No measures that could boost demand for housing in Toronto: Morneau
TORONTO — Three levels of government facing a red-hot housing market in the Greater Toronto Area agreed Tuesday not to introduce any measures that would further boost demand and drive prices even higher.
The federal and Ontario finance ministers and the mayor of Toronto met in the city to discuss how to tackle the housing market in the region, where the average price of detached houses rose to $1.21 million last month, up 33.4 per cent from a year ago.
Ontario Finance Minister Charles Sousa signalled that he will unveil his housing plan before the provincial budget, set to be delivered on April 27.
“In the coming week, the Ontario government will announce a suite of measures designed to increase supply and address demand,” he said. “We’ve developed a comprehensive action plan to help stabilize the housing market.”
Federal Finance Minister Bill Morneau said the three agreed that in the short term, none of the levels of government will bring in new measure for homebuyers that would boost demand.
“We’re concerned that the price increases, in particular in the GTA, are putting the dream of owning a home out of reach of middle-class families,” he said. “At the same time, we know that those who own their homes are concerned that they maintain the value of those homes.”
Morneau offered to share the data Ottawa is gathering on housing markets with the other two levels of government. He also said the Canada Revenue Agency will put resources toward ensuring tax compliance, but shut down a previous request from his Ontario counterpart to change the taxation of capital gains on the sale of homes that are not classified as a primary residence.
“Everything we wanted to say about capital gains taxes was in our last budget and you probably saw what was in our last budget,” said Morneau, who did not include the requested changes in his budget last month.
Toronto Mayor John Tory said he has committed to streamlining and speeding up building approvals, in particular for new affordable rental housing and he is also looking at a vacant homes tax.
Sousa has spoken often in recent weeks about going after speculators who buy a home in the hope of turning a profit rather than living in it. The Bank of Canada’s governor has also said the rate of increase in GTA house prices suggests demand is being driven more by speculators than “just folks that are buying a house.”
A spokesperson for Premier Kathleen Wynne said Tuesday that a tax on non-resident speculators is one of the measures being considered. Sousa declined to clarify what that could look like.