Unlocking Capital & Accelerating Housing: Hear from those leading the way

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Transcript

Note to readers: This video session was transcribed using auto-transcribing software.  Questions or concerns with the transcription can be directed to communications@canurb.org with “transcription” in the subject line.

Mary W Rowe  I’m Mary Rowe, from the Canadian Urban Institute. All of us across the country are still in a bit of recovery from a big, big week in Ottawa last week. So I want to thank everybody that’s a repeat … I was going to say repeat defender, repeat visitor. If you were with us in Ottawa last week, welcome back to our virtual home here on CityTalk. And if you weren’t, we’re sorry you weren’t, but you will see the videos being posted momentarily. We’ve got two guests today who were with us in Ottawa, and what a great treat for us to have a conversation with these two folks who were leading charges in very specific roles, and that’s part of what we’re going to talk about. I’m in Toronto today, happen to be here, traditional lands for many First Nations, Inuit and Metis, and as many of you all know, home to the Haudenosaunee, the Wendat, the Anishinaabeg, just making sure I don’t miss anybody, Mississauga’s of the Credit and the Chippewa, and signed by Treaty 13 and the Williams Treaty. We always ask folks to acknowledge =e in their own community where the ancestral lands are and how they’re continuing to advance not only truth but also reconciliation. We had several participants last week at the Summit from Indigenous communities, which was terrific. So many interesting things happening at different scales and in local levels, and regional and across the country … terrific. And we happened to be in the building with the AFN, the Assembly of First Nations having their meeting a couple of floors below. So there was some good cross-pollinating. And I hope that’s going to continue, that we’re going to continue to learn from one another and continue to be collectively solving housing challenges, which as we know exist in almost every community of every size and composition across this country. So, Ana, Ehren, please join us, turn your cameras on so people can see you. And I was just saying, as we were getting ready, that it’s pretty rare to have a chance to have two folks in pivotal public sector roles or public sector adjacent, to have a sort of fireside chat with you. We always say that CityTalk is about what’s working, what’s not, and what needs to be next. And I’m going to encourage people in the chat to put their questions in there for you two, and I’ll feed them into our conversation together, for you to be able to have a chance to be very candid back. We also try to create as safe a space as we can here so that people speak freely, and so if people are frustrated or concerned, you should express that in the chat – respectfully, obviously … because we’ve got an enormous challenge ahead of us. We have several, but housing is one of the most pressing. And we all want to get to what the best solutions are, what the most effective approaches are. Our last session at the summit, actually Ana spoke at the first session, opening session, and Ehren spoke at the final one. The final one was “Where’s the money coming from?” And which generated lots of you know, we’d had a whole day of it, so people were saying, “Okay, where’s the money?” And the session that Ana was on was trying to really position where housing fits in this larger set of challenges that Canada’s facing. So what I’m going to ask is each of you just to open up a little bit and talk to us a little bit about what your role is and what you see as the moment we’re in. And then we’ll … you guys will compare notes, and then we’ll have some collective chatting because I’ve got a bunch of questions to put to both of you that you may or may not be able to answer, or you’re going to say somebody else will, or somebody in the chat may. So Ehren, I’m going to start with you. Just explain to people what your particular perspective is. What do you think the most pressing challenge is as we round out 2025? Well that’s a big question. I know. Well, we’ve got an hour, so knock it out of the park. There you go.

Ehren Cory Thanks for having me back. Nice to see you, Mary. We were talking before I participated last week, but it was virtually and I was the lone person, I think, on screen. So I wish I had been there with you in person because I think these chats are so important and I really enjoy always talking with you and those who would join someone like CUI, who are progressive, thinking about problems, thinking about how to … like how do we move ourselves forward. That’s very much the mindset I’m in. And I will say I’m in a better mood already from the music. So that’s a good start. The infrastructure bank was created and launched in 2018. The idea being, you asked about “where’s the money?” The very simple idea of the Infrastructure Bank is that we can’t afford everything we need. We do not have through public purse only, the money to build the schools, hospitals, roads, ports, airports, clean power projects, renewable energy sources, et cetera, that we need as a society. It just doesn’t work. And if you don’t accept that you have a problem, you can’t get help. So I think step one is no, we just can’t afford it all. And so the CIB, the idea of the bank was to create a pot of public money. We are a crown corporation. We were created by the federal government. We have … $35 billion was the initial fund that was set up. We actually, in the budget, we can talk more about this, but that was increased now to $45 billion. And the idea is that it is a evergreened investment fund. So we invest that money, we get paid back, we put it out again. And so over its life, it actually should cost taxpayers nothing. We charge enough interest or make enough returns to pay for our all of our operating costs, the occasional losses that will happen on loans, and make a little. So the idea is the fund should stay or even grow a little bit over time while we get more infrastructure built. And I guess the simplest way to think about it is if we can do that for the infrastructure that has a chance of paying for itself, then taxpayer money, traditional grant dollars can be used for the stuff that can’t pay for itself, which might be our public schools and healthcare system, or it might be deeply affordable housing. We will talk more about housing in a second, but we try and we try and skim off, if you will, the stuff that has some element of re-payability. And then we try and do that where our money is only part of the capital going into the project, and the rest can come from elsewhere, like the private sector, so that if government puts in a part of the money, the private sector puts in part, and we get paid back, we can get over time …  I don’t like this expression, get a multiplier effect, if you will, on our money. And the idea is that – when I say there’s a tranche of stuff that can pay for itself, what’s also true is it can’t pay for itself in a traditional market way. And what I mean is there’s either too much risk, too much upfront capital, too long of a time frame for the market to do it totally on its own. If it could, then we don’t need to exist at all. And you know, private corporations do it. But the point is there’s infrastructure in the middle, if you will, that has the potential to pay for itself, but only in the long run, only in very uncertain environments. So I’ll give you an example – you expand a port, Port of Vancouver, it’s got to expand. Shippers will use that port, they pay fees, it might pay for itself, but that may take decades to ramp up. It’s very uncertain. It depends on what happens to global trade flows in ways that none of us can quite predict in the world we live in right now. And so if you said to the private sector only, how do you feel about putting a few billion dollars into a port expansion? The risk … Uncertainty of timing of that is such that that’s a very hard investment for them to make a loan. But if we can take a slice of that, share in some of that risk, and maybe the way our loan would work is we only get repaid once the port reaches a certain threshold of busyness, imagine. That can then allow the rest of the chunk of capital required to come from the private sector. So that’s the concept of the CIB. And I hope that’s helpful. We have now, as I said, started in 2018, we’ve made about a 106 or so investments, exactly as I just described them to you, across the country from coast to coast to coast, in every province and territory, from a 1.5 megawatt, one wind turbine and a battery on an island in Hudson Bay to a new transit system in Montreal where we invested more than a billion dollars and lots of stuff in between. But it all follows the basic logic that I just described to you. And it’s in, as I said, infrastructure categories where they have uncertainty, but they have some source of repayment, which leads us to the role we are playing in urban spaces and around housing. The way we think about it is – what are all the infrastructure processes, elements that enable more housing, transit being the first one. So transit is obviously an enabler, but so are water and wastewater and stormwater management systems, local electricity distribution, et cetera. So we think about how can we make investments in all those things that unlock housing opportunities? And that’s really where we’ve been playing so far. We’ve done that in a number of cities from Montreal and other large urban cities, but all the way to a set of communities in Manitoba, just south of Winnipeg, who were constrained in their growth and needed wastewater handling investments. And so we made those alongside a credit union and the municipalities to expand their water to enable housing and lots in between. So I’ll stop there. But that’s what we’re up to. That’s how we attack the problem, and that’s the role we play. And I think it’s a good segue to Ana, because the way we think of it is we can be complementary to each other. If we do what I just said, and then Ana and Build Canada Homes come in on top of us, and I mean that actually not just metaphorically, but physically, if we just put the pipes in the ground, the roads in the ground, the wastewater, stormwater management in, she can go from there. So Ana over to you …

Mary W Rowe Yeah, I can just pass it over to Ana and then I’ve got some questions to follow back up with you, Ehren, but go ahead, Ana. Give us the lay of the land.

Ana Bailão Thanks Mary, and good afternoon to everybody. And Ehren is absolutely right. This is a great segue. And this is exactly the way that is being structured with our ministry. We now are all part of the same Ministry of Housing and Infrastructure, which I think it was a really important step to bring us together to have more cooperation. And we’re just two of the equation, right? There CMHC. Build Canada Homes, we’re the new kids on the block. And we’re just about two and a half months, and this is a new initiative. We have a very clear mandate, but very flexible tools. So our mandate is to scale up affordable housing, including non-market, the percentage of non-market housing in our country, and while we do this, be a catalyst for modern methods of construction. And we have very flexible financial tools. You know, unlike CMHC that usually runs programs, we are much more flexible. We work with grants and loans, but we will have access to equity, to guarantees. So we have a flexibility to come and unlock the project and be a catalyst for capital as well because that’s the intention … Be a catalyst for other sources of capital. Being from the private sector philanthropic organizations, other orders of government is really important and be a catalyst for modern methods of construction. So the intent is how can we bring others to the table by de-risking projects, by making sure that we create pipelines that make a more a long-term investment and a visibility into term investments, that we create through our relationships with other orders of government – not only we bring them to the table with their resources but again, keep de-risking the projects and use that relationship and … you know the agreement that we had this week with Ottawa is a perfect example of how we can do that. Not only did we bring their funding to the table but we’re de-risking the projects by having a implementation table, fast tracking these applications. This is going to be now a much more appealing projects, the ones that we’re going to be getting involved, to get others to the table as well investing and being part of this equation. So we we are two and a half months in, we’re proud to have already five of our projects direct builds with RFQs out on the street. It’ll be interesting to see how the market is going to react to that and we’re proud to have been able to bring another order of government to the table with their own funding and starting to attract other sources of revenue – that it’s not only the the federal government but it’s how together we can unlock these projects and unlock more housing.

Mary W Rowe Thanks. Lots of people putting questions into the chat already. Thanks, gang. And also the Canadian way … lots of people giving us weather reports. Just saying. So it’s -30 in Whitehorse. Whew, that’s cold. And we’ve got lots of snow. We seem to have snow everywhere. So there you go. Welcome to Canada. So both of you, can we talk about quantum? How much is your total capitalization, Ehren?

Ehren Cory So we have 45 billion, is our fund.  And the government has given us a set of long term targets of where to invest that money in clean power, in trade and transportation in transit systems, and in the enabling infrastructure for housing. And in the budget that came out last month, we were increased from 35 billion to 45. And so we’re expecting sometime soon to get a new … An updated set of sector targets from the government. So I expect in the weeks ahead that’ll come.

Mary W Rowe To help me with the math, you’ve got 45 billion to work with. And at any one time, how much of it is out cycling?

Ehren Cory Well, I mean the idea should be all 45 and then it’ll just cycle for forever. Right now, today, 18 and change of it is invested. And another 10 or so is in term sheets, pretty advanced negotiations … So where there’s a real project and line of sight to the money getting committed. So call it 28 of the 45 that’s either firmly committed or earmarked. [Half …] But that still leaves us lots of room.

Mary W Rowe Almost half, yeah. And how about you, Ana? Thirteen, right?

Ana Bailão We were with an initial, the key is initial, initial capitalization of $13 billion. And we too got some direction from the government with four buckets that needed to be allocated. So $1 billion needs to be in transitional housing, which is very grant heavy in order to produce that transitional housing. We have the six sites that were doing a direct build with $1.5 billion to build those six sites. And 700 units with a Nunavut Housing Corporation and a rental protection fund, $1.5 billion, which also is going to be built with the intention of attracting other sources of funds. So the intention is that this fund is going to be able to attract private, philanthropic, nonprofit participation to help nonprofits to build existing stock to maintain affordability.

Mary W Rowe So how much of your $13 billion, you just trotted off a bunch there …. How much of your $13 billion is still out there, out waiting with you to get it out somehow?

Ana Bailão So there’s probably $9 billion. Close to $9 billion.

Mary W Rowe Got it. Okay. So these are big numbers, just saying, and focused on housing. I’ve got a general question for you, and then we’ll start to go to the chat where people are asking very specific questions. But in terms of the housing shortage challenge or the housing mismatch or whatever we want to characterize the dilemma we’re in, where we don’t seem to have housing to fit all the different folks that need to be housed, how  much of a dent can either of your organizations make in closing this … what seems to be a a huge gap? I mean, we hear different numbers being trotted out all the time, but it’s hundreds of thousands of units every year have to be created across the spectrum. How much of an impact can you two, your two agencies make towards that? Who wants to go first? Ana, why don’t you go first?

Ana Bailão So we will have two kinds of impacts. Our impact will be direct on the increase of the housing, of affordable housing, the supply of affordable housing. So that will be … you’ll be able to … we’ll be reporting very openly and transparently on our  …

Mary W Rowe And you mean deeply affordable, I think.

Ana Bailão Deeply affordable and moderate affordable. So we are going to be working in  the space of moderate affordable as well. We are using an income-based definition. So it responds to the regional needs more accurately, and so we will be reporting on that. But the other way that we’re going to have an impact on the number of houses that are going to be produced, because we know that we have to increase supply across the spectrum. So our fund is …we are responsible for the deeply affordable, affordable housing. But we are a catalyst to the modern methods of construction, which is the intent is build quicker, build in a more economic way, deal with some of the labour shortages that we have in housing as a whole. And this will have an impact in the market as a whole, and what we’re hoping is to decrease the costs of housing as a whole, and be able to build quicker. So we’re going to be able to affect housing in two ways.

Mary W Rowe So thread the needle for me on the second part. You’re going to be able to be a public buyer or funder of a more industrial modular kind of product, right? And you’re going to be able to help get those factories up and running. And there’s questions in the chat about this. Interesting to know whether CIB has any role in terms of that kind of thing. And is the idea, Ana, that you create, like, Nunavut and where else you’re going to do it, that that will somehow trickle over to the other aspects of the of the housing production market that you’re not directly in. But that the modular stuff will get a boost, a bit like how we used to approach solar. You know, where we had government funding for solar, thinking the market would then take it once the price was de-risked.

Ana Bailão So we know that what we’ve heard from a lot of these factories is their biggest issue is pipeline. They can’t scale up. They can’t invest without knowing there’s a predictable pipeline. Right now, there’s still not an uptake in the industry to create that pipeline. So what we’re going to do is through investing in an area of the housing continuum that the government needs to invest, like housing that … To be honest with you, the market is never going to produce. We cannot expect the market to produce the deeply affordable housing. Government needs to interfere in that part of the market, the housing spectrum. And to be honest with you, unfortunately, because the market is such in a crisis, we need to go all the way to what we call workforce housing. By doing that investment, by funding the nonprofits, by partnering with the private sector to create those projects, we create the pipeline that they can go to the factories to have that pipeline of production. And so these factories can start scaling up and and have the capacity to respond not only to what we’re creating to them, but then becoming more reliable, more … producing products that are cheaper, more affordable, and that actually are proven in the market. Because there’s still some questions around it. And so, you know, the  markets will hopefully start more aggressively using these methods of construction. And again, but this capacity starts increasing, they produce more and more. I haven’t met to this day, any factory, manufacturer, any methods of construction that has told me “we are working at capacity.” There’s a lot of capacity in there that we need to create to decrease costs and to have these things doing more faster.

Mary W Rowe Ehren, are you engaged in this at all? How does CIB interact with, let’s say, a factory that that is going to be in, let’s say, Essex County or someplace? And so Ana can somehow supply some kind of … she can create a pipeline for them, I guess. What is CIB’s role there?

Ehren Cory Well, I think it’s a great example of how the two of us work together because our role would be to work with the county. Who did you say, Elgin? Who was your … Essex was your example? Work with the county around where they’re going to put the houses. So do they have roads, water, electricity, district energy. I saw in the chat a comment about geothermal and district energy. Those would all be the areas we would be investing in. The idea being that if Ana can create the houses coming out of the factory, we can create the place to put them. You asked earlier about how much impact we can make. I, yeah, our view is we can make a lot, but none of it on our own. We are, you know, we think of our role as housing enablement. Enablement is cool, but it doesn’t keep … It doesn’t put a roof on your head. So that’s why we work so closely with Ana or with CMHC, with other levels of government, because the idea is we can help them create the conditions for more housing, whether that’s transit or a massive expansion of water systems, but we can’t on our own … That doesn’t make that doesn’t make housing more affordable on its own, or it does bend the curve, but not enough. So we really think of ourselves in partnership.

Ana Bailão But Mary, if I could add, in certain parts of the country, this is a major issue. Like you hear in certain provinces, it’s the cost, it’s the development charges costs. In other parts, it’s infrastructure. The cities and municipalities are not able to create the supply that they need because of the lack of infrastructure. That’s why it’s so important the role of the CIB, of our housing and infrastructure, of us, of CMHC, like working all together because the housing situation is different across the country and some pressures are felt much more in certain municipalities than others.

Ehren Cory You know, I just want to add to that. Can I just say, Mary, I couldn’t agree with Ana more. And what we’ve actually … you know, you find places where they’re not issuing building permits because they don’t have wastewater supply to put them onto. And so it is really impactful. It’s just … We think of ourselves as one part of the equation. But I would just add that through our work across the country, we’re finding that there are sometimes major unlocks that can come from this sort of foundational investment. So …

Mary W Rowe Mm-hmm.

Ehren Cory Think of fast growing regions, Peel region that’s near us here in Toronto, or I think of some of the places we’ve been working in the north where they’re incredibly bottlenecked. Indigenous communities infrastructure is often the bottleneck. And so, yeah, we’ve really … we think it’s an important role. It’s just one part of the puzzle.

Mary W Rowe Well, I can say from CUI’s perspective, you know, we’re always concerned that you don’t … There’s never just one thing you need to build. And we’ve all witnessed this, when housing can be built and there are no services around it, let alone the basic infrastructure, making sure the water and the services are provided, but what about all the other amenities and are we creating complete communities? So I’m pleased to hear you say that. And I think lots of folks would … once we get over this initial supply crisis or whatever we call it, that we won’t just have smacked up a whole bunch of units that are actually desolate neighborhoods. I mean, I lie in bed awake worrying about these things. Okay, we got a bunch of questions for you folks. I’m going to start going to them. Pre-development costs. Where do … Because I am a little concerned that everybody thinks, Ana, you’ve solved it. Build Canada Homes has been created and housing is solved. And yet I know the unit production that you’re going to pull off, in addition to the catalyzing you’re going to do, is just going to start to make a dent. Let’s start identifying other things and other things that may need … that you  two can’t necessarily solve, but what can? So pre-development costs, getting lots of questions about that. Thoughts?

Ana Bailão So we are going to go into that that place, we will be covering pre-development costs, Now, as people that review our investment policy know – that our first priority right now … and this is because of practicality, we know that there’s a lot of shovel-ready projects out there and we just … and we’re a new organization over two months and we need to review those ones that are ready to go. We just thought it was … it would be the smart thing to do. We’re getting lots of proposals and we need to get the ones that are ready to go out the door. So we’re going to be focusing on that. We are going to be addressing and putting something out on pre-developments but what I’ve been telling people is like, we need to create our internal capacity first before creating our external capacity. So it is on our work plan – is how we’re going to roll out the pre-development and we’re finding that, you know, there’s some applications that are coming in that include the pre-development costs, that are, you know, much ready to go. And so we are going to be including and moving those along that are the ones that are still very much afar. And so we need to define some guidelines for that. And we will be doing that in the near future. And so stay tuned, but we are very much in tune with that … that that work needs to be done. Like I said, we just want to make sure that we have these four priorities that we need to get out the door. We have  internal capacity that we need to get going, and we need to get the shovel ready projects. But in the near future we will be creating the pre-development approach, what it will be  … we will be defining that, and we’ll be consulting with some of the groups around us as well.

Mary W Rowe What about you, Ehren? Can you play a role at all in early costs and early … and the related question, I think, which is also in the chat, is smaller developers, smaller projects. Are we going to solve this only with big, large investments or can we in fact find a way to get a thousand flowers to bloom? Many, many, many, many, many smaller projects. And we know in small communities sometimes a small project is what they need. Ehren, are you engaged at all? It said you are. You’re in communities of all sizes.

Ehren Cory Yeah. So I’ll answer the second … on the development cost. The short answer is yes. Now we’re talking about a different thing with us because that would be like the development cost on the design work on a water treatment facility. And it depends where in the country it is. You know, sometimes developers are responsible for developer led transfer over construction of those things. So yes, we could for sure do that. On your second question though, that’s something we give a lot of thought to. And we think of it in two ways. There are four bigger projects the CIB can directly engage. So we’re working on, I don’t know, the Hippodrome site in Montreal or something like that, which could be … or here in Toronto at Downsview, we’re talking about tens of thousands of units potentially and hundreds of millions of dollars of infrastructure spent. Okay. So this is … I’ll call that CIB direct. And we’ve got a number of those in places like Brandon, Manitoba, and just outside Edmonton on Enoch Cree Nation as well. Again, pretty large scale development still, where like the Enoch are building Northeast Development Lands, they’ve got a project to develop hundreds and hundreds of homes. And again, it’s got substantial infra needs.

Mary W Rowe Mm-hmm.

Ehren Cory But the second … so we have those, and it’s not only about Montreal and Toronto, but it is true that those only work at a certain scale. So the second thing we’ve done is to find aggregators, you can bundle partners who … so the best example I have of this actually is in the Indigenous partnership space where we’ve got a a partnership with the First Nations Bank, who are in many communities and who have borrowers at First Nations, historical Métis communities, et cetera. And so what’ll happen is those people will say, “we want to add … We want to build eight new homes on reserve, and we need a street and lighting for those eight homes.” And the CIB would not be able to handle that effectively. So what we’ve got is a co-lending agreement. FNBC’s got a bunch of our money, and they would make a loan to that community both to build the houses but also to do the street work. And the borrower wouldn’t even know it, but they’d be getting some of their money from us and some from FNBC, and they’d be getting the benefit of our long term and low rates blended into one loan. And that helps us reach many smaller projects. We need more of those partnerships.

Mary W Rowe Ana, are you going to look at that too? Can you do some bundling? Because this is this great challenge of Canada. How do we scale? And we, CUI runs the Climate Ready Infrastructure service with communities of thirty thousand or less. We always tease the small communities, you know, the person talking with us has just gotten off the Zamboni. Like this is … these communities don’t have internal capacity. So but they have needs. With all due respect to the Zamboni operators on the chat, signal in, tell me you’re here. But is there a way to do it for you too, Ana? Can you start working with others, bundling other dough? Are you …. It’s early days for you? Are you thinking about it too?

Ana Bailão Yes, absolutely. How do we create capacity? Capacity in terms of what you’re talking about, capacity in certain sectors, like the nonprofit sector. You also have … It’s not only regional. There’s also organizations that need that certain capacity. And we would be … we will be encouraging and these are conversations, very early days, that we’re talking with different organizations to help structure that, because again, we will not have the capacity to deal with all the … It’s not even the capacity. What we want is to make sure that we are creating the most effective and efficient process for these organizations. They are great at what they do, but you know, for a small nonprofit, small municipality, it’s enough already to run what they do on a day to day basis. So how can we create those supports so that they can take advantage, as well, of what we are offering? And it is very much on our work plan and on what we’re going to be doing.

Mary W Rowe Listen, I just feel like you guys are going to leave this call and go, “Oh my god, twenty two more things I have to put in this thing” but everybody here is very supportive of what you’re doing. Just saying. We’re on your side as we scrutinize – what about this? Where’s that? Here’s one … All this investment in creating hard goods, investment. What happens when the darn things are built? How do they have capacity to maintain them, service them? How does your resourcing help continue on the operations side? Both of you, Ehren and then Ana.

Ana Bailão I don’t mind starting … Transitional housing, we’re going very hard on asking the provinces for the operating dollars. Transitional housing does not work if we don’t have the operating dollars. So we’re having conversations across the country to ensure that the provinces are coming to the table and match our capital dollars with the operating dollars. With other affordable – moderate … We are looking at the sustainability of the business plan that they put in front of us. That’s why … not only because it’s a good social model, but we also look at the economic model of having some market units mixed with some affordability and have a … You know, a staggered level of affordability that it becomes sustainable. We will not be entering into the operating world. We are not going to be funding operating capacity, but we will be funding models that are able to sustain those operations.

Ehren Cory Ours is a little different because we’re … all of our investments are repayable. They’re mostly loans or equity investments, but they’re mostly loans. And so the way we structure them is with a financial model that we build together with the municipality or the developer, depending if it’s privately led or municipally led. And we are … the whole model we’re trying to build is how do we get repaid over the long term out of some combination of the users on the water system, the property taxpayers who one day are using that water system, any development charges that go into that place. So all of those pools of money, how can they pay back for the system? And that only … That that payback only comes after the system has been maintained. That’s out of its net income, if you know what I mean. So we actually push quite hard on people to have reasonable business plans with reasonable operating expenses, because we only get paid back if the system keeps working and people therefore can keep paying their water or electricity or utility bills. There has to be a high functioning system. We only get paid if the system works. So we try and make sure that enough money stays in the business, if you will, to run it. I’d say, Mary, that the thing I didn’t say in my intro, but it’s probably the most important thing, and it’s linked to this point is all we’re trying to do at the CIB, in the enabling infrastructure space, is take the idea that growth pays for growth and make it actually work. Because as Ana knows from one of her previous hats, like everyone says growth pays for growth, but it … that’s a really hard model for a municipality who’s underwater from a budget perspective, to say you had to invest in this water system and don’t worry, 10 years from now, when the whole housing is built out and there’s a bunch of users, it’ll pay for itself. It’s like, yeah, sure. But in the meantime, we’re deeply underwater in our budget, and you can’t always afford to do that. So the CIV loan is a way for growth to pay for growth. We make the loan, we only get paid back as the density grows, as therefore users come onto that system and they are paying their bills. And so if that takes 10 years, great, if it takes 15 or 20, that’s the risk we can help. And it’s not about cheap financing, even it’s about helping municipalities not have to take that risk. And a few years ago, Toronto and Vancouver would say to me, Well, we’re not worried about that, the minute we build something, it’ll be full up. That is not exactly true anymore. Like there’s more risk for that. And so you can’t just assume it’s going to immediately pay for itself. So that’s the risk we are taking.

Mary W Rowe I want to debunk the, you know, the growth pays for growth, because everybody wants to counter that and they see development charges as in that mix, Ana, and I know you’re right in the heart of all that debate, but aren’t we just saying – “we need a mechanism to distribute the costs of growth and operation over the long term? And we need that to be equitable and enough and easy to administer so that so that we’re not doing dumb things” Right? So I’m interested, both of you, you’re working out from a premise that there is other capital circulating in the system that you’re going to catalyze and leverage and get in, whether it’s coming from municipal governments or provincial governments or the private sector or pension funds or whatever. How’s that going? Ana, start with you and then Ehren. Like are people standing up?

Ana Bailão Yeah, with us they are. I think also because … I think a lot of people in the sector, in the housing sector, have been asking for something along the lines of Build Canada Homes or at least some of the things that we’re standing up for, using a public federal land. You know, for years and years, people in the housing sector have been calling … Even municipalities. When I was in municipal politics, we were calling on the federal government, put up your land, we’re doing that, put up your land. So we’re using that now with the sole purpose of creating more affordable housing. We are asking for flexibility. You know, everybody had advocated for the national housing strategy. It’s done wonderful things, but it was tough because it’s national programs that sometimes work in certain communities, don’t work in other communities, and especially around the nonprofit and partnerships, sometimes the flexibility that was needed to make things work wasn’t there. And so here we have an organization that is saying, okay, we can come at this in different ways. We can participate in different ways. We’re not going to be a program, we’re going to be an engine to get this done. So I think there’s some enthusiasm around having this done. And people know that this is not Build Canada Home success. This is the success of  … and the opportunity to build up the sector, to create more affordable housing and especially the non-market housing. So we are having conversations with financial institutions. We’ve had lots, you know, foundations that are coming to the table and saying, can we participate? And we are knocking at their doors as well. And we are working with other orders of government as you … Like again this week, you know, Ottawa was very keen in coming to the table and saying we want in and we are going to put something on the table as well.

Mary W Rowe Ana, is that typical the way everybody’s asking in the chat? So do we just need to do what Ottawa did? Break down your door, here we are. Is that going to be typical how you’re going to do it?

Ana Bailão Well we have a portal. We have a portal. And the portal has the proposals, to come in, in terms of the nonprofits, but we want to see these kinds of partnerships and we are having conversations on how we can bring more capital and how we can bring more incentives. And again, this relationship with Ottawa was very much guided at, you know, we have land, how can we   de-risk the land? Because we have these six sites that we would use one specific module. It doesn’t mean that for future sites we’re going to use the same model. They have a pipeline. So we actually said, okay, these … a thousand units we’re going to collaborate, because there’s certain tools, there’s certain barriers that we want to make sure we  get rid of. And the city of Ottawa had put a plan in general, for housing in general, to get rid of some of these barriers and they added the implementation table with us. So we absolutely want to work with municipalities and with provincial governments this way.

Mary W Rowe You heard it here first, guys. The portal’s open. Get going. Just … a question about the relationship with innovation. Because you’re trying … Both of you are stewarding agencies that are trying to do things differently, which I think in the old days used to be what what we used to call … now we call innovation. So you’re doing it better, let’s hope. Is there a connection with more resilient methods with low carbon? We’ve got lots of questions in the chat here … Low carbon, district energy. Are we going to build better, smarter, more environmentally preferable? Can we do that? Can we do it all? And tell me how it’s going with your colleagues that I said … Just asking …

Ehren Cory I can start and I’ll tell you the chat … This is amazing. I’ve … it’s distracting though because there’s so many good questions.

Mary W Rowe I know! The chat  is always on fire at CityTalk. The chatters never disappoint. And we publish the chat, so you get lots of kicks at the can, not just live. Go ahead Ehren.

Ehren Cory Okay, good. I was just going to say there’s something there that I want to answer and, but if you’re going to save it, I’ll get a chance to answer …

Mary W Rowe No, no, you can you can pick one anytime you want. Go ahead. There’s a lot. Thank you.

Ehren Cory I think that it’s a really important question you’re asking, the way that we think about it is we try very hard to, first of all create flexibility and nimbleness for our partners. Ana was talking about not having one size or one model. We get to do that because we were created to do it, but also because the stuff we’re working at, when it’s at larger scale, each deal is quite different. So you get to approach them differently. But what I would say overall is that we at the CIB think, Mary, I talked earlier about our portfolio – the real way we measure investments different than a pension fund, and I didn’t get to answer your question about private capital, but I would say to you that my short answer on private capital is, we’re seeing lots of it. It’s just what risks are they willing or not willing to take. We’ve been having this conversation forever in Canada, like, geez, all of our pension funds are some of the biggest infrastructure investors in the whole world, but they don’t invest enough here in Canada.

Mary W Rowe And we hear it all the time because … is it because we’re too small a market, we can’t give them the return, right?

Ehren Cory But I don’t think that’s it at all, actually. I think it’s simpler than … It’s simpler than that. When they invest in infrastructure around the world, a lot of times what they’re doing is they’re buying mature assets. Here, let’s go back – why do pension funds love infrastructure? Because infrastructure, generally speaking, is stable, long-term cash flows. Largely linked to GDP. You know, you buy operating mature port, airport, water system, and it’s got a lot of stability, it’s got a lot of capital you get to put into it, a lot of steel in the ground or whatever. So you get to put a lot of money in, and you earn a pretty steady return off of that. That is not the same as building greenfield new high-speed transit line between Montreal and Toronto with a … I don’t want to say guess, but with a ton of uncertainty about how many people use it 30 years from now …

Mary W Rowe So we know that it … that private investment goes to lower risk and more secure return and so much of what Canada needs can’t give them that at the moment, right? So that’s why you’re in this.

Ehren Cory That’s why we’re in this. So if we can provide a buffer to that, then they’re happy to invest. And they and they will. Anyway, to your question about innovation, I just want to say this. The CIB, we measure all of our investments, not the way the pension funds do only in terms of financial reward versus financial risk. You look at – we want to get payback. So we do look at financials, but our main measure of return, we’re an impact fund. So we look at five core measures of impact. One is decarbonization, so making our economy less carbon intensive. Two is GDP growth, so investments that expand Canada’s trade capacity or economic capacity. Number three is better connectivity of Canadians, which could be transit connections, could be digital connections, so people who don’t have broadband. Number four is the enablement of new housing starts, so increasing the capacity for housing in our country. And number five is closing the gap in Indigenous communities, making sure that Indigenous communities have access to the same basic sorts of infrastructure that the rest of the country have, because we have a real gap. And we measure every investment against those outcomes. And one investment could achieve all five of them. We talk a lot about double and triple word scores at the CIB. So if you build an electrified transit system or a new transit station that allows more people to take transit and it allows more density in a corner of a city, you could score on connectivity of Canadians, GHG emissions and housing starts. And we measure every investment that way. So we try and drive innovation, Mary, by focusing on those. I don’t focus on like, is it … did you meet my criteria for what a water … Like are you meeting my engineering …

Mary W Rowe I appreciate that you’re looking for outcomes. Look, let’s put the challenge out. I’ve said it before. Could we get an urban city builder wordle? Come on, chat world, create some thing that we can all do every morning that’s in our domain. Somebody’s going to do that overnight, and I’m going to see it in my inbox tomorrow. Ana, on the innovation side though, let’s just talk for a sec about that. What I hear also from both of you is that there are policy innovations that are required. We know that at all three levels. Carolyn’s asking about the building code. Are we going to be … can you guys do all of it? Or is that where your department colleagues are going to start looking … Okay, these five policies … Ehren just listed off his criteria. Are there five or six key policy impediments at each order of government that need to be removed? And who would do that work? Who’s going to help you do that, Ana? Or you’re going to say, I need this to change, and then somebody’s going to figure out how. Right?

Ana Bailão Just to say a little bit on the BCH because again, what everybody had been advocating is why can’t we have for housing a CIB? Why can’t we? So we’re very much modeling ourselves in this flexibility that Ehren talks about. So we tell everybody we are like the CIB. We are much more like the CIB because it’s a bit of a change for people that have been doing housing. And we also have our five criteria, you know, shovel ready, affordability, innovation, partnerships, Canadian made. So we have the the five things and the innovation is absolutely part of it. We are going to be on the front lines. We’re going to be again creating that pipeline. You’re absolutely right. And I saw some of this in the chat. There’s a lot of barriers that in order to scale, we need more than just the pipeline. There’s transportation issues, there’s finance issues, the way we finance off-site construction. There’s building code issues. So we’re going to be going through that and seeing that firsthand and identifying that and working with our colleagues, both at housing and infrastructure and ISED and inter-con as as you explained, to deal with those issues. We’re going to be a crown corporation, so we’re not going to be doing policy work and being part of the government, but we’re going to be at the table and we’re going to be a conduit to that working table for many of these … 

Mary W Rowe But you know, I guess this is part of the challenge for all of usin this gathering. There’s several hundred of us here, and we’ve got to help Ana and Ehren and everybody else figure this out because they can’t do everything. CIB and BCH are not the panacea for everything. But you are on the ground. You’re going to hear about all these very specific challenges. So Alison’s story … I hope you heard the call out I gave Alison to Essex … Close to where you are, I think. You know, she’s saying, “Look, can’t we have the factory investment be in communities that are hardest hit by tariffs?” Well, that’s a good idea. So how do we create that connective tissue within government? I guess we’re here to listen to Ana and Ehren. You tell us, you’re in the corridors of power.

Ana Bailão And we’re already making quite a bit of that connection. [You’re doing it.] A lot of manufacturers coming to us and we’re trying to, you know, ISED is still establishing their their their strategy as well. So we’re kind of like being that first window that creates that relationship with the federal government and trying to do that conduit. So not only the issues, but also be a little bit of a a conduit to some of the … Even programs that are already established that they have to support some of these manufacturers.

Mary W Rowe Mm-hmm. Are there particular things in your jobs now? You’ve been at it for a few years, Ehren, and Ana not as long. But you’ve both worked at different orders of government. Are there particular ways that you’re going to be challenged by and that the attendants here can help you with, in terms of provinces? How are we engaging provincial governments in all of this? Ehren first and then Ana.

Ehren Cory Sure. I think what’s … it is … Ana already expressed this, but partnering and working together is core to us all being successful. And it’s a very Canadian thing. Like our our system of government, the way we’re set up, requires it.

Mary W Rowe But I want to get us beyond the platitudes, Ehren, because my God, you were in the province when I was there too. Like it’s hard. The provincial/federal dynamic is mostly about more money for health care. And provinces jurisdictionally are the order of government that I was supposed to be taking care of housing. And they’re not. So …

Mary W Rowe Just pushing back a bit.

Ehren Cory I couldn’t agree more. What I would say to you …  The problem is, we sometimes joke at the CIB that our biggest source of competition is grants.

Mary W Rowe Okay, let’s talk about that.

Ehren Cory People wouldn’t mind borrowing money from me to put in a water system, but if they could find a program that would give them half of the money in grants, they’d rather that. And that’s true in transit and it’s true in wastewater. Which is fine. And by the way, it’s well maybe it’s fine in the sense that it’s needed in some places.

Mary W Rowe Maybe it isn’t fine. Like, do we have opportunities to have that conversation? Because I know there’s been concern, for instance, when Build Canada Homes was being conceived of ,Ana, that somehow the public money was going to crowd out private money. Right? That it would have the unintended consequence of not getting private capital in. So how do we do this dance? How do we figure out this is appropriate for funding and grants, this is appropriate for investment?

Ehren Cory Well, I’ll talk about the federal government just for a second, Mary. I know you asked about coordination with the provinces … At the federal level, I think we’ve come a long way. We’ve still got a ways to go. We’ve come a long way in improving the coordination amongst us. Like we talk all the time now, Ana and I and our friends at CMHC and Canada Lands on the housing front, but it’s the same, you asked about … ISID, you know, like CIF, the Strategic Innovation Fund, for instance. We work really closely. And the way we work is, and it’s true on urban transit funding as well, broadband was like this. Everything comes in through one window. And then basically the question is, how much of this can the CIB do? We should start with a loan. And then if that can’t be repaid, then we should move to the grant. But if you come, if you went to ISID and said we need a grant to put broadband in this part of the country, ISID’s first response, a few years ago when we were doing a big broadband program was, have you talked to the CIB yet? Go maximize the amount of borrowing you can do and get repaid out of the future users. And only then will we consider a grant. And as a federal government, whether it’s the National Transit Corridor Fund, which in the budget talks explicitly about this sort of layering. Housing for sure, we’re doing it. And to answer your question, I think we need to be doing more of it. We have … people on the other end of the pipe don’t care about levels of government very much. So we have to have the same kind of logic when it comes to coordinating between us provinces. And so I would say candidly that we have that on the CIB side. We have that in some provinces better than others, where the province’s first response is, “How much can we leverage sources of social finance, like the CIB, and then and only then we’ll worry about what’s left. But not everyone does it that way, I would say.

Ana Bailão I think Ehren put it exactly the way … And again for the housing, it’s a bit of a shift because the federal government wasn’t in housing and then it came in housing with the National Housing Strategy very heavy on the grant and loan, and a lot of people are counting on it as the first way of producing most of this housing. The way that we’re structuring with Build Canada Homes is depending on the affordability, we are going to be more willing to deploy some of our tools. So, you know, for the workforce housing, we’re not going to be deploying grants. We’re going to be deploying the loans, we’re going to be … and bridge loans and construction loans, and you know, the kind of affordability that requires  would be enough, and we need to have other orders of government to come to the table. Could be a guarantee, but some projects that might be all they need, is some of these tools. Now, when we’re talking about transitional housing, and again, I saw some things in the chat … we are going to be doing transitional, supportive, affordable, mixed income. As long as it … anything like from the ACLP all the way to the transitional, like we can start working and supplementing some of the projects that even have some of the ACLP. We’re not here to replace ACLP, but then we are going all the way to spectrum. So we’ll be working with social housing, affordable housing, transitional housing, and we’re going to be deploying different kinds of tools, but we want to have other capital coming in first. And what tool do we need to use to unlock and to give the certainty that that capital feels comfortable enough to come in? That’s the role that we want to play.

Mary W Rowe You know, one of the challenges I think is are we going to learn quickly enough? Because you’re out there on the ground, you’re going to try this, you’re going to try … I think there was lots of criticism early, Ehren, in the early days of the CIB that it was taking too long. And I’m wondering if some of it is we just weren’t learning quickly enough. In the time that’s remaining, and I’m just saying, I’m making a list here of future CityTalks, seems to me we need to have CLC and CMHC together. I like having just two because we can actually have, you know, longer conversations, which I appreciate. So … and if other people have suggestions for additional dyads that we should bring in to help to do deeper dives on this, great. But with the time that’s remaining, I guess the question would be – how do we have reasonable expectations about what you’re going to be able to achieve? What what would you say is the key goals? And I’ll start with you, Ana, because one thing that people are asking is … and we’ve had different signals from the Prime Minister’s office, but it looks like you’re going to do deals directly with municipalities. Yes?

Ana Bailão We’re going to be direct, we’re going to be working with municipalities directly, we’re going to be working with nonprofits directly, we’re going to be working with housing authorities directly, we’re going to be working with provinces. We want to create that portfolio and that relationship that unlocks the housing.

Mary W Rowe Got it. And what about you, Ehren?

Ehren Cory What about me what?

Mary W Rowe Well, in terms of what what’s an area of effort that you’re going to put your shoulder to the wheel for in 2026 that you haven’t been able to get to, that now you feel is more of more imperative, or are you just doing more of what you’ve been doing, which is fine.

Ehren Cory Got it. Well, the point of the budget was, as I said, it increased our capital pool by $10 billion. The reason for that is because the Government wants us to do more, faster.  And we’ve built a machine now, to your point about the early days. And it was a challenge, figuring out how to bridge those risk gaps effectively, how to put our money into projects effectively, and I think we’ve figured that out now over the last 3 to 4 years, we’ve pretty consistently made around 25 investments and there 3 to 3.5 billion dollars. They increased our allocations so that we can make 35 investments per year, not 25 and they could be $4 or $4.5 billion not $3 or $3.5 so we can accelerate, and in particular, in a few key areas. And I’ll do this very fast – but it’s partly around the major projects – obviously there’s a pretty big push on some of these large scale transformational projects in our ports, in our energy systems … so in the North. So that’s one place that we need to spend more money than we have been, because frankly, those projects haven’t really been advancing. The high speed rail example I gave earlier, that sort of thing. So that’s one. Second is in housing. So there’s a clear signal from, as Ana said, we report to the same shareholder, the Minister of Housing Infrastructure and Communities. So there’s a clear push around more of our money going into the stuff we’ve been talking about today. And the third thing is really trade resiliency. So I’m talking about, like, from critical minerals, roads and electricity all the way to ports, west, east, and north. So all of those are areas of expanded focus for us. And then lastly, things like how to make our energy system more resilient and cleaner as we build towards the aspiration of an energy superpower. And I mean things like carbon capture, like the oil, like Pathways Alliance and their work. So those are the sorts of things that we are expected to be …  Yes, we’ve got a machine now that really, really hums and we plan on doing even more of it. We also have an increased target, by the way, for our money into Indigenous communities because a third of all of our investments, Mary, one third of them either have an Indigenous partner as an equity investor or are in an Indigenous community. And we want to keep doing more of that. So we also are putting more … We tripled the amount of money we’re putting into that from one billion to three.

Mary W Rowe Wow. Ana, thoughts from you as we finish up here?

Ana Bailão Well we’re going to be reaching out to, like I said, the provincial and municipal governments, it is really important to have the partnerships, to get their participation at the table as well. But our portal is open. We want to make sure that we are engaging with the nonprofit and private sector. We need to make sure that both are at the table to create the partnerships that we need for the scale that we need at this moment. We want to create capacity in the sector, we want to make sure that more and more is done by the nonprofit sector. At this time, I think there is proof of very interesting partnership models as well across the country. So we don’t want to exclude that, but our goal is absolutely to scale the supply of the affordable housing and non-market housing in the country.

Mary W Rowe You know, one of the best things about these two entities is that there’s a very …  just to say the best thing is that there are people like you who we have direct access to. So the more that government can create agencies where we can put somebody like you directly in front of people to have this kind of exchange is really, really valuable. It’s such a well behaved, well brought up audience. They’re all thanking you. So Ana, thank you for being with us. Ehren, thank you for being with us. We’re going to continue, give us suggestions about ongoing conversations. It’s not the last time we’ll talk to both of you, Ana and Ehren. Thank you for all you do. And thanks everybody for tuning in. Happy holidays, and we’ll be back next year. Bye-bye.

5 Key
Takeaways

1. Housing-enabling infrastructure is critical to unlocking supply

Canada cannot close its housing gap with capital for buildings alone; cities need upfront investment in “enabling” infrastructure like water, wastewater, transit, energy and roads so they can issue building permits and support growth. Ehren Cory, CEO of the Canada Infrastructure Bank explained that many municipalities are blocked from approving new homes because they lack wastewater capacity or basic servicing, especially in fast-growing regions and in northern and Indigenous communities. The Canada Infrastructure Bank (CIB) was designed to take on long-term, hard-to-price risk in these systems through repayable loans so that “growth pays for growth” over time, instead of blowing a municipal budget in any single year. By structuring repayment from future users and tax base, CIB aims to de-risk major infrastructure and crowd-in private capital, freeing municipal budgets and scarce grant dollars for things that cannot pay for themselves, such as deeply affordable housing.

2. Build Canada Homes is a flexible engine for non-market and workforce housing

As a new Crown corporation with an initial capitalization of 13 billion dollars, Build Canada Homes (BCH) is mandated to scale up deeply affordable, moderate affordable and workforce housing while catalyzing modern methods of construction. Ana Bailão emphasized that BCH is not just a program, but a flexible financing engine that can deploy grants, loans, equity and guarantees, with tools calibrated to the level of affordability and the segment of the housing continuum. BCH’s early priorities include transitional housing (with heavy grant components and operating partners), direct builds on federal land, a rental protection fund, and a large partnership with Nunavut Housing Corporation. Bailão underscored that BCH will work directly with municipalities, provinces, housing authorities, nonprofits and private partners, and sees its success as building sector capacity and non-market stock, not just delivering BCH-branded projects.

3. Pipeline and industrialized construction are central to building faster and cheaper

Both panelists argued that Canada must move toward more industrial, modular and off-site construction to build more homes quickly and cost-effectively, and that this shift depends on predictable pipelines of projects. Bailão noted that manufacturers consistently report they cannot scale up factories, invest in new lines or drive down unit costs without long-term order visibility, and that BCH intends to create that pipeline by funding the parts of the market the private sector will not deliver on its own—deeply affordable and workforce housing. By aggregating demand from nonprofits, Indigenous partners and municipal projects, BCH hopes to give factories the confidence to scale, which in turn should reduce costs and timelines for the broader market. Cory added that CIB’s role is complementary: if BCH “creates the houses coming out of the factory”, CIB ensures those homes have serviced places to go, including roads, transit, water/wastewater, district energy and local utilities.

4. New institutions are designed to crowd in, not crowd out, capital

A recurring theme was that neither CIB nor BCH can solve the housing crisis alone; their value lies in de-risking projects so that institutional, philanthropic, municipal and private capital can participate at scale. Cory explained that CIB uses its $35-billion-dollar evergreen fund, which is proposed to be increased to $45 billion in Budget 2025, to take the parts of project risk that markets struggle with— e.g. long time horizons, uncertain demand or complex revenue models—so that pension funds and lenders can invest alongside with more comfort. Bailão stressed that BCH will prioritize using loans and guarantees for workforce and moderate affordable housing, reserving grants for deeply affordable and transitional projects, and always looking for other orders of government and investors to come in first. Both described growing interest from cities, foundations and financial institutions, with mechanisms like portals, implementation tables and bundling strategies to aggregate financing to support smaller projects and extend access to small municipalities, nonprofits and Indigenous communities.

5. Coordinated policy, innovation and partnerships are essential to durable, equitable outcomes

The discussion repeatedly returned to the idea that capital financing and funding tools must be matched by policy and regulatory change if Canada is to build enough housing without creating “desolate neighbourhoods” as described by host, Mary W. Rowe. Bailão highlighted barriers to scaling industrialized housing—transportation logistics, financing models for off-site construction, and building code issues—and positioned BCH as a front-line conduit that will surface these obstacles to federal partners in housing, infrastructure and innovation portfolios. Cory described CIB as an impact investor that measures every investment against a defined set of outcomes: e.g. decarbonization, GDP growth, connectivity, housing enablement and closing Indigenous infrastructure gaps, pushing projects toward low-carbon, complete and resilient communities rather than just maximum unit counts. Both CEOs framed 2026–27 as a period to “do more, faster,” but cautioned that expectations must stay grounded in the reality that CIB and BCH are one part of a broader system that includes provinces, municipalities, CMHC, Canada Lands and market actors who all need to align for lasting results.