Housing A Priority in 2022 Federal Budget
On April 7, the Deputy Prime Minister and Minister of Finance, the Honourable Chrystia Freeland tabled “A Plan to Grow Our Economy and Make Life More Affordable”, the first budget of the 44th parliamentary session. As anticipated, this budget is heavily focused on addressing the housing crisis in Canada and acknowledges the importance of housing to both individual Canadians and the Canadian economy.
In her address to Parliament, the Deputy Prime Minister stated: “Housing is a basic human need, but it is also an economic imperative. Our economy is built by people, and people need homes in which to live. But Canada does not have enough homes. We need more of them, fast.”
This Budget highlights the impact and success of consistent, unified, and disciplined REALTOR® community advocacy over the last number of years. This Budget implements many of the asks we have put forward to Parliamentarians, a recognition of the important role REALTORS® play within both the housing and advocacy sector. REALTORS® should be proud of their efforts to highlight: the dire need for more supply across the entire housing continuum; the need for governments at all levels to work together to address the issue; the role federal infrastructure dollars can play to incent provinces and municipalities to build more supply; and the primacy of provincial jurisdiction related to the rules surrounding real estate transactions.
Significantly, the government acknowledges a need to build 3.5 million new homes by 2031, and sets a target of doubling the rate of construction of new housing units over the next decade.
Specific REALTOR® advocacy positions that are included in this budget include:
- Creating flexibility to tie access to infrastructure funding by province, territories and municipalities to increase housing supply;
- A new Housing Accelerator Fund that will spend $4B over five years to support updated processes and systems, and encourage municipalities to build 100,000 (net new) housing units;
- Leveraging transit funding to build more homes;
- Doubling the First Time Home Buyers’ Tax Credit;
- Implementation of the promised Tax-Free First Home Savings Account;
- Implementing the promised Multigenerational Home Renovation Tax Credit; and
- Implementing a publicly accessible, beneficial ownership registry of corporations governed under the Canada Business Corporations Act by 2023.
Additionally, the government has committed to a variety of other measures related to the housing sector:
- Support for Rent-to-Own Projects to assist Canadians on to their path to homeownership;
- A new Co-Op Housing Development Program;
- $1.5 billion for new affordable housing spending through the Rapid Housing Initiative;
- A review of housing as an asset class, in order to better understand the role of large corporate players in the market and the impact on Canadian renters and homeowners;
- Restrictions that would prohibit foreign commercial enterprises and people who are not Canadian citizens or permanent residents, from acquiring non-recreational, residential property in Canada for two years;
- New rules to ensure profits from flipping properties are taxed “fairly.” These proposed rules will be triggered when a property is held for less than 12 months. The government notes, importantly, the measure is intended to make sure flippers pay their “fair share, while protecting the current, vitally important, principal residence exemption for Canadians who use their houses as homes.”
- An extension of the First Time Home Buyer Incentive, and a review to make the program more flexible and responsive;
- Investments in housing for Indigenous Communities;
- Doubling the Home Accessibility Tax Credit to $20,000 for 2022 and the subsequent tax years, accounting for a tax credit of up to $3,000; and
- The government proposes that all “assignment sales” of newly constructed or renovated residential housing be taxable for GST/HST purposes. This will come into effect May 7, 2022.
The Liberals remain committed to developing a home buyer “Bill of Rights” that will include a ban on blind bidding, as well as a potential legal right to home inspection. The government has taken our warnings and understands the primacy of provinces in setting these rules and states they will work with provinces and territories over the next year to bring forward a “national plan.” We will continue to engage with government on this issue during their consultations. Balancing the right of sellers with those of buyers; asserting provincial jurisdiction in this area; and protecting the rights of homeowners are the values that will guide our submissions.
The attention the housing sector has received within Budget 2022 is unprecedented, and CREA’s Government Relations team will be active within the coming weeks to develop a full understanding of the implications of the varied proposals, and to represent REALTOR® positions with decision makers. We will work with boards, associations and REALTOR® PAC Reps to present a unified approach.