Canada looks to provinces to cool hot housing market

Thu Mar 23, 2017 2:52pm EDT
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By Andrea Hopkins

OTTAWA (Reuters) - Canada's federal government lobbed the problem of Toronto's hot housing market back to Ontario on Thursday after its new budget did nothing to rein in real estate speculators, boosting expectations a foreign buyers tax may soon be imposed in Canada's largest city.

Prime Minister Justin Trudeau said a federal solution to a local problem was not the best way to address concerns about high housing prices in response to criticism Wednesday's budget had not done anything to help cool high home prices.

"We recognize the tools of the federal level are necessarily pan-Canadian, and there are tremendous differences and variances between the housing markets in Vancouver and Toronto and housing markets in other cities," Trudeau told reporters in Toronto.

"So we're working very closely with provinces and municipal authorities to ensure that the impacts that we need to have in certain areas of the country don't result in unwanted impositions or negative impacts on other parts of the country," Trudeau said.

Toronto prices have shot up 113 percent since early 2009, while Canadian prices as a whole have jumped 65 percent, according to the Teranet-National Bank price index.

Vancouver housing prices have declined since the province of British Columbia imposed a 15 percent tax on foreign buyers in that city in August, mostly targeting people from mainland China, and many expect Ontario will soon impose a tax in Toronto.

Ottawa has repeatedly tightened mortgage lending rules in recent years on concerns about a housing bubble, but the boiling Toronto market has barely slowed.

Ontario Finance Minister Charles Sousa last week urged federal Finance Minister Bill Morneau to consider raising capital gains taxes, among other measures, to rein in speculation.   Continued...

Canada's Prime Minister Justin Trudeau (R) and Finance Minister Bill Morneau walk to the House of Commons to deliver the budget on Parliament Hill in Ottawa, Canada March 22, 2017. REUTERS/Patrick Doyle