Generation Squeeze argues that the surtax could raise between $4.54 billion and $5.83 billion to go toward other housing projects
A think-tank funded in part by the Canada Mortgage Housing Corporation (CMHC) and National Housing Strategy is proposing that homes valued at more than $1 million be subjected to an annual deferrable surtax as part of a plan to tackle housing inequality.
In a report released on Wednesday, the research organization Generation Squeeze argues that such a surtax would hit nine per cent of homes across the country and could raise between $4.54 billion and $5.83 billion to go toward other housing projects.
The proposed surtax rates would range from 0.2 per cent on homes valued between $1 million to $1.5 million and up to one per cent tax on homes valued at over $2 million. The tax would only apply to the value in excess of the $1 million threshold.
Most Canadians, according to the report, would not have to pay anything.
“The tax will apply only to the nine per cent of households living in the most valuable principal residences in the country — including 13 per cent of Ontario households, and 21 per cent of B.C. households,” it reads.
Deferrable in this case would mean that the tax would not need to be paid until the home is sold or inherited. The report added that this design detail would be flexible to avoid imposing risks on those with limited incomes or wealth beyond their homes.
The proposal, which was part of a package of measures including increasing affordable purpose-built supply and policies to keep rental units affordable, comes as low interest rates and a boom in demand for single-family housing in the suburbs helped push the average home price in Canada to an all-time high of $720,850 in November .
It’s a pretty obvious fix
Thomas Davidoff
Thomas Davidoff, an associate professor at the University of British Columbia who researches housing and real estate, told the Financial Post that setting the politics of it aside, a surtax would ultimately soften inequality between homeowners and renters.
“It’s a pretty obvious fix: if you think there’s housing inequality, taking money from homeowners and big money voters and giving it to renters is a pretty straightforward way to address that.”
Davidoff added that it would take a combination of solutions to address high house prices in the country, but tax policy is step one.
Mortgage expert Rob McLister, however, told the Financial Post that he believes wealth redistribution is not the way to create lasting prosperity.
“The absolute last thing overtaxed Canadians need is another tax,” McLister wrote in an email. “If the goal is to make home ownership more accessible, the solution is the same as it always was: incentivize more home building within a reasonable commute from where people want to live. That takes mass housing coordination by all three levels of government and investment in ultra-high-speed transit.”
In a statement to the Financial Post, The Canadian Taxpayers Federation also criticized the report, arguing that higher taxes could have the opposite effect in addressing home prices.
“They’ve got it backwards. Higher taxes won’t make homes less expensive, higher taxes make everything more expensive,” the group said in the statement. “If there’s a housing problem then we need to build more homes, so governments should be reducing taxes and red tape on homes and the material that is needed to build more homes. We are not going to tax our way to more homes. You build more homes with hammers, not tax hikes.”
Former CMHC chief executive Evan Siddall addressed housing wealth inequality in a 2018 speech when he was leading the organization, noting that the continued escalation of house prices in Canada will create “an even greater gap between the rich and the poor in this country.”
More recently, Siddall called a capital gains tax on homes a “step too far” for politicians during a December interview on CTV’s Question Period.
“There are lots of options. But politicians just aren’t allowed to have this conversation because the opposition — and it’s any colour — will skewer them for it. And so, we don’t have the debate that we need to have,” he said.
The concept has been long considered a political third rail. During last year’s federal election, both the Liberals and Conservatives were quick to shoot down the possibility of introducing measures to impose capital gains taxes on homeowners.
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TORONTO – Roots Corp. may have built its brand on all things comfy and cosy, but its CEO says activewear is now “really becoming a core part” of the brand.
The category, which at Roots spans leggings, tracksuits, sports bras and bike shorts, has seen such sustained double-digit growth that Meghan Roach plans to make it a key part of the business’ future.
“It’s an area … you will see us continue to expand upon,” she told analysts on a Friday call.
The Toronto-based retailer’s push into activewear has taken shape over many years and included several turns as the official designer and supplier of Team Canada’s Olympic uniform.
But consumers have had plenty of choice when it comes to workout gear and other apparel suited to their sporting needs. On top of the slew of athletic brands like Nike and Adidas, shoppers have also gravitated toward Lululemon Athletica Inc., Alo and Vuori, ramping up competition in the activewear category.
Roach feels Roots’ toehold in the category stems from the fit, feel and following its merchandise has cultivated.
“Our product really resonates with (shoppers) because you can wear it through multiple different use cases and occasions,” she said.
“We’ve been seeing customers come back again and again for some of these core products in our activewear collection.”
Her remarks came the same day as Roots revealed it lost $5.2 million in its latest quarter compared with a loss of $5.3 million in the same quarter last year.
The company said the second-quarter loss amounted to 13 cents per diluted share for the quarter ended Aug. 3, the same as a year earlier.
In presenting the results, Roach reminded analysts that the first half of the year is usually “seasonally small,” representing just 30 per cent of the company’s annual sales.
Sales for the second quarter totalled $47.7 million, down from $49.4 million in the same quarter last year.
The move lower came as direct-to-consumer sales amounted to $36.4 million, down from $37.1 million a year earlier, as comparable sales edged down 0.2 per cent.
The numbers reflect the fact that Roots continued to grapple with inventory challenges in the company’s Cooper fleece line that first cropped up in its previous quarter.
Roots recently began to use artificial intelligence to assist with daily inventory replenishments and said more tools helping with allocation will go live in the next quarter.
Beyond that time period, the company intends to keep exploring AI and renovate more of its stores.
It will also re-evaluate its design ranks.
Roots announced Friday that chief product officer Karuna Scheinfeld has stepped down.
Rather than fill the role, the company plans to hire senior level design talent with international experience in the outdoor and activewear sectors who will take on tasks previously done by the chief product officer.
This report by The Canadian Press was first published Sept. 13, 2024.
Companies in this story: (TSX:ROOT)
The Canadian Press. All rights reserved.
VANCOUVER – Mediated talks between the union representing HandyDART workers in Metro Vancouver and its employer, Transdev, are set to resume today as a strike that has stopped most services drags into a second week.
No timeline has been set for the length of the negotiations, but Joe McCann, president of the Amalgamated Transit Union Local 1724, says they are willing to stay there as long as it takes, even if talks drag on all night.
About 600 employees of the door-to-door transit service for people unable to navigate the conventional transit system have been on strike since last Tuesday, pausing service for all but essential medical trips.
Hundreds of drivers rallied outside TransLink’s head office earlier this week, calling for the transportation provider to intervene in the dispute with Transdev, which was contracted to oversee HandyDART service.
Transdev said earlier this week that it will provide a reply to the union’s latest proposal on Thursday.
A statement from the company said it “strongly believes” that their employees deserve fair wages, and that a fair contract “must balance the needs of their employees, clients and taxpayers.”
This report by The Canadian Press was first published Sept. 12, 2024.
The Canadian Press. All rights reserved.
MONTREAL – Travel company Transat AT Inc. reported a loss in its latest quarter compared with a profit a year earlier as its revenue edged lower.
The parent company of Air Transat says it lost $39.9 million or $1.03 per diluted share in its quarter ended July 31.
The result compared with a profit of $57.3 million or $1.49 per diluted share a year earlier.
Revenue in what was the company’s third quarter totalled $736.2 million, down from $746.3 million in the same quarter last year.
On an adjusted basis, Transat says it lost $1.10 per share in its latest quarter compared with an adjusted profit of $1.10 per share a year earlier.
Transat chief executive Annick Guérard says demand for leisure travel remains healthy, as evidenced by higher traffic, but consumers are increasingly price conscious given the current economic uncertainty.
This report by The Canadian Press was first published Sept. 12, 2024.
Companies in this story: (TSX:TRZ)
The Canadian Press. All rights reserved.
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