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Committee members, it is 4:30 p.m. The clerk has advised me that we have quorum, so I'll call the meeting to order.
Welcome to meeting number 79 of the House of Commons Standing Committee on Human Resources, Skills and Social Development and the Status of Persons with Disabilities. Pursuant to Standing Order 108(2), the committee is meeting for a briefing with the Minister of Housing, Infrastructure and Communities.
Welcome, Minister. We'll more formally welcome you a little later.
Today's meeting is taking place in a hybrid format, pursuant to the Standing Orders. Members are attending in person in the room, and they're attending by Zoom as well.
I would like to make a few comments before we begin.
You have the option of choosing to speak in the official language of your choice.
Madam Chabot, if there is a breakdown in the translation, please get my attention. We'll suspend while it's being corrected.
Those in the room please raise your hand if you want to get my attention. Those on camera use the “raise hand” icon. As well, no screenshots are allowed to be taken when the meeting is in progress. I would also ask you to please speak slowly and keep your cellphones away from the microphone, that will avoid popping sounds and will be for the benefit of the translators as well.
With that, as I indicated, we have some members joining us. Mr. Morrice, who was acting chair for a while yesterday is joining us. As well, we have Mr. Scheer, and Mr. Trudel is joining Madam Chabot and Madam Zarrillo.
I will advise that we do have a communications problem with Ms. Kwan online. The quality is not sufficient to translate at this time. It is being worked on.
Before we begin, I'll just say I'm going to conduct the meeting in two one-hour sessions. We'll have a health break after the first hour. For a couple of minutes, we'll suspend, and then I will go back to the normal rotation we have on the speaking order for the first hour. We'll revert to it again for the second hour, just so we're clear.
I would like to welcome our witness this afternoon, Minister Fraser.
Minister Fraser, welcome to HUMA. The floor is yours for your opening statement.
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With it being five minutes, I'll jump right in.
Colleagues, if we're going to solve Canada's national housing crisis, we have to understand the constituent causes of the circumstances we find ourselves in and advance specific measures that are tailored to overcome the very specific obstacles that are posing challenges to home construction in particular.
One of the things I want to acknowledge before I get into some of the challenges and potential solutions to those problems is the scale of what we're dealing with. We're talking about needing to build homes and to build them by the millions. We have about 16.5 million homes in this country. We need to build more than five million more if we're going to restore the level of affordability that existed in Canada 20 years ago.
The way this is playing out is having very real impacts on real people in real communities across the country. We're talking about students who are not able to find a place near where they're going to school. We're talking about young professionals, sometimes who are in a two-income household, who can't afford to get into the market. We're talking about seniors who can't find an apartment when they're looking to downsize in a community where their grandkids are being raised. Of course, we're dealing with a significant number of people who have no place to call home.
My view is that we, as a society, should aim to do better. It's going to require the federal government, working with provincial governments, municipalities, the private sector and the non-profit sector advocates, and of course parliamentarians, to advance solutions that are going to have a meaningful impact. But we won't have a meaningful impact if we just come up with random ideas and throw them at the wall. We need to have targeted measures that are going to maximize the output when it comes to building more homes for Canadians at prices they can actually afford.
The first obstacle that I see is, really, the need to change the financial equation for builders. As a result of the increased cost of supplies and materials, labour, interest rates, the cost of land in Canada and a number of other factors, it's really hard for people to say yes to projects, even where they have the workforce, even where they've already had a project approved.
We have been advancing measures you will have seen recently. The removal of the GST on apartment construction in Canada is resulting in more homes going ahead that otherwise would not have. You may have seen the changes to the Canada mortgage bonds program, which is going to help free up low-cost financing. You will have seen programs that have existed as part of the national housing strategy, such as the rental construction financing initiative that makes money available at a lower price for the people who are looking at the equation, so they can say, “Yes, I can go ahead now.”
There are other things we can do as well, and I look forward to the advice of members of this committee, but it's not just the financial equation. We need to change the way that cities build homes, or in some instances don't build homes. We need to make sure that we're speeding up permitting processes. We need to make sure that cities are investing in housing-enabling infrastructure. We need to make sure that they are zoning in a way that makes it legal to build the kinds of homes that are going to help solve the housing crisis.
When it comes to changing the way cities build homes, we have introduced the housing accelerator fund, a $4-billion fund that is starting to show very serious promise and is already changing the rules cities have in place in places like London.
Peter, I know we were visiting your community a few weeks ago. More recently, Calgary has made a decision explicitly that relied, at least in part, on an exchange of letters we have had regarding the housing accelerator fund.
Of course, we continue to invest in infrastructure that allows more homes to be built, such as water and wastewater, such as public transit funding and the like, so that we make sure we're building not just places to store people but real communities and homes for Canadians.
As we continue to invest in housing, we can't forget that there are a lot of people who need homes that exist outside of the market. This was really the foundation for the national housing strategy: to build more affordable housing for low-income families. After 30 years of lack of investment by both Liberal and Conservative governments, I should say, we are hundreds of thousands of units behind where we need to be if we're actually going to make sure people who cannot afford a place in the market still have a roof over their heads. There's a social cost to not having the ecosystem exist as it should, and we need to work together to overcome it.
Even if we get the policy landscape right on these other areas, we are going to run into a bottleneck at a certain point in time when it comes to the productive capacity of the Canadian industry to actually build the homes that we need. We can overcome this by investing in training programs, as we have in partnership with unions over the last number of years. We can continue to invest in programs like the sectoral workforce solutions fund, but we can't just rely on training the existing Canadian workforce.
We also need to continue to embrace immigration as a strategy to bring in the skilled workers who we need. We had previously made changes to the express entry system through the category-based selection model to bring in more people as permanent residents who have the skills that are necessary to build homes, but even if we get all of those people building, we have to change the way that they build homes.
We don't build cars the way we did a century ago. We're more efficient. We build them in factories now. We need to be looking at innovative ways to build housing more productively by investing in factory-built homes. We need to be embracing technologies, including modular housing, panelization, mass timber and 3-D printing, if we're actually going to change the way that we build homes so we can do it on a much larger scale than we are today.
We need to continue to support labour mobility so workers that may be available in one jurisdiction in Canada can offer their skills to housing projects in other jurisdictions.
There are improvements that I think we need to make on the coordination of programs as well between federal, provincial and municipal programs, and I think in all honesty we can probably improve the way that we administer programs. It might require us to take on a little more risk by times to speed up the process for the projects that we want to support.
Before I conclude there are a few other categories that I'm happy to dig into should time permit, but we need to continue to respond to the changing nature of emergencies that put people in situations where they have no place to go.
My own community was impacted severely by Hurricane Fiona last year and people were displaced. We saw it again during wildfires, not just in Nova Scotia but in communities across the country as a result of severe weather events that are driven by climate change. We need to continue to support communities through our programs that deal with severe homelessness problems, and we need as well to make sure that we're supporting emergency shelters in communities that are facing undue pressures.
I don't want to ignore the need to also address the financialization issues that I know the finance committee has been studying, and I look very much forward to reviewing the report they are generating. However, there are measures we have implemented around changes to the tax regime on short-term rentals such as Airbnbs, the ability of foreign buyers to purchase and own homes, and taxation of people who are non-residents with non-occupied homes.
Finally, we can't ignore that there is a generation of people who feel like they have been left out. If we build all the homes that we can build as quickly as we can, we're still going to have a significant number of people who find themselves with the inability to save up for a down payment to get into the market in the first place.
My sense is that, if we tackle each of these problems with everything we have, in collaboration with every level of government, the private sector and the non-profit sector, we can make real progress. If we aim for anything short of solving Canada's national housing crisis, I think we will be selling ourselves short. I think Canadians deserve to see us working together to advance measures to solve each of the problems I've outlined for you today.
Welcome, Minister.
I'm glad we received a bit of a history lesson today, because I'd like to jump in on that point. I was a municipal councillor back in 2008-09 when the recession struck. Our affordable housing wait-list in Hamilton at that point in time was, I think, about 3,600 to 3,700 individuals. Those people who sat on the affordable housing wait-list were waiting anywhere from three to five years to have their name called and to receive a unit.
After the recession and over the years that followed, that wait-list jumped to almost 6,200 to 6,300 names. I think if you asked us in 2015 whether there was a housing crisis, the answer would have been yes.
I should note that under the previous government, municipalities begged and pleaded for a national housing strategy. We noticed the jump—the doubling—of people on the affordable housing wait-list, and we asked, begged and pleaded with the federal government for resources to assist seniors, single moms and families who couldn't find a way to make it work.
I wasn't here, Minister, but your government responded. I'm hoping you can relay to the committee the importance of having a strategy. There seems to have been a narrative in the House recently and over the last number of months bemoaning the fact that we have a national housing strategy, trying to poke holes in it, when we didn't have one with the previous government when they ignored municipalities.
Why is it important to have a national housing strategy and why is it important to work with municipalities?
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Thank you for the question. I think you added some useful context around the previous questions about whether or not we were living in a crisis in 2015.
In Hamilton, I have no reason to distrust that it is exactly the case you've just made. In my own community, things were very different. However, now in my small town—with a population of about 10,000 people—we're seeing homelessness for the first time. It's being driven by a number of different factors, not exclusively federal government policy, by the way, although I think federal government policy has an important role to play. This is where we see a sea change between the approach that we're taking and the one the previous Conservative government took, and I should, to be fair, point to the cuts that were made in the early 1990s under a Liberal government that actually discontinued investment in affordable housing for low-income Canadians.
Cities can't do this on their own. There are things for which they are uniquely responsible—zoning practices, permitting processes and infrastructure prioritization—but when we saw a lack of investment not only in housing but also in infrastructure for many years, with the exception of the post-financial crisis injection of cash for the building Canada fund, we saw cities that were not prepared to grow when they started to experience population growth. Population growth is a major part of the economic strategy of the Atlantic provinces, for example.
Without the investments we've been making in infrastructure, which have laid the track for community growth, we would be in a much worse position than we are today.
From my perspective, it's essential to work with municipalities so we can incentivize them to overcome the barriers that are uniquely within municipal jurisdiction, but also so we can partner from a funding point of view to build housing-enabling infrastructure.
To your question about having a strategy, if you have a problem and you don't have a strategy, you're never going to solve it. As the problem changes, my view is that the strategy too needs to change and that's why you've seen a new series of measures aimed at a wider array of homes than were uniquely the focus of the national housing strategy that was launched in 2017.
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One of the things that you'll appreciate in my position is that I want to build healthy relationships with governments of different partisan affiliations in every region of the country.
To a province, my sense is that everyone recognizes there's a need for more housing. There are different viewpoints about what kinds of housing we need, how we're going to build it and whether we should embrace urban sprawl or whether we should focus on intensification where services already exist.
My view, particularly in medium- and larger-sized cities, is that intensification is absolutely the way to go, particularly when you have a generation of young people who want to live in urban environments, who want to give to the community and who have professional opportunities that are unparalleled in other parts of the country.
My view is that we need to make sure we're identifying shared priorities, regardless of which province. I can tell you there are projects that we both want to get behind. I actually think we would benefit from improving the coordination of our programs, both for housing and infrastructure, with the project selection and the timing of the release of capital into the market for these different kinds of projects.
My approach is to pick up the phone, to call people, to meet them in person where it warrants, and to actually talk through some of the challenges we're facing, because my sense is that, if you can agree on the nature of the problem, sometimes you'll realize you can pursue solutions in parallel and sometimes you can pursue a common solution together. Depending on the partner, depending on the province, I think there are wins for us to put on the table in every region of the country.
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Thank you very much, Mr. Chair.
Minister, thank you for joining us.
Mr. Trudeau didn't do you any favours by appointing you Minister of Housing. How did you react? We're experiencing a brutal housing crisis. It's extremely serious. You've said that we need to build 5 million housing units, while the Canada Mortgage and Housing Corporation, CMHC, estimates that we'll need to build 3.5 million units by 2030. That's a monumental undertaking. In Quebec alone, 1.1 million units need to be built. The private sector is expected to build 500,000 in Quebec, though forecasts for this year have now dropped. So it will likely be a little less than that, but to achieve a certain balance, we'd need to build 600,000 housing units in addition to what the private sector is going to build. It's a massive undertaking.
I've just returned from visiting one end of Quebec to the other. I went to Gaspésie, Abitibi and Lac-Saint-Jean, and I witnessed tremendous distress. One of the stated goals of the National Housing Strategy in 2017 was to reduce chronic homelessness by 50%. It was in writing. Since then, the number of homeless people in Quebec has doubled. According to the latest count, from October 2022, there are 10,000 visible homeless people in Quebec, and everyone involved told me that this is likely just the tip of the iceberg. I was told that housing needs were so urgent that people were no longer finding their way through this massive strategy, which is not having its intended effect.
Let's talk in concrete terms. A year and a half ago, we passed a budget that included a $4 billion fund to accelerate housing construction. It's a funny name, by the way, because after a year and a half, this fund to accelerate housing construction hasn't built a single house. It's quite peculiar. You are currently negotiating with the Quebec government. There are $900 million at stake and, in Quebec City, I'm told that the Quebec government could add another $900 million. That's quite significant. It would mean a total investment of $1.8 billion.
In Quebec City, I was also told that the provincial government would like these negotiations to focus on real housing construction rather than zoning-related standards or improvements. I'm not saying those aren't important, but I'm told that the Quebec government's priority is to move quickly on housing construction to take concrete action.
What is the status of these negotiations with the Quebec government on this $900 million, Mr. Fraser?
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Thank you to the minister for his opening comments and for acknowledging the fact that the housing crisis is caused by successive Liberal and Conservative governments walking away from building social housing and co-op housing. In fact, it was the Conservatives that cancelled the co-op housing program in 1992. The Liberal government cancelled the national affordable housing program in 1993.
For 30 years, successive Liberal and Conservative governments relied on market forces to provide the housing Canadians needed. It's been, frankly, a massive failure. We have record homelessness, rents have skyrocketed, young people are priced out of the market and we have the housing crisis we are faced with today.
As the minister indicated, in 2017 the announced the national housing strategy with much fanfare—I actually remember this—and even proclaimed that adequate housing is a basic human right. However, the Liberal government's slow walk to roll out the funds resorted to double-counting to inflate the numbers. It was slow to renew the operating agreements for non-profits and co-ops, resulting in more loss of subsidized social and co-op housing units.
The auditor has issued damning reports on the situation. I won't belabour all of those points because it's all on the public record.
The minister admitted that we have a deficit in social housing stock. Canada's social housing stock is amongst the lowest in the G7 countries, at a mere 3.5%. We need to actually enhance and increase the social housing and co-op housing stock. Currently, in the national housing strategy, the development of social housing is pegged at 16,000 units per year. That's not going to do it. It's not going to meet the requirement and the housing needs that Canadians have.
My first question to the minister is this. Will he commit to increasing the social housing stock, where rent is no more than 30% of total income, to at least two million, so that we actually have a fighting chance to meaningfully address the housing crisis?
Thank you to the minister for being here.
I want to start by saying there's no question that this issue impacts all communities across this country. All members on this committee are concerned about this issue because it impacts our neighbourhoods and people who live in the ridings we represent.
I do think there's this narrative that the price of homes has increased just since 2015. It's a false narrative. I bought my house in 2007, which was basically a year after the Conservative government came to power. The average price in Ontario was just under $300,000. By the time 2015 hit, it was at $700,000. This has been an ongoing issue in Canada, and the trajectory has just gone.... It's increased so much. We all, as MPs, have to look for ways to find solutions.
I'm happy with the new initiative to remove GST from new developments. Minister, I think you made reference to the article that came out in Toronto last week: 5,000 new units are going to be built because of this new initiative. Can you speak specifically to this initiative? What do you think the impact is going to look like across the country?
I think it's important to go back to the point that I led with in my opening remarks. The measures that we introduce have to be designed to solve very specific problems. When I looked at the decision to remove GST on the construction of apartments in Canada, it was designed to address the supply challenges that the housing sector is facing, which is driving up the price of homes across this country.
Going back over not only the time we've been in government but also during the government before, we've seen a steady increase in the price of homes. It's accelerated more recently, particularly during the pandemic when more people bought properties and dealt with historically low interest rates, but since then, the financial landscape has changed. The cost of labour has gone up. The cost of supplies and materials have gone up. The cost of land has gone up, and interest rates have gone up.
If we're dealing with builders who have, by the way, hundreds of thousands of units that are already approved across Canada, we need to get them to a place where the equation they're looking at takes a project off the shelf and puts shovels in the ground.
By removing the GST, I've seen estimates as high as 200,000 to 300,000 new homes for Canadians over the next 10 years. The 5,000 you mentioned are one storey. Many of the units, by the way, from that developer are going to be affordable, but that's one example I've heard of.
I read an article today that cited that example, but it pointed to two other developers who now say they're moving ahead with 3,000-unit projects and 1,000-unit projects directly in response to this measure.
This is going to cause an awful lot of home builders to take that project that has been yellow-lit, green-light it and start building right away. This is going to have a major impact. It's one of the most important things we could do, and housing advocates, not just developers but also those looking to build more low-income housing as well, are big advocates of this specific measure. That's why we've done it.
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I would like to address another very specific point.
In Quebec, 72,000 social housing units were built before 1992, partly with provincial government funding and partly with funding from the federal government. As we speak, 4,481 units have been boarded up for lack of renovations. Currently, the Canada Mortgage and Housing Corporation, CMHC, is negotiating the cost of these renovations with the Société d'habitation du Québec, or SHQ.
Mr. Fraser, if, tomorrow morning, you were to write a cheque to Ms. Bowers, who is present, or give her the mandate to quickly conclude agreements, we could renovate these 4,481 units, which could be ready by next July 1st.
I don't understand what's holding up these negotiations.
Good afternoon to my colleagues.
Minister, thank you so much for coming to chat with us.
First and foremost, I'm really pleased to hear you say that we do have a crisis and that the lack of action by successive governments has gotten us to where we are.
I want to make a few points. My province of New Brunswick grew by 49,000 people last year. It grew by 49,000 people in the 29 years before that. That is something that is a good thing for growth, but obviously, when you bring in 50,000 people in one year, that is going to put a lot of pressure on housing stock.
In my province, we have a Conservative premier who boasts about having a billion-dollar surplus this year, yet what he has invested in housing wouldn't fill three streets. The lack of focus is unbelievable. I will say, too, Minister, before I get to my question, that I came in in 2015. I'm happy to be here. In 2016 I did some research on previous policies that the federal government before us had enacted, and what I got back was a blank sheet. I was shocked. I said, “Where are all the policies that the previous government enacted federally?” and there weren't any. I was shocked to see that.
I congratulate you. I think we've shown a lot of leadership by stepping up and recognizing that we need all levels of government to solve this crisis. We need the federal government. We need the provincial government. We need the municipal government, and let's not forget the private sector.
Minister, can you just talk about the importance of having all three levels of government and the private sector working together, and what we are doing to make that happen? Thank you.
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Yes, and keep in mind that the fund isn't just designed to pay for the new permitting system that's implemented. It's a fund that contributes to infrastructure or housing projects and the systems that can be implemented, but part of the conditions to access the fund is that you're going to change the way you get homes built.
I think, for example, of the conversation we had with the city of your colleague to your right just a few weeks ago. We had a really healthy proposal from the City of London that was going to lead to their making certain changes and building more homes where people could access services and the like.
We sent them a response indicating other ways in which we thought they could build homes more quickly, including allowing people to build four units as of right on the properties they may own in the city and including zoning more densely, in particular around places such as post-secondary education institutions and transit developments. The mayor, Josh Morgan, whom I should give credit to, responded in the best possible way, saying, “We want to do this.” As a result, we're investing $74 million in the city, and that's going to add thousands of homes that otherwise would not have been built.
Other cities across the country can change the way they build homes, change the process to permit them and legalize housing. They can make it legal to build the homes that will actually help to solve the housing crisis. If we actually change the rules and have a federal incentive to drive municipal change, we can make a heck of a difference.
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Thank you. I don't mean to interrupt—if people are watching at home—but because we have very limited time, we try to get in as much as we can.
There was a 2016 housing strategy, and we talked about this in committee too. It's all fine and good to have a housing strategy, and I think your intentions seem good, Minister, but there seems to be a disconnect between the who runs this country and what you are saying here in this committee. On behalf of all Canadians and people who are living in tents, especially in Halifax where the rate just went up 500%, I will say that this is not reaching measured targets.
You got upset with Andrew Scheer, my colleague, because you thought he was playing games. It's not a game. Houses are not being built. I hear your empathy. I hear your intention and I hear you trying to say you're going to do things differently, but nothing has happened. I want to point to you in terms of where these operational dollars are going. This is why we talk about having to build homes and not bureaucracy, which is what the Liberal government has done.
There's a youth emergency shelter in my riding. There are 19 family units. These are parents with children and 39 youth on the by-name list in Peterborough, and this is an under-representation. Reaching Home is the only federal homelessness funding they know of. It provides funding for transitional housing amongst other things. They receive funding to cover the cost of one prevention worker. That's where operational dollars are going. When you go downtown in Peterborough, when you go downtown in Halifax and in Ottawa and there are record numbers of people living in tents, that's why. It's because of bureaucracy.
They have a question. I'm here, elected on behalf of Peterborough—Kawartha, and they want to know. I would ask the how she accounts for the costs associated with homelessness. The costs of shelter plus emergency services are higher than those of providing transitional or permanent affordable housing, so why is she not offering funding to the organizations that are already offering the solution to expand their housing programs? Marcel Lebrun, who runs 12 Neighbours, also asks why they're not getting these funds into their hands quickly.
These are life-changing programs and I hear you, but honestly we don't believe you and that is the problem that is on the ground.
I will leave it with you, Minister, to answer that, because what you're saying and what you're doing are not adding up. We saw that today in the House of Commons, with the , who said he is sorry but they're not going to change anything they're doing.
I want to stick with the housing accelerator fund because it seems to be the topic of discussion today.
You talked about working with municipalities. I've had to sit in the House and listen to the nonsensical tag lines, the bumper sticker solutions, in terms of “Get rid of the gatekeepers” and nonsense like that.
Having come from the municipal sector, I'll tell you that municipalities across the country have been building a record number of houses up until the time of the pandemic. They were breaking municipal records. They were in Hamilton. I know that in Ontario, the area that I come from, they were doing much the same in different areas. To say that municipalities aren't doing enough and then to demonize mayors and councillors for not doing their fair shares when, for the last 30 years, they were the only ones, by and large, across the country who were doing their fair share on the affordable housing scene.... They were cash poor and land rich and had to find unique ways, then, to build affordable housing units and housing supply.
Like you, I find it difficult to listen to some of the comments in terms of “they had their opportunity”. The FCM and municipalities across Canada begged and pleaded for support. It didn't come, and hence came the national housing strategy.
I want you to, if you could, reference how important it is...instead of demonizing municipalities and blaming them for the situation that we're in. This is very much where we were with former premier Harris when he demonized municipalities for not doing enough, and then he talked about amalgamation and all of those other things and how it was the “common sense revolution”.
Mr. Chair, we heard this week the common sense plan—very much like what we heard from a former Conservative premier in Ontario—demonizing municipalities for not doing their parts.
I'm just hoping, Minister, that you could talk very briefly about why it's important to work with our partners and work with municipalities, who've done their fair share, and illustrate what contrasts we have in terms of our approach to dealing with our partners in that space.
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It's really important to work with partners at different levels of government. Some of the greatest leaders in terms of reforming the way Canada is going to build homes are municipal government leaders—their mayors, their councillors. There are others who do need to be pushed, but we still need to partner with them, and there are others still who've never dealt with a housing crunch like they're facing now and don't have the muscle memory to know how to respond but very much want to and maybe need a partner from a funding perspective to help share best practices. Depending on the community you're dealing with, the circumstances are different.
The housing accelerator fund is a great example. It's not the only one, but it's a great example of how we can leverage municipal co-operation and partnership by putting real money on the table that's going to incentivize change. Municipal councillors know what it's like to have a little extra cash to invest in the infrastructure they need to have livable communities and communities that can actually have the capacity to accommodate more housing developments.
If I look back in the spirit of comparing what's actually being put on the table, the housing accelerator fund is $4 billion across Canada. That's going to help. We now have in excess of 500 applications that have come in. Compare that to the difference that would be made under the Conservative plan, with a $100-million contribution that's going to be split between only 22 or so communities and is also going to require.... It ignores the fact that sometimes communities need the investments in infrastructure they're threatening to cut if they're going to meet the targets they're now setting. It makes no sense.
If we actually work with municipalities, find the good leaders out there and incentivize the changes that they're already pushing, but then find the ones who are laggards and push them to do more, I think we can actually squeeze more productivity out of every federal dollar and create an ecosystem not just for the next couple of years but for the next couple of generations. We'll have a different way that people build homes, because it will be legal to build the kinds of homes that are required to solve the crisis. It will be faster to permit the kinds of homes that will be built and that will help solve the crisis.
If we work with municipalities, push ones to go further where they need a push and work with the leaders who are already there by incentivizing change, we can make a major difference.
Minister, I'm hoping we'll be able to have that meeting soon that we had to cancel recently.
I wanted to talk about systemic problems in getting affordable housing built. I was looking forward to seeing you here today, because I wanted to hear from you your value proposition and your mentality for addressing this crisis, because we know that the crisis cannot be fixed with the same market-focus mentality of governments current and past.
Here is an example. I wanted to share with you, and perhaps you know this.... I guess I'll ask you.
Did you know that the Canada Infrastructure Bank is investing in REITS, retrofits that result in renovictions and rent hikes? The Canada Infrastructure Bank is doing that. Avenue Living Asset Management, an owner and operator of properties, primarily out in the Prairies, has received commitments from the CIB for retrofits.
Is your plan to continue to use the Canada Infrastructure Bank for REITS and renovictions?
I don't want the conversation to focus solely on the CMHC. I do know that we have arranged for the CMHC to come back to this committee one more time. We did have a study, and there were some recommendations that I hope we can discuss at that time when the CMHC comes back. One of those was the efficiency of the application process and the responsiveness to the clients. I think that's an important question that we should be hearing about when we come back to that.
I'd like to go back to the fact that we have a number of approaches to solving the affordability issue. In my riding of Newmarket—Aurora, because of the GST waiver that is currently under debate, I had a developer contact me and say that he was going to go ahead with 390 new rental units that had been in the hopper for over two years now but the business model didn't work. Now, with the GST waiver, the business model does work, and my community's going to have 390 new units.
I want to go beyond that and talk about an example of collaboration between governments and how important that is. In 2020, through the rental construction financing initiative, the government was able to advance a $79-million construction loan that resulted in 216 units in my riding. In 2023, we also announced a $77-million loan under the same program to finance an additional 175. This emphasizes that it isn't always giving money away, in terms of the reduction of the CMHC. It's also working together with the developer, with the municipality and with the financing organization to cover and manage the risk during the construction period.
Can you explain how the funding of the rental construction financing initiative will help families and build more housing?
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It's important to understand that these policies don't operate in isolation. They work in parallel and one on top of the other. Your citing of the GST, I think, provides a good example.
Everything we can do to change the financial equation to make it more likely for a builder to go ahead is going to help address the supply challenges that we're facing. The GST, obviously, knocked several percentage points off overnight and even more so in jurisdictions where provincial governments have followed suit.
If you piggyback programs like the rental construction financing initiative on top of that now more attractive financial landscape, you're going to see that more people are going to be building homes but also building particular kinds of homes. The rental construction financing initiative operates, essentially, by giving a lower cost of financing, typically in exchange for some kind of a commitment that you'll offer a certain number of units at a particular percentage of market rates.
We made a recent announcement in Vancouver that's going to make available $500 million in financing that's going to 11 different projects, I think it was. It could be nine different projects; I'm testing my memory here. They are typically close to transit or post-secondary institutions. They're typically offered at a fraction of what the market would bear, and because we've changed the equation by offering competitive, low-cost financing in a high-cost financing environment, we're seeing more developers who are interested in building the kinds of homes that will be offered at lower prices because they have access to financing that allows the projects to go ahead.
With everything that we do—whether it's making more low-cost financing available through the RCFI, cutting the GST for apartments that will be built or expanding access to low-cost financing by growing our insurance programs through the Canada mortgage bonds—we're going to see more competitive rates for people who have the capacity to build homes.
Although I'm very encouraged, I'm entirely unsurprised to hear that your community is seeing more people announce that they will go ahead with projects, because I'm hearing it in every community in Canada.
:
Before I answer your question, I knew you were going to ask about London, because I sat on the finance committee with you during the pandemic and you asked about London every single day. I knew you would be true to character.
It's exactly the model that should be replicated across the country. London submitted, I should say, an ambitious application to grow its housing stock. They had e-permitting they wanted to adopt. They had upzoning. They had plans to focus particularly on affordable housing and supportive housing and recognizing that affordable housing is a health care issue. They were demonstrating leadership, but we didn't want to leave homes on the table that we could squeeze out of their housing accelerator fund application. We pushed them to do more to have four units, as of right, citywide, for example. We had conversations about what more they could do to continue to build homes, as they have plans to, around post-secondary institutions and around transit lines, and a handful of other measures.
They responded in the most encouraging way possible. They said, “Yes, yes, yes, we want to do it all, and if you support our application we'll be able to do it.” The result is that thousands of additional homes are going to be built in London over the next few years, but better than that, permanently changing the way that London permits homes to be built and the homes that they allow to be built is going to carry on forever.
This is the kind of thing that's going to have a lasting impact, not just over the next few years under the period of the housing accelerator fund's conflated timelines but permanently. It's this kind of change in cities like London across the country and in communities big and small that's going to help us escape the housing crisis and make sure ordinary people have homes they can afford.
:
I appreciate that. Thank you.
I want to start by saying that I really appreciate the candour you've brought to this conversation, Minister. I appreciate the genuine sense of collaboration that you're bringing to this role. I think it's really important that, if we're going to share in the fact that we're in a housing crisis, we have someone in your position open to working together to try to solve it.
I also think it's important to make clear that, as you've said, this is a crisis that's been decades in the making. It's not going to be solved within weeks. I think what is reasonable to expect is to see seeds planted for a solution both in terms of sustained investments and addressing the way that homes have been treated as commodities, instead of as places for people to live.
You and I have spoken about one way to do that, which is to remove exemptions for large corporate investors who have been commodifying the housing market, real estate investment trusts being one example of that. In my view, that is a clear litmus test for being serious about this.
Can you share whether you're going to give this idea some consideration over the coming weeks and months?