Thank you and good morning.

I'm happy to bring perspectives to you from the Canadian Home Builders' Association on your study.

As I'm here on behalf of the CHBA and our 8,500 member companies from coast to coast, I'll focus my remarks on how the softwood lumber dispute impacts the residential construction industry. However, of course, it doesn't impact just the industry, but also all Canadians. As you are well aware, we're in a housing crisis. In order to address this crisis, the federal government has estimated that to restore housing affordability, we need to build 5.8 million homes over the next decade, and a lot of lumber would be required to build those homes.

During the pandemic, lumber prices skyrocketed, and lumber was in short supply. While prices have come down from those record highs, they still haven't returned to prepandemic levels. Really, any volatility in the lumber industry impacts residential construction, adding costs for builders and renovators, delaying construction times and closings, and exacerbating housing affordability challenges for consumers.

According to the CHBA's housing market index, a leading indicator of the current and future health of the residential construction industry, our 2024 Q3 results show that, for a 2,400-square-foot home, lumber costs are still about $26,000 more than they were prepandemic. Meanwhile, other construction materials surged as lumber costs waned, and normal rates of inflation for building materials continue to compound the cost increases, further eroding housing affordability.

South of the border, in the U.S., price escalation on lumber has been made even worse thanks to the U.S. tariffs on Canadian lumber. Our American counterpart, the National Association of Home Builders, NAHB, continues to fight these tariffs, given their impacts on construction costs in the U.S. The NAHB continues to call on the U.S. government to suspend tariffs on Canadian lumber imports and to move immediately to enter into negotiations with Canada on a new softwood lumber agreement that will eliminate those tariffs altogether.

As the dispute lingers on, the CHBA asks that the federal government support the lumber supply chain to maximize supply security, output and delivery and, of course, seek a timely resolution to the trade dispute that serves Canada well, which, while difficult under the circumstances, is paramount.

The CHBA also asks that the government work with the domestic lumber producers to maintain, and in the future be able to ramp up, production by working with other levels of government to ensure more responsive and certain access to raw materials. We encourage continued collaboration with the lumber industry on key issues of securing certainty for sustainable lumber supply for domestic fibre.

It's also important to understand that there is a need for liquidity for the lumber industry to survive this tariff period, and there is likely a role for the federal government to play there. However, we will leave that to our lumber industry colleagues to detail, so I'm glad to see Mr. Derek Nighbor here today from FPAC.

It's also important to recognize that all industries, including lumber and home building, are facing more and more excessive red tape. There is a growing fatigue within the Canadian business climate that ever-growing amounts of red tape, regulation and bureaucracy continue to be compounded, and this frustration is causing the business environment to move capital elsewhere. With regard to lumber, it's investing in other countries. With regard to homebuilding, investors are looking at other countries with more attractive opportunities for purpose-built rentals and even condo and land development, rather than in Canada. We need those investment dollars to build the 5.8 million homes that Canada needs, and to that end, we need regulations streamlined.

With regard to homebuilding, the federal government has just launched a consultation on a proposed tax on vacant land. This concept shows a clear misunderstanding of the realities of the land development and homebuilding sector, and it is an example of inefficient regulation that could cost homeowners and homebuyers a lot of money in the future. We also need to loosen up all of the red tape restricting getting more homes built in general. There are some good moves afoot with regard to policy change, which is good, but we'll need more.

While more housing, if successful, means more use of Canadian lumber, which is good, I should also add that the move to more and more mid-rise and high-rise construction doesn't necessarily correspond to the same increase in lumber usage. While we are introducing tall wood into the building codes, we still have to find a way to make it more cost-competitive. In the absence of better cost competitiveness, we will see steel and concrete continue to dominate taller construction. We also need to clear the way for more low-rise construction, which can still be higher-density. It is primarily wood-based, and it is the type of housing most Canadians prefer.

The ongoing uncertainty between Canada and the U.S. on the softwood lumber dispute can have major impacts on lumber prices and supply here in Canada. Instability with supply and prices will impact residential construction jobs and the sector's contribution to economic activity, and it will continue to exacerbate housing affordability challenges for consumers. CHBA urges the government to continue to fight hard for a positive resolution to this dispute.

Thank you. I'd be happy to answer any questions you may have.

Transcript

Discussions (0)