Transport Committee on May 21st, 2024

[Sean Fraser, Liberal, Central Nova, NS]

There would have been an agreement for the funding to roll. Again, the bank itself doesn't complete the projects. It would finance the projects, so that would be how many it financed.

[Leslyn Lewis, Conservative, Haldimand—Norfolk, ON]

You consider giving out money as “completed”, as a benefit and a result and as an outcome. Is that right?

[Sean Fraser, Liberal, Central Nova, NS]

Again, those are your words, not mine.

That's how many the bank would have financed. The projects would be at various stages of completion.

[Leslyn Lewis, Conservative, Haldimand—Norfolk, ON]

Varying stages—

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Minister.

Thanks to you, Dr. Lewis.

Next we have Mr. Fillmore for five minutes.

[Andy Fillmore, Liberal, Halifax, NS]

Thank you very much, Chair, and thank you, Minister and Deputy Minister, for joining us today.

Minister, I was very pleased, as many of us were, to see the discussion of federal lands in budget 2024 being positioned as a part of the solution to the provision of housing, including affordable housing in Canada.

You and I have discussed my proposal to use Canada Post lands on the Halifax peninsula, so thank you for keeping that in focus.

This idea of leveraging federal lands to address the housing crisis, through my lens, accomplishes two key things: It can mitigate the cost of land in transactions, which is a huge driver of cost for the end-user, but it's also going to improve the supply of land that's already serviced.

With those two things in mind, could you lay out for us what your department's plan is to use federal lands? While you're answering, could you also mention the challenges the program faces, the big opportunities that you see and what you think some of the timelines might be?

[Sean Fraser, Liberal, Central Nova, NS]

Thanks. Before I go any further, I should acknowledge the advocacy work you've been doing on that specific parcel in Halifax, which helped inform part of the decision-making around what we want to do as we design some of these programs.

I think you've described it the right way. There are, largely, two benefits to having the strategy we've adopted around federal lands. The first that you mentioned is cost. There are certain costs that are within the control of governments or that the government can introduce a solution to, and there are others outside the scope of what the government can influence directly.

In the case of land, we actually have an opportunity to reduce the input cost, because the price of land, particularly in large urban centres, is driving up the cost and reducing the number of homes that are ultimately built. By putting land on the table, we can help reduce that cost, provided we get a good deal. If you sell that land off, you don't necessarily get the same value proposition because you don't pull the cost of land out of the input cost of construction. We're proposing, in most instances, to move forward with long-term leases offered at a low price to reduce the cost of construction in exchange for commitments around affordability.

On the supply piece, in addition to making land available that would not otherwise be made available, we have the opportunity to do more. More broadly, properties like the Canada Post project, which I know you're interested in, have an opportunity to contribute more supply, over and above the usual disposition process around federal lands. That's because when you enter into a leasing arrangement, you have an opportunity to expand the scope beyond properties that are declared surplus and to include properties that are not exclusively for housing and could still serve some other public purpose. When you look at the possibility of adding homes to a property that a Canada Post location could have, for example, you see that it could still serve as a Canada Post location, but it could also serve as a housing development. Where that's possible, we don't want to limit ourselves only to those that have to go through the lengthier disposition process, in which you also forgo the cost advantage of making lands available, without adding that input cost towards construction.

[Andy Fillmore, Liberal, Halifax, NS]

Thank you. I appreciate the expansion of the idea there.

Staying with the notion that the federal government can reduce costs for municipalities, I recently spoke at the annual meeting of CUTA, the Canadian Urban Transit Association, in Halifax, and I can tell you that this group is very excited and very happy about the prospect of a permanent public transit fund. Increasingly, we're hearing from municipalities that there's a sense they are bearing a disproportionate share of the cost of population growth and are having to build infrastructure and services, including transit systems, to support new population growth. I think this kind of federal program can help municipalities that have no ability to borrow money or carry debt and have limited means to raise money.

With that preamble said, how do you see the public transit fund helping to address the costs of growth that municipalities are facing?

[Sean Fraser, Liberal, Central Nova, NS]

This is really important, and FCM is doing some really interesting work around a new proposed municipal growth framework. Until we figure out the long-term shifts between levels of government to fund municipal infrastructure, we want to be there with money to help ensure they can pay for the assets that help achieve the different goals we all want to see: a more livable community and more opportunities for people to access employment and services, all the good things that come with a healthy, functioning transit system.

We wanted to put money on the table to ensure communities wouldn't have to consider the other kinds of costs that were discussed. I know that during a previous set of questions around development cost charges, property taxes were raised as well. Municipalities have a fairly limited number of tools right now, so if other levels of government—provinces and the federal government—don't step up with reliable long-term funding, municipalities will have to ask themselves where that revenue is going to come from, or they will have to choose not to grow, and choosing not to grow right now would be a horrible mistake. Canada is poised for enormous success, and it's going to be led, in a lot of ways, by cities and communities of different sizes. If we're going to expect them to achieve a level of growth that promotes certain national interests, we will have to make sure they're funded to build out supports to allow a community to thrive.

I would go on, but the time has been exhausted.

[The Chair, Liberal, Peter Schiefke]

Thank you, Minister.

Thank you, Mr. Fillmore.

Mr. Barsalou‑Duval, you have two and a half minutes.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

Thank you, Mr. Chair.

Minister, earlier I talked about the fact that you are interfering in the management of cities. To give you a more fulsome demonstration of this, let me read you an excerpt from the Union des municipalités du Québec's response to the tabling of the last federal budget, published in an article entitled “Budget 2024–2025: an attack on municipal independence”:

Following the tabling of the federal budget 2024-25 by the Minister of Finance of Canada, the Honourable Chrystia Freeland, the Union des municipalités du Québec, or UMQ, denounced a number of attacks on municipal independence, particularly in land use planning and taxation. The Union reiterates its major concern about the urgent need to renew the Gas Tax and Quebec Contribution Program (TECQ), mainly funded by the federal government, which expired on December 31. “We deplore the fact that a number of measures introduced by the federal government encroach on municipal jurisdiction. When it comes to transportation, housing and infrastructure, adding conditions slows down the deployment of measures and does not take local realities into account. For example, waiting to renew the TECQ hinders the completion of infrastructure projects. It is high time for the federal government to stop adding new conditions and to come to an agreement with the Government of Quebec,” stated Martin Damphousse, UMQ president and mayor of Varennes.

Do you think it's a good idea to start a war with Quebec municipalities a year before the federal election?

[Sean Fraser, Liberal, Central Nova, NS]

In my opinion, it's important to ensure that federal investments pay off. This is not an obligation for a community. We're making changes to make it easier to build housing. In my opinion, it is essential to remember that, if I make the decision to invest in creating housing or building infrastructure, it's important to get results. I think that's reasonable.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

What Quebec municipalities are telling you is that this budget does not suit them at all. In their view, it is blatant interference in their affairs. That is also what the Quebec Government is saying and what we are saying.

What will happen to that money if everyone says no? Are you going to keep the money in Ottawa? Quebec taxpayers pay taxes to Ottawa, and they need housing, like everyone else. That said, you do not wish to stay within the federal government's jurisdiction and you are encroaching on the cities' jurisdiction.

[Sean Fraser, Liberal, Central Nova, NS]

In fact, Quebec's Bill M‑30 prohibits a municipal organization from entering into an agreement directly with the federal government. I have begun conversations with my Quebec counterpart in order to move discussions forward. The goal is to reach an agreement with the province to facilitate the construction of infrastructure and increase the number of housing units. Thus far, however, the discussions have been inconclusive. There is work to be done, and that's normal.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Minister and Mr. Barsalou‑Duval.

Next we have Mr. Bachrach.

Mr. Bachrach, the floor is yours for two and a half minutes please, sir.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

I'm going to try to fit in two questions. Minister, I hope you'll be brief.

Page 50 of the budget says, “$1 billion available directly to municipalities to support urgent infrastructure needs that will directly enable housing supply.”

There are several rural communities in northwest B.C. that need to replace their waste-water systems. I think of Port Clements on Haida Gwaii and Fort St. James.

There are two aspects to this question. One is how you define “directly enabling housing supply”, recognizing that communities also have infrastructure deficits and failing waste-water systems.

Second, what is the timing on this billion-dollar fund, and how can communities access it?

[Sean Fraser, Liberal, Central Nova, NS]

This funding will be spent this fiscal year. The process will launch, I expect, in the fall, and we hope to make decisions by the end of the calendar year. The process to apply won't open for a few months because we're now designing a program.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

That's fantastic.

I'm going to give my remaining minute to Mr. Morrice, who I understand has many questions.

[Mike Morrice, Green, Kitchener Centre, ON]

Thank you, Taylor.

Thank you, Chair.

Minister Fraser, I'm surprisingly back to ask about the two-way, all-day GO between Kitchener and Toronto.

I want to start by saying thank you. I appreciate the time you and your team have been making to have conversations about calling for accountability from the province. In this case, funds have already been committed from the federal government. As you know, 40% of the project funds have been committed already. It's a project that was committed to over a decade ago, and we still don't even have a timeline from the province.

In my last conversation with folks on your team, they committed that in your next meeting with your provincial counterpart, this would be on the agenda. Can you confirm that this is the case, that it is on the agenda for that next meeting? Also, if you have a date for that meeting, I would love to hear about it. If that's not something you have top of mind, that's okay too, but I would love to know when that meeting is and whether a two-way, all-day GO between Kitchener and Toronto is on the agenda.

[Sean Fraser, Liberal, Central Nova, NS]

Thank you.

The next meeting that's currently scheduled will be between June 26 and June 28, though it's possible that there could be an additional meeting sooner than that.

Because the agenda isn't formally set, it wouldn't be fully honest to say it's actively on it, but I'll commit to you here to make sure that it gets on, although it just may not technically be done from a formal point of view.

[The Chair, Liberal, Peter Schiefke]

Thank you, Mr. Morrice.

Next we have Mr. Barrett. Mr. Barrett, the floor is yours. You have five minutes, sir.

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

Minister, who is Andrée-Lise Méthot?

[Sean Fraser, Liberal, Central Nova, NS]

I don't know them personally. I understand they've held a few board positions within different federal organizations.

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

Ms. Méthot was announced as a member of the Canada Infrastructure Bank, appointed by the Trudeau government. She came from Sustainable Development Technology Canada, which is also known as the billion-dollar green slush fund. Part of the reason it's known as that is some of Ms. Méthot's work, including her financial interest in a group of companies that she voted to give $42 million in taxpayers' money to.

Do you endorse her serving on the Infrastructure Bank?

[Sean Fraser, Liberal, Central Nova, NS]

I understand that this person has resigned, so there is no such service to endorse.