441-01677 (Social affairs and equality)

The Government of Canada thanks the petitioners from Kitchener Centre for sharing their concerns about access to a safe, affordable place to call home.

Our government believes that all people living in Canada should have access to safe and affordable housing. Launched in 2017, the National Housing Strategy (NHS) is a 10-year, more than $82-billion plan to give more people living in Canada a place to call home. The NHS is Canada’s largest and most ambitious federal housing program in history and consists of complementary programs and initiatives that aim to address needs across the housing continuum, prioritizing populations most in need.  

The NHS sets ambitious targets to ensure that unprecedented investments and new programming deliver results. By 2028, it will help create over 160,000 new housing units and repair another 300,000, reduce or eliminate housing need for 530,000 households, and protect 385,000 households from losing an affordable place to live. The government is making substantial progress toward NHS 2027/28 targets and is considered on track.  

The NHS is anchored in the National Housing Strategy Act (NHS Act), which requires the federal government to develop and maintain a national housing strategy with a long-term vision for housing that focuses on improving housing outcomes for those in greatest need. The NHS Act also requires the NHS to take into account the key principles of a human rights-based approach to housing, including the principles of non-discrimination, inclusion, participation, and accountability.

The NHS prioritizes the needs of the most vulnerable, including women and children fleeing situations of domestic violence; racialized persons; seniors; Indigenous peoples; persons with disabilities; those dealing with mental health and addiction issues; veterans; and young adults. It promotes diverse communities, supports the creation of housing that is sustainable, accessible, mixed-income, and mixed-use, and located close to transit, work, and public services. 

Housing affordability?is generally understood from a household’s perspective based on the proportion of?income?going toward their housing costs.? People experiencing homelessness, renters, homebuyers, and existing homeowners all face different and complex housing affordability challenges. Affordability requirements of federal housing programs depend on who the program aims to support, and the housing affordability outcomes the program aims to achieve (e.g. programs to create deeply affordable housing for vulnerable Canadians have different requirements from programs aiming to increase rental housing supply). Similarly, the minimum duration of affordability varies by program. Proponents approved for funding must adhere to minimum requirements and are required to report to Canada Mortgage and Housing Corporation (CMHC) during the construction of their projects and throughout the affordability period to ensure they are respecting the terms of their agreements. 

Supporting and growing community housing in Canada is a priority under the NHS. The $4.3 billion Canada Community Housing Initiative is helping to protect and build community-based housing for 330,000 households across the country and another 50,000 units created through an expansion of community housing. The government is also providing $618 million over 10 years under the Federal Community Housing Initiative, which protects tenants and stabilizes the operations of more than 55,000 units in federally administered community housing projects. Moreover, non-profits and co-ops are eligible to apply for funding under NHS supply initiatives. 

In Budget 2022, the federal government committed to creating a new Co-operative Housing Development Program aimed at expanding co-op housing in Canada. Additional information on this new program should be available in the coming months. 

Strong partnerships with municipalities, provinces, and territories are essential to increasing housing supply and implementing longer-term solutions for housing affordability. Local governments play an important role in creating the conditions to remove systemic barriers to housing supply in their jurisdiction. The $4-billion Housing Accelerator Fund (HAF) is designed to drive transformational change within the sphere of control of the local government regarding land use planning and development approvals with the overall objective to accelerate housing supply. The program will provide funding to local governments to implement lasting initiatives that reduce barriers to housing supply and development approvals, and over the long run, make housing more affordable to Canadians. The HAF is helping to fast track at least 100,000 new homes across Canada over the course of the initiative. 

Real Estate Income Trusts (REITs) are among various players in the rental market. CMHC actively monitors market conditions and works with federal partners to ensure appropriate macro-prudential policies are in place. The government also takes seriously the negative impacts that private ownership of residential properties can have on rents and housing prices.

In terms of regulating foreign investment in residential real estate, on January 1, 2023, the Prohibition on the Purchase of Residential Property by Non-Canadians Act came into force preventing non-Canadians from buying residential property in Canada for 2 years (certain exceptions apply).  

Rest assured our government is working to ensure that everyone living in Canada has a safe and affordable place to call home by expanding Canada’s housing supply and continuing to advance our investments in affordable housing. 

The Government of Canada thanks the petitioners for expressing their views about the importance of affordable housing.

The response from the Department of Finance to part 2), 3) and 6) is as follows:

Part 2) The government is committed to ensuring that investor activity is helping, not hurting, housing affordability in Canada. To this end, the government indicated in Budget 2023 that policy changes applicable to all large corporate landlords could be considered to ensure best outcomes on affordability and fair treatment of tenants.

Part 3) The Government of Canada continues to make significant investments in new initiatives to strengthen Canada’s Anti-Money Laundering and Anti-Terrorist Financing (AML/ATF) Regime, including specific actions to counter money laundering in real estate from either domestic or foreign sources.

For example, regulatory amendments that came into force June 2021 have strengthened AML/ATF obligations for all reporting sectors, including the real estate sector. In particular, real estate agents, brokers and developers are now required to take reasonable measures during certain transactions or activities to collect beneficial ownership information, determine if a client is a politically exposed person, and to take enhanced measures if the client is high-risk.

The latter includes specific obligations such as establishing the client’s source of funds and source of wealth, and obtaining senior management review of a transaction of $100,000 or more.

More recently, to help further prevent financial crimes in the real estate sector, Budget 2022 announced the government’s intention to extend AML/ATF requirements to all businesses conducting mortgage lending in Canada within the next year.

Furthermore, to counter the misuse of anonymous Canadian shell companies for illegal activities, including money laundering, corruption, and tax evasion, the government is accelerating by two years its commitment to amend the Canada Business Corporations Act (CBCA) to implement a free, public and searchable beneficial ownership registry, which will now be accessible before the end of 2023. This registry will cover corporations governed under the Act and be scalable to allow access to the beneficial ownership data held by provinces and territories that agree to participate in a national registry. An initial package of CBCA amendments received royal assent in June 2022, with additional amendments to follow in a subsequent legislative vehicle.

In addition, on December 15, 2022, Parliament passed legislation (C-32) to enhance the tax reporting obligations imposed on certain trusts. These measures are intended to improve the collection of beneficial ownership information and encourage tax transparency to help provide authorities with sufficient information in order to determine taxpayers’ tax liabilities and to effectively counter aggressive tax avoidance as well as tax evasion, money laundering and other criminal activities. The new rules will apply to the tax years of trusts that end after December 30, 2023.

Finally, the government has taken action to curb foreign investment and speculation in Canadian housing, as committed in Budget 2022. On January 1, 2023, the Prohibition on the Purchase of Residential Property by Non-Canadians Act came into force. The Act prohibits people who are neither Canadian citizens nor permanent residents from purchasing residential property in Canada for a period of two years, including preventing non-Canadians from using corporate structures to avoid the prohibition. The Act also establishes penalties for non-Canadians purchasing residential property (and those knowingly assisting them).

Part 6) The government announced its intention to introduce such a tax in Budget 2021.

The Underused Housing Tax Act, which received royal assent as part of Bill C-8 on June 9, 2022, implements an annual tax of 1% on the value of vacant or underused residential property directly or indirectly owned by non-resident non-Canadians.