With less than a month until Canada’s new foreign buyer ban goes into effect, the real estate industry is still waiting for details about the legislation and how it will be implemented.
On Tuesday, Michael Bourque, CEO of the Canadian Real Estate Association, appeared before the standing committee on national finance to speak on housing measures. Bourque used the opportunity to address the contentious legislation.
“…My members have no information about the rules, exemptions, or details of the regulations since they have not been released,” Bourque told the committee. “The onus will be on them to somehow comply…or face a $10,000 fine.”
Beginning next year, non-Canadians will be barred from purchasing residential property in Canada for two years after parliament passed the Prohibition on the Purchase of Residential Property by Non-Canadians Act in June.
CREA has said apart from the steep fine and summary conviction outlined in the act, the association has few details.
“We expect the regulations to be drafted in such a way that the average individual will not be able to comply without expert legal advice,” Bourque said.
The federal government introduced the legislation before Canada’s housing market saw a notable shift in activity. Some industry insiders have told Real Estate Magazine they don’t believe the new ban will move the dial on affordability.
Bourque believes the ban will ultimately make houses less affordable. “Developers count on presales to finance construction, so now they will face a choice of fewer buyers and therefore building fewer units or paying the $10,000 fine as a cost of doing business.”
The CEO added, “Both these choices add to the cost of development and, ultimately, to housing affordability.”
Bourque also warns of the implications the foreign buyer ban could have on Canada’s reputation– adding the country needs immigration to support its labour market.
“We know the benefits of home ownership, and many of the immigrants we attract to our shores share the dream of owning a home and building a community,” he said. “We should make it easier to do so, not harder.
“This xenophobic legislation damages Canada’s brand as a multicultural nation that welcomes people from all around the world,” Bourque said.
The ban comes into effect on Jan. 1, 2023.