Madam Speaker, a 2019 report from CMHC shows that 11% of metro condos are owned, at least in part, by people living outside of Canada. According to Andy Yan, director of the SFU city program, who did a further analysis into the numbers, of the 965 billion dollars' worth of residential real estate in the Vancouver census metropolitan area, $75 billion is tied to at least one non-resident owner. Out of that 75 billion dollars' worth of residential real estate, at least 34 billion dollars' worth is owned by non-residents in Vancouver. Since Vancouver's residential real estate is estimated to be in the range of $341 billion, this means that about 10% of the residential real estate in the city involves non-residents.
Andy Yan also indicated that foreign ownership is particularly high in the condo market. In the case of Richmond, one in four recently built condos has a non-residential owner. Yan's analysis shows that one in five of our new condos is being purchased by those who do not even live in the country. He notes that it has taken 10 years to get this information, and he rightfully asks this: Now that we have the data, what are we going to do about the fact that one in five of our new condos is being purchased by those who don't even live in the country?
The government, in the first budget that has been tabled in two years, responded with a 1% tax on vacant homes owned by non-Canadians living outside of Canada. The idea is to target people who are solely interested in contributing to and profiting from the unsustainable increases in Canada's housing market. While it is a step in the right direction, it is merely a passing nod to the uncontrollable cost of housing. Given that the cost of housing in Canada increased in 2020 by 31% alone, does the minister believe that a 1% tax on vacant homes owned by non-Canadians living outside of Canada will deter foreign investors from fuelling and benefiting from the housing market?
The NDP believes the tax should be much stronger and that we can do better. We are concerned that 1% will not be much of a deterrent given that the cost of housing increased 31% on average in 2020 alone. Even the parliamentary secretary to the minister of housing recently admitted that things are not working for Canadians. He said that Canada is “a very safe market for foreign investment but we’re not a great market for Canadians looking for choices around housing.” Meaningful action needs to be taken to address this growing concern.
For comparison, in B.C. the tax on foreign-owned properties, combined with the speculation vacancy tax, amounts to 2.5% annually, plus a 20% foreign buyers tax in metro Vancouver. The government's proposal is very narrow and must be increased. The government should, at the very least, expand the initiatives in B.C. nationally.
This must also be combined with other measures to address the housing crisis. The government needs to step up in supporting the provinces and FINTRAC with resources for combatting money laundering; must introduce other measures, such as a beneficial ownership registry, to increase transparency about who owns real properties; and should make tax avoidance of capital gains on secondary residences more difficult. The government should also take action to stop tax evasion on the capital gains tax for secondary homes.
Urgent action is needed. We need a comprehensive package to address the out-of-control costs for housing, including home ownership. The time to act is long overdue.