Brief prepared for the committee by Steve Pomeroy, Industry Professor, McMaster University Canadian Housing Evidence Collaborative (CHEC), June 10, 2024
The study that the committee has initiated is important and necessary to ensure that in monitoring the impact of the National Housing Strategy (NHS) and Canada Housing Plan (CHP) we do not repeat the mistake of the last two decades – an absence of transparent objective reporting.
The data also reveal that minimal levels of investment since 1993 are a significant contributing factor in the current and growing housing affordability crisis. Had we sustained the funding and production level that prevailed 1990-1994, representing 10% of all starts, we could have added over 330,000 additional non-market homes and reached just over one million affordable rent-limited homes.
I’ll come back to some specific recommendations that will help improve data transparency and reporting going forward.
Let me start by answering the three questions posed in the motion:
- How much federal money was allocated to social and affordable housing;
- how many units of non-profit and cooperative housing were created; and
- how many units of purpose build rental housing were created.
I have provided the committee with a data brief (appended here) that answers all three questions and provides the detailed numbers, so you can refer to that. This is a result of an ongoing research program at the McMaster University Canadian Housing Evidence Collaborative (CHEC)
I am using 2001 to 2016 because 2001 is when the federal government re-engaged and established the Affordable Housing Framework, and 2016 is the last year that useable data is extractable from CMHC sources (subsequent data is opaque and less accessible)
Between 2001-2016 federal investment totalled $4.17 billion, a portion of which levered PT cost matching). Over the period 2001-2016 this created:
- 41,202 new non-profit homes (1.5%),
- 10,596 co-operative homes, (0.4%) and
- just over 238,000 new private rental units (8.7%).
Over the same period, Canada built 2.73 million total new homes – so NP and Co-op were just less than 2% and private rental just under 9% – meaning that 90% of new homes were for homeownership (including condo). This low amount of new rental housing has contributed to current rental supply-demand mismatch (exacerbated by a large and sudden increase in student and temporary immigration)
The funding relates the three distinct funding programs:
- The Affordable Housing Initiative (rebranded Investments in Affordable Housing in 2011). This provided on average about $125 million annual – with matching requirements from provinces and territories to effectively double that investment;
- A one-time infusion of $1.4 billion to create three affordable housing trust funds negotiated in 2005 by Paul Martin and Jack Layton and passed in the 2006 budget ($800 to Provinces; $300 to the Territories; and $300 for indigenous). This was a direct payment to PTs from Dept of Finance with no involvement from CMHC, no cost sharing requirement, and no available separate reporting on outcomes (any units created would be captured in completion data, but without attribution).
- A temporary stimulus as part of the Canada Economic Action Plan 2009-11, which provided just over $2 billion in total if which $1.025 was for social housing retrofit, so is excluded here. This was administered via CMHC and simply added to the AHI/IAH, but with no P/T cost matching requirements.
While the Committee have posed three seemingly simple questions, and one would think it was easy to generate these answers, this is not the case. There is no simple accessible public data set to answer these questions. I spent considerable time assembling this data from an array of data sets. This also included significant effort working with CMHC officials to coach them on various sources of archival data that current officials were unaware even existed.
Historically, we had good data from 1955 to 2016 when CMHC published an annual volume with over 100 tables, Canadian Housing Statistics (CHS). This covered all kinds of details on housing starts completions, levels of mortgage financing, insured, lending and public expenditures investments as well as outcomes of various market and social housing programs. Annual editions are available on the CMHC knowledge centre website for every year from 1955 to 2016.
After social housing programs were terminated effective December 31,1993 in a decision announced in the final budget of the Mulroney administration, details reported and the number of tables in CHS began to diminish.
In 2002 for example the table that specifically enumerated annual starts and completions of non-profit and social housing was removed.
And in 2016, the publication itself was terminated. It was replaced, in part, by web-based interactive data tool, which provides very good data on market information in the housing system. But the previously available data on funds authorized under the National Housing Act (NHA) and number of social housing units or affordable housing units created is absent from this new web-based portal.
As part of a research project at the Canadian Housing Evidence Collaborative at McMaster University we’ve been trying to reassemble data and re-create a baseline of what was created between 2001, when the federal government re-engaged in investments and affordable housing through the Affordable Housing Initiative (AHI), and 2019, when the National Housing Strategy was implemented. This included working with officials at CMHC responsible for various data systems to try and extract from various administrative files and create new sets to reveal what transpired since 2001.
Pitiful state of reporting on housing outcomes
The state of data reporting and transparency over the post 1994 period, and especially since 2001 is pitiful.
Outside of the diminishing tabulations in the CHS, CMHC failed to publish any detailed information on the units created and households assisted with the over $4 billion of expenditure I have noted above from 2001-2016. While CMHC required detailed reporting from the provinces and territories to adjudicate claims for reimbursement of cost shared programs, this information was buried in accounting files. No annual detailed tabulations were created nor published.
The only information made publicly available, posted on the CMHC website, was a table of cumulative total federal funds claimed and total households assisted since commencement of the funding program (initially from 2001, then from 2011 when rebranded). Data for individual years and provinces were available only by saving the prior year cumulative table and calculating the difference from current year. This table also conflated all details so aggregated households assisted with rental allowance, assisted ownership, rehabilitation assistance (after 2011) and non-profit and co-op units.
Here is a sample of the table which I saved from the CMHC site in 2012:
Providing data in this aggregated, cumulative basis does not support detailed research and analysis – it also fails to support sound policy analysis and program development.
This weak practice and lack of transparency is now being repeated under the National Housing Strategy (NHS) – despite admission by the Minister in 2017 that Canada lags other countries in generating program data, and his promise to do better.
In progress reporting on the NHS, CMHC simply identifies commitments, with no details on the number of actual homes completed and therefore available to house people, nor the location (CMA/Province) of these homes, or level of affordability. Minimal details are available to support detailed research and analysis.
When the NHS was introduced in 2017 It included bilateral agreements with the provinces and territories for three specific programs to be delivered and cost-shared. This imposed a very detailed and onerous reporting requirement on the provinces to complete, and submit semi-annually (with a 12-sheet spreadsheet with massive amount of detail on the number of existing social units that would be preserved, the number of households being assisted with rental assistance, the number of units that were being built and some additional information on target groups). Consequently, much detail is delivered to CMHC – but only minimal high level summary data is then released in the NHS progress reports. This data could be used to generate and publish more useful detailed tables, similar to previous CHS tabulations, which were extensively used by researchers.
While CMHC imposed detailed reporting on PTs under the bilateral agreements (which account for less than 10% of all funding in the NHS) no similar obligation is imposed on CMHC, who deliver over 90% of the funding. What’s good for the goose is good for the gander – CMHC should be directed to create similar explicit action, plans and targets for the unilateral federal programs. And as above, use this to generate and publish transparent data.
Conclusion and recommendations
Let me conclude with three specific recommendations to direct CMHC to:
- Reinstitute the practice (terminated in 2002) in the starts and completions survey of recording when any new housing is being funded under a social-affordable program, or specific initiative under the NHS (or any unilateral provincial program), so that these can be explicitly enumerated and tabulated.
- CMHC should be directed to replicate the same reporting requirements, with targets and action plans for all unilateral federal initiatives in parallel to the reporting obligations imposed on the PTs under the bilateral agreements (although this can be simplified), which now account for less than 10% of all NHS funding.
- CMHC should then be directed to create open-source data files and to generate detailed annual tabulations for transparent reporting on all outcomes of federal and bilateral funded initiatives.
Implementing these recommendations will create more robust reporting and transparency and assist parliamentarians, policy advisers, researchers and taxpayers in more complete understanding on the costs and impacts of federally funded housing activities.
