Will taxing foreign investment cool the housing market?

CIBC’s deputy chief economist, Benjamin Tal, this week called for taxation of foreign real estate buyers in British Columbia, saying that while foreign investment isn’t the only thing driving Vancouver prices into the stratosphere, it is a factor. Taxing them, he said, would cool prices without sending them into a downward spiral.

Addressing the problem of foreign buyers snapping up Vancouver homes without any intention of living in them (which in addition to driving up prices, has also led to outcries against neglected yard and home maintenance in some pricey neighbourhoods), he said, “We don’t want to say that Canada is not accepting foreign investment — absolutely not. But some of them are doing it just to make quick money. This is basically speculative activity. Therefore, let’s tax this activity.” He made the statements on Early Edition.

Tal said that while new development contributes to the economy, employing people and adding to the GDP, resale market sales add nothing. He admitted that, like Toronto, Vancouver is suffering from a chronic lack of inventory so the proposed taxation would not burst our epic bubble. “We are trying to fight supply issues with demand solutions,” he said.

He pointed to markets in Australia and New Zealand that have had success with foreign ownership taxes and regulations; in Australia, for example, foreign investors are allowed to purchase only in new developments.

This should be done, and done quickly. Yes, we are an inclusive society, but by not enacting such simple measures toward a solution, we are failing to do what’s best for our residents and citizens. Most nations have some parameters and taxation for foreign investors — it doesn’t make us racist, but we Canadians are so fearful of offending anyone, we’re reluctant to take the most minor of steps to protect our domestic market. Instead, we keep raising development taxes on new builds.

I’m not saying we should unduly tax anyone who intends to live here for a substantial portion of the year. But I can’t think of one single reason why we shouldn’t tax buyers who benefit from rising house prices through speculation while failing to contribute to the local economy, to say nothing of community life.

In Australia, foreign investors can only purchase in new developments

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Summer is finally here and there are many ways to spend a sunny day in Toronto. Everybody knows to head to The Beach, to the Danforth, to Kensington, right? So in compiling these five activities, I factored in the neighbourhood in which the event takes place, favouring interesting spots you might otherwise overlook.

Get to know a new corner of the city, support the local economy, and have a great time doing it. Isn’t that what summer in the city is all about?

1) Open Roof Festival (ORF), June 21st - August 24th: This isn’t exactly a neighbourhood, but it’s certainly a POV you don’t get to experience every day. Supporting Toronto’s independent filmmakers, the ORF brings music, movies and munchies to rooftops all over the city.

2) Taste of Lawrence, July 8th - 10th: With more than 130 street vendors, midway rides and two stages for live entertainment, Scarborough’s largest street festival provides a good excuse to go east of Victoria Park.

3) York-Eglinton International Street Fest, August 13th & 14th: Dare I say that Eglinton Avenue West from Marlee to Dufferin isn’t exactly the poshest section of road? Marlee is most often used as a way to get from Lawrence to Eglinton without stopping too often. But the Y-E Street Fest is a great excuse to get to know this diverse area a little better. Expect lots for the kiddies and lots to eat, although programming details have yet to be announced.

4) Wheels on the Danforth, August 13th: Classic cars, hot rods and motorcycles, places to spend money and live music — sounds like a solid foundation. We’re all familiar with The Danforth, but you may not have spent much time at Danforth and Danforth in the east end. Here’s a gearhead’s perfect way to fix that.

5) Roncesvalles Polish Festival, September 17th: September is a long way off, but what’s billed as the world’s largest celebration of Polish culture is something to look forward to. Pierogies and jelly doughnuts are reason enough to attend, but there are also four stages for live music, and I suspect you haven’t boogied till you’ve polka danced under the stars.

Whatever you decide to do with it, take full advantage. Our summers are nothing if not too short!