Prime Minister Justin Trudeau’s threat to change tax rules for real estate investment trusts is a “sideshow” that will do nothing to affect home prices in Canada, according to one of the country’s largest publicly-traded real estate developers.

The prime minister has promised to tackle the “financialization of the housing market” by the end of 2023, building on an election pledge last year to review the tax treatment of large corporate owners of residential properties such as REITs. As in the US, Canadian REITs generally don’t pay corporate tax because most of their income flows through to investors, who do pay tax. 

Michael Cooper, president of Dream Unlimited Corp., said the idea of tinkering with the tax structure makes little sense and won’t help the government bring housing costs down. 

“I don’t understand how it could make a difference,” Cooper said in an interview. “The pension funds, they don’t pay any tax. The private equity guys load it with debt. They won’t be paying tax. These REITs are the ones that every person in this country directly or indirectly have exposure to. So I don’t know why you would tax that.”

The government has given no details on what, if anything, it plans to do to the tax rules for REITs, other than review them. 

Still, some analysts have said the policy uncertainty could be weighing on investor sentiment in the sector. Since Trudeau unveiled the idea during an election campaign last August, apartment REITs Canadian Apartment Properties and InterRent have been the worst performers in the S&P/TSX Capped REIT Index -- though rising rates have also been a major factor in their performance.