Liberal Leader Justin Trudeau is promising to deliver a wide-ranging package of measures to address housing affordability, including a policy that echoes the Conservatives’ recent campaign pledge to ban foreign purchases of residential homes.
The Liberal Party’s pledges on Tuesday include a new tax-free savings account for first-time home buyers, a $1-billion program to increase rent-to-own projects, and 25-per-cent lower rates on CMHC mortgage insurance.
Under a “Home Buyers’ Bill of Rights,” the Liberals also promise to ban blind bidding on homes, require the disclosure of recent sale prices, and impose an anti-flipping tax that would apply if a property was resold after less than 12 months.
The political bidding war for Canadian votes in the Sept. 20 federal election also includes an attempt to one-up the Conservative Party’s campaign pledge to support the construction of one million homes over three years. The Liberal plan promises to build, preserve or repair 1.4 million homes over four years. The higher number would be achieved partly by adding a year to the Conservative timeframe and including repairs to about 130,000 homes, rather than new builds.
“We’ll help you buy your first home sooner,” Mr. Trudeau said in Hamilton. “If there’s anything this pandemic has taught us, it is that home is a really important investment; a really important place for people to feel safe, to be able to build their future. ... It is still inaccessible for far too many people.”
Housing affordability – the recent spike in home prices and the dearth of affordable rental units – has been a high-profile issue, and the parties are targeting their platforms accordingly.
Housing is prominent in the Conservative and NDP platforms, which have been made public. The Liberals have not yet released a full platform.
But the challenge is that many housing decisions, such as zoning and building approvals, are primarily provincial and municipal responsibilities.
The proposals to ban foreign nationals from buying residential properties in Canada would escalate efforts to address concerns that international speculation is partly contributing to the rise in home prices.
The 2021 federal budget announced a national one per cent tax on vacant or underused properties that are owned by people who are not Canadian or permanent residents, starting in 2022. The measure would be in addition to similar policies in some provinces.
The Liberal policy announced Tuesday would ban new foreign ownership of Canadian housing for two years. The party said this would give Ottawa time to work with provinces and municipalities on a framework to better regulate the role of foreign buyers in the housing market.
The Conservatives proposed a two-year pause on foreign purchases last week. The party would also encourage foreign investment in purpose-built rental housing that is affordable.
The Liberal government announced a national housing plan, but the impact has been “limited,” funds remain unspent and affordability has worsened, according to a report released this month by the Parliamentary Budget Officer.
Mr. O’Toole said on Tuesday that the Liberals have a record of not delivering when it comes to addressing housing concerns.
“The housing crisis has exploded in the last three or four years under [Mr. Trudeau’s] leadership. He has had programs that have been ineffective in terms of affordable housing and in terms of programs for first-time homebuyers,” he said. “We have a serious plan to tackle a serious crisis for our country. And after six years of inaction from Mr. Trudeau, more hollow words today is not what Canadians deserve.”
Outside a Revera care centre in Mississauga, Ont., NDP Leader Jagmeet Singh spoke on Tuesday morning about his party’s promise to bring for-profit long-term care under the public umbrella.
Mr. Singh also said the housing crisis has got worse under the Liberals. “Housing has become more expensive, renting has become more expensive,” he said. “Canadians can’t afford another four years of broken promises from Justin Trudeau on housing.”
The NDP promises to create at least 500,000 affordable housing units over 10 years, waiving the federal sales tax on the construction of affordable homes, and rent relief for lower-income families.
Murtaza Haider, a professor of data science and real estate management at Ryerson University, said restrictions on foreign home ownership would be welcome. But he said data from the Canada Mortgage and Housing Corp. show that foreign buyers influence only a small segment of the market.
“Restrictions on foreign homeownership are popular, yet their impact is marginal at best in the long run,” Prof. Haider said.
Canada’s housing problems are a result of an imbalance between supply and demand, he added, noting over the past five decades, fewer homes have been built annually relative to the population than in the early 1970s. Canada has undersupplied housing while the population has grown, mostly due to immigration, he said.
“If the math is done right, the Liberals are promising fewer than five per cent more dwellings than the Conservatives if we compare their platforms for the same duration of either three or four years,” Prof. Haider said. “Furthermore, the Liberals might end up building fewer new homes than the Conservatives because the Liberal platform includes repairs and preservation, which does not necessarily add new homes.”
Prof. Haider said it is encouraging the Liberals would attempt to restrict blind bidding and are promising other measures that would give buyers more control, a positive step in addressing house price inflation.
“At a time when the demand outstrips supply, homebuyers compete for fewer homes resulting in bidding wars,” he said. “In Canada, buyers bid without knowing what others have bid, and influenced by the fear of missing out, they end up bidding, at times, hundreds of thousands of dollars more than the second highest offer.”
Joanne Vanderheyden, president of the Federation of Canadian Municipalities (FCM), said she is glad housing affordability is a campaign issue.
“We’re pleased to see specific commitments in today’s announcement by the Liberal Party of Canada that respond to our recommendations to work directly with local governments to increase affordable housing options for Canadians,” she said.
To reach their target of 1.4 million homes, the Liberals say they would provide a $4-billion “housing accelerator fund” to municipalities to make more core urban land available. Other promises include doubling the National Housing Co-investment Fund for a total of $2.7-billion over four years; $600-million to convert empty office space to housing; and a new home-renovation tax credit for families adding a secondary unit for a live-in family member.
The proposed tax-free First Home Savings Account would allow Canadians under 40 to save as much as $40,000 toward their first home. The Liberals also promise to double the First-Time Home Buyers Tax credit to $10,000 from $5,000, which they say will save users $1,500.
With reports from Menaka Raman-Wilms in Ottawa
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