MPC was very encouraged to see housing affordability take such a prominent place in the election, especially after our many discussions.
The first Federal Election of the COVID era is done. While there will be much commentary about it and its results, it is undeniable that all parties are being asked by Canadians to work together to find common ground on issues of pertinence to them, especially housing affordability.
Mortgage Professionals Canada has been at the forefront of such debates. MPC’s continuing effort to represent our industry to government was rewarded during this election campaign by the federal Liberal, Conservative, and NDP parties. Each of those campaigns reached out to MPC to discuss housing policy proposals we suggested to them during our MPC Hill Week in March (when we met with over 70 MPs), and in numerous subsequent meetings with senior ministers, parliamentary critics, and policymakers. The results? Those major political parties’ respective published election platforms reflected our recommendations, incorporating specific promises benefitting MPC members and clients, including:
- greater housing supply (all parties)
- an insurable 30-year amortization option for first time buyers, up from current 25-year max (NDP)
- improvements to the FTHBI (Liberal)
- removal of the stress test for mortgage holders wishing to change lenders at renewal, as long as they have a proven track record of making payments through their prior term, and aren’t taking on new mortgage debt (Conservative)
- increasing the insured mortgage property purchase price cap from its current $1M, to reflect prices today, and adjustments for inflation going forward (Conservative and Liberal)
- improving the Home Buyers Tax Credit (NDP and Liberal)
MPC was very encouraged to see housing affordability take such a prominent place in the election, especially after our many discussions. That said, it is important to note what the Liberals, who will lead a new minority government, promised during the campaign. Briefly, their promises of relevance to our community were:
- 1.4 million homes in 4 years, including
- $4 billion-dollar accelerator fund for cities
- Indigenous housing strategy promised
- $2.7 Billion over 4 years to National Housing Co-investment Fund
- $600 million for office space conversion
- Additional $567 Million to end chronic homelessness ($2.2 billion previously committed)
- 2-year ban on foreign,non-resident purchases of residential property (excl. recreational)
- Flipper tax - 100% capital gains tax if owned < 12 months
- FTHBI option for shared equity or deferred loan
- Increase insurance eligibility cap to $1.25 million, indexed to inflation
- 25% Mortgage insurance premium reduction
Anti-fraud & AML measures:
- Beneficial Ownership Registry
- New Federal Crimes Agency - anti-fraud and money laundering measures
- Double the Home Buyers tax Credit
- $40,000 tax free First Home Savings Account
- Reno tax credit of 15% (max $50,000 / $7,500) for family members
- Rent to Own Program - $1 Billion
- Stop excessive profits in the Financialization of Housing - possible new REIT tax
- Discourage Renovictions, possible new rental income tax regime
- Home Buyers' Bill of Rights:
- ban on blind bidding
- disclosure of representation of both buyer and seller by same realtor
- Right to a home inspection
- Require consumers to be informed of options, including FTHBI
- Lenders must provide up to 6 month mortgage deferral for life events
Our initial focus for discussion with the new government and its parliamentarians will be to assist in the implementation of new supply measures and the promised tax-free First Home Savings account. We will also caution government against the implementation of the proposed 25% reduction in mortgage insurance premiums without significant consultation with industry and OSFI. These premiums are determined by actuaries based upon calculations of expected losses and minimum capital reserve requirements. It is our belief that reducing the mortgage insurers’ top line revenue by such an amount would add significant pressure to a system ultimately backstopped by taxpayers. The possible dollar figure reward of premium savings does not outweigh the systemic risk such a move would make.
We look forward to these important discussions with all parties in the coming weeks. We will continue to keep our members informed as this parliament, led by a minority Liberal government, works to adopt some or all of the proposals made by them during the election, along with other recommendations we will develop within our industry and community as needed. What they promised during the election demonstrates likely common ground, and voters have made it quite clear that they want to see parties work together to improve housing affordability and ensure prosperity for future generations of Canadians.
If you have any questions or comments, please reach out to me and J.P. Boutros, MPC’s Director of Government Relations, by email below. Thank you.
President and CEO
Mortgage Professionals Canada