44th Parl. 1st Sess.
June 13, 2023 10:00AM
- Jun/13/23 12:38:36 p.m.
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Madam Speaker, I am always pleased to rise in the House of Commons and share, hopefully, some insightful words.
Before I begin, yesterday you informed me, Madam Speaker, that you were born in Portugal. Yesterday was national day in Portugal. I know there are some celebrations going on in Ottawa, so to all Canadians of Portuguese descent, happy national day, even if I am a day late, and have a great time this evening.
Turning to housing, this morning when I found out we were going to have a concurrence motion and debate on housing, I gave my mortgage broker in Fraser Valley a call.
In April 2023, the average cost of a home in British Columbia was $995,000 and change. The average detached home in the Fraser Valley or Greater Vancouver region costs northward of $1.2 million. I talked to my mortgage broker, Vic, and asked him what it would take for a young person to get into housing today.
We can go on the assumption that a very modest home in Abbotsford is probably northward of $1.2 or $1.3 million. The member from Langley is pointing his finger up, so it is probably $1.4 million in Langley. It is a bit cheaper in Abbotsford. For a $1.2-million single-detached home in Abbotsford, which would be the cheapest house on the market, one would need a down payment of $240,000.
Before I go on any further, Madam Speaker, I will be splitting my time with the member for Wellington—Halton Hills.
If people were to purchase that home, not only would they need that $240,000, they would also have to account for a property transfer tax bill of $22,000 and legal fees between $1,000 and $2,000 to complete the transaction. That does not even account for any real estate fees to be paid to the listing and selling agent. Therefore, to buy a home today, a starter home in the Fraser Valley, a person is looking at $275,000 and change needed to buy that home.
The average condo in B.C. costs about $500,000. To buy a condo today, people would need approximately a down payment of $25,000. They would probably pay a transfer tax of $8,000 and similar legal fees of $1,000 to $2,000.
Members may ask why someone cannot just start off with a condo. Why do they need a single-family detached home? When a home is valued or listed under $1 million, it is subject to the stress test. If it is over $1 million, people basically need a 20% down payment to purchase that home.
At today's interest rate of approximately 5%, people would need to qualify at the CMHC level of 7.5% interest rate to buy that condo for $500,000. My mortgage broker, Vic, explained to me that in order to buy a condo in Abbotsford, people would need a household income of approximately $125,000 to qualify. I will note that the average income where I live is about $75,000 to $80,000.
For people to get into the housing market today, they either need a really high-paying job, or they need to get help from their parents or receive some type of inheritance. Indeed, my mortgage broker has told me that he rarely, if ever, sees people doing it on their own today. That is a really important point to make. People cannot do it on their own today. Some people have parents who won the real estate lottery and they are able to help their children. Some people seeking to enter the housing market may have some inheritance from a grandparent, but a lot of people do not have those things. They have to do it themselves. The cost of doing it on one's own today is astronomical. In fact, it is such an astronomical amount of money that most people are giving up hope.
Being Canadian, our entire financial well-being in our country, and this is what we are told by our educational institutions, from the Government of Canada and from financial advisers, is that to get ahead in Canadian society, we have to purchase property. That social contract we have had with the government and civil society is eroding before us at a very alarming rate.
When young people graduating from university no longer see a pathway to home ownership, when that seems out of the reach of possibilities, they lose hope. What happens when we lose hope? People turn to extremism, on the left or the right. We are in a dangerous position in Canada where there is going to be an entire generation left out of the housing market. That is partially to do with the government's policies of today.
In 2016, the Liberals promised Canadians that they were going to make housing more affordable, that they were going to put in billions of dollars to help people get ahead, to help them get a home. They have had program after program that was to solve the housing crisis. In fact, the only thing that has happened under any government policy is that things have become more expensive and more out of reach. It is simply not fair.
During the pandemic, when we saw one of the biggest increases in housing prices across Canada, the government urged many Canadians to borrow more. The Prime Minister talked about lower interest rates, that they were here for the long term. In fact, the Liberals predicated the country's finances on the assumption that long-term, low interest rates were here to stay.
As a result of that, Canada's household debt is now 170% of our GDP compared to 95% in 2010. It gets worse. Many of the people who did get into the housing market are now in a position to be subject to a variable rate mortgage. My mortgage broker, Vic, mentioned someone on his street, and this is anecdotal, in a Surrey neighbourhood, who had to foreclose on last week because the interest he was paying increased so much that he could not handle his monthly bills anymore.
If we do not start building more homes, if we do not give young Canadians a form of hope and a pathway to home ownership, we are in for disastrous policy outcomes and a dangerous societal position where young people do not feel they will have a future in our country anymore. The message I am bringing forward today is that governments need to get out of the way.
Before I finish up, I want to mention one policy that is really good. The NDP government in British Columbia is mandating 10 cities in the province to build houses at an accelerated rate. The premier of British Columbia, David Eby, recognizes, and has the same position as the Conservative Party of Canada, that the only way we will maybe tackle this crisis is to compel municipalities to push more housing starts at an incredible rate.
That is one of the key things that we can do to give young people hope again. Under the interest rates today, under a government policy and under the stress test, let alone the incomes that do not match the ability to pay for a home and inability of young people to save, we will be in a very dangerous position in our country in the decades to come if people believe that the social contract they signed up for when they came to Canada, or were born here, is going to be taken away from them.
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- Jun/13/23 12:49:02 p.m.
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Madam Speaker, the member for Fleetwood—Port Kells raises an important point.
Development cost charges by our municipalities increase the cost of new builds at an alarming rate. Second, to that point, I do not believe municipalities, irrespective of jurisdiction, have always been transparent about how those development cost charges are used. I know that in some cases they might charge a DCC on a rebuild in an existing neighbourhood. They do not use the money collected to improve that neighbourhood. A municipality might say that it is going to use it for one of its other priorities.
I believe that development cost charges need to exist but that they need to be commensurate with the needs of young people in order to purchase housing, first and foremost.
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- Jun/13/23 12:50:45 p.m.
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Madam Speaker, with respect to the labour shortage and housing for workers, including housing for people who build homes, the Canadian Home Builders' Association came forward with a very interesting proposal, and it is one I support: removing the GST on new home builds in Canada. Imagine the government did not collect $50,000 to $60,000 on new home construction through taxation. Imagine if we said that those who create purpose-built rental units would not be charged GST on those builds. That is one policy area we could look at a little more closely.
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- Jun/13/23 12:52:03 p.m.
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Madam Speaker, I actually do believe that the private sector has a much bigger role to play in solving the housing crisis we find ourselves in today. I do believe that the private sector could do much more. What we have seen in the last eight years is a government trying to replace the private sector, and all we have seen are disastrous results, higher housing costs, more homelessness and more debt.
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- Jun/13/23 12:53:04 p.m.
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Madam Speaker, let me just say that, in the 1970s and 1980s, when we had the most purpose-built rentals constructed in our country, it was under a taxation plan that deferred capital gains. That is the only time we have seen the amount of rental construction that we actually need. That was a policy of Pierre Elliott Trudeau, I believe. Unfortunately, he quashed that policy. I think we need to look very carefully at bringing back some type of MURB policy to get more purpose-built rentals constructed in our country.
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