THE STANDING SENATE COMMITTEE ON BANKING, COMMERCE AND THE ECONOMY
EVIDENCE
OTTAWA, Thursday, May 28, 2026
The Standing Senate Committee on Banking, Commerce and the Economy met with videoconference this day at 10:32 a.m. [ET] to study the subject matter of Bill C-20, An Act respecting the establishment of Build Canada Homes; and, in camera, for the consideration of a draft report.
Senator Clément Gignac (Chair) in the chair.
[Translation]
The Chair: Good morning, honourable senators.
I wish to welcome all those who are with us today, in person in the room or online at sencanada.ca.
My name is Clément Gignac, senator from Quebec and chair of the Standing Senate Committee on Banking, Commerce and the Economy.
[English]
Before proceeding, I will kindly ask our fellow committee members to introduce themselves.
Senator Fridhandler: Daryl Fridhandler, Alberta.
Senator Loffreda: Senator Tony Loffreda, Montreal, Quebec.
[Translation]
Senator Henkel: Danièle Henkel from Quebec.
Senator Ringuette: Pierrette Ringuette from New Brunswick.
Senator Youance: Suze Youance from Quebec.
[English]
Senator McBean: Marnie McBean, Ontario.
Senator Wallin: Pamela Wallin, Saskatchewan.
Senator Martin: Good morning. Yonah Martin, British Columbia.
[Translation]
The Chair: Thank you.
Honourable senators, an order of reference was adopted in the Senate on May 7, authorizing the committee to examine and report on the subject matter of Bill C-20, An Act respecting the establishment of Build Canada Homes, introduced in the House of Commons. We are therefore continuing to study it as part of a pre-study.
Today’s meeting will consist of three 45-minute panels, followed by a short in camera portion at the very end.
We will now hear from our first panel of witnesses. As is customary, we have officials from the departments responsible for this bill.
[English]
This morning, we welcome Mr. Kevin Lee, Chief Executive Officer, Canadian Home Builders’ Association, and Jeffrey Rankin, Professor and Research Chair, Civil Engineering, and Executive Director, Off-site Construction Research Centre, University of New Brunswick, as an individual.
I understand you have prepared some opening remarks. We will start with you, Mr. Lee, to be followed by Mr. Rankin. You have the floor for five minutes.
Kevin Lee, Chief Executive Officer, Canadian Home Builders’ Association: Thank you. The Canadian Home Builders’ Association, or CHBA, represents more than 8,500 member firms across the country, including builders, renovators, developers and suppliers involved in constructing homes of all forms — low-rise, mid-rise and high-rise — for both the ownership and rental markets.
There are several aspects of what Build Canada Homes, BCH, intends to do that have long been a part of CHBA’s recommendations. These include utilizing public lands for housing, eliminating duplicative inspections, streamlining regulations for modular housing, providing financing to innovative Canadian companies and creating a steadier stream of business to enable investment for manufactured housing factories in productivity. These are good steps, but much more needs to be done to address the breadth of the housing crisis in this country.
We need to recognize what BCH is and also what it is not. BCH is intended to focus on non-market, government-supported housing. That is an important component of the housing system. Increasing the supply of such housing will be critical, as there are urgent needs there. However, it is also critical to recognize that the overwhelming majority of Canadians — approximately 95% — live in the market-rate system. To put this in context, BCH will only build about 1% of the short-term and long-term requirements of the entire housing supply needed for Canada.
There have been suggestions that BCH will “supercharge” the industry and “transform” the way we build houses. While BCH can help those things, given the small scale of BCH compared to the rest of the industry and the activity required, it is important to keep things in context, which includes doing much more beyond BCH to address the housing affordability and supply crisis, such as connecting BCH to broader government policies and programs to achieve such ends.
Where should policy go from here when it comes to BCH and the banking system?
Ensuring BCH rolls out its housing in a timely and efficient matter will be key. As it seeks to do so, BCH will find that typical government requests for proposals, or RFPs, which overburden developers with the usual government bureaucracy, will slow progress and increase costs. This unnecessary red tape should be identified early and eliminated.
As BCH works within municipal systems to seek to build new developments, the red tape at the municipal level will become apparent. It will be important that these issues not just be overcome by BCH but that BCH flags these for the overall change in processes and regulations required within each municipality as well as lessons learned and the direction for positive change for others. This includes issues of municipalities using different zoning, bylaws and other regulatory requirements to make it impossible to build the same project in two different municipalities. Different building official code interpretations also prevent repeatability within the same municipality. These issues need to be flagged by BCH and fed into other government initiatives to address this larger issue of “building code by other means” by municipalities and code interpretation barriers thwarting productivity in the sector.
As BCH projects proceed, they may very well have their development taxes waived by municipalities. This lowers costs for delivering social housing projects but then places more burdens to fund infrastructure on market-rate housing, which is already at untenable levels, further driving up home prices. The government needs to work with municipalities to find alternative funding models for development taxes that instead spread the burden across the entire tax base more fairly. BCH should also ensure that any reductions in development charges will not simply be added to market-rate projects in the municipality elsewhere.
BCH is looking to support more modular construction by creating longer-term contracts for projects with proponents. This is in line with CHBA recommendations. Through this, BCH will find that different construction financing is required to better support modular construction. As BCH works to solve this, the same kinds of principles should be conveyed and used by the Canada Mortgage and Housing Corporation, or CMHC, to create new financing products to support both site-built and factory-built solutions, as construction financing becomes more difficult to access for market-rate housing these days.
Finally, related to financing, BCH may, in some of its projects, support subsidized affordable home ownership, which is a good thing. Two key opportunities to better support home ownership exist directly within the banking regulatory environment. One, fix the stress test for both insured and uninsured mortgages to facilitate better access for well-qualified buyers, and two, amend the Interest Act to facilitate 7- and 10-year mortgage terms, products for which the stress test can be removed entirely.
There is no silver bullet to fixing the housing crisis, but, taken together, these are some of the measures that can help increase supply, improve productivity and restore affordability across the housing system. Build Canada Homes can play an important role, but it must be connected to a broader coordinated strategy to address the housing crisis across the entire housing continuum.
Thank you. I look forward to taking your questions.
The Chair: Thank you, Mr. Lee.
We are moving now to Mr. Rankin for your opening remarks. Limit them to five minutes, please.
Jeffrey Rankin, Professor and Research Chair, Civil Engineering, and Executive Director, Off-site Construction Research Centre, University of New Brunswick, as an individual: Thank you for the invitation to appear as a witness today. My daughter graduated from nursing yesterday, and I could not make the travel work to be with you in person. I certainly value the opportunity and am pleased to contribute in any way that I can.
I will focus my opening remarks with a brief overview of my perspective and a few of the organizations I represent.
I am a professor of civil engineering and research chair in construction engineering and management as well as the executive director of the Off-site Construction Research Centre at the University of New Brunswick, or UNB, and also currently the president of the Canadian Society for Civil Engineering.
My professional experience is in building construction practices, and early in my career I was a member of the design and construction team that delivered the Confederation Bridge. I began my research at the University of British Columbia, or UBC, focused on digital technologies in construction, and I have about 25 years in industry-driven research in the adoption and implementation of advanced technologies and practices. My perspective today is as a construction engineering researcher.
The University of New Brunswick’s Off-site Construction Research Centre is guided by an advisory board of practitioners representing some of Canada’s largest developers, general contractors, designers and manufacturers in the building and construction industry and has worked with over 80 industry partner organizations on research topics of modern methods of construction, including digital technologies, design, manufacturing and construction processes and building products. It has ongoing collaborations with researchers and industry organizations across the country and internationally.
Some of the recent work of the centre at the national level includes the Roadmap to Transform the Canadian Construction Industry through Industrialized Construction, Research and Innovation, which was published in April 2025, in partnership with the National Research Council, and a more recent deeper dive into housing supply for the Atlantic region, entitled Atlantic Off-site Housing Innovation Roadmap, which was published last month and provided to the committee clerk in both official languages. These roadmaps propose solutions to the barriers of innovation in the areas of policy and regulatory frameworks, procurement models, financial and insurance services, skilled workforce development and research and data sharing.
The Canadian Society for Civil Engineering is a non-profit learned society created to develop and maintain high standards of civil engineering practices in Canada, and it has a membership of practitioners and researchers. The society is also a national focal point for approximately 50 university-based construction engineering and management researchers in Canada.
A task force of this group, entitled rethinking housing construction in Canada, was formed to offer a coordinated voice of researchers in the areas of procurement, digital transformation, automation and robotics, and industrialization within the construction industry.
The group’s response to the Build Canada Homes market sounding request in August 2025 highlighted a number of opportunities to support research-driven innovation in areas of alternative forms of procurement and project delivery and process and product methodologies and technologies to try to help overcome the inefficiencies of conventional construction approaches by accelerating innovation.
Both the UNB’s Off-site Construction Research Centre and the Canadian Society for Civil Engineering have ongoing interactions with federal entities to provide support as the Build Canada Homes agenda takes shape.
It cannot be overstated that what is required to deliver on housing needs for Canada and, more broadly, nation-building projects is a significant transformation in the ways we design, build and deliver infrastructure. In a way, it is “complicated,” as my colleague said.
I am, admittedly, not an expert in public policy or legislative documentation. However, in my layperson’s review of Bill C-20, the submissions to the Standing Committee on Human Resources, Skills and Social Development and the Status of Persons with Disabilities, what has been released in terms of projects and programs under Build Canada Homes and our interactions with those that have been involved to date, I am optimistic with many of the directions indicated and the early steps taken.
Build Canada Homes appears to be structured to deliver on several key roles, including an opportunity to somewhat de-risk investments to increase supply by providing some certainty in market demand; a means for the industry to explore ways of accelerating supply through innovation in processes, products and delivery mechanisms; and a very unique opportunity to catalyze additional federal departments and programs to develop solutions, such as changes in code and regulations, alternative project procurement and project delivery and financing, de-risking the adoption of innovative solutions, to name a few. Most importantly, I think it’s an opportunity to capture successes and lessons learned and enable transformation.
Thank you.
The Chair: Thank you, both of you, for your opening remarks. Mr. Rankin, congratulations to your daughter for graduating from nursing. You should be proud. We need nurses.
Colleagues, we have 30 minutes left. I propose we limit our time to three minutes each if possible. We will start with the critic of the bill, Senator Martin.
Senator Martin: Thank you for your testimony.
Congratulations, Mr. Rankin, to your daughter.
My questions are for Mr. Lee. You packed a lot into your presentation.
A key thing I noted is that there is quite a breadth of the housing affordability crisis, and Build Canada Homes really addresses, as you say, 1%. There needs to be connectivity to a broader, coordinated strategy.
Yesterday, there were some witnesses from Build Canada Homes, including the CEO, whom I asked about the issues that may be faced with municipalities, and she indicated that there is a good conversation with the provinces and that she hasn’t heard of the kind of pushback that I have read about.
You did elaborate on this unnecessary red tape and what they will face when it comes to municipalities. Could you further elaborate on what you were saying to us?
Mr. Lee: Sure. One of the biggest challenges, if you talk to builders and developers, in getting anything done is going through all of the municipal approval processes.
Ironically, the places where we need the most houses are the slowest and hardest to get through. When you look at the Greater Toronto Area, or GTA, and the Lower Mainland, the largest two urban centres, it is really difficult. It takes a really long time. We do a municipal benchmarking study. It takes almost three years in Toronto to get through the building permit process. I just came from Charlottetown yesterday, where they were concerned that it was taking five weeks, right? Granted, there are some different scales.
But still, there is a lot that can be done to streamline these things. So many alternative studies and requirements have been piled on to all of these different things.
I think what we’ll see, because we saw it through the Rapid Housing Initiative, is that when municipalities want to get things to move fast, they can. If you can do it faster with the Rapid Housing Initiative and faster with Build Canada Homes, which I hope they can because it is important housing that needs to be built, the question then becomes: Why does it take three years for regular housing, which we actually need? That not only prevents supply; it makes things more expensive. You have the carrying costs, et cetera. I could go on. That is one example.
Another example that I will pull out is the issue of completely different interpretations of the exact same building code. There are interpretations by building officials and also different zoning and bylaw requirements. You literally cannot build the same house in two different places, and that does not help factory-built construction and modular construction. It is all about productivity and repeatability. When we talk about productivity in residential construction, building the house is easy; it is everything else that is tough.
Senator Martin: BCH is saying that they are going to do this. You say that you are hopeful that it could happen, but, realistically, are they going to run into the same issues that you are running into?
Mr. Lee: As I said, they will run into some of the same issues, but they will also be fast-tracked through some of those. When they run into those issues, they need to work with the municipality and figure it out, but then that shouldn’t just stop there. That should be a discussion that should be ongoing with the municipality and other federal programs, maybe CMHC, et cetera, to say: What is the problem, and how do we overcome this? When they get fast-tracked through, that is good. But why can’t we fast-track all the other projects then? What are you skipping for BCH that we could skip for other houses, too, because we have a housing crisis?
Senator Martin: The 99%.
Mr. Lee: Yes.
The Chair: This is an issue that we have discussed in our special report recently. Thank you for raising that.
Senator Fridhandler: Mr. Lee, yesterday the minister appeared here. In speaking on BCH, he said that Build Canada Homes is focused on rental housing and not home ownership. He went on to say that Build Canada Homes will be very focused on rental housing and deeply affordable rental housing, so it would not be affected by GST or HST.
That surprised me because I do not see that in the bill. I don’t know what your members might think about whether this relates to owned homes as well as rentals. Can you comment on that?
Mr. Lee: There has been a lot of confusion in the marketplace. The way BCH has been communicated by some — more at the political level, if I can say that — has been that it will be all of these things. When you read what it is actually going to do, it is on “affordable” housing. And by “affordable,” it’s not “housing I wish that I could afford to buy”; it is “affordable” as in subsidized or social housing. That is what “affordable” is when we are talking about the housing spectrum.
That is what it is focused on, and that is really important work, but the fact of the matter is that there is the whole rest of the market.
Will it provide houses for ownership that people can afford better in the marketplace? No. And that is okay. We just need other stuff that will address that side of things.
I know there is some talk, potentially, of some groups like Habitat for Humanity, which is subsidized home ownership — that is a good thing to get more families into the marketplace; that is helpful. However, BCH is very much about supporting those who cannot otherwise afford even rental housing. Again, that is an important part of the market, but we need to do everything else, too.
Senator Fridhandler: In your opening remarks, you talked about dealing with all of the RFPs that you have to face when you are dealing with government. One of my questions yesterday was — we are setting up this new entity, and we have all kinds of other federal programs. What are your thoughts about how dispersed programs are versus the need to consolidate and manage through the system?
Mr. Lee: The intent of setting up BCH was to create a new entity that can be focused and might not be encumbered, perhaps, with the bureaucracy of an existing agency to try and move quickly. That will probably work for a while until maybe BCH becomes encumbered with its own bureaucracy over time, but I know that the intent is to move fast.
As long as there is good coordination, especially with a group like CMHC — there will be some natural overlap because there is a transition happening. Also, some of the funding from CMHC, such as their construction loan program, will probably help to finance some of the work that is going on with the Build Canada Homes projects, especially if they get mixed-income developments going where you have a bit of market-rate rentals in addition to all of the other things.
It is a new agency. Not everybody would go that way. Hopefully, the idea that they will get stuff faster and be really focused will be successful.
[Translation]
Senator Henkel: My first question is for you, Mr. Lee. The report Out of Reach: Unlocking Canada’s housing affordability crisis, which our committee recommended to the federal government, of course supports SMEs in the modernizing construction, particularly in the areas of prefabricated and modular housing.
The majority of your nearly 9,000 members are SMEs. How do you see their place in the Build Canada Homes strategy? How can we ensure that they aren’t overshadowed by the major players that are already industrialized?
Mr. Lee: Thank you for the question.
[English]
First, moving to more modern methods of construction and the factory-built side of things are directions we need to go. Those sorts of support are going to be important. We need to understand, though, that the reason why the industry has not moved in that direction is because of the large overhead that is involved. Residential construction is actually quite efficient in what it does. It is basically an assembly line, but instead of moving the house down the assembly line, the workers move through the house.
That also means that when we go through boom-and-bust cycles, you slow down and you do not have the overhead. Instead of going bankrupt, because you have a factory with all the equipment there, you are able to slow down. You might have to not hire workers, but a lot of it is subcontracted, and many of those contractors will go into renovation, industrial and commercial. Hopefully, they come back; they do not always do so. That is the reality of the industry.
We see that, sure, some of the big players will invest over time in more factory-built approaches, but we also expect that, because of the labour shortages, almost all of our industry over time will be seeking to improve productivity. We see a time when most will be using at least some form of factory built. I always use this example: Right now, you would never consider hiring a carpenter to come in and assemble your kitchen cabinets on site. You work with a kitchen cabinet manufacturer, and those come in modules, essentially.
We do see a time when most of the industry will be using that, including smaller builders who will work with panelized factories and maybe modular factories to bring those things on site. That is part of the future.
Build Canada Homes can help some of that. It is a tiny volume, but it is one of our recommendations that there be more investment by people doing public-type housing for longer-term contracts so that factories can invest in their equipment.
Senator Wallin: I will stick with you, Mr. Lee.
You talked about — and we discussed this yesterday — that the narrow focus of Build Canada Homes is really on what they describe as affordable housing. That was, more or less, defined by the minister. I think you have made the case here, but we still need market-value housing or housing for other people that is affordable as well and home ownership, which is different than a rental unit.
I have a couple of questions about that. If there is a focus on Build Canada Homes and they get to circumvent some of the rules or get fast-tracked in dealing with municipalities, what are the impacts on the other builds, the builds of market-value homes, and the impacts on access to talent and skilled workers if it is all going to be sucked up in the one part of the project?
Mr. Lee: We have definitely heard from our members in some places that it seems like the only things making it through the approval system sometimes are social housing projects or purpose-built rentals. It has become slower to get units for ownership through the system.
Yes, we have concerns about insufficient capacity for the industry.
Build Canada Homes is only going to build a small number of homes. That is not going to be a huge problem for there not being enough workers overall, I would suggest. There’s a lot we can do to support workers in general — a lot more. If it weren’t for the downturn we are facing right now, especially in Ontario and B.C., where starts for ownership are way down — and that is one thing I should say. I don’t want to get into all of that, but housing starts right now are only being supported by purpose-built rentals. The number of units for ownership is going down. It was 70% in 2021 and 80% 10 years ago. Now, it is below 50%, and this quarter it is down around 45%. So the number of starts for ownership is way down. That is something we need to rectify.
I have an entire other submission that I could provide to you on what we can do for that.
Senator Wallin: That is the downside. Yes, we may get more “affordable homes,” although you say that the build-out will probably be slow, but it is stalling the other market almost completely.
Mr. Lee: In some jurisdictions. As I said, I have heard members complaining that they can’t get anything through.
Senator Wallin: I will put this out there, then, if you have a way to answer it, because our time is so limited: We were told that the second mandate of Build Canada Homes is to spur high-tech building, the modular or ready-to-move, or RTM, supplies. I’ll move on, but I’d appreciate if you could answer the following in another question: Is that necessary, and will it work? Thank you.
The Chair: Thank you for your understanding, senator.
Senator McBean: Senator Wallin, I will take that baton because it is my question. I’m probably going to come to you on this, Mr. Lee, but I’ll go to Professor Rankin first.
As you know, there is theory and there is practice. We hear that Canada is really behind in modular housing, and, Mr. Lee, you are suggesting it might be because of all of the different bylaws. How can the Build Canada Homes model under Bill C-20 leverage off-site modular construction as a core delivery mechanism rather than a supplementary approach to accelerate housing? Is that going to work for us in practice in the timelines that Build Canada Homes is hoping to get homes out there, or is it more theory than practice?
Mr. Rankin: It is current practice for many in the industry today. It is arguably only perhaps at a 10% level or less, but if we look at the numbers, we are supposed to be building twice as fast as we have in the history of the country. Using current technologies and methodologies to do that is not going to meet the targets, so we have to rethink the way we supply housing.
To your question, senator, when I talked about the more than 80 folks we work with, those are industry practitioners who are trying to understand how to adopt it not just on the manufacturing or the building side of things but also on the project delivery side. It starts at the beginning with a conceptual design and then moves to a digitized design that can feed into the manufacturing process. We have the skill set for the people who are actually putting it together on site.
With respect to Build Canada Homes, as has already been commented, we know it is a small percentage in terms of the houses that have to be built, but there is an opportunity to cut down some of the barriers and understand a better way to enable more advanced practices that will proliferate throughout the industry in the longer term.
The Chair: Three minutes is too short. Mr. Lee, maybe you can catch up on the answer to another question.
Senator Loffreda: Thank you, Mr. Lee and Mr. Rankin, for being here.
From the perspective of builders, what are the three biggest obstacles currently preventing Canada from significantly increasing housing supply? Could you elaborate on that in the few minutes we have?
Mr. Lee: Simply, it is too expensive. When it’s too expensive, people cannot afford to buy, and then you don’t get housing production. When we talk about doubling housing starts, CMHC, in its analysis, says that 75% of new starts need to come from units for ownership. When people can’t afford to buy, you just can’t build. So that’s at the top of the list. Taxes and development taxes are a huge issue.
Can we do things better and faster? Yes. The way to do that is to move to more factory-built homes. We do have a whole separate transition strategy on how to do that, which I could pass along to the committee, but a lot of what we need to do there is to remove the barriers to replicability, as I was talking about earlier.
If you talk to our factories, they’ll say the number one thing they need is more buyers. They need more of a funnel. If they had more buyers and were delivering more products, they would invest themselves. Tax credits and grants on machinery help. All these things help, but the number one thing is a marketplace that can do it.
There are some countries that do a lot of factory-built and modular housing. We only do somewhere between 3% to 5% of volumetric modular, but about 30% of our members are using some sort of factory-built housing, which is more panelized. When things were really booming, 90% of our members said that, within the next three years, they wanted to move in that direction. However, we are no different from the United States and Australia, two very similar countries that have very limited numbers. Even in Japan, a leader in this technology, most of their housing is still site built. A lot of the world builds exactly the way we do or similarly. It is going to take a lot to transition.
Senator Loffreda: In one minute remaining, I would ask Mr. Rankin if he has any opinion on what has been said and what policies would move supply forward or, as we say in Montreal, “bounce forward.”
Mr. Rankin: I would reiterate what Mr. Lee just said. The only thing I would add is how important it is to actually provide that certainty in the market for the appropriate amount of time. Nobody is going to invest in automation or digitization unless there is proof of certainty in demand.
[Translation]
Senator Youance: My question is for Professor Rankin. There has been a great deal of discussion about creating catalogues and complete concept design technical packages with a view to simplifying and accelerating the construction process. How do you see the role of universities and, for example, the Canadian Society for Civil Engineering in the technical validation of these models and in terms of their adaptability to different seismic and climate constraints? Also, since this is a catalogue that can be built across Canada, how will these designs make it possible to promote modularity and flexibility in light of the constraints specific to different regions?
[English]
Mr. Rankin: Thank you for the question.
We play a key role in terms of industry-driven research in those areas. That’s pretty much what we do on a daily basis.
I have to be careful about what I say about which projects we are working on, but we do work with the federal government on research in the housing space and in understanding where there are opportunities to come up with standard approaches, whether it be the products or the processes. I see two other faces on this call that we work with from the standardization perspective.
If I could just reiterate what I said in my opening remarks, we know that BCH is a small portion of what has to get done, but it is a really good opportunity to demonstrate how that can have an impact.
Senator Ringuette: My question is also for Mr. Rankin from the UNB.
This committee has always championed the removal of interprovincial trade barriers. My question is in regard to how much the slate of building codes is creating an impediment in regard to the modular industry’s capability to expand and innovate.
Mr. Rankin: I’m sorry. I didn’t quite understand. How much is it an impediment? Was that the question?
Senator Ringuette: Yes. How much is the slate of building codes an impediment?
Mr. Rankin: I think it very much is. I would argue that everybody knows that. It is universally accepted that this is a barrier, but it really comes down to what the steps are in order to get everybody at the table to remove those.
I think our little — I shouldn’t say “little” — regional project, where we brought together the Atlantic provinces, the construction industry, the provincial housing authorities as well as universities and researchers, essentially mapped that out, understanding what is at the heart of those barriers with respect to codes and regulations and laying out how we actually provide some of those solutions.
Senator Ringuette: Should the removal of these interprovincial and intermunicipal trade barriers in regard to building codes be included in the mandate of Build Canada Homes?
Mr. Rankin: Just so I’m very clear, it is not necessarily the removal of codes and regulations; it is having a common interpretation of those codes and regulations. They don’t vary from one jurisdiction to another, one municipality to another or province to province.
Senator Yussuff: Mr. Lee, three minutes is not a lot of time, so I will focus all my time to you so that you may give a more direct response.
This debate seems like a chicken-and-egg issue in that costs have a lot to do with people getting into housing. If you can’t afford it, you won’t be in there, and then your option is to rent. So how do we build faster? Ontario and the federal government just recently agreed on an interim measure. The evidence so far that has been tracked shows a huge uptick in inventory dropping significantly. Without permanently dealing with that issue, are we really going to build faster if we can’t make the market more accessible to those who are looking to get into the market?
Mr. Lee: We are certainly not going to build more, and taxes are the number one thing we can deal with quickly. They should be permanent. What is going on with that latest arrangement with Ontario, which will hopefully proliferate to other provinces, is that Ontario is taking that money and removing the GST portion and the PST portion of their HST. That’s having an immediate and huge impact on the market, and projects are now starting to move forward.
Development taxes are the other huge one I mentioned earlier. You are talking about hundreds of thousands of dollars in Toronto and the Lower Mainland. We wonder why we can’t afford houses these days. Those need to come down, and we need to find alternative funding models.
The third one that would be fast to help more people get into the market is to adjust the stress test to be more dynamic.
Those are things that can happen immediately.
I would like to touch on the National Building Code because it is a huge issue. The 2025 National Building Code just got released. We have done an analysis, and on a typical 2,500-square-foot home, it is going to add $56,000 to the cost of the home for limited benefits. That doesn’t include all the energy requirements, which could send it up to $120,000. It could be more if you are looking at seismic and wind because, in many cases, you will have to bring engineering in, which is overkill. We have yet to see a home in Canada structurally fail from wind, including hurricanes. The biggest damage comes from trees falling, or you will lose shingles, but it is not a structural problem.
We need to address these things and get serious about affordability because that’s the only way we are going to be able to build a lot more houses.
Senator Yussuff: Very rapidly, modular building is not necessarily new. There are aspects of the construction industry where you take roof trusses, pre-assemble them, bring them and put them on the roof of the house. For Canadians trying to understand that, it’s like the auto industry. The auto industry is fully automated today; it was not 25 or 30 years ago. The reality is that you still need consumers to buy cars.
There has been and continues to be evolution in parts of modular in terms of the construction industry. Every builder uses different forms. Walls are pre-constructed.
Can you take a few moments to explain that so people can understand the complexity of this and we can better appreciate it?
The Chair: In 30 seconds if it’s possible.
Mr. Lee: The short version is this: You can automate the auto industry because you don’t have every municipality stopping every car coming into a city and telling them that they have to inspect it and decide if it’s okay for their own city. That’s what we’re dealing with, and we have thousands of cities in this country. That’s why the automotive industry can do it and why housing can’t. That’s what we need to tackle.
That was less than 30 seconds.
The Chair: Thank you. That was very effective and informative as well.
We are moving to conclude this panel.
Senator Pupatello: That was very good, and it might answer this question as well. I might direct this to the professor.
I’m curious about innovation and those small start-up companies in the housing space that are trying to get into the supply chain. We asked the minister about this. How do you get them in? How does the big guy, who is winning an opportunity to do a large build, know where these small companies are that are doing all this innovation in building houses, such as 3-D printing, applications, et cetera? How do they find these guys?
Mr. Rankin: I like to think that organizations, such as the Canadian Home Builders’ Association, and the research community can fill those gaps, which is what we are trying to do.
I know time is limited, but to one of the previous questions that I think relates to this one, it is not a modular, volumetric type of approach that is going to solve it. As you just said, it is that whole supply chain. If you think about the car manufacturing industry, it is not just the GMs and Fords; it’s that whole supply chain, which does allow for opportunities for small- and medium-sized enterprises, or SMEs, to plug into it.
Mr. Lee: When good technology emerges that is cheaper, the industry adopts it really fast. There are not too many of those right now. You gave the example of 3-D printing. That is significantly more expensive right now than wood frame construction. Why hasn’t mass timber been more widely adopted? We love it as a concept, but it is still more expensive. Moving to these different technologies — the market is not going to move unless it is really competitive or there is some other reason to move.
We have different start-ups starting, which is good. You always want innovators. They will find the builders and developers. The builders and developers will find them when it is good technology, and it will get adopted. We have some robotics companies that are coming out and starting to penetrate.
The industry is misconstrued as being very risk-averse. There is probably nothing more risky than building and developing housing. They just try to manage risk. But when there are new technologies emerging that are going to help, especially on the cost front these days, they will be adopted quickly.
But our existing manufacturers are not racing to automate. They are not racing to spend millions of dollars on robotics because they are already pretty darn efficient and they know that they don’t have the volumes yet. Those things go hand in hand. As Mr. Rankin mentioned, de-risking some of these investments is really important, too, and one of our recommendations is to finance these investments in factories over not time but volume. Thereby, if your volume dips, you are still not trying to repay that loan on a time basis. If you get more volume, then that’s great.
That’s another way we can help with the investment.
The Chair: Thank you, colleagues, for your discipline and collaboration. Thank you to both witnesses for your very informative testimony. Next time, we will have more time, but today we are squeezed for time.
We are pleased now to receive, in person, Sean Strickland, Executive Director for Canada’s Building Trades Unions, and, from the CSA Group, Nevena Dragicevic and Dwayne Torrey virtually.
Welcome to all of you. I propose we begin with opening remarks from Mr. Strickland.
Sean Strickland, Executive Director, Canada’s Building Trades Unions: Thank you, Mr. Chair. It’s a real pleasure to be here and to be amongst honourable senators. I appreciate your invitation to speak on Bill C-20, the Build Canada Homes act.
Our organization, Canada’s Building Trades Unions, or CBTU, is an organization representing 14 international unions that collectively represent 500,000 skilled trades workers across Canada. Thousands of our members work in the housing industry, building multi-residential high-rises in major urban areas. Many of our members also work on low-rise and single-family home construction in markets such as the GTA and right here in Ottawa.
I’d like to congratulate the committee for its in-depth study on affordable housing. Your final report makes many wise recommendations that I hope the government will consider.
From the moment the Build Canada Homes initiative was announced, CBTU has supported its core objective of collaborating “. . . with industry, other orders of government, and Indigenous communities to build affordable housing at scale and at speed.”
However, as we have pointed out to the government, Build Canada Homes should also seek to act as a catalyst for broader community benefits and fair labour practices.
The interim report published by your committee in December 2023 highlighted the challenge posed by what some describe as a “skilled labour shortage.” During the last session, you had much discussion about that. Let me add a bit of nuance here.
In general, Canada does not presently suffer from a skilled labour shortage. In fact, in some regions of our country, we are experiencing high unemployment. If I were to tell you that right now in Toronto we have the highest level of unemployment with our building trades members than we have had in the past 30 years, you likely would be surprised. That is largely due to the collapse of the multi-residential high-rise market and also the low-rise housing market. That has negatively impacted our members’ employment in the Toronto area.
We also have surplus labour available in Newfoundland and Labrador. We have unemployment in Alberta as well.
The point I’m trying to make is that trade shortages are episodic. We talk, in Canada, like it is forever thus. Trade shortages are episodic. It is not all trades in all regions at all times. Lack of coordination for major projects also contributes to this dilemma. When multiple large-scale construction initiatives move forward at the same time, sometimes we have projects stacking. This creates a strain on skilled trades and construction labour. Again, the shortages are episodic.
The problem, therefore, is not so much one of labour shortages but more one of how we optimize our labour — labour optimization.
The current government began addressing this challenge in its recent spring economic update. It announced an increase in the labour mobility tax deduction for tradespeople, known as LMD, from $4,000 to $10,000, to help improve mobility. Those members in areas of high unemployment can move to areas where there is greater demand for tradespeople.
Also, as your committee recommended, the government announced the Team Canada Strong program, $6 billion over five years, an historic, monumental investment in skilled trades, which will help attract and retain young Canadians to the skilled trades labour force.
These are very significant initiatives that will go a long way in addressing Canada’s skilled labour needs. However, we believe that a few of the pieces of the puzzle are still missing. For instance, CBTU has been consistently advocating that whenever taxpayer dollars are utilized to attract private investment, such as in Bill C-59, the Canadian Sustainable Jobs Act, those government dollars should be used to leverage economic development and prosperity and opportunity for all Canadians. This aspiration can be met through the use of what are called Community Employment Benefits agreements, or CEBAs.
These agreements are typically negotiated by key partners on major infrastructure or development projects that involve commitments by project proponents to deliver specific benefits to the community as part of the construction projects. Those agreements typically include prevailing wage requirements, mandatory minimum apprenticeship requirements and local and equity hiring targets.
Build Canada Homes will invest $11.5 billion in housing projects across the nation. Our view is that the Government of Canada should require that the developers benefiting from these substantial public funds negotiate Community Employment Benefits agreements comprising, at the very least, prevailing wage and apprenticeship requirements.
Briefly turning to the much-discussed possibility of modular home construction, I would advise the committee that modular home construction is not a strategy to solve our housing crisis. It is a tool as part of a larger suite of services and program enhancements and government policies that are required, such as reducing the cost of development charges and reducing taxes on new home construction and many more initiatives. Modular home construction is a tool in that tool box; it is not a strategy all on its own.
In closing, the housing affordability crisis will not be resolved instantly or easily. We all know that. However, we are confident that if it is implemented effectively, including labour standards, the Build Canada Homes initiative can be a significant part of the solution.
Canada’s Building Trades Unions are more than willing to work with Build Canada Homes to ensure that skilled trades workers are available for each project the new Crown corporation is involved in.
Thank you. I look forward to the discussion.
The Chair: Thank you. I turn now to the CSA Group. The floor is yours.
Dwayne Torrey, Director, Construction and Infrastructure Standards, CSA Group: Thank you, Mr. Chair and honourable senators. We appreciate the opportunity to address the standing committee.
The CSA Group is more commonly known as the Canadian Standards Association. Our presentation today will focus on key enabling factors we believe can help set the necessary foundation for Build Canada Homes to achieve its vision. That includes increased standardization, regulatory capacity and harmonization of modular construction.
I would like to begin by briefly introducing our organization. CSA was established over 100 years ago and today is Canada’s largest accredited standards development organization. We are a member-based association with a portfolio of over 3,000 codes and standards in areas such as construction, infrastructure and the environment.
CSA applauds the commitment of Build Canada Homes to increase the supply of needed affordable housing, while simultaneously promoting innovative and efficient building techniques.
One of these techniques is modular construction, an area in which CSA has decades of experience, having developed the first modular standard over 50 years ago. In recent years, as the need for housing has increased and construction productivity has declined and labour shortages have worsened, modular has been increasingly recognized for its potential to speed up project delivery and achieve greater cost efficiencies, with the added benefits of enhancing sustainability and worker safety.
But while the opportunities afforded by modular construction are significant, they are not guaranteed. To achieve speed and reduced costs, modular requires economies of scale. While scaling will depend on coordinated efforts across the construction ecosystem, two key elements are mission-critical for setting the necessary foundation for success. These are standardization and regulatory capacity and harmonization.
Manufacturing efficiency depends on repeatable products, uniform components and predictable processes. This can only be achieved through increased standardization and capacity building. At CSA, we have worked with technical experts to develop an integrated suite of modular construction standards that span the full building life cycle, from CSA A277 for factory certification before modules leave the plant to requirements for on-site installation of multi-storey modular buildings to guidance for permitting and approvals of modular builds.
In the coming months, we will also release a standard on the design of modular structures and guidance for modulars for the North. Collectively, the CSA series of standards, complemented by no-fee, online training for users, forms a comprehensive framework that helps enable modular construction that can be designed, built, delivered and approved to consistent, high-quality standards.
Nevena Dragicevic, Senior Manager, Public Policy, CSA Group: In addition to increased standardization, greater regulatory capacity and harmonization are essential to unlocking scale and efficiency gains. I’d like to address two issues here.
First, most building inspectors have limited experience with modular and rely on permitting and approval processes largely designed for conventional builds. This has proven to be a critical bottleneck, resulting in project delays.
Standards can help here, too. CSA A277 supports code compliance for prefabricated construction by enabling accredited third-party certification bodies to verify that factory-built components meet applicable codes. The standard is essential to instilling confidence in modules and factory systems and, when combined with other CSA standards, supports more streamlined inspections and approvals.
The second regulatory challenge I’d like to highlight is the gaps and inconsistencies in Canada’s building codes, which influence industry uptake of modular methods. For example, CSA A277 is currently mentioned in the National Building Code in an informal manner, creating fragmentation amongst provinces and territories.
Because modules can be manufactured in one part of the country and transported to another for assembly, the lack of regulatory harmonization introduces complications and delays. Building codes are also largely silent on some unique aspects of modulars, such as transportation or on-site lifting and placement, injecting further uncertainty.
We are encouraged to see the recent work by the National Building Code to align with the needs of modular construction. We believe that formally adopting CSA A277 in the next edition of the code will provide more clarity and certainty for its use and application, especially as manufacturers seek growth opportunities across Canada’s markets.
We also encourage reference of the soon-to-be-released CSA Z251 standard on the design of volumetric buildings in the National Building Code to address design considerations specific to the modular construction of multi-storey buildings.
In closing, if Canada is to scale modular housing effectively, we must pair ambition with the right foundations: clear, harmonized regulation and strong, modern standards. Building capacity and capability of the construction ecosystem in modular methods would further serve to strengthen this foundation.
CSA stands ready to support this work so that Build Canada Homes can deliver more affordable housing faster, safely and at scale.
Thank you very much.
The Chair: Colleagues, we have around 30 minutes left, so I count on your discipline and understanding to limit your time to three minutes each. We will start with the bill’s critic, Senator Martin.
Senator Martin: Thank you, all three of you, for your presentations.
I will ask Ms. Dragicevic about what you just said regarding the lack of regulatory harmonization. Is the National Building Code being reviewed in five years’ time or very soon?
When we talk about the foundation that needs to be ready in order for Build Canada Homes to be successful and achieve its mandate, can you talk about how close we are to creating this strong foundation?
Ms. Dragicevic: We are very close to creating this strong foundation. There is current discussion around amending this part of the code, specifically moving the reference to CSA A277 to another part of the code, which will make it more enforceable and consistently applied across provinces. It would create that more systemic and standardized approach to how modular builds are approved at the municipal level.
I will turn it to Mr. Torrey to add any additional perspectives.
Mr. Torrey: Yes, absolutely.
Senator Martin: Sorry. Just mindful of the time, I wanted to know how close we are. I know it is a long process, and it is reviewed every — I’m seeing five years, but I could be wrong.
Mr. Strickland, you outlined what needs to happen, but, from your perspective, is Bill C-20, as currently drafted, providing enough certainty about the scale, timeline and types of projects that Build Canada Homes will deliver to justify investments in training and workforce planning, or are there gaps that you can identify?
Mr. Strickland: Thank you for the question, senator.
I think the housing crisis we have in Canada is complex, and complex problems require complex solutions.
The Build Canada Homes act, in its entirety, is a good start. It is setting a foundation. It is creating a Crown corporation to finally give some real federal focus on this very challenging issue.
In terms of the investments in skilled trades related to that, I think that $6 billion, as I said in my remarks, to help train our workers and improve our workers and attract more people and retain them into the trades is a fantastic investment. That is only going to serve Build Canada Homes as a portion of — we have the Major Projects Office that we are going to lay on top of all of that.
I think all the initiatives the government announced in the spring economic update to support the skilled trades will help enable the Build Canada Homes act and will help us meet whatever labour requirements are required.
I would suggest one thing that is important in this conversation around affordable housing is that you have to have supportive housing. If we’re looking at ways in which we’re going to solve homelessness in Canada, it is much more than just putting them into a home or an apartment. There needs to be support that goes along with that. That is something the committee may want to consider in addressing the Build Canada Homes act.
Senator Fridhandler: To our CSA witnesses, on the conundrum that is Canadian harmonization — and it is at all three levels: federal, provincial and municipal — some of these things with CSA are jurisdictional, so I want to better understand how your approvals weigh on decisions that are made at the provincial and municipal levels relative to clearing and accelerating. What issues do you see?
Mr. Torrey: Thank you very much.
One of the first steps is to ensure that it is being done consistently amongst the provinces and territories with the identification of CSA A277 as the baseline.
One of the challenges goes beyond the regulation of it. It is the understanding and the capacity building. One of the key recommendations is that we need to build the knowledge base when it comes to modern methods of construction, like modular, so that everybody is on the same page and understands what the role is with it.
We can reference the appropriate standards in regulations and remove the barriers to harmonization. We need to do that in concert with proper capacity building, not just of regulators but of the industry as a whole, so that we can start to upskill to open the tap a bit on this technology.
Senator Fridhandler: Who is “we”? If Build Canada Homes is not the leader, how do they take the lead and contribute to making this happen?
Mr. Torrey: That’s a good question. It is the support of the continued work towards developing the standards and the tools and building the capabilities out there.
If there is an avenue for Build Canada Homes to work with those who are developing the solutions and creating the regulations to build that skill set, that would go a long way.
Senator Yussuff: I have two questions for the panellists. Thank you, all, for being here and for sharing your thoughtfulness with us.
Ms. Dragicevic, I will ask you: Are there three things that you could point to in the bill that will accelerate and foster the development of the modular sector going forward that will help us in regard to the study of this bill?
Ms. Dragicevic: Yes. The most important thing is that this is an essential market signal, as colleagues previously mentioned in the other opening remarks. There is long-term demand certainty that is needed for modular builders to invest in the overhead that is necessary to enhance production and to enter this market.
Having this long-term vision through Build Canada Homes is essential in signalling that the federal government is in it for the long run.
Further to that, I would suggest one important thing that is crucial to do through Build Canada Homes is to demonstrate efficiency and productivity gains by gathering evidence and measuring the progress and the impact of the housing projects that it will enable. That is a crucial opportunity to enhance overall system learning.
This is what will make a big difference in terms of market uptake as well. We need a stronger Canadian evidence base for potential entrants and for the private sector to invest in this.
Senator Yussuff: Skilled workforce is essential to any capacity to build in this country. It doesn’t matter where you are in the country.
Given the glaring need for accelerating the housing sector and the broader effort of the country to build infrastructure, do you see a competing challenge in the country of meeting the needs we are going to have in terms of skilled workers to be able to do this in the speed the government is hoping to achieve?
Mr. Strickland: A great question and observation. Yes, there is a real challenge. It goes back to my opening remarks around optimizing the skilled labour we currently have available. We have a lack of sophisticated labour market data in Canada, so it is very hard to plan large-scale infrastructure projects because there isn’t enough data there for you to make a final investment decision.
My recommendation — and I have said it loudly and consistently — is that we need to form a labour management supply coordinating committee so we can feed into this body all of the projects coming forward from the Major Projects Office, or MPO. What is their trade profile? What are their demands for trade? What trades do you need, when and where?
That’s similar for housing. I understand there are 80 projects submitted to the MPO. My concern is that, when you look at all of this economic opportunity that is coming, these projects will get approved altogether at the same time, and then we’re not going to be able to deliver to the force and effect that the nation requires.
So we need to coordinate and get ahead of that. Housing is a part of that equation, senator.
Senator Loffreda: Thank you to all of our panellists for being here.
Mr. Strickland, Bill C-20 is ultimately about helping Canada build faster and more efficiently. From your perspective, what labour-related barriers are currently slowing housing construction the most across the country? More precisely, if you could recommend — and you said that complex problems require complex solutions — one major federal policy change tomorrow that would most improve Canada’s ability to build housing and major infrastructure projects faster, what would that be?
Mr. Strickland: It would be a labour management coordinating committee, senator, 100%. We need to do that, and we need to do that fast.
In terms of labour for building housing, I represent the unionized sector. We have pockets of high union density, mostly in the GTA and in Ottawa, when it comes to building housing. In other parts of Canada, it is more non-union or alternative union. From our perspective, there is not a barrier from labour to build housing in Canada right now. The problem is the lack of demand and the lack of construction that are currently occurring.
In order to solve that, as you said, it is a complex problem and a complex solution.
We have a collision of macroeconomic forces and microeconomic forces. The macro is the uncertainty that we have in Canada right now. I’m experiencing this on some major projects that have been announced. Because of tariffs and the lack of a trade deal with the United States, people are not making those investment decisions, and I think that that is also impacting the housing market. I think that people are not ready to make the biggest purchase of their lives because of that uncertainty. On a macro level, we need to sort out the free trade deal with the U.S., and that will help the housing market quickly.
Senator Loffreda: For our other panellists, I will keep it short. In your opinion, does Bill C-20 meaningfully address the structural barriers facing builders, or does it mainly add another layer to the system?
Ms. Dragicevic: No, we don’t think that this is adding additional structural barriers.
The biggest issue we see is, again, the regulatory harmonization and the inconsistent use of standards that are meant to enable confident compliance pathways for modular builds.
Senator Loffreda: Thank you.
Senator Ringuette: Chair, you will be happy that the last comments from Mr. Strickland and the CSA confirm that we have a good start. My biggest concern remains the slate of building codes. I understand you’re working on the modular one. You indicated that you are working on multi-level modular building codes.
But I find that one level is still not applied evenly or consistently. That, from the get-go, is a major barrier. Can you further comment?
Mr. Torrey: I will jump in on this. I think we are off to a good start. Factory certification and the appropriate processes are in place in many jurisdictions. As I said, we do have a capacity-building element in place.
At the end of the day, with the modular construction standards that are there, regardless of height, they have to meet the same building codes as conventional construction with some additional factory certification requirements.
We have all of the right pieces in place. We have many skilled companies out there who are ready to go.
There are a few pieces and levers we have to flip to enable it more.
I think that the financing aspects and some of the key components of Bill C-20 are going to help to begin to move this forward.
We are taking the right steps here.
[Translation]
Senator Youance: My question is for the CSA Group representatives.
Build Canada Homes has a responsibility with respect to innovation in construction. This will gradually lead to changes or additions in terms of standards. How can CSA Group support Build Canada Homes in the development of these standards, expeditiously?
I’m referring, for example, to the process that was undertaken for mass timber construction. This took place over several years, and required testing. How can CSA Group support Build Canada Homes in such a process?
[English]
Mr. Torrey: We work with an amazing group, a network of experts across the country, well established, everything from the National Research Council to the technical experts who volunteer their time at CSA.
At CSA, for example, we have 11,000 people who volunteer their time, the best experts from across the country, in various areas. They contribute their time, knowledge and expertise. They are ready to help us create the solutions to many of these emerging technologies that I think Build Canada Homes is going to support: modern methods of construction that go beyond modular construction.
It is just simply engaging with these experts and quickly coming to ground on what we need next. There is already a series of items that have been identified as potential items to assist this moving forward. It is about enabling it and moving forward on some of these new tools.
Senator Wallin: A question to you, Mr. Strickland, about what you think the leverage is that Build Canada Homes will have, or we supposedly assume they will have, in terms of circumventing the rules or regulatory problems we see in municipalities. Even within a city or a town, the rules are different literally across the street. Why is it or how is it that Build Canada Homes would be able to get through that faster than anybody else building other types of homes?
Mr. Strickland: Thank you for the question. I think the first part of that, senator, is the land acquisition or the land that the Government of Canada already owns through the Canada Lands Company. Part of the big challenge of developing housing, either low-, mid- or high-rise, is purchasing land and getting the zoning approvals in place for that land. That is a really good start. Doing an inventory of all of the available land across Canada in different communities is really going to help with that.
Senator Wallin: Are you saying that because they are bringing land to the table, the municipal officials will say, “Okay, we’ll maybe just turn a blind eye to this rule here”?
Mr. Strickland: I do not know if the municipality would turn a blind eye, but they are bringing land to it already. That is a good first start.
Then, on top of that, they are able to bring in the force and effect of the federal government. The federal government’s reputation as a legitimate owner, developer and partner with municipalities on so many other different fronts helps them to open the door to get this housing built.
That is not to say that there won’t still be challenges. There still will be challenges. You have to ensure, when you are building housing developments, that you have the water, sewer and wastewater capacity and all of those other planning elements that go into building communities.
Build Canada Homes is a Crown corporation and will be able to leverage the federal government’s expertise and the fact it owns land, which will help accelerate the development of housing, in my view.
[Translation]
Senator Henkel: My question is for the CSA Group representatives.
Do you think modular construction can be a real driver in reducing the environmental footprint of housing in Canada? How can we ensure that the supply chains for the necessary materials are able to deliver sufficient quantities quickly enough to meet the demands of construction projects that are expected to move at an extremely fast pace?
[English]
Mr. Torrey: Yes. When looking at the environmental concerns and modular construction, there are many opportunities when you look at factory-built housing, such as the reduced material waste in buildings and the ability to deconstruct. By having reduced material waste, there is a lower carbon impact, et cetera. There are a number of efficiencies that can be found. There are efficiencies found in the construction phase as well. For example, there is less downtime for roads because you can deliver the modules quickly. There are a number of benefits in that space.
Again, it is important to have planned out the project properly, thought it through from the beginning and do this right because, if you go into it with the wrong perspective or intent, you can set it back. There are a number of benefits to taking this approach from environmental and efficiency standpoints.
The Chair: Was there a second part to the question?
[Translation]
Senator Henkel: I didn’t get an answer to the second part of my question. I was talking about the supply chain for these materials. Is there a risk of barriers? Can you list them? A significant number of modular homes need to be built, and they need to be built quickly, too. Do you foresee any difficulties with the supply of these materials?
[English]
Mr. Torrey: That is not an area of expertise for us as far as supply chains and material availability go.
That has to do with the scaling and confidence, as discussed by some of the other witnesses. If the volume presents itself, they can scale up effectively, but there needs to be that confidence there. Regarding the active supply of materials, that is something that I would have to defer to others.
The Chair: Colleagues, that completes the first round. We have five minutes left.
Senator Martin: I will go back to my first question for the CSA Group about the building code.
I know there is the national code, but there are other levels of building codes as well. In terms of readiness and being in alignment, our previous witness, Mr. Kevin Lee, talked about the red tape and the delays that happen at the municipal level. I know I cut off Mr. Torrey because I wanted to get my other question in. Would you continue to talk about this alignment and what we need to have? I think there will be delays at various levels unless everything is fully aligned.
Mr. Torrey: Yes. When it comes to how modular housing is adopted throughout various provinces and territories right now, many provinces have recognized CSA A277 in their adoption of the building code. It is in place right now in various provinces, including Ontario, Alberta, B.C. and, I believe, Quebec. We’re well on the way to where we need to get.
We’re working at the national level with the national model codes. As far as the timelines for their consideration and acceptance are concerned, that is not CSA’s space, so I wouldn’t want to answer on their behalf.
You asked about the municipal level, I believe, as well. Municipal approvals can face delays for a whole host of reasons. When it comes to modular builds, the issues can simply be compounded by that lack of awareness and know-how in ensuring that the factory components are code compliant. We have standards in place for that and guidance documents to help support municipalities, as well as self-guided training at no fee. It is complimentary. The pieces are in place. At a municipal level, we need to continue to provide more education to provide comfort for acceptance and approvals.
Senator Martin: Very quickly, then, you also mentioned there is a lack of inspectors with expertise. What about readiness on that?
Mr. Torrey: That is a part of the capacity building that we’re trying to help with by developing some of this training. CSA developed a guideline a couple of years ago. It is available. It’s called CSA Z252:23. It walks building officials through the process to give them that confidence and comfort in what they are doing. We’re trying to continue to build capacity in that space as well.
Senator Yussuff: Mr. Strictland, $6 billion has been announced in regard to efforts to boost the skilled trades in this country. That is a lot of money, obviously.
One of the biggest things we see in this country, which is not known writ large, is that the building trades are the largest trainer for apprenticeships. What is the capacity for the Canadian building trades and its affiliates to be able to utilize the money and to find young people and mentor and support them to ensure they can get through this training so they are ready to meet the needs of the country?
Mr. Strickland: That’s a great question, senator. It will take quite a while to answer it sufficiently.
I will say two things. First, thank you for the shout-out. We are the largest private sector trainer of apprentices and journeypeople in Canada. We have over 200 training centres across the country. Part of that announcement for the $6 billion was $225 million for the Union Training and Innovation Program to help us build that capacity. That’s critically important.
Another critical component of the announcement is that we get apprentices in — we don’t have a problem attracting apprentices. The challenge our industry has is in retaining apprentices. Part of the announcement is in the in-school portion for apprenticeship training. There is a top-up of up to $400 per week, up to a maximum of $16,000 over four years, plus a $5,000 completion incentive. That amount of support for apprentices will help with our ability to train the best skilled tradespeople in the world, retain them and help them be gainfully employed for a long time.
The Chair: Thank you to our witnesses. It was very informative. Sorry to have such limited time.
[Translation]
Honourable senators, we will move to our third and last panel of witnesses to complete this committee’s pre-study of Bill C-20.
Today, we have the pleasure of welcoming in person Janice Myers and Garry Bhaura, Chair of the Canadian Real Estate Association.
Joining us again by video conference, we welcome Mike Moffatt, Founding Director of the Missing Middle Initiative, who was with us on October 9.
Please keep your opening remarks to five minutes.
[English]
Mike Moffatt, Founding Director, Missing Middle Initiative: Thank you, and thank you for having me here today representing the Missing Middle Initiative, a think tank dedicated to reviving Canada’s urban middle class.
In recent months, we have seen positive moves from the federal government, including the HST and development charge agreements with the Province of Ontario, which will cut the cost of new homes by 15% to 20%, making new homes competitive with resale homes, which will increase housing starts. Since these are temporary measures, we encourage all governments to use this time to extend them to other provinces, get them fully implemented and enact further reforms to drive down the costs of building new homes.
Earlier this year, the CMHC released projections showing that housing starts will fall in each of the next three years. Therefore, these recent reforms, while important, are insufficient to reach the government’s ambitious target of doubling housing starts.
Now, targets, while helpful, are not enough. An ambitious target is admirable, but it is no substitute for a goal. A housing target is a means; it is not an end or a goal. A young family in search of a home does not care how many housing starts there were last year; they care about finding a home they can afford that meets their needs in their community.
Canada’s lack of a middle-class housing goal creates a policy vacuum that the Office of the Federal Housing Advocate has attempted to fill, with a recent report advocating a 2060 target to address the middle-class housing crisis. That goal, if adopted, would cement a future of intergenerational inequality for Generations Z, Alpha and Beta, threatening to tear apart the country’s social and economic fabric. Therefore, we would advise the government to adopt a target that comes sooner than 2060.
The government needs a comprehensive plan to accompany a goal. Bill C-20 and Build Canada Homes can be important parts of that plan; however, the Missing Middle Initiative has significant concerns around implementation and transparency. Build Canada Homes itself lacks a clear goal, targets, key performance indicators and accountability measures, which are not part of Bill C-20. The public has not been told how many homes the program will complete, what types of homes and what the rents and prices will be over what time frame. I won’t be able to tell you five years from now whether Build Canada Homes has been working as there is no benchmark for success. That is a problem.
Our team is also concerned about the lack of transparency regarding the unit mix to be created and, particularly, that those homes might not meet the needs of larger families. Statistics Canada reveals that over half of all renter households with five or more members live in unsuitably small housing according to the federal government’s own National Occupancy Standard. Of those large families living in unsuitable housing, 78% need a home that has four or more bedrooms to meet the federal government’s standard. Despite this, we do not know what proportion of homes built by Build Canada Homes will be large enough to suit these families. But what we do know is concerning.
In Build Canada Homes’ Investment Policy Framework, project proponents are encouraged to leverage the CMHC’s Housing Design Catalogue in their proposals. However, in that design catalogue for Ontario, only one of the 21 units has four bedrooms, with 16 having two bedrooms or fewer. This leaves us concerned that Build Canada Homes will build very few homes that are suitable for larger families as Build Canada Homes is encouraging the creation of smaller homes.
This is a problem because we need more larger homes. We would encourage the government to provide greater transparency regarding the type and size of the units to be created and to not forget that households come in all shapes and sizes, including multi-generational families.
Thank you for your time.
The Chair: Thank you.
Mr. Bhaura, the floor is yours.
Garry Bhaura, Chair, The Canadian Real Estate Association: Thank you. Good afternoon, Mr. Chair and members of the committee. The Canadian Real Estate Association, or CREA, represents over 155,000 realtors across the country, and we help navigate one of the most important financial decisions of Canadians’ lives. I am joined by CREA CEO Janice Myers. CREA welcomes the government’s commitment to drastically increase affordability and supply and recognize the critical need for purpose-built rental and social housing stock.
We applaud the action taken to date. Realtors understand that, for the average Canadian, housing is not a supply target on the government’s spreadsheet. It is not about bricks, mortar, modular or panelized wood. It is about home, a place where people put down roots, create memories and find the security to grow and thrive.
But the pathway to homeownership has been narrowing for nearly 20 years, dropping 2.5% over a decade. The drop is sharpest among Canadians aged 25 to 44. This cohort should be entering homeownership right now. Despite this, 81% of Canadians aged 18 to 44 still want to own a home, but the supply to meet this demand does not exist at scale.
What has been built has skewed towards the extremes: luxury condos at one end and unaffordable detached homes at the other. But volume alone is not the answer. Even the new supply too often lacks the square footage, bedroom counts and layouts Canadians need. Building more is not the same as building right.
I will turn it over to Ms. Myers now.
Janice Myers, Chief Executive Officer, The Canadian Real Estate Association: Thank you. CREA has three concrete recommendations. First, give both Build Canada Homes and CMHC clearly defined outcome-driven mandates, with CMHC’s primary focus returning to attainable homeownership through middle housing supply, as it did when mortgage insurance was established in 1954. Second, legislate formal coordination between the two agencies. Align targets and typologies, with no more gaps. A starting point is adding CMHC’s CEO to the board of Build Canada Homes: two Crown corporations, one national goal. Third, commit to a National Housing Strategy 2.0 before the current strategy sunsets in 2027, one that prioritizes housing choice across the full continuum, from ending homelessness to addressing inequities facing Indigenous Peoples to rebuilding the pathways to homeownership for generations of Canadians.
For several years, CREA has worked with partners across the continuum to bring a systems lens to housing supply. We know all aspects of the housing continuum must be addressed, including the missing middle.
The spring economic update’s expansion of mortgage insurance eligibility to three- and four-unit properties is a meaningful step. Realtors welcome this. It opens the door for increased middle housing stock. But opening the door is not the same as building what is behind it. Without a dedicated federal mandate to restore missing middle stock and attainable for-sale supply, the homeownership rate will continue to decline, not because Canadians no longer want to own homes but because no federal instrument is explicitly tasked with helping them to do so.
CREA’s October research with Abacus Data found that 61% of Canadians say that there are not enough homes being built that meet their size and layout, but they’re ready to compromise. The dream of homeownership has not died, but the pathway is broken. Without renewed national commitment to building the right homes, we risk losing attainable ownership for current and future generations.
CREA thanks this Senate committee for the opportunity to appear, and we welcome your questions.
The Chair: Thank you for your opening remarks.
Colleagues, like the previous panel, I suggest limiting your time to three minutes each. We will start, as usual, with the critic of the bill, Senator Martin.
Senator Martin: Thank you, all. Your presentations have given us much food for thought. I have limited time. My first question is to Mr. Moffatt. What would you like to see in Bill C-20? You outlined two key concerns you have. What concrete numeric targets and performance indicators would you like to see in Bill C-20? To your second point, what specific requirements or safeguards on the unit mix do you think BCH should adopt to ensure it delivers enough of the types of homes that you’re telling us we need. In their catalogue, there is only one option. Would you address those two questions? What would you like to see in Bill C-20?
Mr. Moffatt: We would like to see timelines and targets. In the same way we have a climate policy that puts in targets, we’d like to see something along the lines that Build Canada Homes will have, say, 25,000 housing starts by 2031. Layered into that, what is the mix as far as affordability? What proportion of these homes will be affordable or deeply affordable? What will the unit mix be? We would like to see at least a quarter of these be four bedrooms to meet the needs of larger families. I think there does need to be some debate and discussion — those are kind of the back-of-the-envelope estimates that we have done — and having some kind of target at all. It is not clear to us at the Missing Middle Initiative what Build Canada Homes is trying to accomplish or even if we can say five or 10 years from now if the program was a success. We don’t have any benchmarks to assess whether or not Build Canada Homes is meeting its goal.
Senator Martin: Ms. Myers, you said that one of your recommendations is to legislate clear coordination of two Crown corporations. I’m not sure we need another Crown corporation, to tell you the truth, but would you expand on that, please?
Ms. Myers: We recognize the critical need for supportive and social housing investment, and a dedicated vehicle may serve that purpose. Our position is not to oppose BCH, but it is a call for that clearly defined outcome-driven mandate for both entities so that neither gap nor duplication results from the creation of it. We want to ensure that, given the government’s decision to create BCH, both agencies are working in collaboration and pointed in the right direction. This is why we have made several recommendations regarding how they could work together better. One of the recommendations is that the CEO of CMHC be on the board of BCH to ensure that coordination exists well into the future.
Senator Martin: At our committee yesterday, we had the CEO of BCH separately. We wanted to understand how this would work together. I think that is an important recommendation. Thank you.
Senator Fridhandler: I’m fearful that my understanding — and I would like to hear yours — of Bill C-20 and BCH is that what the minister says and what the bill says and what you would like to see are like ships passing in the dark.
When the minister spoke here yesterday, he said that it was primarily rental housing. I don’t know how many four-bedroom rental housing units exist. Folks from CREA have talked about ownership, and that doesn’t imply rentals. I don’t know that middle housing supply or the missing middle is rental versus ownership. But, fortuitously, affordable housing is undefined, so it can be relative to whom and however. I’m just throwing that over to you because I think this is replete with uncertainties. I would like to focus on what Bill C-20 actually says.
Mr. Moffatt: I agree with all of that. Now, there is a very big lack of rental four-bedroom housing, which I think is why Build Canada Homes needs to be doing it. Build Canada Homes should not be replicating what the market is doing. It should be doing what the market will not. Overall, the bill itself does not necessarily have to contain those targets, although I would like to see a definition of affordability in the bill. What the bill could contain is a provision that requires Build Canada Homes to set annual targets to report its performance against those targets each year and so on.
Part of that is just having an understanding of what Build Canada Homes is trying to accomplish, but it’s also more important just as an accountability measure. We will not be able to assess Build Canada Homes’ performance because we will have no benchmark to compare it to.
Ms. Myers: When you take a step back, housing is a system. We believe all these pieces are important. Rental housing is very important; young people start there. Then we hope there is a path for them to home ownership. Along the housing continuum, we think it must be served from end to end. If BCH handles the deeply affordable end and CMHC handles the ownership pathway, we see that it has the potential to make a real impact with those clear mandates and clear key performance indicators, or KPIs, and all those types of things that will hold them accountable for success.
We believe everything in the continuum needs to be addressed. We see homelessness every day in our cities. We see all the things that impact safe communities. Everything has to be addressed. There is potential here to have a big impact and for CMHC to go back to its original mandate and focus on that, and BCH can take that deeply affordable side of things. I hope that helps.
Senator Yussuff: One of the objectives in the bill, to go back to the point made by the minister, is that families shouldn’t have to spend more than 30% of their income. That would make it affordable. Regardless of whatever the income is, it would still be 30%.
That’s one of the clear objectives and goals of this piece of legislation. That’s clearly stated in the objectives. Regardless of whether you are renting or in home ownership, 30% is 30%. Ultimately, that is the goal. In that context, how would you suggest that the bill and what you are proposing are in conflict? Or is it complementary with what the bill is trying to achieve? That number really guides me in terms of how we should try to shape this debate.
Mr. Moffatt: That is 30% of whose income? Yours? Mine? Bill Gates’?
Senator Yussuff: Hang on. It’s not 30% of Bill Gates’. It’s 30% of the individual who is trying to get into the housing market to make sure that person can have a reasonable roof over his or her head. Let’s not stretch the envelope beyond comparability. It’s 30% of the income of most average families in the country.
Mr. Moffatt: Right. That covers a lot of people. In the GTA, that covers a couple earning $150,000 a year. Build Canada Homes will not be able to create enough homes to house all of those people. I don’t think we should expect it to. A certain amount of triaging needs to take place.
Will Build Canada Homes focus on those most in need of deeply affordable housing? Will some projects be focused on the middle-class families who have been priced out of the GTA because it’s impossible to find anything under, say, $700,000? It is those kinds of things. I don’t think all of those have to be in the bill, necessarily, but some commitment is needed to lay those out.
Carolyn Whitzman, for example, has laid out different tranches in dollar amounts in different communities showing what is affordable, deeply affordable and so on. A lot of that work could be overlaid to Build Canada Homes, but it hasn’t been done. So, yes, 30% is helpful, but, at some level, we need to define the denominator.
Ms. Myers: From a national perspective, one of the reasons that homeownership has become unaffordable is, again, because we’re not building the right type of supply. We’re building small apartments around accessibility to transit and that sort of thing, and then we’re building single-family homes that are, in most markets, unaffordable for somebody wanting to get into the market.
The 30% target is actually very difficult for most people to meet in most markets. I appreciate the goal that Build Canada Homes has with respect to this. In our understanding, it will be non-market, deeply affordable opportunities for these people, but if you look at the market in general, it is a very challenging market right now. This is why we, and Mr. Moffatt as well, are concentrating on making sure there are incentives to address that missing middle for Canadians to find pathways to home ownership, particularly young Canadians.
Senator Loffreda: Thank you to all our panellists for being here. You are all skilled, experienced real estate experts. Maybe to Mr. Bhaura first, from your conversations with realtors and developers across Canada, are there particular regions or cities that are doing a better job at accelerating housing development? What lessons can be learned from them? I’ll keep the question short to give you more time.
Mr. Bhaura: Thank you, senator. That’s a great question. A lot of areas of alignment are missing here at this time. The alignment between the provincial and federal and municipal levels will help us very much. The alignment between both bodies will be helpful for us. At the same time, what we believe as realtors on the ground is that some units that may be two or three or four bedrooms or a duplex or a triplex are the actual missing middle that we are contemplating at this time. That supply should be available for Canadians.
We have understood over the years that it is a whole ecosystem. If we have rentals, starter housing and the missing middle available, those are very important for Canadians.
I personally want to share my own story with you. My parents own a four-bedroom property. They want to get into the right size of house, but that is not available there. That is what we are missing now. The younger community wants to start their families there, but that is not available for them. There are condos of maybe 500 or 600 square feet, but they want to grow their families. They want to move into two bedrooms or around 900 square feet, or it may depend on what is available in the area where they are living. Those are the units they want to buy, which is the missing middle. That is the challenge that we face right now as realtors on the ground.
Thank you.
Ms. Myers: Where we see some movement on the missing middle builds is in the Prairie provinces. The reason for that, I believe, is that the land costs are less. Land cost is one of the big reasons why development has become so deeply unaffordable.
Senator Ringuette: I do believe that Bill C-20 is in regard to non-market housing, not the private market housing you deal with.
I fail to see how not having the head of CMHC on the board diminishes it because yesterday she said that they have been collaborating since day one.
Anyway, that being said, Mr. Moffatt, you said that you need targets and benchmarks, and we have had different federal housing entities, whether it is CMHC or whatever — and CMHC told us yesterday that they are shackled by programs in silos and very regulated red tape. I’m happily surprised to see that these shackles are not part of Build Canada Homes.
Would you not agree that it is a good step forward in regard to having some flexibility and ability to deliver whatever opportunity aligns to supply housing in the non-market sector?
Mr. Moffatt: Absolutely, we need flexibility in how we approach a target or how we hit a target, but I do think we need to have a vision in mind.
Let’s say that that opportunity is in building a lot of very small units. We could do that. We could run up a unit count, but that’s not meeting the needs of Canadians. The biggest needs are for family-sized homes.
My concern is that, without those targets, governments will do basically whatever is easiest to do and not necessarily the largest need of low-income families.
It is a very important accountability measure to have a vision and determine what we are trying to accomplish, and then, yes, we do need flexibility on how we get there.
Senator Wallin: I will go to Mr. Moffatt first, and then I have a question about the regional differences that we have in this country.
One of the problems we seem to be having is the overpromising and underdelivering of this program. When it was first announced, it was, “We are going to build homes at a rate that you have never seen before and faster.” I think people thought they meant all kinds of homes. That is not what this program is.
This is, as we learned from the minister yesterday, “deeply affordable” homes in major urban centres and on land that may already be owned by the federal government.
Is that your understanding of where we have actually landed, despite what was promised?
Mr. Moffatt: I believe so, but it is hard to know. This is why we need that clarity of the government being clear on this program, of what it is meant to accomplish and what it is not.
To be clear, I would not suggest for a moment that this program tries to be all things to all people. I do think it needs to triage and look at where the best opportunities are, but we do need that clarity.
I believe that is what they are doing, but even as somebody who studies housing every day, it is hard from the sidelines to figure out exactly what this organization is trying to accomplish.
Senator Wallin: I will go to you, Ms. Myers, on this question. Is it your now clear understanding that this has nothing to do with building homes of any size for purchase and that this is about rental units?
Ms. Myers: Yes, and we’re not opposed to that, by any means. It will take care of an important aspect that has been left unaddressed.
We do believe, as Mr. Moffatt has pointed out, in clearly defined, outcome-driven mandates for both BCH and CMHC, with legislated — not just administrative — affordability, timelines, typology and liveability as targets, and they must have aligned supply and housing typology targets between both of them. I really think that is very important.
Senator Wallin: Most of the examples cited yesterday were in big city cores. Again, that doesn’t address home access, whether it is rental or home ownership, in smaller places across the country.
Ms. Myers: Not at this phase, from our understanding as well.
[Translation]
Senator Henkel: My first question will be for Mr. Moffatt.
Mr. Moffatt, I’m always very interested in the evolution of the barriers or benefits that could be faced by developers who are going to build these homes.
You have raised a significant risk. Despite the creation of Build Canada Homes, developers may still need to navigate between multiple federal players, including the Canada Mortgage and Housing Corporation, Innovation, Science and Economic Development Canada, regional agencies and the Department of Finance. But Build Canada Homes is supposed to create a much more agile tool.
Could you give us a few recommendations — the ones you consider to be the most important at the moment — that could facilitate or simplify the journey of these projects, but above all not burden an already fragmented system? Thank you.
[English]
Mr. Moffatt: That is a great question. What we have advocated for is a concierge service at Build Canada Homes. You might have a developer who wants to build, as part of Build Canada Homes, modular, multiplex housing. That involves building up a factory and investing in new technology and equipment. They may find themselves needing to apply for Scientific Research and Experimental Development, or SR&ED, credits. They might need money from regional development agencies.
These units may also qualify for Apartment Construction Loan Program, or ACLP, funding through CMHC. There are a lot of different programs to navigate, some of which have almost contradictory requirements.
By creating a one-stop shop and, on top of that, ideally, one set of forms and criteria, a developer or a modular firm that wants to do this can fill out one set of paperwork and have one key contact in the government or within Build Canada Homes and then can connect to all of these programs in a seamless way.
[Translation]
Senator Henkel: They can send it to us afterwards, Mr. Chair. Thank you.
Ms. Myers and Mr. Bhaura, Build Canada Homes will have to make decisions, such as where to invest, what land to develop and what type of housing to support. The risk with national targets is producing a uniform response to markets that are not experiencing the crisis in the same way. We say it every time.
What local data do you think should be essential to prevent Build Canada Homes from building housing that meets federal objectives but not the real needs of the market and citizens?
[English]
Ms. Myers: You have pointed out a really important consideration, and that is that there will need to be access to data, some of which the Canadian Real Estate Association, or CREA, can provide, as that data is out there, in order to ensure — our biggest concern is that what is built is not meeting the actual needs of the local communities.
I think that that data is available. It just has to be used very meaningfully and mindfully. This is another thing that we would definitely encourage to ensure that, as these projects are approved and at scale, they take into consideration the needs of the community. We’re pointing out the needs of the missing middle, in particular. The types and sizes of units are extremely important for all Canadians across the country.
Senator McBean: My questions have mostly been answered. In the first panel, we heard from Mr. Lee, the CEO of the Canadian Home Builders’ Association. He was pointing out that this is mostly for non-market housing, which is 5% of Canadians, so 95% of Canadians live in market-rate housing. I think we’ve come to an understanding that this will help the 5% but not really help the 95%. Everything else we have been doing here is talking about what advice we should be giving to the board of BCH.
I will ask both groups. I will start with Mr. Moffatt and then Ms. Myers. What kind of composition would you put on the board of BCH? When you look at Bill C-20, there is a brief discussion of that. Who would be important to be on that board to ensure we are meeting the needs of Canadians?
Mr. Moffatt: I have to defer to my colleagues at CREA; it is not something we have thought about a lot. However, I think it would need to be a diverse board that includes builders and developers, social advocates and so on. I would also like to see a representative on the innovation side of things and on the environmental side of things. If Build Canada Homes is successful, one of the things it can do is advance a number of clean technologies, whether those are building materials or new types of heat pumps, et cetera.
As Build Canada Homes develops, I hope we can use it to achieve some of our environmental and climate goals as well.
Ms. Myers: Those are recommendations we would have as well.
We have specifically pointed out that we see having the CEO of CMHC on the board as being very important. I understand they are working toward and committed to that right now, but things change and people change. That is why we believe it is important to recommend or mandate that the CEO of CMHC be on that board, as well as the partners and the opportunities that Mr. Moffatt points out.
[Translation]
Senator Youance: Thank you to the witnesses. What we are hearing today is that Build Canada Homes is not the only answer to the housing crisis and that specific areas where Build Canada Homes should focus its efforts or where it can make a difference should be identified. You highlighted the challenge of middle housing. This is of particular interest to me. So, if we want to address middle housing, new construction is probably not the most relevant approach, but acquisition may be.
We are seeing a division of the real estate sector between Build Canada Homes and the private sector. How do you view the coexistence of Build Canada Homes with the private sector in different aspects? To what extent will private investors continue to take on risk, the role of investors and access to financing? In other words, I’m looking for a comparison between private investors and Build Canada Homes. You may not have the full answer, but I would have appreciated some insights. In addition, how can the Canadian Real Estate Association support the five-year evaluation or the first-year of evaluating the actions of Build Canada Homes?
[English]
Ms. Myers: Wow, that is a jam-packed question.
We have talked about data being so important in determining what gets built. Certainly, incentivizing that missing middle to be built in some way is also really important because we have seen from programs that what gets encouraged and incentivized does happen, for sure.
I don’t have much more to say about that.
We certainly believe in that alignment between what CMHC has been created to do, focusing on that and recommitting to that as part of the home ownership piece, and BCH focusing on the private sector on opportunities for non-market housing. If we can get that right, I think we’ll definitely be helping.
Mr. Moffatt: There are opportunities for BCH to work with private developers on market-rate housing. For instance, the government may have a piece of land downtown where a high-rise could be built, and BCH, with the private sector, could come up with a development that is mixed income, where a proportion of the units are market rate and those market-rate units help subsidize deeply affordable units in the same building. You create a mixed-income community that can also contain first-floor commercial space as well. It creates a kind of walkable, all-in-one community.
One of the risks of Build Canada Homes is that it could inadvertently create communities that all have deeply affordable housing and very concentrated pockets of low-income families. I think we’re better off as a society to have more mixed-income communities, and Build Canada Homes can be a part of that.
Senator C. Deacon: Thank you to the witnesses for being here.
There has been a lot of conversation about outcomes, but how are we going to measure that? Ottawa prefers KPIs that are associated with processes, not outcomes; there is no question there.
My experience is that many programs are set in stone from the outset and don’t evolve. They don’t iterate over time based on lessons learned. Again, that is another cultural practice in Ottawa.
Are you aware of any current outcome KPIs that have guided program improvement over time? Are you aware of any programs that have been successful at doing that?
For me, it is central that it is a part of this program, given the factors you and other witnesses have laid out. Are you aware of anything that we can leverage or build off as a committee to really point to that? I might start online with you, Mr. Moffatt.
Mr. Moffatt: It has not been an unalloyed success, but I would say that the Housing Accelerator Fund is one example where there have been agreements with the municipal government on a set of KPIs, some of which are procedural but some of which are a certain number of housing starts in a certain amount of time. If the federal government is looking to have targets in Build Canada Homes, I would suggest that they audit the Housing Accelerator Fund and determine what worked as far as the KPI setting in that example and also learn what didn’t work and where they can improve.
Ms. Myers: I will speak more generally. I think the federal government controls some powerful tools when it comes to funding agreements, infrastructure programs, as Mr. Moffatt pointed out, mortgage insurance products and bilateral agreements. They can all be better aligned to incentivize the kind of housing that Canadians need and want. I cannot point to anything specific. The Housing Accelerator Fund is a good example, but there are other levers the federal government can utilize to ensure the right type of housing gets built.
Senator C. Deacon: I will ask a slightly different question to follow up. I’m looking for something that will guide the changes. Do you believe there are KPIs that can help guide the changes that will invariably be needed over time? Do you have any in mind or anything that you can point to?
Ms. Myers: Yes. We did make some suggestions. I am just trying to ensure I get them off the top of my head, and I do have them written down.
They are mostly about making sure that there are affordability and timeline targets. It is in our brief. We can certainly make some more specific recommendations that I do not have off the top of my head if that’s okay.
Senator C. Deacon: I appreciate that.
The Chair: Thank you, senators and witnesses.
I’d like to extend a special thanks to Mr. Moffatt. In your opening remarks, you referred to the fact that the federal government and the Ontario government have some initiatives to reduce the costs of new homes, including cutting HST. It was our first recommendation, colleagues, if you remember, in our report called Out of Reach: Unlocking Canada’s housing affordability crisis. It seems that the government has listened to a recommendation from this Senate committee. Thank you for referring to that.
Thank you again to our witnesses.
Colleagues, we will now go in camera.
(The committee continued in camera.)