Feds Adding Further Exceptions to Foreign Homebuyers Ban: Document

A real estate sign is displayed in front of a house in the Riverdale area of Toronto on Sept. 29, 2021. The Canadian Press/Evan Buhler

Ottawa is adding further exceptions to a ban introduced earlier this year prohibiting foreign buyers from purchasing residential real estate in Canada, according to federal documents.

Housing Minister Ahmed Hussen’s department wrote in a legal notice on April 13 that regulations in the ban drafted in 2022 and introduced this past January now seem “too onerous,” “confusing,” and “overly restrictive.”

The notice, titled “Regulatory Impact Analysis Statement” and obtained by Blacklock’s Reporter, said the Liberal government now sees a “need to increase housing supply” across the country that is being hindered by the recently imposed restrictions on foreign buyers.

The Prohibition on the Purchase of Residential Property by Non-Canadians Act took effect on Jan. 1 and was intended to bring down high real estate prices across the country to make housing more affordable for Canadian residents, especially those living in major cities.

The prohibition was also meant to prevent homes from being used “as financial assets for foreign investors.”

In late March, Hussen announced the federal government would be bringing in a number of exceptions to the regulations, one of which allows foreign investors to purchase Canadian residential real estate if they declare it’s for development purposes.

Hussen’s department expanded the exceptions on April 12 to exempt temporary foreign workers from the ban and also to lift all restrictions relating to foreign speculation on vacant lands. The department also broadened the definition of “foreign” to narrow the law’s application for non-Canadian investors.

Hussen’s department said the unamended restrictions were “preventing some developers from purchasing vacant land for the purpose of development or from redeveloping residential property,” which it said are necessary activities to “increase Canada’s housing supply and improve affordability.”

“Amendments repeal the vacant land provision from the definition of residential property so the prohibition does not apply to vacant lands,” the department wrote in the statement. “In other words, the purchase by non-Canadians of vacant land or any other property that does not actually have a dwelling unit on it will be permitted.”

Prohibiting foreign investors from buying up Canadian residential real estate was one of the Liberals’ campaign promises during the 2021 federal election.

The party’s campaign platform at the time attributed the rise in “underused and vacant housing, rampant speculation, and skyrocketing prices” to foreign real estate investments in Canada.

It also said that homes are “for people, not investors.”