Thank you, Mr. Chair and members of the finance committee, for having me here today to support your study.

It's critical to understand well the real issues eroding affordability and preventing supply, and from the motion that led to this study, I can see there are some potential misunderstandings of the situation that I would like to address head-on.

As for the CHBA, let me be clear that our members build all forms of housing, from single detached homes—which are fewer and further between these days—to low-rise multi-unit houses like townhomes and stacked townhomes to mid-rise buildings and high-rise apartment complexes.

While I am listing what we build, let me emphasize that we need to build all of these forms of housing. We need to build smarter upwards, inwards, and outwards, to build 5.8 million homes this decade to achieve the affordability and choice that Canadians want and need.

Our members build housing units for private home ownership, for rental, and for affordable housing owned by not-for-profits and governments, and again, we need more of all of these.

However, we must recognize that it has taken decades of government policies restricting building and driving up house prices to get to this point, and to get out of this crisis there is no silver bullet. It will take comprehensive approaches by all levels of government, focused on the right outcomes, and it will take years to turn this completely around. However, the time to take action—and fortunately, some has already begun—is now.

Right now, high interest rates and inflation are indeed an issue with housing affordability, and we do need those to come down as soon as possible, but let’s be clear that while the study by the committee’s motion states that 40% of mortgage holders are having trouble paying for their expenses, 47% of renters are having the same issue and 23% of homeowners without a mortgage are also having the same challenge. This isn’t about owning versus renting, though homeowners clearly have a better financial situation, showing, again, why home ownership should continue to be encouraged for Canadians; this is about inflation and the cost of living, an issue for all Canadians and about, essentially, all of their necessities.

Therefore, while we need to address inflation overall and while higher interest rates do need to come down to make housing more affordable as well as to support more construction and supply, the root causes of home price escalation are not about today’s inflation. They are about other policy issues that preceded the inflation situation, that will persist afterwards, and that desperately need policy change. These policy changes can help us in the current high interest rate environment, but they will also be needed as rates come down because we need to dramatically increase our housing supply.

The drivers of price escalation and deteriorating affordability have been, and continue to be, a lack of housing supply; high taxes at all levels of government, but especially at the municipal level; mortgage rules that have locked out first-time buyers and limit construction; red tape, delays and Nimbyism; labour shortages and increasing labour costs; and expensive changes to codes and standards that are slated to get worse in the years ahead. All of these have been created by government policy, and all can be addressed by policy change.

Let me address the financial issues—or financialization, if you will—head-on. Without the ability of Canadian individuals and organizations to finance the construction of more housing, we simply will not be able to double housing starts to address the housing gap. Building 3.5 million additional homes this decade will take an investment of over a trillion dollars, the lion’s share of which must come from private capital.

For first-time buyers, the first financial policy piece is simple. Given the challenges with house prices, we need to increase the purchasing power of first-time buyers without driving up house prices. A return to 30-year amortization periods for insured mortgages, but only applied to new construction, can support more construction of entry-level homes that young families can afford without driving up prices and causing extreme demand in a supply-constrained market because, empirically, this will be adding to new supply. It's also, by the way, a no-cost measure for the government to implement.

With regard to private investors in rental units, we need to be clear. Investors are essential to create the rental supply we need in Canada. We need Canadians with the means to be able to purchase and finance rental units for long-term renters, which, by the way, includes laneway homes and other accessory dwelling units.

We also need institutional investors to support purpose-built rentals, or PBR, as we call it. However, again, let’s be clear: There is limited profit in purpose-built rentals, which is why institutional investors, like pension funds for unions and insurance companies, with patient capital and a long-term investment outlook, are essential to support PBR development.

The low margins, which thankfully will now be made a little bit better thanks to recent GST changes, are why most developers have built condos instead of PBRs over the years and why we don't have enough PBR in Canada now.

Right now, with interest rates high, making financial construction issues even more expensive, it makes more sense for investors to invest in GICs at a 5% return rather than apartment development. Investment in PBR is not a get-rich-and-get-out investment; it's a long-term investment, and we need private, patient capital to make that happen.

I'd be happy to speak to the many other barriers beyond these I just mentioned, as well as to other drivers of increasing house prices, which many of you have heard from me before, but I'm out of time.

I look forward to your questions. Thank you.