HAMILTON — Canadian Prime Minister Justin Trudeau, seeking to revive his election prospects, on Tuesday unveiled a housing plan that pledged a ban on foreign buyers, a rent-to-own program and other measures to tackle soaring home prices.
Trudeau promised to build more homes and make home buying more transparent to help the many Canadians who are unable to join the housing market.
“If you work hard, if you save, that dream of having your own place should be in reach,” Trudeau said in Hamilton, Ontario, a fast-growing city outside Toronto.
The election is on Sept 20.
Trudeau, buoyed by a successful vaccination campaign, appeared to be cruising toward a majority after calling the vote on Aug 15. But support has melted away and his Liberals are now at 33% to 31% for their rival Conservatives, according to a recent Nanos Research poll.
Housing affordability is a key issue, given housing prices have sky-rocketed during the COVID-19 pandemic. The Canadian Real Estate Association’s home price index is up 69.7% since November 2015, when Trudeau first took office.
To address the demand side, the Liberals are promising to ban new foreign ownership of Canadian homes for the next two years and expand an existing tax on foreign-owned vacant housing, along with a new anti-flipping tax and a more transparent bidding process.
“We’ll crack down on predatory speculators that stack the deck against you,” said Trudeau.
He also outlined a new rent-to-own program to help Canadians turn a portion of their rent into savings for a down payment and a separate tax-free down payment savings plan for younger would-be buyers.
Trudeau’s main rival questioned his record so far.
“Mr. Trudeau has had six years and has failed,” said Conservative leader Erin O’Toole. “The housing crisis has exploded in the last three or four years under his leadership.”
O’Toole pledged last week https://www.reuters.com/world/americas/canadas-conservatives-promise-job-boom-challenge-trudeau-2021-08-16 to build a million homes over three years and also said he would ban non-resident foreigners from buying Canadian homes for at least two years.
Steve Pomeroy, a professor of public policy at Ottawa’s Carleton University, said the foreign buyer bans and measures like flipping taxes would do little to tackle affordability.
“It’s an easy target,” said Pomeroy. “But in terms of actual sales, it’s not so much the foreign buyers that are driving up home prices, it’s domestic buyers. Appreciation begets more appreciation.” (Writing by Julie Gordon in Ottawa; Editing by David Ljunggren, Jonathan Oatis and Dan Grebler)