Back to Blog May 6, 2024

Government Steps In With Some Housing Hope

Barbara Lawlor

In the recently tabled federal budget entitled “Fairness for Every Generation,” the Liberal government included several steps aimed at easing housing affordability and availability in Canada. The big news was that to help younger home buyers, the budget targeted Canada’s highest earners with an increase on capital gains tax for those who will have more than $250,000 in capital gains in a year. The first $250,000 would remain at one-half, while anything above that would be taxed at two-thirds. These amendments to the Income Tax Act, which have been hotly contested, would take effect on June 25th of this year – but it was just announced that the amendments will be removed from the Budget and voted on separately.

These changes would affect Canadians with an average income of $1.42 million. I applaud the concept of fairness to help our housing situation, especially in the face of the overwhelming demand for homes by newcomers to Canada. I question, however, how fair it is to older Canadians who have worked hard for decades to assemble wealth – and who may now decide to hold on to their second or third residences rather than selling them and increasing badly needed supply. It may also dissuade condominium investors. Wealthy Canadians are already hit with an onerous level of taxation. Time will tell whether voting on the changes separately will make a difference.

The budget covered other steps geared to increasing supply with policy initiatives designed to build 3.87 million homes by 2031. Among these, I find the most feasible the $600 million for innovations in modular and prefabricated homes and the $15 billion to top-up the Apartment Construction Loan Program. This sounds wonderful, but does the math translate? During Trudeau’s years as Prime Minister, an annual average of 230,000 housing starts were reported, bringing the number of homes under construction to over 350,000. Yet, CMHC says we need twice as many to keep up with demand. How are we going to see more than 500,000 new homes built every year for the next seven years?

Of course, the 30-year mortgage amortization for first-time buyers change will take effect o August 1st, which is brilliant – but that should have been done across the board for all buyers. That would have done a lot to help instill confidence in the entire market.

I do think the “public lands for homes” strategy is a wise one. Selling off unused and underused publicly owned properties for residential development just makes so much sense. These lands should be put to better use. So, I say let’s have a round of applause for that!

You can read the budget at

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