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Volume 1, Issue 1 CONSERVATIVE HOUSING AND CONSTRUCTION CAUCUS NEWSLETTER A Word from the Chair Welcome to our first balanced, healthy housing and Conservative Housing and construction sector, by dealing Construction Caucus with issues such as affordability, e-newsletter! A big thank you sustainability, and the effective to everyone who was involved provision of social housing for and provided articles for our Canadians. first issue! We have a devoted group of Since our inaugural meeting in Conservative caucus members, October, we have had an and along with the support of extraordinary response from Minister Bergen & Minister key stakeholders, meeting with Kenney, we will continue to work over 10 industry groups, closely with all stakeholders for primarily through a series of the betterment of Canada’s luncheon meetings. Each housing sector. get-together has resulted in robust and passionate Hoping you all have a fantastic discussions, great ideas, and summer, and looking forward to agreement on many common seeing you in the fall! goals. It is of vital importance that we continue to work toward a Inside this issue: The Cost of Housing in Ottawa 1 What has the Caucus been up to? 2 CFAA’s Rental Housing Solution 2 A Message from the Honourable 3 Candice Bergen Budget Submissions 2015 3 Local Housing: Brantford’s Rob Melick 4 Membership List 4 Page 1 CONSERVATIVE HOUSING AND CONSTRUCTION CAUCUS NEWSLETTER What has the Caucus been up to? On October 23rd 2013, the Conservative Housing and and priorities related to the Federal Government. Groups Construction Caucus (CHCC) was launched with strong such as the Canadian Housing and Renewal Association, support from Conservative Members of Parliament. This Genworth Canada, Verdiroc, the Canadian Federation of inaugural meeting featured notable attendees such as the Apartment Association and the Co-Operative Housing late Honourable Jim Flaherty, former Minister of Finance, Federation of Canada presented their ideas to the caucus. and the Honourable Kellie Leitch, Minister of Labour. In June, Members rallied one last time to close off the The meeting also welcomed the Ontario Home Builder’s Parliamentary Session with the Canadian Home Builder’s Association, Canadian Home Builder’s Association, the Association’s Forum for Growth event. This reception drew Canadian Real Estate Association and the Canadian in a number of Members, including the Honourable Association of Accredited Mortgage Professionals to Candice Bergen, Minister of State for Social Development, initiate conversations and explain the current priorities and the Honourable Jason Kenney, Minister for Economic within the housing industry. and Social Development. The event’s massive success was a perfect way to bring the Parliamentary session to a close Building on this momentum, the CHCC began immediately and have members looking forward to the next meeting with various groups in order to get a parliamentary session. comprehensive understanding of all sectors linked to the housing and construction industry, along with their issues Canadian Federation of Apartment Associations’ Rental Housing Solution by John Dickie, President, CFAA The Canadian Federation of of disturbances, which both the individual landlords and Apartment Associations (CFAA) was the condo boards are hard pressed to deal with. pleased to meet at length with the Some people recommend incentivizing new construction Housing and Construction Caucus. as the way to get more purpose-built rental units, but in As the voice of Canada’s residential CFAA’s view, that is often not the best solution. landlords, CFAA’s concern is the Incentivizing new construction can crowd out existing rental housing sector. rentals, through conversions or demolition. For the last 10 years, rental The better way to obtain a larger supply of rental housing construction has averaged 17,650 is to make rental investment more attractive so that rental dwellings per year, which is just owners want to hold more rental housing assets. That will under 10% of all dwellings draw out more production without crowding out the constructed in Canada in that time period, even though existing rental supply. 30% of Canadians rent their homes. The low level of rental construction is of mounting concern because of the CFAA presented the Caucus a variety of ways to achieve negative impact of shortages of rental housing in growing that goal, including various tax reform measures to communities, and research which links a decline in private- provide a more even playing field in the choice of rental market renting with higher unemployment rates. investments as compared with other investments or other housing options. It is true that condominiums are being built and many are rented. However, that source of new rental supply is far CFAA looks forward to working further with the Housing from ideal. At any time, units can be sold for owner-- and Construction Caucus, so that the rental housing sector occupation, and there is little -on site management of the can contribute to stronger economic growth, greater social renters. Many owner-occupiers find the renters a source harmony and lower unemployment across Canada. Page 2 Volume 1, Issue 1 A Message from the Honourable Candice Bergen Minister of State for Social Development Our Government has made unprecedented investments in housing. In fact, Canada came through the recent global recession better than any other country in the western world due in large part to the strength of our housing sector. That strength came from hard work, careful planning, prudent investments and the strong leadership of Prime Minister Stephen Harper. Together with our partners, we have helped close to 1 million families access affordable housing. This includes more than 46,000 new affordable housing units and contributions towards the construction and renovation of more than 104,000 housing units for low income families. Additionally, Economic Action Plan 2013 committed a further $1.25 billion towards the renewal of our ‘Investment in Affordable Housing.’ We look forward to continuing to work closely with the provinces and territories who have the flexibility to use our substantial investments to design and deliver programs that meet their local needs and priorities. Sincerely, Candice Bergen Minister of State for Social Development Budget 2015 Submissions As you know, the Housing and Construction industries are vital to the overall health of the Canadian economy. Our Government is committed to creating more jobs, and increasing economic growth in order to achieve a vibrant and healthy Canadian housing industry. This is why the KEY FACTS: Conservative Housing and Construction Caucus is interested in The single biggest investment most hearing your ideas about measures that you would like to see Canadian households will ever make is in the 2015 Federal Budget sustainable for future generations. in their home. Overall, the housing market accounts for around 20% of Canada’s GDP. If you have a policy idea you’d like to present, or wish The Housing and Construction to set up a meeting with the Conservative Housing industry helps employ over 850,000 and Construction Caucus please contact the office of : Canadians (CHBA) Phil McColeman MP for Brant E-mail: [email protected] Page 3 Phone: 613-992-3118 CONSERVATIVE HOUSING AND CONSTRUCTION CAUCUS Local Housing: Home Ownership: Attainable Dream or Pipe Dream? By Rob Melick, President of the Brantford Home Builders’ Association Declining affordability and more stringent mortgage qualification rules are conspiring to make the dream of home ownership an unattainable pipe dream for young families. Government imposed fees and taxes can add up to 20% or more of the cost of a new home. Couple this with recent reductions in mortgage amortization periods, and many who would have been well qualified for a mortgage only a few years ago, are now unable to qualify. We are pleased that the Conservative government has made major investments in infrastructure through the New Building Canada Fund, as hopefully this will help stem the tide of ever increasing development taxes charged locally on new housing. Development Charges, planning and development fees, taxable wages, land transfer taxes – all of these are built into, and driving up, the price of a new home, then GST is charged on top. These charges and taxes imposed by municipal and provincial governments should be exempt from GST, so that tax is not charged on tax. In 2012, reduction of the maximum mortgage amortization period to 25 years was implemented, as a step towards protecting Canada from the economic collapse that affected much of the world. However, well below one percent of Canadian residential mortgages have gone in arrears over the past 20 years (Canadian Bankers Association) , proving that reduction of the maximum mortgage amortization period was unnecessary, yet this reduction in amortization period makes purchase of a new home impossible for many. It’s time to restore the allowable mortgage amortization period to 30 years for well qualified first time home buyers, as it was only 2 years ago—it is these first time home buyers that have been hardest hit by the economic downturn, and it is in the economic interest of all Canadians to ensure the dream of home ownership remains an accessible one to hard working young families and new Canadians. The residential construction industry is a major driver of the local and national economy, contributing over 900,000 jobs and over $120 billion
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