Ottawa, ON: Today the Federal government released their budget, which includes a significant portion addressing the housing crisis. Major policy announcements include a ban on blind bidding, a new tax-free First Home Savings Account, a foreign buyer ban, and $4 billion for municipalities who grow quicker than the historical average.
The Consumer Choice Center’s Toronto based North American Affairs Manager David Clement responded stating “Unfortunately, the government’s housing plan is not bold enough to properly tackle the housing crisis and effectively deal with the issue of chronic undersupply.”
“They’ve proposed a ban on blind bidding, which has already been shown to have no impact on prices and does nothing to increase supply. Their foreign buyer ban is yet another policy that is attempting to tinker with demand, without addressing supply. And while some of Ottawa’s response will allow for consumers to save more, like the Tax Free First Home Savings Account, these tax policy changes also do nothing to increase the supply of housing,” said Clement
“The only supply side policy the federal government has announced is their earmark for communities that grow at a quicker pace than the historical average. The government’s own estimate states that this could result in the building of 100,000 new homes by 2025, but the problem is that a province like Ontario needs another 650,000 new homes just to get to the national average, which wouldn’t be much to celebrate considering that Canada ranks dead last in the G7 for housing units per 1000 people,” said Clement.
“Rather than tinkering with demand and an underwhelming earmark program, the federal government should have focused on zoning reform. The federal government could quite easily tie federal funding for affordable housing and public infrastructure to density goals, with zoning reform as the core mechanism to achieve it. This would be broadly similar to the recent child care agreements which involve the transfer of federal dollars in exchange for a set of provincial deliverables,” said Clement.