Housing affordability is top-of-mind for Canadians in the upcoming Federal Election, which comes as no surprise after the red-hot, record-breaking real estate market conditions seen across the country recently. The average cost of a home has increased 15.6% in the last year (to $662,000) with extremely competitive conditions for buyers, with the national sold-to-listing-ratio staying in firm sellers’ market territory, reaching a record-breaking 90.2% in January.
In response to the record-breaking market conditions, all six of the major parties have released their housing platforms, detailing how they would resolve the issue if they are elected. Here’s how they compare on the biggest topics:
When it comes to housing affordability, whether that’s making mortgages more attainable or encouraging more affordable ownership structures, each party has proposed policies to help make monthly payments more affordable.
Reduce monthly mortgage costs by reducing the price charged by the CMHC on mortgage insurance by 25%.
Revise the stress test to stop discriminating against small business owners, contractors, non-permanent employees, and casual workers; remove the stress test requirement on mortgage renewals.
Provide resources to facilitate co-housing (co-ownership agreements) and ease access to financing by offering CMHC-backed co-ownership mortgages.
Reform the homeownership system, considering the realities of Quebec households and increasingly diverse family situations.
Privatize or dismantle the Canada Mortgage and Housing Corporation (CMHC) to stop encouraging Canadians to buy houses they can’t afford.
Declare housing affordability and homelessness a national emergency; update the mechanisms for financing co-op housing; Re-focus the core mandate of CMHC on supporting the development of affordable, non-market and cooperative housing.
Support for First Time Buyers
Aside from policies that will generally make housing more affordable, certain parties have made policy promises that directly support first-time buyers who are trying to get into the market.
Introduce a tax-free First Home Savings Account to allow Canadians under 40 to save up to $40,000 for a home; make the first-time homebuyer (FTHB) incentive more flexible to give Canadians the option of a deferred mortgage loan; double the FTHB Tax Credit; implement a Home Buyer’s Bill of Rights that will ban blind bidding, establish a legal right to home inspection, ensure total price transparency on the history of recent house sale prices, and more.
Encourage a new market in seven- to ten-year mortgages to provide stability for first-time buyers and lenders; increase the limit on eligibility for mortgage insurance and index it to home price inflation to allow those in high-priced real estate markets with less than a 20% down-payment an opportunity at homeownership.
Double the FTHB tax Credit; re-introduce 30-year terms on CMHC insured mortgages on entry-level homes for FTHB.
Increasing Housing Supply
When it comes to providing long-term relief to the overheated Canadian housing market, experts cite that it’s imperative to increase the supply of new housing or decrease demand. Although housing supply is typically regulated at the provincial and municipal levels, increasing supply is the most popular solution amongst the major parties, with all platforms including some measures targeting to increase the amount of new housing in Canada.
Build or repair 1.4 million homes over four years; convert empty office spaces into housing with $300 million in new funding; creating the Multigenerational Home Renovation Tax Credit to support secondary suites in homes; creating a Housing Accelerator Fund worth $4 billion to help municipalities build homes faster.
Build 1 million homes in the next three years; release 15% of federal real estate for housing; encourage developers to invest in rental housing by extending the ability to defer capital gains tax when selling a rental and reinvesting in rental housing; Exploring converting unneeded office space to housing.
Set up a dedicated fast start fund to streamline the application process; mobilize federal resources for co-op, social and non-profit housing by repurposing unused and under-used properties; spur the construction of affordable homes by waiving the federal portion of the GST/HST on the construction of new affordable rental units.
Create an acquisition fund using a financial reorganization of the National Housing Strategy programs. The fund would allow cooperatives and NPOs to acquire housing that is currently accessible in the private market. Reinvest progressively in social, community and truly affordable housing until it reaches 1% of its total annual revenues. Dedicate all surplus federal properties to the development of social, community and affordable housing to help reduce the housing crisis.
Stop government-funded housing, which competes with private developers.
Expand the Rapid Housing Initiative to bring new affordable and supportive housing onstream without delay. With this expansion, more quality projects with funding and agreements already in place can quickly become affordable or supportive housing.
Cooling Housing Demand/Speculation
The other side of addressing the lack of supply heating up the Canadian housing market is to introduce measures that will help cool demand for housing. All major parties have agreed that measures need to be implemented to reduce speculation in the real estate market, particularly by foreign investors, but the PPC and Liberals both have more detailed plans to cool housing demand in Canada.
The Liberals are proposing an anti-flipping tax on residential properties requiring properties to be held for at least 12 months. They’re also committing to reviewing the tax treatment of large corporate owners and speculators trying to amass large portfolios of Canadian rental housing and putting in place policies to curb excessive profits.
The PPC, on the other hand, proposes to substantially reduce immigration quotes (from 400k under the current Liberal government to 100-150k) to lower demand from new Canadian residents, as well as lower the Bank of Canada’s inflation target from 2% to 0%.
Support for Renters
Outside of supporting homeowners, most major parties also included policies in their platforms targeted towards supporting renters, who have also faced tight supply and steep prices. These policies either provide direct support to renters, or provide more generalized support for the rental industry.
Committing $1 billion in loans and grants to develop and scale up rent-to-own projects with private, not-for-profit, and co-op partners, creating a pathway to home ownership for renters in five years or less; Stop ‘renovictions’ by deterring unfair rent increases that fall outside of a normal charge in rent.
Encourage foreign investment in purpose-built rental housing that is affordable to Canadians; Support Canadians investing in rental housing by extending the ability to defer capital gains tax when selling a rental property and reinvesting in rental housing, which is currently excluded.
Spur the construction of affordable homes by waiving the federal portion of GST/HST on new rental units; provide immediate relief for families that are struggling to afford rent in otherwise suitable housing while long-term supply is being addressed.
Similarly to their mandate to boost supply, the PPC wants to stop government involvement with building and renting apartments.
Establish a national moratorium on evictions, which will be maintained until the pandemic is over and for a reasonable time thereafter, in cooperation with provincial governments. Create national standards to establish rent and vacancy controls; provide a retroactive residential arrears assistance program to protect Canadians at risk of eviction. Assess the role of real estate investment trusts (REITs) in Canada’s housing market.
Indigenous Housing Matters
All major parties, with the exception of the Bloc Quebecois, have included direct policies surrounding Indigenous housing matters in their platforms.
Co-develop a housing strategy with Indigenous partners and creating a National Indigenous Housing Centre.
Enact a “For Indigenous, By Indigenous” housing strategy that will empower Indigenous Peoples with the autonomy to meet their own housing needs.
Address the Indigenous housing crisis by implementing a co-developed, fully funded Indigenous national Housing Strategy within the first 100 days in office.
Explore further avenues to promote the establishment of individual property rights on reserves so as to empower its residents, and give them increased control over their lives and housing.
Develop inclusive and culturally appropriate Urban, Rural and Northern Indigenous Housing Strategies including supporting off-reserve and non-status peoples, for Indigenous Peoples and by Indigenous Peoples; change the legislation that prevents Indigenous organizations from accessing financing through CMHC to invest in self-determined housing needs; allocate funding towards urban Indigenous housing providers; leverage federal lands for transfer to off-reserve Indigenous organizations to create housing and economic development opportunities.
Money Laundering in Real Estate
All major parties, with the exception of the Bloc Quebecois, have cited strong interest in cracking down on money laundering through Canadian real estate. The most popular method of doing this is through the creation of a Beneficial Ownership Registry, which all parties except for the PPC and Bloc Quebecois have included in their platform.
Similar to money laundering, reducing the role of foreign ownership in Canadian real estate has been a hot topic in party platforms. The Liberals and Conservatives have both promised to ban foreign ownership (the Liberals indefinitely, and the Conservatives for at least two years). The NDP has proposed a 20% Foreign Buyer’s Tax, which passes on more up-front costs to the purchaser than the 1% annual tax included in the Liberal’s 2021 Budget. The PPC and Green Party have not included specific measures in their platforms, but have reiterated a commitment to curb foreign speculation.
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Rachel is Zoocasa’s PR and Content Marketing Manager, and is responsible for creating content that helps Canadians make more informed real estate decisions. Previously working in pre-construction sales and marketing, she brings a unique perspective on the real estate industry. Outside of Zoocasa, she can be found sprucing up her fixer-upper in Hamilton or sewing something new to wear.