Economy1 hour ago (Aug 24, 2021 05:16PM ET)
© Reuters. FILE PHOTO: Canada’s Liberal Prime Minister Justin Trudeau visits a veterans’ retirement home during his election campaign tour in Victoria, British Columbia, Canada August 19, 2021. REUTERS/Kevin Light
By Steve Scherer and Julie Gordon
HAMILTON, Ontario (Reuters) -Canadian Prime Minister Justin Trudeau, seeking to revive his election prospects, on Tuesday unveiled a new housing plan that pledged more supply, a ban on foreign buyers and other measures to tackle soaring home prices.
“If you work hard, if you save, that dream of having your own place should be in reach,” Trudeau said at a campaign stop in Hamilton, 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 faded and his Liberals are now at 33%, just ahead of the Conservatives, according to a recent Nanos Research poll.
Housing affordability is a key issue, given housing prices have sky-rocketed during the pandemic. The Canadian Real Estate Association’s (CREA) home price index is up 69.7% since November 2015, when Trudeau first took office.
Trudeau outlined a new program to let Canadians turn part of their rent into down payment savings and a separate tax-free savings plan for young buyers.
The Liberals also promise to ban new foreign ownership of Canadian homes for two years and expand a tax on foreign-owned vacant housing, along with a new anti-flipping tax and more transparency for buyers
“We’ll crack down on predatory speculators,” said Trudeau. “No more blind bidding.”
Blind bidding is a common practice in which buyers submit an offer not knowing what others may have bid. It can be abused to inflate selling prices, opponents say.
Canada’s real estate agents said a ban would not address price escalation, pointing to auction-style bidding wars in countries like Australia.
“Open bidding is still bidding,” CREA said. “Home ownership remains out of reach for millions of Canadians because there is not enough housing supply.”
Trudeau and Conservative leader Erin O’Toole both pledge to build more housing and promise temporary foreign buyer bans.
“Mr. Trudeau has had six years and has failed,” said O’Toole. “The housing crisis has exploded in the last three or four years.”
Steve Pomeroy, professor of public policy at Ottawa’s Carleton University, said the focus should be on building the right supply in the right place.
“In my neighborhood, people are knocking down old houses… and building a semi- (detached house) with two units and selling them for C$1.4 million,” he said. “That adds supply, but does it make it any easier for families to get into these homes?”
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