VANCOUVER (NEWS 1130) – The federal government is trying to sell its budget to Canadians by saying there’s something for everyone. The budget continues to contain a deficit, but includes a national pharmacare program and some help for first-time homebuyers.
The first-time homebuyers’ incentive will see a reduction in the requirements for down payments under mortgage insurance. There is also an increase in the amount you can take out of your RRSP for a first-time home purchase, going up to $35,000.
A tax expert says aside modest help for first-time buyers, there isn’t a lot of relief for the average Canadian, considering this is an election year.
Thom Armstrong, the executive director of BC’s Co-Operative Housing Federation, says it is important to remember more than half of all homes in Vancouver are occupied by renters. “A fifth of them pay more than 50 per cent of their gross income on shelter and utilities. So, it’s difficult to imagine that they will see themselves in a position to qualify for even the most generous first-time homebuyer plan.”
He says the federal government’s challenge in B.C. is to match $7-billion worth of investments promised by the provincial government over the next 10 years.
“The big impact on affordability is really going to come from provincial investments in housing. We can only hope the province and the federal government will figure out a way to coordinate their spending and investment in housing to get the maximum benefit for people who need it the most.”
Russell Crawford with KPMG says given it’s an election year, he was hoping there would be more tax relief for the average Canadian. “There are a few minor items that are included in the budget. I’m not sure there is anything overly significant, in that regard.”
“There was some hope that you might see a decrease in certain tax rates, although that wasn’t expected,” Crawford added.
“Currently — if you compare to the U.S. corporate rate, for example — we’re pretty competitive, here in Canada.”
Meanwhile, Dane Eitel, a Vancouver-area real estate analyst, says he’s pleased there are no changes to the mortgage stress test introduced last year. “Real estate is supposed to be a free market. I wasn’t expecting to see anything — I’m kind of happy we didn’t see a knee-jerk reaction to taking thing out literally within a year or two of putting implements in.”
“Now that we’re in this new reality, there hasn’t been enough of a drop across the nation … especially Vancouver and Toronto — to take the foot off of the pedal.”
Although the feds are not making changes to the mortgage stress test, it says it will adjust, if necessary.
– With files from Mike Eppel