- Member of Parliament
- Member of the panel of chairs for the legislative committees
- Conservative
- Wellington—Halton Hills
- Ontario
- Voting Attendance: 65%
- Expenses Last Quarter: $120,269.09
- Government Page
- Jun/13/23 1:07:07 p.m.
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Madam Speaker, we support all sorts of housing, whether it be co-op, not-for-profit, for profit or affordable housing. To be clear, the source of our problem with the lack of apartment supply in Canada is not solely capital gains taxes. There is a range of problems.
One other problem, which I did not mention in my remarks, is property taxes. I was talking to Jack Mintz, an economist who has done some research on this, and he told me something astounding. In most Canadian cities and provinces, property taxes on apartment buildings are way higher than property taxes on single detached homes in the suburbs. That is because over decades, municipal councils have decided they can increase the mill rate, the tax rate, per hundred thousand dollars of assessment on apartment owners in a way they cannot on homeowners of single detached homes. That is a problem that needs to be addressed, because many people who rent are of much lower income than those who own a home.
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- Jun/13/23 1:05:11 p.m.
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Madam Speaker, I thank my hon. colleague for her question about the report's 14th recommendation.
I agree that more affordable housing is needed across the country, including in my riding of Wellington—Halton Hills. At the same time, Canada is in a crisis situation.
We cannot rely on only building affordable housing units. The only apartment units being built in Canada are being built with public subsidies. The private sector should be building much more than just affordable housing units that have been subsidized with public subsidies. They should be building apartment units for people to rent, but they are not because of some of the macroeconomic policies that I just highlighted as a problem at the federal level.
While I support the construction of new affordable rental units, more than that, we need many more rental units to help drive down the cost of renting an apartment. That would be a far more powerful way to make housing more affordable for low-income Canadians than any single government program.
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- Jun/13/23 1:03:36 p.m.
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Madam Speaker, what I believe in are macroeconomic policies of the Government of Canada that are going to ensure that, in the long run, housing returns to 3.5 times a typical family's income. Today in this country, in many communities, it is more than triple that, and as a result, Canadians are struggling under record high levels of household indebtedness. The House can pass all the motions it wants about housing as a right, but the reality is that, in practice today in Canada, affordable housing has become a distant reality for many Canadians because of these ill-founded macroeconomic policies.
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- Jun/13/23 12:53:48 p.m.
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Madam Speaker, I want to speak to the concurrence debate on this report on the Standing Committee on Human Resources, Skills and Social Development and the Status of Persons with Disabilities because housing is an important topic to my constituents and also an important topic to all Canadians.
I think it is safe to say that we have a housing crisis in Canada. The government, over the last eight years, has presided over this crisis. While provinces have a role to play, and so do municipalities, what I hope to make clear to the House in my short remarks is that the primary responsibility for this mess is with the Government of Canada. The Government of Canada has huge macroeconomic levers not available to the provinces. It regulates our banking system through the Office of the Superintendent of Financial Institutions. It regulates the mortgage market through CMHC's mortgage insurance programs, and Finance Canada plays a big role in regulating our financial services sector. These are, far and away, the cause of the housing crisis in Canada. None of the initiatives that the government has announced as part of the plethora of programs on housing is going to offset the macroeconomic mistakes it has made over the last eight years.
We truly have a crisis in two forms. It is a crisis in terms of housing prices. Let us be frank and candid here; Canada has a housing bubble. It is a bubble of epic proportions, which has gone on for so long that we do not even see it for what it is. How did we get this housing bubble? Quite simply, the government mismanaged a number of macroeconomic policies through Finance Canada, through CMHC and through OSFI. For example, it allowed mortgage credit to grow at an unbelievable annual compounded rate over the last eight years, far in excess of inflation, population growth and other measures like productivity growth. As a result, household debt in Canada has grown from 80% of GDP, some 15 years ago, to 107% of GDP today. That is a 27% jump in household debt in Canada. That is almost a 30% jump, in household debt in real terms, per household, in the country over the last 15 years. Most of it is under the government's watch, and all because the government failed to regulate the growth and mortgage credit through OSFI, through Finance Canada and through CMHC.
I will give one example of its mismanagement. In the early days of the pandemic, OSFI relaxed the domestic stability buffer, allowing banks to loan out hundreds of billions in new money. OSFI put no restrictions on the money being loaned out. What happened? Almost all of it was loaned out for residential real estate. It poured fuel on the fire of housing, which is why housing prices during the pandemic skyrocketed. The government should have said, look, we are going to inject some liquidity into the system but we are not going to allow the financial sector to put all of its eggs in one basket, into residential mortgages, and to pour fuel on the fire of housing prices. That is one big reason why housing has skyrocketed over the last several years.
There are so many other things the government did. It argued against the B-20 rule and it forced financial regulators to weaken the B-20 rule. What situation do we have today? We have a situation where one-fifth of all of CIBC mortgages are ones where the borrowers are not even paying the interest on their loan balances, and their principal is getting bigger. As a result, we are looking down the barrel of a financial crisis.
In about two short years, many of the mortgages that were given out during the pandemic will come up for renewal. Most of these are five-year-term mortgages. Most of these mortgages are fixed monthly payment, variable rate. When those mortgage holders renew about a quarter of outstanding mortgages, they are going to be faced with a crisis, because renewal mandates that the mortgage renew at the original amortization track that the mortgage was supposed to be on when the term was originally negotiated. As a result, people are looking at a 20% to 40% jump in their mortgage payments in about two short years. Those figures come from Desjardins's research analysts. Those figures come from the Bank of Canada itself, and that is the best case scenario.
That is if rates start to drop early next year, and it is not clear they will, because the bank continued to hike them this past month alone, and it may hike them further. It is predicated on our having a mild recession that we get out of fairly quickly, and it is predicated on rates dropping to two and a half per cent pretty quickly. This is all a Goldilocks scenario that may not come to pass, and even in that Goldilocks scenario, payments for these mortgages are still expected to jump 20% to 40%. If a worst-case scenario comes to pass, the payment jumps could be much higher. We are talking about a fifth to a quarter of all outstanding mortgages being in this situation, and that is a direct result of the government's mismanagement of the banking system.
We have a second crisis in our system that the government is not addressing at all, and that is a lack of housing supply. What has happened over many years is that the supply of purpose-built apartment buildings has plummeted. Several decades ago, more than two-thirds of Canadians rented an apartment in a purpose-built apartment building, but I looked up the data for the number of apartment buildings that have been built in the last several decades, and it has plummeted to almost nothing. In fact, in the province of Ontario, 86% of all apartment building stock was built prior to 1980. Almost none of it was built after the 1980s, and as a result, only 60% of renters in Canada today rent an apartment in a purpose-built apartment building. The other 40% of renters are renting a house, a room in a house, a condo or some other non-purpose-built apartment. As a result, we have a government focused entirely on the wrong solution to the problem: building more houses and condos. What we need are more purpose-built apartment buildings, but the government is not thinking about these macroeconomic policies because it is focused on microeconomic policies that are not going to make a difference.
The slowdown in apartment construction coincides with the introduction of capital gains taxes on apartment buildings that do not apply to primary residences. It coincides with negative changes to capital cost allowances that did not allow private developers to write off their investments in a way that made them financially viable. It is a result of GST rules that favour one type of housing over another. It is a result of CMHC introducing restrictions on underwriting of rental housing. It is a result of a range of other issues the government has failed to address, and until the government addresses these macroeconomic policies, whether it is the growth in mortgage credit that has led to a housing bubble, or the lack of rental housing in purpose-built apartment buildings, we are not going to be able to address this crisis.
For all those reasons, I encourage members of the House to think about what the committee has found in this report and to consider the broader picture of how we got into this situation, which is not just a housing crisis but one that could really put the financial stability of our entire Canadian banking system at risk.
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- Oct/20/22 3:51:27 p.m.
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Madam Speaker, one of the things we can do to help disparity in this country is to reduce the tax burden on the most vulnerable households, many of whom live in rural Atlantic Canada and rural Ontario, many of them in older housing stock that was built before 1980 that are facing extraordinarily high heating bills this winter.
I think that would be a good place to start, and I encourage all members of the House to vote for the motion in front of us.
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Madam Speaker, in March 2020, the Office of the Superintendent of Financial Institutions reduced the domestic stability barrier to 1%, thus freeing up an additional $300 billion in capital. The government at the time said that it expected the banks to lend it out, and the banks did loan it out. Mortgage credit has exploded over the last two years of the pandemic, from $1.7 trillion to $2 trillion today.
Should the government have put in place measures to ensure that this additional $300 billion in credit did not all go into the residential mortgage market, thus fuelling the explosion in house prices and the skyrocketing housing prices we have seen over the last 24 months?
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