Human Resources committee  That's a great question. It's been a very challenging environment for developers, certainly for the construction industry, in the last few years. We had the legacy effects of the pandemic, which obviously created a lot of hiccups in supply chains and accessing materials. We then had a tremendous and unexpected surge in inflation that really affected building costs in a significant way.

Human Resources committee  Yes. Here in the Lower Mainland and in B.C. generally, there are a great many projects that have been paused. In other words, land has been assembled and developers were planning to proceed to build the tower or a townhouse complex. However, because of the higher cost of money, because of the high inflation and the tremendous escalation in building costs, and also increasing charges, levies and fees on new development and the affordability challenges that so many households are facing, it has lead to a significant pause in development activity.

Human Resources committee  From the private sector side, increases in capital gains taxation will have a dampening effect on—as I mentioned earlier, in response to one of your colleagues' questions—capital formation in the market economy. Maybe government will use some of the revenue to try to offset that, but in the market economy context, higher capital gain taxes will have a negative effect on homebuilding, for sure.

Human Resources committee  It's a game of margins, really. We are in such a difficult position in Canada with new housing supplies so dramatically lagging the rates of population growth and household formation, especially in in many of the urban areas. I think the measures in the budget and the other components of the housing plan will help and some of what B.C. is doing here in our province will help, but it's not going to fundamentally move the dial in the short run.

Human Resources committee  Absolutely. I mean, the needs are tremendous. One of the earlier speakers talked about co-op or non-market housing. We need all of it, certainly here in the province of British Columbia.

Human Resources committee  I think any increase in the taxation on capital deployment or the returns that will be generated from capital deployment will act as a headwind to capital formation. Higher capital gains taxes are not helpful to encouraging capital formation, whether that's in housing or any other part of our economy.

Human Resources committee  Thank you.

Human Resources committee  That is definitely a concern. I can't speak to what's happening elsewhere in the country, but here in B.C., especially in metro Vancouver, the costs of various taxes but also development cost charges, community amenity contributions and a variety of other fees that are levelled on the development of new dwelling units add hundreds of thousands of dollars to the eventual cost.

Human Resources committee  I'd have to get my calculator out and do a little bit of additional work, but it is monumental. Let me just say something else in that context, Mr. Aitchison. Canada is already devoting 8% to 9% of GDP, of national income, to homebuilding, home renovation and real estate intermediation.

Human Resources committee  It's a privilege to be here this morning with you from Vancouver. I'm Jock Finlayson, the chief economist of the Independent Contractors and Businesses Association, which is actually the largest construction association in Canada. We have about 4,000 or so members and clients, and we also operate a very substantial employee health and benefits business in addition to our work on behalf of the construction sector.