Prime Minister Justin Trudeau recently addressed the issue of unsustainable home prices and their impact on retirees at a private seminar with Canada's leading advocates of a home equity tax. Blacklock's Reporter says Trudeau emphasized the need to curb real estate speculation to prevent housing from becoming solely an investment vehicle rather than a means of building family and community."The big thing is we just have to slow down on the speculation, right?" said Trudeau. "I mean, housing prices and values should increase over a lifetime, but you shouldn’t be able to flip a home eight years later and have it double the price.”He elaborated on the consequences of this speculation, noting, “There is something unsustainable, and it moves housing into an investment vehicle rather than a vehicle for supporting a family and building a community around it. And as soon as it’s an investment vehicle, you have people who have money using it as a way of generating more as opposed to us saying, ‘Okay, everybody should have an opportunity to do this.’”These comments were part of a 37-minute excerpt from a private town hall held on June 25 with Generation Squeeze, a University of British Columbia group that supports a home equity tax. Attendance was by invitation only and limited to "supporters and allies," according to a statement from Generation Squeeze.Despite cabinet's April 16 budget announcement of an $18 billion increase in capital gains tax revenue, which would not apply to the sale of Canadians' principal residences, the Prime Minister did not clarify the reasons behind his private meeting with home equity tax proponents. He described the group as "a great group of people where we agree on all sorts of things and look forward to digging into the places where we can all learn from each other.”Trudeau also discussed the challenges faced by retirees with substantial home equity, describing how many older Canadians live in homes that are too large for their current needs but are unwilling to relocate due to strong community ties. He acknowledged the generational disparities in the housing market, which disadvantage first-time buyers.“We have taken those last 10, 20 years of massive increase in value of homes as sort of a new normal, as okay, that’s just the way the system works,” said Trudeau. “It’s tough but it means we are going to have value in our homes that we can therefore retire on.”He highlighted the need for better retirement planning and pension systems to ensure that lifelong renters are not left financially insecure in their later years. “There are lots of cities around the world where people just accept they are going to rent their entire lives but they are not feeling they are going to be impoverished in retirement," Trudeau said.However, he acknowledged the strong opposition from various groups, including farmers, doctors, and small business owners, to capital gains tax hikes. “We know that unlocking close to $20 billion to be able to invest in housing opportunities, to be able to put toward things young people are going to need now by asking not older generations specifically but those who have done very well particularly amongst older generations, not to pay a little more, just to make a little less profit when they sell off extremely profitable investments,” he stated.Trudeau also touched on the generational differences in attitudes towards housing affordability. “You talk to the older generation of folks, they say: ‘Oh, no, I remember I had to scrimp and save for years before we could set a downpayment on a home,’” he said. “It’s this idea that housing was always the big expense and it was always hard to get into housing.”“There is something foundationally different in this generation,” he continued. “Young people have great jobs and a solid side hustle and shifted expectations and they still can’t find a place to actually start on that path towards home equity.”Though Trudeau did not explicitly endorse a home equity tax during the town hall, he refrained from reaffirming his 2021 election campaign promise to never consider such a measure. In the past, he has assured that the capital gains exemption for primary residences would remain intact, calling any suggestions otherwise “the lie about what we might be doing.”Generation Squeeze, supported by a $450,000 grant from the Canada Mortgage and Housing Corporation (CMHC), released a report advocating for the taxation of principal residences. The report, "Wealth And The Problems Of Housing Inequity Across Generations," estimated that such a tax could raise $5.8 billion annually.4o
