The federal changes to mortgage insurance eligibility, and subsequent increased mortgage insurer minimum capital requirements and B20 amendments were introduced while the Liberal Party of Canada has governed. As such, most of our discussions through the last three years have been with their members.

In March, 2019, MPC (testifying before the standing committee on finance) told Parliament and CMHC that the shared equity mortgage program known as the First Time Home Buyer Incentive (FTHBI) was not going to meet the government’s projections unless changes were made to it, because the qualification limits were too restrictive to assist almost all would-be first-time buyers in the important Vancouver and Toronto markets. On September 2, FTHBI officially began taking applications; a mere 10 days later, the Liberal Party announced changes to the FTHBI to “increase the value of a qualifying home from approximately $500,000 to $800,000” in the Greater Vancouver and Greater Toronto areas. With this significant change (contingent on the Liberals being re-elected) the FTHBI program would undoubtedly be improved. We appreciate that they heeded our advice.

It should be noted, the real constraint on qualification for the FTHBI is not the home value, but rather the household income of the purchaser(s) and the income multiple. The maximum home values are only achievable by those fortunate enough to be making exactly the limits permitted. Maximum purchase prices for those who qualify, on a case by case basis, will be determined by the size of the down payment, the shared equity percentage chosen (5 or 10% if new construction) and currently, four times the household income if less than $120,000 annually. Given that the purchaser(s) must have an insured mortgage to qualify for the program, and the minimum shared equity amount is 5%, the simple calculation would see four times the household income to represent 85.01% of the maximum home price available. (80.01% loan-to-value insured mortgage and 5% equity with slightly less than 15% down payment).

The Liberals have also pledged to add a one per cent tax to non-resident, non-Canadian homebuyers to “address the impact of foreign speculation.” This has been implemented on a provincial level, but not nationally. The Liberals would also work to complete the National Housing Strategy, funding the construction of approximately 140,000 more housing units by 2028.

The complete Liberal platform can be found HERE.

The Conservative Party of Canada (CPC) responded to MPC’s request and recommendations with a notable four-point plan, which included our three primary asks. CPC officials told us last month that our top recommendations, discussed with them since fall last year, would be included as part of an official CPC election announcement, which Leader Andrew Scheer made on Monday, September 23.

If elected to government, the Conservative Party of Canada has committed to:

• Fix the mortgage stress test to ensure that first-time homebuyers aren’t unnecessarily prevented from accessing mortgages and work with OSFI to remove the stress test from mortgage renewals to give homeowners more options.
• Increase amortization periods on insured mortgages to 30 years for first-time homebuyers to lower monthly payments.
• 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.
• Make surplus federal real estate available for development to increase the supply of housing.
  

It must be noted again that the top two items on this list contain MPC’s top three asks of the government and all parties. We shared this announcement in an email to members last month as we are pleased that the CPC’s promise comprehensively delivers what we have been working towards.

What follows are relevant comments by the NDP to MPC:

• “The existing 5.19% mortgage stress test qualifying rate does limit ability of homebuyers to select the mortgage that works best for them, and may not accurately represent the market realities across Canada (including rural and remote communities).”
• “New Democrats are committed to making homeownership a reality for those Canadians currently left out of the market. An NDP government would undertake a study of the existing qualifying rate and include the input of diverse regional partners and industry experts – not just those in Vancouver or Toronto.”
• “New Democrats understand that repeated stress tests can make buying a new home or renewing a mortgage difficult.”
• “New Democrats would consult with stakeholders, industry experts, and consumers for best practices on creating an exemption for borrowers wishing to renew their mortgage through a different lender.”
• “New Democrats believe that homeownership shouldn’t be forever out of reach for Canadian families. New Democrats are committed to reintroducing 30-year terms to CMHC insured mortgages on entry-level homes for first-time homebuyers. This will allow for smaller monthly payments, freeing up funds to help make ends meet for young families.”
• “To help put an end to speculation that is fueling high housing prices, New Democrats will put in place a Foreign Buyer’s tax on the sale of homes to individuals who aren’t Canadian citizens or permanent residents.”
• “New Democrats are also fighting money laundering, which fuels organized crime and drives up housing prices. We will 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.”
  

MPC appreciates the thoroughness of the NDP in their response to us. Their platform can be found here, with housing on pages 12-13. CLICK HERE.

The Bloc Québécois (BC) has mentioned very little related to housing in their platform, discussing green energy programs for renovations, and sensibly discussing how victims of natural disasters (such as flooding) should be allowed to take money out of their RRSPs to pay for repairs and rebuilding. Specifically, the Bloc Québécois “ont proposé de permettre le retrait d’argent des REER, sans pénalité ni impôts, pour la rénovation des maisons des victimes de sinistres majeurs liés aux changements climatiques.” http://www.blocquebecois.org/2019/09/aide-aux-sinistres-le-bloc-veut-permettre-lutilisation-des-reer-pour-renover/

The BQ platform can be found HERE.

In its platform, the Green Party of Canada states that it would “re-focus the core mandate of Canada Mortgage and Housing Corporate (CMHC),” adding that, “individual homeownership should not be the preoccupation of a public service housing agency and a national housing strategy.” The Green Party also indicates that, if elected, it will:

• End first-time homebuyer grants and programs, focusing instead on affordable rental housing.
• Create a Canada Co-op Housing Strategy, updating how co-op housing would be financed, “in partnership with CMHC, co-op societies, credit unions and other lenders.”
• Remove the “deemed” GST whenever a developer with empty condo units places them on the market as rentals.
• Appoint a Minister of Housing (an overdue requirement for any Canadian government).

Sometimes, organizations such as ours, who send questions to parties for comment, are informed that the platform speaks for itself. With the People’s Party of Canada (PPC), they informed us directly that they had no firm housing platform, and that the PPC “have not developed positions on every issue and do not have the resources to do so”.