It's a privilege to be here this morning with you from Vancouver. I'm Jock Finlayson, the chief economist of the Independent Contractors and Businesses Association, which is actually the largest construction association in Canada. We have about 4,000 or so members and clients, and we also operate a very substantial employee health and benefits business in addition to our work on behalf of the construction sector.

We think construction has an important role to play in moving Canada forward in this fast-changing and increasingly competitive world. It's a big industry, as I'm sure the committee members know, accounting for about 8% of employment across the country—a little bit more than that here in the province of British Columbia. The word “crisis“, I think, is overused in Canadian policy discourse, but in the case of housing, the term is probably warranted given where we're at today.

The Canada Mortgage and Housing Corporation has done some studies suggesting that the last time housing was affordable in Canada, as they define it, was two decades ago. The lack of affordable housing is rooted in insufficient supply relative to population growth and rates of household formation.

It's become an important barrier to improving and even maintaining living standards in many parts of the country, and certainly here in metro Vancouver, which I would describe as ground zero for Canada's housing challenges. The rapid population growth that we've experienced over the past couple of years has played an important role in aggravating the pressures we see in housing markets. It is quite striking to see how quickly Canada's population has been increasing relative to peer jurisdictions. There was 3.2% growth last year, and the number will probably be fairly close to that, I would predict, for 2024.

This reflects Canada's commitment to open immigration and the substantial number of newcomers who have been coming to our country. Indeed, over the last couple of years I estimate that immigration, temporary plus permanent, has dwarfed dramatically the number of new housing units that have come into the market.

For every new unit that we've seen come into the Canadian housing market, we've actually had somewhere between four and four and a half newcomers. That, I think, is recognized as perhaps a little bit excessive, and hence the Government of Canada's move to begin slowly to reduce the number of non-permanent residents living in the country.

We think a realistic goal for housing starts in Canada is not 700,000 or 800,000 a year—which is embedded in the federal government's housing plan and has also been touted by CMHC—but rather probably something closer to 400,000. I say that because Canada has been struggling to build even a quarter-million new dwelling units per year.

The construction industry across the country, and certainly here in B.C. and Alberta, is not overflowing with unused resources. The job vacancy rate in construction remains somewhat elevated. It's down from a couple of years ago, but we simply don't have the capacity in the industry to suddenly and quickly double, or even increase by two-thirds, the number of annual starts, even if all the other barriers to doing that were swept away.

We think the 400,000 number is realistic. It would help, and we can perhaps rally a lot of support across the country behind that. Back in 1972, with 22 million people living in Canada, we built 230,000 homes. Last year, with 40 million, we essentially were in the same ballpark.

That's really a sign of the reality that it's been harder and more expensive to build homes and almost everything else in Canada today than it has been in previous decades. It's a fundamental challenge, and it's not just one for the Government of Canada, by any means. We support many of the measures that the Government of Canada has unveiled over the past 12 to 18 months, including a number that were updated in the budget, and in particular focusing on building more rental housing, which we think is critical. One-third of Canadian households are renters, and I predict the share will go up over time.

In that regard, the accelerated capital cost allowances for new apartment units, the extension of the earlier removal of GST from rental housing to include student housing units, the changes being made to the Canada mortgage bonds program and the increase in funding available under the apartment construction loan program should all help over time to begin to accelerate the supply of new rental housing into the market, which is critical.

Fostering densification in cities and towns is also crucial. Here in B.C., the provincial government is working very aggressively to deliver on that. Earmarking public lands and underutilized public buildings for consideration for housing development also makes sense, but we have to recognize that housing is not a sphere of jurisdiction where the Government of Canada is really the primary actor. A lot of the decisions—or most of the decisions—around new development, zoning, land use, densification, community and the rules that shape community evolution are determined by local governments and the provinces. The federal government can assist. It can create incentives, and it can create sticks and carrots, but it doesn't ultimately have the final authority.

Finally, I will comment on labour supply, Mr. Chair, and then I will finish. We estimate that about 2% of permanent immigrants to Canada in recent years have ended up moving into the construction trades. Construction is 8% of the Canadian workforce. We think the immigration selection criteria for permanent residents in Canada should be tweaked to put a higher priority on skills that are relevant to the construction industry.

Thank you for your patience.