To tackle Canada’s housing affordability crisis, governments need to do two things. First, they must build more homes of all types. Second, they must lower the taxes and fees Canadians pay to find an affordable place to call home. Today’s Federal Budget gets it right on supply but needs to be careful about the impact of tax measures on housing supply and affordability. 

The Budget continues the government’s vital work announced last week as part of the Canada Housing Plan which will help deliver 3.87 million homes over the next ten years. The Toronto Regional Real Estate Board (TRREB) is encouraged to see more information on commitments in the Canada Housing Plan to build new homes. TRREB is a strong proponent of the federal government maximizing the use of its land assets to spur new construction of homes families can afford. 

The Budget also announces a higher tax on capital gains and a consultation on the taxation of vacant land zoned for residential housing. These measures could work against Canada’s housing affordability goals. For example, hiking the capital gains tax could increase the costs of converting underused commercial property into new housing. Similarly, hiking taxes on vacant lands zoned for residential is a risky measure that may result in costs passed on to new home buyers. 

No plan from any level of government that proposes to end the housing affordability crisis can achieve real progress unless it addresses the government taxes, fees, and charges on housing. 

Jennifer Pearce
TRREB President