Mr. Speaker, I appreciate the opportunity to speak to the bill because originally 15 months ago I was asked to present the bill and in fact had already had it drafted by the clerk. Things were going very smoothly until I realized that my buy Canada motion for public transit was pretty much a priority for myself and my riding. I am really glad to see this surface again in this way.
In particular, my sister-in-law, who is a very highly respected broker, will appreciate this as will John Litt who is an Ontario Real Estate Association representative and had been a real champion of this issue. Mr. Litt and his team deserve full marks for encouraging this.
Just as an aside, the City of Thunder Bay has the highest rate of home ownership in Canada and I am proud to announce that. It also has the second highest rate of home ownership for people with recreational properties. Some call it cottages, others cabins, and in our neck of the woods it is called camp.
As mayor, I met frequently with the Thunder Bay Real Estate Board and as MP I am regularly briefed by its representatives.
When this came forward, it seemed to me like a very natural type of bill that should be proceed in a very regular way. The purpose of the bill is to raise the limits from $20,000 to $25,000 per plan holder with future indexing. Let us face it, we really do not want to come here every 16 years to do this. To bring it to the rate of inflation would bring the plan closer to its value.
Let us look at the stats when it was introduced in 1992. Since that time average residential home prices have risen 66%. The consumer price index is now up 27 points over the same period. If we use that $20,000 under the plan adjusted for inflation, it would now come to $25,400. Therefore, the bill itself is very reasonable and very fair in terms of what it intends to do as compared to the original base.
Just as an aside, of course, in November 2005 gasoline was 79¢ and now it is twice as much at $1.48, so I will ask members to research their governments to find out what gasoline prices were under which government.
When we make a case for raising the limits, it is the fundamental argument as the case for the plan itself. Canadians can save for retirement and save for a home simultaneously. Previously, one had to make that decision: retirement, home, or in many ways diluting both of those ambitions.
The Canadian Real Estate Association has been successful in making the pitch that home ownership is the cornerstone of retirement for the vast majority of Canadians and they really should not be placed in a situation where they have to choose. This plan has allowed Canadians to save for retirement and leaving the option to borrow against RRSPs at a later date to access ownership.
The fact that we have come to the realization that it should be indexed means that we do not have to play catch-up. Members of the Canadian Real Estate Association will realize that this will be good legislation that makes a lot of sense to a lot of people. Because it does not divert retirement funds from the goal of retirement security, we know that the bill has further merit.
I would like to quote from the Canadian Mortgage and Housing Corporation. It said: “The plan is a means of promoting homeownership and homeownership is good public policy. The reasons are strongly embedded in the fabric of Canadian society. Surveys show that owning a home is an aspiration of the majority of Canadians. Homeownership makes better citizenship, it represents an important national asset, and it provides a sense of being part of free enterprise. There are major economic and employment spin-off effects from housing, directly and indirectly”.
We have been under the impression that home ownership has increased four points, from 62% to 66%, over a 10-year period, from 1991 to 2001, and the plan can take a considerable amount of that credit. We also know that mortgage insurance flexibility and its expansion along with the dropping of interest rates have also been positive contributors to that.
We must do everything we can to encourage people to save. Certainly, research by the Vanier Institute of the Family shows that the overall increase in home ownership has been driven entirely by those aged 55 and over. Their ownership rate increased by 68%. The question is: How can we get younger people to save and realize the dream of owning their own homes?
The Vanier Institute reports that, on the surface, the increasing proportion of Canadians who own their homes looks like good news, indicating that home ownership is a realistic goal for all. That goal has proved to be attainable for older Canadians, but it remains to be seen whether or not, over time, the same proportion of younger Canadians will be able to make the dream of home ownership a reality.
This is another step we can take to make it easier for younger people to own their own homes. Clearly, the program has been working, is working, and this bill would make it work even better.
Members of Parliament, over the past year or 15 months, have all generally been supportive of the proposal to raise the limits. The fact that it exists comes from two parties. Former minister Don Mazankowski initially introduced it and the current hon. member for LaSalle—Émard and former prime minister made permanent this legislation. Therefore, we owe a great deal to two parties for what we have today. If people really wanted to argue against them, they would be talking about pre-tax dollars, but I would think that argument would ignore the fact that an effective mechanism is in place to protect the integrity of retirement savings.
There are at least three points that I would like to make. First, the borrowed savings are invested in a principal residence, which of course is the pillar of security. Second, the plan would require the borrower to repay the plan over 15 years. Third, as an incentive to repayment, funds not repaid are fully taxable. That should get a healthy rate of repayment and statistics show that it has been well accepted and repayment rates are very positive.
We really do not want to get into a situation, such as is becoming the trend with our friends to the south, where mortgages of 35, 40 or 50 years are now commonplace. It probably means that people will never own their own homes. We have already discussed the value, pride, investment, and basically the value system that home ownership provides.
The home buyers' plan is unique among support plans. It encourages savings and maximizes down payments. These are important. Heaven knows that Canadians want to avoid the disastrous subprime situation.
Let us face it, this is a very modest request. We are all going to support and endorse it, I hope. Paying off a mortgage is key to fighting inflation. There are 90,000 members of the Canadian Real Estate Association encouraging us to do this. We have a national housing policy. With all of these things combined, including the good work of the Canadian Real Estate Association, the local brokerages, and all regional real estate associations that are all asking us to do this, the least we could do, in an all party way, is unanimously endorse this bill.