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Ontario Finance Minister wants meeting on house prices with federal counterpart soon

Charles Sousa wants meeting before the spring provincial budget, widely expected April 27. “Buyers are frustrated every time they get into these bidding wars,” Sousa said.
April 6, 2017
Rob Ferguson

Fast-rising house prices make it crucial for federal Finance Minister Bill Morneau to meet “as soon as possible” on help for hard-pressed home buyers, his Ontario counterpart Charles Sousa says.

Sousa wants the gathering Morneau offered with him and Toronto Mayor John Tory to take place before the provincial budget, widely expected April 27.

“Buyers are frustrated every time they get into these bidding wars and we recognize that more and more of them are occurring,” Sousa, who has already promised aid in his fiscal blueprint, told reporters Thursday.

“It’s expanding beyond Toronto and the GTA . . . . Those are some of the things we want to discuss.”

Morneau’s offer to meet came after his budget last month spurned Sousa’s push for higher capital gains taxes on house-flippers who don’t live in the homes they purchase for profitable re-sales in a skyrocketing market.

Sousa brushed that off, saying “I appreciate his outreach,” and noting the two levels of government have had continuing discussions about housing.

Profits on the sale of a principal residence are exempt from capital gains taxes.

But with many sellers hoping to cash in on the boom and some areas of the province not experiencing such overheated markets, Sousa is treading carefully and avoiding talk of specific solutions.

“What’s important is we take the appropriate steps without harming anyone,” he said after the Legislature’s daily question period, warning some measures could have “unintended consequences.”

“There’s no consensus. In fact, there’s a wide degree of pros and cons on every decision that’s being put forward.”

One problem in the market Sousa has repeatedly mentioned centres around buyers who snap up large numbers of new homes and hold them until construction is completed, selling them for big profits.

After hearing anecdotal stories of that strategy, he is awaiting data.

“I welcome further input from developers on the registrations of those purchases.”

Progressive Conservative MPP Vic Fedeli (Nipissing), his party’s finance critic, said he fears “their go-to solution is to raise taxes” on home purchases and sales.

NDP Leader Andrea Horwath questioned why Morneau, who represents Toronto Centre, a downtown riding in the thick of many bidding wars, suddenly stepped up his concerns about the real estate market.

“It’s a crisis situation they’ve allowed to continue to snowball. Now, everybody’s, all of a sudden, jumping on a bandwagon that, really, they should have been addressing.”

With the average home price in the GTA hitting $916,567 in March — up a stunning $228,556 from a year ago — a lot of people have “no hope in hell” of being able to afford houses, Horwath said.

New Democrats have also been pressing the government to move faster on expanding rent controls, which now apply only to buildings constructed before 1991.

Some landlords are raising rents dramatically and making it difficult for tenants to find affordable accommodation.