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Feds applaud plan to cool Toronto housing market; won't make it national policy

Last Updated Apr 21, 2017 at 10:49 am EDT

A real estate agent puts up a "sold" sign in front of a house in Toronto, Tuesday, April 20, 2010. Soaring houses prices are drawing an influx of real estate agents, but they face stiff competition. THE CANADIAN PRESS/Darren Calabrese

The federal government welcomes Ontario’s move to tax foreign home buyers in and around Toronto, but says it won’t be replicated on a national level because it’s unnecessary in the vast majority of the country.

Finance Minister Bill Morneau said his government was consulted in advance of the move by the Ontario government, which announced a 15-per-cent tax on foreign purchases in the hope of cooling a scorching-hot Toronto housing market.

It was one of multiple moves announced this week as part of a housing plan that replicates Vancouver’s foreign-purchase tax, expands rent control, allows municipalities to tax vacant properties and creates new layers of scrutiny for speculative purchases.

“There was nothing that surprised us in their announcement. We had discussed in broad strokes the measures they were moving forward with,” Morneau said Friday during a visit to Washington.

“The measures around trying to reduce speculation in the market, we think, are positive … We do believe there’s an important issue around psychology in the market that needs to be addressed — and Ontario is making progress.”

This week’s announcement generated considerable international media attention, with headlines from outlets such as the BBC and the New York Times about the Canadian city’s effort to cool its housing market.

But Morneau is adamant: there will be no similar plan at a national level.

That’s because the conditions that drove Toronto home prices up more than one-third in a year to an average value above $1 million simply don’t exist in most places.

“We have very different markets in different parts of the country. So the measures being taken are dealing with specific market conditions in places like Toronto and Vancouver,” Morneau said.

“That’s why we have not even considered these measures federally.”

Morneau made the remarks during a roundtable interview alongside global financial meetings in Washington.

Later Friday, he was to join Mexico’s finance minister at the NHL playoff game between the Toronto Maple Leafs and the Washington Capitals.

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They just popped the biggest housing bubble. Another thing for the liberals to own

April 21, 2017 at 12:26 pm

Toronto should look to Detroit to solve its high housing cost problem. The residents demanded the return of honest government last November 8. 2016 and it worked. Housing costs have since become more affordable. But, the same people are coming back who want to cut city services and I want to go against them by getting everyone to sign my Change.org Petition to end federal cuts to public community transit.

I’m sure if everyone in Toronto signs and Detroit gets federal funding, then it will be known you care and Detroit people will come to your city and spend tourist money. And then Voila, there will be more money for housing. So, please make my site go viral. http://savethefueltax.org

April 21, 2017 at 5:48 pm