As Canadians process the results of Monday’s federal election, attention is quickly turning to what a fourth Liberal mandate will look like for the country’s housing sector.
The “centrepiece” of the Liberal housing plan is the “Build Canada Homes” program, which appears inspired by British Columbia’s housing market interventions, said Andy Yan, director of the City Program at Simon Fraser University.
The BCH program promises “to get the federal government back into the business of building homes,” according to the Liberal platform posted to the party’s official website.
“It is interesting to kind of see that level of direct building,” said Yan. “The question is, what’s the format of that kind of building? Are we looking at some kind of new federal agency? Are we looking at a kind of sub-contract, a series of grants in towards other levels of government?”
If the federal government becomes a homebuilder, Yan said issues surrounding jurisdiction and division of power are likely to result.
“How many of these promises criss-cross the type of political jurisdictions in Canada, and how are they going to be aligned with the … areas through which the federal government has historically not been and, much less constitutionally, isn’t supposed to be there?” Yan asked.
“You see things like zoning, you see things like development cost fees, and it’s something that largely the federal government has not directly been in, much less governed.”
Other challenges will include how to adapt federal measures to local geographies and the differing financial capacities of beneficiaries, Yan said.
'Build, baby, build'
It’s now time for the rubber to meet the road, said Chris Atchison, president of the BC Construction Association.
“We were heartened to hear Prime Minister [Mark] Carney say, ‘Build, baby, build’ on election night. The reality is that now we all must work together to make that a certainty,” Atchison said.
Investigation and consultation with the construction industry will be critical for the BCH program to succeed, he said.
“I think the government can play a critical role in helping to facilitate or freeing up the ability for developers and for builders to build more homes without becoming a bit of a gatekeeper or becoming another barrier,” Atchison said.
“We would be very concerned about the federal government going very fast, very far down this path without serious consultation about how that might work. In fact, we would be confident that other industry-led solutions to this challenge, by us having a seat at the table, would likely deliver better outcomes.”
Cutting GST, reviving MURB also considered
Other Liberal proposals include cutting the GST for first-time homebuyers on homes up to $1 million. Because the federal Conservatives had a similar proposal, this could be an opportunity for the two major parties to collaborate, said Brad Jones, chief development officer with Wesgroup Properties LP
“Both of them have similar GST-exemption proposals on new housing, the Liberals obviously being limited to first-time homebuyers,” Jones said.
“I think that’s a really important policy proposal that those two parties could be able to bridge, and would really bring down that upfront cost for new housing purchases.”
Jones also said some horse-trading could yield public benefits.
For example, the Conservatives could support the Liberals’ plan to revive the “Multi-Unit Rental Building” tax incentive from the 1970s, in exchange for the Liberals agreeing to support tax deferrals for capital gains reinvested in Canada.
MURB, a program regarded as successful in the ’70s and ’80s, allowed investors to claim depreciation and other costs against unrelated income.
“I think that is really attractive housing policy that could generate good urban infill rental housing across the country, and so it would be great to see the Conservative party align with the Liberals on that,” Jones said.
