How will the housing market be affected by the federal election?

With a couple of notable exceptions, the federal parties haven’t offered much in the way of concrete platforms that directly relate to housing, each has a few policy changes up their sleeves that will affect the affordability of homes and the income levels of Canadians. Here’s a little primer, to hopefully whet your appetite to do some more in-depth research into the ones that interest you most. Whatever you decide, make sure you vote.

Harper’s Conservatives

Harper’s most notable campaign promise that speaks directly to homebuyers may affect first-timers profoundly: he’s saying if elected he’ll raise the allowable RRSP withdrawal towards a down-payment from $25,000 to $35,000.

He’s promised also to cut “the red tape burden” for small businesses by 20% and to enact commonsense policies that “make it easier to buy and invest in one’s home.” He’s also promised to collect data on foreign buyer activity in Canada’s housing market, which some say is precariously driving up prices, and to ensure such foreign investment increases the availability and affordability of homes for Canadians.

On the periphery, he says he’ll increase tax relief for service club members up to 29%, which may not just put extra money in your pocket but also encourage community involvement.

Trudeau’s Liberals

If he follows through, Trudeau’s plans (which don’t include much in the way of specifics for homeowners) may profoundly affect affordability for the middle class. He says his party will cut the middle class income rate from 22% to 20.5%, effectively cutting taxes by 7% for those in the $44,701 to $889,400 group. He’s also promised to add a high-income tax bracket of 33% for those making more than $200,000 a year and eliminate Harper’s income-sharing scheme.

He’s also promised to significantly increase the Canada Child Tax Benefit. On the Liberal website, they say that instead of the current $275/month for a theoretical family with one child under six and one somewhere in the six to 17 range and a $90,000 annual household income, they’ll get $490/month. Significant increases would be realized for those with lower incomes and more children, obviously, and you can find a calculator on the site. I put in a household income of $39K and two kids under six, and was told they’d receive nearly $12,000 annually. He’s also promised to legalize marijuana, which may not put more money in your pocket, but should make you care less whether you own a home or not.

Mulcair’s NDP

The current official opposition say they’ll lower the tax rate on small businesses from 11% to 9% over two years, as well as create a million new childcare spaces and cap fees at $15/day. For anyone trying to find daycare in the GTA, that’s a number that will make you turn cartwheels. He’s also promised to lower the retirement age back to 65, scrap income-splitting, and deliver a balanced budget. None of it speaks directly to the housing market, but it may mean a significant difference in income to some.

May’s Green Party

Elizabeth May’s party just yesterday released the most detailed plan to directly address housing. “We will unleash an army of carpenters, contractors, and electricians to increase home energy efficiency, saving Canadians money on their heating and electricity bills,” May stated. “It’s time the federal government gets back into the business of investing in social housing, instead of offloading its responsibilities onto cash-strapped municipalities.” She promised to retrofit all Canadian homes by 2030 to increase efficiency and cut heating and electric bills and, by 2040, reduce 80% of building emissions. Not sure where the funds will come from, but it’s a nice idea.

She promises to create and implement a National Housing Plan including a seniors’ housing plan, First Nations plan, social housing plan and a plan for affordable market housing. A one-on-one outreach program would house chronically homeless people, and she promises to dedicate funding to the co-op housing sector and extend funding for co-ops whose federal contracts are expiring.

Her proposed Guaranteed Livable Income plan to help lower-income Canadians own homes is reminiscent of Manitoba’s Mincome experiment of the mid ‘70s, essentially a negative income tax that guarantees an unconditional annual income to all Canadians. In follow-up studies to see if it deincentivized people to work, it has since been shown that while the plan did result in lower working hours, it was by far predominantly among mothers with newborns and teen moms, which in turn had a positive effect on education: higher test scores and lower dropout rates in such families, as well as an increase in adults pursuing continuing education. Hospital visits dropped by 8.5% with fewer incidents of work-related injuries and fewer emergency room visits due to car accidents and domestic abuse, as well as a reduction in psychiatric hospitalizations and mental illness-related consultations with health professionals.

While not every party has a plan that will affect you personally, I encourage you to take the long view and remember that, in the end, what’s good for the community at large is good for you too.

With the added caveats that most politicians are in fact weasels so they may not keep these promises, I’d warn against basing homebuying decisions on the results of the October vote-count, and repeat my favourite homebuying advice: buy when you find a house you love at a price you can afford. While some of these platforms will help you, none are going to turn a too-expensive property and/or a too-low income into a winning combination.

Feature image credit (L-R):

"Harper,-Stephen-Jan-23-06" by Ted Buracas. Licensed under CC BY 2.0 via Commons

Justin Trudeau by Steve Russell/Toronto Star via MoneySense.ca

"Mulcair-Ottawa-2015" by Canada's NDP / NPD du Canada from Canada - Flickr. Licensed under CC BY-SA 2.0 via Commons

Elizabeth May by FRED CHARTRAND / THE CANADIAN PRESS, via thestar.com.