April 7, 2022
TORONTO - Today, Finance Minister Chrystia Freeland tabled the 2022 Federal Budget with a message aiming at Canada’s housing crisis. Included is a two-year ban on foreign buyers, a new savings vehicle for first-time buyers, and $10B of investments in housing initiatives over the next 5 years. However, in light of rocketing housing costs in cities across Canada, the Finance Minister’s policies are like trying to stop a forest fire with a water gun.
One campaign promise delivered on is the introduction of a temporary Foreign Buyers ‘Ban’. “Foreign buyers are often vilified and easy scapegoat in Canada’s housing discourse”, said More Neighbours volunteer Bilal Akhtar, “Both domestic and foreign speculators have a role in Canada’s housing market, the Federal Government clearly believes that the foreign speculators are the only demographic that they can target politically”.
Another highlight is the creation of a new tax-free savings vehicle allowing first time buyers to avoid capital gains on up to $40,000 (in increments of up to $8,000 every year) in savings for down payments. This benefit pales in comparison to the unlimited capital gains exemption on homes, representing upwards of millions of dollars in exempted gains for long-time homeowners. The unfairness in tax treatment between those who own and those left out is disgraceful, and it is time to consider policies that will treat renters equally.
In the same vein, the first-time home-buyers tax credit was doubled to provide $1,500 and the first-time home-buyers incentive programme was extended to 2025. “These programs might be good politics but they are terrible policy”, said volunteer Jacob Dawang “this funding would have a greater impact if used to directly address the housing shortage or to fund affordable housing for those struggling the most.”
Of the $10 Billion earmarked for expanding housing supply, $2.5 billion will be targeted directly at the creation of new homes; this includes $1.5 billion that will fund the rapid housing initiative for another two years, and the creation of 6,000 units targeted at the most vulnerable Canadians. “Wouldn’t the $1.2 billion in the first-time buyers incentive programme achieve greater good if diverted into the rapid-housing initiative?” asked More Neighbours volunteer Colleen Bailey, referring to the unclaimed funds remaining in the incentive programme.
An additional $4 billion is going to be directed to incentives for provinces and municipalities to accelerate the approval of new housing. This value, representing $250m to the City of Toronto, is unlikely to be a big enough carrot to encourage needed reforms when those reforms in of themselves would benefit cities financially. Money doesn’t solve NIMBYism.
“The government may have adopted the language of the housing crisis but, words are cheap just like their actions”, lamented volunteer Rocky Petkov, “this budget demonstrates a lack of the ambition required to confront this crisis.”.
The budget gets the directions on some things right - even if it's off scale from the reality on the ground. More loans and grants for low-income housing providers, and new funding to expand co-operative housing starts, are correct moves. However, the devil is in the details; plus, the amount of funding could be insufficient. "$500 million to incentivize co-operative housing starts across the country might sound like a lot, but seeing as land acquisition and construction is a major hurdle for co-ops, that amount falls short when considering land values in Toronto and Vancouver", said Petkov.
“Provinces may have power over planning and land use but the federal government is more influential than they let on”, suggested Eric Lombardi, another advocate, “if the federal government chose to leverage all its tools and resources, it could be possible to imagine a future in which young Canadians could afford a home. Once again, our leaders have left everyone dreaming of attainable housing out to dry through inaction.”
Media contact: Eric Lombardi, firstname.lastname@example.org
More Neighbours Toronto is a volunteer-only organization of housing advocates that believe in building more multi-family homes of all kinds for those who dream of building their lives in Toronto. We advocate for reforms to increase our city’s ability to build more homes in every neighbourhood. We are a big-tent organisation with members across the political spectrum who are nevertheless committed to counterbalancing the anti-housing agenda that dominates Toronto's politics, created an affordability crisis, and has cost burdened a new generation of aspiring residents. We are firmly committed to the principle that housing is a human right and believe Toronto should be inclusive and welcoming to all.