Re-elected Liberals offer new incentives and programs to deal with inflated housing market
Faced with skyrocketing real estate prices that are shutting an increasing number of house buyers out of the market, the Trudeau Liberal government’s new Minister of Housing, Diversity and Inclusion says Ottawa will be coming to the rescue with new incentive programs aimed especially at potential young home buyers.
House prices soared
According to the Canadian Real Estate Association, the average price of a home in Canada has gone up more than 50 per cent in the last five years.
Nationally, the average home price in September – when Canadians went to the polls and elected a new Liberal government – was up 13.9 per cent over the same month the year before.
“The current election has made it very clear that housing is a top priority for Canadians,” Ahmed Hussen said in an interview with Newsfirst Multimedia. He noted that the government introduced a proposed housing plan during the election campaign that would build on a foundation based on an earlier Liberal housing policy.
Helping first-time buyers
In addition to provisions to build more affordable housing including rental units, the wide-ranging plan also includes new programs for “rent-to-own,” which “should give more first-time home buyers, especially young Canadians, the ability to buy their first home,” said Hussen.
“We’ll also be implementing a promise to introduce a first-time home buyer tax-free savings account,” he continued, noting that account holders will be able to put in up to $40,000 tax-free as a down payment. At the same time, he said the federal government will be continuing a first-time home buyer incentive program to help with first-time home purchases.
Funds for cities and towns
As well as these programs focused on families and individuals, Hussen said Liberal government programs introduced during the Covid pandemic are making significant sums available to towns and cities for “100 per cent federally-funded rapid housing solutions for the most vulnerable in our communities, including the City of Montreal, which got money to build over 312 new permanent affordable housing units for the most vulnerable residents of Montreal.”
One of the persistent problems that officials from certain municipalities like Montreal have expressed has been their inability to put together a “bank” of purchased properties to be developed into low-cost or social housing, because of the steep prices now being demanded in a very competitive real estate market.
Municipalities and housing
With this in mind, Hussen said his ministry wants to set up a $4 billion accelerator fund to “incentivize municipalities to build more affordable housing, to build more housing supply and to overcome some of the barriers to building more housing. That includes, for example, helping municipalities purchase land, overcoming some of the other hurdles.
“And we want to make sure there is more supply of housing in Canada so that we can meet the really high demand for housing. So, that $4 billion fund will be application-based, and we will encourage municipalities to do everything that they can to bring forth measures that will encourage more housing supply fast.”
‘We need more housing’
Hussen said this measure and others currently being offered by the federal government will encourage “and really help municipalities overcome some of their challenges. We need more housing supply in Canada, we need more affordable housing.
“We also need more mixed housing and we need more housing built around transit. All of those things encouraging more accessibility and energy-efficiency in housing projects are something we have supported in the past, but we will be able to even more with the commitments we made during the election.”
Foreign home investment ban
Hussen reiterated that the Liberal government plans to honour a pledge made by the Liberals prior to the September election that they would introduce a two-year ban on investment by non-Canadians in home ownership as one of several means to deal with the problem of housing affordability in Canada.
“We promised a two-year ban on foreign investment – not foreign ownership – moving forward,” he explained. The proposed restriction would be an attempt by Ottawa to calm the Canadian housing market, which soared during the Covid-19 pandemic and has yet to cool down, while inflation takes a toll on the stability of the country’s economy.
