Housing Affordability
This analysis is current as of October 21, 2019. You can find the complete Voter's Guide (covering housing, family, climate and public finance here)
👆 These summary scores are produced from an analysis of 9 separate criteria, as described below.
Table of Contents
Introduction
This election, Generation Squeeze is undertaking a rigorous assessment of federal party platforms and commitments on four key issues: housing affordability, climate change, family affordability, and generational fairness in public finance.
Our mission: to help voters better understand how far each party's platform goes towards actually solving big problems facing young people today.
Instead of simply listing party promises, our assessment attempts to make meaning of those promises, individually and in aggregate, by:
- Publishing a comprehensive, evidence-based policy framework for addressing each issue, beginning with a clearly stated goal
- Translating each framework into a set of key criteria
- Assessing the degree to which each major party’s platform addresses the key criteria. The resulting analysis includes:
- Criteria table and scores, where party platforms and commitments are given a score based on the extent to which they meet the stated criteria.
- Detailed commentary that explains how a score was assigned, as well as the assessed strengths and weaknesses of each commitment.
For the 2019 federal election, Gen Squeeze is focusing our analysis on the four major parties who began the race with at least one MP who was elected as a representative of that party, and who are running a national slate of candidates. This includes the Conservative Party, the Green Party, the Liberal Party, and the New Democratic Party.
Gen Squeeze does not aim to tell you who to vote for, or to portray any party in an inherently favourable or unfavourable light.
Read more about our detailed methodology here.
Housing Policy Framework
Our housing affordability framework draws on the work of the Housing Research Collaborative, a collaboration of academics and community stakeholders (including Gen Squeeze) hosted at the University of British Columbia. This framework is most recently reflected in the report Housing Policy Framework and Policy Options for the 2019 Federal Election. Our housing framework also draws on the findings of Gen Squeeze's 2016 "Building Housing Common Ground" session and report, which sought areas of common ground between a range of stakeholders from across the housing system. Read more about our framework design here.
Gen Squeeze Housing Framework:
Scores
We've translated our housing policy framework into 9 key criteria. Parties are assigned up to one point for their platform's response to each, as outlined in the following table. The full scoring methodology is described below.
Note for mobile/smartphone device users: The table below may not display properly on your smartphone screen. If the table appears to be cut-off, please return to this page on a desktop/laptop computer. We apologize for the inconvenience.
| Criteria used to assess party platforms |
Party scores |
|||
| CPC | GP | LPC | NDP | |
| CLEAR GOALS AND PRINCIPLES | ||||
|
Commits to adopt the Canada Mortgage and Housing Corporation goal that “By 2030, everyone in Canada has a home that they can afford and that meets their needs," or a similarly clear and ambitious goal. |
0 | 1 | 0.5 | 0.5 |
| Demonstrates a commitment to the principle of “Homes First”, which at its core means treating housing and residential land simply as a place to call home, not a way to get rich. The bottom line is that we cannot make housing more affordable while at the same encouraging home values to increase (faster than local earnings). Policymakers need to choose. | 0 | 0 | 0 | 0 |
| Commits to a Phase II of the National Housing Strategy which means expanding the scope of the current National Housing Strategy to (a) serve all Canadians struggling to find a good home, including all ~1.7 million households currently in core housing need (the current NHS aims to serve ~500,000 households), in part by (b) addressing all of the forces that shape the regular housing market upon which most Canadians rely (the current NHS largely focuses on the non-profit/community housing market). | 0.5 | 0.5 | 0.5 | 0.5 |
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|
|
|
|
|
| SCALE UP THE NON-PROFIT MARKET |
|
|
|
|
| Action to strengthen the current National Housing Strategy, including by shoring up the existing stock of community housing, expanding the stock of community housing, and creating special strategies to serve the most vulnerable. |
0.5 |
1 |
0 |
1 |
|
|
|
|
|
|
| ADJUST THE DIALS OF THE REGULAR MARKET |
|
|
|
|
| Action to dial up the right kind of supply in ways that combat sprawl and encourage density and mixed-use in urban land already reserved for residences (protecting land required for industry, farming and green-space), with an emphasis on protecting/stabilizing existing affordable supply, adding so-called "missing middle" housing, family-sized units and purpose-built rental, and incorporating low/zero-emission goals into supply-side housing policy. |
0 |
-0.5 |
0 |
0.5 |
| Action to dial down harmful demand, including from (a) money launderers, speculators, foreign buyers, tax cheats, house flippers, short-term rental operators, and also (b) from more 'mundane' but pervasive sources of domestic investment demand, including everyday Canadians who problematically turn to housing and land to earn a profit – via equity gains, secondary unit rental income or both – instead of putting that capital into productive investments like stocks and bonds, or alternatively into the construction of secure, "purpose built rental" and (c) from Canadians who, lured by loose mortgage regulations, borrow and bid more than they can realistically afford. |
+0.5 -0.5 0 |
0.5 |
0.5 |
+0.5 -0.5 0 |
| Action to address wealth inequalities created by housing, between renters and owners, and between older and younger demographics, for example by rebalancing the way we tax income vs. housing wealth (whether at the time of purchase, the time of sale, or annually through the duration of ownership). |
-1 |
0.5 |
0 |
0.5 |
|
Action to de-risk the market against a decline in prices, acknowledging that unless Canadians' earnings dramatically increase (unlikely), the only way to close the affordability gap is to carefully rein in housing and land costs for first-time and other homebuyers – and indirectly for renters – while simultaneously mitigating the risks such a decline creates for highly leveraged households and the Canadian economy. |
-0.5 |
0 |
0.5 |
0 |
| Action to improve housing data, including with a national beneficial ownership registry, additional information on global capital flows into Canadian residential real estate, and the current extent of non-resident and investor ownership of local housing. |
0 |
0.5 |
0.5 |
0.5 |
| TOTAL SCORE (out of a possible 9) | -0.5 | 3.5 | 2.5 | 3.5 |
| Weighted to a total score out of 10 (to more easily compare to other issue areas) | -0.6 | 3.9 | 2.8 | 3.9 |
Scoring Methodology
For each key criteria, parties receive a score that ranges from +1.0 to -1.0, assessed as follows:
| Assessment | Points |
| No discernible commitments | 0 |
| Commitments are somewhat capable of achieving the goal | 0.5 |
| Commitments are capable of achieving the goal | 1.0 |
| Commitments somewhat undermine progress towards the goal | -0.5 |
| Commitments undermine progress towards the goal | -1.0 |
This five-point method was chosen because (a) it’s relatively simple, (b) it's capable of distinguishing between narrow/shallow responses and comprehensive responses to each criteria, especially the criteria that relate to broad policy categories, and (c) it allows us to subtract points where the evidence suggests a particular policy or group of policies put forward by a party is likely to exacerbate the problem/take us further away from the goal.
You can learn more by reading our detailed methodology.
Detailed Commentary
Here's a more comprehensive explanation of why Gen Squeeze assigned the scores we did, and the strengths and weaknesses of individual policy proposals.
For each section, we generally begin our commentary with the party we see as having the strongest platform on that criteria and then move to parties we see as having the weakest platform or the least to say.
Criteria 1: Do the platforms commit to CMHC's 2030 Goal?
The arms-length Canada Mortgage and Housing Corporation has committed to the goal that “By 2030, everyone in Canada has a home that they can afford and that meets their needs." We believe parties should adopt this or a similarly clear and ambitious goal.
Green Party: The Green platform starts with a vision of where Canada should be in 2030, and orients all of its commitments to achieving change by 2030. Key elements of its vision for that year include that the green economy “provides affordable housing for everyone” (p. 27). Accordingly, we give the platform a point for organizing its policy commitments in line with the CMHC goal.
Liberal Party: The current NHS aims to move half a million families out of core housing need by 2030. This is an incremental step toward the CMHC goal. We allocate half a point for this criterion.
NDP: While the NDP platform (p. 15) aims to build 500,000 affordable units by 2030, it does not explicitly embrace the concrete timeline of 2030 that is recommended by CMHC in order to achieve the goal that all Canadians can afford a good home by that year. For this reason, we allocate half a point to the NDP platform for this criterion.
Conservative Party: The Conservative party's only housing announcement so far makes no mention of a goal that all Canadians should be able to afford a suitable home, nor a timeline by which to achieve that goal. We assign no point for this criterion so far.
Criteria 2: Do the platforms demonstrate a commitment to the principle of Homes First?
Homes First means treating housing and residential land simply as a place to call home, not a way to get rich. The bottom line is that we cannot make housing more affordable while at the same encouraging home values to increase (faster than local earnings). Policymakers need to choose.
No party has explicitly embraced this guiding principle yet in their platforms.
Conservative Party: The Conservative Party's major housing announcement so far does not make any specific mention of the need to ensure that home prices do not grow faster than local earnings. Nor does its platform acknowledge the degree to which housing price increases over the last decades have resulted in many regular Canadians, plus local and foreign investors, getting rich. As a result, there is insufficient indication that the party platform demonstrates a commitment to the principle of Homes First. So far, we allocate no point to its platform for this criterion.
Liberal Party: Liberal party housing platform announcements do not yet include specific discussion of the need to ensure that home prices do not grow faster than local earnings. Nor does its election promise backgrounders acknowledge the degree to which housing price increases over the last decades have resulted in many regular Canadians, plus local and foreign investors, getting rich. As a result, there is insufficient indication that the party platform demonstrates a commitment to the principle of Homes First. So far, we allocate no point to its platform for this criterion.
NDP: While the NDP platform indicates that it is making housing a priority, it does not yet include specific discussion of the need to ensure that home prices do not grow faster than local earnings. Nor does its platform acknowledge the degree to which housing price increases over the last decades have resulted in many regular Canadians, plus local and foreign investors, getting rich. As a result, there is insufficient indication that the party platform demonstrates a commitment to the principle of Homes First. So far, we allocate no point to its platform for this criterion.
Green Party: While the Green platform (p. 60) indicates that it is making housing a priority, and an October 8 update to the platform (a) acknowledges how home prices have outpaced wages and (b) specifically uses the phrase "Homes First," it does not yet include specific discussion of the need to ensure that home prices stop growing faster than local earnings. Nor does it acknowledge the degree to which housing price increases over the last decades have resulted in many regular Canadians, plus local and foreign investors, getting rich. As a result, there is insufficient indication that the party platform demonstrates a commitment to the principle of Homes First. So far, we allocate no point to its platform for this criterion.
It is worth noting that the Green platform does refer to legislating “housing as a legally protected fundamental human right for all Canadians and permanent residents” (ibid.). Much of the existing dialogue around a legislated right to housing is largely about helping to compel – via legal or quasi-judicial means – all levels of government to do what is necessary to eliminate homelessness. Focusing on housing “rights” is useful, and is an action under exploration by the federal government. However, if used as a guiding principle in housing platforms, we encourage its interpretation to be broadened to focus on all aspects of the housing market (not just social housing), drawing a distinction between housing as homes vs. housing as a commodity/investment. Protecting housing as places to call home requires governments to formally embrace the principle that home prices should not grow faster than local earnings.
Criteria 3: Do the platforms commit to a Phase II of the National Housing Strategy?
This means expanding the scope of the current National Housing Strategy to (a) serve all Canadians struggling to find a good home, including all ~1.7 million households currently in core housing need (the current NHS aims to serve ~500,000 households), in large part by (b) addressing all of the forces that shape the regular housing market upon which most Canadians rely (the current NHS largely focuses on the non-profit/community housing market).
No party has yet specifically said that a second phase of the NHS is required to move beyond its primary focus on scaling up social housing. However, several platforms propose policy ideas that go beyond the current NHS, including:
Liberal Party: Its announcements early in the 2019 campaign, along with its 2019 budget (pp. 22-32), signal a need to implement policies to adjust the dials on the entire market for housing, beyond the initial NHS which focused primarily on growing the below-market housing sector. This is evident in policy proposals related to dialing down harmful demand for housing via speculation, empty homes and money laundering, and via its focus on scaling up housing supply. Accordingly, we assign half a point for this criterion.
NDP: The NDP includes a promise (pp. 14-16) to incentivize the market to build more purpose-built rentals, and measures to dial down harmful demand, including from foreign buyers. Such policy measures go beyond the social housing focus around which the current NHS is organized. Accordingly, we award the platform half a point for this criterion.
Green Party: The Green platform (pp. 60-61) includes less detail about housing policy reform than the Liberal and NDP platforms. Much of its language reads primarily as if it would focus on scaling up the social housing sector – which is in line with current NHS – rather than reform policy incentives that shape the broader housing market on which the majority of Canadians will rely even if the social housing sector is doubled, tripled or even quadrupled. While it proposes one measure to increase market supply of purpose-built-rental, its effect may be counterproductive (see below). However, an October 8 update to the platform includes new language and new documented policy promises that begin demonstrating a more explicit commitment to tackle failures in the broader housing market. In response to the October 8 update, we revise our original score of 0 on this criterion to a half point.
Conservative Party: The Conservative Party promises to address factors shaping the housing market by “launch[ing] an inquiry into money laundering in the real estate sector and work with our industry partners to root out corrupt practices that inflate housing prices.” The current platform will also revise policy to facilitate home-buyers to borrow more as a strategy to address the large gap between home prices and local earnings, which, as we discuss below, risks re-inflating home prices, and having younger Canadians become over-leveraged. Nevertheless, these proposals look beyond the NHS focus on social housing, so we award half a point for this criterion.
Criteria 4: Do the platforms commit to action to strengthen the current National Housing Strategy?
Including by shoring up the existing stock of community housing, expanding the stock of community housing, and creating special strategies to serve the most vulnerable.
NDP: The NDP are committing to build another 500,000 units in the community housing sector by 2030, with half of those units built over the first five years. To support this work, the platform (pp. 3 and 5) would increase current annual federal spending of approximately $1-2 billion per year (depending on what one counts) by an additional $5 billion during its first year in office to help accelerate the development process, followed by $3 billion/year thereafter. While it is worth noting that these additional billions of dollars cannot guarantee an increase of half a million units of new supply, we assign the platform a full point for this criterion, because its platform will strengthen the current NHS. In addition, the platform promises $300 million to fight homelessness, and around $1.3 billion to provide “immediate relief” of up to $5,000/year to renters who cannot afford their current rent, although there is limited information about policy mechanism and criteria by which this support would be delivered. The latter promise sounds similar to, and more generous than, the Canada Housing Benefit announced by the Liberal government as part of the National Housing Strategy, which is scheduled to start in 2020.
Green Party: The Green platform (pp. 60-61) aims to build or renew 400,000 affordable units by 2030, increasing the National Housing Co-Investment Fund by $750 million to support new builds; creating a Canada Co-op Housing Strategy to finance new co-op units in partnership with CMHC, co-op societies and credit unions with an investment of $700 million annually (p. 6); and a tax credit for gifts of lands or buildings to community land trusts. The Green party also proposes to refocus the core mandate of the CMHC away from its current mandate to de-risk investment in home ownership toward supporting development of affordable, non-market and cooperative housing. In addition, the party will add another $750 million to supplement rent assistance for 125,000 households via the Canada Housing Benefit that the Liberals have proposed to start in 2020. We assign its platform a full point for this criterion.
Liberal Party: The Liberal party set an important benchmark for improving the social housing sector by establishing our first national housing strategy in decades. This represents real progress by comparison with previous governments. However, Liberal announcements to date do not include any major improvements to the current NHS focus on social housing, and the current NHS continues to be critiqued for the slow pace at which committed funds are flowing to actual below-market housing projects. As a result, we don’t yet assign any point for this criterion.
Conservative Party: The Conservative platform promises to “make surplus federal real estate available for development to increase the supply of housing." This approach could make an important contribution to growing the supply of below-market housing if the Party plans to keep these lands in the public sphere in order to protect the units that are built indefinitely from the influences of speculation, etc. We award half a point for this criterion.
Criteria 5: Do the platforms include action to dial up the right kind of supply?
In ways that combat sprawl and encourage density and mixed-use in urban land already reserved for residences (protecting land required for industry, farming and green-space), with an emphasis on protecting/stabilizing existing affordable supply, adding so-called "missing middle" housing, family-sized units and purpose-built rental, and incorporating low/zero-emission goals into supply-side housing policy.
NDP: The NDP platform does not incentivize cities to revise their zoning for residential land to add density in areas that currently privilege single-detached and other low-density forms of housing. However, the NDP platform (p. 3) does allocate $125 million per year to waive federal GST on the construction of new affordable rental units. This policy will incentivize the development of more purpose-built rental, which is a critical kind of supply that we need to grow across Canada. For this reason, we allocate half a point to the NDP platform for this criterion. (It is worth noting that the federal Liberals ran on the same promise in the 2015 election. However, the Liberals did not implement the promise). While renters are waiting for new supply to be built, the NDP also promises to invest $1.35 billion annually (contingent on $450 million/year from promises) to provide up to $5,000 per year in support for up to 500,000 renters. It is not yet clear how eligibility for this rental support would be determined.
Green Party: The Green platform (p. 61) does not incentivize cities to revise their zoning for residential land to add density in areas that currently privilege single-detached and other low-density forms of housing. It includes one brief mention of “restor[ing] tax incentives for building purpose-built rental housing;” but it is unclear what tax incentives they mean, or what changes they will make.
In addition, the Green platform includes the promise to “remove the ‘deemed’ GST whenever a developer with empty condo units places them on the market as rentals.” While this promise likely aims to reduce the risk of empty homes, the mechanism it proposes risks exacerbating the trend which sees many developers build condos more regularly than purpose-built rentals. For example, this proposal risks operating as a tax-payer funded insurance product to subsidize condo developers when their condo projects do not sell. This would work in opposition to the need to revise market incentives to encourage more developers to shift away from building condos, which are currently more profitable to build, toward building more purpose-built rentals, for which there is a shortage of supply, and growing demand. Accordingly, we deduct a half point from the Green platform for this criterion.
Liberal Party: The Liberal platform does not incentivize cities to revise their zoning for residential land to add density in areas that currently privilege single-detached and other low-density forms of housing. Nor does the Liberal platform yet include measures to address the critique that its rental construction financing initiative target of 42,500 (p. 27) units is insufficient for a pan-Canadian program. Its target is small by comparison with, for example, the City of Vancouver, which is aiming for around 72,000 units just in its region; and the province of BC, which is aiming for 114,000 affordable homes (p. 18). It’s worth noting that the federal Liberals campaigned in 2015 on a promise to eliminate GST from new purpose-built rental units, which they then ruled out. Since this policy change would offer a much larger incentive to grow the supply of purpose-built rental units, it is an idea that merits ongoing attention or refinement. For these reasons, we do not yet allocate the Liberal platform a point for this criterion.
Conservative Party: Insufficient information. The Conservative platform does not incentivize cities to revise their zoning for residential land to add density in areas that currently privilege low-density forms of housing. Nor does the platform include any specific measures to scale up the supply of purpose-built rental homes. For these reasons, we currently assign no point.
Criteria 6: Do the platforms include action to dial down harmful demand?
Including from (a) money launderers, speculators, foreign buyers, tax cheats, house flippers, short term rental operators, and also (b) from more 'mundane' but pervasive sources of domestic investment demand, including everyday Canadians who problematically turn to housing and land to earn a profit — via equity gains, secondary unit rental income or both — instead of putting that capital into productive investments like stocks and bonds, or alternatively into the construction of secure, "purpose built rental" and (c) from Canadians who, lured by loose mortgage regulations, borrow and bid more than they can realistically afford.
Liberal Party: Liberal housing platform announcements to date make a number of important strides forward in this area. It has announced a new national tax on non-resident, non-Canadians to discourage foreign speculation in the Canadian housing market. While ongoing work is required to reduce speculation among locals, this is an important development. The platform also commits to ensure Statistics Canada and CMHC improve data collection about foreign ownership and speculation. Plus, the Liberal platform commits to reduce money laundering through residential real estate by establishing a consistent national approach to beneficial ownership transparency.
In addition, the Liberal platform continues to resist calls to help first-time home buyers by weakening stress tests on mortgage borrowing, or by extending the amortization period over which people can finance mortgages beyond 25 years. While these suggestions intend to help younger Canadians achieve ownership, they would ultimately do so by making younger people borrow more, pay more interest, and do so in ways that drive up home prices further. The latter impedes the ultimate goal of reconnecting home prices to local earnings.
Instead of this problematic approach, the Liberal platform is expanding its “shared equity” approach to supporting first-time home buyers, including to help more first-time buyers in particularly expensive markets like Victoria, Toronto and Vancouver. This empowers the CMHC to partner with first-time buyers by taking a 5-10% stake in the home, which reduces the amount that younger people need to save, and reduces the borrowing. Simultaneously, it builds public equity in the housing market, which is a unique innovation; while also helping to de-risk the market should there be substantial price declines. CMHC research suggests that this approach to supporting first-time buyers will contribute to price escalation at 1/5 to 1/6 the rate of plans that change the mortgage stress tests or amortization period.
For these reasons, we allocate a half point to the Liberal platform for this criterion.
Further progress in dialing down harmful demand is required. Of note, the Liberal platform should consider options to restrict sources of harmful domestic demand including domestic speculation, problematic numbers of individual rental income investors, the commercialization of homes into short-term rental accommodation, etc.
NDP: The NDP platform includes measures that work in opposition to one another on this issue (see https://www.liberal.ca/wp-content/uploads/2019/09/2019-backgrounder-homebuyers-EN.pdf, pp. 14-16). Strengths of the NDP platform include that it proposes a “public beneficial ownership registry,” which is one of the most important mechanisms to reduce money laundering through real estate. It also proposes a Foreign Buyer’s tax of 15% for all non-resident purchases of housing. While it would be useful for the platform to also discuss policy options to regulate short-term rentals like AirBnB, these first two commitments would earn the platform a half point.
However, the platform also includes a key measure that would exacerbate harmful demand – namely, the promise to re-introduce 30-year terms to CMHC-insured mortgages on entry level homes for first-time buyers. While we applaud the intention of this policy promise – to help first-time homebuyers – lengthening the amortization period will re-ignite demand for housing by inviting people to borrow more than they otherwise would. The result is younger Canadians end up paying more personally for housing by taking on more debt on which they owe mortgage interest; and the accelerated demand will inflate sticker prices for homes. At the end of the day, the top priority for the next phase of the National Housing Strategy should be that home prices don’t rise (especially after inflation) so that local earnings can regain some ground over time. As a result, we subtract a half point from the NDP platform for this election commitment. This means the NDP platform ultimately receives no point for this criterion.
The NDP also promise to increase the value of the tax credit available to first-time home buyers so that the maximum savings increases from $750 to $1,500. While this change is likely good “retail” politics, a $750 tax break does relatively little to make home ownership in Canada affordable given that average prices are around half a million dollars. As a result, the value of this spending is unclear – although we concede many younger home buyers would be pleased to save $750 additional dollars given how hard it is to save for home ownership these days. Risks that a more generous tax break for first-time home buyers may fuel further price escalation would also need to be monitored.
Green Party: The party's main platform document (pp. 60-61) makes no mention of reducing money laundering through real estate, regulating short-term rentals, the role of foreign buyers, empty homes, domestic speculation, etc. in decoupling home prices from local earnings. However, an October 8 update to the platform includes new promises to tackle money laundering and fraud in real estate, to ensure that short term rental platforms such as AirBnB (and presumably those platforms' hosts) collect and remit Canadian taxes, and to collect data on global capital flows into Canadian real estate. Altogether, these three promises represent a modest effort to begin dialing down harmful demand. In response to the October 8 update, we revise our original score of 0 on this criterion to a half point.
Conservative Party: The Conservative platform includes measures that work in opposition to one another on this issue. Strengths of the Conservative platform include that it proposes to “Launch an inquiry into money laundering in the real estate sector and work with our industry partners to root out corrupt practices that inflate housing prices.” We award a half point for this criterion, noting it would also be useful for the party to develop additional policies to address foreign and local speculation, short-term rentals and empty homes.
However, the platform also includes key measures that would exacerbate harmful demand – namely, the promises to re-introduce 30-year terms to CMHC-insured mortgages for first-time buyers, and to remove/revise the mortgage stress test. While we applaud the intention of this policy promise – to help first-time homebuyers – lengthening the amortization period and weakening the stress test will re-ignite demand for housing by inviting people to borrow more than they otherwise would. The result is younger Canadians end up paying more personally for housing by taking on more debt on which they owe mortgage interest; and the accelerated demand will inflate sticker prices for homes. At the end of the day, the top priority for the next phase of the National Housing Strategy should be that home prices don’t rise (especially after inflation) so that local earnings can regain some ground over time. As a result, we subtract a half point from the Conservative platform for this election commitment. This means the Conservative platform ultimately receives no point for this criterion.
Criteria 7: Do the platforms include action to address wealth inequalities created by housing?
Including between renters and owners, and between older and younger demographics, for example by rebalancing the way we tax income vs. housing wealth (whether at the time of purchase, the time of sale, or annually through the duration of ownership).
NDP: The NDP platform currently does not mention that many home owners have acquired wealth via escalating home prices, and that such wealth goes largely untaxed when the home is a principal residence. This is a significant omission in the platform’s housing policy, and forgoes opportunities to reduce taxes on middle- and moderate-income levels. The NDP platform (p. 44) does, however, propose to increase the share of capital gains that count for income tax purposes from 50% to 75% -- the rate of inclusion that Canada had in 2000. Among other things, this change would subject capital gains earned from the sale of secondary and vacation residences to higher levels of taxation. In addition, the NDP platform will raise the top marginal income tax rate charged to Canadians earning over $210,000 annually from 33% to 35% (ibid). This will subject some capital gains earned from the sale of secondary or vacation homes to higher rates of taxation, if those gains push the taxpayer’s income into the highest income category for a given year of taxation. Finally, the NDP platform promises a new one percent wealth tax on wealth that Canadians hold over $20 million (ibid.), although it is not clear if they plan for the value of principal residences to count towards the calculation of a resident’s assets. For these reasons, we assign the platform half a point for this criterion on the grounds it is proposing modest, incremental changes to rebalance the tax treatment of earnings and housing wealth.
Green Party: The Green platform (p. 32) promises to “establish an arms-length Federal Tax Commission to analyze the tax system for fairness and accessibility, based on the principle of progressive taxation;" and the supplementary document (p. 3) that provides financial estimates for all Green promises makes mention of a “wealth tax” that is expected to collect $6.3 billion annually by 2023/24. While it is unclear whether the terms of reference for this Commission would include home equity in one’s ability to contribute to public goods and services, we ascribe the platform half a point for this criterion because such a Commission could provide an excellent forum through which to identify, and set in motion, a broader tax shift to rebalance the tax treatment of earnings and housing wealth.
Liberal Party: The Liberal platform continues to ignore a major elephant in the room – that skyrocketing home prices over the last while have made many regular Canadians much wealthier, while often harming many younger Canadians by pushing home prices (as renters or owners) beyond typical local earnings. So far, the Liberal platform makes little mention of promising a tax shift that would reduce income taxes on middle and lower earners, and compensate by increasing taxes on high value homes. This is interesting, because it is out of step with the Liberal rhetoric, which suggests that those with considerable wealth should be expected to contribute a little more. It’s unclear why the party does not apply this logic to homeowners who are millionaires as a result of their home values. For these reasons, we do not assign the Liberal platform a point for this criterion.
Conservative Party: The Conservative platform formally rejects the idea that the Canada Revenue Agency should collect information about the capital gains earned from the sale of principal residences on the grounds that the collection of such data makes it easier for a government to tax those gains in the future – a tax policy to which the party is opposed. We therefore subtract a full point for this criterion given the party entirely rejects the possibility of factoring housing wealth into measurements of residents’ ability to contribute to public goods and services, even when this could facilitate corresponding reductions to other taxes to improve the fairness of the tax system, and/or raise revenue to invest in young and old alike.
Criteria 8: Do the platforms include action to de-risk the market against a decline in prices?
Acknowledging that unless Canadians' earnings dramatically increase (unlikely), the only way to close the affordability gap is to carefully rein in housing and land costs for first-time and other homebuyers - and indirectly for renters - while simultaneously mitigating the risks such a decline creates for highly leveraged households and the Canadian economy.
Liberal Party: The proposed modest expansion of the “shared” equity component of the party’s first-time home-buyers’ plan is an incremental step toward de-risking the market against a decline in home prices. For this reason, we assign a half point for this criterion.
NDP: The NDP platform does not include any policy recommendations to address this issue. As a result, we do not assign it a point for this criterion.
Green Party: The party's main platform document (p. 60) proposes to “eliminate the first-time home buyer grant." It does so on the grounds that the policy risks “exacerbating housing speculation and commodification.” While this is a modest risk, it is worth noting that CMHC research suggests that this approach to supporting first-time buyers will contribute to price escalation at 1/5 to 1/6 the rate of plans that change the mortgage stress tests or amortization period. The cursory way in which the main Green platform document rejects the first-time home buyers incentive means it overlooks the unique way in which the policy facilitates governments to grow public equity via partnerships with residents in the private housing market. This “shared equity” approach could lay the foundation for new opportunities to de-risk the housing market against a decline in home prices. However, an October 8 update to the platform includes a revision to this promise to "review the program instead to ensure that it is not facilitating housing speculation." In response to the October 8 update, we revise our original score of -0.5 on this criterion to zero.
Conservative Party: The Conservative platform doesn’t include any measures to protect people against a potential decline in prices. Instead, the party’s proposals to lengthen the amortization period and weaken the mortgage stress test will likely do the opposite, by inducing people to borrow more, especially first-time buyers. This means the Conservative platform risks enticing more Canadians to become over-leveraged with housing debt – and to do so at a point in time when promoting housing affordability requires prices to stagnate, and drop by comparison with earnings/inflation. For this reason, we deduct half a point for this criterion.
Criteria 9: Do the platforms include action to improve housing data?
Including with a national beneficial ownership registry, additional information on global capital flows into Canadian residential real estate, and the current extent of non-resident and investor ownership of local housing.
Liberal Party: The Liberal housing platform announcements to date make important strides in this direction. It promises to ensure “Statistics Canada, the Canada Mortgage and Housing Corporation, and the CRA have the tools to accurately track foreign ownership and speculation in Canada. We will work collaboratively with provinces, territories, municipalities and law enforcement to ensure that this data is effectively shared to address other opportunities related to tax evasion that may exist." In addition, the Liberal party promises to work with provinces “to establish a consistent national approach to beneficial ownership transparency, which will help fight financial crime in real estate and other sectors, while respecting Canadian privacy rights” (ibid). We allocate a half point for this criterion, because these are two noteworthy improvements. We encourage the focus on data collection to go further with a database on pre-sale condominium assignments to support federal and provincial tax authorities to ensure taxes are paid; along with a plan to support the CRA to continue improving its measurement of the capital gains that people incur upon the sale of principal residences.
NDP: The NDP platform (p. 16) also makes an important stride in relation to this criterion. It promises to “work with the provinces to create a public beneficial ownership registry to increase transparency about who owns properties, and require reporting of suspicious transactions in order to help find and stop money laundering." We assign it a half point for this criterion. Further advances in data collection are required to establish a capital flows data program to understand the total flow of investment capital into Canadian residential real estate, which may occur through individuals purchasing investment properties, as well as corporations, investment funds or other entities. In addition, we encourage parties to develop a database on pre-sale condominium assignments to support federal and provincial tax authorities to ensure taxes are paid; along with a plan to support the CRA to continue improving its measurement of the capital gains that people incur upon the sale of principal residences.
Green Party: An October 8 update to the Green platform includes new promises to (a) create an "open data partnership between the Federal Government, provinces, municipalities, universities and civil society groups [...] to improve the gathering, analyzing and sharing of data relating to housing. This would include data on global flows of capital into Canadian housing markets and its impact" and (b) "monitor and report on fraud, money laundering and other criminality" in housing markets. In response to the October 8 update, we revise our original score of zero to a half point. We encourage the focus on data collection to go further by also including a database on pre-sale condominium assignments to support federal and provincial tax authorities to ensure taxes are paid; along with a plan to support the CRA to continue improving its measurement of the capital gains that people incur upon the sale of principal residences.
Conservative Party: The current Conservative party platform makes no concrete proposals to improve data collection about factors that shape housing affordability. For this reason, we assign no point yet for this criterion. However, as mentioned above, the party formally rejects the idea that the Canada Revenue Agency should collect information about the capital gains earned from the sale of principal residences on the grounds that the collection of such data makes it easier for a government to tax those gains in the future – a tax policy to which the party is opposed. Since we have already deducted a point for this element of the Conservative platform above, we don’t deduct a point again in regards to this criterion. However, the party position on this issue would prevent the country from collecting important information that could help us address housing unaffordability, which would otherwise merit a half point deduction according to our scoring methodology.