Mr. Speaker, I am pleased to speak today in favour of Bill C-520, An Act to amend the Income Tax Act (Home Buyers' Plan).
Prior to my election to the House of Commons in 1993, I worked for many years as a real estate agent in the greater Toronto area. During that time I remember the introduction of the home buyers' plan in 1992.
My work in real estate helped give me insight into the importance of home ownership in Canadians' lives. That is why I spoke in favour of extending the plan in one of my first speeches in the House of Commons on February 1, 1994.
The Liberal government made the home buyers' plan permanent in its budget three weeks later. Since then the program has helped hundreds of thousands of Canadians purchase their first home. It has assisted thousands of Canadians with disabilities in finding a home more suited to their needs.
The home buyers' plan seemed like a good idea when it was first introduced and over the years has proven to be a great success.
The program has minimal cost to the government and because participants must quickly repay the money they take out from their RRSP, in most cases it has no negative long term effect on retirement savings. In fact, due to the importance of home ownership in the retirement plans of many Canadians, it could be argued that the plan adds to participants' financial security after they leave the workforce.
Thus, it seems that the only major problem with the home buyers' plan is that the $20,000 allowable amount is set in the Income Tax Act and therefore has not increased since it was first created.
Bill C-520 aims to fix that problem, at least for the time being. It raises the allowable amount to $25,000, a more appropriate amount given today's financial realities.
The need for this increase is great. In the past 16 years real estate prices in Canada have risen at historic rates making the home buyers' plan an even more important incentive, especially for urban Canadians.
The Canada Mortgage and Housing Corporation reported in February 2005:
It is interesting to note that the proportion of participants in the HBP in Toronto, Montreal, Vancouver, Calgary, Ottawa, Gatineau, and Quebec, was higher than the proportion of these cities’ population in the Canadian population. In other words, the Home Buyers’ Plan take up is more heavily concentrated in Canadian urban centres.
It is not hard to see why that might be the case. Since I was first elected to the House of Commons in 1993 the average multiple listing service sale price of a home in Toronto has risen from $196,000 to an incredible $352,000 in 2006.
Prices in some other cities have grown at even faster rates. According to the Canadian Real Estate Association, the average sale price of a home in Calgary was $415,000 in February of this year--