SoVote

Context: House Hansard - 212 - Jun/13/23

Jun/13/23 12:23:45 p.m.
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Madam Speaker, all I can say is that all I am hearing in the House from this opposition party is insults. They are saying that people are incompetent, particularly when they are talking about municipalities. As a former city councillor, I find that extremely disrespectful to those duly elected representatives. The members of that party often talk about buying a home. Yes, that is important. I spoke about it in my speech. However, why do they not recognize the issue of the right to housing? All they see in housing is an economic contribution. That is all.

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Mr. Chandra Arya (Nepean, Lib.)

Jun/13/23 12:24:18 p.m.
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Madam Speaker, global inflation, the pandemic, the war in Ukraine and supply chain disruptions are some of the biggest issues of our times, and they are colluding to drive up the cost of living up in Canada, particularly the cost of housing. I am thankful for the opportunity to stand here today to discuss housing affordability, a crucial issue that affects everyone in this country. Our colleagues across the floor have the privilege of picking isolated issues and suggesting that solutions are simple. It is, of course, the role of the opposition in the House to find fault, question policy and hold government to account. Meanwhile, it is the role of the government to act, and we have done that. We have launched a suite of measures to address the problem of housing affordability on multiple fronts. It would take more than my allotted time to address them all, so I would like to draw the attention of members to two initiatives focused specifically on speeding up the creation of housing. One of the things that defines the problem of housing affordability is that it takes years to build a home, but the need is happening now, so we created the rapid housing initiative, which is designed to support affordable housing projects with the quickest possible turnaround times. We also developed the housing accelerator fund, which is launching this summer, to encourage systemic changes in how housing is built in this country. The rapid housing initiative is one of the most successful in our national housing strategy. It is designed to quickly yield new affordable homes for those who need them most and who need them soon. Through two rounds of funding, the rapid housing initiative has exceeded every target we set for it. Once the last bricks are laid, the two rounds are expected to produce more than 10,000 homes, which is 2,500 more than we had hoped for. That is why late last year we launched the third round of projects, which is backed by $1.5 billion in investments. It is expected to yield 4,500 additional affordable homes, bringing the total expected to 15,000. The rapid housing initiative was launched as part of our government's response to the pandemic. It continues because we recognize the urgent need for housing has not gone away. While that initiative is getting shovels in the ground now, we have also announced the housing accelerator fund to look to the future. The fund will help municipalities cut red tape and streamline their housing processes. The fund is backed by $4 billion in federal investments and will run until 2026-27. It will begin accepting applications this summer. The target is to create at least 100,000 net new homes over the course of the initiative. By partnering with local governments, we can create long-term systemic changes to how we build housing in Canada. These changes will continue making a tangible impact on our housing supply well beyond the timeline of the fund itself. I could spend all my time today telling members why I think these are great programs, but let me tell the story of Brenda Blanchard. Brenda was on a wait-list for seniors' housing and living with her daughter. She had been struggling with housing costs for a long time until she found a home in the Bechtel modular housing development in Cambridge, Ontario. Brenda's new home is part of an innovative project to turn shipping containers into affordable housing for seniors. It is funded by the rapid housing initiative, and the project was turned around in 15 months. Most importantly, it has transformed Brenda's life for the better. Its accessibility features mean she can get around easily, and most importantly, she says that it has given her back her independence. By teaming up with partners in municipal, provincial and territorial governments, indigenous communities and the private and non-for-profit sector, we are creating many success stories such as Brenda's across this country from coast to coast to coast. As I said, the rapid housing initiative and the housing accelerator fund are just two initiatives in our $82-billion national housing strategy. They are complemented by the strategy's other activities that, together, tackle this problem from every angle that will have an impact. It is a complex issue that needs a diverse set of responses. We have built on and enhanced this strategy repeatedly since its launch in 2017 in response to feedback from partners and the public, and to the changing needs of the people of Canada. This is a long way of saying that we have listened and we have acted. We will continue to do both because there is a lot more to do. Too many people in this country are still struggling to find and keep a roof overhead, to get a home that meets their family's needs and allows them to thrive. There are too many Brenda Blanchards out there, people who are underserved by the housing market and just need a little help getting a home. Our government has made housing a priority since day one of our mandate, and we will continue to do so. In my riding of Nepean, we have funded Multifaith Housing Initiative's 98 beautiful affordable homes, which are now occupied by families who are very happy. We are also funding a new affordable housing project in the Christ Church area of Bells Corners, with 47 new units coming up. We have also announced funding for Ottawa Community Housing, which is going to start building affordable housing projects and affordable homes in the Barrhaven area of Nepean. One of the key things in housing is the starts, the new housing buildups, which have become stagnant in the last almost 45 years. In 1980, when the population of Canada was 24.5 million, the housing starts were 130,000. In 2023, the population of Canada is 38.8 million, but the housing starts are just 213,000. The ratio of housing starts to population growth has come down from 0.55 in 1980 to just 0.3 in 2023. That is the key thing we are tackling, along with partnering with the provincial and municipal governments. The housing starts have to grow, and one of the major reasons developers say that they cannot build new homes is the regulations at the city level or municipal level. We are partnering, in the same way, with the municipal governments so they can act much more quickly and do the approvals faster to get new homes built as soon as possible. I look forward to any questions that my colleagues might have.

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Ms. Louise Chabot (Thérèse-De Blainville, BQ)

Jun/13/23 12:33:11 p.m.
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Madam Speaker, I would like to talk about the recommendations set out in that report, which was actually produced in 2022. One of the recommendations indicates that the housing accelerator fund should be largely devoted to the acquisition, renovation, and construction of off-market affordable rental housing units. Could my colleague give us an idea of where the government is at in terms of that recommendation? How many units has that been done for to date?

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Mr. Chandra Arya

Jun/13/23 12:34:01 p.m.
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Madam Speaker, there are two things I touched upon. One is the rapid housing initiative, which is for a quick turnaround. It has already accomplished the objectives we had and is now generating up to 15,000 homes. Second, is the housing accelerator fund, which looks much more into the future and builds up a reward system. Making it exclusive to one particular need, in my view, is not the right approach. It also has different objectives, which are very defined and provide more answers to housing affordability needs in the medium to long term.

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Mr. Wayne Long (Saint John—Rothesay, Lib.)

Jun/13/23 12:34:51 p.m.
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Madam Speaker, as a federal government, it is important that we acknowledge that, yes, we have a lot of work to do and we need to make a difference in housing nationally. We have come forth with wonderful programs, whether it is the co-investment fund, the rapid housing initiative, the housing accelerator fund, the Canada housing benefit and the right to housing, which the Conservative Party voted against. My question for my colleague is this. Which one of those federal programs is having the most impact in his riding?

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Mr. Chandra Arya

Jun/13/23 12:35:25 p.m.
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Madam Speaker, the beauty of the various programs under our national housing strategy is that each one of them is making an impact. I am from Ottawa, as Nepean is part of Ottawa, and almost every single program of the federal government is making a major impact on providing affordable housing and affordable rental units to the people in Ottawa. As I said, we also have to focus on how we can improve housing starts.

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Mr. Peter Julian (New Westminster—Burnaby, NDP)

Jun/13/23 12:36:03 p.m.
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Madam Speaker, I always appreciate hearing my colleague speak. However, as he realizes, the seeds of this housing crisis started with Paul Martin's elimination of a national housing program. The fertilizer was the dismal decade of the Harper regime where there was simply no funding for affordable housing. The government has been pressed by the NDP, by members for Vancouver East and Burnaby South, to build more affordable housing, but it has chosen to prioritize things like a $750-billion liquidity support package for banks, $30 billion going every year to overseas tax havens, and it is a crisis. Would the member admit that the government has to act immediately and has to treat the crisis with the scale and scope required, which means immediate investments to build housing across the country?

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Mr. Chandra Arya

Jun/13/23 12:36:58 p.m.
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Madam Speaker, the fact of the matter is, without anybody suggesting it, that the moment we came to power in 2015, from day one, we have focused on housing. Our national housing strategy is a very defined strategy with various excellent programs. We have partnered with provincial authorities and governments, which have the major responsibility on housing, but we have not stopped telling them that it is their exclusive responsibility. We have stepped up with real money in the national housing strategy and various programs on the affordability crisis for Canadians.

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Mr. Marc Dalton (Pitt Meadows—Maple Ridge, CPC)

Jun/13/23 12:37:46 p.m.
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Madam Speaker, the member talks about the beauty of all the government programs, but it has a lot problems actually delivering on them. For example, on the incentive for new homebuyers, almost nobody has taken it up because it does not work. I think of the Canada Infrastructure Bank and all the money it says it has for projects, but nothing is happening. Will the member not recognize that it is fine to say the words, but things are not getting done on the ground?

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Mr. Chandra Arya

Jun/13/23 12:38:12 p.m.
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Madam Speaker, one thing I can agree with member on is that the funds are available. As I said, the problem is the supply, as the money is available for developers. The problem is that we are not seeing new houses getting built by developers. That core issue has to be dealt with first.

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Mr. Brad Vis (Mission—Matsqui—Fraser Canyon, CPC)

Jun/13/23 12:38:36 p.m.
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Madam Speaker, I am always pleased to rise in the House of Commons and share, hopefully, some insightful words. Before I begin, yesterday you informed me, Madam Speaker, that you were born in Portugal. Yesterday was national day in Portugal. I know there are some celebrations going on in Ottawa, so to all Canadians of Portuguese descent, happy national day, even if I am a day late, and have a great time this evening. Turning to housing, this morning when I found out we were going to have a concurrence motion and debate on housing, I gave my mortgage broker in Fraser Valley a call. In April 2023, the average cost of a home in British Columbia was $995,000 and change. The average detached home in the Fraser Valley or Greater Vancouver region costs northward of $1.2 million. I talked to my mortgage broker, Vic, and asked him what it would take for a young person to get into housing today. We can go on the assumption that a very modest home in Abbotsford is probably northward of $1.2 or $1.3 million. The member from Langley is pointing his finger up, so it is probably $1.4 million in Langley. It is a bit cheaper in Abbotsford. For a $1.2-million single-detached home in Abbotsford, which would be the cheapest house on the market, one would need a down payment of $240,000. Before I go on any further, Madam Speaker, I will be splitting my time with the member for Wellington—Halton Hills. If people were to purchase that home, not only would they need that $240,000, they would also have to account for a property transfer tax bill of $22,000 and legal fees between $1,000 and $2,000 to complete the transaction. That does not even account for any real estate fees to be paid to the listing and selling agent. Therefore, to buy a home today, a starter home in the Fraser Valley, a person is looking at $275,000 and change needed to buy that home. The average condo in B.C. costs about $500,000. To buy a condo today, people would need approximately a down payment of $25,000. They would probably pay a transfer tax of $8,000 and similar legal fees of $1,000 to $2,000. Members may ask why someone cannot just start off with a condo. Why do they need a single-family detached home? When a home is valued or listed under $1 million, it is subject to the stress test. If it is over $1 million, people basically need a 20% down payment to purchase that home. At today's interest rate of approximately 5%, people would need to qualify at the CMHC level of 7.5% interest rate to buy that condo for $500,000. My mortgage broker, Vic, explained to me that in order to buy a condo in Abbotsford, people would need a household income of approximately $125,000 to qualify. I will note that the average income where I live is about $75,000 to $80,000. For people to get into the housing market today, they either need a really high-paying job, or they need to get help from their parents or receive some type of inheritance. Indeed, my mortgage broker has told me that he rarely, if ever, sees people doing it on their own today. That is a really important point to make. People cannot do it on their own today. Some people have parents who won the real estate lottery and they are able to help their children. Some people seeking to enter the housing market may have some inheritance from a grandparent, but a lot of people do not have those things. They have to do it themselves. The cost of doing it on one's own today is astronomical. In fact, it is such an astronomical amount of money that most people are giving up hope. Being Canadian, our entire financial well-being in our country, and this is what we are told by our educational institutions, from the Government of Canada and from financial advisers, is that to get ahead in Canadian society, we have to purchase property. That social contract we have had with the government and civil society is eroding before us at a very alarming rate. When young people graduating from university no longer see a pathway to home ownership, when that seems out of the reach of possibilities, they lose hope. What happens when we lose hope? People turn to extremism, on the left or the right. We are in a dangerous position in Canada where there is going to be an entire generation left out of the housing market. That is partially to do with the government's policies of today. In 2016, the Liberals promised Canadians that they were going to make housing more affordable, that they were going to put in billions of dollars to help people get ahead, to help them get a home. They have had program after program that was to solve the housing crisis. In fact, the only thing that has happened under any government policy is that things have become more expensive and more out of reach. It is simply not fair. During the pandemic, when we saw one of the biggest increases in housing prices across Canada, the government urged many Canadians to borrow more. The Prime Minister talked about lower interest rates, that they were here for the long term. In fact, the Liberals predicated the country's finances on the assumption that long-term, low interest rates were here to stay. As a result of that, Canada's household debt is now 170% of our GDP compared to 95% in 2010. It gets worse. Many of the people who did get into the housing market are now in a position to be subject to a variable rate mortgage. My mortgage broker, Vic, mentioned someone on his street, and this is anecdotal, in a Surrey neighbourhood, who had to foreclose on last week because the interest he was paying increased so much that he could not handle his monthly bills anymore. If we do not start building more homes, if we do not give young Canadians a form of hope and a pathway to home ownership, we are in for disastrous policy outcomes and a dangerous societal position where young people do not feel they will have a future in our country anymore. The message I am bringing forward today is that governments need to get out of the way. Before I finish up, I want to mention one policy that is really good. The NDP government in British Columbia is mandating 10 cities in the province to build houses at an accelerated rate. The premier of British Columbia, David Eby, recognizes, and has the same position as the Conservative Party of Canada, that the only way we will maybe tackle this crisis is to compel municipalities to push more housing starts at an incredible rate. That is one of the key things that we can do to give young people hope again. Under the interest rates today, under a government policy and under the stress test, let alone the incomes that do not match the ability to pay for a home and inability of young people to save, we will be in a very dangerous position in our country in the decades to come if people believe that the social contract they signed up for when they came to Canada, or were born here, is going to be taken away from them.

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Mr. Ken Hardie (Fleetwood—Port Kells, Lib.)

Jun/13/23 12:48:21 p.m.
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Madam Speaker, my almost neighbour and I share a piece of territory that has many of the same concerns. That is why I would be very interested in his reflection on the issue I brought up with the NDP. I would like to hear the Conservatives' thoughts on it. It is about development cost charges, which are really heavily laden on new construction because municipal governments are scared to death of raising property taxes on existing homes. Obviously, that is distorting the price of new units. What are his thoughts on that?

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Mr. Brad Vis

Jun/13/23 12:49:02 p.m.
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Madam Speaker, the member for Fleetwood—Port Kells raises an important point. Development cost charges by our municipalities increase the cost of new builds at an alarming rate. Second, to that point, I do not believe municipalities, irrespective of jurisdiction, have always been transparent about how those development cost charges are used. I know that in some cases they might charge a DCC on a rebuild in an existing neighbourhood. They do not use the money collected to improve that neighbourhood. A municipality might say that it is going to use it for one of its other priorities. I believe that development cost charges need to exist but that they need to be commensurate with the needs of young people in order to purchase housing, first and foremost.

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Mr. Sébastien Lemire (Abitibi—Témiscamingue, BQ)

Jun/13/23 12:49:58 p.m.
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Madam Speaker, there is something rather ironic when we talk about the whole issue of access to housing. In my region, Abitibi—Témiscamingue, the vacancy rate is less than 1%. We cannot even house new workers, even those who would come to build the housing. How will we ultimately be able to implement a new housing strategy? That will take money and programs, but we will also need the temporary means to house people. The labour shortage is hurting our economy. The Abitibi—Témiscamingue CEGEP said publicly today that it needed housing for its students to train the workers of tomorrow. This is what we have come to. How did the situation get so out of hand over the past 15 years? I would like my colleague to comment on that.

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Mr. Brad Vis

Jun/13/23 12:50:45 p.m.
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Madam Speaker, with respect to the labour shortage and housing for workers, including housing for people who build homes, the Canadian Home Builders' Association came forward with a very interesting proposal, and it is one I support: removing the GST on new home builds in Canada. Imagine the government did not collect $50,000 to $60,000 on new home construction through taxation. Imagine if we said that those who create purpose-built rental units would not be charged GST on those builds. That is one policy area we could look at a little more closely.

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Mr. Randall Garrison (Esquimalt—Saanich—Sooke, NDP)

Jun/13/23 12:51:29 p.m.
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Madam Speaker, my question to the hon. member has to do with the elephants in the room I talked about earlier. We have some members of the House who tend to blame immigrants for the shortage of housing, when we know that we need workers and that the immigrants themselves suffer from the lack of housing. We also have people who are blaming councils. As a former councillor, I know most councils have worked hard to try to get new housing built. Does the hon. member really believe that the private market will actually solve the affordable housing crisis in this country, when it has demonstrated that it would not?

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Mr. Brad Vis

Jun/13/23 12:52:03 p.m.
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Madam Speaker, I actually do believe that the private sector has a much bigger role to play in solving the housing crisis we find ourselves in today. I do believe that the private sector could do much more. What we have seen in the last eight years is a government trying to replace the private sector, and all we have seen are disastrous results, higher housing costs, more homelessness and more debt.

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Mr. Mike Morrice (Kitchener Centre, GP)

Jun/13/23 12:52:32 p.m.
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Madam Speaker, while I agree with the concern that the member for Mission—Matsqui—Fraser Canyon shared, it is important to point out that this did not happen just overnight. This crisis was decades in the making, from multiple parties that formed government at that time. With respect to the member's talking about government getting out of the way, I would love to hear his reflections on the 80s and 90s when governments invested significantly in social and community housing. Did that not help?

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Mr. Brad Vis

Jun/13/23 12:53:04 p.m.
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Madam Speaker, let me just say that, in the 1970s and 1980s, when we had the most purpose-built rentals constructed in our country, it was under a taxation plan that deferred capital gains. That is the only time we have seen the amount of rental construction that we actually need. That was a policy of Pierre Elliott Trudeau, I believe. Unfortunately, he quashed that policy. I think we need to look very carefully at bringing back some type of MURB policy to get more purpose-built rentals constructed in our country.

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Hon. Michael Chong (Wellington—Halton Hills, CPC)

Jun/13/23 12:53:48 p.m.
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Madam Speaker, I want to speak to the concurrence debate on this report on the Standing Committee on Human Resources, Skills and Social Development and the Status of Persons with Disabilities because housing is an important topic to my constituents and also an important topic to all Canadians. I think it is safe to say that we have a housing crisis in Canada. The government, over the last eight years, has presided over this crisis. While provinces have a role to play, and so do municipalities, what I hope to make clear to the House in my short remarks is that the primary responsibility for this mess is with the Government of Canada. The Government of Canada has huge macroeconomic levers not available to the provinces. It regulates our banking system through the Office of the Superintendent of Financial Institutions. It regulates the mortgage market through CMHC's mortgage insurance programs, and Finance Canada plays a big role in regulating our financial services sector. These are, far and away, the cause of the housing crisis in Canada. None of the initiatives that the government has announced as part of the plethora of programs on housing is going to offset the macroeconomic mistakes it has made over the last eight years. We truly have a crisis in two forms. It is a crisis in terms of housing prices. Let us be frank and candid here; Canada has a housing bubble. It is a bubble of epic proportions, which has gone on for so long that we do not even see it for what it is. How did we get this housing bubble? Quite simply, the government mismanaged a number of macroeconomic policies through Finance Canada, through CMHC and through OSFI. For example, it allowed mortgage credit to grow at an unbelievable annual compounded rate over the last eight years, far in excess of inflation, population growth and other measures like productivity growth. As a result, household debt in Canada has grown from 80% of GDP, some 15 years ago, to 107% of GDP today. That is a 27% jump in household debt in Canada. That is almost a 30% jump, in household debt in real terms, per household, in the country over the last 15 years. Most of it is under the government's watch, and all because the government failed to regulate the growth and mortgage credit through OSFI, through Finance Canada and through CMHC. I will give one example of its mismanagement. In the early days of the pandemic, OSFI relaxed the domestic stability buffer, allowing banks to loan out hundreds of billions in new money. OSFI put no restrictions on the money being loaned out. What happened? Almost all of it was loaned out for residential real estate. It poured fuel on the fire of housing, which is why housing prices during the pandemic skyrocketed. The government should have said, look, we are going to inject some liquidity into the system but we are not going to allow the financial sector to put all of its eggs in one basket, into residential mortgages, and to pour fuel on the fire of housing prices. That is one big reason why housing has skyrocketed over the last several years. There are so many other things the government did. It argued against the B-20 rule and it forced financial regulators to weaken the B-20 rule. What situation do we have today? We have a situation where one-fifth of all of CIBC mortgages are ones where the borrowers are not even paying the interest on their loan balances, and their principal is getting bigger. As a result, we are looking down the barrel of a financial crisis. In about two short years, many of the mortgages that were given out during the pandemic will come up for renewal. Most of these are five-year-term mortgages. Most of these mortgages are fixed monthly payment, variable rate. When those mortgage holders renew about a quarter of outstanding mortgages, they are going to be faced with a crisis, because renewal mandates that the mortgage renew at the original amortization track that the mortgage was supposed to be on when the term was originally negotiated. As a result, people are looking at a 20% to 40% jump in their mortgage payments in about two short years. Those figures come from Desjardins's research analysts. Those figures come from the Bank of Canada itself, and that is the best case scenario. That is if rates start to drop early next year, and it is not clear they will, because the bank continued to hike them this past month alone, and it may hike them further. It is predicated on our having a mild recession that we get out of fairly quickly, and it is predicated on rates dropping to two and a half per cent pretty quickly. This is all a Goldilocks scenario that may not come to pass, and even in that Goldilocks scenario, payments for these mortgages are still expected to jump 20% to 40%. If a worst-case scenario comes to pass, the payment jumps could be much higher. We are talking about a fifth to a quarter of all outstanding mortgages being in this situation, and that is a direct result of the government's mismanagement of the banking system. We have a second crisis in our system that the government is not addressing at all, and that is a lack of housing supply. What has happened over many years is that the supply of purpose-built apartment buildings has plummeted. Several decades ago, more than two-thirds of Canadians rented an apartment in a purpose-built apartment building, but I looked up the data for the number of apartment buildings that have been built in the last several decades, and it has plummeted to almost nothing. In fact, in the province of Ontario, 86% of all apartment building stock was built prior to 1980. Almost none of it was built after the 1980s, and as a result, only 60% of renters in Canada today rent an apartment in a purpose-built apartment building. The other 40% of renters are renting a house, a room in a house, a condo or some other non-purpose-built apartment. As a result, we have a government focused entirely on the wrong solution to the problem: building more houses and condos. What we need are more purpose-built apartment buildings, but the government is not thinking about these macroeconomic policies because it is focused on microeconomic policies that are not going to make a difference. The slowdown in apartment construction coincides with the introduction of capital gains taxes on apartment buildings that do not apply to primary residences. It coincides with negative changes to capital cost allowances that did not allow private developers to write off their investments in a way that made them financially viable. It is a result of GST rules that favour one type of housing over another. It is a result of CMHC introducing restrictions on underwriting of rental housing. It is a result of a range of other issues the government has failed to address, and until the government addresses these macroeconomic policies, whether it is the growth in mortgage credit that has led to a housing bubble, or the lack of rental housing in purpose-built apartment buildings, we are not going to be able to address this crisis. For all those reasons, I encourage members of the House to think about what the committee has found in this report and to consider the broader picture of how we got into this situation, which is not just a housing crisis but one that could really put the financial stability of our entire Canadian banking system at risk.

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