International Trade Committee on June 8th, 2023

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

Do you have any way to monitor that, and make sure those properties are actually occupied, that they aren't in fact vacant, despite what it may say on paper? If so, is it done through a filing?

[Wayne Redekop]

We don't track the occupation of the homes owned by the Americans or the non-resident seasonal residents. We don't necessarily track the frequency of use of the short-term rental properties, but we know that they're mostly not occupied by the owners on any basis. There would be a handful that would be occupied by the owners, but most of them are commercial enterprises. I'm sorry that I can't be more precise.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

Do you know how many Americans are being unfairly subjected to the vacant housing tax?

[Wayne Redekop]

I could probably get that breakdown. I would simply need to go to the addresses of these properties and figure out which ones are within the urban boundary and which ones are outside the urban boundary. I would say that the majority, though, would be within the urban boundary. There would still be a healthy number outside the urban boundary, but most of them would be within the urban boundary.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

Very good.

If you could forward that information to the committee, we would appreciate it.

[Wayne Redekop]

For sure, I will.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

Thank you.

The topic of exemptions has come up a lot to ensure that this tax has the least possible impact on Americans in border communities.

According to a recent article on CBC Lite, you think the exemption should be broadened to include those who spend at least three months a year at the property.

Do you still think that's adequate?

[Wayne Redekop]

I do, as long as it's a three-month period of occupation by the owner and not used for commercial purposes. I still stand by that.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

I don't have any more questions.

Thank you, Mr. Redekop.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

We'll go to Mr. Cannings for five minutes, please.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Thank you, Chair, and thank you all for being here.

I'd like to direct my questions to Mayor Redekop as well. The only connection I have to Fort Erie, I have to say, is that my father used to live there in the 1930s, working for Fleet Aircraft. Then after the Second World War, he went back to the Okanagan Valley in British Columbia, where he was born and raised, and, of course, that's why I ended up being born and raised there and not in Fort Erie.

In British Columbia in 2018, the government brought in the speculation and vacancy tax, which is very similar in some ways to this tax—at least, it has the same aims and in many ways the same mechanisms. However, it works on a much more regional basis and carves in most of the big metropolitan centres, where the housing price crisis is greatest. It leaves out a lot of the more rural areas—most of British Columbia in fact, including the south Okanagan, where I am—but it includes the central Okanagan. It takes that much more regional approach, in which there are boundaries, but I would say they're much bigger than the boundaries I've seen with regard to this, so there's less in and out.

I'm just wondering if you might comment. You talked about the exception with respect to how long someone has been a resident there, but do you think it would be possible for the government to bring in something like that on this tax? I know with federal taxes it's a little different, but would it help the situation if the federal government were to say, “Look, this is really a problem more in places like the greater Toronto area?”

[Wayne Redekop]

I definitely think there could be some revisions to the legislation that would cover the concern expressed by the member who represents the Toronto riding. Probably it is a greater problem in those larger cities, including, I'm sure, Vancouver.

It's a completely different dynamic along the border, as you've heard from Mr. Ketteman and Ms. Wright. It's not housing for us, because these American seasonal residences have never been part of our housing market. They're not really having an impact on the availability of housing or the affordability of housing in terms of our community. If they are in the larger centres, then definitely that's an issue that needs to be addressed, so there could perhaps be a greater focus on the size of the community or something of that nature.

I'm not crafting the legislation, but if I were to think about how to capture the real problem, I would identify where the real issue is occurring, what the extent of that problem is and how best to target that. It's like using a rifle as opposed to using a shotgun.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

That's right, and I was interested to hear your comments about the housing situation in Fort Erie. It sounds very similar to the housing situation in my home town of Penticton, where we have had record housing starts over the past few years. As a city representative told me recently, every day we're building more housing than we've ever built in Penticton, and every day we have fewer units of affordable housing. That was his way of saying we need a different tactic here; we need to build truly affordable housing. Is the situation similar in Fort Erie?

[Wayne Redekop]

It is, and I guess I would say that there is a connection here between these properties that are owned by the Americans, because if they go on the market and if they're purchased by Canadians for investment purposes, that in itself has an impact on the pricing, because investors will pay more for a house than a person who's going to live in it as their residence will. If you're living in it as your residence, you're not thinking about your return on your investment, whereas an investor is.

We've seen that dynamic occur here, particularly with respect to the short-term rentals, so we're having problems here that are similar to what you're experiencing in Penticton. The big challenge for us is how we manage all of this.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

I'll just comment that one of the big differences between the British Columbia speculation and vacancy tax and the federal unused housing tax is that they apply to both Canadians and foreign owners in British Columbia.

I'll leave it there.

[The Chair, Liberal, Judy Sgro]

Thank you very much. This ends round one.

We have 10 minutes remaining. I could go on to the next two people we have in round two, if the committee wants to continue.

Yes.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

Madam Chair, would you indulge me for some discussions on future meetings at the end of this?

[The Chair, Liberal, Judy Sgro]

Well, there are 10 minutes remaining in our schedule, so I could before we go into round two. Otherwise I'm going into the first two speakers on round two. That will bring us to 5:30, and that will be the end of the meeting.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

Well, Madam Chair, perhaps we could thank our witnesses for attending, and then I'd like to discuss the possibility of calling another meeting to discuss inviting CRA officials.

[The Chair, Liberal, Judy Sgro]

Okay.

To our witnesses, thank you very much. We very much appreciate your taking time out of your own busy schedules and sharing your concerns. We heard them all very clearly, so thank you very much.

We will disconnect now and go on to our other business.

Mr. Baldinelli, go ahead.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

Thank you, Madam Chair.

Thank you to my colleagues, first of all, for agreeing to hold the two sessions with regard to the UH Tax Act and its impact on border communities.

I am hopeful—based on some of the commentary we've heard, including today from finance officials, who crafted the policy but who are not responsible for its implementation, and the example from Mr. Ketteman—but I wrote to the minister a year ago, and we're still working on trying to get clarification for a number of residents with regard to the impact as well as any potential changes if they could be made.

I am hoping we can have at least one more session, to which we could invite officials from CRA to come forward to discuss the UHT and its implementation, and how they are working with residents.

I am disappointed at not having had another chance to talk to Mr. Allen from Global Affairs, because I would have asked whether the government is aware of how many snowbirds live in the United States—there are 500,000 in Florida alone—and what the impact is.

Mr. Higgins discussed the notion that he doesn't want this to be a race to the bottom, and I agree with him, but if we're going to move forward and we're going to be taxing 900 residents in Fort Erie alone, I think Mr. Higgins is going to have some concerns with that. What will the impact be on Canadians who reside in the United States?

I didn't get a chance to ask Mr. Allen that question. To me, it is more than just a minor concern; it's something that I think deserves at least one more hearing.

I am hopeful that my colleagues here would agree to that.

[The Chair, Liberal, Judy Sgro]

I have Ms. Gladu, Mr. Arya, Mr. Carrie and Mr. Cannings, so we will have to move it along.

[Marilyn Gladu, Conservative, Sarnia—Lambton, ON]

Very good. Thank you, Chair.

I would support having CRA come in, because I have some questions, for example, about how they are going to verify the 28-day residency. Are they going to use CBSA information? Is that another resource that's needed?

They said that 35,000 folks would be affected by the tax, but that wasn't really how many people would have to file and just say that they were exempt, so that's a huge burden of work for CRA.

I'd be interested in hearing from CRA, because we also don't know whether there is a mechanism for dispute, if people think they deserve an exemption, such as the person who has a neighbour right next door who doesn't have to pay whereas she does.

[Arif Virani, Liberal, Parkdale—High Park, ON]

On a point of order, Madam Chair, we're discussing committee business, and that's usually done in camera, so can we switch to in camera?

[The Chair, Liberal, Judy Sgro]

By the time we went in camera, the meeting would be over. There is five minutes remaining and if we went in camera, by the time they did all the technical stuff, that would be the end of the meeting.

We can have this discussion at another time, at the beginning of our meeting on Monday.

I have Mr. Sheehan, Mr. Arya, Mr. Carrie and Mr. Cannings, who all want to comment on this. We're in a public session and we should be doing committee business in a private session.

I am going to go in camera because that's how we're supposed to do committee business. We'll go in camera, but I don't know how much time that's going to take. It's going to take a couple of minutes.