What good is door-to-door mail delivery for the millions of Canadians who can’t afford to buy a house?
The argument over Canada Post been tossed around in the federal election campaign, as the Crown corporation works toward ending door-to-door service in favour of community mailboxes. At least three party leaders have pledged to restore front-door delivery. Their promises have grabbed the attention of newspaper columnists whose most faithful readers fondly remember when the milk was delivered, too. For the Canadians who have the most, having to go around the corner to pick up the mail is a big #firstworldproblem.
Meanwhile, the roughly one-third of Canadians who don’t live in the type of house that comes with a driveway and front door want to know what the election will mean for their dreams of owning a home. Currently, low mortgage rates and limited housing stock have driven prices higher in Vancouver and Toronto, and kept the market steady in the rest of the country. With affordability an issue and bubble concerns growing, the major party leaders have all weighed in on their vision for the future of Canadian housing. Here’s what we’ve been promised so far:
The incumbent Conservative party has been the most vocal on the subject of home ownership.
Promises to give Canadians more tools to buy and improve homes are enshrined in the Conservative platform, and leader Stephen Harper has bragged about Canada’s high home ownership rate, calling it a sign of a strong economy despite criticisms and warnings that Canadians are already invested in real estate to an unsustainable level. Here’s what the Conservatives are promising to help you with your mortgage:
- Increasing the Home Buyers’ Plan (HBP) from $25,000 to $35,000. This is the program that allows you to withdraw money from your RRSP, tax-free, if you’re buying your first home. The Conservatives have promised to increase the amount you can withdraw by $10,000, giving you more room to save for a down payment.
- Maintaining the TFSA contribution limit at $10,000. The important tax-sheltered savings tool and its annual contribution limit have been debated throughout the campaign. You’ll be able to sock away $10,000 a year under the Conservative plan, but this will probably only help you if you’re one of the few Canadians who actually max out their TFSAs.
- Introducing a permanent home renovation tax credit. A temporary credit was introduced in 2009 to help boost the economy, and the Conservatives have now promised to make it permanent. The proposal would give homeowners a tax credit on home renovations costing between $1,000–$5,000.
- Collecting data on foreign investment. As foreign investors continue to take the blame for Vancouver’s skyrocketing house prices, the Tories promise to get to the bottom of it. They’ve pledged federal money to pay for research that probably should have been done years ago anyway.
Justin Trudeau’s Liberal party has acknowledged that different parts of Canada face different challenges. Rather than expanding programs to make it easier to buy a house in the current marketplace, the Liberals have promised incentives to ease pressure on renters, people with low incomes, and people who support their extended families. The specifics include:
- Creating $125 million per year in tax incentives for landlords. Part of the Liberals’ “social infrastructure” plan is a substantial tax break for developers and landlords to build and renovate rental housing. The plan includes a GST rebate and government-backed financing for purpose-built rental developments.
- New ways to use the RRSP to buy a home. The Liberal plan doesn’t necessarily include increasing the withdrawal limit, but it does include extending the program beyond first-time buyers. The Grits have promised the HBP will be extended to Canadians who move for work, or take in an elderly relative.
- Reviewing affordability in Toronto and Vancouver. The specifics haven’t been announced, but the Liberals have promised to “keep home ownership within reach for Canadians living in these areas.”
Looking for a promotion from the official opposition to the governing party, the NDP has been critical about the other parties’ plans on housing. Their own plans, however, are less specifically focused on housing, and more on cutting costs for middle- and low-income Canadians. In addition to promising stimuli like a $15-per-hour federal minimum wage, and $15-a-day daycare, the NDP has promised:
- 10,000 affordable housing units. Citing that 35,000 Canadians are homeless, the NDP has promised to build 10,000 affordable housing units over 10 years.
- Renewing co-op operating agreements. The NDP would spend $2 billion by 2020 to maintain current funding levels for housing cooperatives and social housing.
- Better housing in remote areas. The NDP platform includes specifically working with members of the First Nations, Métis, and Inuit communities to improve the availability and quality of housing
Political promises are just that: promises. No matter who’s in government, there will always be obstacles to home ownership and tools to overcome them. Whatever Ottawa’s offering, some of the most important things you can do to afford your next home are budget carefully, and shop around for the best mortgage rates.
And regardless of how far you have to go to pick up your mail, be sure to make the trip to your polling station on October 19.