HUMA Committee Report

Dissenting Report to the

Human Resources, Skills and Social Development and the Status of Persons with Disabilities Committee Report On The National Housing Strategy

Conservative Party of Canada

June 6, 2023

Introduction

Conservatives know that Canada is in a housing crisis and that the first step of a productive, fulfilling, and dignified life is a home to call your own. The Federal Government must use every level available to them to solve this crisis. A successful housing strategy must be more than announcing a dozen units here and there, it must take serious and bold action to build the homes Canadians need.

Canada’s Housing Crisis

Canada is in a housing crisis, and while the Minister of Housing and Diversity and Inclusion has had difficulties admitting so, Mr.Paul Mason (Senior Vice-President, Client Solutions, Canada Mortgage and Housing Corporation) was clear^[1]:

As we at CMHC have said in the past, we believe there's an affordability crisis within Canada that is driven primarily by supply.

Furthermore, Mr. Mason told the Committee what the single biggest problem in the housing market is today^[2]:

“We feel that there are a lot of different aspects to housing in this country, but the one common denominator and underlying driver is supply. If there's one single thing we could do, it would be to increase the density and supply of housing in this country.”

Conservative Members agree with Mr. Mason. Adding density to our communities, and supply of social housing, affordable housing, rental housing, shelters, and more of all housing types into the market will be key to solving the housing crisis.

The CMHC itself recognizes the need to build an additional 3.5 million new housing units above and beyond the current pace of building by 2030.^[3] When you consider that Canada is currently

building fewer homes today than it was in the 1970s, Conservative Members cannot recognize the NHS as anything but a failure.^[4]

The ‘Transformational’ National Housing Strategy

The Trudeau government announced their National Housing Strategy in 2017, with great fanfare. The Prime Minister even went so far as to call the NHS ‘transformational’. The NHS is supposed to^[5]:

• Remove 530,000 Canadian families from housing needs.
• Reduce chronic homelessness by 50%.
• Protect 385,000 community housing units.
• Provide 300,000 households with affordability support.
• Repair and renew 300,000 existing housing units.
• Create 100,000 new housing units.

But here is what has happened since 2015 under the Liberals and their NHS:

• House prices have doubled in Canada since 2015.^[6]
• Monthly mortgage costs have more than doubled to over $3,000 per month.^[7]
• The average rent for a two-bedroom apartment in Canada’s 10 biggest cities is $2,213, compared to $1,171.^[8]
• Nine out of ten young people in this country who do not own a home believe they never will.^[9]
• It now takes over 60% of Canadians' income to cover the cost of owning a home.^[10]
• According to the OECD (2023), Canada has the largest gap between home prices and incomes among G7 nations.^[11]
• Canada has the fewest number of homes per capita in the G7.^[12]
• The CMHC is predicting that housing starts will decline by up to 32% this year.^[13]

In a scathing report which examined homelessness reduction programs, the Auditor General concluded that after spending over a billion dollars between 2019 and 2021, the CMHC and Infrastructure Canada had no idea “whether chronic homelessness and homelessness had increased or decreased since 2019 as a result of this investment.”^[14] Furthermore the Auditor General concluded that after spending $4.5 billion on the National Housing Strategy the CMHC “did not measure the changes in housing outcomes for priority vulnerable groups.”^[15]

The Liberal record on housing has resulted in rents that have doubled, mortgage payments that have doubled, an ongoing and worsening housing supply gap, and they have no idea whether the billions spent on reducing homelessness has made any difference. That is the legacy of the Liberal’s NHS.

Conservative Members note that despite the failure of the NHS, the CMHC continues to reward top level executives and public servants with performance bonus payments. Between fiscal year 2020 and the end of fiscal year 2022, the Liberal government handed out over $52 million dollars in performance bonuses. Every single high-level executive was given a bonus for exceptional performance. Conservative Members note that bonuses meant for exceptional performance were handed out for a job not done.

Ministerial Responsibility and Accountability To Parliament

The Canada Mortgage and Housing Corporation (CMHC) is a crown corporation and acts as the federal government's national housing agency. The CMHC Board is appointed by the government, and the Minister of Housing and Diversity and Inclusion is directly accountable for the agency.

Simply put, the Minister of Housing and Diversity and Inclusion is responsible for CMHC. When a community group abandons a housing project because of complicated paperwork, the Minister is responsible. When housing providers can’t get assistance during the application process, the Minister is responsible. When the CMHC raises their insurance fees on new missing middle and high density housing, as they did recently, the Minister is responsible.^[16]

On homelessness reduction, the CMHC told the Auditor General of Canada (AG) that they were not directly accountable for addressing chronic homelessness.^[17] Infrastructure Canada, who also is involved in reducing chronic homelessness, told the AG that they were not solely accountable for the NHS’ target of reducing chronic homelessness.^[18]

It is clear that both organizations suffer from a failure of leadership. This failure rests at the top, with the Minister of Housing and Diversity and Inclusion.

Conservative Members note that CMHC is often blamed for the failing NHS, but ultimately, the Minister of Housing and Diversity and Inclusion is the person responsible for this failure.

Board Governance

In Meeting #56 on February 17, 2023, MP Tracy Gray (Kelowna-Lake Country), pursued a line of questioning on board governance and involvement at CMHC with Mr. Paul Mason (Senior Vice-President, Client Solutions, Canada Mortgage and Housing Corporation).

MP Gray was examining the involvement of the board directly in National Housing Strategy Programs, if they were privy to funding applications, and if the board would ever have direct involvement on whether funds were distributed to specific applications.

The following exchange took place:^[19]

MP Gray: “Can you table for this committee the minutes from all CMHC board meetings from January 1, 2016 to December 31, 2022?”

Mr. Mason: “Yes, I suppose so. I don't think the board minutes are confidential.”

The Conservative Members of HUMA make note that CMHC never complied with this request from MP Gray. They did provide breakdowns of project funding, timelines, and applications rejected, but failed to provide minutes from board meetings between January 1, 2016 and December 31, 2022 as requested. Conservative Members view this as evading a parliamentary committee and a request for documents from a Member of Parliament.

Conclusion

Conservative Members agree with the committee's recommendations that have identified significant shortcomings and areas for improvement with the NHS and the application processes at CMHC. Conservative Members also recognize that the CMHC was unwilling to admit the extent of the failures of the NHS, the scale of the housing crisis, and the Liberal record on housing since 2015. Finally, Conservative Members note the unwillingness of the Minister of Housing and Diversity and Inclusion to accept responsibility for the performance of the CMHC and the NHS.