Harper Aims To Add More Than 700,000 New Canadian Homeowners By 2020
Homeownership provides Canadian families with financial stability and strengthens our communities.
Today, 7 out of 10 Canadian households own their own homes. Under our Conservative government, Canada’s homeownership rate has now exceeded the US rate for the first time in over 40 years. Canadians also report having considerable equity in their homes – averaging about 74 percent of the value of the homes.
A re-elected Conservative government will aim to add more than 700,000 new homeowners to Canada’s rolls by 2020. This would increase Canada’s homeownership rate to approximately 72.5 percent. In the 1970s, Canada’s homeownership rate was approximately 60 percent. By 2001, it had risen to 66 percent and has been rising more quickly in the past fifteen years.
This aspirational target for affordable, responsible homeownership in Canada is based on projections from the Canadian Mortgage and Housing Corporation (CMHC)  and the Canadian Home Builders’ Association – both of which have set out projections of average ownership household growth of more than 140,000 per year until 2021. The target is achievable and reasonable with the right plan to encourage affordable, responsible homeownership.
Our Conservative government’s commitment to a low-tax balanced-budget plan will ensure that home ownership is within reach for even more Canadians. A re-elected Conservative government will build on our record of lowering taxes and supporting affordable homeownership for families by:
- Expanding the Home Buyers’ Plan from $25,000 to $35,000 so that first-time home buyers can withdraw savings tax-free to make their down payments.
- Maintaining the 2015 enhancement to Tax-Free Savings Accounts that allows annual contributions of up to $10,000 so that Canadians can save and invest even more of their hard-earned money tax-free.
- Implementing the new Home Accessibility Tax Credit which provides up to $1,500 to seniors and disabled Canadians to keep their homes safe and secure.
- Establishing a new permanent Home Renovation Tax Credit for home renovation expenses between $1,000 and $5,000.
- Collecting data on foreign buyer activity in Canada’s housing market and, as necessary, taking concrete action to address the issue in coordination with provinces.
Adding more than 700,000 new homeowners will also have other benefits for the Canadian economy, including stimulating residential construction and local job creation. Nearly half a million Canadians are employed directly in the residential construction industry, a sector that largely employs local workers and contracts with small and local businesses. Expenditures in this sector are more than $100 billion per year and account for more than 6% of Canada’s GDP.
Investing in a home is a major financial decision for families and often represents their most significant financial commitment. Indeed, for many Canadians, the family home is their biggest asset and their largest investment in their future financial security.
That’s why our Conservative government believes in helping Canadian families purchase and invest in their first home. We’ve taken steps including:
- Establishing the First-Time Home Buyers’ Tax Credit – a $5,000 tax credit to help with the costs associated with purchasing a home such as legal fees and land transfer taxes.
- Increasing the Home Buyers’ Plan from $20,000 to $25,000 to help first-time home buyers make their down payment.
- Establishing and expanding the Tax-Free Savings Account.
- Providing nearly $1 billion in funding to support energy efficient renovations between 2009 and 2011.
Under Prime Minister Harper’s leadership, Canada’s home ownership rate has now exceeded that of the United States, for the first time in nearly two generations. In 2011, the Canadian home ownership rate was 69% versus 66% in the US, where the rate continues to fall. And, since we formed government in 2006, 28% of Canada’s 9.2 million homeowners moved into their homes.
Canada’s success relative to the United States is attributable to our Conservative government’s careful economic management and prudent policy framework that has encouraged affordable, responsible home ownership:
- Prudent mortgage rules ensure Canadians only take on mortgages that they can afford. We have not weakened our regulatory framework, nor have we introduced mortgage interest deductibility or affirmative action financing that encourages larger and longer mortgages. With our prudent rules in place, Canada’s homeownership has continued to grow by approximately five percentage points over the previous decade, but in a careful and responsible way.
- Encouraging voluntary saving, through vehicles such as the Home Buyers’ Plan and Tax-Free Savings Accounts, makes it easier for Canadians to make larger down payments to reduce the size of their mortgages, and in turn their monthly payments and interest payments. Unlike forced savings programs such as the proposed Ontario Retirement Pension Plan, voluntary savings plans provide Canadian families with the flexibility needed to support home ownership.
- Lower taxes translate into more money in the pockets of Canadians to spend on the priorities they choose, including purchase of a home. Canadians’ after-tax disposable income has increased by 10% across all income levels since 2006, and in 2015 alone, the average family now has $6,600 more in their pockets, thanks to our Conservative government’s low-tax balanced-budget plan.
The result is that Canadians are better able to manage their mortgage payments and ultimately have more equity in their largest investment. The total number of mortgages in arrears in Canada is well below the historical average at 0.27%. The Mortgage Bankers Association in the U.S. estimates the U.S. equivalent at 2.09%, nearly eight times higher than in Canada. Simply put, the Conservative government’s support for voluntary savings and investment in the family home is creating a national environment where responsible homeownership is possible for an even greater number of Canadians.
For low-income families and vulnerable Canadians, the Conservative government has also been working to ensure better access to affordable housing:
- From 2011-2019, we have committed $1.9 billion to increase the supply and quality of affordable housing across Canada. More than $1 billion of that funding has now been delivered to benefit over 205,000 households.
- Upwards of $400 million annually supports the housing needs of Aboriginal Canadians on and off-reserve.
- The Homelessness Partnering Strategy provides $600 million over five years to help homeless individuals transition from shelters and the streets into stable housing.
Our Conservative government has been able to deliver on these affordable housing commitments through careful fiscal management, and without increasing taxes on Canadians.
The Liberals and NDP would do nothing to make purchasing a home more affordable for Canadians. In fact, both have promised to spend hundreds of millions of dollars on tax breaks and financing incentives for investors to build new rental and social housing. To pay for these promises, the Liberals and NDP have admitted they will raise taxes and take away benefits from Canadian families which will make home ownership less affordable for Canadian families as a result.
Ontario homeowners remember the risks associated with an NDP government. While home prices were stable or increasing in Canada’s other major housing markets in the early 1990s, Toronto’s housing market experienced a devastating crash followed by low prices that persisted throughout NDP Premier Bob Rae’s tenure, and did not recover for many years.
Canadian homeowners cannot afford the Liberals and the NDP. Only a re-elected Conservative government will protect Canadian homeowners and their home equity, and make it easier for even more Canadians to purchase a family home.
WHAT STAKEHOLDERS ARE SAYING
“The Home Buyers’ Plan has helped so many Canadian families realize their dream of home ownership. Today’s commitment to increase the withdrawal limit of the HBP will ensure that the dream stays within reach for today’s young people” – Canadian Real Estate Association
“We welcome the Conservative Government’s announcement today proposing to increase the RRSP Home Buyers’ Plan withdrawal up to $35,000 from the current $25,000 for first-time home buyers” – Canadian Association of Accredited Mortgage Professionals
“We are glad that the importance of home renovation to the Canadian economy has been introduced into the election campaign. A permanent tax credit is sound policy for all Canadians, helping homeowners protect and add value to their homes, while also addressing the chronic problem of the underground ‘cash’ economy in home renovations and repairs” – Canadian Home Builders Association
“The Conservative pledge for a permanent home renovation tax credit is more good news for Canada’s skilled trades!” – Progressive Contractors Association of Canada
“Merit Canada is pleased to support @pmharper call for a permanent home renovation tax credit which will save taxpayers $1.5 billion. A permanent Home Renovation Tax Credit will also create jobs and ensure consumers choose professional contractors” – Merit Canada
“Good 2 see #CPC promise 2 make Home Renovation credit permanent. A CFIB budget ask” – Canadian Federation of Independent Business
 See: http://www.caamp.org/meloncms/media/Annual%20State%20Report%20Fall%202014.pdf.
 Long-Term Household Growth Projections – 2013 Update. Research Highlight, Socio-economic Series 13-006. Canadian Mortgage and Housing Corporation. http://publications.gc.ca/collections/collection_2014/schl-cmhc/nh18-23/NH18-23-113-006-eng.pdf
 Canadian Housing Industry – Performance and Trends. Canadian Home Builders’ Association (2012). http://chba.ca/uploads/Policy%20Archive/2012/Performance%20and%20Trends%202012.pdf
 Labour Market Assessments for the Residential Construction Industry 2015–2024. Build Force Canada. https://www.constructionforecasts.ca/sites/forecast/files/pdf/Labour-Market-Assessments-Residential-Construction-Industry-2015.pdf
 Canada: https://www.cmhcschl.gc.ca/en/hoficlincl/homain/stda/data/data_003.cfm
 US: http://www.census.gov/housing/hvs/data/histtabs.html
 http://www.cba.ca/contents/files/statistics/stat_mortgage_db050_en.pdf (CBA –Sept 2015)
 https://www.mba.org/2015-press-releases/august/mortgage-delinquencies-and-foreclosures-continue-to-drop-in-second-quarter (MBA -Aug 2015)