A house or a condo is more than a place to sleep and go to after a long day at work. When a family moves into a house, they turn it into a home, a refuge from the world. A national poll in 2018 showed that 75% of Canadians believe that a middle-class family should be able to own a home, but 76% of Canadians think that without change only the rich will be able to afford a home in a neighborhood that they want to live in. Despite this, home ownership is becoming increasingly difficult for every day Canadians, and the Liberal government under Justin Trudeau is making it even harder.
In October 2016, the Liberal government introduced changes to Canadian mortgage rules, which made it more difficult for Canadians to qualify for a mortgage. The changes were designed to deal with rising housing prices in Toronto and Vancouver, without consideration for the impact on the rest of the country. The changes, which were implemented without consultation, have been a failure. While they were designed to deal with situations in Toronto and Vancouver, the one-size-fits-all approach is hurting housing markets across the country. These changes have made it much more difficult for first-time home buyers to buy a home. They have also hurt the residential construction industry across the country, which is a key economic driver in every community in Canada, creating 1.2 million jobs and creating $150.9 billion in economic activity. It has been clear for some time that the Liberals’ policy hasn’t been working.
Instead of fixing their mistakes in the 2019 budget, the Liberal government tried to apply a band aid. The Liberals implemented a First-Time Home Buyer Incentive, which loans 5% on existing houses and 10% on new builds, to households making less than $120,000, on mortgages that are insured by the Canada Mortgage and Housing Corp. and no more than four times the household’s total income. These loans are paid back when the house is sold. Unfortunately, while it looks good on paper, it would have virtually no effect in the most expensive housing markets, like Vancouver or Toronto.
Secondly the Liberals’ increased the RRSP withdrawal limit for the Home Buyers’ Plan to $35,000, but have pushed the dream of homeownership further away by making it harder to save for a down payment by increasing taxes. 80% of middle class Canadians are paying higher taxes under the Liberals, and nearly half of all Canadians are within $200 of being unable to pay their bills at the end of the month. Letting Canadians use more of their savings to buy a home, while nickel and diming them so that it is impossible to save isn’t a solution. Canadians need a real plan, that accounts for the complexities of the various regions and markets, and for life to be more affordable, so that first-time homebuyers can realize their dream of home ownership.