EVIDENCE

[Recorded by Electronic Apparatus]

Wednesday, November 22, 1995

.1531

[English]

The Chairman: This meeting is called to order. Colleagues, I'm going to attempt to set a record, if possible. I'm happy to convene the Standing Committee on Government Operations.

As you know, today we are hearing from - well, we have available to us, let's put it that way - officials from the Canada Mortgage and Housing Corporation: Mr. Girard, Ms Kinsley, and Mr. Poirier-Defoy. We have circulated to you some comments that Mr. Girard would have made.

I apologize for scheduling three meetings this week, but as you know, this is a very brief amendment. I understand that neither opposition parties have any amendments, and if that is the case and no one has any questions, we could proceed to clause-by-clause.

Mr. Asselin, I thought I heard you say prior to the beginning of the meeting that you had a couple of questions you wanted to ask. Is that correct?

[Translation]

Mr. Asselin (Charlevoix): Yes. I received the document two days ago and I have read it. It's an extremely interesting brief. As you undoubtedly know, the Bloc Québécois supports Bill C-108 which has yet to be amended. I do, however, have several questions for CMHC officials.

In the first paragraph on page 2 of your brief, you state the following:

Should increases be justified in the future, the government will include a request for the increase in the Main or supplementary Estimates, which will come before Parliament in an Appropriation's Bill.

Furthermore, in the second paragraph on page 1 of the same document, you state:

I would like to stress that the $50 billion increase is not an expenditure and that there is no cost to the government as a result of this increase.

How do you explain the discrepancy between these two statements?

Mr. Gilles E. Girard (Senior Vice-President, Insurance, Land and Asset Administration, Canada Mortgage and Housing Corporation): Would you like me to answer the question immediately?

Mr. Asselin: Yes, because I have another one for you.

[English]

The Chairman: Before I do that, I want to make sure...does everybody agree with my carrying on the way I am?

Mr. Duhamel (St. Boniface): So far.

The Chairman: Okay, I like these wide mandates, because Bill C-108 is a very short bill and I don't want it to drag on.

Mr. Asselin has asked a question, Mr. Girard. Do you wish to comment?

[Translation]

Mr. Girard: I would be happy to answer Mr. Asselin's question. The amendment relates to part two of Bill C-108. Instead of amending, in the text of the legislation, the maximum allowable amount of insurance in force, we are suggesting that the amount be included each year in the Main Estimates. I want to make it clear that we are not asking Parliament to authorize an expenditure as such, but rather to set a national ceiling on mortgage insurance.

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Mr. Asselin: In the final paragraph on page 14 of the same brief, you state the following:

If Bill C-108 is not passed, Canadians will not have equal access to home ownership...

This relates, of course, to the 95 per cent financing provision and to the $50 billion increase.

Could you tell me exactly what you mean by: "Canadians will not have equal access to home ownership". I would also like to know how CMHC can be improving the situation by insuring loans up to a maximum of 95 per cent when this will cost an additional $50 billion? What benefits will this provide for housing cooperatives? Why would housing cooperatives not be entitled to a fully insured mortgage loan?

How much would it cost to make up the difference between providing a fully insured loan and one insured at 95 per cent?

Lastly, I would like you to touch on CMHC's relations with the SHQ, the Société d'habitation du Québec, because the two corporations operate in Quebec. We know that the SHQ works, among other things, with municipalities.

[English]

The Chairman: Thank you, colleagues.

[Translation]

Mr. Asselin: Are you going to answer my question?

[English]

The Chairman: Mr. Girard.

[Translation]

Mr. Girard: I'm prepared to answer Mr. Asselin's three questions.

Firstly, it won't cost the government anything.

Secondly, as for the improvements that we will be making, the insurance fund will continue to operate in accordance with its current mandate. Right now, we have a problem with the maximum allowable aggregate amount of insurance, that is $100 billion. This limit must be increased and we are asking the government to approve such an increase. This will involve no additional cost to government. We're merely asking that the limit be increased.

Thirdly, with respect to housing cooperatives, I would answer that every housing cooperative is free to apply to CMHC and is treated much the same way as it would be by the private sector.

We can insure a housing cooperative up to a maximum of 85 per cent. The remaining 15 per cent represents the capital that the cooperative needs to get its project off the ground. In cases like this, the risk is much higher. The insurance fund is just that: we collect premiums and charge fees to cover overall expenditures. Therefore, risk must be properly assessed. We ask every private company applying for insurance for a multiple use venture to put up 15 per cent of the required capital. In the case of housing cooperatives that operate in partnership with municipalities, non-profit or community groups and that are looking for insurance, we are prepared to insure up to 85 per cent of the value of the undertaking. Moreover, in 1992, we initiated a process called "P cubed", which stands for "Private, Public, Partnership", through which we encouraged this type of housing on a number of occasions in Quebec as well as in the other provinces.

Mr. Asselin: Do you favour the private sector over the cooperative sector or is the reverse true?

Mr. Girard: We do not favour one sector over another. We merely assess the risk to the insurance fund. Obviously, if the risk is higher, the premium will be adjusted accordingly. At some point, the premium is no longer saleable or acceptable to the client.

As for relations between CMHC and the SHQ, they are very good. The two corporations work closely together. Moreover, since 1987, we have signed memoranda of understanding with the SHQ for the delivery of social housing programs in the province of Quebec. We have also signed similar memoranda with other provinces covering various programs. The provinces were the ones who decide which programs they wanted to implement. Our objective was to eliminate duplication as much as possible.

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Moreover, as you know, Quebec has always tended to take more responsibilities in this area. We demonstrated considerable flexibility in our negotiations with each province, because it is their responsibility to decide the kinds of programs they want to deliver. That's the type of memorandum of understanding that we currently have with the SHQ.

[English]

The Chairman: Thank you, Mr. Asselin, and thank you, officials.

So we have the order of reference from the House from November 8, 1995, and that is, that Bill C-108, an act to amend the National Housing Act, be read a second time and referred to a standing committee.

It has now been referred to us. We've heard very briefly from officials.

Clauses 1 and 2 agreed to on division

The Chairman: Shall the title carry?

Some hon. members: Agreed.

The Chairman: Shall the bill carry?

Some hon. members: Agreed.

Some hon. members: On division.

The Chairman: Shall I report the bill to the House?

Some hon. members: Agreed.

Mr. Duhamel: On division.

Some hon. members: Oh, oh!

The Chairman: We're adjourned. Thank you very much.