NRGO Committee Meeting

STANDING COMMITTEE ON NATURAL RESOURCES AND GOVERNMENT OPERATIONS

COMITÉ PERMANENT DES RESSOURCES NATURELLES ET DES OPÉRATIONS GOUVERNEMENTALES

EVIDENCE

[Recorded by Electronic Apparatus]

Thursday, April 15, 1999

• 0934

[English]

The Chairman (Mr. Brent St. Denis (Algoma—Manitoulin, Lib.)): Good morning, colleagues. It's my honour to call to order this Thursday, April 15 meeting of the Standing Committee on Natural Resources and Government Operations. Our business of the day is clause-by-clause consideration of Bill C-66, an act to amend the National Housing Act and the Canada Mortgage and Housing Corporation Act and to make a consequential amendment to another act.

To assist us with any questions that members might have, we have with us Douglas Stewart, vice-president, policy and programs; Karen A. Kinsley, vice-president, insurance; André Asselin, director, strategic planning and policy; and Marten Brodsky, senior solicitor. All are from the Canada Mortgage and Housing Corporation.

I've been advised that there are seven amendments proposed by different opposition members. Are there any objections for clauses for which I have not had indications of amendments, so that I can group them for disposal?

• 0935

Werner.

Mr. Werner Schmidt (Kelowna, Ref.): Yes, I have a question, Mr. Chairman.

I'm sure all committee members were very impressed with the witnesses we heard here, I believe it was on Tuesday. I think they raised some pretty significant issues, and I know they pointed out some changes that might be brought to the act. Generally speaking, they're pretty complimentary and they're favourably disposed towards the act, but they did raise some pretty serious questions, Mr. Chairman. With the urgency with which this thing is being pushed forward, Mr. Chairman, I was wondering whether we are really going to be missing some of the key points that were made by some of those members. Perhaps the government would wish to consider some of those suggestions and incorporate them into the bill and bring some government amendments forward. I was just wondering whether we should perhaps delay this for a week or so, in order to allow the government to do that. It's just a question of procedure, Mr. Chairman.

The Chairman: If I may, from my point of view, I think you're probably referring to some amendments that GE Capital in particular had brought forward and that were received quite recently. Like others, they have had the bill for some weeks, and it would have been very helpful to have their amendments earlier. All that said, unless the committee instructs me otherwise, I think we should proceed. Anybody who has amendments is free to bring them forward at report stage in the House.

Mr. Werner Schmidt: Sure, that's fair, Mr. Chairman. I was just wondering whether you wanted to reconsider that. I'm most certainly not going to make a big issue out of it, because I agree with you. They have had it for awhile. By the same token, I just wanted to make sure. From our point of view, I'm certainly flexible enough to allow that to happen.

The Chairman: Thank you Werner.

Ghislain.

[Translation]

Mr. Ghislain Lebel (Chambly, BQ): My comments are along the same lines as those of my Reform Party colleague. We hadn't yet heard from our final witnesses, and this morning's meeting had already been planned. Credibility has become an issue here. We haven't had enough time to fully consider what impact the witnesses' statements will have, as far as the bill is concerned. The whole process of calling in witnesses has become a farce. Whether or not we hear from them and regardless of what they have to say, it really doesn't change anything. We make our decisions and adopt the bill clause by clause once the door shuts behind them. If only for the sake of maintaining our credibility, we should delay our meeting until next week to give ourselves some time to examine the testimony presented.

Bank of Montreal officials informed us that they are launching a program to provide funding for housing on native reserves. We haven't called in officials from Indian Affairs to either corroborate or deny this and yet this morning, the committee is ready to adopt just about anything. I repeat, Mr. Chairman, this whole process is a farce.

[English]

The Chairman: Ghislain, as I indicated to Mr. Schmidt, the committee could instruct otherwise. In the absence of that, I think we will proceed. The bill has been in the public domain for review for some weeks. The eleventh-hour amendments needed to be dealt with very quickly, and I don't know how anybody could have managed that. That said, I invite you, as I did Mr. Schmidt, to study the suggested amendments further and bring them forward at report stage.

I'll go to Tony and Carolyn, and then come back to you, Ghislain.

Mr. Tony Ianno (Trinity—Spadina, Lib.): Thank you, Mr. Chairman.

I received from CMHC the information we were questioning the witnesses about the other day, regarding the number of appraisals that are done by CMHC and the lenders together. The information I have—and the clerk now has it too, so he'll pass it out—is 26% in 1998 versus 34% in 1997, which is roughly one-quarter of the properties being appraised. So these numbers are different from the numbers that were presented, or the gut feeling that was presented, by the appraisal organization. I hope the clerk will also send this to the appraisal group, so that it understands what the numbers are, and it's available from the clerk if any of the members want a copy of it.

The Chairman: Thank you, Tony.

Carolyn.

• 0940

Ms. Carolyn Parrish (Parliamentary Secretary to the Minister of Public Works and Government Services, Lib.): I was just going to comment that both speakers opposite talked about CMHC and the government being prepared to look at some of the amendments that were introduced by GE Capital. They're here today, I've spoken to them, and they're very comfortable with proceeding. They might want to make a comment, but I don't think there's a problem with proceeding today.

The Chairman: Ghislain, back to you.

[Translation]

Mr. Ghislain Lebel: Firstly, I'd just like to inform my distinguished colleague that we, the members, direct the work of this committee, not CMHC officials.

Secondly, I agree that they have had the bill for some time now, but were representatives of GE Capital and other groups given the opportunity to give testimony before Tuesday of this week? At least we need to ask ourselves that question. The argument that they have had the bill long enough doesn't wash. That may be true, but they haven't had an opportunity to share their views with the committee. We should simply postpone our meeting, at least to give the impression that we take our work seriously.

[English]

The Chairman: The witnesses were made aware that their input was anticipated some time ago. I understand too that they had discussions with CMHC officials. Unless there are further interventions, we shall continue. You agreed that for clauses for which there are no amendments proposed, I would attempt to group them.

(Clauses 1 and 2 agreed to on division)

(On clause 3)

The Chairman: Werner, I believe you'd like to say something about clause 3.

Mr. Werner Schmidt: Yes, Mr. Chairman, I would like to propose an amendment. I believe members have the amendments. Have they been distributed?

The amendment would delete lines 39 to 41 on page 6. I think there's a very solid reason or principle behind deleting that particular section of text. First of all, it certainly makes for the provision of direct interference in the marketplace by a crown corporation. In principle, I think it is wrong for a crown corporation to interfere either directly or indirectly in the marketplace. While you could argue that this is an indirect interference, it is nevertheless interference in the marketplace.

The second reason why I think that clause should be deleted is that the real beneficiaries in this instance are the banks. It benefits the banks in terms of protecting them in regard to the particular rate structure they have.

I think the third point is that it creates for CMHC a potential and unnecessary liability that I don't think CMHC should be subject to, because that really means the Canadian taxpayer is exposed to that liability.

Therefore, Mr. Chairman, I would respectfully recommend to the committee that we amend the proposed legislation by deleting lines 39 to 41 on page 6 of the proposed bill.

The Chairman: Are there any comments in reference to Werner's amendment?

Ghislain.

[Translation]

Mr. Ghislain Lebel: Clause 3 of the bill can be found on page—

[English]

Mr. Werner Schmidt: It's on page 6.

[Translation]

Mr. Ghislain Lebel: Clause 3 is on page 3.

[English]

Mr. Werner Schmidt: It's clause 3 and it's on page 6. If you want the proposed section number, it's the bold 16.

Ms. Carolyn Parrish: There's something wrong. We have two different bills.

Mr. Werner Schmidt: No, this is the bill.

Mr. Rob Anders (Calgary West, Ref.): Two separate bills? It must be the government's fault.

The Chairman: No, there are clauses in this bill that are referring to sections in the main legislation.

Mr. Werner Schmidt: That's right.

• 0945

The Chairman: When you refer to clause 3, you mean clause 3 in this bill.

Mr. Werner Schmidt: It has to be, yes. It's clause 3 in this bill. That's what we're dealing with. We're dealing with clause 3 in this bill.

The Chairman: Yes, and you're saying that the item in clause 3 is on page 6?

Mr. Werner Schmidt: That's correct.

The Chairman: Ghislain, do you see where Werner is, what he's talking about? It's on page 6.

[Translation]

Mr. Ghislain Lebel: No. The French version reads as follows: "Que le projet de loi C-66, à l'article 3, soit modifié par suppression des lignes 38 à 40, page 6". That would be the proposed section 16, I believe. It's not obvious at all.

[English]

The Chairman: Yes, it's proposed section 16 in the bill.

[Translation]

Mr. Ghislain Lebel: That's not written down anywhere.

[English]

The Chairman: Did you have a comment, Ghislain?

Mr. Ghislain Lebel: No.

The Chairman: Are there any other comments?

Will the amendment proposed by Mr. Schmidt, on page 6, in regard to proposed section 16...? That's all in clause 3, lines 39 to 41.

Rob, do you have a question?

Mr. Rob Anders: I'd like to speak on the amendment, if I could?

The Chairman: Yes, okay. We're still on clause 3 and the amendment proposed by Werner Schmidt.

Mr. Rob Anders: Mr. Chairman, I guess it's been a little over a year and a half since I was elected to this House. For us rookies, I guess we're coming up on our second anniversary in June. I've sat through a lot of clause-by-clause, committee stage, and amendments. I must say that, generally, the more legislation that's passed in this place, the worse I think it is for most taxpayers, the more intrusive it is, and the more it takes away from the private sector and its own initiatives.

Mr. Chairman, speaking in regard to clause 3, I feel this is another example of one of those interferences in the marketplace and in the lives of citizens. I don't know why we would want to expose a crown corporation or the taxpayer to the types of liabilities that are part and parcel of clause 3. Just because it's been done in a number of other pieces of government legislation doesn't mean we have to continue that practice here. I don't know why the government would seek to do that. I'm appealing to the government's better interests on behalf of the taxpayers and its constituents, in order to limit taxpayer liability with regard to this, and to go along with this amendment.

The Chairman: Seeing no further comments, shall the amendment by Mr. Schmidt carry?

Mr. Rob Anders: I want a roll call. It's a good amendment, and I want it on the record.

• 0950

(Amendment negatived: nays 10; yeas 3)

The Chairman: Shall clause 3 carry?

Some hon. members: Agreed.

The Chairman: I have a question from Gilles.

Mr. Gilles Bernier (Tobique—Mactaquac, PC): I had an amendment on clause 3 also, proposed section 18.

The Chairman: We don't have it.

Mr. Gilles Bernier: I submitted it.

The Chairman: We have them from you, Gilles, on clauses 25, 42, and 18.

Are you sure you submitted one for clause 3, Gilles?

Mr. Gilles Bernier: Yes.

The Chairman: Do you have it available in both languages?

Mr. Gilles Bernier: I have it in English.

The Chairman: Is it a short amendment?

Mr. Gilles Bernier: It's a long one.

I propose that Bill C-66 be amended by adding after line 23, on page 7 the following new clause.

The Chairman: It's line 23, page 7. Okay we need to get a copy for the interpreters, Gilles.

Colleagues, let's deal with one thing at a time.

Gilles, do you have this in French or not?

Mr. Gilles Bernier: Yes.

The Chairman: Do you have enough copies to distribute it around the table?

Mr. Werner Schmidt: On a point of order, Mr. Chairman, we have it.

The Chairman: Is it the one on clause 3?

Mr. Werner Schmidt: Yes. It isn't labelled as clause 3. It has a different label on it, that's all, but we have it.

The Chairman: It's the fourth sheet in. Problem solved. Our humble apologies to you, Gilles. It just didn't jump out as clause 3 on the note here.

Gilles, I'll have you speak to your amendment, please.

Mr. Gilles Bernier: Do I have to read it?

The Chairman: No.

Mr. Gilles Bernier: This is on clause 3, proposed section 18.1. This bill, as proposed, would take $200 million out of CMHC over five years—it's really $197 million. The intent of the amendment is to turn that money back over to CMHC under the minister's account, so it can be used for social housing. Otherwise the money could be used for anything—put into the general account and spent anywhere, anyhow. So if we're going to take $197 million out of CMHC and give it to the government, we'd like something to be done about social housing for that amount of money.

That's the intent of the amendment.

The Chairman: Are there any other comments on Gilles amendment?

Carolyn.

Ms. Carolyn Parrish: Thank you, Mr. Chairman.

I would speak against the amendment. As you know, the government right now is in the business of transferring a lot of the social housing over to the provinces. Every year at budget time, and at the time for the Speech from the Throne, priorities are set for the government and for spending. Parliament debates the Government of Canada's spending priorities and they're detailed in the budget. I don't think tying the hands of a piece of legislation like this in directing money to social housing is acceptable. It's actually not even in keeping with the tone of the bill.

The Chairman: Are there any other comments?

Gilles, that was a sincere effort.

(Amendment negatived—[See Minutes of Proceedings])

• 0955

(Clause 3 agreed to on division)

(On clause 4)

The Chairman: On clause 4, we have notice from Michelle Dockrill. This is a page 9 item. So Michelle, we'd ask you to say a few words about that.

Mrs. Michelle Dockrill (Bras d'Or—Cape Breton, NDP): Thank you, Mr. Chair.

We're proposing the following be added after line 37 on page 9 in clause 4:

(5) The terms of the contract entered into under subsection 22(1) shall provide that the rent charged for each unit of a housing project in the first three years following the unit's construction shall not exceed an amount determined by the Corporation.

I think the amendment is self-explanatory. The intent of the amendment is to ensure CMHC has the power to restrict any unreasonable increases in rents for projects that receive funding from them. I don't think I have to say any more than that.

The Chairman: We'll go to Werner and then Carolyn for comments.

Mr. Werner Schmidt: I have two questions. First, what happens after three years? If the amendment goes through, it seems to me it would mean that after three years the thing would be wide open. That's one question I have, and I'd like the honourable member to explain that.

The other question I have is what about proposed subsection 22(1)? Doesn't it say exactly the same thing as is being proposed? In proposed subsection 22(1) it says:

The Corporation may enter into contracts...a financial return from a rental housing project...in an amount to be determined by the Corporation for a total period of not more than thirty years.

So it seems to me the intent of what the honourable member is proposing is already provided for under proposed subsection 22(1). The restriction of three years actually mitigates against the intent of what the honourable member is trying to promote.

I really appreciate what she's trying to say, but I don't think it works that way.

The Chairman: Maybe we'll go to Carolyn and then ask Michelle if she wants to make concluding remarks.

Ms. Carolyn Parrish: Mr. Chairman, with your permission, I'd like the CMHC officials to respond to this.

The Chairman: Mr. Stewart.

Mr. Douglas A. Stewart (Vice-President, Policy and Programs, Canada Mortgage and Housing Corporation): Thank you very much, Mr. Chairman.

I'll make two comments. One, this bill is intended to take out a lot of the program-specific clauses, so there would be more flexibility in designing housing programs. This type of restriction could make it difficult to enter into partnerships, particularly with provinces, with respect to new programs. The idea here would be to give us the flexibility to design program details by policy and not by legislation.

The Chairman: Michelle, do you want to come back on the question?

Mrs. Michelle Dockrill: With all due respect, I don't see unreasonable rent increases as flexibility. Certainly—and I have to speak only from my riding—I have grave concerns about that being allowed.

(Amendment negatived on division)

(Clause 4 agreed to)

(Clauses 5 and 6 agreed to)

(On clause 7)

The Chairman: On clause 7, we'll go back to you, Michelle. You'll want page 12 in your bill, colleagues, line 4.

Mrs. Michelle Dockrill: I think it's exactly the same thing as with the previous clause.

The Chairman: It's the same point?

Mrs. Michelle Dockrill: Yes.

The Chairman: Werner.

Mr. Werner Schmidt: I have a technical question. Would the honourable member explain why the term “non-resident” is being used? I'm not quite sure what is meant here by “a loan made to a non-resident”.

• 1000

Mrs. Michelle Dockrill: Well, if they're a resident, then they own the house, right?

The Chairman: Can it be interpreted as landlord?

Mrs. Michelle Dockrill: Yes. It's probably the wrong use of terms.

Mr. Murray Calder (Dufferin—Peel—Wellington—Grey, Lib.): Werner, it could be a multiple-unit owner—more than one apartment building or whatever.

The Chairman: Okay, Werner?

Mr. Werner Schmidt: I just wanted to get at this.

The Chairman: Okay, are there any other comments on the amendment? Carolyn.

Ms. Carolyn Parrish: I'll just speak against the amendment for the same reasons we voted the other one down.

(Amendment negatived on division)

(Clause 7 agreed to on division)

(Clauses 8 to 23 inclusive agreed to on division)

(On clause 24)

The Chairman: We don't have an amendment to clause 24. Werner, do you have a question? Is it a question for officials?

Mr. Werner Schmidt: I do indeed. Thank you.

The Chairman: Okay.

Mr. Werner Schmidt: If you don't mind Mr. Chairman, to the officials through you, on page 19, it's with regard to lines 16, 17, and 18—the insertion of the word “generally” in the regulations:

The Governor in Council may make regulations generally for carrying out the purposes and provision of this Act.

I would like to ask the significance of inserting the word “generally”.

Mr. Marten Brodsky (Senior Solicitor, Canada Mortgage and Housing Corporation): It makes it clear that the regulations could apply to any portion of the act. Until now there have been assorted places in the existing act where specific reference has been made to the possibility of regulations. This simply makes it general and plenary for the whole statute.

Mr. Werner Schmidt: Does this then suggest that the governor in council can, by regulation, in effect override the provisions of the act where the act is not specific?

Mr. Marten Brodsky: Where the act is not specific, the governor in council cannot override, but can by regulation set out requirements that CMHC must comply with.

Mr. Werner Schmidt: In a specific instance then, where the act has a general provision but not a particular, specific provision, who would determine the action? Would it be Parliament or the governor in council?

Mr. Marten Brodsky: The content of the statute always binds. Parliament is supreme. The regulations are always subject to this section of the act.

Mr. Werner Schmidt: If a case were contested in court, isn't one of the usual approaches to use the specific rather than the general to determine the decision?

Mr. Marten Brodsky: Yes, when you're talking about general and specific within the same, may I say, level of legislation. That would be general and specific within a statute. If there's a conflict with something in a statute compared to something in a regulation, the statute always applies. The regulation always yields to the statute.

Mr. Werner Schmidt: I understand that perfectly and that's very clear to me. That is exactly why I have the question about inserting the word “generally”, which could, I think, have the possibility of confusing the issue rather than clarifying it. I think the intent here is for you to clarify it, and I submit to you that you may be doing the exact reverse.

Mr. Marten Brodsky: This use of the word “generally” is applied from time to time. It was a standard put in the drafting of the bill through the drafters at Justice. Quite clearly, there would be no issue. The word “generally” applies to all aspects of the act. It does not apply to any possibility of overriding any provision in the statute. This would just not be the case.

• 1005

Mr. Werner Schmidt: Yes, that's fine. Mr. Chairman, I think the point is that this really expands the total operation of the cabinet, in effect, to really determine everything that's in here by regulation, not just particularities but the whole act. I think that's exactly what this does, and we'll deal with that at report stage.

The Chairman: Thank you for that, Werner.

(Clause 24 agreed to on division)

(On clause 25)

The Chairman: I'll refer you to an amendment by Mr. Bernier, page 19, lines 19 to 34.

Gilles, do you want to go ahead?

Mr. Gilles Bernier: Mr. Chairman, if you would agree, would it be possible to deal with clause 25 and clause 42 at the same time, because they relate to the same thing?

The Chairman: Is there any disagreement to doing that, colleagues? Okay, we can multi-task here for a moment.

Mr. Gilles Bernier: Clauses 25 and 42 change the composition of the board.

The Chairman: Okay. We'll get our page here for clause 42. It's page 24.

Gilles, the floor is yours.

Mr. Gilles Bernier: Clauses 25 and 42 change the composition of the board. Right now there are 10 directors. You have a chairman, the president, vice-president, two public servants, and five political appointees. That makes for a five-five balance.

What the bill proposes is to change the board to consist of the chair, the president, and eight political appointees. I don't see why we need that. I believe we should leave it the way it is at five-five. Who knows, in the future you might have another government in power, and they might use that power. I'm not saying your government is going to do that, but you might. If you don't, the next government after you might do that, whether it's us or anybody else. I believe it should stay at five-five, as it is. I think the fewer government appointees we have, Mr. Chairman, the better it is.

So there is no need, really, to change the composition of the board right now.

The Chairman: Caroline.

Ms. Carolyn Parrish: Mr. Bernier, you had the same argument with the Mint bill.

Mr. Gilles Bernier: Yes.

Ms. Carolyn Parrish: I don't see any difficulty or purpose to changing the structure from the other crown corporations, so I disagree with you. I think we're trying to have all the crown corporations designed in a uniform way. This gives the flexibility to appoint people from both inside and outside the public service. It gives the government the flexibility to get the best experts they can, those who have the most knowledge. We will agree to disagree again on this one.

The Chairman: Okay, are there any other comments? What I'll do is we'll deal with both those clauses and both amendments, initially. So we're first on Gilles' amendment to clause 25.

(Amendment negatived on division—[See Minutes of Proceedings])

(Clause 25 agreed to on division)

The Chairman: We're going to go to Gilles' amendment to clause 42.

(Amendment negatived on division—[See Minutes of Proceedings])

(Clause 42 agreed to on division)

(Clauses 26 to 29 agreed to on division)

(On clause 30)

The Chairman: Werner, did you have a question?

Mr. Werner Schmidt: No, not a question. I want clause 30 to be separate because I want to vote against it on a recorded vote, please.

The Chairman: Okay.

• 1010

(Clause 30 agreed to on division: yeas 7; nays 5)

(Clauses 31 to 41 agreed to on division)

(Clause 43 agreed to on division)

The Chairman: Shall the title carry?

Some hon. members: Agreed.

The Chairman: Shall the bill carry?

Some hon. members: Agreed.

The Chairman: Shall I report the bill to the House?

Some hon. members: Agreed.

The Chairman: Colleagues, thank you for your cooperation and good questions. I just want to remind members that we'll have a future business meeting on Tuesday, at which time we'll discuss, among other things, our very important mid-coast B.C. forest trip, where we will be looking at the European boycott issues of our Canadian forest industry in B.C.

Mr. Gagliano will be here next Thursday on the main estimates for Public Works and Government Services. I know Gilles is excited about that.

I've had feedback from Mr. Goodale's office, and if you like, Mr. Goodale and his officials will help prepare us for our B.C. trip. It will be a very important meeting Tuesday. Have a great weekend, colleagues. Thank you very much.

The meeting is adjourned.