Policies at every level of governance drive up the cost of housing by restricting supply and by increasingconsumer-side burdens through taxes and fees, according to a top official of the Canadian Taxpayers Federation.
Reports of the Canada Mortgage and Housing Corporation considering a home equity tax – while subsequently proven to be “misleading”– emphasized the central role that the government plays inprice levels, said Jasmine Moulton, Ontario director of the CTF.
“A home equity tax would be but the latest example of politicians using housing as their personal ATM,” Moulton said. “More taxes won’t increase affordability. … Instead of addressing their own regulations that suffocate supply, governments have instead focused on red-herring policies to suppress demand, such as targeting foreign buyers.”
These measures, ostensibly implemented to protect domestic buyers, have proven unsuccessful even in their stated purpose, Moulton said.
“Ontario’s non-resident speculation tax collected a meagre 156 payments in Toronto in the first quarter of 2019 – this in a city that expects to grow by 41,000 people per year,” Moulton said.“Foreign buyers are a drop in the bucket. Vancouver’s foreign-buyer tax also failed. No wonder.”
Improving inventory would be a long-term solution, but authorities need to get at it sooner than later.
“Governments could increase supply by acting promptly and reasonably on zoning matters,” Moulton said.“In Ontario, re-zoning can take up to seven years and there’s currently a lengthy backlog, including 100,000 units held up in Toronto alone.”