In terms of those specific actions, the federal government can take immediate steps to improve affordability and contribute to the prosperity of middle-class Canadians.
First, Canadians must get the maximum benefit from infrastructure and transit investment. To this end, the federal government should encourage its government partners to mandate appropriate densities along transit corridors and nodes. The federal government needs to offer land writedowns for family-oriented housing and mixed-income/mixed-use complete communities.
Second, to assist first-time homebuyers, federal housing policy should support both stability for housing markets and access to home ownership. Macroprudential rules that guard against financial system risks must not lock out well-qualified first-time homebuyers. Specific measures include support via the home buyers' plan, the continued availability of 5% down payment mortgages, and provision of 30-year amortization periods for well-qualified first-time homebuyers for homes priced under $500,000. Shared appreciation mortgages are another tool that should be explored to increase access to home ownership. Supporting first-time homebuyers is the key to healthy housing markets and a growing, inclusive economy.
Third, market rental housing is an important part of the housing spectrum. Modest revisions to how GST is applied would remove barriers to new market rental production. GST on new purpose-built rental developments is based on final value, as if they were for-sale condominiums, but should be based on actual project costs plus profit.
Also, the current arbitrary application of GST on secondary suites discriminates between attached and detached units and favours renters who have a family tied to the owner. This doesn't make sense. Secondary suites are an innovative form of affordable infill rental housing favoured by many municipalities, and they shouldn't be stymied by a federal tax policy glitch.
My final comment concerns the need for a renewed home energy retrofit program to benefit the environment, improve existing homes, and help Canadians save money.
In terms of climate change, housing is a Canadian success story. We have 38% more houses in Canada today than we did in 1990. Even with this, total residential emissions are down 11%. This has not come through codes, but from ongoing innovation and voluntary improvement supported by industry and government R and D collaboration.
Moving forward, we will continue to build homes that are even more efficient, but more stringent codes that reduce affordability are not the answer because new housing is not the problem. The largest GHG opportunity lies in retrofitting existing homes and a dollar invested in an existing home will yield four to seven times more GHG reductions than the same level of investment in a new home. A permanent refundable energy retrofit tax credit, using the EnerGuide rating system will most effectively address the government's climate change goals related to housing. By requiring homeowners to get receipts to qualify, our research suggests reduced underground economy activity can make such a program cost-neutral to government.
I'll leave it there. Bob and I will be happy to answer questions about these or other recommendations from our more detailed pre-budget submission.