.

Without a doubt, the CMHC plays a distinctive role in our housing system and delivers substantial benefits to Canadians. For example, CMHC mortgage insurance has helped one in three Canadian families buy a home of their own with as little as 5% down and at interest rates comparable to those for homebuyers with a down payment of 25% or more.

I have less difficulty with the objects of the use of the funds proposed to be transferred from CMHC than the formula suggested to raise those funds. Those objectives are: first, for social and affordable housing purposes; second, to encourage a supply of quality housing at affordable prices; third, to increase housing choices for the people in the provinces; and finally, to contribute to the creation and development of housing cooperatives.

It is also important to recall that the government is already taking action in all of the four aforementioned areas. For example, through CMHC, the federal government has demonstrated its commitment to social and affordable housing by spending $2 billion annually, primarily in support of some 633,000 households.

In addition, a major component of CMHC's assisted housing efforts are directed toward Canada's aboriginal population, both on and off reserve. CMHC provides funding for specialized housing construction and renovation programs, capacity development and ongoing subsidies for existing portfolio of assisted housing on reserve.

Moreover, we are encouraging the supply of quality housing at affordable prices. For example, we are moving ahead with the $1 billion affordable housing initiative and working with provincial, territorial and other stakeholders to deliver affordable housing for Canadians.

More broadly, the one percentage point reduction of the goods and services tax is helping Canadians by making housing more affordable. As well, the budget includes a provision for a strategic investment of as much as $1.4 billion to establish three housing trusts. These trusts will focus on affordable housing, northern housing and housing for aboriginal people living off reserve.

Likewise, we are also working to increase housing choices. Funding for CMHC's residential rehabilitation assistance program, commonly referred to as RRAP, and several related housing, renovation and adaptation programs has been extended for 2006-07 at a cost of $128 million. RRAP provides financial assistance to repair homes occupied by low income people. This program is also used to create housing by converting non-residential buildings into residential use.

We are also providing resources for cooperative housing. Across Canada, where CMHC administers, there are about 53,000 households living in some 2,000 non-profit housing co-ops currently in operation. In addition, where CMHC administers on behalf of the federal government, CMHC will provide some $100 million in 2006 to federal cooperatives under various programs. This is how it should work, where parliamentary appropriations address the needs envisioned by the objectives outlined.

However, the proposal to use profits in a mortgage insurance business for social housing purposes means essentially that the premiums are, in effect, being used for social objectives and are, in effect, being funded by individual homebuyers as opposed to the Government of Canada.

Bill C-285 would lock the government and Parliament into a very rigid formula that would circumvent, not only Parliament's direction but also do it at the expense of first time homebuyers and those purchasing mortgage insurance.

It is for these reasons that I cannot support the bill. We cannot use moneys collected from premiums made by first time homebuyers and use those funds for social housing objectives or any other objectives for that matter. Those types of objectives should be made by Parliament and by appropriation from this House where everyone has an opportunity to contribute to the process and actually have a vote because in the end it is the taxpayer that is responsible.

Canada Mortgage and Housing Corporation ActPrivate Members' Business

6:50 p.m.

Liberal

Paul Szabo Liberal Mississauga South, ON

Mr. Speaker, I am pleased to participate in this debate on private member's Bill C-285, an act to amend the Canada Mortgage and Housing Corporation Act related to the distribution of profits to the provinces.

I think the bill, in terms of its intent, is a laudable goal. In fact, it certainly covers some of the objectives which a number of other programs within the Government of Canada already share.

The bill basically calls for the distribution of profits from CMHC, being a crown corporation, and the appropriation of the profits and the reserves from the crown corporation would be distributed to the provinces on a per capita basis. The bill provides for somewhat of a formula for doing this.

Ultimately, the objective of the bill is to provide for social and affordable housing purposes, to encourage the supply of quality housing at affordable prices, to increase housing choices for the people in the provinces and to contribute to the creation and development of housing co-operatives.

Prior to becoming a member of Parliament, I had the opportunity to serve on the board of the Peel Regional Housing Authority. It was a jointly funded housing authority with the Province of Ontario in cooperation with the region of Peel and Peel non-profit, which is the region's own not for profit housing service.

The Peel Regional Housing Authority took care of some 2,000 housing units. Half of them were senior units, who usually paid their rent on time, and the units were well kept. The other half were family units, 75% of which were lone parent situations, mother-led families usually, often with financial difficulties.

It is an extremely difficult job to be in the social or so-called affordable housing business. It takes the collaboration of not only the municipalities, the regions and the provinces, but also the federal government. A number of initiatives have evolved over the years to ensure that some of these objectives are being appropriately dealt with, whether it be rent geared to income arrangements or rent supplement where people are permitted to pay what they can afford, and it deals with developers.

Housing is not solely a federal responsibility. Social housing is a provincial responsibility and that has been seconded to the regional level of government. I know that our offices often deal with these situations. People who have the pressures of the demands for affordable housing invariably have other problems that they have to deal with. It may be children's issues or personal financial issues and people are looking for some advocacy by their member of Parliament to help them out of a difficult situation. Many times they have other social situations and disabilities within their children. It is probably one of the toughest areas, I must admit, that has been prevalent in my work as a member of Parliament over some 13 years, and I have tried to be sensitive to the needs.

This particular bill is sensitive to those needs and seeks to look to the Canada Mortgage and Housing Corporation, which is a crown corporation, but is also a commercial business. It has reserve requirements based on its housing stock and on capitalization needs. There are established financial standards within the office of the Superintendent of Financial Institutions. It operates within the guidelines provided to it to ensure there is proper coverage for its portfolio and for its exposures and liabilities, and it must be competitive. When we think about it, some $2 billion is being made available for the purpose of achieving its overall objectives.

In just a general sense, CMHC, the Canada Mortgage and Housing Corporation, lends money to individuals who do not have enough money for down payments. It offers, for an additional cost, mortgage loan insurance which enables people to buy houses. Potential buyers, who only have 5% of the capital needed to buy a house, can receive a mortgage loan from CMHC in addition to the mortgage loan they receive from the bank. As we can see, a significant role is being played.

There is another aspect to the bill, or that is related to the bill, that must also be taken into account. It has to do with a term that we have discussed quite a bit in this Parliament and that is accountability.

The profitability or the operational income or loss of any crown corporation is consolidated into the consolidated revenue fund. In fact, the financial position and performance, the surplus or deficit for a year, of the Government of Canada on an annual basis includes the operations of these crown corporations to the extent that there are prior year surpluses that have been accumulated to provide the financial protection for the exposure that CMHC has made. These have already been accounted for. To the extent that we take these profits out, one of the things that it will do on an annual basis is actually, on a comparative basis, reduce the surplus or increase the deficit of the government's financial position, simply because prior years had the profitability from this commercial venture.

The other issue is that the bill seeks to have this money simply transferred to the provinces, effectively on a per capita basis. If we were to do that, we would be dealing with matters which relate, not only to equalization but also to program funding, which we have. It means that cash, over and above which has been agreed upon by the provinces, would now be appropriated to the provinces. However, once the federal government loses that or delivers the money, we do not have a string to say that the money is there for this purpose and it should be used for that purpose.

However, what if it is not? What if we do not achieve our objectives? How does the federal government that taxes Canadians to achieve the revenue requirements to support programs and operate crown corporations, to run viable commercial ventures in areas where Canadians need support, and to make a reasonable profit competitive with the industry in which they are participating, take those moneys, which belong to Canadian taxpayers and transfer it to the provinces and not have some sort of accountability? The bill does not provide for that accountability and it is probably one of the biggest flaws of the bill.

It is not good enough for any level of government to collect money basically from its constituents, its taxpayers, and to use that money to give to someone else for whatever purpose without having those rigours.

Crown corporations are subject to review and audit by the Auditor General. If those funds are being transferred, the operation and use of those funds would be outside of the purview of the Auditor General. We would not even have a mechanism to ensure that the funds were properly safeguarded and used for the purpose for which they were intended.

As we can see, in general I am sure that all hon. members will agree that the spirit of the member's bill, Bill C-285, is certainly laudable. It is certainly an objective of all Canadians to ensure that affordable housing is in reasonable supply for those who need it.

Social housing is a slightly different issue because now we are talking about those who are unable to have housing. They would be on the streets otherwise and these are generally outside the purview of the Government of Canada in its role as it works. To suggest that this is dealing with both social and affordable housing issues would tend to provide an intrusion of the Government of Canada into provincial jurisdictions. This raises yet another issue and certainly there has to be respect. The Constitution provides for the constitutional responsibilities that have been assigned to the provinces.

Having said all that, I want to congratulate the member on raising an important issue about the need to be sensitive to the needs of Canadians with regard to affordable social housing, but unfortunately, this bill is perhaps not the instrument we need to enhance that objective.

Canada Mortgage and Housing Corporation ActPrivate Members' Business

7 p.m.

NDP

Peggy Nash NDP Parkdale—High Park, ON

Mr. Speaker, I am pleased to rise this evening in support of Bill C-285, an act to amend the Canada Mortgage and Housing Corporation Act. We believe this bill will help alleviate the housing burden placed on people, not only in my riding but right across Canada.

The bill would have CMHC profits that exceed 0.5% distributed to the provinces for social and affordable housing, to encourage the supply of quality housing at affordable prices, to increase housing choices for people, and for the creation and development of housing co-operatives.

In the city of Toronto, where I come from, there are about 65,000 households on a waiting list for assisted housing. It can take up to 12 years for a family on the list to get a three bedroom apartment. Housing is clearly in crisis.

In my own riding of Parkdale—High Park, a mere 12 affordable homes have been completed since 2001, according to a June 2006 report from the City of Toronto's Shelter, Support and Housing Administration, and another 21 are under development. But this is a riding where there are more than 24,000 people living below the poverty line and more than 10,000 very low income households, that is, households with annual incomes below $20,000.

These very low income households can afford a rent of about $500 a month based on the standard calculation that they should spend no more than 30% of their annual income on shelter. The average market rent in my riding of Parkdale—High Park for a typical two bedroom apartment is $1,085. This is double what the poorest households can actually afford.

The real culprits behind this crisis are the federal and provincial governments, which have cut funding and then downloaded housing responsibilities. The federal government cut new affordable housing funding in 1993 and Ontario followed in 1995. The federal government downloaded most federal housing programs to the provinces and territories in 1996, and Ontario followed in 1998 by downloading to the municipalities.

As homelessness and housing insecurity have grown following the housing cuts, governments have tried to respond with a patchwork of funding and programs, but the federal homelessness programs are due to sunset at the end of fiscal year 2006. Literally thousands of services that provide critical relief to tens of thousands of homeless people are at risk.

The federal government recently allocated $1.4 billion of the $1.6 billion in housing funding from Bill C-48, which was a result of the NDP's amendment to the last Liberal budget, passed in 2005, but that is nothing more than a down payment set against years of cuts, downloading and neglect.

There are some people in this country who are now recognizing that we have a housing crisis even in the province of Alberta. Retiring Alberta Premier Ralph Klein announced Tuesday that he would allocate $16 million for new affordable housing in Calgary.

He stated this week that the struggle of the homeless and working poor in places like Calgary and Fort McMurray is unfortunately more of a challenge today than ever. He said it is a great concern to see that half of Calgarians who are homeless right now have a job and are simply not making enough money to afford appropriate accommodation.

I should say that I have introduced a federal bill to increase the minimum wage to $10 an hour, which would also help people who fall under federal jurisdiction.

Mr. Klein at least is doing a little. It is very late, but it is great to see that at least one Conservative is finally starting to get it.

We need now to deal with homelessness and housing insecurity. We need to make sure that the levels of government that have the funds to deal with housing are putting money into housing.

In May 2006 a United Nations committee of experts in Geneva released its latest review of Canada's compliance with international economic, social and cultural rights and called homelessness and affordable housing a crisis in Canada that is a national emergency. I certainly agree with that assessment.

I want to emphasize the importance of this bill, especially in light of the Conservative government's cuts to housing funding and affordable housing in general.

It is my grave concern that the money that could come as a result of this private member's bill may not amount to much because the recent changes to mortgage insurance, which opens up mortgage insurance to the market, will negatively affect the profits of CMHC.

CMHC insurance is important to people who cannot afford a full down payment on a home, but still want to have the opportunity to purchase a home.

Mortgage insurance is a good business for the government to be in. It generates money. In 2005 the net income from mortgage insurance for CMHC was nearly $1 billion. As a crown corporation, CMHC must be concerned about profits, but since the shareholder is the Government of Canada, it has the ability to address the welfare of Canadians instead of just the bottom line.

Assuming the goal is not to have CMHC removed from mortgage insurance altogether, it is very likely that new competitors will take the more profitable and stable contracts, leaving CMHC with only the higher risk and less profitable ones. This would put housing insurance at risk for lower income families as CMHC would have fewer funds to access. Any hopes that profits from CMHC mortgage insurance could be used to create affordable housing in Canada would then be greatly reduced or eliminated.

The real solution here is that we need a national housing strategy that needs all levels of government to make significant investments in affordable, supportive and co-op housing. This bill does not solve all of those problems. We do have a national crisis, a national emergency, in affordable housing in this country, but we believe that this bill is one positive step and that is why we support it.