“There’s a lot of smoke and mirrors here,” said David Hulchanski, a professor of housing and community development at the University of Toronto. Federal Finance Minister Chrystia Freeland told the House of Commons on Thursday that housing is “the most pressing economic and social issue in Canada today,” and therefore a central element in the Liberals’ budget. The numbers underscore the urgency of the problem. Prices are so high in most markets across the country that nine out of 10 would-be home buyers surveyed in a recent poll said they had given up on their dream of owning a home. The average price of a home in Canada has doubled since the Liberals took office in 2015, reaching $ 816,720 in February. That number is much steeper in the greater Toronto area, rising nearly 28 percent year-over-year to $ 1.3 million in February. David Hulchansky, deputy director of research at the University of Toronto’s City Center, says some of the federal budget measures will stimulate demand, which is already contributing to rising property prices. (Dwight Friesen / CBC)
But Hulchanski said the measures outlined by Freeland on Thursday would not make much of a difference overall. Her reduced budget included doubling First-Time Buyers’ tax credit, providing up to $ 1,500, creating a tax-free savings account for those who want to buy their first home, and a one-time payment of $ 500 to “affordable housing”. Hulchansky said the measures stimulate demand, which is already high and initially contributes to the spike in prices. “[The government is] “Playing a very … micropolitical vote game in and around Toronto and Vancouver,” he said.

Measures help “set a certain income threshold”

To boost supply, the federal Liberals are launching a “Housing Acceleration Fund” to streamline approvals for municipalities to build new subdivisions. “It definitely helps those who are within a certain income threshold,” said Nemoy Lewis, an assistant professor in the School of Urban and Regional Planning at Ryerson University. Nemoy Lewis says the federal budget does not meet the needs of the most vulnerable in terms of affordable housing. (Submitted by Nemoy Lewis)
“Providing a simple supply does not necessarily mean that it will equate to an affordable price.” Lewis said the people who will be able to benefit from a tax-free savings account are those who have money to save initially, which is not always the case with low- and middle-income people. Hulchanski said the $ 562 million in two years for the federal Reaching Home strategy for homelessness was not really as significant as the budget for prospective homeowners.

Foreign home buyers

The budget also includes a two-year temporary ban on foreign home buyers, but John Pasalis, president of Toronto Realosophy Realty, said they represent only a fraction of the market. “It is not the main lever of the rapid rise in house prices,” he said. Statistics Canada has released data showing that Ontario’s non-resident ownership rate was 2.2 percent in 2019. There are also many exceptions, including permanent residents and foreign students and employees. People who buy their main home are also excluded. “[This] “It means it is unlikely to have a big impact,” he said.

Ontario Housing Strategy

However, the Ontario government welcomes the federal budget, saying it will complete its own plan. At Queen’s Park on Thursday, Home Affairs and Housing Secretary Steve Clark said the Ottawa plan “will build on the success of what the prime minister and I announced in January,” a $ 45 million effort to speed up growth approvals. Last week, Ontario tabled its own housing bill which, in part, focuses on streamlining planning at the municipal level, suggesting that the local approval process in place slows down housing construction and raises prices. Home Affairs Minister Steve Clark, whom we saw here asking questions at Queen’s Park last month, says the federal budget measures will complement the county government’s own plan. (Evan Mitsui / CBC)
Ontario NDP leader Andrea Horwath said her party was “optimistic” that restraining international home buyers would help, but blamed the Progressive Conservative government of Premier Doug Ford for not doing more to protect tenants and stop speculators. In a statement, Ontario Liberal leader Steven del Duca also targeted the Ford government. “The Liberal federal government is doing the heavy lifting, and the Ford Conservatives are at their disposal.”