SoVote

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

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

Jun/13/23 1:03:20 p.m.
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Madam Speaker, the member opposite certainly has my respect. I do have a question for him. Why did he vote against the right to housing? Does he not believe in the right to housing?

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Hon. Michael Chong

Jun/13/23 1:03:36 p.m.
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Madam Speaker, what I believe in are macroeconomic policies of the Government of Canada that are going to ensure that, in the long run, housing returns to 3.5 times a typical family's income. Today in this country, in many communities, it is more than triple that, and as a result, Canadians are struggling under record high levels of household indebtedness. The House can pass all the motions it wants about housing as a right, but the reality is that, in practice today in Canada, affordable housing has become a distant reality for many Canadians because of these ill-founded macroeconomic policies.

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Ms. Monique Pauzé (Repentigny, BQ)

Jun/13/23 1:04:20 p.m.
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Madam Speaker, we have reached a point at which even the middle class is having trouble finding housing. Imagine how bad it is for more disadvantaged or economically vulnerable households. People are on the verge of homelessness. This is a big deal. There is one recommendation that I find very interesting. I would like my colleague to tell us more about it. The 14th recommendation reads as follows: “That the Housing Accelerator Fund support public and non-profit acquisition of vacant land and existing buildings, including rental housing stock, for the purpose of creating net-new affordable housing units.” This is really for people who are in a very fragile economic situation. To me, this recommendation is huge. What are my colleague's thoughts on it?

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Hon. Michael Chong

Jun/13/23 1:05:11 p.m.
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Madam Speaker, I thank my hon. colleague for her question about the report's 14th recommendation. I agree that more affordable housing is needed across the country, including in my riding of Wellington—Halton Hills. At the same time, Canada is in a crisis situation. We cannot rely on only building affordable housing units. The only apartment units being built in Canada are being built with public subsidies. The private sector should be building much more than just affordable housing units that have been subsidized with public subsidies. They should be building apartment units for people to rent, but they are not because of some of the macroeconomic policies that I just highlighted as a problem at the federal level. While I support the construction of new affordable rental units, more than that, we need many more rental units to help drive down the cost of renting an apartment. That would be a far more powerful way to make housing more affordable for low-income Canadians than any single government program.

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

Jun/13/23 1:06:32 p.m.
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Madam Speaker, now I have heard the second Conservative speaker calling for some kind of capital gains exemption for real estate investors as a way of solving the housing problem. In the 1990s, we understood that the most vulnerable in Canada, such as young families, seniors and low-income people, needed alternatives to ownership to get secure housing. I am going to ask the hon. member this again: Do any of the Conservatives support returning to a strong co-op movement in this country that provides people with security of housing, which they pay for themselves but which requires some public subsidy to get going?

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