Real estate association questions policy's effectiveness on affordability
The Canadian Real Estate Association (CREA) has called out the government's recent decision to prolong a ban on foreign ownership of Canadian housing.
The Department of Finance Canada announced Sunday the federal government’s intention to extend the existing ban by another two years.
“By extending the foreign buyer ban, we will ensure houses are used as homes for Canadian families to live in and do not become a speculative financial asset class,” Minister of Finance Chrystia Freeland said in a statement. “The government is intent on using all possible tools to make housing more affordable for Canadians across the country.”
Initially issued in 2022 to make homes more affordable for Canadians, CREA argues that this extension might do more harm than good.
CREA chief executive Janice Myers criticized the extension as groundless, highlighting a lack of supportive analysis or data from key national institutions.
"The newly announced two-year extension is completely unnecessary, considering the fact there is no analysis, evidence or data from Statistics Canada, CMHC, or Finance Canada, to support the government’s intended impact on housing affordability in Canada,” Myers stated through a written consultation to the Canada Mortgage and Housing Corporation (CMHC).
She further urged the government to reconsider the extension and to adopt CREA's recommendations, which include exemptions for pre-construction financing, clear definitions and exemptions for recreational property, inclusion of CUSMA exemptions, and allowing provincial input to customize the approach to meet local housing market needs.
CREA has been openly skeptical about the effectiveness of the foreign ownership ban since its implementation, questioning its actual impact on making housing more affordable for Canadians.
While the association supports the principle that Canadian housing should primarily serve Canadians, it said there are better policy measures to achieve this goal. Specifically, CREA believes that the federal government should prioritize policies that encourage the construction of more homes nationwide to address the country's housing affordability issues more directly.
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