Mr. Speaker, as I rise today, February 2, in the House, I want to pay homage and respect to my party leader, who resigned today from being party leader of the official opposition. Being in the job of party leader in an opposition party is an incredibly difficult job, and he has done yeoman's work over the past couple of years. In a time when Canada was locked down, expectations of what we needed to do as a country changed dramatically and we continue to try to adapt. This is a difficult time to be in this kind of job, and I pay respect right now to him and his family for having committed and having given so much to this country, to our party and to this Parliament.
I am here today to address the new Bill C-8 proposed by the Liberal government about how to address some more spending that we need to commit for coming through COVID, some of which we find is going to be on the backs of Canadians again.
The bill is in seven parts. I cannot address all seven parts adequately in this sitting in the next 20 minutes, so I am going to focus on the real estate part of this bill. My colleague across the way spent a lot of time on the real estate section of this bill as well.
Starting in the 2022 calendar year, we are going to look at a 1% federal surtax on passively held non-resident owners of real estate in Canada. That means that foreigners who buy real estate in Canada are going to pay an extra 1% annually on the value of the real estate, much like a municipal tax for those people who own property or own their single-family home. Therefore, we would transport some of this tax mechanism that usually rests at the municipal level, and we would put it onto the federal government's balance sheet at this point in time. For what effect, I do not know but it would be an overstep into municipal jurisdiction.
It seems a bit of an overstep and I will give some examples, but first I am going to refer to what my colleague across the way was referring to, a report by an organization called Generation Squeeze, which was commissioned by a crown corporation, the Canada Mortgage and Housing Corporation, to look at ways to get more housing built in Canada. It did not look at better ways to get more housing built in Canada. What it looked at and what it reported to CMHC, which it was of course paid to do, was ways to tax more housing ownership in Canada. Its proposal was much like this one: a 0.5% surtax annually applied on properties over $1 million. I know that sounds like a big number, but the annual surtax doubles on properties over $2 million.
Vancouver itself has an empty homes tax already, effectively the same thing as what Generation Squeeze is providing, except it is 3% of the assessed value and it has been applied since 2017. Now there is 0.5%, 1%, 3%, but there is more. The Province of British Columbia has a speculation and vacancy tax applied on such properties, starting at 0.5% for a resident and going up to 2% for an offshore property owner. That has been applied since 2018, so with 3% plus 2% plus 0.5% plus this proposed 1%, we really are just tacking on and on here and really overstepping as far as which level of government is collecting this.
What are we trying to accomplish in this?
Foreign ownership still accounts for approximately 7.7% of Vancouver home purchases. We are still getting a lot of foreign ownership growing into the housing base in the Lower Mainland, despite the fact that we are tacking on significant taxes here that were supposed to slow this down. This is a great discrepancy between the actual people who work in the city and the people who are coming to live in the city. That is one of the major factors that is pushing up housing prices in Canada, but particularly in the Lower Mainland.
Have we looked at the increase in home values under the current Liberal government?
In the last six years, the price of a typical family home has gone up 87%. Since the government has come to power or shortly thereafter, six years ago, the average price of a family home in Canada is up 87%. That is inflation. Since 2016, when it was at $476,000, it is now $811,000 according to the Canadian Real Estate Association.
Are we trying to jam the price above $1 million just to collect a proposed federal surtax? The average house in Toronto and Vancouver now sells for over $1 million. Think about it: A home that costs over $1 million in two of Canada's large cities. That is not counting the interest paid on the mortgage. It is not counting the upkeep required on a regular basis. It is not counting the maintenance. It is not counting the furniture and window coverings. To get into a home now, it is over $1 million for a starter home. The cost of home ownership is going through roof in Canada, and that is not just bungalows, split-levels or two-storeys, but all single-family homes.
What has caused this?
The government keeps professing that it needs to spend more, and thus collect more, to build more housing in Canada. Who is going to pay this tax? It is the home sellers who, according to Generation Squeeze, are primarily retirees. They have made gains in the value of their homes that is not taxable at the federal level, so they obviously deserve to pay more tax in their retirement years, according to Generation Squeeze. This is a ridiculous oversight of the financial snapshot faced by retirees in Canada, many of whom are and will be augmenting their incomes by working longer and receiving government programming like the guaranteed income supplement. The proposal from Generation Squeeze, commissioned by an arm of this government, is an inequitable tax grab on some of our most vulnerable citizens. I will oppose it strongly.
Why are seniors having difficulty saving for retirement? It is inflation, inflation, inflation. Things are costing more, but people's incomes are not going up on a commensurate level. It is a real monetary factor that this government does not really pay any attention to. As the Prime Minister said during the election, he does not really think about monetary policy, unfortunately. Government should be thinking about monetary policy.
I would point out to the government that, this year, CPP payments for everybody in Canada have been increased in their payroll tax by 10%. If a 10% increase in our CPP is not more reflective of the inflation people are actually feeling, then I think the government is trying to mask something here. The Canada Pension Plan Investment Board has said that its investments are sound for what it is expecting to spend for the next 75 years, but the government thinks a 10% increase in deductions is important at this point in time. That might tell us what the government thinks the real rate of inflation is in this country, because most consumers have lost faith in the numbers calculated by Statistics Canada and the Bank of Canada. These statistics are meaningless as far as what they are experiencing in the stores, with their rents and at their doors. Everything they pay for in Canada is going up significantly more than indicated by Stats Canada or the Bank of Canada.
Housing takes up more than 11% of our gross domestic product, partially because we do not have much more gross domestic investment going on in this country, so most people are building into housing at this point in time. Also, this is double of where it has usually been in this country. It is usually around 4% to 5%, but it is now north of 11% of our gross domestic product going into residential housing at this point in time. It has been that way for a number of years, yet, supposedly, we are short of housing stock. What housing stock? It is single-family homes, to be precise, and starter homes.
I can tell members that, when knocking on doors in Calgary Centre, when I knocked on condo doors, I saw some of those buildings had a 50% vacancy rate, and there is a 10%-plus vacancy rate in apartment buildings. However, developers are still building more condo buildings, encroaching on neighbourhoods filled with single-family homes, and this is referred to as “densification”. Condo resale prices are down 15% over the past six years in Calgary, and Calgary's downtown commercial core has been decimated by the government's aimless policies towards Canada's most productive industry, oil and gas.
The City of Calgary's approach is to spend taxpayers' dollars to retrofit some of the vacant office towers into residential towers, in the hopes of bringing life back into the downtown core, at a cost of over $400,000 per door, which is in contrast to a new build at $250,000 per door.
We are overspending to solve a problem the government created in the first place, so we are just supposed to ignore the negative effects of the outcome of what we are doing here. We cannot go on doing that. We have to look at the outcomes.
For a young condo owner, a loss of 2.5% per year on a condo is a daunting issue, especially as they try to get into a single family home at some point in time. We have government dollars chasing retrofits to a problem the government created, and around and around we go. Someone is paying the bill.
Let us go back to inflation. We have incurred over $560 billion of deficit spending over the past two years. One-third of it, over $170 billion, had nothing to do with the COVID pandemic. Never miss out on a good crisis to move an agenda forward, as the Liberals have said.
Let us look at more things here, as far as inflation goes. Let us look at what we are abetting here in the process. Let us look at where the numbers are actually leading us. As members know, I am somewhat analytical at looking at what the solutions to these problems might be.
Some of this money coming into Canada, such as 7.7% of the purchases in Vancouver, is still foreign money coming in. Investment properties are on top of that from Canadian investors, but much of this foreign money is not clean foreign money. Much of it, according to the Corruption Perceptions Index from Transparency International, is actually money laundering. It is what is called “snow washing”. Snow washing happens more in Canada than in any other country in the G20 for one reason: because we allow it to. The government keeps the rules loose on money laundering coming into Canada, and it is a shame for us in an international sense around the world.
In a national criminal intelligence estimate, the Canadian Criminal Intelligence Service said that money laundering of about $133 billion per year was one of the factors driving up real estate prices in Canada. In the last year, let us recall, real estate prices went up 26% for a typical family home in Canada. That is corruption. We are allowing corruption to enter Canada.
I know some people think that it is just the money part of corruption, but the money part of corruption leads to all other kinds of criminality. When we actually invite dirty money into the country, we are inviting everything else associated with that dirty money into the country.
Let us take a look at the fentanyl deaths on the streets of our cities, including Calgary, where I live. Fentanyl deaths and overdoses and homeless people living in the streets have abounded over the last number of years because of these laws that allow people to launder their money in Canada and bring with it the commensurate crime that arrives with money laundering. This is a problem we need to address. The government needs to address it.
I am concerned that the government does not want to address it, because it is complicit in a lot of areas where it is actually involved in what we will call “shady practices”. That includes SNC-Lavalin and the cover-up of what happened there and the ditching of one of the brightest lights on the Liberal front bench when she tried to expose what was going on there. This includes the WE scandal and the hundreds of millions of dollars that was buried in bureaucratese before we could get to actually following the money trail.
That brings us to where we are today: How do we come through this? We need to build a system that is not inflationary and does not continue to have government money thrown at the wall while continuing to not solve problems and issues like housing. Housing is a big issue. Putting a 1% extra tax on top of housing is not part of the solution. Curbing foreign money laundering is in the federal government's bailiwick and should be instituted as quickly as possible.
I know I am running out of time, but it is my pleasure to be here today again. I do propose that we actually start with legislation that leads somewhere and, as opposed to an extra tax that is already being applied locally and provincially in many areas in Canada where it is a problem, that we look at how we address money laundering laws in Canada.