Page 1

Federal election primer – Make your vote matter A federal election will soon be upon us, and RHB Magazine

wants our readers to be informed so that you can make the most appropriate choice on election day. We are not taking sides in this election – we want to publish the facts and allow our readers to decide what is important to them. We conducted interviews and researched the main federal parties’ election platforms to find out where they stand on issues that matter to the rental housing industry. 14 | September - October 2019


Q&A with John Dickie RHB Magazine interviewed John Dickie, President of the Canadian Federation of Apartment Associations, on what the main federal political parties are promising for the current election, as well as what the association would like to see from the parties, if they form the federal government. RHB: What are Canada’s political parties promising with respect to income taxes? John Dickie: As of September 26, here are some

platform commitments. The NDP has said they will raise the federal income tax rate on incomes over $210,000 from 33 per cent to 35 per cent. They have also stated that they plan to increase the taxes on capital gains by raising the capital gains inclusion rate from 50 per cent to 75 per cent. That would be devastating, especially since much of the capital gain on rental housing is just making up for inflation. Several years ago, the general federal corporate tax rate was reduced from 18 per cent to 15 cent. The Greens promise to raise it to 21 per cent.

rentalhousingbusiness.ca | 15


“CFAA spoke to the Liberals, the Conservatives, and the NDP about improving the tax treatment of energy retrofits to ensure they can be claimed as current repairs rather than capital items.” As many readers know, early in their mandate, the Liberals raised the income tax rate on the top bracket from 29 per cent to 33 per cent. They are not suggesting raising it any more. They have also reduced the federal tax rate on middle incomes from 22 per cent to 20.5 per cent. While they have not said so explicitly, the Conservatives might reduce that top income tax rate, and would likely hold the line on corporate taxes and capital gains taxes. CFAA spoke to the Liberals, the Conservatives, and the NDP about improving the tax treatment of energy retrofits to ensure they can be claimed as current repairs rather than capital items. The Liberals and the Conservatives seemed favourably disposed toward that idea. The Greens might be as well. RHB: What do the federal parties’ platforms include on the subject of housing? John Dickie: The Liberals have already brought in the National Housing Strategy. It includes substantial low interest loans for new for-profit rental construction with an affordability component. Many developers are taking up that incentive. The Liberals are also funding social housing repairs and new social housing, and are rolling out portable housing benefits with the provinces. To make home ownership more accessible, they have promised to increase the number of homes for which first-time home buyers can use the new First Time Home Buyers Incentive in expensive markets by increasing the value limit to almost $800,000 in those markets.

16 | September - October 2019

The Conservatives have promised to facilitate first-time home ownership by reworking the stress test, considering 30-year mortgage terms and working with the provinces to remove barriers to new home construction. All of those measures would also help renters by reducing the excess pressure on rental markets, which has resulted from young families being priced out of expensive markets and renting longer. For that reason, most rental providers support measures to facilitate new home ownership at this time, but not over the long term. The NDP are promising much more emphasis on providing more subsidized social and cooperative housing. The Greens are promising to reduce government encouragement to home ownership, and to restore tax incentives for building purpose-built rental housing. The Greens are also promising an increase in the funding for portable housing benefits and a “guaranteed livable income.” The Liberals moved in that direction with the Canada Child Benefit and the increase in the Guaranteed Income Supplement. Landlords support adequate income support for low-income people. RHB: Where do the federal parties stand on energy and climate change? John Dickie: The Liberals are levying a federal carbon tax in provinces that do not already levy a carbon tax, returning 90 per cent of the money to consumers, with 10 per cent to some entities, with no special consideration for rental providers, who pay the carbon tax.


“The different parties see the world differently, and have different philosophies about government and who they most want to serve.” The Conservatives have promised to abolish the federal carbon tax, and instead to place limits on carbon emissions by large emitters. The NDP would continue the Liberals’ current measures, while moving to carbon-free electricity generation by 2030. The Greens would also phase out coal-fired electricity, and mandate energy retrofits for all buildings by 2030. Mandatory energy retrofits raise concerns for landlords, who have already invested billions of dollars in energy efficiency upgrades. RHB: As an advocate for fair treatment of rental housing providers across Canada, what would you seek from each party? John Dickie: The different parties see the world differently, and have different philosophies about government and who they most want to serve. Therefore, what CFAA seeks from each party is different. The Liberals want to act on housing needs, and CFAA seeks to shift their focus toward portable housing benefits, which preserve tenants’ autonomy and choice, and support the private rental market rather than undercutting it. We also seek tax changes to make investment in rental housing more attractive. We would also want the Liberals to resist demands for even more social housing than is in the National Housing Strategy now because that additional social housing would provide little benefit at enormous cost.

18 | September - October 2019

In the past, the Conservatives have shown less interest in taking direct action on housing, and especially social housing, and have expressed more interest in income support measures or tax reductions. CFAA would seek those measures, so that lowincome households would receive support within a disciplined fiscal environment. The NDP have too much faith in the value of social housing, and too little appreciation for the value private rental markets provide for Canadian households. CFAA would work to raise their understanding of the advantages of portable housing benefits, for renters, governments, and taxpayers. CFAA would also resist tax increases. RHB: Housing is primarily a matter of provincial jurisdiction. How does that affect what rental housing providers want from the federal government? John Dickie: The federal government has a lot of power over income taxes and the GST/HST. Those are key areas for landlords, both for ongoing rental operations and for new rental construction. On housing, the federal government can choose to spend money or not to spend money, and what to spend it on. Therefore, encouraging the federal government to support portable housing benefits is advantageous. It is also useful to encourage the federal government to focus its programs on spending that reduces costs for the private rental sector, such as incentives for energy retrofits.

CONTINUED ON PAGE 22


“Too many young people today can’t even imagine buying a home today just like their parents did.” The federal government also has a substantial impact on rental demand, through its control of immigration, and through CMHC’s impact on access to home ownership. Rental providers are certainly happy with rental markets with good demand, but too much excess demand leads to unhappy tenants, and that in turn can lead to counter-productive policy choices. Rental providers want enough choice in the rental market so that renters can move when they change jobs, and so that landlords can reposition buildings when there is more demand for higher end housing options. Enabling tenant mobility and labour force attachment is also good public policy.

Federal party Q&A RHB Magazine sent questions related to rental housing to the four major federal political parties. At the time that this issue went to print, only the Liberals representative responded to the questions. RHB: If it forms the government after October 21, what steps would your party take to increase rental housing supply, or to assist with the renewal of existing privately-owned rental housing stock on an affordable basis? Liberal: Through investments we have made as part of the National Housing Strategy, nearly 42,000 units of affordable rent-assisted housing have or are being built since 2015. More than 100,000 will be built over the rest of the strategy, and the new Canada Housing Benefit will provide $2,500 in rental assistance to 300,000 Canadian renters who today are struggling to get ahead. In addition, as a result of investments made

22 | September - October 2019

over several Budgets, we have invested $10 billion into the rental construction housing initiative which will build 40,000 units of rental housing targeted at young professionals and those working to join the middle class. RHB: Housing affordability is a key issue in many areas of Canada. What are your party’s plans to make housing more affordable? Liberal: Too many young people today can’t even imagine buying a home today just like their parents did. We are making the current BC non-resident, non-Canadian tax for housing a national program. So a modest 1 per cent tax will be levied annually on those properties that are being used solely for investments to reduce speculation. This WILL NOT affect any non-resident Canadian with investments in Canada or any Canadian in one part of the country with a second home in another. The first-time homebuyers incentive provides up to 10 per cent off the purchase price of their first home. But even with that, we knew that in high-price markets like the Greater Toronto, Vancouver, and Victoria areas, foreign speculation has still put that first-time purchase beyond reach. So, we have committed to making the first-time homebuyers incentive more widely available in those markets. This means that first-time buyers could qualify for this incentive for homes costing almost $800,000. The national program for markets elsewhere remains in place. These are strong measures for first-time home buyers, affordability, and for the stability of our markets. The first-time home buyers incentive is an innovative solution that focuses on equity rather than debt solutions for the first time buyer. For the latest updates on the federal parties’ platforms, please visit www.cfaa-fcapi.org.

Profile for Juan  Malvestitti

RHB Magazine Sept/Oct 2019 - Federal Election Primer  

RHB, RHB Magazine, Federal Election Primer

RHB Magazine Sept/Oct 2019 - Federal Election Primer  

RHB, RHB Magazine, Federal Election Primer

Advertisement