the federal budget presented this week includes several measures to combat soaring housing prices, but according to several experts, it will not be enough to help those who need it most.
Finance Minister Chrystia Freeland told the House of Commons on Thursday that housing is the most pressing economic and social problem in Canada today ”And therefore the centerpiece of the Liberal budget.
The numbers show the urgency of the problem: nine out of ten potential buyers surveyed in a recent survey said they had all but given up on their dream of owning a home, because prices were too high in most markets across the country.
The average price of a home in Canada has doubled since the Liberals came to power in 2015, reaching $816,720 in February. This cost is much higher in the Greater Toronto Areawhere it soared to more than $1.3 million in February, nearly 28% more than the same time last year.
David Hulchanski, professor of community development and housing at the University of Toronto, believes that the measures announced by Ms. Freeland on Thursday will not change things so much overall. It’s a smokescreen“, he believes.
In its budget, the federal government announced that it would double the amount of the first-time home buyers’ tax credit, which it would create a tax-free savings account for those seeking to buy their first home, and offer a one-time payment of $500 to support those who are struggling to find affordable housing.
According to Mr. Hulchanski, these measures will stimulate demand, which is already very strong and contributing to the surge in prices.
© / Radio-Canada
The federal budget includes several measures that target first-time buyers.
To increase the supply of housing, the federal Liberals are also launching a fund to accelerate the construction of housing, with a unique and flexible application systemto help municipalities build new subdivisions.
But more housing doesn’t mean more affordability, notes Nemoy Lewis, assistant professor at Ryerson University’s School of Urban and Regional Planning.
He also believes that the people who will be able to benefit from a tax-free savings account are those who have money to put aside from the start, which is not always the case for people low or middle income.
Gallery: Buying a house: watch out for hidden costs! (Espresso)
All this certainly helps those who have a certain income threshold“, sums up the professor.
David Hulchanski also notes that the budget provides $562 million in funding over two years for Canada’s homelessness strategy. Towards a home“. But he points out that, compared to measures concerning future owners, this investment is not as significant.
Foreign buyers
The budget also includes a two-year ban on buying property in Canada for foreign investors.
According to John Pasalis, president of the Toronto real estate brokerage Realosophy Realty, these represent only a fraction of the market. Not the main driver of rapidly rising house prices“, he argues.
Statistics Canada has released figures that show the rate of non-resident owned properties in Ontario was 2.2% in 2019. There are also many exceptions to the proposed federal measure: permanent residents, students and foreign workers and people buying a principal residence are exempt.
It is therefore unlikely that this will have an impact, concludes John Pasalis.
Provincial reactions
The Ontario government, for its part, applauds the federal budget and notes that it will complete its own plan. Thursday at Queen’s Park, Municipal Affairs and Housing Minister Steve Clark said Ottawa’s plan will build on the success of what the Prime Minister and [lui] announced in Januaryor $45 million to streamline construction project approvals and increase housing supply.
Last week, Ontario tabled its own housing bill, which includes a new tool to help municipalities speed up approvals.
For her part, Ontario NDP Leader Andrea Horwath is hopeful that the federally announced restrictions on foreign buyers will help, but she also blames the Progressive Conservative government of Doug Ford, which she says is not not enough to protect tenants and stop speculators.
In a statement, Ontario Liberal Leader Steven Del Duca also took aim at the Ford government: he believes that the federal Liberal government does most of the work».
With information from Lisa Xing, CBC
