THE STANDING SENATE COMMITTEE ON NATIONAL FINANCE
EVIDENCE
OTTAWA, Wednesday, October 22, 2025
The Standing Senate Committee on National Finance met with videoconference this day at 6:49 p.m. [ET] to examine and report on federal programs and initiatives to support the creation of housing.
Senator Claude Carignan (Chair) in the chair.
[Translation]
The Chair: Good evening, honourable senators. I welcome all the senators and all Canadians following us on sencanada.ca.
My name is Claude Carignan. I am a senator from Quebec and chair of the Standing Senate Committee on National Finance. I would like to ask my colleagues to introduce themselves.
Senator Forest: Good evening and welcome. Éric Forest from the Gulf division in Quebec.
[English]
Senator Cardozo: Andrew Cardozo from Ontario.
Senator Kingston: Joan Kingston, New Brunswick.
Senator Ross: Krista Ross, New Brunswick.
Senator MacAdam: Jane MacAdam, Prince Edward Island.
[Translation]
Senator Hébert: Martine Hébert from Quebec.
The Chair: Thank you very much, colleagues. Today, we are beginning our study on federal programs and initiatives to support the creation of housing.
For our first group of witnesses today, we are pleased to welcome Coleen Volk, President and Chief Executive Officer of the Canada Mortgage and Housing Corporation. From Housing, Infrastructure and Communities Canada, we are welcoming Janet Goulding, Senior Assistant Deputy Minister, Housing and Homelessness Branch. Finally, from Build Canada Homes, we have Ana Bailão, Chief Executive Officer, and Jean Lamirande, Senior Vice-President, Policy and Operations, by video conference.
Welcome, everyone, and thank you for accepting our invitation to appear before us this evening. We will now hear opening statements from Ms. Volk and Ms. Bailão. You each have five minutes, and then we will have questions for you.
Ms. Volk, you have the floor.
[English]
Coleen Volk, President and Chief Executive Officer, Canada Mortgage and Housing Corporation: I’m pleased to have the opportunity to speak to the committee, here on the traditional, unceded territory of the Algonquin Anishinaabeg.
[Translation]
For close to 80 years, Canada Mortgage and Housing Corporation has helped Canadians access housing, through good times and bad.
Through our insurance and securitization products, we help ensure stable housing finance. Through our research and policy advice, we provide trusted expertise. And we support the federal government in tackling the housing challenges of the day.
CMHC has always come through for Canadians — and when the federal government launched its National Housing Strategy, we stepped up once again to administer its key programs.
[English]
Each of these programs came with its own individual design and prescriptive criteria. While we couldn’t change the design, we worked closely with clients to improve delivery. As a result, we significantly cut turnaround times, simplified processes and got projects off the ground faster.
One of the flagship programs of the National Housing Strategy, or NHS, is the hugely successful Apartment Construction Loan Program, or ACLP. ACLP offers low-cost financing to developers to build purpose-built rental homes. We deliver the program on behalf of the federal government on a break-even basis, and we’re financing more than $5 billion annually through this program. Demand for this program remains high and may exceed current allocations.
Other programs include the Affordable Housing Fund, which recently received $1.5 billion in top-up funding and is helping to meet the urgent demand for more non-market housing, and the Federal Lands Initiative, which makes unused federal lands available at low or no cost for affordable housing projects.
Separately from administering programs, we are an insurance company, supervised by the Office of the Superintendent of Financial Institutions, or OSFI. Our mortgage loan insurance products are designed and delivered by Canada Mortgage and Housing Corporation, or CMHC, at no cost to government and taxpayers.
By combining the financing tools of the Apartment Construction Loan Program and our multi-unit mortgage loan insurance, we’re now backing between 80% and 90% of new rental construction in Canada, up from just 5% in 2017. Many industry partners tell us that next to no rental construction would be happening without CMHC’s support.
Given this surge in demand for our multi-unit mortgage loan insurance, we recently raised our premiums, but just enough to ensure its sustainability into the future. Even with this change, demand remains strong.
Aside from our financing tools, CMHC also offers trusted research, data and insights. Our supply reports helped define the scale and urgency of Canada’s housing shortage. We’ll continue to dig deeper into the data to offer practical, evidence-based ideas for policy-makers and industry.
Our research linking high levels of municipal regulation to higher housing prices helped inform the creation of the Housing Accelerator Fund, which is now fast-tracking housing in 241 communities across the country.
Now, with the launch of Build Canada Homes, or BCH, this new entity will take the lead on creating more affordable housing. We welcome BCH as a powerful new partner and will do whatever we can to support its success. We are working alongside BCH to share our expertise and help support a smooth transition and continuity for projects already in the pipeline.
At the same time, CMHC will focus on market housing, which represents a large portion of the housing continuum today. This gives us plenty of opportunity to be creative and potentially have an even bigger impact. We will continue to build on CMHC’s momentum and strong track record. We’ll use every tool we have, working with our 10,000 partners and clients across the housing system to deliver real results.
Thank you for your time. I’d be pleased to answer your questions.
Ana Bailão, Chief Executive Officer, Build Canada Homes, Housing, Infrastructure and Communities Canada: Thank you, Mr. Chair and honourable senators, for the opportunity to share about the work we’re doing at Build Canada Homes to address the housing crisis for Canadians.
The September launch of Build Canada Homes represents a significant step forward in the Government of Canada’s commitment to doubling housing construction, restoring affordability and reducing homelessness. As a new federal agency, our mission is to accelerate housing supply, foster innovation and support the sector in building faster, smarter and more affordably.
With an initial capitalization of $13 billion, Build Canada Homes provides financing and partnerships to help builders, developers, non-profits and Indigenous-led projects get affordable homes built at scale.
We do this by leveraging public lands, scaling up modern construction methods and deploying flexible financing tools to make home building more productive and efficient. This approach will help unlock private capital, increase housing supply and ensure housing remains financially viable and affordable over the long term.
In addition to financial and partnership instruments, Build Canada Homes will also adopt a direct-build approach by working with Canada Lands Company to oversee the construction of 4,000 factory-built homes, with a focus on affordable mixed-income communities. We are starting with six public land sites — in Dartmouth, Longueuil, Ottawa, Toronto, Winnipeg and Edmonton. These initial projects will demonstrate how federal land can be leveraged to deliver affordable mixed-income communities at scale.
We also recognize the urgent need to preserve existing affordable rental housing. Across Canada, affordable rental buildings are being lost to redevelopment, rent increases and conversions faster than new supply is being built. To address this, Build Canada Homes will oversee the $1.5 billion Canada Rental Protection Fund. This fund will help non-profit and community housing providers acquire rental buildings and maintain affordability over the long term.
As part of our commitment to advancing housing solutions in northern and remote communities, Build Canada Homes is partnering with the Nunavut Housing Corporation to deliver over 700 new housing units. Approximately 30% of these homes will be constructed off-site using innovative factory-built methods, helping to accelerate delivery and improve cost-efficiency in challenging environments. This initiative reflects our broader goal of ensuring that all regions, including regions with unique housing challenges, benefit from modern scalable approaches to affordable housing.
Build Canada Homes also plays a key role in addressing homelessness. We will work with provinces, territories, municipalities and Indigenous communities to build transitional and supportive housing paired with the wraparound services people need to achieve housing stability and long-term well-being.
To ensure alignment across federal efforts, Build Canada Homes will work closely with CMHC. CMHC will continue its important role in Canada’s housing system by delivering existing programs, such as the Apartment Construction Loan Program and the Affordable Housing Fund. In September, the Affordable Housing Fund received an additional $1.5 billion in loans and accelerated funding, as my colleague, Ms. Volk, mentioned, to bridge the gap while Build Canada Homes ramps up.
As CMHC continues to focus on commercial solutions, like mortgage loan insurance and low-cost financing, Build Canada Homes will concentrate on increasing affordable housing supply. This clear division of roles allows both organizations to align strategically and deliver results more effectively.
Concurrently, Build Canada Homes is operating as a special operating agency within Housing, Infrastructure and Communities Canada, or HICC. HICC is incubating Build Canada Homes during this initial phase, providing administrative support and coordination. This arrangement allows Build Canada Homes to draw on existing federal resources and expertise while establishing its operational foundation.
In the new year, Build Canada Homes will evolve into a stand-alone federal agency, reporting to the Minister of Housing and Infrastructure. Thank you again for the opportunity to speak with you today. I am happy to take your questions.
[Translation]
The Chair: Thank you very much. We usually begin the question and answer period with members of the executive, but since Senator Hébert has to leave in five minutes, I will make an exception and give her the floor.
Senator Hébert: Thank you, Mr. Chair. It’s much appreciated. Good evening, ladies, and thank you for joining us tonight.
In each of your introductions, you spoke about the partnership that would bring together your two organizations. I am trying to understand specifically how these collaborations between your two organizations will be established and where bridges will be built. I would also like to know where there is likely to be overlap.
I would like you to give us some concrete examples of this partnership that will bring together your two organizations.
[English]
Ms. Volk: Thank you for the question.
I will start by saying it’s early days and it has just about concluded a month but not quite. We’re working on the details of this, but I think we have had many meetings and we have a good understanding of how we think this can work.
CMHC is already established, with a big network of clients and programs and insurance products, and we’ll continue doing that. We are going to be less active in the space that BCH will be more active in, which is the more affordable parts of the spectrum. I think Ms. Bailão has some ideas about how they can fill some of that space, but in terms of how they can work with us, there may be projects that will be requiring some of our support, either through our low-cost financing or our insurance programs, and that we’ll also require support from Ms. Bailão and Build Canada Homes in order to get some of the affordability outcomes that we’d be looking for from a social perspective.
So our products may complement one another; they may both be active in a particular project, and there may be components that both of us are offering in a particular project. There will likely be other projects that will be Build Canada Homes on their own, where they won’t need necessarily a CMHC component of that. But Build Canada Homes will be able to offer a full project offering in some cases.
Ana, would you like to add to that?
Ms. Bailão: I would just add that we have a housing continuum, and Build Canada Homes will be focused on the supportive, transitional, social, affordable housing, and CMHC will take on that role when it starts with the apartment construction program, which is that partnership that brings in the private sector. That’s an area where we can actually work together because we can stack the flexibility that we have with our organization with the work established already by CMHC. And then they will continue on the housing spectrum in the market.
So if you could picture, through you, Mr. Chair, the housing spectrum, Build Canada Homes would be very active on the creation of affordable housing, and CMHC on the continuation of work with the market. Now, there is a transition to happen on the Affordable Housing Fund, where, as my colleague, Ms. Volk, said, we are working on the details to make sure that there are no gaps and no overlap, and there are continuation and support.
We want to improve the services to our clients — that’s what we have in mind — and speed up the opportunity to get shovels in the ground. That’s our main objective during the transition as well.
[Translation]
Senator Forest: Thank you for being here to enlighten us on an issue that is truly a major challenge for our society.
I have a concern. A number of years ago, CMHC was a very important partner of municipalities and really enabled us to increase the supply of affordable housing, particularly with non‑profit organizations and municipal housing authorities.
Will there be a transfer of knowledge to Build Canada Homes in that respect? Financial arrangements are sometimes complex; they can sometimes include government participation and almost invariably municipal participation, either through tax breaks or other means.
You are in the process of constructing Build Canada Homes. It is a brand-new home that has never been lived in before. How will this home be furnished, and how can we ensure that there is adequate knowledge transfer for such complex issues?
[English]
Ms. Bailão: We’re working very closely together. Actually, part of our transition team has several members from CMHC, so that work on transition is definitely very much kept in mind. What we now have available are different tools that CMHC did not have in some of these offers and programs.
For example, Build Canada Homes will be able to come and work with municipalities and our partners with equity. We want to add, and I think the knowledge base that exists through CMHC, through the department itself is something we want to make sure is captured. That’s why so many members are involved in the transition team and might even continue to work in some of the programs.
[Translation]
Senator Forest: One of the important issues is having spaces and land to build on, but also having land covered by municipal services. Will your program provide municipalities with assistance in developing roads and water and sewer infrastructure, for instance, and in ensuring that they are able to accommodate projects from different developers?
[English]
Ms. Bailão: Under the leadership of the minister, what we have is actually a “Team Housing.” We are very much having conversations not only through BCH, through CMHC, but also through the Canada Infrastructure Bank, or CIB, and the ministry as well. There are coordination, dialogue and conversations happening through HICC, CIB, BC Housing. We call ourselves “Team Housing,” to deliver housing and to have that exact coordination that is needed, not only to bring the homes but to bring the infrastructure as well. Probably my colleague from HICC can add a lot more to that.
Janet Goulding, Senior Assistant Deputy Minister, Housing and Homelessness Branch, Housing, Infrastructure and Communities Canada: Thank you for the question. Certainly, HICC does have programming that supports that kind of infrastructure. The Canada Community-Building Fund, for example, is a transfer program that we administer in collaboration with provinces and territories, but it absolutely directly supports municipalities in providing that kind of infrastructure.
We also have the Canada Housing Infrastructure Fund, which supports municipalities looking to put in place additional water, wastewater or waste infrastructure. As well, we have the new Canada Public Transit Fund, which helps with transit funding. There are many complementary programs at Housing, Infrastructure and Communities that address those kinds of infrastructure needs.
[Translation]
Senator Forest: Today, there are all kinds of service points that are not necessarily coordinated under the Build Canada Homes program.
Does Build Canada Homes have the openness required to verify best practices in the field? I am thinking in particular of Rimouski, which has reduced its delivery time to nine days. Are you able to go out into the field to see what best practices and most effective ways there are to speed up the construction of affordable housing?
[English]
Ms. Bailão: Through our direct-build approach, we are going to be working very closely with municipalities. As we know, building permits are a responsibility of the municipalities. There have been programs through the Housing Accelerator Fund, which has and is measuring improvements on that development, that we hope very much — through our programs as well — we’re going to be able to add to what has already been delivered through the accelerator fund, which includes a component of that.
Senator Cardozo: Thank you very much for being here. Ms. Bailão, I am very pleased that you have taken on this position. We haven’t had the chance to meet before, but I certainly know of your career and know of your dedication to housing and that complex megacity of Toronto. I’m sure you will take that knowledge and experience to your new role.
Just as a comment, I would rather have seen Build Canada Homes be part of CMHC than create another agency because we have already three agencies in here.
Looking at the words we’re using, is Build Canada Homes about building new homes? Is that what the new agency’s role is? Are you going to be focusing more on middle- and lower‑income housing? And what will we see a year from now or two years from now? Will we have 1,000 new homes in Canada or 2,000? How specific can you be for us at this point?
Ms. Bailão: The role of Build Canada Homes is to increase the supply of affordable housing. We are going to be focused on that side of the spectrum: transitional, supportive, social, affordable. That’s our focus. That is also done through mixed‑income communities. We will be involved in projects that have a mixture. They are more economically and socially sustainable when you have mixed income and mixed communities. We’re going to be focused on that as well.
We’re going to be focused on increasing the supply of affordable housing and, at the same time, increasing the capacity of the sector.
We’re going to do this through the financial tools and the public land we’re going to have available. The financial tools are not only financing and grants, but we’re also going to be able to have equity participation in projects and guarantees. It will be very much like a partnership approach versus you sending us your application. What we want is to partner with the sector as well.
Through the creation and increase of affordable housing — and we need supply, but definitely we need an increase in supply of affordable housing — we are targeting to be a catalyst for the industrialization of this sector. We need to have the modernization, the speed, the scale in the creation of affordable housing. What we heard very often is that it is hard for this to happen when factories don’t have certainty of the pipeline. We believe, through public investment in affordable housing — which we need to invest in to create that affordability — we can be a catalyst to this industry so it starts picking up, and eventually the market as a whole starts picking up. That’s how we’re going to speed the construction — by having this impact as being the catalyst as well.
Senator Cardozo: You mentioned six cities. What exactly will you be doing with those?
Ms. Bailão: These are six properties that were under Canada Lands. These properties are the first six properties where we’re going to have the direct-build approach. We will be putting out the request for proposals, or RFPs, to have the companies come and build, oversee the projects, and then have non-profits operate the properties.
Senator Cardozo: How many homes?
Ms. Bailão: These are about 4,000 homes on these six properties. These are just the initial. We’re hoping to do a lot more than that. These are just the initial six properties we’ve announced.
Senator Cardozo: Will you be working with co-op housing?
Ms. Bailão: We certainly hope so. We’re starting to see a bit of a resurgence in the co-op movement, and we hope to work closely with the co-op movement.
Senator Ross: Thanks for your presentations this evening. I’m interested in a bit of a follow-up on Senator Cardozo’s question about the 4,000 factory-built homes on federal lands. That’s about 10% of the total of 45,000 that has been indicated as your goal with the $13 billion in your budgeting.
I wonder if you can give us a timeline on, first of all, the 4,000 and, secondly, the 45,000. I’m also wondering about identifying more properties and where they will be, or if that has been identified. How can municipalities and provinces get involved and get on that list so that they’re participating as well?
Ms. Bailão: The 4,000 properties are under Canada Lands. The lands that Canada Lands has under their jurisdiction and are ready to produce housing can go up to 45,000. The $13 billion is not only going to be used on public lands. It’s going to be used on different forms, like transitional housing, where most likely we will be partnering with provinces and municipalities, like the rental fund. There’s a mixture.
The 45,000 number is homes that can be eventually built on what today are Canada Lands properties. We will be identifying more through the properties that are under their jurisdictions, making evaluations, preparing, ensuring that rezoning is done, that the site is ready to get shovels in the ground, that we can go for the RFP, working with the local communities as well.
Obviously, we want to prioritize the communities that we can partner with and where those projects are welcomed. Nowadays, probably the majority of the country would welcome affordable housing development. We will have that communication and dialogue as well.
Obviously, through the process, working with our partners at PSP, there will be properties further identified down the line. We are starting with all the properties that are under Canada Lands and working closely with them. We’re just starting that process, as my colleague said. This is my fourth week on the job.
Senator Ross: No pressure. I’m interested in the RFP process. Will that be going through you or some type of a procurement office? How will that work? I’m wondering if one company or one proposal will get all 4,000. How you’re going to break that down: by site, by number?
Ms. Bailão: We’ve launched the first request for qualifications, or RFQ. We’re testing. This is fairly new. The first one has been launched for Downsview. There will be other ones coming. They are very different cities. We are testing the market and will see what’s going to come back from the market.
Obviously, there’s a capacity issue as well, and we’re going to be evaluating the capacity of the companies that respond. That’s why, actually, we did a two-stage approach so that we have an RFQ and then move into an RFP to adequately evaluate the companies. All this is being done through proper procurement practices.
Senator Ross: I have one last quick question. You mentioned that when these homes are built, they’ll be run by not-for-profits. Are these deeply affordable homes not going to be available for individual purchase by families and utilizing the no GST on new builds?
Ms. Bailão: For these 4,000, the plan is not for home ownership. These are rental. There’s a mixture. So 40% is to be affordable; 60% is to be rental to create that healthy mixture. It is with the definition of 30% of the median local household income, very much targeted to what some people call “workforce housing.” There will be 20% of that and then 20% a little deeper. It’s a mixed-income community because we want to ensure the sustainability of the model, as well, on the operational side.
Senator Ross: So some will be for sale to individuals?
Ms. Bailão: They will be rental.
Senator Ross: Just rental?
Ms. Bailão: Yes.
Senator Ross: Thank you very much.
Senator Kingston: Welcome, everyone. My questions are for Ana Bailão. I’m interested in deeply affordable housing and supported housing.
Over the last two years, I’ve watched the support part move from Employment and Social Development Canada, or ESDC, to the Reaching Home funds over at Infrastructure Canada. I was concerned about that at the time because it just seemed that Infrastructure Canada had a lot of focus on building and not necessarily supporting. The people that I’m thinking about, the homeless who are chronically homeless, often need a great deal of support for some time in order to be successful.
Now I see in what you’ve written that this is part of your portfolio. How do you plan to do it? There was a point in time when the Reaching Home funds were very flexible and, I believe, started to incentivize the health care system, for instance, to be part of the wraparound supports. That stopped about the time when that moved to Infrastructure Canada, and now it’s moving or relocating again.
Could you please talk about how you plan to make sure there is supported housing for those very needy, chronically homeless individuals?
Ms. Bailão: Thank you for your question. I will be asking my colleague to talk a little bit more about Reaching Home. Before that, just on the way forward, we will be working very closely with provinces and municipalities to get those wraparound services.
In my previous life, I was a municipal politician, very involved in delivering transitional housing, and it is extremely important. The success of these projects happens only if we have the other orders of government at the table as well. We have initiated certain conversations already with the provinces, and we will be reaching out. The minister’s staff have been at the provincial-territorial meetings. This has also been brought up. We will continue. There will be a very lively conversation moving forward.
This is a significant amount of funds where we can have a significant number of units of transitional housing built across the country, but we will need to have the provinces at the table for the wraparound services.
Ms. Goulding: Thank you very much for the question. Maybe I could just add a little bit about Reaching Home.
I have been part of the Reaching Home program. I was there at Employment and Social Development Canada and was part of the move to Infrastructure at the time. Just to clarify for the senator, though, the time of the move was in the fall of 2021, and we were still very much in pandemic mode and getting out of the pandemic. The additional flexibilities that Reaching Home put in place during the pandemic had less to do with the move between ESDC and HICC and more to do with the fact that there were just more needs in the communities during the pandemic period.
In fact, the government at the time increased the amount of funding available to Reaching Home for that exact reason. Those additional flexibilities around medical supports, for example, were very important to make sure that we had medical services where we had temporary isolation units that were put in place for quarantine situations and for social distancing.
The program has always relied on provinces and municipalities to provide those medical services. They are not something that is typically eligible under the program, just given that the federal government does send significant amounts of funding to provinces and territories for health care, and we do expect them to be partners in this space.
Senator Kingston: What I don’t see from the provincial side or from having worked in that sector is much coordination between the federal and provincial governments, and that’s why I talk about incentives. Health care systems need to transform to provide outreach services, the type of services that are needed, and very often, the non-profits recognize that and try to build in some primary care types of supports, but then they are not linked to the health care system.
I guess I’m asking you to think about some ways to further engage in a meaningful way in getting this done because the amount of housing that’s available and that actually helps some people with chronic homelessness and complex needs won’t work unless something happens together where everybody’s on board and actually putting money from the health care system into these more primary care/outreach-type services.
Ms. Goulding: Absolutely, and thank you very much for those observations. I do think one of the strengths of Reaching Home and one of the things that it tries to implement in all of the communities that it funds is a program we called “coordinated access and intake.” One of the elements that we actually actively fund and support through Reaching Home is to allow communities to put in place the governance and the infrastructure to work more broadly across the sectors that are engaged in this conversation, so not just health services but correctional services and medical services like primary medical services as well.
It’s a very valid point, a very important point, and I do think that creating Build Canada Homes as a special operating agency within the department also allows that sort of close collaboration.
Reaching Home itself will not move to Build Canada Homes, but we now have the advantage of looking at how we can coordinate some of the investments that Build Canada Homes will be making in supportive and transitional housing with some of the work that we already see going on in the community around homelessness.
The last thing that I would briefly add, if I can, is that Build Canada Homes is a really important new tool in our tool kit, but the National Housing Strategy is a much broader conversation. The minister met with his federal-provincial-territorial colleagues in early September. The renewal of the National Housing Strategy and thinking about how we can do more with provinces and territories to really have meaningful reductions in homelessness across the country are very much on that agenda.
Senator Kingston: Thank you.
Senator MacAdam: I have questions for Build Canada Homes. How will affordability be measured? How are you defining affordability in your criteria with Build Canada Homes? Will that be applied to all your programs?
Ms. Bailão: That’s correct. Affordability will be 30% at the median household income in the region so that we respond to the needs and different economic scenarios across the country. The University of British Columbia developed this definition. I don’t know if you want to add anything else on that, Ms. Goulding, but it is 30% of the median household income.
Senator MacAdam: Is that consistent with what CMHC uses for any of its affordability programs currently?
Ms. Volk: CMHC has different affordability targets for different programs, depending on what they are trying to reach. I should say that CMHC doesn’t define those targets; they are part of the programs we operate. We deliver them on behalf of the government, but the government defines those targets.
They are different in some programs. They vary across programs. Sometimes it’s 20%; sometimes it’s 30%. Sometimes it’s income, and sometimes it’s compared to median market rents rather than median incomes. I know that’s distasteful to many people because they would prefer that we have one common definition, and I appreciate that. I think that’s a good goal, so I’m glad to see that BCH is able to have one common definition.
In our programming, though, because it covers a broader spectrum of housing — it’s not all about the more deeply affordable — sometimes the people we’re trying to reach maybe aren’t as far along on the housing spectrum. Perhaps getting 80% of median market rents might be an appropriate target for a program rather than 30% of income. You reach a different group, and it doesn’t cost as much so you get more units. You can give less support across more units.
BCH will be focusing on, as Ms. Bailão said, definitely the lower-income part of the spectrum, so it would make more sense for them to have a common definition that’s based on income.
Ms. Bailão: Yes. I think the big difference is our definition will not be a market-based definition; it will be an income-based definition.
Senator MacAdam: The issue of affordable housing is very important to my rural province of Prince Edward Island. I understand that P.E.I. has some of the lowest vacancy rates in the country. It’s particularly acute for the more vulnerable populations. I was happy to see a recent announcement under the Affordable Housing Fund of 56 affordable rental units across P.E.I. That’s just as a segue into my comments here on affordable housing.
At a recent Public Accounts Committee meeting, CMHC mentioned the Federal Lands Initiative. The Federal Lands Initiative is the one, if I’m correct, that takes some federal properties and converts them into property that could be used for affordable housing, and the Auditor General did a recent report on that area.
At that recent Public Accounts Committee meeting, CMHC mentioned that the Federal Lands Initiative is not a program that will work well in rural Canada because of the absence of a lot of federal buildings there but there are other programs that will work better in rural and remote areas. What are some of those other programs that work better in rural and remote areas of the country?
Ms. Volk: Thank you for asking that question because it was asked at the committee but right as time was up, and I wasn’t allowed to answer, so I appreciate that.
The Federal Lands Initiative doesn’t work as well in the more remote areas because it uses land that is already owned by the federal government, and they don’t own a lot of land in remote regions. They have more land in cities and larger centres. That’s why that program isn’t geared to the more remote areas.
By contrast, the Affordable Housing Fund is indifferent in terms of where it might take place. There are some excellent affordable housing projects in major centres, but that program can also work in a smaller centre. It doesn’t require anything specific about a large centre. It doesn’t have to be land that the federal government occupies. There aren’t restrictions in terms of where it might work, so we do have affordable housing projects across the country in many remote and rural areas, and in the North as well.
Senator MacAdam: At that meeting you were also asked about the Housing Accelerator Fund, and you didn’t have precise figures for the housing starts in particular regions. You were going to bring that back to that committee, and I’m wondering if you could share that information with this committee as well.
Ms. Volk: Yes. The Housing Accelerator Fund is meant ultimately to result in housing starts but not immediately because the focus of the Housing Accelerator Fund is on accelerating approvals, accelerating zoning, accelerating permitting — accelerating that process — and it doesn’t immediately result in starts. It allows projects to move through that application process faster, but then they still need to get to the shovels-in-the-ground stage, and that isn’t instant.
There aren’t a lot of concrete results in terms of housing starts in the Housing Accelerator Fund, not because there won’t be, but just because it’s early in the program. Most of these agreements have been in place only for a year or a little more, and it just takes a little bit longer to actually see the starts that result from that.
[Translation]
Senator Miville-Dechêne: Ms. Bailão, you obviously want to build more housing, and if I understand correctly, you plan to offer low-cost loans to build these homes. That’s very important. However, will you also ensure that the houses built are made in part with eco-friendly materials and are able to withstand increasingly frequent weather events? For example, can the loan conditions include such criteria, or are you simply trying to build at the lowest possible cost?
[English]
Ms. Bailão: Obviously, quality will be something that we will be evaluating, also because we are evaluating new methods of construction. Even before we start with RFPs directly for projects, we are doing requests for proposals to evaluate companies at large, materials at large, so that evaluation will be done as well.
We want to create as much affordable housing as possible, but environmental concerns, sustainability, buying Canadian products are other things that we’re measuring as well. Part of our program is not only new methods of construction but buying Canadian, and obviously there will be attention paid to environmental outcomes as well.
[Translation]
Senator Miville-Dechêne: Is this something you are hoping for, or is the issue of eco-friendly materials part of the building regulations? You seem to be saying that you will try, but do you already have rules in place for loans or for awarding contracts to a particular contractor when it comes to newer, more environmentally friendly materials?
[English]
Ms. Bailão: Right now we are in the process of developing our investment policy. These conversations are live in terms of how many points we will give, but all this is on the table as we develop our investment policy that will be available for people to, in an open and transparent way, understand how we’re taking in these projects, evaluating and awarding the funds.
[Translation]
Senator Miville-Dechêne: Very well.
I would like to continue on the issue of Rimouski. I heard a very interesting report saying that the main reason for the slow pace of construction was the municipal authorities, as the granting of permits takes time. Do you have any control over the time frames that vary from one municipality to another? When it comes to building houses quickly, not being able to obtain a permit for several months slows down construction accordingly.
[English]
Ms. Bailão: Absolutely right. My last post that I just finished about four weeks ago was developing, building across Canada, so lots of experience in very different markets and speed of approvals.
I just want to make a couple of points. It is important to speed, and there are standard designs, relationships, improvements through the Housing Accelerator Fund that the government is trying to push municipalities to do, zoning and policy things that need to happen. All of this is really important.
I’ll give you an example of Toronto, where you hear about projects taking two years to approve, three years to approve. That is no longer happening today. The biggest reason that projects are not moving ahead today is not the zoning. There are 300,000 units approved in Toronto today. The math does not work. The speed today in certain parts of the country is more about the math not working and the projects not being able to get shovels in the ground than it is about some of the permits.
This is not to say that there aren’t important improvements that need to happen, important zoning reforms that need to happen in order for us to get ahead because the time will come when we will need that zoning reform. But it is important for us to keep in mind that right now we need to almost be working on a two-track approach because in certain markets many areas are completely zoned and we need to have the math working.
In other projects, it is still the timing that we need to continue to work on through programs like the accelerator fund, partnerships, the catalogue that was just released. All these things will improve over time. We are also working with trying to have the manufacturing going because that’s another part of the project that takes a long time. There are different parts of this acceleration of the housing production that need to take place.
Senator Miville-Dechêne: Good luck.
Ms. Bailão: Thank you.
Senator Dalphond: In the Banking Committee earlier today we heard from economist Peter Norman, Vice President at Altus Group. He did a study of the time it takes to get a project approved from municipality to municipality or city to city across Canada. On average, it’s about 20 months. In Toronto, it’s 32 months.
I’m just hearing now that things are moving much faster in Toronto than I was told at the previous panel. I’m glad to hear it, but what has happened? When we hear 32 months on average, are we talking about 28 months now, which is faster? It’s still slow. These projects that are not starting now, maybe they were approved last year and they are still waiting perhaps.
To follow up on these questions, yesterday, you made an announcement with the minister that 540 new homes will be built in the Arbo project in Toronto. Have you already received the approval from the city, or when do you expect to get the approval?
Ms. Bailão: With regards to Arbo, the project is rezoned, and we have a design-build RFP out on the street. The project is fully rezoned, so that has been approved.
In terms of timing —
Senator Dalphond: And the construction permit?
Ms. Bailão: It’s the site plan and construction.
Senator Dalphond: The site, okay. That takes some time.
Ms. Bailão: In the City of Toronto now, you can get it in two, three months. But in this case, because it’s new technology, it actually makes sense that it’s done with the builder. Sometimes you go through the site plan, and then you build in the builder, and you do construction drawings, and then all of a sudden — I’m sorry, I’m getting in the weeds in here, but this is what happens — you get construction drawings, and then you have to go back because there are changes.
It’s a wise choice to go with the design-build so that the company can actually do the drawings and the site plan at the same time. That’s all it’s missing.
I think at the end of the day, we will save time going this way, and so what is missing is the site plan and then building permits.
Senator Dalphond: When is the expected construction date?
Ms. Bailão: Next year.
Senator Dalphond: Next year. So that’s about a year from now?
Ms. Bailão: We have the RFQ out on the street, and we will be able to have a better, more precise answer once we go through that RFQ. I wouldn’t want to tell you exactly the month because I think we need to go through the RFQ and RFP.
Senator Dalphond: I see in the announcement also there were projects in Montreal, 47 units in Dollard-des-Ormeaux, but there’s not a word about Longueuil. A month or two months ago somebody — maybe a deputy minister or somebody else — said there was a big project coming up in Longueuil, but it wasn’t in the announcement yesterday.
Ms. Bailão: We will be putting out our RFQ and we will be in contact with the local representatives in the community, making sure that everybody is informed, and then putting out the RFQ and having the announcement as well.
Senator Dalphond: This is on Crown land?
Ms. Bailão: This is Canada Lands, yes.
Senator Dalphond: And do you need the approval from the City of Longueuil? Or do you need new approvals for the zoning, the building, construction —
Ms. Bailão: You’re really testing my memory now.
I can get back to you. I just reviewed everything recently, but I cannot remember which ones — most of these are rezoned sites. That’s why we have announced these six sites, but we will get back to you with the exact stage of the process.
Senator Dalphond: I’ve heard the announcement almost every month now for two months, but I would like to know when it starts. So you are not in a position to tell me today but you’re going to check — thank you very much for that.
Some funds were transferred from affordability, I think from Canada Mortgage and Housing Corporation, to BCH. What is the amount that was transferred?
Ms. Volk: I’m not aware of a transfer.
Senator Dalphond: I understand you are still supervising those that you committed to finance, but the rest has been transferred or is in the process of being transferred.
Ms. Volk: Are you thinking about the Affordable Housing Fund?
Senator Dalphond: Yes.
Ms. Volk: So the Affordable Housing Fund is a program we administer and we have had money for that in recent years. We just got a top-up of $1.5 billion in that program, which we will also administer. The intent of that money is to tide us through and the market through while BCH is stood up.
So our funds will end, really, as opposed to being transferred. The funds we have we will deliver, and then the intention is that BCH will be there with their own different product offering that will fill that space that we’re occupying.
Senator Dalphond: I see. You will manage the $1.5 billion?
Ms. Volk: Yes.
Senator Dalphond: Thank you.
[Translation]
The Chair: I have so many questions that I don’t know where to start. Perhaps with design-build.
When you talk about design-build and new technologies, the design-build projects I’ve worked on…. I want to make sure we’re clear on the definition: Design-build is when you come up with the description, you have the land, the project, you produce a complete estimate, with the number of dwellings, the specific features you want inside, then you put out a call for projects, and then the developer or builder bids based on the list, the estimate, the “grocery list” you want. Is that what you mean by design-build? Are we talking about the same thing?
[English]
Ms. Bailão: Yes, the project has the rezoning. We will be putting out a request for proposals on how to deliver a certain number of units with a certain level of affordability under certain conditions in terms of materials — Canadian-made, new methods of construction. Then we will be getting proposals so that the chosen partner will design, do the construction drawings and then deliver the project.
[Translation]
The Chair: When you talk about new technologies, are you referring to materials, construction methods or technology? Because there have been significant advances in construction, particularly in design software such as Beam, which is revolutionary in the construction industry…. Are you not talking about that, but rather about techniques?
In Europe, in Scandinavian countries, they make modular bathroom or kitchen units in factories that can be moved into the building structure; the units are prefabricated and then placed inside a building. Is this the kind of thing you are talking about?
[English]
Ms. Bailão: That is correct. There are different kinds of technology nowadays. There’s the modular where it’s almost like the box comes, and it is almost like LEGO. There are other methods of construction that are more about panelization. When we are talking about a high-rise, for example, it’s more of those methods that are used nowadays, so yes. Depending on the project and the building type, there are going to be certain different approaches that we will get different proposals for sure. I’m certain about that.
[Translation]
The Chair: That’s interesting; thank you.
I looked at the CMHC website; I identified myself as a customer who wanted to build, and there I saw the list and was told where to click to make my application. Among the options offered were the Affordable Housing Fund, the Affordable Housing Innovation Fund, the Apartment Construction Loan Program, the Canada Greener Affordable Housing program, funding for community (social) housing, the Federal Lands Initiative, and I could go on, but it’s pretty much the same as the mandate the government has just given to Build Canada Homes.
Was the government unhappy with CMHC? How do you explain that a large part of CMHC’s mandate is being transferred to Build Canada Homes?
[English]
Ms. Volk: It’s a great observation. If you say it’s a big part of our mandate as defined by the number of programs involved, yes. But some of the other things we do are bigger.
But you’re right; the government has historically given CMHC a number of small — some small, some large, but smaller — individual programs with very prescriptive rules. So you will have $500 million for this program, and you do exactly this, with very specific rules and regulations for each program. We’ve got small carve-outs, and sometimes, even within a big program, we’ll have many carve-outs for different pieces: maybe a carve‑out for Indigenous housing or a carve-out for the North or a carve-out for homelessness or a carve-out for modular housing.
Our programs have been structured in sometimes small but very prescriptive ways. That takes a lot of effort, and if you look through the website, you get an impression that that’s the magnitude of our work. I would say, in fact, the magnitude of our work is on the insurance side, which is very large, and on the program side, really, the big programs have been the Affordable Housing Fund and the Apartment Construction Loan Program, particularly the ACLP.
The government’s intention in establishing Build Canada Homes is to move away from that model and, instead of having individual prescriptive programs, to really have a fund — well, I don’t even know if “fund” is the right word, but an opportunity to invest.
My colleague will have the ability to look at many projects and identify what’s required and do what’s required to get those projects to work, as opposed to the model that CMHC was given, which involved very prescriptive rules about different things.
[Translation]
The Chair: Something more interventionist within the economy?
Ms. Volk: Absolutely.
The Chair: When we examine the estimates and come across the CMHC budget, will it be reduced because some of the activities will be carried out by Build Canada Homes? Will the number of employees at your organization be reduced? Will the budgets allocated to you for all these programs be transferred to Build Canada Homes, or will you retain these budgets to do something else?
[English]
Ms. Volk: Not really, because most of the programs that you mentioned are programs that are — in our terminology — scheduled to sunset. They were programs which we were given time-limited funding for. It doesn’t necessarily mean that the government intended to renew them. If they intended to renew them, then, yes, that funding may get transferred to Build Canada Homes, but it’s not clear that they would necessarily be renewed. It could be that they just sunset, and Build Canada Homes offers services to that clientele but in a different way, with new funding.
[Translation]
The Chair: We will examine all of this in detail, program by program.
[English]
Ms. Bailão: Mr. Chair, if I could just add, I think the big difference is BCH will not be offering programs. We will be partners. We will be a catalyst to develop an industry but also to attract capital.
We will be using private capital to hopefully attract investment and hopefully attract us. We could probably invest in some projects as well. We can do loans. We can do lending. It’s about ensuring the project is moving ahead and ensuring that we use our tools to leverage others. We will use our land. We will use our guarantee capacity. We will use our funds. We will use our lending to make sure we attract other money and leverage all this to make it go farther.
It’s not fair to say, “Oh, CMHC did not do their job properly.” Under the way that they are structured, they would not be able to do this, and they don’t even have an arm to develop.
[Translation]
The Chair: This will be my last question before moving on to the second round, as my colleagues will tell me that I am abusing my role as chair.
Will you have independent revenue like CMHC does? If so, what proportion of your overall budget will be independent revenue?
Will you have independent revenue from your activities, or will the entire budget come from government funding? Based on what you’ve told me about your activities, I would expect to see a line item for independent revenue in your budget from loans or other sources.
[English]
Ms. Bailão: We will not be producing revenue for the government. What we’re hoping to do is produce revenue to create more affordable housing. Our mandate is to deliver affordable housing and to create capacity in the sector and create catalysts.
We have the capacity of equity. As we are developing now, for example, our investment policy and business plan, one of the areas that we’re looking at is how we can take advantage of this equity and maybe create some revolving funds that could help us create more affordable housing.
We would not be a source of revenue for the government, but we hope to be able to create, through these partnerships, a source of revenue to more affordable housing.
[Translation]
The Chair: Can you send us your year 1 budget? Any entrepreneur starting a business or agency has a year 1 budget. Can you send us yours?
[English]
Ms. Bailão: I believe we will have to develop that and give it to the Treasury Board?
Ms. Goulding: Yes. In terms of the way we set up Build Canada Homes as a separate operating agency within the department, the department is supporting the agency’s first year of operations, and once the budget is passed, BCH will be able to access its statutory appropriations. The $13 billion will be coming through statutory appropriation, we hope. That’s the plan. Then we will have to submit our financial plan to the Treasury Board of Canada Secretariat.
We’re just not there yet. By January, I think all of those things will be in place.
[Translation]
The Chair: We will now move on to the second round. Are there any questions?
Senator Forest: You talk a lot about partnerships, and I truly believe that’s the key. Ms. Bailão, I’ll put a little pressure on you. It reassures me to know that you were a municipal councillor. Yes, a partnership is needed with the provinces and territories. However, housing is built on municipal land, and bottlenecks in this area must be avoided. I truly believe that we can succeed if the three levels of government work in a coordinated and effective manner.
During the last election campaign, the Liberal Party, which now forms the government, promised to cut by half municipal development charges for multi-unit residential buildings in collaboration with the provinces and territories.
I understand that specific measures may be announced in the next budget. However, I would like to know this: How do you intend to reduce development charges? Will it be through project-based grants? Do you already have an idea of how this refund to municipalities will be structured to compensate for the loss of revenue from those charges?
[English]
Ms. Goulding: Thank you for the question. At this time, the department has done a lot of work to explore the impact of development fees across the country, and what we’ve found, as you’ve mentioned, is that it is very local. Development fees are the biggest barrier in Ontario and British Columbia. It’s not the only place where development fees are used, but it is very much where that barrier impact is felt.
We do expect that the government may, in fact, announce how it intends to support that development charge issue in the budget, but we don’t have anything more that we can share right now.
[Translation]
Senator Forest: If we achieve the goal of being able to offset and reduce charges, we will be able to generate a margin. How can we ensure that this margin is not reused by developers, for example? Since we are going to reduce fixed input costs, how can we ensure that, on the other hand, the developer does not ultimately recoup this space?
[English]
Ms. Goulding: You raise a completely valid point, senator. I do think that is one of the challenges in dealing with this particular issue. It is very difficult to know whether the elimination of a development charge, for example, does something — like Ana Bailão mentioned — in terms of making the math work or whether that is something that a developer could use to increase their profit margins. It is something that the government is thinking very seriously about in terms of how best to address that issue.
The challenge is, of course, that development charges are regulated by provinces, and they do set criteria in terms of how those development charges are established and charged. We do know that there are some really difficult issues around the federal government at our level being able to ensure that savings in development charges are passed on to the consumer or simply used to really make that math work. I think it’s part of that conversation.
Senator MacAdam: Part of Build Canada Homes, as described in the Prime Minister’s announcement, is to:
Help create the conditions for a high-capacity, growth oriented non-market housing sector that can scale, built on new and innovative partnerships with reduced reliance on ongoing government subsidies.
I’m wondering, how will these new and innovative partnerships produce less reliance on ongoing subsidies? You mentioned equity investments, and you mentioned guarantees. Were those financing options available with CMHC before, or are these new for housing?
Ms. Bailão: I think in terms of the sustainability of the operations it is making sure that the project as a whole — because we are coming in with a mixed-income model, with the supports through the different tools and through the land — is less reliant on future operational models. Once we are working with that non-profit or whoever is developing, the municipality and so on, ensuring that the pro forma is going to work not only during the development and construction, but that the operations actually work and that there’s the feasibility to continue to work: There’s revenue coming from the market rents, and the loan is at a size that can be sustained throughout the project. All these things are taken into consideration.
Senator MacAdam: As for attracting partnerships and kick-starting — being a catalyst is what you talked about — and having more partnerships, do you think that the guarantees and the equity investments would stimulate that kind of —
Ms. Bailão: The deal is going to depend on what partners the organization, the municipality or the developer is coming to the table with. Creating affordable housing can be very different depending on what partners you can bring to the table.
I’ve been creating affordable housing both in the private and in the public sector, and one thing that’s common is you need to bring different partners. You need to be able to stack different programs and bring different partnerships to the table. We believe that our tools are going to enhance those kinds of partnerships, and we want to be able to push for those kinds of partnerships.
Senator MacAdam: So more tools attract more —
Ms. Bailão: More tools and the conversation to be that organization that a non-profit or somebody who wants to develop affordable housing can come to and have us work with what they have. Maybe they have land, and we can partner through some of our programs and bring in the municipality or the provincial government, be that partner that can leverage not only our tools but theirs as well, bring more and be able to create affordable housing and create capacity. It’s very important. One of the things we want to ensure through this process is that not only are we a catalyst for a new industry, but we create capacity in our non-profit sector across the country.
Senator MacAdam: Thank you.
Senator Ross: The idea of what is affordable seems to be a complicated issue. You mentioned that the standard is 30% of median income. I’ll use the example of my home community of Fredericton.
Fredericton has just released a Housing Needs Assessment. In that, it indicates that median household income in Fredericton is $91,500. That means nearly $2,300 would be considered affordable housing. The average rent currently, as of August, was only $1,850, which we’re hearing loud and clear is still not affordable because about 20% of the households have an income of $37,000.
Just to give some context to that, in the five years between 2019 and 2024, a person with a household income of $60,000 could afford 60% of the listings that were for sale in our community. In 2024, only three of them would have been considered affordable. How do you square all of that? What is affordable?
Ms. Bailão: We use that 30% of median household income as a benchmark and then everything below that. We are going to get deeper affordability as well, exactly because of what you’re saying.
For example, when we’re doing transitional housing, it’s not going to be $2,500 per unit. It’s going to be deeper than that. We will have different levels of affordability. We’re going to target up to that level and then below.
For example, our transitional projects will be deeply affordable and will target people who are most likely on social assistance programs, which, across Canada, are significantly lower than median household incomes anywhere. We will be targeting that. It is income-based, so it will be on a 30% basis.
It’s interesting. We were having a discussion with our team, and one of the things we want to be able to do through our programs is exemplify what this means across the country. Whom are we housing?
When I talk to most people about 30% median income, they wonder what that actually means. We want to be very clear and transparent on what kind of people we are housing. We are going to house somebody who is on social assistance. We are going to be housing people who are — for example, in Toronto, the average income in social housing is $19,000. That’s the household income of those people. We’re going to be targeting those people. We’re going to be targeting workforce housing, namely, the nurse who is just graduating or the new teacher who is just graduating — that workforce for whom, nowadays, unfortunately, our markets are not producing housing that is affordable enough. Those are the kinds of people for whom we will have a definition that will be going down the housing spectrum from transitional to median income.
Senator Ross: What kind of an income do you think Build Canada Homes is going to have on the overall need for homes in our country? The Housing Needs Assessment in my community said we would need a minimum of 14,000 housing units over the next 10 years.
How much of that do you see Build Canada Homes in any community being able to support or provide?
Ms. Bailão: Right now, we are in the process of developing our business plan, also to initiate certain conversations about partnerships and bringing more of these funds. We will be able to publish our goals, be measured and be very public about the kinds of units that we’re producing and the kinds of people we’re housing. We’ll be publicly reporting on that.
Senator Ross: Thank you. Again, using Fredericton as an example because it’s the community I’m most familiar with, one of the things in their housing plan talks about the municipality finding land, so it wouldn’t be coming out of the Canada Lands Company.
When communities are coming up with these creative ways of jump-starting programs, will they get front-of-line access to Build Canada Homes support?
Ms. Bailão: That’s exactly the kind of partnership that we want, to have people say, “This is what we have. How can we partner?” Like I said, we’re not going to be a program where you’re coming in and asking for financing or a grant. We want to be able to see what the organizations are bringing to the table. How can we make this work? How can we partner with municipalities, provinces and non-profits?
There are a lot of non-profits that have significant amounts of land, but they don’t have the capacity. How can we create that capacity? That’s where Build Canada Homes is going to be partnering to leverage our tools but also leverage them and bring all these together.
Senator Ross: Thank you very much.
Senator Kingston: This question is for Ms. Bailão. It’s from your 2025-26 Departmental Plan. Thank you for that. You talk about the Homelessness Reduction Innovation Fund, which was around apparently last year as well and is through to 2027-28. It is managed by the Canadian Alliance to End Homelessness, but it talks about only launching calls for proposals to deliver this initiative outside of Quebec. Was this a kind of pilot project in Quebec, then, in that fiscal year?
Ms. Goulding: Thank you for the question. In the province of Quebec, we have the Canada–Quebec Accord that governs the way we spend Reaching Home funding in Quebec. What we did is include the Quebec portion of that fund as part of our conversation with Quebec in that context.
The Homelessness Reduction Innovation Fund is very much targeting supporting some of the work we already do under Reaching Home around coordinated access and intake and around supporting communities to make those broader connections you mentioned earlier. In Quebec, though, because we work with them through this Canada–Quebec Accord, that funding is part of those conversations.
Senator Kingston: So will the request for proposals be going out across Canada to all provinces in this next round?
Ms. Goulding: The funding administered by the Canadian Alliance to End Homelessness is not something that will be accessible in Quebec. Like I said, that funding is part of the conversation that we are having directly with the Government of Quebec on how to implement coordinated access in that jurisdiction. It’s something that we’re still working with them on. The Government of Quebec does not have a province-wide information management system for homelessness, so this is kind of a fundamental conversation that we’re having with them right now and on which we hope to be able to conclude a way forward soon.
Senator Kingston: But it does speak about delivering this initiative outside of Quebec. That’s what I’m wondering about.
Ms. Goulding: Yes. The money that the Canadian Alliance is managing is mostly outside of Quebec.
Senator Kingston: Thank you.
Senator Dalphond: Let’s take this new project in Toronto that you just announced yesterday. How is that going to work? Are you going to ask for proposals from contractors? They will come up with their proposals. Will you pick and choose the best one, according to your selection criteria? Then they will start the work, and you will be paying as they go? Will the construction be financed by you and compensation paid to the contractor by you? Once the project is completed, what happens? You said you are not going to be the owner. So will you transfer it?
Ms. Bailão: We will be the owner, but it will be operated by a non-profit. Or at that point in time, there could be a decision also —
Senator Dalphond: So that would become Crown property?
Ms. Bailão: At this point in time, that’s where it is. There could be a point in time we have a non-profit that could be interested and have the capacity to acquire it, but we have that opportunity. Right now, the plan is to continue to have ownership.
Senator Dalphond: So each project will have a non-profit corporation that will manage it, yes? These 540 houses will be managed by this corporation?
Ms. Bailão: It will eventually be put out also for an RFP at that time for a non-profit organization to come in and operate it.
Senator Dalphond: Is it contemplated eventually that the occupants of these houses will pay a rent based on their income?
Ms. Bailão: Yes.
Senator Dalphond: So similar houses will be rented at different prices, depending on the income of the family or the unit. Will there be a program at one point to transfer the property to these people, if they are interested in buying the property?
Ms. Bailão: At this point, no. It’s a rental program that we have and that non-profit organization will be operating. It will be 60% market rental and 40% affordable rental, with 20% of that to be deeper.
Senator Dalphond: Which means that you’re financing these properties. Essentially, you will provide subsidies because these people will be paying 20% of their income, which will be below, I suppose, covering the costs of the rental.
Ms. Bailão: As we put the project together, that’s why we have a percentage that is market-based because that will help finance —
Senator Dalphond: Cover the rest —
Ms. Bailão: — the project as a whole, with the grants that the government puts in, with the value of the land. The affordability is created through land value, through the grant system and through the operational revenue that comes in from the market rent.
Senator Dalphond: The income might be good one year, bad the following year or vice versa. Will the rent be readjusted on a yearly basis based on the family unit income?
Ms. Bailão: That is something that, to be honest with you, we’ll be developing very closely with the non-profits. Even municipality plans, many of them have access systems that I’m sure at that point in time will be taken in consideration with the work that the ministry already does.
Senator Dalphond: The non-profit will have to cover the cost invested in it? Is it like a mortgage?
Ms. Goulding: I think what I would say — Ms. Bailão is absolutely right — is this is something we’re working towards right now. I think part of the vision that we have for Build Canada Homes and what it will be able to catalyze in the sector is really a transformation in their own business model. We do have very sophisticated not-for-profit developers who understand that a business model that is self-sustaining is really important, and moving there is really important. Just to build on what Ana was saying, when we think about that RFP and who the non-profit is, doing the operating is understanding their business model and how they’re leveraging, say, the equity in the buildings they have as part of their portfolio, how they are working in this sector to really think about that long-term sustainability.
Even when we talk about how we will impact that reduction in reliance on government subsidies, that is really about the sector also embracing and building that capacity that Ms. Bailão talked about, embracing a new business model that really does allow them to think about how they leverage the equity in their own portfolio, how they leverage mixed income, mixed rents to build that sustainability and allow them to function in a different way.
Senator Dalphond: How are you going to cover the running costs? At one point, the roof will have to be replaced. At some point there will be some adjustments to do to the heating systems and everything else. I assume your model is that the non-profit corporation will have to cover that by itself because the government is not going to put in more money. The project has been handed over to this corporation.
Ms. Bailão: The pro forma of the project right now allocates to have a fund like most builders or condos have. The pro forma that we’ve created allocates funds to deal with those situations.
Senator Dalphond: You will have to generate these funds from the rents they collect, yes?
Ms. Bailão: It’s part of the pro forma how we structure the business plan for the project.
Senator Dalphond: But they will not have to pay a portion of the capital that will be invested.
Ms. Bailão: There will be a fund created from day one as part of the project, and money comes into that fund.
Senator Dalphond: I understand that, but you’ve put like $300 million to build these houses. That’s too much, but let’s say you’ve put in $150 million to do that project, and that’s the capital investment you made up front. Are you going to receive any return on that investment? Is that part of the rental, part of it will be returned to you, the Crown, that has financed the project, or nothing will be coming back?
Ms. Bailão: As we develop the RFPs through the organizations and we work with the models with the organization, we will be developing that model as well. This is affordable housing, so the money is creating the affordability that we have on-site, including creating, through the operating fund, a fund to create the maintenance of those buildings and those properties as well.
Senator Dalphond: Thank you.
[Translation]
The Chair: If I understand correctly, you will not own the buildings? Will you own the buildings?
[English]
Ms. Bailão: On the Canada Lands, we are the owners of the land.
[Translation]
The Chair: Okay, on federal land, are you going to do something like long-term leases?
[English]
Ms. Bailão: Only federal lands, yes.
[Translation]
The Chair: I’m also trying to understand your website: transitional housing, supportive housing, support services and community housing? Are we talking about student housing, for example? Would that be eligible?
[English]
Ms. Bailão: Correct, yes.
[Translation]
The Chair: In another life, I saw projects in my municipality for specialized homes for young people with autism who needed support, so would this type of accommodation be eligible?
[English]
Ms. Bailão: That’s correct.
[Translation]
The Chair: Are there any other questions? I think we’ve covered everything. Thank you very much. It was very interesting. As you can see, there is a lot of interest from senators in housing and this new mission. Thank you to the whole team; we will resume next Tuesday at 9 a.m. Thank you.
(The committee adjourned.)