Budget 2022 roundtable discussion with Minister Ahmed Hussen

Budget 2022 roundtable discussion with Minister Ahmed Hussen

Minister Ahmed Hussen, MP Salma Zahid and MP Rechie Valdez with attendees.
Photo: MC Ramos

By Michelle Chermaine Ramos
LJI Reporter
The Philippine Reporter

With inflation rising across Canada and around the world and the disruption of supply chains for goods and services, Canadians have been feeling the brunt of that economic impact especially in the area of accessing affordable housing.
To put things into perspective, Canada has the fastest growing population of the G7 countries but our construction of new housing has not grown to accommodate that demand.

The government has announced its plan to lead a national effort to increase the supply of affordable housing in the proposed Budget 2022 in the hopes of doubling the number of new homes built in Canada in the next 10 years.

On April 30, 2022, Salma Zahid hosted a roundtable meeting for the Filipino media with MP Rechie Valdez of Mississauga-Streetsville and MP Ahmed Hussen, Minister of Minister of Housing and Diversity and Inclusion, to introduce the key items on the proposed budget, which if passed, promises to offer opportunities for Canadians to reach their dream of home ownership.

Minister Ahmed Hussen

SUMMARY

The government announced their target of building 3.5 million new homes. With $4 billion invested in the Housing Accelerator Fund, the goal is to build 100,000 new affordable homes within the next two years. How?
First by increasing the housing supply by building more units faster by investing in municipalities after they have shown their plans to build more housing.

Secondly, by helping first-time homebuyers with a tax-free saving account where they can put $40,000 towards the purchase of their first home and doubling the first-time homebuyer tax credit to $10,000. This is to enable them to pay for things like lawyer fees, agent fees, title insurance, land transfer tax, etc.

By extending the first-time homebuyer incentive. “This is the program where the federal government will come and actually give you 10% of the value home as a down payment in exchange for the federal government owning 10% of the of the home. But you get into the market. It lowers your mortgage payments, and it allows you to change from a renter into a homeowner,” Hussen explained.

By tackling unfair business practices in the sector, blind bidding will be banned. Foreign ownership of residential real estate will also be banned for two years.

By investing more in affordable housing, the government will build the first new buildings for co-ops for the first time in 30 years with a target of 6,000 new co-ops.

Rent-to-Own Projects

There is a $200 million investment to create a new rent-to-own program for people who cannot afford a down payment on a house. Many are paying more in rent than what they would pay for a mortgage so it’s clear that the biggest hurdle stopping them from buying a home is affording the down payment.

“There’s a number of countries that have already done this, where there are different models. Generally, what happens is you’re paying your rent. Every month that you pay your rent, you get a certain amount of credit. And at the end of five years, the idea is that you can buy that unit. And if the landlord that you’re renting from refuses to sell, you can take that credit and apply it to another home and purchase it. That’s the idea. The details depend on which model you go with. So, the idea is to give you a certain amount of credit for the rent that you’ve paid for five years, but also back it with additional government investments. So when you combine those two, we put you in a position where you can afford your own home,” Hussen explained.

$10 a Day for Child care

MP Rechie Valdez mentioned the childcare support which provides $10 a day per child. Minister Hussen added, “I knocked on a door in my area in Toronto where a family was paying $120 a day per child for childcare. Two kids, that’s $240 a day. With our $10 a day childcare plan, $220 will go back to their pockets. Multiply that by 30 days, that’s a second mortgage. So that money will go back. Right now they’re carrying a second mortgage. That money will go back into their pockets, which means they can use that money to buy a house.”

Banning foreign investments in residential properties

Large foreign investors have been taking a big chunk of the residential real estate market away from Canadians and using it as an investment portfolio. They can still invest in commercial real estate and recreational property. However, to increase the housing supply, the government is banning foreign investors from buying residential real estate for two years to provide housing for Canadians.

When asked what numbers came into play when they decided on the two-year ban and if they think it will be enough, Hussen said that they will follow the evidence and the data and evaluate the impact after two years to determine whether they need to extend the ban. “By then we are hoping to have built just for one of the programs an additional 100,000 new ones, let alone the other ones that I mentioned. So, in two years, we may be in a better spot. But let’s see what happens. But now we have to take this action. Because by the middle of the second year, you have data from the first year, and then you can make a decision before the end of the second year,” he explained.

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