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Fall Economic Update: A Commitment to Homeownership and Additional Financial Support

Please note: the federal government is constantly updating their website as new information is announced. Remember to check Canada’s official coronavirus webpage and the Canadian Real Estate Association (CREA)’s COVID-19 online hub to stay up to date.

This afternoon, Deputy Prime Minister and Minister of Finance Chrystia Freeland tabled the Fall Economic Statement, providing an update on the Liberal government’s plans for economic recovery and support for Canadians through the COVID-19 pandemic. The update included a reiteration of government’s commitment to homeownership through the First-Time Home Buyer Incentive (FTHBI) and funding for energy-efficient retrofits. The government also proposed enhancements to the Canadian Emergency Wage Subsidy (CEWS) and the Canada Emergency Rent Subsidy (CERS).

The Fall Economic Statement serves as the first major fiscal document produced by the Liberal government since Budget 2019 was tabled in spring of last year—although former Finance Minister Bill Morneau provided a fiscal snapshot this July.

The commitment to expanding the First-Time Home Buyer Incentive in Toronto, Vancouver and Victoria was repeated. Changes include the eligible buyer’s income threshold being raised from $120,000 to $150,000 as well as their ability to purchase a home up to 4.5 times their household income— an increase from the current limit of four times their household income.

Natural Resources Canada will also receive $2.6 billion over seven years to help homeowners improve their home energy efficiency through up to 700,000 grants of up to $5,000 to make energy-efficient improvements and up to one million free EnerGuide energy assessments.

Meanwhile, the Canada Mortgage and Housing Corporation will provide an additional $12 billion in new lending available through the Rental Construction Financing Initiative, which will also tackle the issue of housing supply.

Regarding financial support programs, the government has proposed increasing the maximum rate for the CEWS to 75% for the period beginning December 20, 2020, and to extend this rate until March 13, 2021. The government also announced their intent to extend the current subsidy rates of the CERS for an additional three periods. This means a base subsidy rate of up to 65% will be available on eligible expenses until March 13, 2021.

The statement also included a reference to government’s intention to take steps over the coming years toward implementing a national, tax-based measure targeting the unproductive use of domestic housing owned by non-resident, non-Canadians, which removes these assets from the domestic housing supply. It also intends to apply the GST/HST to all platform-based short-term rental accommodation supplied in Canada effective July 1, 2021.

CREA is working with the federal government as the COVID-19 pandemic evolves and continues to provide recommendations ensuring REALTORS® and brokerages receive the support they need as existing measures are implemented and new initiatives are developed.

This article is for information purposes only and is not a substitute for professional advice. If you need professional advice you should consult a lawyer, accountant or other qualified professional.