Thank you very much for having me and for the invitation to be here while this committee takes on the important issues around housing.

As you know, I'm the CEO of the Canadian Home Builders' Association, which represents over 8,500 member firms across the country in home building, land development and renovation, and supports the suppliers and service providers in the residential construction sector. This represents over 1.5 million jobs and $211 billion in economic activity from coast to coast. Our members build low-rise and high-rise housing for home ownership and for rent.

The motions that launched this study speak to three different but related parts of the housing continuum: one, below-market-rate housing, which is often referred to as social housing or affordable housing; two, market-rate purpose-built rental; and three, market-rate home ownership. I draw your attention to these three different parts of the continuum because it is important to understand how they are intrinsically connected.

In the current housing crisis, all three are under stress, which is not surprising because affordability in the market-rate part of the continuum has deteriorated brutally over the past decade and a half, which in turn has put more pressure on the below-market-rate affordable housing stock. This is important to understand because there is often a call for more funding for affordable housing, which you will no doubt hear a lot about in this study. While that funding is important, I'm here to tell you that you'll never fix the affordable housing issue with funding alone. There are simply not enough tax dollars to go around.

As past chair of the International Housing Association, I can tell you that these challenges are not unique to Canada. Experts from developing countries in the IHA tell us something about their countries that applies equally to developed countries like Canada: If you don't first fix housing affordability, you can never fix your social housing problems. If you don't fix housing affordability, people can't buy homes. That puts pressure on the rental housing stock, as more people are forced to rent, and rent prices keep going up due to increased demand and other affordability issues. This in turn puts mounting pressure on the social housing stock, as more people need housing assistance because they can't afford market-rate rental units.

In this scenario, no matter how many affordable units you build, the lineup will keep getting longer for more. I heard a term for a similar problem from a policeman when I was involved in studying the challenges in Vancouver's Downtown Eastside. He said that without policy fixes, trying to deal with addiction on the streets was just like shovelling water. If you help one person, then there is a new one right behind taking their place and it's like you did nothing.

We need to break that cycle in housing. That can only come with fixing housing affordability across the board.

The current issues of housing affordability have developed over the past two decades through policy action or inaction at all levels of government. There's no silver bullet to fix it. We need a comprehensive approach that comes with the challenge from all angles for all levels of government.

We know we need much more supply. Numbers like building 5.8 million units over the next decade are important targets to strive for, but our industry can't build more homes if people can't afford them. While high interest rates have slowed the market down right now—and we need those rates to come down as soon as possible—it is actually the ever overtightening of mortgage rules that has been knocking well-qualified buyers out of the market for the past 15 years. We were therefore very pleased with the move to 30-year amortizations on insured mortgages for first-time buyers in new construction. We would advise that this be extended to all insured mortgages for new construction as soon as possible. A revision of the stress test is also critical and long overdue.

High interest rates have also severely hampered purpose-built rental construction, but again, the problems began long before the rise in interest rates. The PBR business model has been broken for decades, resulting in a lack of PBR supply. That is why we had long called for and are happy to have secured the removal of the GST on purpose-built rentals last fall. I would note that we also need to fix the GST threshold for the new housing construction rebate.

Back to PBR, we need simplified access to more low-interest financing and less encumbrance on that financing on things that drive up construction costs. Energy efficiency, accessibility and more affordable housing units are all fine, but not if they are excessive and drive up the costs of the market-rate units.

That brings us to the building code. There is too much going into the building code too fast. It is driving up house prices and reducing housing supply. We need to make some smarter choices to optimize all of our housing challenges.

I'll wrap up by saying that there are several other issues driving up house prices, too, from development taxes to red tape to Nimbyism to labour shortages. We are seeing the start of policy action to address these, which is good, but we need to keep going at all levels of government.

I look forward to your questions. I'd be happy to expand on any and all of these issues.

Thank you.