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Recently, Minister of Finance Bill Morneau announced a package of measures affecting Canada’s housing market. These include closing tax loopholes, higher standards for mortgage lending and mortgage insurance, and plans to shift more risk onto private lenders. Finance Canada says these measures are intended to improve financial security for Canadians, market stability and the integrity of the tax system. The new rules will be in place on Monday, October 17th, 2016.

The Liberals have already made it harder for Canadians to buy a home by raising taxes, including:

    • Introducing a CPP tax hike that will cost a family with two working parents as much as $2,200 a year;
    • Breaking their promise to reduce taxes for small businesses;
    • Slashing the amounts that Canadians can save tax-free;
    • Ending the Children’s Fitness Tax Credit;
    • Ending the Children’s Art Tax Credit; and
    • Ending tax credits for post-secondary education and textbooks.

Now, by making it harder to get a mortgage, the Liberals are putting home ownership further out of reach, especially for young Canadians.

The Liberals should be helping Canadians by giving them the tools to save, lowering their taxes and creating jobs.

    • Unfortunately, economists predict that the Liberals’ housing policies will reduce the value of people’s homes across the country and lower economic growth.

Housing prices in the rest of the country have been steady or even negative, especially in resource dependent regions like Edmonton and Calgary.  The last thing the government should do is make it harder for families to buy or sell their homes. The previous Conservative government took a number of steps to ensure the stability of the housing market and steered Canada through the global financial crisis without any bank failures or bail-outs.

Further information on how these changes will affect you:

Canadian Mortgage Rule Changes October 2016 – Winners and Losers (hint: The big banks are the ‘winners’ and homeowners are the ‘losers’)

First-time homebuyers across Canada will be most affected by the changes (Robert Hogue, RBC senior economist)

These measures could reduce home sales and prices between 5% and 10% and reduce GDP growth by 0.5%. (Stuart Kraft, National Bank Financial)

The new rules will reduce the purchasing power of middle class homebuyers by $50,000-150,000 (Matt Lundy)

Technical Backgrounder: Housing Insurance Rules and Income Tax Proposals