Prime Minister Justin Trudeau’s power-sharing deal with an opposition party promises to tackle the soaring cost of housing in Canada and may target real estate investment trusts that own homes.
The agreement between Trudeau’s governing Liberals and the New Democratic Party says the government will act on the “financialization of the housing market by the end of 2023.” No details were given, but in last year’s election the Liberal platform pledged to review the tax treatment of large corporate owners of residential properties such as real estate investment trusts to “curb excessive profits.”
Such a move, if implemented, has the potential to impact publicly-listed real estate firms including Canadian Apartment Properties REIT, Minto Apartment REIT, InterRent REIT and Boardwalk REIT.
The Liberal-NDP deal also promises to move ahead with a Homebuyer’s Bill of Rights that bans blind bidding for homes, establishes a legal right to a home inspection and requires real estate agents to disclose if they’re involved on both sides of a transaction.
Other measures include a Housing Accelerator Fund to increase the housing supply and extending by an additional year a program for new homes for vulnerable groups.
The agreement also makes it nearly certain the Liberals will raise corporate income taxes on banks and insurance companies that earn more than $1 billion (US$794 million) per year. The surtax, another Trudeau election promise, is supported by NDP Leader Jagmeet Singh and the prime minister said Tuesday it’s a priority for the government.
In exchange for its support, the NDP gains greater legislative traction for its own priorities, including national dental care and prescription drug programs.
The parties said in a joint statement the deal will also advance efforts to create a previously-announced affordable child care program, boost green jobs that can help confront the climate crisis and introduce anti-scab legislation for federally regulated industries.
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