Following an extensive pre-budget consultation process, the Minister of Finance Bill Morneau tabled Budget 2016 yesterday afternoon. This is the first budget for the new Liberal government after rising to power on an ambitious plan centered on strengthening the middle class.
The current fiscal reality has seen the national deficit increase to $29 billion as the federal government works to fulfill its election commitments, combat climate change and introduce measures to stimulate the economy amid a collapse in oil prices.
Given the government's concerns about home prices in high-priced markets (like Toronto and Vancouver) and its recent decision to increase minimum down payments, CREA did not expect our industry's lobbying proposals for the Home Buyers' Plan (HBP) to be included in this year's budget.
CREA will continue to press for changes to the HBP in meetings between MPs and PAC representatives during our spring constituency visits and the PAC Days conference this fall.
Budget 2016 also contains additional initiatives of interest to the REALTOR® community:
- Middle income taxes are cut from 22 per cent to 20.5 per cent. A new tax bracket of 33 per cent for individuals earning more than $200,000 each year has been created.
- The government will invest on social infrastructure, including affordable housing and senior facilities. They plan to increase Canadians' access to affordable housing by building more units and renovating existing stock. They will also provide operational funding support for municipalities, including renewing support for Housing First initiatives that help homeless Canadians find stable housing.
- An important investment will be made to First Nations Communities to address on reserve urgent housing needs as well as the renovation and retrofit of existing units. The government will focus on establishing a National Housing Framework to support the construction and maintenance of on-reserve housing.
- On December 11, 2015, the Government announced coordinated actions to strengthen the resiliency of Canada's housing finance system, increase market discipline in residential lending, and promote long-term stability and balanced economic growth. The budget notes that the government will continue to closely monitor vulnerabilities related to housing and consumer debt and is prepared to implement further measures, should they be needed.
- Budget 2016 proposes to address this data gap by allocating $500,000 to Statistics Canada in 2016-17 to develop methods for gathering data on purchases of Canadian housing by foreign homebuyers.
- The government is not proposing any modifications to what is known as the "5 person rule" that defines an active business.
- The government will invest $30 million over 3 years starting in 2016-17 to homeowners affected by Pyrrhotite, a mineral found in foundations in certain regions of Québec.
- $3.4 billion over three years will be invested to upgrade and improve public transit systems across Canada.
CREA will continue to monitor developments on these issues and keep the REALTOR® community informed as further details are disclosed.