THE STANDING SENATE COMMITTEE ON NATIONAL FINANCE
EVIDENCE
OTTAWA, Wednesday, October 29, 2025
The Standing Senate Committee on National Finance met this day at 6:46 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 and welcome to all honourable senators, as well as all Canadians following us on sencanada.ca. My name is Claude Carignan, I am a senator from Quebec and I am the chair of the Standing Senate Committee on National Finance. I would now like to ask my colleagues to introduce themselves.
Senator Forest: Éric Forest from the Gulf Division in Quebec.
Senator Gignac: Clément Gignac from Quebec.
Senator Dalphond: Pierre J. Dalphond, De Lorimier division, Quebec.
Senator Galvez: Rosa Galvez from Quebec.
[English]
Senator Cardozo: Andrew Cardozo, Ontario.
[Translation]
Senator Boudreau: Victor Boudreau from New Brunswick.
[English]
Senator Ross: Krista Ross, New Brunswick.
Senator Marshall: Elizabeth Marshall, Newfoundland and Labrador.
[Translation]
Senator Hébert: Martine Hébert from Quebec.
The Chair: Today, we continue our study of the federal initiative to support housing creation.
For our first group of witnesses tonight, we are pleased to welcome Ray Sullivan, Executive Director, Canadian Housing and Renewal Association, and Tim Ross, Chief Executive Officer, Co-operative Housing Federation of Canada. Thank you for agreeing to appear before us this evening. I give you the floor; you have four or five minutes each, and then we will move on to the question period. We have an hour to spend together.
[English]
Ray Sullivan, Executive Director, Canadian Housing and Renewal Association: Thank you, senator, and good evening, kwe, kwe. Thank you all for the invitation to appear before the committee.
The Canadian Housing and Renewal Association, or CHRA, is the national voice of the community housing sector. We represent public, non-profit, co-op housing, as well as shelter providers, researchers, academics, municipal governments and any others who come together to work on strengthening the role of non-market community housing.
It is now widely acknowledged that the federal government’s retreat from community housing in the mid-1990s has directly led to today’s housing and homelessness crisis. Thirty years ago, both Conservative and Liberal federal governments withdrew from funding new community housing development.
What we are dealing with now is a complicated and structural problem. There is no silver bullet, but there are major strategic initiatives that will address the crisis, and the top of my list is a focused and deliberate effort to increase the share of non-market, mission-driven community housing. I’m talking about housing owned by land trusts, non-profits, co-ops and public housing agencies. This also includes not-for-profit homeownership developed by groups like Habitat for Humanity, who will be testifying later this evening.
For too long, federal policy has been influenced by a trickle-down theory of housing supply. CMHC’s analysis says that if we can double housing starts and add 3.5 million homes to the market in the next decade then the oversupply of housing will result in lower housing costs. Simple supply and demand, right?
But it’s an economic analysis exercise, a desk exercise; it isn’t a practical policy prescription. Why? Because the market is not willing or able to oversupply the market, and this is what we’re seeing happen in many cities right now. As rents and housing prices have levelled off in many parts of the country — and this, I point out, was the intended policy outcome the government has been working on — private market developers have stalled and put projects on the shelf.
There are reports of an oversupply of high-end rental units in some parts of the country. There is unsold condo inventory in some big cities across the country. CMHC’s analysis was a desk exercise, not a practical real-world solution, because the market is self-correcting, and it must self-correct to a level that allows for profit.
Yes, we need to reduce the cost of delivery and housing development. This means taking a hard look at development charges and fees, construction and labour costs. But the fundamental economic principle remains: When we are dependent on a profit-driven system to provide adequate housing for the population, which I point out, is recognized as a human right in Canada, the private market cannot rapidly oversupply the market because it reduces profit and they can’t find investors. That’s why private developers do absorption studies before undertaking major new developments: to make sure they aren’t flooding the market with new product, and of course, they adjust their timelines accordingly to avoid that outcome.
So what is the answer? The answer is to increase the share of non-market, mission-driven community housing to help stabilize the housing market. The current and lasting boom-bust cycle of residential real estate development is an obstacle to improved economic productivity, and the lack of affordable housing is a drag on our economy.
We released an analysis two years ago co-authored by Deloitte Canada that showed that increasing the supply of non-market community housing just to the OECD and G7 average of 7 to 8% will boost productivity a staggering 6 to 9% in every year that we maintain that level of community housing in the economy.
In terms of permanently increased GDP, it pays for itself in less than two to three years. This is consistent with the Scotiabank recommendation in 2023 to double the supply of social housing and the RBC recommendation in 2024 to quadruple the rate at which we build social housing.
CHRA is calling on Canada to support a target of doubling the share of community housing in the next decade and, within that target, quadrupling the supply of Indigenous-led community housing — housing that is for Indigenous and by Indigenous. Once we achieve those targets, we need to aim for a 20% market share. To get there, we need to focus specifically on non-market community housing. Building non-market community housing directly addresses housing need, takes pressure off the rental market, will have a positive ripple effect across the housing continuum and makes our economy more efficient and more productive.
One of the missed opportunities of the National Housing Strategy was that it was not focused on non-market community housing. In fact, the biggest envelope of spending was a program that financed new private market housing with very limited, very modest and very temporary affordability.
We have an opportunity to correct our course. We’re encouraged that the Prime Minister and the Minister of Housing have committed that Build Canada Homes will primarily focus on non-market housing.
Thank you.
[Translation]
Tim Ross, Chief Executive Officer, Co-operative Housing Federation of Canada: Good evening, and thank you to the committee for inviting me here tonight to participate in this important study. My name is Tim Ross, Chief Executive Officer of the Co-operative Housing Federation of Canada, or CHF Canada, the national voice of co-operative housing.
CHF Canada has long been involved in federal housing policy, from the first co-operative pilot projects in the late 1960s to the co-design, launch and implementation of the Co-operative Housing Development Program in June 2024.
Already, $423 million in new projects have been announced. We have launched construction sites and are delivering turnkey housing at a pace unmatched in decades. We are ready to continue.
In my brief opening remarks, I will first discuss the value of co-operative housing; second, some start-up considerations for Build Canada Homes; and third, some potential risks and possible solutions.
First, on the value of co-operative housing, co-ops house more than a quarter of a million people in this country. Demand is increasing because co-ops offer a strong sense of community, affordability and security of tenure. In a housing market that leaves too many people behind, co-ops empower people and give them control over their lives.
A recent study shows that co-operative housing costs tenants $400 to $500 less per month than private rental properties of a similar age. What would you do with an extra $400 to $500 per month?
[English]
Now I wish to pivot to some considerations around recent policy announcements relating to the start-up of Build Canada Homes. We certainly commend the federal government’s continuing commitment to play a stronger leadership role in addressing the housing crisis, and we appreciate that Build Canada Homes will focus on the development of much-needed affordable community and co-operative housing at a faster and larger scale. We also agree that it is prudent for Build Canada Homes to define affordability based on household income rather than market averages since there is a disconnect between what the market is charging and what people can afford.
Finally, we commend Build Canada Homes for committing to the launch of the Rental Protection Fund. The most affordable housing we have today is the housing that has already been built. Protecting security of tenure for renters while increasing the asset base of non-profit and co-op housing in Canada is a proven win-win.
At this juncture, I also wish to highlight three potential risks that need to be addressed. First, Build Canada Homes is a brand new federal agency arriving in the final years of a 10-year National Housing Strategy. Industry and community have invested significant resources to deliver a robust pipeline of new housing opportunities based on the current policy and programmatic landscape. As we transition, we must ensure that clear signals are sent to the market so that current projects in the pipeline — like the 4,000-plus new co-op homes that my organization has in pre-development — can proceed without delay or disruption. It is vital that the federal government clarify a long-term investment framework to ensure that affordable housing development will continue at scale and without disruption.
Second, there is an acute opportunity for the federal government to clarify its position on the continuity of important measures that provide security of tenure to low-income households. Programs like the Federal Community Housing Initiative and the Canada Housing Benefit are set to expire in just a couple of years. Hundreds of thousands of households rely on these income supports to maintain housing stability. To protect deeply affordable housing, these measures need to be made permanent and need to be expanded to new housing developments.
Third, there is an enormous inequity in housing outcomes affecting urban, rural and northern Indigenous households. Despite a $4-billion commitment in 2023 to begin addressing this inequity, the dollars seem to be stuck in the machinery of government and have not been deployed to the community. I would urge the committee to use its reporting and questioning authority to find out why this is and what can be done about it. I’m pleased to see on the panel tonight other experts who I expect will bring even greater clarity to this issue.
Thank you for the opportunity to highlight the value of co‑operative housing in the context of current federal programs and initiatives to support housing creation. I look forward to further discussion. Thank you.
The Chair: Thank you, Mr. Ross.
Senator Marshall: Thank you very much for being here tonight. I’ll start with a general question for both of you. The federal government has indicated that they need to build 3 million more homes by 2031 or 2035.
Both of you are looking at a certain segment of the population. Have you identified how many of those 3 million homes are for the clientele that you are looking after? What is the shortfall? Have you done an assessment where you can put a number on it and say, “We need so many new homes by 2031”?
Mr. Sullivan: Thank you for the question, senator.
Yes. In fact, there was research published by the Federal Housing Advocate that analyzed exactly that housing need.
One of the common indicators of housing need is called “core housing need,” but it actually excludes people who are without a home, incarcerated or institutionalized. That report estimated 4.3 million homes are needed for low- and very-low-income households.
Part of the challenge is that it is not just about building new houses, as Tim highlighted. The ability to stop the loss of existing private market rental affordable housing is also important.
Across the country, for every one new home that is affordable to low- and modest-income households built with government support, we’re losing nine homes in the private market due to loss of affordable rents or absolute loss of that housing stock. So it’s the combination of those two things.
Senator Marshall: As an example, for co-operative housing, how many new co-operative housing units do we need? Is there a number for it?
Mr. Ross: We would certainly support the numbers cited by Mr. Sullivan in recognizing that we need both a combination of non-profit affordable housing and co-operative housing. They both add value to addressing Canadians’ housing needs.
We also know that we have a significant shortage of supportive housing in communities — housing and supports needed to address homelessness.
As it stands today, we need a mix of housing types. Co-ops and non-profits would form a proportion of the numbers cited by Mr. Sullivan.
I won’t get into a rivalry and say that there should be more co‑op homes than non-profit homes. Both forms of housing are important for addressing the shortage of affordable housing.
Senator Marshall: Is there a number? The federal government is saying we need 3.5 million more new homes. What number of that 3.5 million would be, for example, co‑operative housing? How many of those units would be non‑market community housing? Is it broken down like that? I’m trying to get a handle on it. I have another question after that. I’m going somewhere.
Mr. Ross: There are a number of targets that would move us in the right direction. I’m sorry, I don’t have a specific number. I will say, as many as possible, believing in the value of co-op and non-profit housing.
[Translation]
Senator Forest: Thank you for being here. Mr. Sullivan, I know that municipalities are among your members, and they are key players in the challenge of creating new social housing and urban renewal. What challenges do municipalities face in relation to government programs in order for these programs to be fully effective?
Mr. Sullivan: Thank you for the question.
[English]
Municipalities are a fundamental part of the equation and play an important role as system coordinators in many parts of the country. There is also pressure on municipalities now, especially in some provinces, to look at development charges and how that gets in the way of being able to develop additional housing. This is a challenge because municipalities have limited revenue sources to pay for infrastructure and services.
It is also a challenge in our federal system that when one order of government makes an investment in supportive housing, it saves a different order of government a whole lot of money in hospital care, the judicial system and those kinds of things.
Yet, the returns on investment are very well known. The At Home/Chez Soi study, which is one of the gold standards in this, looked at it. For every dollar spent on intensive supportive housing, we save $2 elsewhere. I have seen studies that show even a higher ratio of rate of return.
Municipalities are at the front line of that crisis, but they are not the order of government that benefits from that return on investment. So there needs to be a well-coordinated approach among all three orders of government — all four if I add Indigenous governments to that as well.
That was one of the elements that could have been stronger in the National Housing Strategy: engaging the Federation of Canadian Municipalities in looking at a new deal for municipalities that help them to engage on these issues, but also much stronger engagement — particularly when we’re talking about supportive and deeply affordable housing — with provinces and territories alongside the federal government.
[Translation]
Senator Forest: When you mentioned off-market community housing earlier, what kind of housing does that refer to?
[English]
Mr. Sullivan: It is any form of housing that is operating outside of the speculative market. That includes housing that is owned and operated by non-profits, co-ops and public housing where the motivation and purpose of that housing is oriented toward affordability and security of tenure, not profit for investors.
It is more insulated from the kinds of cycles we see in the economy leading to this boom-bust cycle in residential construction now. It provides a stable safety net for individual renters and households, but also a stable keel against those swings in the market altogether.
We see this in other jurisdictions in Europe and other places where this has a positive effect. In the province of Quebec, where the proportion of community housing is more like 8% to 9%, we see how that dampens some of the most acute parts of the housing and homelessness crisis compared to other provinces with a much lower percentage.
[Translation]
Senator Forest: Is your organization successful in matching needs? When building community housing, there is often a tendency to build three-and-a-half or four-and-a-half-room units, when there is a significant need for families and five-and-a-half-room units should be built.
Are you succeeding in making projects viable? Should there be incentives, particularly with the Build Canada Homes program, which allows for housing where there is a better match between supply and demand and increases urban density to avoid having two cars, for example?
Mr. Sullivan: Thank you for the question.
[English]
Mr. Sullivan: It is an important question, and it is in part an answer to Senator Marshall’s question as well.
The Housing Assessment Resource Tools group out of the University of British Columbia has done a detailed analysis — Canada-wide and province-by-province — of exactly what level of affordability, and by household size, is needed unit by unit across the country. Those numbers are there and are able to be found.
Yes, the programs themselves also need to create incentive for the right kinds of densification and family-sized apartments as well as for individuals.
Senator Ross: Thank you both for your presentations. My question is for Mr. Ross.
Are the co-op housing initiatives easy or simple to implement? Where do your clients who would end up living there come from? Are they people who were previously housed in a different situation, or are they unhoused?
I’m from Fredericton, New Brunswick, as you know. We don’t see as many co-op housing projects as we could. How could we get more? Are the timelines the same as commercial projects? Can private developers or businesses get engaged in these types of co-operative projects as well? Sorry, there were 10 questions. Go for it.
Mr. Ross: I will try to address as much of that as I can.
The formation of a co-operative is relatively easy insofar as co-operatives have their own distinct statutes and incorporating legislation. Our organization provides that expertise. That expertise is actually deployed on the ground right now in Fredericton in pursuit of a new development opportunity. We aim to fix that problem of there not being enough co-ops in Fredericton.
In terms of timelines, many of the timeline struggles are consistent across housing typologies.
What is distinct about co-op housing is that the community is involved in the development of the co-operative. We aim to create not just four walls and a roof but a strong sense of community and ownership in the project.
We partner with businesses and developers as well. In fact, one of the largest co-op developments under way in Canada right now is a very strong partnership with a developer. We partner with the private sector to do all of our building, and we are also often able to attract some forms of community investment to support the development of the housing co-operatives as well.
Senator Ross: You answered all the questions. Thank you.
I have some questions for Mr. Sullivan as well. I’m wondering if you can give me a sense of how many non-market housing units there are that are under your umbrella and how many there should be. Again, where do your clients come from? Are they unhoused? Are they under-housed? Who are you looking to serve at this time? If you were to say that there should be a policy change the federal government should do — one that would make a big difference — what would that policy change be?
Mr. Sullivan: That is a great question. Thank you very much. The current supply of non-market community housing across the country is about 750,000 homes altogether, and it has been growing in terms of raw numbers over the past several years with support from the National Housing Strategy. But as a percentage of the total housing supply, it is not growing. In fact, it might actually be shrinking, and we are preparing research that we will release at the end of November to document exactly that.
The tenants and residents of this non-market community housing come from all walks of life. Some of it is mixed-income housing, including deeply affordable and subsidized rents, but also near-market and middle-market rents and everything in between.
In some cases, there are also non-profits providing additional support and wraparound services to help people live independently in the community where that otherwise might be a struggle. In others, it is just a rent that folks can afford at the near end of the market.
One of the important differences is not just the affordability of the rent but the security of the tenure, which is much stronger in the non-profit sector and the co-op sector than you might see in the private market. One recommendation to the government would be to set specific targets around the share of the supply of non-market community housing.
Senator Ross: Thank you.
Senator Cardozo: I just want to take the question from my colleague Senator Ross a little further and ask you, Mr. Ross. There are so many Rosses. I’m trying to keep it straight here.
Could you tell me more about how a co-op works? Does a group of people come to you, or do you go out to people and recruit them and try to get them to engage in a co-op?
Mr. Ross: It is certainly a bit of both. Right now we are finding that housing development is very challenging, particularly in the environment that we exist in today. The majority of co-ops and not-for-profits in Canada that were developed in the 1970s and 1980s operate at a very small scale. We now aim to scale up the existing portfolio base of co‑operative housing and try to bring the existing asset base together, because this creates a stronger basis of continuing operation and continuing development. So we go to communities and pursue sites and development opportunities where we know there is a development opportunity, and then we bring community into that development. Sometimes there are community groups out there wondering, “How do we start a co‑op?” They call us, and we help to advance their interest in becoming members of housing co-operatives.
Senator Cardozo: At what point do you reach out for government money, and is government money for co-op housing available at all three levels of government?
Mr. Ross: No, I wouldn’t say there are programmatic supports specifically for co-ops in all jurisdictions. What is important, particularly at a federal level, is to make sure there is some sustainable, long-term, almost permanent source of construction financing and take-out financing available. Without that, it is really hard to put together the rest.
Senator Cardozo: So it is based on loans. Nobody is giving you grants?
Mr. Ross: There are certainly grants available, and grants are important for offsetting the operating costs or the construction costs so that the starting housing charges or rent levels can be more affordable for the end users, for the members.
Senator Cardozo: I want to ask this simple question: What’s the simplest way of providing housing for all those folks who are unhoused today? Is there a low-cost way to do it for all the people who are in encampments?
Mr. Ross: That’s a good question. I wish it were as simple as a silver-bullet answer, but right now Canada lacks any long-term sustainable source of funding and financing to develop community housing at scale. If we start to focus on and address that gap, then we can start to build the rest, particularly to catch up on the growing prevalence of homelessness and encampments in all communities. But homelessness is fundamentally a housing problem.
Mr. Sullivan: A month ago, our organization just finished a study tour to Helsinki, Finland. Finland is one of the only jurisdictions in the developed world that has effectively ended chronic homelessness. We had a lot to learn from them. The factors that generate homelessness in Finland are the same that generate homelessness in Canada, and the ways of getting people out of homelessness in Finland are the same as doing it in Canada.
The issue is that they just keep doing it, and they don’t stop doing it. They found that they are spending less money per person now than they were 15 years ago before they began this effort, because the costs in emergency rooms, the costs of the judicial system, the costs for all those other parts to society are lower because they are housing people. It is a supply-based program. They are building a lot of supportive housing, and they are resourcing it with ratios: There are nurses who are providing the support at a ratio of 3 to 1 or 4 to 1, compared to a Canadian context where you would see support givers at a ratio of 12 to 1 or 15 to 1. So they are spending more money to get it done, but it actually costs them less overall in the long run. They have shut down shelters. They have one shelter in the city of Helsinki with about 55 beds, and it always has space.
[Translation]
Senator Hébert: Mr. Ross, in your presentation, you referred to the creation of the new agency, Build Canada Homes. Mr. Sullivan, in correspondence you sent to the Minister of Finance, among others, you mentioned several programs and funds that exist for all kinds of construction and clienteles in the housing sector.
Given the urgency, scale and diversity of the issue across Canada, wouldn’t it have been more efficient for the government to create a kind of entity that would bring together all these programs and funds, similar to what has just been done in the defence sector and what is also being done with the creation of the Major Projects Office? Would that have helped or could it help?
Mr. Sullivan: Thank you for the question.
[English]
In my understanding, the role of Build Canada Homes is to consolidate all the resources that are primarily focused on non‑market community housing with Build Canada Homes. That means some programs that were at or are still at CMHC might migrate over to Build Canada Homes.
The transition through that is very important to us. It costs about $300,000 or $400,000 to put together an application for CMHC. You have to be very far advanced in your development before you are eligible to apply, and you don’t get a signed commitment and a fixed interest rate until you’ve actually started construction with CMHC, which puts a lot of risk on the non‑profit developer. These are some of the rebalancing of risk equations we are expecting to see with Build Canada Homes and more flexibility around lending.
However, the Affordable Housing Fund at CMHC was recapitalized recently, which is fantastic. That probably takes it into the first quarter of next year. Will Build Canada Homes be stood up and ready enough so that there is a seamless transition, or will those projects be going into a dead end that reaches the end of its financing? This is a concern.
Mr. Ross: I would echo that concern. I reiterate that through this transition there are projects where there has been significant investment in feasibility and predevelopment. The application period for the second round of the Co-op Housing Development Program under the existing suite of programs closed at the end of the summer. We know that the budget available for that program is insufficient to meet all the qualified demand. So there is more qualified demand that would qualify for financing than funding and financing available. Some opportunity to consolidate and create one window with the federal government to streamline access to investment would certainly be welcome. It needs to happen on a timely basis because, as these proponents wait for a response on their applications, costs are going up, conditions are changing and there is a risk of projects becoming non-viable after all of this investment in their feasibility in predevelopment.
Senator Galvez: The Everyone Counts 2024 report says that nearly 60,000 people were experiencing homelessness on a given night. That’s horrible. That’s abhorrent data. If my colleague Senator Pate, who used to sit on this committee, were here, she would probably ask how these people who experience homelessness reach other things than shelters? It joins to the question of Senator Cardozo: Do you go to them or do they come to you? It also relates to the question of Senator Marshall: Of the 3 million, how many do we need for this group of people to bring down these statistics?
Mr. Sullivan: Thank you. Research has traditionally shown that 80% or more of people who end up unhoused are able within a few months to get themselves back on their feet and stabilize and find homes. Over 80%.
Senator Galvez: 80%.
Mr. Sullivan: The challenge that is happening right now, though, is that those accessible affordable homes that people were able to find are no longer available in the private market, and the pace at which we are building co-op and non-profit housing has not kept up with population growth in overall housing supply. So it is harder to get out of homelessness than it was before, and then people go down the spiral and suffer through those challenges.
Senator Galvez: The situation in Ottawa really strikes me. I live in Lévis, Quebec. I arrived from Peru at the end of the 1980s, and I saw the really big co-operative movement, and it was very nice. We live here in Ottawa three days a week, and it is unbelievable to see these rich condominiums, which are $5,000 to rent, and just at the other corner there are shelters and homeless people. Is the municipality unable to organize itself? According to you, what’s happening?
Mr. Sullivan: It’s a phenomenon that 10 years ago you only saw in big cities and it is something you see in small towns and small communities that have never seen that kind of visible homelessness before. You see encampments in small towns across the country. In many ways, it is like a game of musical chairs. When the music stops, it is the person who cannot move as quickly and it is the person who is not as quick to react who finds themselves without a chair and is out of the game. That’s what happens. Racialized communities, people with unstable employment — and some of those might be people who experience addictions or mental illness and have trouble with gainful employment — even people with stable, low-income jobs find themselves ejected from the system because there is not a supply at levels that they can afford.
[Translation]
The Chair: Thank you very much.
Senator Miville-Dechêne: I’m going to talk to you about co‑ops. You think we need to double the number of units. I saw it in one of your reports: CHF Canada says that we need to build new housing co-ops and double the number of non-private housing units by 2030. What are the financial and regulatory obstacles you need to overcome to achieve this result?
Mr. Ross: Thank you for the question.
[English]
In terms of obstacles, the main obstacle is this: First, it has taken some time for the community and non-market housing sector to get its footing again. We had 30 years of federal divestment in the creation of community and co-operative housing. Recreating that development capacity and priming the pump have taken some time, but now we are actually up and running. We were pleasantly surprised to see that the qualified demand for the Co-op Housing Development Program is actually much higher than the amount of federal budget in terms of available financing and funding. So we want to try to solve for that in terms of an obstacle.
One other barrier in all the federal suite of programs is that there is very little support to create very deeply affordable housing.
[Translation]
Like co-operatives, where there is a mix of members.
[English]
The overwhelming majority of federal financing is going into an apartment loan program, and we do need more apartments. However, in earlier decades, programs also included Rent‑Geared-to-Income Assistance to create mixed-income communities.
[Translation]
Senator Miville-Dechêne: One of the criticisms often levelled at the co-operative housing movement is that it houses wealthy people. There are people with very high incomes living in co-operative housing that should be used by people with special needs. How do you respond to this criticism? Do you have regulations? Do you really check who wants to live in co‑operative housing?
[English]
Mr. Ross: Our understanding of the demographic data does not support the fact that there are a lot of rich people in co-op housing. Average incomes in housing co-operatives are very modest.
Senator Miville-Dechêne: What are they?
Mr. Ross: They average between $40,000 and $50,000 per year based on some recent data.
One thing that is important in terms of how we build housing and how we build communities is to create security of tenure and to create diverse communities. We think it is an asset that in a co-operative you may have a professional such as an accountant who may have started as a single parent without much education, created housing stability, and now they are contributing to the governance of their co-operative. We think this is an important thing and not a detriment to the model, because it creates social inclusion, and it models opportunities for households seeking opportunities.
[Translation]
Senator Miville-Dechêne: Thank you.
Senator Gignac: Welcome to the witnesses. My first question is for Mr. Ross.
When we talk about 3,200 co-operative housing units in the announcement made in June 2024, it seems to imply that there is $1 billion in loans and $500 million in grants. For the latter amount, $500 million in grants for 3,200 units, that works out to about $150,000 in grants per unit. My question is this: $150,000 is not a lot in Toronto, but it is better in Moncton or Quebec City. How does this work in terms of regional distribution? Does the federal government impose targets on you by province? Is it per capita? Are you the ones who make the decisions?
Mr. Ross: That’s a very good question.
[English]
The short answer is that the program has a competitive scoring framework. Yes, there are vast differences in markets. The purpose of the contribution dollars is first to make projects viable and also to increase the starting level of affordability for households. The decisions about regional allocations and the proportion of contribution versus financing allocated to projects — some of that is pro forma driven, so what does the pro forma require to make a project viable under the criteria of the program. It would be good to direct more specific questions about that to CMHC, because CMHC is responsible for the administration, underwriting and allocations under the program as well, but those are some general factors that may be useful.
Senator Gignac: Thank you. I don’t know if I understood correctly following your discussion with Senator Hébert. Do we shift now from CMHC to Maisons Canada who will now take care of that program? That means that for three or four months nothing will happen because they don’t have BIA acceptance? Will it be frozen for three or four months?
Mr. Ross: We are hoping that is not the case. It is critical that that not be the case. Our understanding is that CMHC will continue to administer the Co-op Housing Development Program as well as other national housing programs until their upcoming expiry dates. Most programs expire in 2028.
However, this is creating a great deal of uncertainty because, as I mentioned, there is more qualified demand under the existing programmatic framework, so more resources are needed now; and people are making decisions now about how to develop projects, and we don’t know the investment criteria.
Senator Gignac: Okay. Shifting topics back to Mr. Sullivan, what is the secret sauce in Quebec? It seems that Quebec has much more co-op housing. Is it because the Quebec government matched the federal government money? Could you explain? You referred in your opening remarks that Quebec is different than the other provinces.
Mr. Sullivan: In the mid-1990s, when the federal government withdrew from supporting community housing, there were only two provinces that were able to maintain some of that momentum: British Columbia and Quebec. As a result, they have a much more developed community housing sector than elsewhere.
Quebec also has a long-standing tradition of solidarity and co‑operation. There is a very well-resourced and well-developed infrastructure around the capacity of the sector, with several federations coordinating their work together. This is important. But at the end of the day, it’s because they didn’t have to recover from that dearth of investment that almost all the other provinces experienced from the mid 1990s and for at least 20 years after that.
Senator Gignac: Thank you.
Senator Dalphond: I don’t know if you follow our work, but the Canada Mortgage and Housing Corporation wants to build 3 million more units over the next 10 years.
The Parliamentary Budget Officer thinks that $1.5 million is what is needed. It took some time, at least for me, to understand why there is such a gap. The gap is because corporations want to have an excess and create a vacancy rate of about 12%. That will bring down the rental prices because the laws of the market will make sure that the price will go down; and therefore, there would be more affordable housing available on the market.
I gather from what you are saying that this is not exactly the strategy you favour. You would prefer that we invest most, if not all, of the $13 million going to Build Canada Homes into social housing, co-operative and transition housing and look at the social issue more than the market. Am I correctly understanding that this is your perspective?
Mr. Sullivan: Yes, and fundamentally that analysis from CMHC is an economic desk exercise. It is a theoretical exercise. If there were a vacancy rate of 12%, the market would not continue supplying new housing. Let’s be clear: The private market will supply housing for the vast majority of Canadians. Where government needs to focus its attention is on those segments of the market that cannot be served by private market developers, and this is the low and modest end of the income spectrum. I believe strongly that Build Canada Homes needs to focus very clearly on that and set those targets.
This is also a counter-cyclical kind of investment. When the private market is slowing down in development, we don’t want to put construction companies out of work. We don’t want to lose those supply chains we have worked hard to build up, so we can invest in those times, counter-cyclically, in social and affordable housing instead.
Senator Dalphond: My next question is about social housing. Let’s focus on that, especially the co-operative model. I understand it is about two thirds of the market rental that the members of the co-operative will be paying to get more or less the same housing. In the co-operative models, is there room for adjustment so that those who have lower income pay less and those who have higher income pay a bit more so that overall it is 60% of the rental, but for some it is like 30% of the market? Or do we need a special program to finance those with income so low that they cannot even afford the 60% of the market?
Mr. Ross: That’s right. Right now, the majority of households living in housing co-operatives pay a break-even economic rent. What is the cost of the overall operation, taking into account the financing, the capital renewal and the operations? That’s why you get that relative affordability compared to market. This makes it even a bit easier to ensure that co-operatives are open and available to households with even greater challenges.
As it stands today, co-operatives are accessible and attainable because of the availability of programs like the Federal Community Housing Initiative that offers a subsidy to the household to be able to make up the difference between their low income and what an economic break-even rent would be.
Your question is this: Can we get to a point where there is some level of cross-subsidization? It is very challenging to do that today in Canada because of the very small average size of a housing co-operative. An average housing co-operative in Canada today is 40 units. If some households are paying a little bit more to subsidize their neighbours, that is not always very viable. We’re also concerned that if co-ops internally subsidize or cross-subsidize low-income households, it also puts the asset at risk because you are starving the asset of the revenues needed to have good asset management and have a sustainable and growing co-operative.
However, if we look at Europe, this is what social and co-op housing providers are doing, because they are operating at a scale of tens of thousands of units, which does create that dynamic where you can have some element of cross-subsidization. As it stands today, with the very small and disaggregated portfolio base, that may be difficult and create some problems.
Senator Dalphond: [Technical difficulties] rental subsidy for those that are [technical difficulties].
Mr. Ross: Yes, without continuity of a program like the Federal Community Housing Initiative, low-income households would be at risk of some economic eviction from community housing.
[Translation]
Senator Boudreau: Welcome to our two guests, and in particular to Mr. Ross, a former colleague from New Brunswick. You do such good work that Ottawa came to New Brunswick to recruit you.
I have a question for Mr. Ross and then, if I have time, another for Mr. Sullivan. Creating a new federal housing agency would not necessarily have been my first choice. However, that is what the government has announced. I would have prioritized programs, partnerships and project development.
I think my colleague Senator Gignac is very optimistic when he says it will take three to four months. I have a feeling it will take much longer.
Furthermore, when undertaking an initiative such as this, the aim is to bring all the programs together and create a new entity. This may be an opportunity to address certain shortcomings or challenges in the existing programs.
In your opinion, what are the three most significant challenges the co-operative housing market faces with the existing programs, and what could be changed by redesigning the program?
Mr. Ross: Thank you for the question. First of all, CHF Canada strongly recommends recapitalizing the Co-operative Housing Development Program. As I mentioned, there are more applications, but the budgets are not sufficient to meet the current demand. So, one potential solution would be to recapitalize the Co-operative Housing Development Program.
[English]
The other thing that is important to signal clarity on is that, while Build Canada Homes builds up, what is the federal government’s position on the continuity of rental assistance to low-income households? Yes, the program expires in 2028, and that sounds like it’s a lot of time to figure it out. It actually is not in relation to the great speed of government.
We also need to take note of the fact that housing providers are risk managing the uncertainty around the end of this program. They have an obligation to the sustainability of the co‑operative or the non-profit. If a tenant who may be in receipt of rental assistance moves out or moves on, co-ops and non‑profits may be taking decisions not to fill that unit with someone who is in receipt of rental assistance as a matter of risk managing going forward because they don’t know if they are going to be able to continue offering that level of assistance to that household when that program expires. We’d really like to see some attention paid to this critical issue because we already have such a lack of deeply affordable housing, and we need to preserve all the deeply affordable housing that we have in Canada.
Senator Boudreau: Mr. Sullivan, the 2024 Fall Economic Statement had promised to extend the Federal Community Housing Initiative, a program that protects housing security and prevents homelessness of some of the most vulnerable in our communities. I’m just wondering what the status of that program is, if you could bring us up to speed.
Mr. Sullivan: In the Federal Community Housing Initiative and Canada housing benefits, there are 350,000 households across the country that benefit from those rent supplements. The funding for those ends in a few short years. As Tim said, they are very short in terms of government years. That absolutely has to be a priority. The system cannot absorb that level of change in a short period of time. Some of those are delivered through provinces and territories, and those negotiations need to start right away to ensure that continuity.
I also have my list of three major initiatives for Build Canada Homes if you’ll hear those: The first is that it has to have new flexibility around lending that were not available to CMHC; the second is that it has to have a different approach to risk, because we cannot solve a systemic problem without taking risks; and the third is that it has to have a greater focus on non-market community housing.
The Parliamentary Budget Officer showed that the National Housing Strategy did not actually have a measurable impact in reducing core housing need, and that’s partly because it wasn’t focused specifically on the immediate affordability that non‑profits and co-ops offer.
Senator Marshall: I have a question for Mr. Ross. I just want to get an idea about the time frame for constructing co-op housing. We were talking about the 2022 budget. There was $1.5 billion approved for 6,000 units.
Are you able to give us a little update as to whether the 6,000 units are actually built and occupied? Or after three years, are we still waiting for that program to work its way through?
Mr. Ross: The 2022 announcement in the budget was added to the budget, but that didn’t immediately translate into a program. The program didn’t launch until June 2024. I give a lot of credit to CMHC and the federal government because once that program launched, the application window opened, and commitments were made relatively quickly. There is already $423 million committed as of last year, and the second round opened up over the summer. We’re looking forward to hearing a response to that second application round, since it closed at the end of August.
Senator Marshall: Are there any units built yet?
Mr. Ross: There are a few projects with units that have been developed now in Nova Scotia.
Senator Marshall: Okay.
Mr. Ross: A lot of groundbreaking is under way right now.
Senator Marshall: It takes time.
Mr. Ross: Yes.
[Translation]
The Chair: That concludes the first part of our meeting. I would like to thank the witnesses for their valuable advice and testimony.
Honourable senators, we are pleased to welcome our second group of witnesses, Pedro Barata, President and Chief Executive Officer, Habitat for Humanity Canada, and Alana Lavoie, Senior Director, Government Policy, Habitat for Humanity Canada. We also welcome Lois Duke, Vice-Chair, Board of Directors, Jocelyn W. Formsma, Chief Executive Officer, and Stacey Howse, Executive Director, First Light: St. John’s Friendship Centre. They are all from the National Association of Friendship Centres.
Thank you for accepting our invitation. We will now hear your opening statements. Mr. Barata, you have the floor.
Pedro Barata, President and Chief Executive Officer, Habitat for Humanity Canada: Thank you and good evening, everyone.
[English]
It’s a pleasure to be here and to speak with all of you today. Canada’s housing system is at a pivotal moment, as you have been hearing, and together, we have the opportunity to ensure Canadians have access to the housing they need and want. Habitat for Humanity Canada is a pan-Canadian charity founded in 1985. We work in every province and the North. We build homes, we build communities and we build hope. Our work includes construction, repair, financing, skills training for young people going into the trades and policy advocacy. We are part of Habitat for Humanity International, and we are building homes and opportunity in over 70 countries around the world.
We’re also proud members of the Canadian Housing and Renewal Association. We need to respond to the diversity of housing needs of Canadians, and we need an ecosystem approach as described by Ray Sullivan and Tim Ross earlier.
Since 2019, over 40 Habitat affiliates across the country have together served over 5,000 individuals, nearly 4,000 children. We’re already ahead of the curve in terms of building homes that are energy efficient, accessible and affordable. These homes remain affordable for future families because we have the option of buying them back so that every home sold by Habitat gives another family that opportunity through a virtuous cycle.
We leverage federal funding, and we have been doing it since 2019 by a factor of at least 2 to 1. We unlock provincial, municipal and private investment through private financing through construction, mortgage financing for families who own homes. We fundraise, and we also generate quite a significant amount of revenues from our ReStore social enterprises across the country. We have almost 100 of those. In fact, they cover all of our operating costs. All of this building has generated over $300 million in construction activity and over $40 million in tax revenue since 2019.
Habitat for Humanity is closely watching the evolution of the federal role in housing and particularly the new agency, which you have been talking about, Build Canada Homes, or BCH. We welcome its clear mandate on nonmarket housing, but we also want to make sure that nonmarket housing is more than rental housing. Homeownership remains a defining goal for Canadians. Just a couple of weeks ago, an Abacus Data poll showed that 65% of non-homeowners, renters, want to own a home someday, and this includes younger families. Eighty-six per cent of those aged 18 to 29, and 80% of families with young children are holding on to the dream of homeownership.
Including affordable homeownership in the mandate of BCH would address a critical policy gap because it offers stability, financial security and, of course, intergenerational benefits. Our model — and we have done this research with Deloitte — shows that households who are Habitat households increase their employment income by 28% compared to renters over the same time period and same family type.
Our Habitat homes generate $35 million in annual economic uplift and see improved health and education outcomes. We have a few key recommendations for BCH, being mindful of time.
First, we’d like to ensure that the investment framework for Build Canada Homes includes affordable home ownership. We would also like to work with Build Canada Homes on a portfolio approach so that we move away from the project-by-project approvals and delegate investment responsibility to trusted partners.
Second, we would also like to recommend that BCH enable flexible financing so that the contributions of BCH are, indeed, catalysts with low-cost loans, guarantees and equity sharing that support early-stage financing for modular, innovative construction that allow for flexible stacking of federal, provincial and municipal funds.
Third, it is also critical that, as BCH moves forward, we invest based on impact, not complexity. We need to define clear affordability targets, portfolio-level commitments and allow for regional flexibility in affordability definitions. We also need to consider additional metrics in terms of not just homes built but also access for underserved populations, local economic impact and sustainability, and ensure that we’re building homes for families with children. On average, a Habitat home houses 2.8 individuals.
Finally, building sector capacity is crucial. As Tim Ross said earlier, the nonmarket sector spent 30 years in a position where it was not growing, and we have made tremendous progress in terms of finding our feet, keeping that momentum going, investing in the sector, and ensuring that we have access to financing tools and supports is going to be critical moving forward. Thank you.
The Chair: Thank you.
Lois Duke, Senior Vice-President, Board of Directors, National Association of Friendship Centres: Good evening, honourable senators. My name is Lois Duke. I am from Foothills First Nation located in Kelly Lake, B.C. I’m also the vice‑president of the National Association of Friendship Centres, or NAFC.
I have with me Stacey Howse, the CEO of First Light Friendship Centre in Newfoundland and an NAFC board member, as well as our CEO Jocelyn Formsma.
Thank you for this opportunity to ensure that urban Indigenous experiences are included in Canada’s national housing strategy.
In 1972, NAFC was established to represent friendship centres and provincial territorial associations, or PTAs, across Canada. Today, the NAFC consists of over 100 local friendship centres and PTAs offering programs and services to Indigenous People living in urban, rural and remote settings. Over 60% of Indigenous People in Canada live in urban areas, yet housing for this group remains the most underfunded part of the housing system.
Indigenous People are one and a half times more likely to be in housing need and eight times more likely to experience homelessness than non-Indigenous households. For context, I have five siblings, three of which have experienced homelessness. My sister is currently unable to get out. My brother is working on getting out by accessing some supports in the city of Grande Prairie, and my little brother passed away in 2013.
For decades, the friendship centre movement has filled these jurisdictional and policy gaps. To advance this work we recommend the following:
One, that Build Canada Homes partner directly with the National Indigenous Collaborative Housing Inc., or NICHI, to lead urban, rural and northern Indigenous housing projects.
NICHI is the largest Indigenous-led housing network, co‑founded by NAFC, bringing together over 100 Indigenous housing providers delivering affordable homes. NICHI has successfully delivered the kind of outcomes that Build Canada Homes aims to achieve. In 2023-24, it distributed $275.2 million to 74 Indigenous agencies across Canada, creating more than 3,800 housing units. Delivery timelines were rapid, with some community members receiving the keys to their new home within eight months of funds being distributed.
Two, the NAFC recommends that Build Canada Homes adopt a realistic national definition of housing affordability. The current definition of affordability does not reflect the real costs of child care, transportation, food or utilities that Indigenous families encounter. Many housing programs consider units affordable when, in reality, they are still out of reach for Indigenous people.
Three, the NAFC recommends that federal lands be transferred to Indigenous housing providers to accelerate development. Access to land remains a significant barrier to building affordable housing for urban Indigenous communities. Federal lands are often leased rather than transferred. Prioritizing Indigenous access to federal lands will enable shovel-ready, culturally grounded and cost-effective housing as proven by NICHI’s early track record.
Four, the NAFC recommends that Canada invest in an urban Indigenous workforce strategy. The national housing crisis can be an opportunity to train and employ Indigenous people in building the homes our communities need. The friendship centre movement has extensive experience delivering employment and skills development programs, despite lack of access to existing federal programs. Leverage the movement’s experience in co‑developing an urban Indigenous housing workforce strategy.
Five, the NAFC recommends that Canada provide sustainable, multi-year operational funding for Indigenous-led wraparound supports. Friendship centres provide vital housing and homelessness programs in their communities. Despite the success of these efforts, funding remains short-term and unpredictable, making it difficult to sustain services. Friendship centres must continue to deliver these crucial supports.
Six, the NAFC recommends that Canada fulfill the MMIWG2S+Calls for Justice through immediate housing action.
I wear red today in honour of my grandmother, who was murdered in 1961.
The National Inquiry identified housing as a key for safety in their final report.
In 2021, Canada announced $724 million for the Indigenous Shelter and Transitional Housing Initiative. As of early 2025, less than 20% has been spent, and only two shelters have been completed nationwide. It is imperative for Canada to immediately release the remaining funds to ensure the safety of Indigenous women, girls and gender-diverse people.
In conclusion, federal housing policy must reflect the lived realities of all Indigenous People, including those living in urban, rural and remote areas. The friendship centre movement, alongside partners like NICHI, has demonstrated that Indigenous-led solutions are effective, efficient and accountable. When we are resourced to lead, families move into homes, communities thrive and progress happens faster.
I will end with a quote from MD Andrew Boozary: “Housing is healthcare.”
Thank you, honourable senators.
[Translation]
The Chair: Thank you very much, Ms. Duke. We will begin the question period with Senator Marshall.
[English]
Senator Marshall: Thank you, Mr. Barata and Ms. Duke, for your opening remarks. Can you give us some idea as to the number of housing units you are looking for in your future plans, how you came up with those numbers and how you anticipate achieving those plans? I expect it will not be a one-year plan; it will be a multi-year plan. I’m trying to get a handle on the magnitude of the numbers you are dealing with.
Mr. Barata: I’m happy to start. Given the urgency, we are looking at 1,000 shovel-ready homes across the country that we can start building right away. Over the next two years, we would ensure that that pipeline is on the ground as we plan for ramping up those efforts over the next 5 to 10 years. We believe that, with a new partnership with Build Canada Homes, with our two‑to‑one factor, and with the right financing tool from Build Canada Homes, we can mobilize 10,000 homes starting over the next five years.
Senator Marshall: That would be 1,000 a year over a 10-year period. That’s interesting. Thank you. Ms. Duke?
Jocelyn W. Formsma, Chief Executive Officer, National Association of Friendship Centres: I can answer. Right now, the information we have is that approximately 667,000 Indigenous households live in urban, rural and northern areas. Of those households, 124,000 are in need, including 37,500 individuals experiencing homelessness in a given year. The reality is that we don’t know the extent of the need because urban Indigenous housing is not something that has had the capacity to actually undergo the policy work needed to do the proper research.
For example, the NAFC, many of our member friendship centres have offered housing for decades, and some are realizing and are starting to get into it. That is why we wanted to partner with other urban Indigenous housing providers to found NICHI so that we have a centralized specialized entity that can undergo the broad research to actually understand the extent of the issue across the country. Right now, we have bits of information here in B.C., a little bit here in this city and a little bit there in that city. So we don’t have a full national picture of the need.
Senator Marshall: It is not quantified. What would you look at for the first year? If a program comes on stream, what would you look for? Would you look for approval for 1,000 housing units or 2,000 even though you don’t have the data? That’s quite common, looking for adequate data. What would you look for? Would you look for 1,000 or 2,000 units? Where would you get your number from?
Ms. Formsma: I can say that when we did the first calls for proposals where we received the $275 million through NICHI, the range of proposals was over 447 applications, constituting $2 billion of need that were for what we called basically urgent and shovel-ready projects.
That’s 447 applications that were eligible for just projects that could start within a year. There was no information about projects that would require a feasibility study or looking at the long-range situation over a few years. That gives you an initial sense. We were only able to fund 74 of those projects.
Senator Marshall: That gives me a sense. Thank you.
[Translation]
Senator Forest: Thank you very much for your presence, which is greatly appreciated. My first question is for Mr. Barata.
Since the pandemic, construction costs have skyrocketed, both for materials and labour. If I understand correctly, you have to sell the houses at market price. How will you be able to adjust so that we can protect the affordability and accessibility of homes, if the Canada Revenue Agency requires you to sell them at current prices and there is a sharp increase in the cost of the homes you put on the market?
Mr. Barata: Thank you for the question.
[English]
One of the beauties of the Habitat model is the connection to the ground — that our affiliates know the conditions on the ground and they have good relationships around procurement, for example, and sourcing materials, and ensuring that we have many gifts in-kind in terms of the materials that end up in a build. We also use a lot of volunteers. We recruit volunteers, not to build the entire home, but to fill in where they can fill in, which also reduces our gap, and very generous contractors who actually love to give us in-kind or reduced labour. You combine that with our ability to get land, primarily from municipalities who understand that there is a huge need locally to have service land that can come to us either at no cost or very low cost. That urgency is also there, which provides another source of reducing revenue. We are also working with developers who may have inclusionary zoning requirements, who often work with us to make available land at reduced cost, no cost, sometimes turnkey units at the cost to build.
Our affiliates know what is happening on the ground; they have those relationships to go and find every possible saving to keep costs low.
With Build Canada Homes, we now have an opportunity to have access to low financing that we can leverage to build faster, make sure we maintain affordability and keep turning those dollars over, so that instead of taking on all of the construction costs we can use some of those dollars on financing to build more.
Despite supply chain issues, cost of labour and labour shortages — those are all real issues — we are confident we have the right formula to mitigate some of those.
[Translation]
Senator Forest: The Canada Revenue Agency, as I understand it, does not require you to sell. You can sell at the cost price of the house, not at market price?
[English]
Mr. Barata: I would like to turn it over to my colleague Alana to address the fair-market value.
[Translation]
Alana Lavoie, National Senior Director, Public Policy, Habitat for Humanity Canada: Thank you for the question. One of the challenges of our model at Habitat is that the CRA requires us to sell at market value. This pushes us to reduce construction costs as much as possible, because it helps us with mortgages and internal costs, and it also helps us save resources for other projects. Yes, indeed, we have to sell at market value.
Senator Forest: There is a lot of volunteer work, municipalities donate land, builders make very little profit, but the Canada Revenue Agency collects the profits? Is that the reality?
Ms. Lavoie: This is a discussion we would probably like to have with the Canada Revenue Agency.
Senator Forest: That is the conclusion we have reached this evening.
The Chair: They usually listen to us.
Senator Forest: Do I have any time left?
The Chair: No.
Senator Forest: I am on borrowed time.
[English]
Senator Cardozo: First, if you will allow me, Jocelyn Formsma, I wish to take a moment to thank you for your service. This is probably your last official duty in this role with NAFC. You have been a formidable leader for seven years. I have had the good fortune of knowing you in this role and others. You have been a great leader. I wish you the best in what you do next. Thank you for your role here.
Ms. Formsma: Thank you.
Senator Cardozo: I have a couple of questions for you in terms of the role of NAFC in relation to the National Indigenous Collaborative Housing Inc., or NICHI. It reminds me of university when you talk about Nietzsche. What is the relationship between the NAFC and NICHI? Is it a creation of NAFC? How does it go about building those homes?
Ms. Formsma: Thank you for the question. Essentially, it started when there was an announcement for the Urban, Rural and Northern Indigenous Housing Strategy. Approximately — I’m going to probably get this number wrong — $4 billion was set aside for urban, rural and northern housing.
The federal government was not sure how it was going to be rolled out, and they were considering doing CMHC. They ended up carving off a portion for what they called “distinctions-based” groups: First Nations, Métis, Inuit governments. Then there was still a portion left to be rolled out.
At the time, as NAFC, we were a part of a conglomerate of other urban Indigenous housing associations, like the Aboriginal Housing Management Association in B.C. There are a few in Saskatchewan, which are more municipality based. There were some regional ones in Manitoba, others in Quebec and across the country.
We had been part of this advocating group, saying, “Give the money to us.” They said, “What’s the mechanism? You don’t have a mechanism.” We had offered NAFC as a potential mechanism. Ultimately, it wasn’t the right mechanism.
Coming together to start NICHI, it was a mechanism to be a membership-driven entity that could take funding and undergo the process to distribute funding across the country for urban Indigenous housing, which is what we did.
By the time we started as a group, even though it was new, we had organizations behind it that were many decades old. We were not able to secure the $3 billion we had hoped to — that money is still locked up somewhere — but we were able to receive just under $300 million. That was the statistic my colleague referred to: that, within nine months, some of the first tenants were able to go from receiving the funding to keys to their new home in their hand. That’s record-breaking.
The way the mechanism works, we set up an independent advisory committee that reviews the proposals that are eligible, which are reviewed by the staff. NAFC sits on the board of directors of NICHI now. The board of directors is elected by the membership. Right now, there are approximately 100 urban Indigenous housing providers who are members.
The members elect the board of directors. The board of directors is not involved in the decisions. Those are independent advisors reviewing the proposals and recommending the projects. All of the projects typically have to have a track record of providing housing for a certain amount of time. There is a certain criterion they have to follow. Then they are prioritized. That was the list that went through.
NICHI then funded them. Once they received their funding proposals, they were off to the races to build. While the first ones were done within nine months, many of those were the quick builds or refurbishing, and some of them are still under way. There is still a greater need.
Senator Cardozo: That’s helpful. Thank you.
Ms. Formsma: It was a long answer.
Senator Cardozo: It was a good answer.
The Chair: Short question, long answer. Sometimes it is a long question, short answer.
Senator Ross: My question is for Habitat for Humanity. Thank you to both groups for your presentations this evening.
There are families who are not low income enough for subsidized housing but can’t afford market rent and can’t afford to buy in today’s housing market.
What policies do you think could be implemented to help those in that gap to find an affordable solution? Habitat for Humanity is doing great work coast to coast. I know you have done a number of projects in my community of Fredericton. What would be a key factor that would allow you to increase your volume or scale up the operations?
Mr. Barata: To the first part of your question, in terms of addressing some of those gaps, as we mentioned off the top, having that ecosystem approach and recognizing there is a diversity of needs, depending on where you are on the continuum and addressing the variety of those needs is key.
I would also note — Tim Ross mentioned this — we tend to think about housing on the supply side. Income is part of the housing solution. The Canada Housing Benefit is a critical key in helping low- and modest-income households close the gap between their rent and incomes. We don’t spend enough time thinking about and investing in that kind of a program, which has been, beneath the surface, successful.
For us, having access to more financing tools — especially financing tools that give us beneficial conditions — will allow us to lower our costs.
Having some of those instruments up front that we know will be available that we can leverage, and making sure there is enough of that instrument to allow us to get out of the gates fast, means we reduce what we have to put in and that we can invest financing that otherwise would have to go into homebuilding into other units.
It also allows us to lower the first mortgage that a family takes on, despite the fair-market value issues, which means that we can lower the thresholds of affordability.
Right now, if you look across the country, the reality is that, on average, a Habitat for Humanity household sits somewhere between $60,000 and $90,000, and they are paying 30% of their income toward that. It can go as low as 22% in some communities. We would love to serve a wider range by having access to more and better terms on financing tools.
Ms. Formsma: My colleague Ms. Howse operates a housing unit in St. John’s, and she may have a perspective on that question as well.
Stacey Howse, Executive Director, First Light: St. John’s Friendship Centre, National Association of Friendship Centres In St. John’s, First Light is the only Indigenous organization that exists in the capital city. We operate 25 housing units. As our colleagues Ray Sullivan and Tim Ross mentioned earlier, wraparound services are really important. Sometimes you cannot just build the units and expect individuals in marginalized situations to be successful in those homes. Wraparound services are important, and that’s what friendship centres are able to do in terms of mental health. It is not just affordable, but it also needs to be supportive. Friendship centres are supportive completely in mental health, justice supports, addiction supports, child care, welfare. Friendship centres provide support so homes can be affordable but also successfully lived in, long term.
Senator Galvez: Thank you so much. This is a very important conversation and subject. We have discussed a lot about the numbers needed for housing, and we have concluded there is not enough. We need to invest in more funds and more mechanisms. That’s very clear.
I would like to ask you about the intersection of these rural needs and sometimes small housing in difficult areas where global warming is having an effect. You have forest fires, floods and high humidity. How do you overcome those challenges in order to produce a safe and healthy home in the long term for this high-need part of society?
Ms. Formsma: That’s something we are facing quite acutely right now. Northern Alberta friendship centres were responding not only to the emergency — like the evacuations from Métis and First Nation settlements — but were also responding to wildfires in southern Northwest Territories. This sometimes included, for example, loading a pickup truck with supplies and driving up to Northwest Territories to provide support to their neighbouring territory.
What is also happening is that, due to the evacuation, some people lost their homes and those homes are not going to be rebuilt immediately. They end up coming to the city in an emergency fashion because of wildfires and climate change, but they don’t get to go home for a few years, if ever.
Some friendship centres that have had to respond to those emergencies are now responding to increasing demand for services from people who initially required their services as an emergency but are now going to be living there long term. It puts more pressure on some of the housing limitations that were already there, and we can’t get ahead of it. We are already trying to catch up in terms of housing, and now it adds additional pressure. These are some of the things we are seeing.
Ms. Lavoie: When it comes to building back, Habitat for Humanity has been involved in rebuilding in Nova Scotia after the forest fires there and have been supporting the communities in the Northwest Territories as well. We are being increasingly conscientious and proactive in how we build back, whether it’s by starting to include FireSmart guidelines in our construction or by ensuring high levels of energy efficiency as well as other resilient materials and being very conscientious in that work.
We want the homes to work on all levels for those who are going to live in them, and that includes watching their pocketbook in terms of their costs and also ensuring we are creating environmentally sustainable communities that can handle the changing climate.
Ms. Duke: I would like to add that my home community was displaced for 21 days due to forest fires this year. It was a tremendous cost to community members still living in community. They lost all their food. They lost animals. There was incredible loss. Being displaced into a town that is not necessarily wanting to see them there in those communities is very stressful, and it was a harmful time for my community members.
When they were able to go back, they basically went back to fire, smoke, ash and soot. It is not ideal. These are things that probably need to be addressed with the statistics for Indigenous People.
Ms. Formsma, can you explain the statistics for Indigenous People that are not happening in two years?
Ms. Formsma: My colleague is referring to the Indigenous Peoples Survey, which happens every few years. The decision was made not to conduct that survey this year. We understand it is due to the cost. There could be other factors. That’s what we understand. Any updated numbers that we have for a population, especially an urban, Indigenous population, we are not going to have up-to-date numbers due to the cessation of that survey this year.
[Translation]
Senator Miville-Dechêne: I would like to continue the conversation about Habitat for Humanity’s business model. I believed — perhaps a little naively — that the houses you built were specifically for people who couldn’t afford to buy a house at market prices. But that’s not the case. What is your business model? Do you build houses for those who can afford them? Please explain. When I saw President Carter building houses in the United States — obviously, this is a romantic view — I thought they were being sold at a moderate price.
[English]
Mr. Barata: That’s true, senator. I think you’re reacting to the 60-to-90 income band that I mentioned. The reality today is that if you cannot afford a down payment — which is at least 20% of the value of your home — and then put together your regular payments, that is a reality further up the income bands in ways we have not seen in generations.
That’s why we are seeing that more and more Canadians, especially those of the next generation who have jobs and want to start families, are not able to pull that math together. Every single Habitat home is going to a family which otherwise would be locked out of homeownership, and 40% of Habitat homes are lone mother-led with kids, for whom it would be very difficult to put the financing together and make that affordability happen.
So the Habitat homes are that bridge between the rental and the social aspect of the system to eventually having the equity to afford a down payment and build a home. That’s exactly what we are going for: to provide that opportunity to get your foot in the door, build your equity and be able to invest in your future.
[Translation]
Ms. Lavoie: The family never pays the full price. They take out a mortgage, and it’s never more than 30% to 34% of the total market price. We at Habitat finance the rest. They are isolated from the real costs. We absorb them.
Senator Miville-Dechêne: Very well. Please excuse my ignorance of your concept.
Ms. Lavoie: It’s a bit complicated.
Senator Miville-Dechêne: I also wanted to ask you a quick question. You have been very critical of the Build Canada Homes project, which, for the moment, is renting out houses. You seem to be saying that we need to build houses that people can buy. Given the price of houses and what we are seeing in Europe, isn’t there an inexorable trend towards young people no longer being able to buy houses and becoming tenants? Shouldn’t we just accept that?
[English]
Mr. Barata: Thank you for the question, senator. To be clear, we need both. We need rental, home ownership and social, and we need to help unhoused people. We need the full spectrum, and we’re hoping that Build Canada Homes will have that entire scope.
We’re not prepared to give up on the dream of home ownership for Canadians, especially the next generation, and frankly, neither should Canada. When you ask Canadians how they feel about home ownership, increasingly, what we hear is that it is increasingly out of reach. It is almost like a dream that people can’t make happen, but people still believe in it and still want to do it if they are a young person, or they still want their kids to have that opportunity. So we’re not prepared to give up, and neither do we think Canada should. We have the tools in our hands right now to make sure that we take advantage of that opportunity and build an entire ecosystem approach.
[Translation]
The Chair: Thank you very much.
Senator Dalphond: I would like to continue in the same vein as Senator Miville-Dechêne, because I am having a little difficulty understanding the concept.
The municipality gives you a plot of land, you organize a group effort with volunteers, people make contributions, and so on. You build a house. Does the house become your property or that of the person who will live in it?
Ms. Lavoie: As you mentioned, we receive land or purchase land. Then we build houses with volunteers or developers and builders. After that, it works exactly like home ownership for everyone else. At this point, the client takes out a 30% mortgage and we have another mortgage that applies to the land, but it is the family that pays, takes the equity in the house and develops it. There is a small share at the end when they decide to sell the house. In addition, Habitat can buy back the house to give it to a second or even a third family.
Senator Dalphond: You said in your presentation that you were keeping the house to sell it to someone else in the same situation. I therefore understood that you were still the owner and that you had the right of first refusal on the house. When you exercise this right of first refusal, for the owner, it is considered a sale at fair market value, and that is when the owner is exempt from capital gains.
Ms. Lavoie: Yes.
Senator Dalphond: This is their primary residence. They live there and are selling their residence.
Ms. Lavoie: Yes, absolutely.
Senator Dalphond: I don’t understand the tax issue.
Ms. Lavoie: They come out with a portion of the residual value; we always take a small portion to add to our humanity funds and we create a new owner.
Senator Dalphond: You become the owner again; you transfer your right of first purchase to someone else who buys it directly.
Ms. Lavoie: Yes.
Senator Dalphond: What is the issue you are having with the Canada Revenue Agency? It is a principal residence that is being sold, there is a profit, and the capital gain is tax-exempt.
Ms. Lavoie: Our difficulty relates to regulations that require us to sell the house at market value.
Senator Dalphond: Yes.
Ms. Lavoie: To the first family. The house is transferred from Habitat for Humanity to the families. It has to be done at market value, so for the family, yes, when they sell it, there will be capital gains. For Habitat’s first purchase —
[English]
We built it for $300,000, and the fair market value is, say, $430,000, but because we’re Habitat, we’d love to sell that closer to the cost of construction, but CRA —
Senator Dalphond: Sell it to the first owner —
Ms. Lavoie: Yes, to the first owner.
Senator Dalphond: — and the first owner — you don’t get the tax exemption, whatever, because —
Ms. Lavoie: We don’t, no.
Senator Dalphond: — you are not living there.
Ms. Lavoie: We’re a charity.
Senator Dalphond: I understand the difficulty there.
There have been recommendations that money should be allocated for Indigenous housing. There was a budget of $1 billion over five years, or $4 billion over seven years, and the money hasn’t been spent so far, and this group, Habitat, and some before on the previous panels, are recommending that the money be transferred to the National Indigenous Collaborative Housing Inc. Are you in agreement with this proposal? I don’t know what this organization is. I am sorry.
Ms. Formsma: Like I said, it is new, but it is backed by organizations that have existed for a long time, including ours. So we’re a member; we were elected. I sit on the board of directors. We believe that it is the best mechanism to get urban Indigenous housing built quickly and in a way that is community-driven.
Senator Dalphond: Thank you.
Senator Boudreau: My question is for Habitat. In my previous life, I was a CAO for a municipality in New Brunswick, and we had a very good project with Habitat. It went very well. I want to dig a little bit into something you mentioned. You said that most municipalities will donate the land to get the project going. Small municipalities don’t have all that much land to give, right? We were able to give one parcel of land. We got a duplex built, it was great, and the project went very well.
When municipalities apply to federal programs across the board, the cost of land is never an eligible cost, right? So if a municipality wanted to apply for a federal program for help buying land to be able to then go into a partnership with someone like Habitat, would you see the justification for an exemption to that rule or policy stipulating that land cost is not an eligible cost for these federal programs?
Mr. Barata: That sounds like a policy ninja question.
Ms. Lavoie: Again, that’s an excellent question. The role of municipalities cannot be understated nor can the importance of those partnerships. We have had great success in New Brunswick with our colleagues there.
With municipalities, yes. The more flexibility in the eligible costs and the more ability that non-market providers like Habitat and others have to create the relationship with the municipality that’s going to work and that the funding can come into play to work with that, the better. So, yes, having eligible land costs would be great, or having eligible capital — the predevelopment costs — would be great. There is a lot that goes in before you can even say, “Yes, let’s build the thing.” Then having, obviously, the standard construction and capital costs, which apparently the federal government is very comfortable funding, from what we have seen. There is obviously the capacity-building costs both within the provider as well as ensuring that municipalities are well equipped to step up when we are ramping up and scaling up development. So yes.
Ms. Formsma: We have the same issue of not being able to purchase land as an eligible expense. So we can buy the shack that is falling over on the land and maybe the land comes with the purchase of the shack. I’m using a silly example just to emphasize that that is also an issue for us.
The other eligibilities also don’t extend to a situation in which we want to build using bricks and mortar — so we need the housing first — but we also need the workforce that supports and makes sure that that remains a safe home, and we also need the supportive housing. We’re also looking at some models, and we have models that are being built or are already built that have the service delivery entities right within the housing units. So it messes with people’s minds because they don’t know what kind of category it is. We talk about housing as a spectrum, but we look at it as a web. It is not just from here to there. It is actually a web that can manifest in many different and creative ways, all of which are eligible.
Mr. Barata: I know federal officials appeared before this committee last week and described the first phase, the rollout, of the Canada Lands Corporation, the five or six sites. The determination for the first phase is that all 5,000 units are going to be rental. It is what it is.
However, we know that there will be more Canada Lands Company phases rolling out. Federal officials, when they appeared before you, said that they want to retain ownership of most of that land, but there is a possibility for the not-for-profit operators to purchase some of those lands. One of the great opportunities that we have, as Canada Lands Company continues to roll out their land options, is to create a portion — it doesn’t have to be 50% — of Canada Lands Company to be available for affordable home ownership, because that would create an acceleration of our model and would be to everyone’s benefit.
[Translation]
Senator Hébert: My question is for the National Association of Friendship Centres. I apologize, but this is an issue I am not very familiar with and am trying to understand.
What are the success factors that should be considered with the Build Canada Homes program so that you can say that it helps you in your mission and in the objectives you are pursuing? In other words, do you feel that Build Canada Homes will help you achieve your objectives? If so, under what conditions would this be the case for the communities you represent?
[English]
Ms. Formsma: I would ask Stacey to weigh in as well, because she operates the housing units, as mentioned.
There are over 100 friendship centres across Canada, coast to coast to coast, in every province and territory. We are the largest Indigenous services provider in the country, providing services to well over a million people every year. We have found that providing the services and programs alone isn’t enough; we actually have more and more friendship centres getting into the area of providing housing, on an emergency, transitional, supportive basis — not free-market rent so much, but at least closer to that end.
We are worried that if Build Canada Homes isn’t considerate of the urban Indigenous reality, there is a risk that we might be left out completely. We’re serving the largest Indigenous population in the urban spaces without access to the resources to adequately serve that population, with demand rising.
We are hopeful, but it is still not clear yet how we fit into that picture.
Ms. Howse: I’ll go back to the wraparound services. For example, we entered into an operational agreement with another organization that was run by the United Church of Canada. They had started the housing at what is now one of our locations, and their aim was to provide affordable housing. However, they quickly realized that the individuals who need affordable housing had other needs that they did not have the capacity to meet; there were many gaps. It was a pretty intense situation.
So, as an Indigenous organization working with individuals in precarious situations, we have experience with those situations, and we know the success factor is that wraparound support — the web, as Jocelyn mentioned. That’s exactly what friendship centres are able to do.
Ms. Duke: I want to add that, today, 60% of Indigenous People live in urban settings, and StatsCan predicts that, by 2036, there will be 1.5 million urban Indigenous Peoples.
[Translation]
Senator Hébert: Thank you.
The Chair: There are two minutes left. Senator Cardozo, I now yield my speaking time to you.
[English]
Senator Cardozo: I just want to address that last point. In terms of numbers, can you tell us the number of Indigenous People in urban centres versus on reserves?
Ms. Duke: It is 60%.
Senator Cardozo: Sixty per cent of Indigenous People are in urban centres.
Ms. Formsma: In a national picture. In some areas, it can range from 50% to 85%.
Senator Cardozo: Would that be cities in Saskatchewan, for example?
Ms. Formsma: Yes, many northern areas of most of the provinces, such as northern Ontario, B.C., Alberta and Saskatchewan.
Senator Cardozo: Thank you.
The Chair: The last word goes to Senator Forest.
[Translation]
Senator Forest: Quebec’s Native Friendship Centres recommended that all funds allocated to Build Canada Homes be devoted to addressing problematic situations in urban areas. Do you share this view?
[English]
Ms. Formsma: I can’t speak specifically about the recommendation you are speaking to. I’m just not familiar with it. Our affiliate in Quebec Le Regroupement des centres d’amitié autochtones du Québec has a housing arm, and they are building student housing in at least three or four communities right now. It is called La Société immobilière du Regroupement des centres d’amitié autochtones du Québec, or SIRCAAQ. I would encourage you to seek out their recommendations specifically on the Quebec reality, because they are very much in that world. They have really good experiences to draw from.
[Translation]
Senator Forest: Thank you very much.
The Chair: That concludes our session for today. Our next meeting will take place at 9 a.m. on November 4, a very special day in the world of finance. Many thanks to the witnesses.
(The committee adjourned.)