Tembo Financial August 27, 2021 No Comments

Welcome to the second Election 2021 housing platform blog, with a quick dive into what the official opposition is proposing to do to help Canadians afford homes. The Conservatives are focusing on a platform that addresses four areas, with the first looking at boosting supply.

To “quickly” build 1M homes over three years, the Conservatives will look to transform 15% of the property the federal government owns into residential space. Tax incentives will be implemented to encourage the construction of rental units and for large landowners and businesses to donate property to trusts, and public transit will be paid for under conditions that high density housing be built close by.

Step 2 is rooting out corrupt activities that drive up prices“. This would include changes to the Proceeds of Crime Act, among others, to give law enforcement and prosecutors tools to root out aggressive instances of real estate related money laundering. The Tories would also look at the findings and recommendations of the Commission of Inquiry into Money Laundering in British Columbia, and quickly implement recommendations at the federal level.

Like the Federal Liberals, the Tories would ban foreign investors not moving to live in Canada from buying homes for 2 years, and then reviewing the policy.

The third area of focus is homelessness. The Tories want to focus on rehabilitating homeless people from drug related challenges through an investment of over $300M over a number of years.

Finally, to make mortgages more affordable, the Tories propose to:

  • Encourage a new market in seven- to ten-year mortgages to provide stability both for first-time home buyers and lenders, opening another secure path to homeownership for Canadians, and reducing the need for mortgage stress tests.
  • Remove the requirement to conduct a stress test when a homeowner renews a mortgage with another lender instead of only when staying with their current lender, as is the case today. This will increase competition and help homeowners access more affordable options.
  • Increase the limit on eligibility for mortgage insurance and index it to home price inflation, allowing those in high-priced real estate markets with less than a 20% down-payment an opportunity at home-ownership.
  • Fix the mortgage stress test to stop discriminating against small business owners, contractors and other non-permanent employees including casual workers.

There is very little fiscal firepower attached to this plan, as it focuses on stimulating market forces, leaning on crown property, and incentivizing construction through preferential tax treatment. The Tories will likely hammer away on the need to increase supply throughout the campaign, but so far, the plan shows less government involvement in housing than the other party platforms. The full Tory platform can be accessed here.

The next and final blog will examine NDP Leader Jagmeet Singh’s plans for housing.



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