Bill to Authorize Certain Payments to be Made Out of the Consolidated Revenue Fund for the Purpose of Improving Housing Supply

Honourable senators, the Senate is resolved into a Committee of the Whole in order to study the subject matter of Bill C-26, An Act to authorize certain payments to be made out of the Consolidated Revenue Fund for the purpose of improving housing supply.

Honourable senators, in a Committee of the Whole, senators shall address the chair but need not stand. Under the Rules, the speaking time is 10 minutes, including questions and answers, but, as ordered, if a senator does not use all of their time, the balance may be yielded to another senator. The committee will receive the Honourable Gregor Robertson, P.C., M.P., Minister of Housing and Infrastructure and Minister responsible for Pacific Economic Development Canada.

I would now invite Minister Robertson to enter, accompanied by his officials.

(Pursuant to the order of the Senate, the Honourable Gregor Robertson and his officials were escorted to seats in the Senate Chamber.)

Minister, on behalf of all senators, welcome to the Senate.

As I have informed my colleagues, the question-and-answer period will be divided into 10-minute blocks. These blocks will be shared between two or three senators and will include time for your responses.

I would ask you to make your opening remarks of at most five minutes.

Thank you, Mr. Chair. I am very pleased to be here with you today.

Thank you, all senators, for the opportunity to appear before you to discuss Bill C-26 and for your willingness to study this important legislation on an expedited basis in particular, given that we are in a housing crisis. I would like to thank Senator McBean for sponsoring this bill and helping it move along.

I wish to note, before we start, that I may need to pause briefly to vote on my phone. I will need to take a time out in about 25 or 30 minutes. We are moving things along through the House, as are you. I appreciate your patience with that. I will signal you when I need to do that. It will only take a minute or two.

On the subject of housing supply, our government is focused on boosting housing supply all across the country. By implementing a range of measures across the housing system, we are seeing early signs of significant progress.

We are working alongside our partners in order to build more homes: provinces, territories, cities, Indigenous communities, the private sector and community builders. Creating more affordable housing is really the ultimate focus here. Affordability is obviously a top concern for many Canadians as well as reducing barriers so that Canadians can access housing.

Housing remains a pressing issue. We have had arguably 30 to 40 years of history during which we did not invest enough in housing. By implementing a range of measures, we will see movement, but there is a lot more work to be done.

Bill C-26 is a key part of addressing housing needs across the country. The legislation provides for $1.7 billion directly to provinces and territories for the purpose of accelerating housing supply.

This bill will enable the Minister of Finance to make payments to the provinces and territories as long as the federal funds are used exclusively for measures aimed at increasing the housing supply. These funds can be tailored to address the specific circumstances and needs of each province and territory, which will help to make housing more affordable for all Canadians.

The provinces and territories are well positioned to determine how federal support can strengthen their efforts to increase the housing supply in the various regions.

Housing needs vary from one place to anther across the country, and the measures that we are planning are designed to meet those different needs. The challenges faced by a growing urban centre are very different from those faced by a small community or one that is more remote.

Bill C-26 gives the provinces and territories the means to allocate the funding where it will have the greatest impact on increasing the housing supply.

Our partnerships with provinces and territories are focused on taking action to lower building costs and to accelerate the delivery of new housing. These measures can include, but are not limited to, reducing development fees or levies on new home construction. Funding can also be used for incremental investments in provincial and territorial programming that is already in place to spur housing developments.

The Government of Ontario’s HST announcement on March 30 of this year is a key example of how these federal transfers will enable partnerships to improve housing supply. Ontario went first and set a great pace with this.

The partnership between the Government of Canada and the Government of Ontario will reduce taxes and fees for a new home in Ontario by up to $200,000 through a combination of reduced development charges and HST relief for new homebuyers. Ontario estimates that this measure will support an additional 8,000 housing starts in 2027.

Bill C-26 also complements the work that we are doing and deepens the impact of investments being made through Build Canada Homes.

Since Build Canada Homes was launched in September 2025, it has secured significant partnerships with Nova Scotia, New Brunswick, Ontario, B.C., Quebec, Yukon and Nunavut. A tripartite agreement in principle has also been signed between the Government of Canada, the Government of Nunavut and Nunavut Tunngavik Incorporated, the housing agency. Negotiations are currently still under way with other provinces and territories, and more partnerships are being developed through Build Canada Homes.

Thank you, minister.

We will now proceed to the question-and-answer period. We will begin with the first block, starting with Senator Housakos.

Minister, welcome to the Senate, particularly following the pre-study we did on Bill C-20. Now we are dealing with Bill C-26 here today.

As you may be aware, the Standing Senate Committee on Banking, Commerce and the Economy tabled an observation on Bill C-20 last month. I understand that those observations have been shared with your department, and I hope that you and your officials give them serious consideration as the bill proceeds through its remaining stages.

Minister, Bill C-26 authorizes $1.7 billion in payments to provinces and territories for the purpose of improving housing supply. That is the central phrase in the bill, but the bill does not define it.

Can you tell this chamber, in plain terms, what specific outcomes are expected from this $1.7 billion? How many homes?

What is the time frame and how many homes will be purchased with the $1.7 billion? What measures will be set as your success bar in terms of judgment?

Minister, if your government cannot tell Parliament how many additional homes this funding is expected to produce, how can senators responsibly conclude that this bill is a housing supply measure rather than simply another transfer of public funds with a housing label?

We want to know what your benchmarks are specifically in terms of how many homes, what the time frame is and what you consider as success.

Thank you for the question. With this transfer, as I mentioned, right out of the gate, we had an example of what the Province of Ontario has decided to do with their portion, which is to eliminate the HST in Ontario for the year 2026-27. They combined that with the previous initiative on development charges. This piece, in particular, for homes up to $1 million is a $130,000 reduction in the cost of a home, which is very significant. An additional $70,000 is estimated as a reduction from the development cost charge change due to the investment that we have made as well.

Ontario is taking an approach of helping to get the housing market going, which has stalled significantly in the GTA, as well as getting builders building and ensuring new homebuyers have an opportunity to save significantly, given the challenges in the economy and with affordability. They figure that will flow through to developers building an additional 8,000 homes in the year ahead.

There is a knock-on effect as the equity that developers and builders have in the current stalled inventory can be redeployed into new homes being built.

We see an Ontario example. It will be different for other provinces and territories. We are keeping it flexible. We have many different tools right now between Build Canada Homes, Reaching Home: Canada’s Homelessness Strategy and the Canada Housing Benefit. We have a number of different tools working with the provinces and territories.

This is one that is targeted at the housing market crisis in Ontario and B.C. We assume — Ontario has already taken the lead on that — that they will deploy it accordingly to help solve the challenge in their markets, as well as the additional benefits that will accrue around affordability.

We will see different approaches in different provinces and territories. In good faith, this is an investment in housing supply.

I am certainly in touch with housing ministers across the country. We have a summit together this summer, and we will be checking in on what everybody is doing with their next steps. Certainly, the public will be asking questions, as well as the oppositions in their legislatures, of how they directed their funds and what the outcomes are.

I did not hear a specific answer to the question. I appreciate that you want to prime the wheels of provincial governments and their existing programs, which are clearly failing in every province across the country for well over a decade now.

The truth of the matter is more money into a bad structure isn’t necessarily the solution. We’re talking about getting an approval from us for $1.7 billion.

I ask the question again concretely: As minister on a national basis, from coast to coast to coast, how many homes do you expect to get for $1.7 billion at the end of this exercise?

Thank you again.

To your question, we are not being prescriptive and setting targets for provinces and territories. In this case, we are making an investment in the provinces and territories to boost their housing supply, trusting that they will invest that wisely on behalf of the people who live in their provinces and territories.

This is a collaborative effort to direct funds and boost housing supply, trusting that the provinces and territories will deliver results on their own terms. We have many other programs that are much more prescriptive.

Through my colleagues in the House, it was felt that this was an opportunity to invest as a flexible tool in provinces and territories and, at the same time, complement our other programs, with Build Canada Homes being one significant example, which are now working in partnership with the provinces and territories through targeted measures to deliver specific numbers of homes.

This is more about covering a broad base and letting the provinces and territories come up with their own solutions to the problems that they have.

What I’m hearing is that $1.7 billion is being transferred and that there aren’t really any targets for achieving objectives. Is the reduction conditional? You announced that the measures could help reduce development and new housing construction charges. Is that reduction a condition for obtaining funds? Will achieving such reductions be mandatory?

Thank you for the question.

There are no conditions on this funding provided to the provinces and territories. It is a direct transfer to them. It is clear and simple language: boosting housing supply.

For me, among my colleagues, the provincial and territorial ministers, I’m looking at this as a friendly competition. Who can deliver the most housing supply through the investments being made? We are leaving it to them to apply the dollars to the solutions as they see fit.

Ontario is a different context from many of the other provinces and territories.

I don’t want to interrupt you, minister, but I don’t have much time.

So, I understand that they won’t be required to remove or reduce the various development charges. Will that be left to the provinces’ discretion? QST proceeds go to the province, and the province has chosen to forgo them. Development and construction charges, as well as construction permit charges, go to the municipalities, which is different.

Will the province have a free hand? If extending water and sewer systems and infrastructure allows the development of a street, can the municipalities use these funds to build new housing?

Thank you for the question.

It is an excellent example of what a province or territory may do with these funds. Given that discretion, they may choose to invest in housing-enabling infrastructure.

Many provinces and territories have challenges with increasing housing supply because they don’t have the infrastructure to do that at the community level, such as water infrastructure, including waste water and stormwater infrastructure. They have the discretion to apply those funds toward the biggest housing supply impact. The expectation of my colleagues is they will be looking at the choices they can make and looking to get the best results from that.

It is not conditional, however, as I have said before. For the development cost charge reductions, there is a separate initiative through the Build Communities Strong Fund. The Provincial and Territorial stream of the new $51-billion infrastructure fund requires matching funds from provinces and territories, and it is eligible for housing-enabling infrastructure. We will see investments tied directly to the dollars and the delivery, but in Bill C-26, with this pool of capital, they have the discretion to apply that.

I suspect some of them will, as you suggest, focus on housing-enabling infrastructure to be able to build more in their communities.

Minister, the Standing Senate Committee on Banking, Commerce and the Economy recently completed an extensive study of Canada’s housing affordability crisis and heard from builders, municipalities, economists, housing advocates and financial institutions.

The committee concluded that increasing housing supply must be the centre of any serious affordability strategy and made several recommendations aimed at accelerating home building and supporting the infrastructure needed to enable new housing, including programs like the one you mentioned in Ontario about rebating the HST.

While Bill C-26 would provide significant funding to provinces and territories, as you said, the legislation does not prescribe how those funds should be spent.

How is the allocation of funding among provinces and territories determined, and what discussion took place with the provincial and territorial governments regarding the intended use of these funds?

Thank you, senator, for the question.

What we’re looking at, across this pool of capital, are different allotments for different provinces and territories that are tied more to their housing challenges. Ontario, far and away, has the largest challenge with housing supply right now, a combination of not enough affordable housing for those who need it and also market housing not selling. There is a lot of uncertainty in the market. There is a lot of condo product in the GTA that has stalled, and that has stalled the equity of many home builders who cannot move that product and build more.

In Ontario’s case, they will get the largest amount of this $1.7 billion. B.C. has a comparable problem on a smaller scale. The majority of the funds will go to those two provinces because it is being responsive to the crisis we have with housing supply and stalled markets. It will drop off from those provinces, which have the biggest challenges, but still have some proportionality to the populations of the provinces and territories.

We have a parallel approach with public transit funding, where we weight the ridership on public transit, but we also have a population formula. Here, it is a combination of housing supply challenges and population across the provinces and territories.

Minister, my questions pertain to the efficiency, coordination and harmonization of codes.

At a time when innovation is emerging as a key driver, particularly with the creation of Build Canada Homes, how does the government intend to use these funds to encourage the adoption of faster and more efficient solutions — notably prefabricated and modular construction — while promoting greater harmonization of building codes across jurisdictions? For example, the Canadian Wood Council has pointed out that the CMHC is not funding modular construction because they are awaiting your ministerial directive.

Thank you for the question.

There are a couple of components to that which I will respond to.

With this Bill C-26 funding, the provinces and territories have discretion. There may be provinces or territories that decide that investing in modern methods of construction and making the home building industry more productive and efficient are the best way to increase their housing supply. That’s their decision.

We are focused on boosting those innovative home building techniques, manufacturing in particular, through Build Canada Homes. That is a very important part of the Build Canada Homes mandate — to require that modern methods of construction are part of proposals that come in to create the demand for the manufacturers, to create the demand for innovation in the home-building sector, more efficiency, lower costs and Canadian materials, so boosting our Canadian economy. That’s part of the Build Canada Homes mandate.

With this bill, in particular, we leave it up to the provinces and territories to decide if they want to direct some of their investment at those innovations and changes.

The final piece you asked about was on National Model Codes or building codes. That, again, is something we have signalled in the Spring Economic Update as next steps to work with provinces and territories across the country to look at more harmonization between building codes so that we can be more efficient between provinces and territories with workers, trades, materials and manufacturers who are manufacturing in one province and wish to ship to another.

We are looking at that as a separate initiative but certainly aligned with these steps, all different tools that work together.

My second question pertains to coordination between the various public stakeholders. Given that Bill C-26 provides for flexible transfers to the provinces, how will the government ensure that these investments will genuinely contribute to better coordination and that they will not exacerbate the fragmentation already observed in housing policies? When I say “fragmentation,” I’m referring in particular to the responsibilities, standards and programs, but also to the stakeholders that are spread across various levels of government and institutions. How can the government ensure better coordination?

Thank you for the question.

The senator identifies arguably that the largest challenge we have with housing across Canada is not enough coordination between our federal tools, provincial and territorial, local governments, the private sector and the non-profit housing community.

In the case of Bill C-26, we’re not seeing this as a direct contribution to solving the challenges we have around coordination. We do see that as a critical piece with our housing work going forward. We are looking at a new national housing strategy being crafted this year, as the 2017 National Housing Strategy is coming near to an end and the agreements related to it will expire in less than two years. Our partners are now asking, “What does it look like? We don’t want it all to stop.” None of us want that to happen. We’re starting to have those conversations on coordination.

This investment in provinces and territories, and trusting that they will make good choices, is also a measure of good faith. We are committed to being good partners. We are committed to trusting our provinces and territories to do the right thing to boost housing supply.

We want to work with them to harmonize building codes to get more affordable housing built on the other programs that we have.

This piece is more flexible and more trusting. The others, we need to advance aggressively in the months and years ahead. They complement one another that way.

For my last question, I’d like to pick up on the topic discussed by Senator Carignan.

The government has introduced a number of programs: the first-time home buyers’ GST/HST rebate program, the Build Canada Homes program, and Bill C-26. So we have different tools that share the same objective of making housing more affordable. How do you intend to assess whether the various programs are meeting their objectives? Have you thought of introducing some overarching objectives, for example, rather than approaching these three actions separately?

Thank you for the question.

Assessment will be a combination of the extensive research that the Canada Mortgage and Housing Corporation, or CMHC, does. CMHC is the leading agency for doing research on housing and finance related to housing. We anticipate rigorous analysis of all of these programs and their overall outcomes from CMHC in their work.

There are, obviously, a number of independent bodies and industry-related bodies that are doing research and tracking.

We have seen some success from programs to date in that we have had 20 months in a row of average rents coming down across Canada, which is a great sign that the supply of rental housing is catching up and —

Thank you, minister.

Minister, welcome to the Senate. Thank you for being here with us.

My questions today are not about the important work of improving the housing supply but about the process that you have taken with this bill. This is a one-clause bill to appropriate funds.

In a briefing yesterday, after a question about why this is stand-alone legislation, officials said that the government wants to move money very quickly. This reasoning seems somewhat confusing, considering that, yesterday, June 16, this chamber passed both Bill C-32 and Bill C-33, the supply bills for the Main Estimates and Supplementary Estimates (A), which were only introduced in the House of Commons on June 8. This bill, Bill C-26, was introduced in the House of Commons three months ago and only began second reading yesterday.

My questions are as follows: Why was this funding not done through the estimates process? Why has your government chosen stand-alone legislation as the vehicle for this funding? Does this not make it more difficult to follow and scrutinize government spending within the full fiscal picture? If this funding is so critical, why did it take your government so long — from March 26, when it was tabled, to yesterday — to move to second reading?

Thank you, senator, for your questions. First and foremost, I don’t have all of the answers to your questions relating to the process of the bill through the House of Commons, overseen by my colleague the Government House Leader and his team.

As I’m sure the senators here know, there is a lot of cut and thrust between the government and its opposition in terms of agendas, prioritization of bills, debate and committee time. I’m not directly involved in making those choices.

That said, this is a relatively expedited investment of housing funding for provinces and territories. It was announced in late March, and Ontario immediately had uptake, announcing that partnership between the Governments of Canada and Ontario at the end of March, with these funds in mind to reduce their HST, with the federal component of the GST being the allotment that they were projecting here.

Provinces and territories are seeing this as likely to come through, and they are making their plans. We expect deployment to be rapid. In the broader context of our government investing in housing, this is a relatively expedited process, and, at the same time, it’s very simple. It’s a simple bill that stands alone in terms of investing this funding in provinces and territories for the purposes of boosting housing supply and giving them the flexibility to direct that funding. I anticipate that we will all be tracking the outcomes of that.

There is no argument about the purpose of the funding and its implementation. With a $1.7-billion price tag, down the line, when the National Finance Committee, which I am a part of, continues to track the funding spent by this government through the estimates, this won’t show up. I’m really thinking more about transparency and fiscal responsibility.

Do you agree that money could be tracked more easily if it were part of the regular fiscal cycle and if it were part of the —

Thank you, Senator Ross.

I’m going to take a slightly different tack and talk about military housing. We know from the technical brief that housing on-base is covered under the Canadian Forces Housing Agency, but it’s very important to note that the majority of bases in Canada are in rural or very small communities. The only government in charge of housing that actually affects military operational effectiveness is the federal government. Please note that there are bases located in places like Cold Lake, Alberta; Shilo, Manitoba; Bagotville, Quebec; and Yellowknife, Northwest Territories. These are places where we cannot even move people because there is no affordable housing or anything available on-base.

My question to you focuses on the challenges of growing a force rapidly and maintaining operational capability. We know that access to housing and child care are major retention issues in a growing force, and they are also reasons why people will not join.

Given the special relationship of the federal government with the Canadian Armed Forces, or CAF, in maintaining the defence and security of Canada, what discussions have happened between provinces and territories containing bases and the federal government that could encourage the investment of more funding into these smaller communities? Thank you.

Thank you, senator, for the question. Provinces and territories have the flexibility to direct this funding to build housing adjacent to bases in their various communities. I haven’t heard from my fellow housing ministers across the country that it is a priority for them. Generally, they will point to the fact that it is a federal responsibility, for the reasons that you mentioned, and to the relationship between the federal government and the Canadian Armed Forces.

I work very closely with the Minister of Defence, and he has a robust housing agenda, recognizing that there is a housing shortage for CAF members on-base. Through the Pathfinder program that was launched in previous years, they have an approach to getting more base-supporting housing in lands adjacent to the bases in those communities.

We see a real opportunity for synergies and alignment, and for Build Canada Homes in particular to be able to partner with the Canadian Forces Housing Agency to get more housing built and to look at a combination of our forces to deliver more housing that benefits both the base and the community in which it is situated, especially in small communities.

Thank you, minister.

Thank you for being here, minister. In the answers you’ve given today, you talked a lot about agreements between the provinces and the federal government and, if I understood correctly, you confirmed that the provinces will be given a lot of flexibility.

How does the government plan to ensure an equitable distribution of funds between rural areas and large urban centres in the agreements with the provinces, particularly the agreement with Nova Scotia, where I’m from?

Thank you for the question. We have certainly heard, loudly and clearly, during my past year as minister, about the needs of housing in rural Canada, and I certainly hear it from my colleagues in Nova Scotia, which has a particular mix of rural housing outside of the Halifax region.

We do see the importance of ensuring that there is a floor for investment in rural communities. Build Canada Homes has a 20% floor with its funding for rural, northern and Indigenous housing. We want to make sure that we are investing in rural communities.

There is a good example next door to you, in New Brunswick. The Province of New Brunswick put together a portfolio of housing projects in their province that encompasses many small projects in rural communities, which makes it easier for us to administer one single investment in New Brunswick that they can then deploy across smaller communities. Those are many smaller projects that may have a big impact in those small communities. But, obviously, it’s more work to go from one small project to another.

We are developing a system across some of our other tools — Build Canada Homes in particular — to make sure we are investing in rural housing. The housing affordability crisis and the shortage are impacting many rural communities. We’re certainly seeing that in the North, and that is recognized in the agreements with Nunavut and Yukon.

I see this as a really important component. It’s not direct, obviously. Bill C-26 is a very simple bill. I anticipate that some provinces will direct some of this funding toward boosting housing supply in rural communities. Those are provinces and territories that primarily consist of rural communities.

Thank you for being here, minister. It is fun to see someone from my own neighbourhood here in the chamber.

In your remarks, you made reference to Bill C-26 being just one piece within a more comprehensive housing plan that is being implemented across the country. In discussions like this, especially with the timelines we are facing on the bill before us, it can be easy to focus too singularly on particular pieces.

Would you be able to describe in more detail how this bill and its intended outcomes fit into the wider housing plan you referenced?

Thank you for the question, senator. This is certainly complementary to the other tools in the tool box, and I would say that the most flexible and trusting way to deal with our partners at the provincial and territorial level is by giving them the discretion to apply this funding to boost housing supply.

Build Canada Homes, which senators have been deliberating on, is a new agency within my department that will hopefully soon be a Crown corporation with the flexibility and tools to be able to acquire real estate, to develop, to have federal land in the tool box and to focus on delivering affordable housing using Crown corporation tools if we empower it with that. That’s a different model that’s more based on proposals from all sorts of partners — provinces, territories, cities, private sector and community builders. It’s a new tool that we think has flexibility, but also has a very clear mandate to deliver with those partners.

We have an array of tools that come from the National Housing Strategy that range from tackling homelessness, with Reaching Home and the Unsheltered Homelessness Encampments Initiative, to the Canada Housing Benefit and many other programs related that are in the National Housing Strategy that are more targeted.

What we anticipate here with Bill C-26 is much broader and much more flexible, and I think it will be really important for us to look at the outcomes and see if this is a good tool going forward. We recognize we’re in a crisis —

Thank you, minister.

My question relates to whether there has been consideration to require an agricultural impact assessment to establish land’s agricultural value before any federal department or agency disposes of Crown land located in an agricultural area or converts such land into non-agriculture use, that is, for housing, especially where the land is fit for food production. We are losing food-producing land, and with the geographic expansion of cities, how do we manage the intersection of the need to build homes and the need to keep agricultural land in food production?

Thank you, senator. I appreciate you flagging that concern. As a former farmer on land that was protected in B.C. by the Agricultural Land Reserve, I would have never had the opportunity to have a career in farming and food, which led to food processing and, ultimately, to me being here today. I have a very direct and passionate connection to the points you raise.

I would love to follow up in terms of an agricultural impact assessment tied to federal tools to make sure there is a balanced approach. Many of the provinces and territories do not have a system like B.C., which has protected agricultural land for 50‑plus years. We’re certainly looking at every opportunity to put housing on federal land where it makes the most sense, but it should be sensitive to ensuring that we are not taking away valuable farmland in a time when food security is paramount.

Thank you for the question.

Thank you for your concerns. I’m very familiar with an existing program we have with the Affordable Housing Fund — a $50-million carve-out of the Affordable Housing Fund for Black households — which is making sure we’re supporting renter households and home ownership for Black families across the country.

As of the end of February of this year, that carve-out is fully committed. It supported nine projects, I believe, across the country, and more than 500 homes were created through that program. We’re now looking at the renewal of the National Housing Strategy, so we have an opportunity to take that to the next level.

It’s not directly related to Bill C-26 in this case, but I think there was good success with the Affordable Housing Fund program and certainly a desire to continue to scale that to meet the needs, noting that it is a significant challenge and Black households are disproportionately affected by affordability challenges. We need to rise to that challenge, and I do anticipate that with the renewal of the National Housing Strategy going forward.

Thank you for being here, minister. I have a two-part question. Over the past four to five years, one of the reasons cited for the shortage of housing was immigration. Immigration levels have been reduced considerably in the last couple of years. I wonder what your thoughts are on the link between immigration and the shortage of homes and your thoughts about whether Bill C-26 helps in this regard.

My second question is regarding Build Canada Homes. Do you have numbers on how many houses have been built, or when do you think you will have numbers firmly?

Thank you, senator.

With immigration, the priority of our government is to make sure we have our immigration system under control and that the housing ecosystem across Canada has an opportunity to catch up a bit, given there were very high levels of immigration, particularly in 2022-23. It was one of the factors contributing to challenges with people finding adequate and affordable housing. There are many others. The direct purpose of Bill C-26 is to boost housing supply. Supply has been a challenge all along.

I would say, as the circumstances change, we’ve seen really good outcomes with the changes with immigration in getting the system under control. But Canada is a country of immigrants, and we are nearing a point where, I would say, we will start looking at the next steps with immigration. We need to ensure our housing decisions are informed by that.

To your second question, there are over 12,000 homes now in the works with Build Canada Homes. There has been a huge flow of proposals from across the country, with partners of all levels looking to have financing and investment in their projects — a very robust deal flow. Right now, there are about 12,000 already in the system, going for financing, and tens of thousands more coming. So those are good results right out of the gate in this first year.

Thank you, minister, for being here today.

Bill C-26 says that the amount of each payment is to be determined by the Minister of Finance. Is there an allocation formula for these payments? Will it be based on population, housing starts, housing need, provincial commitments, municipal permitting reforms, affordability pressures or some other metric that I haven’t mentioned?

Thank you, senator. There is no prescriptive formula for this funding. I mentioned the approach being taken is one of looking at housing supply needs. Ontario and B.C. have the most critical needs right now and are having a real crisis in terms of the housing markets in the GTA and Metro Vancouver. That will be weighted alongside a broader population formula for the provinces and territories, but I anticipate Ontario and B.C. will be more heavily weighted given the challenges they have with housing supply.

Would it be fair to ask whether you are going to create an allocation formula before the Senate is asked to pass this bill? If not, why would the Senate approve $1.7 billion before knowing how the money is going to be divided among the provinces and territories?

The money, as I said, will be divided on the basis of population with weighting on housing supply challenges.

The Ontario funding is what is driving Ontario’s elimination of the HST this year. They have chosen to apply it to that. In my judgment, it is a very strategic and important decision to boost housing supply in Ontario and to offer a significant measure of affordability for new home buyers that boosts the housing market in Ontario.

At this point, we are giving flexibility to the provinces and territories on how they deploy that capital, but it will be proportionate to their needs. We’ll have an opportunity on the other side of this to gauge the outcomes from this investment, as we do with the rest of our housing programs.

Minister, the government has also pointed to Build Canada Homes and roughly $40 billion in broader housing programming. Bill C-26 appears to add another $1.7 billion of transfer authority.

How does this bill fit into the government’s overall housing plan? What gap is it intended to fill that existing programs do not already address?

Thank you.

The gap that this Bill C-26 funding fills is really around flexibility. Most of the instruments, tools and programs that we have are very prescriptive. In particular, with respect to project-based funding, which is the majority of what goes out through the Apartment Construction Loan Program, the Affordable Housing Fund and Build Canada Homes, most of the capital that is deployed is going through project-based analysis.

In this case, these are flexible funds for the provinces and territories to apply as they see fit for their particular challenges with housing supply. This is trusting our provinces and territories to invest this wisely where they see fit without prescribing to them, as with many of the other programs. Funding is subscribed in many of those as we go into the rollover of the National Housing Strategy.

Part of this is also gauging how successful we can be in working with provinces and territories and offering more flexibility with some of the funding. However, it’s a small proportion of the overall investment and a very small proportion of what is being invested in housing overall.

Minister, are you saying that Bill C-26 is not necessarily funding a clearly defined program within the housing plan but is more a flexible pool of money to be allocated later as negotiations with provinces and territories unfold?

I anticipate provinces and territories moving swiftly to deploy the funding to address their housing supply challenges. We’ve certainly seen that with Ontario, who have been asking for that type of support so they can act.

I know we will see swift action from B.C. as well because they are in a comparable predicament.

Minister, Bill C-26 contains no clawback provision, no statutory reporting requirement and no requirement to demonstrate that the money actually produces additional housing supply.

What happens if a province or territory receives funding but fails to deliver measurable results?

Thank you.

In terms of outcomes, we will be tracking the work that is done in each of the provinces and territories based on the funding, how they’re utilizing it and what the outcomes are.

This is a new approach — one that hasn’t been taken before — but it recognizes we’re in very unusual circumstances in terms of being in a housing crisis and a housing supply crisis in some of our provinces.

The approach here is to give the provinces and territories an opportunity to prove what they can do when they are given the flexibility to deploy this capital. We can then measure the outcomes from that and determine whether we do anything like this going forward or use different tools if the outcomes are not satisfactory.

The initial feedback from Ontario is very positive in terms of the immediate market signal that we had in April and May. It is very positive in terms of their action in reducing the HST. They feel strongly that it has been a great success out of the gate.

We need to look at that as we go through this program and go through the year and assess whether this is a tool that we need to continue using. However, it is an important next step to give the provinces and territories a chance to prove what they can do when they have flexibility with this funding.

Minister, will the government withhold, reduce or recover funding if promised housing outcomes are not achieved? If there are no consequences for non-performance, how is this an accountable use of public money?

I am not aware of a recovery mechanism regarding this funding, and I would say that we have a lot of other funding programs with the provinces and territories. They rely on us, in particular, for some of the major programs, with the Canada Housing Benefit being a very significant one.

It is incumbent on the provinces and territories to deliver good results with this investment. We are trusting them to do that, and we certainly have leverage with a number of other housing programs. If they’re not getting results with this funding, then there is not likely to be any more of it to follow. It will certainly influence our decisions around the balance of our programs if funding invested in good faith is not being used for the outcomes we all share — or that I would hope we all share — and we can make decisions based on that.

Minister, your government is asking Parliament to approve $1.7 billion, but the bill contains no definition of improving housing supply, no allocation formula, no eligibility criteria, no public reporting requirements and no clawback if results are not achieved.

Why should senators not view this as a blank cheque?

Thank you.

This is an investment in boosting housing supply with provinces and territories. The provinces and territories have been kicking down the door asking the federal government to invest and support their needs on housing.

We have, as a federal government, underinvested in housing for about 40 years now, as programs have been pulled back, eliminated and reduced. There has been a resurgence of investment.

We don’t have a precise handle on what the array of new investments made over the past 5 to 10 years has been. There is a lot of analysis right now. We’re still testing the tools, and I think the first National Housing Strategy has certainly done a good job of that —

Thank you, minister.

Welcome, Minister Robertson.

Bill C-26 focuses on increasing our housing supply and making housing more affordable for Canadians. This is welcome and, as you have said, long overdue.

Last December, I met with the Canadian Housing and Renewal Association. They outlined that almost 20% of households in Canada cannot afford shelter costs of more than $1,050 per month, yet only 4.4% of our total housing stock is in affordable, non-market community housing. To stabilize the rental market and make housing more affordable, they suggested the government focus on doubling the proportion of community housing over the next 10 years.

Recognizing the flexibility that you’ve described and some of the issues that Senator Ataullahjan has mentioned about no mandatory reporting, audit or accountability frameworks, have you heard from provinces and territories who plan to build more non-market community housing with these funds?

Thank you, senator.

I have certainly heard from some of the ministers that their focus is on boosting the non-market housing supply, which is the biggest challenge in their province or territory. Ontario has chosen a different path, with their funding right out of the gate, recognizing that they have a major crisis with the housing market in the Greater Toronto Area, or GTA, in particular.

We will see some provinces and territories focus on non‑market housing, and across the other tools — Build Canada Homes, notably — we are going to have a big focus on non‑market housing and making that the top priority of the federal government. We have a huge shortage of non-market housing compared to our peer countries in the Organisation for Economic Co-operation and Development, OECD, or the G7. We have to catch up. Being at 3.4% is obviously inadequate. That is why there is a homelessness crisis and too many people who cannot access housing affordably. There has to be more of a focus on non-market or community housing, as it is often branded these days.

Thank you. That is wonderful to hear.

The Chronicle Herald in Halifax has recently reported that 32% of post-secondary students in Nova Scotia experience what is called “hidden homelessness,” where they are couch surfing, sleeping in cars or staying overnight at campus libraries. The City of Halifax is also the fourth most expensive major city in the country.

How do you see this bill assisting the housing needs of the Province of Nova Scotia?

Thank you. I will leave it to the ministers in Nova Scotia to determine their priorities with this funding in particular.

We have a great agreement with the Province of Nova Scotia. Initially, with Build Canada Homes, it has a real focus on non‑market housing and supportive and transitional housing for people who are homeless or at risk of homelessness. Many of the provinces and territories have also signalled that they want to build more student housing, which is a priority for them. We have had a lot of proposals for student housing at Build Canada Homes.

Some of this funding may end up in student housing in some provinces and territories. Certainly, Build Canada Homes will be focusing some of their investments in student housing as well.

Welcome, Minister Robertson, and thank you for appearing before us today.

I welcome Bill C-26 and the government’s ongoing efforts to address both housing supply and housing affordability across Canada. I’m hopeful that the $1.7 billion in funding proposed through this legislation will help increase the availability of affordable housing.

As you know, the Standing Senate Committee on Banking, Commerce and the Economy released a report earlier this year entitled Out of Reach: Unlocking Canada’s housing affordability crisis. Among its recommendations, the committee urged the federal government to demonstrate leadership by working with other levels of government to establish best practices for municipal approval processes while using financial incentives to encourage their adoption.

Could you tell us what types of incentives the government is considering in order to help reduce approval delays, streamline permitting processes and address regulatory barriers, all of which are so important to speeding up and building homes?

Thank you, senator, for your question.

We have incentives in the form of the Housing Accelerator Fund, which is a set of agreements with 241 local governments to reduce red tape, streamline approvals and do more rezoning for gentle density and transient-oriented density. We’ve seen really good success and uptake with that incentive program through the Housing Accelerator Fund.

I would say that the Bill C-26 investment of $1.7 billion is a big incentive approach to provinces and territories boosting housing supplies in the ways they see fit. We certainly heard from Ontario that they wanted to see their housing market kick‑started in the GTA, and they have chosen to eliminate the HST this year, which is a big incentive for new homebuyers in Ontario. It is up to $1 million. That is a big saving for those homebuyers, and they are already seeing some fruits from those labours.

Across the rest of the provinces and territories, we don’t know yet whether they will take an incentives-based approach with the capital that would be advanced by Bill C-26. As a former mayor, incentives are an important part of the program, certainly at the local or community level. They are definitely stretched to fiscal capacity, so having incentives to make the changes that are needed would be welcomed.

Around coordination, as was mentioned earlier, in terms of national building codes, with a more national approach to expediting approvals, permitting and licensing, there are many cities doing their own thing on this right now with different systems. Some are using AI.

It would be great to see incentives that try to get everyone on a more common platform with more advanced technologies to speed up the process of approvals, which will help make home building more affordable as well.

Thank you for that answer.

In 2023, our committee also released an interim report on housing affordability that called upon the federal government to work urgently with provinces and territories toward the greater harmonization of building codes across Canada. We heard compelling evidence that innovation can play a critical role in increasing housing supply and reducing construction costs, yet officials from the Canada Mortgage and Housing Corporation, or CMHC, at the time noted that construction remains one of the least digitized sectors of our economy, highlighting the need for greater adoption of new technologies, modern construction methods and more efficient building practices. They told us that different building codes and regulations, sometimes even within the same region, can create significant obstacles to innovation and discourage investment in new approaches.

What steps is the government taking to modernize the housing sector, promote innovation and advance the greater harmonization of building codes across the country?

Thank you, senator. I mentioned a few of these earlier, so thank you for the question on it.

We are looking at incentives. Based on Build Canada Homes’ work, the proposals they are considering are weighted toward proposals with modern methods of construction. We want to see projects that are driving the demand for innovative building technologies, from the design through the materials to the on-site construction. Manufactured components are going to be essential to this. As a country, we are far behind our peer countries in Europe and Asia in terms of adopting these modern methods and off-site manufacturing technologies.

We are prioritizing that at Build Canada Homes to drive the market and create the demand.

Through the spring economic update, we are also embarking upon a process with the National Model Codes, working with provinces and territories to see more harmonization. We want to see support for off-site manufactured components. Right now, there are barriers and bottlenecks that make it much more difficult for home builders to use those manufactured components, not only on the permitting, licensing and regulatory side but also on the financing side. We want to remove those barriers and support this fledgling industry to grow and help to bring down the costs of home building.

That is what we’ve seen in other countries, and it makes for a more efficient home-building industry. Ultimately, that improves affordability.

We have a few initiatives like that, and I anticipate that work scaling in the months and years ahead.

Honourable senators, the committee has been sitting for 65 minutes. In conformity with the order of the Senate, I am obliged to interrupt proceedings so that the committee can report to the Senate.

Minister, on behalf of all senators, thank you for joining us today to assist us with our work on the bill. I would also like to thank your officials.

Hon. Senators: Hear, hear!

The Chair: Honourable senators, is it agreed that the committee rise and I report to the Senate that the witness has been heard?

Hon. Senators: Agreed.

Honourable senators, the sitting of the Senate is resumed.