Thank you very much.
My name is Wayne H. Redekop, I'm the mayor of the Town of Fort Erie, and have been for nearly 18 of the past 25 years. I grew up in Fort Erie and have lived there for my entire life, with the exception of when I pursued my education. I'm a lawyer by profession and practised law for nearly 46 years. One of my summer jobs for four years as a student was as a customs officer at the Peace Bridge, which connects Fort Erie with Buffalo, New York. I served with the board of trustees of D'Youville College—now a university—in Buffalo, New York, between 2007 and 2015, the last two years as chairman of the board. I'm very familiar with my community and the dynamic of the Canada-United States border as it relates to people and trade.
One of my grandmothers was born in the United States, in Buffalo, New York. I can trace my ancestry through my American relatives back to the Mayflower. As a youth, I visited family living in western New York and associated with many Americans who spent summers with their families in Fort Erie as seasonal residents. The development of friendships and relationships continues to be the reality in what can best be described as our binational region. In fact, it is typical for many who grew up in south Niagara and western New York to have family and friends on both sides of the international border.
On February 21, 2023, I corresponded with Minister Chrystia Freeland on the underused housing tax. I did so because there are approximately 900 properties in Fort Erie that are owned by United States residents or citizens; that number constitutes about 6% of the housing stock in Fort Erie. The vast majority of those properties have been used and owned by families, some for multiple generations, as Mr. Ketteman has indicated. Some are cottages in the familiar sense; others are large homes located on Lake Erie, and all are typically used by the owners and their families as seasonal residences.
The underused housing tax is causing great anxiety, anger, disappointment and uncertainty among Fort Erie's American seasonal residents. These are individuals who are not only good friends and relatives in many cases, but also participants and supporters of local programs, activities and events. They're important customers of our local businesses. They are a vital element to the richness of life in our community. The fluidity of frequent travellers across the border between Niagara and western New York is a testament to the closeness of relationships between the people of our two countries—the greatest friends, allies and trading partners in the world. They are the living symbols of that relationship.
I understand the purpose of the tax was to prevent offshore investors from acquiring Canadian residences and taking them off the market for those in need of permanent housing. We all recognize the need for more housing units as the population of our country grows. As the tax relates to our American seasonal residents, though, it misses the mark. These seasonal residences have never been part of the community's permanent housing market and were not acquired for investment purposes. They're not owned by individuals or corporations that have no other connection to our community or expect to capitalize on the stressed housing market. They're owned by families that are considered to be part of our community in every sense.
In truth, the acquisition of housing units in Fort Erie by others who do not live in our municipality—although based in Canada—used for short-term rental purposes represents a greater challenge affecting the need for housing in our community. Perversely, the underused housing tax advantages those investors and could result in more opportunities for them to invest in property in Fort Erie and elsewhere as our American friends and relatives decide they cannot afford the new tax and choose to sell their properties, which would be incredibly unfortunate. At the expense of inadvertently punishing individuals and families who have been part of the life in our community for generations, the Government of Canada would benefit Canadian-based investors with no interest in our community other than the business opportunity. There could not be a worse result; it is a true example of an unintended consequence.
The exemptions provided for in the legislation are inadequate to provide relief for most of the Fort Erie American seasonal residents who own their own homes. Fort Erie, a municipality of 33,000 people, is part of the St. Catharines-Niagara census metropolitan area. The municipality is a mix of urban and rural areas containing several population centres that align with our urban boundaries. My understanding of the new legislation is that it provides that the seasonal homes within the urban boundaries of Fort Erie are subject to the underused housing tax, whereas those that are located outside our urban boundaries are not. That in itself highlights the unfairness regarding the tax.
I would suggest one solution to rectify this problem would be to change the exemption provision so that regardless of whether the property is inside or outside the urban boundary, the property is exempt if the owner or his or her spouse occupies the property for at least three months of the year.
The tax would then capture anyone who has acquired a house for investment or commercial purposes, while providing relief to those who use a house as a seasonal family residence. It would also defuse the simmering anger of our American neighbours, who will bear the brunt of this tax and the reporting mechanism contained in the legislation.
Many of our seasonal residents continue to have little, if any, knowledge of the reporting requirement of the tax and will be subject to extraordinary penalties for simply owning property that the federal government has classified for special taxation. Unless the federal government intends to reach out to all property owners affected by the underused housing tax, the Town of Fort Erie is willing to assist it to notify these property owners of any filing requirement or changes to the legislation and regulations.
This is an extremely important matter, not only for our seasonal residents, but also for our community.
Thank you for providing me the opportunity to address you today, and for your consideration of changes to the exemption provisions in the legislation and the need to provide clear, concise and timely information to the affected property owners.
Thank you.