A Conservative Party amendment to ease the housing crisis by temporarily banning foreigners from purchasing Canadian real estate in order to stem demand has been voted down by Liberal MPs, despite this being part of their party’s platform during the last election campaign.
“Recognizing it is not permanent, it is mostly so that we can all take a step back and try to take the wind out of the sails a little bit of this breakneck speed that we’re seeing in the property market,” Chambers said as he presented the amendment.
Chambers noted the amendment, which would ban foreign buyers from Canada’s real estate market for a period of two years, would buy time to “see what’s happening” in the housing market as home prices reach record highs in recent months.
“This won’t be a silver bullet, but it will help take some of the upward pressure out of the property market,” he said.
The Underused Housing Tax Act seeks to implement an annual tax of 1 percent on the value of vacant and underused residential property directly owned by non-resident non-Canadians.
Liberal MP and Chair of the committee Peter Fonseca first ruled the amendment to be inadmissible due to it being a “new concept that is beyond the scope of the bill,” but his decision was overruled by opposition MPs.
The amendment was then debated but finally voted against, with Bloc Quebecois MP Gabriel Ste-Marie siding with the government.
In explaining his rationale, Ste-Marie said he was worried that enacting such a law would be met by retaliation from the U.S. in the form of similar legislation, which would hurt Canadian snowbirds who want to buy properties down south.
“I can already see people come into my riding office, a lot of people would not be pleased,” he said.
Ste-Marie also wondered if there would be exceptions, such as if a property owner in Canada wants to sell to his children who are not residents.
Liberal MP Terry Beech recognized that the amendment is “very similar to something we campaigned on actually in the last election,” but he argued the measure would be more adequate in a separate piece of legislation.
“I'd certainly want to give more time to it and probably more thoughts to a more complete, holistic approach to implementing this, and making sure that it was effective,” Beech said, noting that the Conservative amendment would only apply to individuals and not entities.
NDP MP Daniel Blaikie expressed frustration that the Liberals supported the measure in principle but are not being more proactive in adopting it.
“One of my frustrations over the last six and a half years has been the slow pace at which the Liberal government undertakes to meet its own commitments,” Blaikie said, adding he supports the amendment because it would push the government “in the right direction.”
Conservative MP and finance critic Ed Fast, a former minister of international trade under Stephen Harper, argued that based on his trade experience he did not expect other countries to retaliate if Canada were to impose such a measure, and if they did, the challenge mechanisms would take longer to kick-in than the proposed two-year ban.
“It would send just that clear message that we are placing Canadian buyers of residential real estate first. They come first, then anybody else who wants to join can come later. But right now, we have to focus on Canadians themselves,” said Fast.
Fast also argued that approving the amendment in committee would still allow the government to review it at the report stage, allowing a more comprehensive examination of the measure that Liberal MPs on the committee said is needed.
