15 Things You Should Know About 2022 Budget
Considering moving to Canada?
We have discussed 15 Things You Should Know About 2022 Budget in the article below
Here we will discuss what the government of Canada is doing to improve our country to accommodate for those moving here. According to the Canada Government Budget Plan in order to make housing more affordable, more housing needs to be built.
However, while building more housing will require investments, it will also require changes to the systems that are preventing more housing from being built.
The Canada federal government’s goal is to incentivize the cities and towns that are stepping up to get more housing built, while also ensuring that municipalities are able to get the support they need to modernize and build new homes.
Canada’s Budget 2022 proposes to provide $4 billion over the next five years, starting in 2022-23, to the Canada Mortgage and Housing Corporation to launch a new Housing Accelerator Fund.
This fund will be designed to be flexible, to fit the needs and realities of cities and communities. The focus will be on increasing supply, however government supports will be targeted to ensure that balanced supply includes the needed increase to the supply of affordable housing.
This new fund will target the creation of 100,000 net new housing units over the next five years. This is great news for those looking to immigrate to this beautiful country.
Making Housing More Affordable
Foreign investors and speculators are buying up homes that should be for Canadians to own.
Rents in our major cities continue to climb, pushing people further and further away from where they work. All of this has an impact on our economy, too. Increasing our housing supply will make Canada more competitive in the global race for talent and investment.
It will help make sure that our economy can continue to grow in the years to come.
Increasing our housing supply will be key to making housing more affordable for everyone.
Finance Canada and the Canada Mortgage and Housing Corporation estimate that Canada will need to build at least 3.5 million new homes by 2031.
To reach that number, significant steps have to be taken today. In a given year, Canada constructs about 200,000 new housing units—standalone houses, individual condos, and other types of homes alike.
To meet these housing needs, Budget 2022 proposes measures that—in partnership with steps that must be taken by other orders of government—will put Canada on the path to double our construction of new housing and meet Canada’s housing needs over the next decade. Budget 2022 measures that will build more homes and make housing more affordable across the country include:
*Putting Canada on the path to double our housing construction over the next decade;
*Helping Canadians buy their first home;
*Protecting buyers and renters;
*Curbing unfair practices that drive up the price of housing; and,
*Continuing to fight homelessness and support housing affordability, particularly for the most vulnerable.
In addition to these measures, Budget 2022 proposes additional funding to address housing needs of Indigenous peoples, as detailed in Chapter 7.
Canada's Key Ongoing Actions
The federal government is already on track by 2027-28 to deliver more than $72 billion in financial support through the National Housing Strategy, in addition to other measures that will make housing more affordable. Actions underway since 2015 include:
*More than $42 billion in federal support for the construction and repair of rental housing, affordable housing, and shelters;
*More than $15 billion in joint funding with provinces and territories, including for the Canada Housing Benefit to provide direct rent assistance;
*More than $11 billion in support for community and social housing;
*More than $2.7 billion in distinctions-based support for housing in Indigenous communities;
*More than $3 billion for Reaching Home: Canada’s Homelessness Strategy, and a commitment to eliminate chronic homelessness by 2030; and,
*Tabling legislation that would implement Canada’s first national vacant housing tax on non-Canadian, non-resident owners.
Canada's Goals For Building Affordable Homes
Every order of government has a role to play in building more homes and making housing more affordable for Canadians.
To help double our rate of construction over the next ten years, make our housing and building stock more environmentally friendly, and address homelessness, the federal government is proposing a range of measures that will:
*Incentivize cities to build more homes and create denser, more sustainable neighbourhoods to increase housing supply;
*Support those in need of affordable housing by building new affordable units faster;
*Create a new generation of co-op housing through the largest investment in new co-op housing in more than 30 years;
*Accelerate retrofits and build more net-zero homes in communities across Canada so that people can save on energy bills; and,
*Support those experiencing or at risk of homelessness by continuing to provide doubled annual funding for Reaching Home; building new affordable units for the most vulnerable; continuing work to end chronic homelessness; and introducing a new program to combat veteran homelessness.
Canada's Announcement of A New Housing Accelerator Fund Launch
Building more housing will require investments, but it will also require changes to the systems that are preventing more housing from being built.
The federal government’s goal is to incentivize the cities and towns that are stepping up to get more housing built, while also ensuring that municipalities are able to get the support they need to modernize and build new homes.
Budget 2022 proposes to provide $4 billion over five years, starting in 2022-23, to the Canada Mortgage and Housing Corporation to launch a new Housing Accelerator Fund.
This new fund will target the creation of 100,000 net new housing units over the next five years.
Utilizing The Infrastructure Funding to Encourage More Home Construction
Every year, the federal government provides significant amounts of funding to provinces, territories, and municipalities to help them deliver important public infrastructure projects.
At the same time, there is not enough housing being built to keep up with the needs of Canadians. Budget 2022 signals the government’s intention to create flexibility within federal infrastructure programs to tie access to infrastructure funding to actions by provinces, territories, and municipalities to increase housing supply where it makes sense to do so.
This flexibility would be included within the Canada Community-Building Fund.
Together with the new Housing Accelerator Fund, this represents nearly $43 billion in new and existing federal funding over the next ten years that will be leveraged to encourage the construction of more homes for Canadians across the country.
Rapidly Building New Affordable Housing
To ensure that more affordable housing can be built quickly, particularly for those experiencing or at risk of homelessness, the government is proposing to extend the Rapid Housing Initiative for a third round.
Providing $1.5 billion over two years, starting in 2022-23, to the Canada Mortgage and Housing Corporation to extend the Rapid Housing Initiative. This new funding is expected to create at least 6,000 new affordable housing units, with at least 25 per cent of funding going towards women-focused housing projects.
This also proposes to provide $475 million in 2022-23 to provide a one-time $500 payment to those facing housing affordability challenges, through the Canada Housing Benefit.
Budget 2022 proposes to re-allocate $500 million of funding on a cash basis from the National Housing Co-Investment Fund to launch a new Co-operative Housing Development Program aimed at expanding co-op housing in Canada. An additional $1 billion in loans to be reallocated from the Rental Construction Financing Initiative to support co-op housing projects.
An estimated 6,000 units will be constructed.
The federal government is continuing to work with partners across the Northern areas to address the issues of housing availability and quality that disproportionately affected. Budget 2022 proposes to provide $150 million over two years, starting in 2022-23, to support affordable housing and related infrastructure in the North. Of this amount, $60 million would be provided to the Government of Nunavut; $60 million to the Government of the Northwest Territories; and $30 million to the Government of Yukon.
Multi-Generational Home Renovation Tax Credit
For some families across the country, having different generations living together—an elderly grandparent with their daughter’s family or a son with a disability with their parents—can be an important way for them to care for each other.
To support these families, Budget 2022 proposes to introduce a Multigenerational Home Renovation Tax Credit, which would provide up to $7,500 in support for constructing a secondary suite for a senior or an adult with a disability.
Starting in 2023, this refundable credit would allow families to claim 15 per cent of up to $50,000 in eligible renovation.
For some families across the country, having different generations living together—an elderly grandparent with their daughter’s family or a son with a disability with their parents—can be an important way for them to care for each other.
To support these families, Budget 2022 proposes to introduce a Multigenerational Home Renovation Tax Credit, which would provide up to $7,500 in support for constructing a secondary suite for a senior or an adult with a disability.
Starting in 2023, this refundable credit would allow families to claim 15 per cent of up to $50,000 in eligible renovation.
Speeding Up Housing Construction & Repairs For Vulnerable Canadians
To protect housing affordability tomorrow, the government is accelerating its investments today.
Budget 2022 proposes to advance $2.9 billion in funding, on a cash basis, under the National Housing Co-Investment Fund, so that all remaining funds will be spent by 2025-26. This will accelerate the creation of up to 4,300 new units and the repair of up to 17,800 units for the Canadians who need them most.
This new fund will target the creation of 100,000 net new housing units over the next five years.
Building More Affordable & Energy Efficient Rental Units
The Rental Construction Financing Initiative (RCFI) incentivizes the construction of new rental housing by offering low-interest loans and mortgage insurance to those building more rental housing in areas where it is needed most.
Developers who significantly exceed these requirements and build highly affordable and energy efficient units will be eligible to have a portion of their repayable loans converted to non-repayable loans. RCFI will target a goal of having at least 40% of the units it supports provide rent equal to or lower than 80% of the average market rent in their local community.
This will ensure that rental units built through this program are more affordable, reduce pollution and save on energy bills
Greener Neighbourhoods & Housing
Budget 2022 proposes to provide $33.2 million over five years, starting 2022-23, to Natural Resources Canada, including $6 million from the Green Infrastructure – Energy Efficient Buildings Program to implement a Greener Neighbourhoods Pilot Program in up to six community housing neighbourhoods to pilot “Energiesprong” model in Canada.
Budget 2022 also proposes to provide an additional $458.5 million over the program duration, starting in 2022-23, to the Canada Mortgage and Housing Corporation to provide low-interest loans and grants to low-income housing providers as part of the low-income stream of the Canada Greener Homes Loan program.
Tax Free Savings & Tax Credits
Budget 2022 proposes to introduce the Tax-Free First Home Savings Account that would give prospective first-time home buyers the ability to save up to $40,000. Like an RRSP, contributions would be tax-deductible, and withdrawals to purchase a first home—including investment income— would be non-taxable, like a TFSA.
Tax-free in, tax-free out. Budget 2022 proposes to double the First-Time Home Buyers’ Tax Credit amount to $10,000. The enhanced credit would provide up to $1,500 in direct support to home buyers.
This measure would apply to homes purchased on or after January 1, 2022. To help more Canadians purchase their first home, Budget 2022 announces an extension of the First-Time Home Buyer Incentive to March 31, 2025, and that the government is exploring options to make the program more flexible and responsive to the needs of first-time home buyers, including single-led households.
Home Buyers Bill Of Rights
Budget 2022 announces that the Minister of Housing and Diversity and Inclusion will engage with provinces and territories over the next year to develop and implement a Home Buyers’ Bill of Rights and bring forward a national plan to end blind bidding.
Among other things, the Home Buyers Bill of Rights could also include ensuring a legal right to a home inspection and ensuring transparency on the history of sales prices on title searches.
To support these efforts, Budget 2022 proposes to provide $5 million over two years, starting in 2022-23, to the Canada Mortgage and Housing Corporation.
Ban On Foreign Investment & Speculation
Budget 2022 proposes new measures that will ban foreign investment in residential real estate, crack down on illegal activity in our housing market, and make sure that property flippers and speculators are paying their fair share of tax.
To make sure that housing is owned by Canadians instead of foreign investors, Budget 2022 announces the government’s intention to propose restrictions that would prohibit foreign commercial enterprises and people who are not Canadian citizens or permanent residents from acquiring non- recreational, residential property in Canada for a period of two years.
Refugees and people who have been authorized to come to Canada under emergency travel while fleeing international crises would be exempted. International students on the path to permanent residency would also be exempt in certain circumstances, as would individuals on work permits who are residing in Canada.
Making Property Flippers Pay Their Fair Share
Budget 2022 proposes to introduce new rules to ensure profits from flipping properties are taxed fully and fairly. Specifically, any person who sells a property they have held for less than 12 months would be considered to be flipping properties and would be subject to full taxation on their profits as business income. Exemptions would apply for Canadians who sell their home due to certain life circumstances, such as a death, disability, the birth of a child, a new job, or a divorce.
Exemptions will be set in forthcoming rules and Canadians will be consulted on the draft legislative proposals.
This new measure will ensure that investors who flip homes pay their fair share, while protecting the current, vitally important, principal residence exemption for Canadians who use their houses as homes.
The measure would apply to residential properties sold on or after January 1, 2023.
Taxing Assignment Sales
Homes should be for people to live in, not commodities to be traded and profited upon by housing speculators. Speculative trading in the Canadian housing market contributes to higher prices for Canadians.
Speculative trading can include the resale of housing before it has even been constructed or lived in. This is called an “assignment sale.”
To address these issues, Budget 2022 proposes to make all assignment sales of newly constructed or substantially renovated residential housing taxable for GST/HST purposes, effective May 7, 2022.
Speculative trading can include the resale of housing before it has even been constructed or lived in. This is called an “assignment sale.”
Ban On Foreign Investment & Speculation
Budget 2022 proposes new measures that will ban foreign investment in residential real estate, crack down on illegal activity in our housing market, and make sure that property flippers and speculators are paying their fair share of tax.
To make sure that housing is owned by Canadians instead of foreign investors, Budget 2022 announces the government’s intention to propose restrictions that would prohibit foreign commercial enterprises and people who are not Canadian citizens or permanent residents from acquiring non- recreational, residential property in Canada for a period of two years.
Refugees and people who have been authorized to come to Canada under emergency travel while fleeing international crises would be exempted. International students on the path to permanent residency would also be exempt in certain circumstances, as would individuals on work permits who are residing in Canada.
Conclusion:
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