News & Resources

Federal Budget a Snoozer for the Housing Market

April 19, 2021
6 mins
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The Liberal government just dropped its first full budget in more than two years and real estate watchers nationwide are finding it rather anti-climactic.

Minimal news is good news if you're a homeowner worried that politicians would burst the housing balloon. It's bad news if you're a wanna-be homebuyer praying for politicians to burst the overinflated housing balloon.

Here's a quick rundown on what the feds announced today that's housing-related:

No New First-time Buyer Program

CMHC confirmed a few weeks back that a revamped First Time Home Buyer Incentive (FTHBI) is "still expected for the spring." But it didn't arrive in this budget.

The unpopular FTHBI launched in September 2019. It's been widely panned for being an overly bureaucratic, complex scheme that doesn't actually improve the buying power of most young buyers. The Department of Finance may have felt the timing was too risky to launch a new demand-stoking program given home prices are already going orbital.

No Changes to the Primary Residence Capital Gains Exemption

Homeowners are breathing a sigh of relief as the budget did not include new taxes on the sale of principal residences. In reality, this was always a low probability possibility—given how outraged people would have been at Ottawa dipping into their nest egg.

Vacant Property Tax

Canada's first-ever national vacant property tax is scheduled for January 1, 2022. It applies only to "non-residents" and will discourage few offshore buyers in our hottest markets. Hence, it's a policy made more for optics than effect.

National Child Daycare

A new government child care program promises to bring "fees for regulated child care down to $10 per day on average within the next five years." It could help up to 240,000 workers enter the labour force the government estimates. To the extent that helps families generate more income it might be slightly bullish for home prices—at the very margins.

Today's Featured RatesUpdated 18:56 ET on Jun 23, 2021

Rates are based on a $300,000 mortgage.

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1.73%
Term
5 Yr Fixed
Loan to value
Up to 65%
Insurance
Insurable
Rate held until
Aug 08
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1.44%
Term
3 Yr Fixed
Loan to value
Up to 65%
Insurance
Insurable
Rate held until
Oct 22
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0.99%
Term
5 Yr Variable
Loan to value
80.01% to 95%
Insurance
Insured
Rate held until
Oct 22

Funding for Energy Efficiency

The government proposes that CMHC provide "interest-free loans worth up to $40,000 "to homeowners and landlords who undertake retrofits identified through an authorized EnerGuide energy assessment." That would include things like installing energy-efficient windows, replacing an oil furnace, installing solar panels or adding better insulation. The program is slated to start in "summer 2021."

New Public Transportation Funding

The budget touts "investments in public transit to help local governments unlock more housing supply." But it's scarce on details, particularly with respect to the ultra-high-speed rail needed to move bodies from regions with high home values to regions with lower housing costs.

Skilled Trade Apprenticeships

If you've tried to build or renovate a home lately, you know full well how scarce and expensive tradespeople seem to be. The Liberals want to spend $470 million to establish a new Apprenticeship Service. The budget says, "Apprenticeship Service would help 55,000 first-year apprentices," many in construction, find opportunities at small and medium-sized employers. Employers could get up to $5,000 for first-year apprentices ($10,000 for women, minorities and those with disabilities) to cover costs like salaries and training.

More Low-Income Housing Funding

The Liberals plan to spend billions more on low-income housing and housing for other disadvantaged groups.

Rob McLister

Rob McLister has been informing mortgage consumers and professionals since 2007. In that time, he’s written more than 2,500 mortgage stories for publications ranging from the Globe and Mail — where he presently serves as mortgage columnist — to the National Post, Maclean’s, Canadian Mortgage Trends and RateSpy.com. Regularly quoted throughout the media, Rob is a committed advocate of greater transparency in the mortgage industry. He’s also been a vocal consumer advocate for more sensible mortgage regulation. In 2011, he launched two mortgage fintechs: mortgage comparison website RateSpy.com and digital mortgage broker intelliMortgage Inc. The former is the go-to source of Canadian mortgage news and the only site comparing all publicly advertised prime mortgage rates. The latter is Canada's leading online mortgage provider for self-directed borrowers. Both companies were acquired in 2019 by RATESDOTCA Group Ltd.

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