44th Parl. 1st Sess.
December 9, 2021 10:00AM
- Dec/9/21 1:12:27 p.m.
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Madam Speaker, I will be sharing my time with the member for Carleton.
I am pleased to rise in debate today to talk about today's opposition motion. Prior to 2015, I was in the mortgage brokerage industry. I spent 21 years in the residential mortgage brokerage business, so access to housing, home ownership and mortgage credit are issues that have been dear to me for many years and are also dear to my constituents.
There is clearly a crisis in affordable housing in Canada, and in affordability generally in Canada. The average home price is now a staggering $717,000. Even if we subtract Vancouver and Toronto, the average is still $561,000 across Canada. People have generally thought for a long time this is a peculiarity to two markets, maybe even especially Vancouver, but it is no longer the case. Affordability is a crisis across Canada.
The average weekly wage is just over $1,000, so if the average worker saved 10% of their wages, it would take them almost 10 years just to save enough for the minimum down payment on the average house in Canada. Even that would be futile, though, because at that income level they would not come even close to qualifying for the nearly $700,000 in mortgage debt they would need to take on to buy this average house with this average weekly wage.
Generations of Canadians have achieved a degree of financial security and independence through home ownership by buying a home probably around the time of family formation and then paying it off over a generation. Today's young people have simply given up on that dream. As with all questions of people's unlimited wants and needs, this really is a question of supply and demand.
Canada's increasing population has always fuelled demand for housing, but since this pandemic, Canadian interest rates have been artificially suppressed through quantitative easing, wherein the Bank of Canada buys the Canadian government's debt in order to facilitate the staggering national deficits triggering inflation. This inflation is nowhere more obvious than in our housing market, where we have seen an extraordinary increase in the price of real estate amid an economic contraction.
Let us think about that. During a once-in-a-lifetime economic contraction, housing prices actually went up. During a crisis where there is a massive collapse in economic activity, real estate has gone up. The effect of interest rates being artificially suppressed has clearly added to the demand for housing while doing nothing to address supply.
What about housing supply? A recent report says that Canada lacks 1.8 million homes; that is the deficit in housing supply. Developers have complained about delays in bringing new land under development. Regulation and red tape from all three levels of government cause delay and uncertainty that restrict development. These issues are not new, and we were approaching crisis levels long before COVID.
The government now takes enormous credit for its national housing strategy, which includes its signature program first announced just before the 2019 election: the first-time homebuyer incentive. I want to talk about this program, because as recently as during these past two weeks, the beginning of this Parliament, the Prime Minister has cited this program in question period in response to questions from the opposition about inflation and housing affordability.
This program was designed to help first-time homebuyers struggling to access mortgage credit under the government's so-called stress test. The stress test was actually put in the first place to try to cool the housing market by restricting access to mortgages. When the government realized the people who were being punished the most by the stress test were first-time buyers in real estate markets other than Vancouver and Toronto, it announced this program and called it “transformational”, claiming 100,000 Canadian families would achieve the dream of home ownership through the program.
Under this program, a would-be homebuyer must be an absolute top-tier borrower in terms of credit eligibility, employment and whatnot. They would had to have saved 5% down from their own resources, and they may apply to have the government supply another 5%, which would have the effect of very slightly reducing the amount that they need to borrow from the bank and therefore slightly reduce their monthly payment. The borrower can repay the government later, either when they sell the home or by paying out and discharging the government's interest in the property based on a future appraised value. This was the government's 2019 solution for access to home ownership.
This solution is to offer something to people who would have qualified anyway and would have had access to mortgage credit. By giving them the chance to have the government be an equity partner with them in their own home, when the homeowner eventually sells the property, the government gets half of the profit, but if the property goes down in value, the taxpayer shares in the loss. This was the Liberals' solution to access home ownership before the 2019 election. They are still talking about it now as if this is somehow part of their solution to the current crisis that we are in. This program was launched just before the election, and it is now entering its third year. As of July, only 9,000 Canadians had accessed this program; this “transformational” program, they claimed.
Last night, during committee of the whole, I asked the Associate Minister of Finance for an up-to-date figure, because that 9,000 figure was from July. He had several, very capable Finance Department officials around the table, but he chose to ignore that question, and so the July number is the most up to date one we have. However, there is no question that this program has been a complete failure. It has not really addressed anything. It is hardly “transformational”. The problem of affordability and home ownership being out of reach for so many Canadians has gotten much worse since this program was announced.
Today, Conservatives are proposing meaningful solutions that will actually address some of the limitations on housing supply while assuring existing homeowners and prospective homeowners that owning a principal residence, we believe and the House affirms, is an important foundation for stable families and communities, and that the government will not tax the primary residences upon sale.
The Conservatives are proposing that the federal government review and consolidate federal real estate properties and make 15% available for residential development. We heard today that the federal government owns tens of thousands of buildings. These buildings are in various states of repair or disrepair, with wildly varying degrees of functionality or obsolescence. Many of these buildings may not be worthwhile and may not be in the public interest for the Crown to continue to hold them. Commercial buildings have a life cycle, and the highest and best use for land varies over time. We ask the government to take a serious look at whether it is in the public interest to continue to own many of these properties. With large amounts of land and thousands of buildings, surely there are some that the federal government can use to add to the supply of housing to do something to arrest this out-of-control, continuing inflation in real estate.
Another factor limiting the supply of homes is the existence of unoccupied homes in Canada. Conservatives are proposing to prevent foreign investors from parking their money in Canada as a place to sit money in a vacant property. For many years now, it has been widely known that Canada's real estate market has been a prime destination for wealthy foreigners to, at best, take advantage of Canada's relative stability and rule of law as a hedge on their foreign wealth or, at worst, use as a haven for money laundering among the world's kleptocrats. It is time for meaningful action. No foreign national should be permitted to buy a home in Canada just to have it sit vacant while Canadian families give up the dream of ownership.
To conclude, I will add that the Liberals have sent out mixed signals on the issue of taxing capital gains. In a recent interview with a former CEO of CMHC, he talked about and affirmed his support for such a tax. We know that Adam Vaughan, who was this government's principal spokesman on housing issues, favoured such a tax. We also know that this government will eventually have to reckon with the debt and deficits that have accumulated, and were accumulating long before the COVID crisis. Its instincts will always be to pass on these costs in new taxes.
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- Dec/9/21 1:23:28 p.m.
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Madam Speaker, is the member asserting that the Liberals are successfully managing, as I think I heard in the speech by the member for Edmonton Riverbend, 37,000 buildings, that they have succeeded in ensuring that buildings that have reached the end of their life cycle, that are no longer functional for their intended purposes, meet the best use of land and that they are succeeding in transitioning these lands for private development? Is that his assertion? I would suggest that he vote in favour of this motion and commit to 15%.
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- Dec/9/21 1:24:43 p.m.
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Madam Speaker, when a motion is put forward, it is always tough when we talk about all the things it could have said in addition to the things that it actually says.
The member is correct in terms of drawing attention to many of the deficiencies of the government on housing. This motion and my remarks on this motion primarily address the failure of supply and the role that the federal government can play in increasing the supply of real estate available for development and for sale for Canadians to buy.
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- Dec/9/21 1:26:11 p.m.
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Madam Speaker, a new development in that particular location would add to the overall supply and put a damper on the endless increase in demand. The condo building that the member for Wellington—Halton Hills spoke about would add to the supply throughout the market and would have a positive effect on affordability. This is the problem. Demand is being fuelled in part by the government's deficits, which are being facilitated through quantitative easing. We need to get past that. We need to increase supply and quit pouring gasoline on demand.
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- Dec/9/21 1:27:48 p.m.
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Madam Speaker, it sounded like there were some questions for a few other members there. Regarding the third part of the motion, there was an interesting response from the member for Winnipeg North. It seems that the—
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- Dec/9/21 2:05:32 p.m.
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Mr. Speaker, let me thank the amazing people of Calgary Rocky Ridge for returning me to represent them in the House of Commons. I wish to thank my incredible volunteer team, without whom I would not be here today.
I thank my parents Marnie and Duane Kelly, my loving wife Kimberley, her parents Brian and Melodie McBeath and our incredible daughters Katie, Jessica and Meaghan for their love and unwavering support. I also thank the other candidates, their teams and the poll workers for ensuring that voters had a choice in a free and open election.
I grew up in my riding and have in turn raised my own family in Calgary Rocky Ridge, where the people have elected me in opposition to the government. I will carefully consider all the measures proposed in this chamber, and if the government persists in the policies that have caused so much harm and disappointment in my riding since 2015, my constituents can count on me to oppose them with all the tools available to me in the House of Commons.
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