The Votes Are In! What the Election Results Mean for Canadian Homebuyers
The 2019 federal election resulted in the Liberal Party being elected as a minority government under Justin Trudeau. What this means is the Liberals will need the support of other parties to pass any legislation and are subject to a non-confidence vote at any time; in other words, they need to “play nice” with the other parties.
Housing affordability has been a hot topic in Canada and was a key point in political party campaigns. Each party had varying agendas, but overall making housing more accessible to Canadians and first-time home buyers was important for most parties.
Trudeau’s Liberal Party looked to improve the First-Time Homebuyer Incentive by increasing the loan value to 10% and allow the Incentive to apply to homes up to $800,000 in major cities where housing is less affordable. In addition to implementing a foreign homebuyers’ tax, the Liberals advocated for providing accessible and affordable housing for veterans and Indigenous communities.
The Conservative Party led by Andrew Scheer sought to extend the mortgage amortization period to make monthly payments lower, while removing the mortgage-stress test for mortgage renewals. In addition, Scheer’s party looked to provide a 20% refundable tax credit to help cover green home renovations, as well as make federal real estate available to increase supply in the market.
The Green Party led by Elizabeth May looked to renovate existing housing, increase rent assistance, introduce a co-op housing strategy, and eliminate the first-time homebuyers grant.
The NDP led by Jagmeet Singh pledged to create 500,000 units of affordable housing in the next 10 years, make rentals more accessible by eliminating the federal portion of GST and HST on new rental buildings, increase amortization periods to 30-years for first-time home buyers, and increase the Home Buyer’s Tax Credit to $1,500 (from $750). Like the Liberals, the NDP Party wants to impose a foreign homebuyers’ tax.
The People’s Party of Canada led by Maxime Bernier did not have a strong housing-specific platform, though the party did address increased immigration as inflating real estate costs in major cities.
Regarding the 338 Canadian federal electoral districts, Liberals won 157 seats, Conservatives 121, Bloc Québécois 32, NDP 24, Green 3, and Others 1. The People’s Party of Canada received zero seats.
What does this all mean for Canadians?
Since many of the parties were in support of making it easier for first-time homebuyers to break into the real estate market, we should see the Liberals follow through with their agenda to improve the First-Time Homebuyer Incentive. The First-Time Homebuyer Incentive is a new program as of September 2019, so whether it will help Canadians has yet to be proven.
A foreign homebuyer’s tax might cool housing prices; the theory behind the tax is to help prevent foreign investors from driving up prices, as we have seen in the Vancouver market. In addition, the tax may result in increased housing supply for Canadian residents rather than out-of-country investors.
At best, the parties will cooperate with one another to address housing affordability and supply. A positive note is that all parties holding seats in parliament want to increase housing affordability and accessibility – having a common goal is important.
At worst, the parties will struggle to find enough common ground to pass legislation that leads to little progress in the way of an improved real estate market in Canada.
If the parties keep the interest of Canadians in mind, we should see improvements in our real estate market despite having a minority government with hoops to jump through.
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