The Housing Minister, Ahmed Hussen said “we realize that housing is becoming a threat to our ability to not only integrate folks but to also economically develop regions in Canada.”
“The Canada’s investment in housing will pay dividends in terms of attracting and retaining immigrants.”
The former immigration minister said that “housing, although it can be seen as a challenge, it is also an opportunity for us to grow.”
Canada hit a record-breaking immigration level of welcoming about 405,970 new permanent residents to the country last year and in February this year, Canada announced in its Immigration Levels Plan 2022-2024 that it will be welcoming 431,645 permanent residents in this year, 447,055 in 2023 and 451,000 in 2024.
Ottawa has also increased its effort in accepting an unlimited number of Ukrainians that are fleeing the war in Ukraine and seeking refuge in Canada. It created a pathway called the Canada-Ukraine Authorization for Emergency Travel (CUAET) and this pathway was flooded with more than 112,000 applications in its first two weeks.
The new immigration pathway allows Ukrainians to stay in Canada for up to three years and be eligible for free open work and study permits.
How Inflation In The Cost Of Housing Has Been A Problem For Immigrants
With the rise in the inflation to 6.7% and the ability to afford houses becoming a challenge, Ottawa is worried that a lack of affordable housing could slow Canada’s economic development and discourage prospective immigrants from coming to Canada.
The Federal Government in its latest budget is looking to address the perceived shortage of affordable housing through strategies that are designed to double the level of construction of housing over the coming decade.
These strategies include:
- A $4 billion Housing Accelerator Fund which is expected to lead to the creation of 100,000 new housing units over the next five years
- $1.5 billion over two years to extend the Rapid Housing Initiative and create 6,000 new affordable housing units
- The tax-deductible Tax-Free First Home Savings Account to give first-time home buyers the ability to save up to $40,000 to buy homes
- An extension of First-Time Buyer Incentive to the end of March 2025 and a promise to make the program more flexible and responsive to the needs of first-time homebuyers.
- $200 million for the Affordable Housing Innovation Fund, including $100 million to support non-profits, co-ops, developers and rent-to-own companies building new rent-to-own units.
- A Home Buyers’ Bill of Rights
- $500 million to launch a Co-operative Housing Development Program to expand co-op housing
- $1 billion in loans to support co-op housing projects.
- Anti-flipping rules taxing all profits on the sale of a property held for less than a year as business income starting in January next year.
- A $7,500 Multigenerational Home Renovation Tax Credit for homeowners who want to build mother-in-law suites
- $845 million over seven years to support housing in Inuit communities
- $2.4 billion over five years to support First Nations Housing on reserves
- $190 million over seven years for housing in Metis communities
- $565 million over five years to support housing in self-governing and modern treaty holder First Nations communities.
- $475 million to provide a one-time, $500 payment to those facing housing affordability challenges
- $150 million over two years to support affordable housing and related infrastructure in the three territories
- A doubling of the First-Time Home Buyers’ Tax Credit amount to $10,000
- $300 million over five years to co-develop and launch an Urban, Rural and Northern Indigenous Housing Strategy
- A proposed two-year ban on buying non-recreational, residential property by foreign-owned companies and foreigners.
- A doubling of the qualifying expense limit of the Home Accessibility Tax Credit to $20,000 which will mean a tax credit of up to $3,000
- $562.2 million over two years beginning in 2024 for Reaching Home, to help the homeless.
The Minister of Finance Chrystia Freeland said “we will make the market fairer for Canadians. We will prevent foreign investors from parking their money in Canada by buying up homes. We will make sure that houses are being used as homes for Canadian families rather than a speculative financial asset class.”
The foreign investors that are targeted under the two-year ban on buying Canadian residential real estate will not include foreign nationals who are studying at Canadian colleges and universities or those from other countries who have already obtained their permanent residency.