Reaction to the federal budget’s passing nod to housing in Canada ranged from lukewarm to total failure..Derek Holt, vice-president and head of capital markets at Scotiabank, blasted Budget 2023 as being “divisive” representing “an assault on relatively wealthy folks,” reports Canadian Mortgage Professional, adding, at best, it was confusing when it came to housing..“The Bank of Canada is trying to contain inflationary pressures and soften previously raging house prices,” said Holt. “The Feds have thrown open the immigration doors into a market with no supply while another tax subsidy to housing starts up on April 1.”.Holt fears Canadian housing markets are heading into a phase of volatility that could undermine the bank’s efforts to date..“Governments did a fantastic job in the early days of the pandemic,” he said. “The problem is that they are now addicted to high spending and delivering divisive jabs at certain interests. Nothing is being done about productivity and competitiveness pressures that are mounting year by year. Big spending, big deficits, big debt, high taxes, high inflation, and bond market challenges are not the path to prosperity.”.“Government policy, especially at the federal level, has typically been targeted on the demand side; freeing up more money to buy a house. While the thinking is this should improve affordability, counterintuitively, it mostly just helps prices increase,” said the Conference Board of Canada in a statement..“At a time of sky-high immigration, governments need to focus on how to increase housing supply, and this budget does little on that front.”.“This budget was plainly and simply a political budget, not an economic budget,” said Paul Betts, president of real estate consulting firm, GAP Marketing and a home construction industry veteran. “In order to retain support from the (federal) NDP, two big bones were thrown their way, universal dental care and extension of the GST rebate program.” .“There were no meaningful measures directly addressing housing, in my view, aside from the passing comment about working on adding 100,000 new units over the next five years.”.“There was a provision allowing those under 40 to save $40,000 tax free for down payments, which has not worked before and does not address the immediate urgencies.”.“I would have liked to have seen, one, a GST break on new homes/construction and two, support for skilled trade education in the form of paid schooling.”.Under the Liberal government, housing costs have become progressively more expensive, said Michelle Rempel Garner, CPC MP, Calgary Nose Hill.“Since the Liberals came to power in 2015, the average cost of renting a two-bedroom apartment in Canada was $949 while today, the figure sits at $2,103. The average home price also doubled from 2015 to 2021, increasing from $413,000 to $811,700,” said Rempel Garner in a release..“With advocates across Canada raising this as a critical issue ahead of the budget and Conservative Leader Pierre Poilievre making it one of his top priorities, Trudeau needed the budget to show significant action on the issue.”.Rempel Garner said from an affordable housing viewpoint, the budget just regurgitated previous policies, with no clear guideline on timing or practical targets to open up new housing supply..“Politically, Trudeau isn't likely to get much of a polling bump from the budget,” she said. “Instead, it seems to have been designed to do the bare minimum to avoid an election over a budget vote, while acting as a political tourniquet by giving the media something to talk about over the next two Parliamentary recess weeks other than the foreign election interference scandal.”.“In the wake of the budget, expect the cost of housing to stay the same.”
