Finally I'm not the only one in the room arguing housing is a demand issue, not a supply issue. Two efficient and key suggestions below.
On the demand side, in reality, there are no restrictions for anyone in the world to buy a property or housing in Canada. A buyer does not even have to be or live in Canada. Canada could build housing in the tens of millions, possibly hundreds of millions, and still they would be scooped up. Foreign buyer tax or not, FINTRAC or not. A housing supply augmentation of these proportions to allow Canada's housing market "to be in balance" is unrealistic.
It has been tried to slow down the foreign buyer with taxes, etc. However, there are so many ways to avoid this it is a policy seive, but looks good on those that invoke it.
As referred in article, this Liberal government has been absolutely reckless in its approach to immigration with no foresight on its impact to healthcare, infrastructure, pensions, sheer numbers of employees required in the IRCC, extra services borne by three or four major urban centres AND housing.
Of note, the overwhelming majority of 401,000 permanent residencies awarded in 2021 were to those already in Canada and in the application system (due to covid restrictions, travel impacts, etc. The goal to be reached by those typically from outside Canada was severely impacted). To reach the goal, the qualifying scores for permanent residency were also reduced drastically and in many cases health exams were waived (during a pandemic health crisis) for those already in Canada. The statement that 401,000 new permanent residents travelled to Canada, the best and brightest, were legally approved to enter Canada and added to Canada's housing demand is not true.
Two suggestions to housing policy that do not require an unrealistic amount of new houses, construction, re-zoning, red tape removed:
1) those arguing that housing is something Canadians/permanent residents/residents want to buy, raise families and stay in a long time, then why is the tax free status on the average homeowner's largest purchase attained after only 365 days according to CRA? If it truly is a long term investment and a place of stability and longevity, then why aren't homes made tax free after a longer period of time or a graduated scale? Say over 10 years (see Germany). This would stop many flippers (buy, renovate, live in it one year, sell it) and the speculators (buy pre-construction condo, assign it to another buyer within months or sell upon closing, book gain, repeat) at the same time satisfy those current homeowners as well as assist those entering the housing market while the government the government's capital gains tax revenues may increase slightly yet mitigated by reduced speculation.
2) The institution of immigration needs to be made independent from any overly zealous, whimsical government election promises that deal in huge, pleasing, round numbers in the hundreds of thousands without any backing "data and science" demonstrated to Canadians. Independent, much like the Bank of Canada and the Courts are independent, and away from the vote generating bias of such governments (seeking a majority at all costs) and policies that make promises beyond the resources they have.
"...To put the challenge in context, Ontario has about 5.5 million housing units now. It had over 100,000 housing starts last year, the highest level in over 30 years. The task force uses the more conservative number of 75,000 starts achieved in 2020 as a baseline, but either way, the increase required is daunting.
In the Stephen Harper years, immigration was around 250,000 per year. When Prime Minister Justin Trudeau was elected in 2015, he set higher targets. In 2021, despite the pandemic, Canada admitted 401,000 new residents, the highest number in a century.
Census data released this week show that Ontario’s population grew 5.8 per cent between 2016 and 2021 and 80 per cent of that growth was immigration. The province received nearly twice as many immigrants as it had in the previous five years.
Given the flood of new demand, it’s no surprise that Ontario’s rules-bound housing industry hasn’t been able to produce adequate supply. The lack of housing is not just a problem for new immigrants, but also for Ontarians who don’t have the money to compete in the home-buying and rental markets.
Census data released this week show that Ontario’s population grew 5.8 per cent between 2016 and 2021 and 80 per cent of that growth was immigration. The province received nearly twice as many immigrants as it had in the previous five years.
The Ontario government’s focus on supply is useful, but unless demand is addressed as well, housing shortages will continue indefinitely...."
https://nationalpost.com/opinion/randall-denley-fixing-supply-is-one-part-of-solving-ontarios-housing-crunch-immigration-is-another
https://financialpost.com/real-estate/ontario-must-double-housing-production-to-improve-affordability-task-force-says
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