Trudeau vows to help housing affordability with national tax on foreign buyers

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This article was published 11/09/2019 (1835 days ago), so information in it may no longer be current.

Standing on a parcel of land that most young families in Victoria likely could not afford to purchase, Liberal Leader Justin Trudeau announced two measures directly aimed at helping to address out-of-reach home prices in Canada’s biggest cities.

A re-elected Liberal government would impose a national one per cent tax on properties owned by non-Canadians and non-residents in an effort to curb foreign speculation in real estate, Trudeau pledged Thursday at campaign stop in Victoria, B.C.

The tax would help deter foreigners who wish to speculate in the housing market, which has been a key contributor to a surge in home prices in some markets in recent years.

The changes would help ease affordability concerns that affect first-time home buyers, the Liberals say.

“We know a lot of people are still struggling especially in places like Victoria or Vancouver, where the cost of housing has skyrocketed due to housing speculation by foreign owners,” Trudeau said.

“We’re also sending a message that Canada is not a place for those who wish to speculate in the housing market,” he added.

Trudeau is also promising to expand a program first announced in last spring’s federal budget to help first-time home buyers lower their monthly payments through a shared-equity mortgage with the Canada Mortgage and Housing Corporation.

A Liberal government would increase the maximum-qualifying price of a home for applicants to this program in the high-priced housing markets of Victoria, Vancouver and the Toronto region.

The enhanced program would come into force as of November and proposes to increase the value of a qualifying home in those areas to nearly $800,000, up from approximately $500,000.

It’s one step in the right direction that could help young families need to keep them from leaving places like Victoria, said Edward Geric, a developer in Victoria who was on hand for the announcement.

“The demand has just been incredible over the last number of years which has obviously pushed pricing up in the area,” he said.

“A lot of families and their young kids are having to move up-island or away from the city, and that’s not community. So the parents and grandparents who have had their places for years are still here, but now the younger generations are being forced elsewhere.”

But realtors and mortgage brokers say the stress test for qualifying for mortgages is also too stringent and needs to be addressed.

Real estate associations representing nearly three-quarters of the realtors in Canada are calling on all federal parties to commit to easing mortgage rules.

They say too much regulation is also big part of what is making home ownership unaffordable across the country, while the CEO of the Canada Mortgage and Housing Corp. has urged the federal government to keep the rules in place to protect the economy from tragic consequences as debt levels soar.

Trudeau hopscotched east after his Victoria announcement.

He stopped first in Kamloops, B.C., where Liberal candidate Terry Lake is hoping to unseat the Conservatives’ Cathy McLeod. Lake is a former Kamloops mayor who went on to the B.C. legislature and served as provincial environment minister and then health minister.

McLeod has served three terms as the MP for Kamloops-Thompson-Cariboo but was re-elected in 2015 in a tight race, coming out on top of a three-way split with New Democrat and Liberal challengers.

And then it was on to Alberta, where Trudeau wrapped the day with a rally, about 500 supporters cheering lustily as he talked about how the Liberals have done their best to help Albertans through a bad economic time driven by low world oil prices.

“I’ve made a point of coming to Alberta, and to Edmonton, many, many times since I became prime minister,” Trudeau told the crowd. “Because this province, and its people, matter. Alberta has been key to Canada’s economic success over the course of our history … We will never pit regions of this country against each other, and you can rest assured that our government in Ottawa will always have your back.”

He emphasized the government’s $4.5-billion purchase of the Trans Mountain project, which would twin an existing pipeline to move a lot more oilsands products to port in British Columbia. It’s faced steep regulatory hurdles and the government stepped in when the private sector got cold feet. Trudeau has faced fierce criticism from environmentalists for it.

The Edmonton crowd was smaller than the one that greeted Trudeau in Vancouver the previous night but very enthusiastic. People kept shouting variations of “We love you, Justin” while he tried to speak, and he grinned back.

Not everyone was pleased Trudeau was in the Alberta capital. One heckler was escorted out by a volunteer. Outside, a man who said he works in oil and gas complained he’d been excluded from the event after he’d been given an admission bracelet and as he waited to go in.

“I never did a thing… I never said anything wrong, never said anything bad,” Patrick King said, adding he had no plans to heckle or disturb the event. “I have worked damn hard for my country and I have stood up proud as a Canadian to listen to this gentleman (Trudeau) to hear what he has to say.”

King said he’s been out of work since last November. He said he was part of the United We Roll convoy that went to Ottawa last winter, protesting inaction on pipelines and calling for reductions in immigration.

“I’m here to listen and to have Mr. Trudeau look me in the eye and tell me why he sold out my brothers and sisters in the oil and gas industry,” he said. “Here we are sitting in Alberta, starving, hurting, our oil and gas industry is being devastated and now I’m standing here after travelling across this beautiful country we call Canada, and I am trying to fight for my industry… I deserve my voice to be heard.”

The Liberals had an unusually strong showing in Edmonton in the 2015 election, winning two seats — one in the south of the city by the skin of their teeth. Trudeau’s rally was in Edmonton Strathcona, a downtown riding that’s been held by the New Democrats’ Linda Duncan, who isn’t running for re-election.

Right after the rally, Trudeau headed for the airport to fly to Trois-Rivieres, Que., where Conservative Leader Andrew Scheer had his first campaign event on Wednesday. The NDP have held that riding but both the Liberals and Tories think they’re vulnerable.

Trudeau has an announcement in Trois-Rivieres Thursday morning and then heads home to Montreal for more campaigning.

—With files from Jody White in Toronto.