Is Trudeau’s housing pledges possible?
Douglas Todd: Trudeaus housing promises still not materializing
Douglas Todd
The Vancouver Sun
Opinion: It’s imperative to monitor how little the prime minister has done to rein in prices that have soared 85 per cent since the Liberals were first elected in 2015.
Few things reveal Justin Trudeau’s unwillingness to seriously follow through on his housing rhetoric than his approach to foreign buyers. (Photo: PM visits housing complex in Ontario on July 20, 2021.) Photo by Cole Burston /The Canadian Press
It’s easy to lose track of Prime Minister Justin Trudeau’s broken promises on the housing crisis.
But it’s imperative to monitor how little he has done to rein in prices that have soared by 85 per cent since his Liberal government was first elected in 2015.
Few things reveal Trudeau’s unwillingness to seriously follow through on his housing rhetoric than his approach to foreign buyers, who most analysts agree have been one of the significant factors jacking up prices.
We can go back more than two years, to the fall election campaign of 2019, when Trudeau strategically came to B.C., where the unaffordability crisis had been brewing for years, to announce a tax on homes owned by foreign buyers.
Yet, when the Liberals won a minority government in October of that year, Trudeau managed to make the foreign-owners tax promise disappear from the public’s mind — despite the Conservatives and the NDP making it clear they would support it.
Then, in last fall’s election campaign, Trudeau again trotted out the same commitment, vowing a one-per-cent tax on under-utilized homes owned by non-resident, non-Canadians.
And when the Conservatives’ Erin O’Toole upped the housing-crisis ante by promising to ban foreign buyers for two years, Trudeau blatantly copied him. He also claimed he would put a tax on property flipping, spend billions on housing supply, and restrict exploitive real-estate agents.
Journalists, as a result, began talking about Trudeau’s “aggressive” new approach to the housing calamity.
But what, actually, has happened? There are, for instance, no signs his dramatic-sounding two-year ban on foreign buyers is about to become legislation any time soon.
And even Trudeau’s mild old promise — a one-per-cent tax on foreign-owned vacant homes, effective Jan. 1, 2022 — is far from reality.
The Liberal government is “diddle-daddling” on the housing disaster, says Brad Vis, MP for Mission-Matsqui-Fraser Canyon, and recent housing shadow minister for the Conservatives.
Last June, Vis introduced an opposition-day motion in the House to freeze housing purchases by non-resident foreign buyers. It was passed with the support of Conservative, NDP and Bloc MPs, but opposed by Liberals.
Still, the public would be forgiven for thinking that Trudeau’s meek campaign promise to tax foreign nationals’ under-utilized homes would be running by the beginning of this year, since that’s when it was supposed to go into effect. But, with the Liberals largely avoiding parliament last year, it took until mid-December to even become a legislative proposal.
It is important to make sure it’s “not easier for foreign buyers, who often possess a taxation advantage over Canadians, to use that advantage to outbid Canadians in the housing market,” says Conservative MP Brad Vis, the party’s shadow minister on the B.C. economy. Photo by Christian Diotte /Christian Diotte, HOC-CDC, 2021
The Liberals have “only tabled the (tax) legislation in an omnibus bill that hasn’t been debated in parliament,” said Vis. “So we could have months of debate and committee study and then have to go through the Senate as well. We’re months away from any kind of foreign-buyers tax.”
A multi-pronged response to the housing tragedy is necessary, Vis said, because Canadians, and young British Columbians in particular, “are having a harder and harder time, even on a six-figure salary, to even consider owning a home. For many, it’s impossible.”
In addition to tackling the ways housing supply, low interest rates and immigration levels impact housing costs, Vis said it is important to make sure it’s “not easier for foreign buyers, who often possess a taxation advantage over Canadians, to use that advantage to outbid Canadians in the housing market.”
Vis is far from alone in his thinking. Even the Liberals’ former secretary of housing, Adam Vaughan, admitted as much last year when he said Canada has become “a very safe market for foreign investment … but it’s not a great market for Canadians looking for choices around housing.”
With national home prices rising another 26 per cent year-over-year in December, Vis charges Trudeau with “negligence.”
Even the Liberals’ potential bill to tax non-foreign owners reveals significant loopholes. Were it to go ahead, the party wants to exempt non-Canadians who buy what it calls “recreational properties,” including one a family member lives in for just four weeks a year.
Whatever comes of the bill, dubbed C8, it is also a far cry from a two-year ban on all foreign buyers. And it doesn’t come close to Singapore’s recent decision to slap a 30-per-cent surtax on all foreign purchases , as well as a five-per-cent tax on first buys by permanent residents.
The modest bill also would not match the foreign-buyers’ taxes B.C. and Ontario already have in place to cover urban centres. And it doesn’t touch one of the many problems related to foreign capital (as distinct from foreign buyers) that B.C. has tried to address with its 2018 speculation and vacancy tax, which in part targets “satellite families” who earn more than half their income offshore.
Citing the work of former SFU prof. Josh Gordon , Vis recognizes many immigrants, especially professionals, who buy houses in Canada are doing so with equity from their homelands. “I don’t blame them for that,” he said, “but for Canadian citizens, it’s another stoke in the fire” of unaffordability.
To be clear, it is not only Trudeau who has been painfully lacklustre on housing. As UBC prof. Paul Kershaw, founder of Generation Squeeze, said Wednesday, Canadians are now hearing a lot about our inflation woes.
“But it’s surprising that this story is only just taking centre stage when rampant inflation to the largest expense faced by all Canadians — housing — has been the norm for the last 20 years.” Since 2000, he said, average home prices have risen by a “whopping 318 per cent.”
Still, Trudeau, now in his seventh year in power, took until last September’s election to construct his apparent wall of housing pledges. And, unlike the possible tax on non-resident owners, his other verbal commitments are not yet even possible bills.
When Postmedia asked Housing Minister Ahmed Hussen this week about the party’s vows, his media official responded with what has to be called more verbiage, saying the minister recognizes “the dream of home ownership has become out of reach for far too many Canadians.” Hussen was doing all he could to “consult” and “work with every tool” to bring about affordability. No legislative deadlines were offered.
Nevertheless, despite what often seems a Liberal haze of smoke and mirrors, the party keeps winning minority governments by snagging one-third of the popular vote, in part on the strength of Trudeau’s so-far hollow housing promises.
His election machine capped off the September vote by grabbing all but a handful of the 79 ridings in Greater Toronto and Metro Vancouver, where housing costs have long been the worst, not only in Canada, but in much of the world.
Go figure.
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