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Freeland announces housing affordability measures for first-time buyers, current owners

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Deputy Prime Minister and Finance Minister Chrystia Freeland announced a number of housing affordability measures Thursday that she said will help buyers get their first homes and help current homeowners afford the homes they have.

“I really hope and believe the specific measures we announced today are going to provide a lot of comfort and a lot of hope to young Canadians,” she said in Toronto.

Freeland announced that effective April 16, the amount first-time home buyers can withdraw from their RRSPs to make a down payment on their first home will rise from a maximum of $35,000 to $60,000.

“This, plus the Tax-Free First Home Savings Account, can be combined, which will give younger Canadians more tools to save what is actually needed,” she said.

The Tax-Free First Home Savings Account program allows Canadians to save up to $8,000 per year toward a home, with a maximum lifetime contribution limit of $40,000.

Contributions to the accounts provide people with tax rebates. Growth in the accounts is not taxed and money can be taken out tax-free for a down payment.

Extending RRSP repayment period

Freeland also said she is more than doubling the time allowed for Canadians to start repaying their RRSP contributions once they have made a withdrawal to pay for the deposit on a home.

She said first-time home buyers who withdraw money from their RRSPs between Jan. 1 2022 and Dec. 31, 2025 will now have five years to begin repayments, instead of two.

Freeland also announced changes to the amortization schedule for mortgage repayments.

She said that beginning Aug. 1, first time home buyers with insured mortgages who purchase a new home will get 30 years to pay that mortgage back so “more younger Canadians can afford to pay that monthly mortgage on a new home.”

Changes to the mortgage charter

Under the Canadian Mortgage Charter announced in the fall, the federal government requires that banks reach out to homeowners four to six months in advance of their mortgage renewal date to inform them of affordability options.

Freeland said Thursday lenders will now have to contact borrowers “up to 24 months in advance of a homeowner’s mortgage renewal” to discuss options.

The Mortgage Charter also requires that lenders provide temporary extensions on the amortization period for mortgage holders who were facing financial difficulties. Freeland said Thursday that temporary measure is now being made permanent.

She said that “depending on a homeowner’s circumstances,” the amortization period can be made permanent, even for people with insured mortgages, and making that change will not come with any extra fees or penalties.

Other Mortgage Charter measures targeted at “vulnerable borrowers” under financial strain that were announced in the fall include:

  • Waiving fees and costs that would otherwise have been charged for mortgage relief measures.
  • Exempting insured mortgage holders from re-qualifying under the stress test when switching lenders at the time of a mortgage renewal.
  • Allowing borrowers to make lump sum payments to avoid negative amortization or sell their principal residence without incurring prepayment penalties.
  • Waiving interest on interest when mortgage relief measures result in mortgage payments that fail to cover interest payments on a loan.

PBO says Canada needs 1.3M new homes by 2030

Earlier Thursday, the parliamentary budget officer released a report saying Canada will need to build 1.3 million additional homes by 2030 to eliminate the country’s housing gap. The new report looks at how many more homes are needed to restore Canada’s vacancy rate to its historical average.

The report by Yves Giroux’s office also accounts for the number of additional households that would form if sufficient housing were available. Based on those benchmarks, the PBO estimates that Canada would need to build 181,000 more homes per year than it currently does.

The report does not take into account recent federal efforts to bolster housing supply or Ottawa’s new cap on temporary residents.

WATCH: Freeland unveils new measures for first-time home buyers:

Freeland unveils new measures for first-time homebuyers

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Duration 4:21

Deputy Prime Minister Chrystia Freeland announced new measures on Thursday aimed at lessening the financial strain on first-time homebuyers, including 30-year amortization rates on insured mortgages for newly built homes.

The Canada Mortgage and Housing Corporation has said Canada needs to build 3.5 million more homes by 2030 to restore affordability to 2003-04 levels.

Giroux said his estimate is much lower than that of the CMHC because he looked only at closing the gap between demand and supply.

The Liberal government has made a string of housing announcements ahead of the federal budget, largely aimed at increasing housing supply. The proposed measures include billions of dollars in low-cost loans to spur more rental construction, as well as infrastructure funding for provinces and municipalities.

Conservatives, Home Builders Association weigh in

The Canadian Home Builders’ Association issued a statement welcoming the 30-year amortization period announced by Freeland, saying the measure will “go a long way” toward turning the market around.

“Through this announcement, the government has recognized that we need to get first-time home buyers into the market,” said the association’s CEO Kevin Lee.

The Conservatives did not directly address the new measures announced by Freeland Thursday. Instead, they issued a statement saying that after eight years of Prime Minister Justin Trudeau’s government, Canada has been left with a “historic housing crisis.”

“Canadians are living through this housing hell because Trudeau has failed to build enough homes for Canadians to live in,” the statement said.

“This was confirmed again today by the Parliamentary Budget Office, who reported that Canada needs 1.3 million more homes than what is already forecasted to be built.”

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Gould calls Poilievre a ‘fraudster’ over his carbon price warning

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OTTAWA – Liberal House leader Karina Gould lambasted Conservative Leader Pierre Poilievre as a “fraudster” this morning after he said the federal carbon price is going to cause a “nuclear winter.”

Gould was speaking just before the House of Commons is set to reopen following the summer break.

“What I heard yesterday from Mr. Poilievre was so over the top, so irresponsible, so immature, and something that only a fraudster would do,” she said from Parliament Hill.

On Sunday Poilievre said increasing the carbon price will cause a “nuclear winter,” painting a dystopian picture of people starving and freezing because they can’t afford food or heat due the carbon price.

He said the Liberals’ obsession with carbon pricing is “an existential threat to our economy and our way of life.”

The carbon price currently adds about 17.6 cents to every litre of gasoline, but that cost is offset by carbon rebates mailed to Canadians every three months. The Parliamentary Budget Office provided analysis that showed eight in 10 households receive more from the rebates than they pay in carbon pricing, though the office also warned that long-term economic effects could harm jobs and wage growth.

Gould accused Poilievre of ignoring the rebates, and refusing to tell Canadians how he would make life more affordable while battling climate change. The Liberals have also accused the Conservatives of dismissing the expertise of more than 200 economists who wrote a letter earlier this year describing the carbon price as the least expensive, most efficient way to lower emissions.

Poilievre is pushing for the other opposition parties to vote the government down and trigger what he calls a “carbon tax election.”

The recent decision by the NDP to break its political pact with the government makes an early election more likely, but there does not seem to be an interest from either the Bloc Québécois or the NDP to have it happen immediately.

Poilievre intends to bring a non-confidence motion against the government as early as this week but would likely need both the Bloc and NDP to support it.

Gould said she has no “crystal ball” over when or how often Poilievre might try to bring down the government

“I know that the end of the supply and confidence agreement makes things a bit different, but really all it does is returns us to a normal minority parliament,” she said. “And that means that we will work case-by-case, legislation-by-legislation with whichever party wants to work with us. I have already been in touch with all of the House leaders in the opposition parties and my job now is to make Parliament work for Canadians.”

She also insisted the government has listened to the concerns raised by Canadians, and received the message when the Liberals lost a Toronto byelection in June in seat the party had held since 1997.

“We certainly got the message from Toronto-St. Paul’s and have spent the summer reflecting on what that means and are coming back to Parliament, I think, very clearly focused on ensuring that Canadians are at the centre of everything that we do moving forward,” she said.

The Liberals are bracing, however, for the possibility of another blow Monday night, in a tight race to hold a Montreal seat in a byelection there. Voters in LaSalle—Émard—Verdun are casting ballots today to replace former justice minister David Lametti, who was removed from cabinet in 2023 and resigned as an MP in January.

The Conservatives and NDP are also in a tight race in Elmwood-Transcona, a Winnipeg seat that has mostly been held by the NDP over the last several decades.

There are several key bills making their way through the legislative process, including the online harms act and the NDP-endorsed pharmacare bill, which is currently in the Senate.

This report by The Canadian Press was first published Sept. 16, 2024.

The Canadian Press. All rights reserved.

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Voters head to the polls for byelections in Montreal and Winnipeg

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OTTAWA – Canadians in two federal ridings are choosing their next member of Parliament today, and political parties are closely watching the results.

Winnipeg’s Elmwood —Transcona seat has been vacant since the NDP’s Daniel Blaikie left federal politics.

The New Democrats are hoping to hold onto the riding and polls suggest the Conservatives are in the running.

The Montreal seat of LaSalle—Émard—Verdun opened up when former justice minister David Lametti left politics.

Polls suggest the race is tight between the Liberal candidate and the Bloc Québécois, but the NDP is also hopeful it can win.

The Conservatives took over a Liberal stronghold seat in another byelection in Toronto earlier this summer, a loss that sent shock waves through the governing party and intensified calls for Prime Minister Justin Trudeau to step down as leader.

This report by The Canadian Press was first published Sept. 16, 2024.

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Next phase of federal foreign interference inquiry to begin today in Ottawa

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OTTAWA – The latest phase of a federal inquiry into foreign interference is set to kick off today with remarks from commissioner Marie-Josée Hogue.

Several weeks of public hearings will focus on the capacity of federal agencies to detect, deter and counter foreign interference.

Prime Minister Justin Trudeau and key government officials took part in hearings earlier this year as the inquiry explored allegations that Beijing tried to meddle in the 2019 and 2021 federal elections.

Hogue’s interim report, released in early May, said Beijing’s actions did not affect the overall results of the two general elections.

The report said while outcomes in a small number of ridings may have been affected by interference, this cannot be said with certainty.

Trudeau, members of his inner circle and senior security officials are slated to return to the inquiry in coming weeks.

This report by The Canadian Press was first published Sept. 16, 2024.

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