May 6, 2025 • 43 mins
In this episode of The Last Honest Realtor, host David Fleming tackles the aftermath of Canada’s 2025 federal election—and why, despite all the promises, Toronto’s housing market remains stuck in the same cycle of gridlock, speculation, and political soundbites.
What begins with a sharp story about development roadblocks turns into a no-holds-barred analysis of the post-election housing landscape. David breaks down why new legislation, tax promises, and party platforms won’t deliver affordability—and how politicians continue to mislead voters about what’s really possible in Toronto real estate.
In This Episode:
- Why the election outcome won’t change market fundamentals
- How GST and HST rebate promises misrepresent real buyer impacts
- Why political gridlock at the municipal level continues to block real solutions
- How developers, not governments, are dictating the pace of new housing
- Why every party’s housing plan was more about votes than viable policy
Timestamps:
00:00 – The Election Is Over. What Happens Now?
04:00 – The False Promise of GST and HST Housing Rebates
10:00 – Why Politicians Can’t (and Won’t) Deliver Affordable Housing
18:00 – Municipal Gridlock: The Real Barrier to New Supply
25:00 – Developers Press Pause, Governments Point Fingers
33:00 – Soundbites vs. Reality: The Future of Toronto’s Housing Market
Also in This Episode:
- David shares a real-world example of political interference in housing development
- A critical look at “Build Canada Homes” and why government-built housing is a flawed idea
- Why Toronto real estate is too big to fail—and what that means for buyers and sellers moving forward
Subscribe to The Last Honest Realtor on YouTube or your preferred podcast app. Drop a comment if you’re fed up with political promises that never materialize—or if you just want straight answers about what’s really happening in the market.
Disclaimer: This post contains affiliate links. If you make a purchase, I may receive a commission at no extra cost to you.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
SPEAKER_00 (00:00):
The election is over and so too is the real estate
market decline in Toronto.
Maybe, or perhaps not at all.
Hello and welcome back to theLast Honest Realtor podcast.
I'm your host, David Fleming.
Thank you so much for joining mehere today, the first podcast
post-election, where, of course,we're going to delve into the
election promises that weremade, a lot of the legislation
(00:20):
that has been enacted or isexpected to be enacted, and what
this means for you.
Now, before I jump into this, Iwant to tell you a very quick
story.
This story seemingly will havenothing to do with a federal
election, but it is a microcosmof the intersection of politics
and real estate.
Now, let's say that there's avery big developer, and let's
(00:42):
say that they own property inthe Golden Horseshoe.
As you can tell, I'm trying toprotect the people involved
here.
Now, let's say, as a fact, theproperties that they own are
zoned as of right forfourplexes.
As of right, as you would think,means that you don't need to do
anything.
You don't need to change anyzoning.
(01:02):
They are as of right.
This is what you may do.
Now, the local city councilorhas told the developer
privately, we would reallyprefer if you just built
single-family dwellings here.
Now, whether or not thedeveloper was going to build
fourplexes doesn't matter.
But say they wanted to buildtowns.
Say they wanted to build semis.
(01:23):
Why is the city councilortelling them, We would prefer
for you to build singles becausethat's what the constituents
want.
And here is the problem with theintersection of real estate and
politics.
And I have long stated thatpolitics is not about serving
the best interests of thepeople.
It is about staying in power.
That is the point.
Because if a politician is nolonger a politician in office,
(01:46):
they're unemployed.
So in this particular case, Theas of right land, you can build
four units on there.
The constituents said, we don'twant four plexes.
They want single familydwellings.
The developer said, we have theright to do this.
And the local city councilorsaid, you absolutely do, but we
will fight you every step of theway, and we will make this
(02:09):
process miserable.
Now, why would a city councilordo that?
Well, it's aboutself-preservation.
That's my cynical side, sayingthat that's what politics is
about.
And here you see a situationwhere, and this city councillor
said, publicly, I will supportit.
Privately, I will fight it.
Yeah, what did Voltaire say?
(02:30):
about politicians.
You can Google that on your owntime.
So that story, folks, is a trueone.
It is just simply to lead usinto the conversation, which, as
you can tell, I might have alittle bit of a cynical
viewpoint.
What people say publicly andwhat happens privately or what
you say before or during anelection and what happens
afterwards does not always lineup perfectly.
Now, the Liberals have wonagain.
(02:50):
They have yet another term.
What does this mean for realestate in this country and more
specifically in Toronto?
Let's have a basic recap just tosay that we did.
The Liberal Party has secured$100 It is a minority.
It is 17 shy of a majority.
Conservative leader PierrePolyev lost his own seat in
Carleton, marking a very bigsetback for the party.
And I will say that as far aspolitics goes, it is dirty.
(03:13):
Having 89 independents run inPierre's riding, that was
absolutely brilliant strategy.
Exceptionally dirty.
But hey, the dirtiest usuallywins.
Now, the election wasinfluenced, as we know, by
President Donald Trump'saggressive trade policies,
annexation threats, whichgalvanized Canadian voters and
bolstered liberal support.
But I do want to make one pointhere.
(03:35):
And no, this isn't a politicalpodcast, but if you did not read
this article in the NationalPost, this is fascinating.
Tristan Hopper, first reading,if this had been any other
election, Polyev would have beenprime minister.
Folks, listen to this.
This is fascinating.
Conservative leader PierrePolyev captured 41.4% of the
vote.
(03:55):
This has never been equaled byany of the seven prior elections
contested since the party's 2003founding.
Now, what does this mean?
This 41.4% vote is higher thanthe 39.6% that Stephen Harper
needed to win a majority in2011.
More importantly, this 41.4%vote that the Conservatives just
(04:17):
gained in 2025 is higher thananything ever won.
by Prime Minister JustinTrudeau.
Trudeau's only majority win in2015 was delivered with just
39.5% of the vote.
Now, if this doesn't make senseto you, well, there's something
missing.
The NDP.
So the NDP had their absoluteworst showing.
(04:37):
The article says the NDP'swholesale collapse saw the
progressive vote consolidatearound the Liberals unlike any
time since the 1950s, ensuringthe Conservative Party at the
top of its game was not onlydenied power, but isn't likely
to increase its caucus size morethan a dozen seats.
If Polyev had brought a votetotal of 41.4% to any other
(04:59):
federal election in the last 45years, he would be prime
minister.
Polyev's Conservatives received3.2 million votes in Ontario,
which is 1 million higher thanthe 2.2 million ballots that
Doug Ford wrote to a majority inthe provincial election.
So essentially it is this.
(05:20):
The problem for the Tories isthat the greatest electoral
performance in their historycoincided with the worst-ever
performance by the NDP in theirparty's history.
In conclusion, And this is fromthe article.
Although multiple pundits notedthe Conservatives had lost a
20-point polling lead that wasrecently as December, their
performance on Monday was on parwith what had been projected.
(05:42):
It's just that the Liberalopposition surged 30 points in
the interim.
That is the true story of whatjust happened in this election.
And most of the story is thatthe Conservatives collapsed,
Pierre dropped the ball.
No, what happened was that theOrange team...
became completely irrelevant,which if I'm going to be honest,
I've always kind of thought theywere.
(06:02):
I don't want to be like theUnited States.
They have a two party system andit has made them so incredibly
divisive.
But here we are in Canada wherebasically orange went red and
that made all the difference.
Now I can tell you this, and Idebated whether to have this
conversation with you, theviewer, knowing that half the
country voted for the liberals.
I don't want to alienate theviewers and say, listen, I voted
(06:24):
conservative.
I have always thought I'm asocial liberal and a fiscal
conservative.
I still maintain that.
I did not enjoy the last 10years from an economic
standpoint.
I did not think the governmentdid a good job.
But I'm Canadian.
I have a maple leaf tattooed onmy back.
I am eager to move forward.
No, I don't love Mark Carney.
No, I don't love the liberals.
(06:46):
But I want to know what is instore for this country.
Let's move forward.
That was such a divisiveelection.
And...
To be honest, I'm still nothappy about it.
I do not like the party that isin power, but I am ready to move
forward and I hope everybodyelse in this country is as well.
So having said that, guys, oneof the things I want to talk
about is a CBC article that wasabout removing GST off of new
(07:12):
home sales.
And so I can tell you that...
having just said, you know, openpublicly and not everyone wants
to opine about politics.
No, I don't love the party inpower.
I think that over the last fewyears, there were so many
mistakes made just from aneconomic standpoint by that
government that when we see MarkCarney come in and everybody's
touting his business acumen,everyone's talking about, you
(07:34):
know, he was the governor of theBank of England.
And of course, Liz Truss doesn'tlike him, but I mean, she had
the shortest tenure in thehistory of anybody in England.
So what we want to know is,What, among other things, that
has already been discussed orannounced by Justin Trudeau is
Mark Carney going to do?
And so, again, not to make thistoo political, and part of the
reason why I'm really notenthused by the Liberal Party in
(07:55):
general over the last 10 yearsis because—and I know all
politicians lie.
That's just what they do.
Pauliev is no different, eventhough he had my support.
Mark Carney supported— all theclimate change initiatives that
have now been walked back.
Mark Carney supported theincrease in capital gains tax,
which has now been walked back.
So when you have a party and youhave Krista Friedland and you
have Mark Carney, who both say,here are our bright ideas, and
(08:17):
then once they get into apolitical race, they walk them
all back, it's very, verydifficult to trust or listen to
all of the things that have beensaid up to this point.
And again, as I said, allpoliticians lie.
It is part of what they do.
But this article in the CBC Ifound very interesting.
Now, this goes to before theelection.
I wrote a this in my blog andit's a very simple conversation
(08:38):
which I want to have today justas an example of how one small
idea can have a monumentalimpact on the real estate
market.
Now this was in the CBC and itwas called removing GST off of
new home sales.
So Mark Carney and Pierre Polyevboth promised to eliminate the
5% GST off the purchase of somenew homes, but the promises
(09:02):
differ.
The liberal proposal is limitedto homes under a million and for
first-time buyers only.
The conservative proposal wouldcover a wider range of
purchases, all new homes under1.3 million, regardless of the
buyer.
So again, elections are allabout promising.
I have often maintained that youare basically buying people's
votes.
And I'll go off on a tangenthere, because why not?
(09:24):
There's this school of thoughtthat free...
means that you don't pay for it.
Free is not a real thing.
If you take a dollar of revenueand put it up against a dollar
of expenditures, okay, we havean equilibrium.
Now, if you have a party thatsays, we're going to have free
dental and free daycare and freethis and free that, it's not
actually free.
You have to pay for it somehow,either through a big budget
(09:45):
deficit or more taxation.
And so when you have politicalparties that are saying
everything's going to be free, Ijust say, guys, come on, what
are we really doing here?
So when I look at theseproposals, And I say that Pierre
is saying all new homes pricedunder$1.3 million regardless of
the buyer will be exempt fromthe GST.
And Mark Carney is saying, no,it's only going to be first-time
(10:06):
buyers.
It's only going to be under$1million.
The first thing I think of is,what are you going to do to
replace that revenue?
So take something as simple asDoug Ford saying, hey, I'm going
to eliminate the little stickerthat you pay for, the vehicle
registration, and it's going toput$250 into your pocket.
Okay, great.
Where are you going to get that$250 from?
It's that simple.
And that's what people don'trealize.
(10:27):
When a government says, hey,today we're announcing a$1
billion Pharmacare plan.
That's great.
Where are you getting the moneyfrom?
That's what politicians neverreally explain.
So we can talk about the budgetdeficit in the United States and
that everything Donald Trump isdoing is a bit of a look here
while I do this thing over here.
They have, what, a$20 trilliondeficit.
(10:50):
Here in Canada, much was made ofthis liberal government policy
basically taking us from a 40billion deficit and pushing us
towards a 60 billion deficitwhen the original promise was to
balance it.
It's worth noting that neitherCarney or Polyev said they were
going to balance this budget atany time.
So back to this story here.
There are questions about theseproposals and what they would do
(11:12):
to make the housing market moreaffordable.
Now, I have long maintained thatthere is very little that the
federal government can do or theprovincial or the municipal to
make housing more affordable.
And when we have written onToronto Realty Blog in the past
about the ridiculous amount oftaxes that are buried into the
price of new construction, Icontinue to make that point
that, hey, if you eliminate itall, you've got to make it up
(11:33):
somewhere.
So if the average million dollarproperty would cost$750,000, if
not for all the collectivetaxes, if you To eliminate those
taxes, well now you have toeliminate, I don't know, snow
shoveling or crossing guards orwhat, raise taxes.
It's a zero sum game.
You have to take a dollar fromPeter to pay Paul.
(11:54):
That's how it works unless youwant to run a ridiculous budget
deficit.
So as this article continues,and I'm going to read this here.
GST is not charged on resalehome purchases, and resale
accounts for three quarters ofthe residential real estate
market Toronto, and this isbased on TREB data.
Now, what I would say is thathistorically correct, three
(12:14):
quarters of sales are resale,and one quarter would be
pre-construction where you havethis GST, HST.
But if you look at the statsover the last 18 months, and
we've written about this a loton Toronto Realty Blog,
pre-construction sales havehalted.
They're down 80%, 90%, 99%.
So as both of these politiciansare making this promise, I'm
(12:34):
going to make housing moreaffordable.
I'm going to eliminate the GST.
We have to look at this and say,okay, but if a tree falls in the
woods and no one's around tohear it, does it make a sound?
If pre-construction is down 90%,then who are you really helping?
Not only that, if you're onlydoing it for first-time buyers,
(12:55):
then, well...
What if on the other side of it,it's for all buyers?
Are we talking about investors?
Because who buys?
pre-construction.
And I'm going to come back tothat because the people
interviewed in this do as well.
Now, Steve Pomeroy, a professorat the Canadian Housing Evidence
Collaborative at McMaster, whereI went, says the GST cuts will
help stimulate some new homeconstruction, but says that the
(13:15):
liberal and conservative claimsthe move would save new home
buyers$50,000 or$65,000 offtheir purchases are not
accurate.
He says, quote, it's a good10-second political soundbite.
The reality is it's not going tohave that big an effect, which
I, of course, agree with.
He says that's becausedevelopers build the sales tax
into the market price of a newhome.
He says you negotiate with thebuilder for a price and let's
say you agree to$700,000 whichwould be a relatively modest
(13:37):
condo in Toronto.
You don't actually add the taxon top of that.
It's absorbed into the pricebecause that's the price you've
negotiated.
Now I wrote on my blog last weekthat if you take a million
dollar property and HST isburied in and it would be
$885,000 without it.
On the flip side if you postedsomething for$885,000 and then
you walked up to the proverbialcash register and said, I'm
(13:58):
going to pay 13% and now it's amillion dollars, I think that
would drastically affect sales.
We can all walk up and buy aGatorade for$1.99 and then pay
$2.26 or whatever it is, 13% ofthat.
Sorry, that's actually a lotmore.
But I was quoting the blog thatI wrote the other day when I
said you take something that's adollar and now it's$1.13, okay?
(14:19):
That's fine.
But when you do it on a milliondollars, that's really
expensive.
heavy.
Now, that is why developers havealways buried HST in the price.
Now, John Pasalis, as we knowfrom Realosophy, has said, how
do we make it more affordablefor the next generation to own?
He says, I tend to think apolicy that gives a tax benefit
to first-time buyers, youngerfamilies, rather than people who
(14:41):
are using homes as aninvestment, is a way to get that
down the road.
The Liberals, the Conservatives,the NDP have all set up targets
upping the pace of new homeconstruction in Canada, which
only totaled 245,000 last year.
Now, the Liberal Party doubledthe current pace of construction
to 500,000 new homes per year ina decade.
The Conservative Party, a 15%increase in the number of new
(15:03):
homes built each year, whichwould double the current pace in
five years.
The NDP, 3 million homes builtover the next five years.
This is all absolute nonsense.
Don't you just picture AustinPowers, 1 billion homes.
No offense, okay?
Do you think Jagmeet Singh hasany plan on how to build 3
(15:24):
million homes over the next fiveyears?
These guys are basically justplaying poker and saying, I'll
raise you, I raise you.
There's no plan.
And if you were to boil it downto how many homes has to be
built per minute, It'sludicrous.
So back to this idea of the HSTand connect all the dots here
because as I'm explaining this,I'm having so many thoughts and
(15:45):
trying to veer off withdifferent examples.
But Mr.
Pasalis and Mr.
Pomeroy are absolutelypositively correct.
Here's how this looks.
First, who primarily buyspre-construction?
Investors.
So if you're going to eliminatethe GST on pre-construction, you
are helping investors.
(16:05):
Now, Pre-construction is down90%.
It won't always be like that.
But right now, if you're sayingwe're going to make housing more
affordable by eliminating GSTportion of HST on new
construction, how many peopleare you really helping?
So you put this all together,and then you say, well, is it
first-time buyers or is it allbuyers?
And you take what John Pisalissaid, and it makes perfect
(16:27):
sense.
If you actually want to help thenext generation, then you've got
to do more than just give asoundbite.
And that is exactly what Carneyand Polyev did.
I don't know if they put a lotof thought into that.
I don't know what their advisorswere telling them, but the HST
portion on new construction isnot going to move the needle.
Now, if this was in 2022, whenthe market was ripping, yes,
(16:49):
back then, one quarter of allsales were in fact
pre-construction.
Okay, so you're helping onequarter of all home buyers.
But most of them are investors.
So I wrote on my blog last weekthat if you really want to help
the next generation, you want tohelp first time buyers, look at
the ridiculous amount of landtransfer tax that people pay.
(17:10):
And I use the example on myblog.
If you're buying for$1.2 millionin Toronto, which is about an
average property, you're paying$40,000 in land transfer tax to
the municipality and to theprovince.
Now, if you were to buy aproperty and there's HST buried
into it, you're amortizing that.
You don't know the difference.
But when you're paying$40,000 inland transfer tax, that forms...
(17:30):
money up front.
You're taking that from yourdown payment and that is in part
what makes it so much lessaffordable.
So as I wrote on my blogthroughout last year, there was
a report that said 35.6% of theprice of a new piece of real
estate is made up of taxes.
We have owe so many taxes.
I mentioned the land transfertax.
(17:51):
That is provincial and that ismunicipal.
We have development levies andcharges and fees like crazy
through the municipalities.
And while someone roasted me onmy blog, I wouldn't say roasted
because I don't care, somerandom blog reader in their
mother's basement said somethingabout, of course developers
should be paying for this.
They're building theinfrastructure.
They're using the roads.
Of course they should pay forit.
What this person is missing iswhat I always say.
(18:14):
Look past, look, you know, playchess, not checkers.
The developers paying for itmeans that the buyer pays for
it.
They just pass the cost along.
Unless, as this person woulddescribe, I don't know, the
government just takes control ofeverything, which will probably
be the case in 15 years afteranother three terms of a liberal
government.
We will all work for thegovernment.
That is probably where thiscountry's headed.
(18:35):
I'm kidding.
I'm kidding.
A little.
Sort of.
Maybe.
But point is, this gentlemanthat posted on the blog saying,
hey, developers should pay forit.
Of course they should.
It is passed along to the buyer.
Look one step further.
And that is what I am sayingwhen you consider what Carney
and Polyev are talking about,reducing the HST, GST portion of
that And in the end of the day,you're just helping speculators
(18:55):
because that is who buyspre-construction.
So with every promise comes agreat soundbite.
And from there, we've got totake the next step and look.
And as this article continues,and I'm sorry to just roast
this, but it's so insane.
These promises of building allthese houses, the government's
not in the business of buildinghouses.
And Carney went on and he talkedabout, we need to get building
homes again.
And I was downtown on theweekend with my family and stuck
(19:18):
on a pole was some...
website about how we need tobuild more not-for-profit and
more co-ops and it should belike 1950.
A lot's changed since 1950.
And you can't just sort ofexpect the government to just
start doing what they did 80years ago again, post-World War
II.
And yet that is what a lot ofwhat Carney was promising
(19:39):
sounded like to me.
So...
Continue with this article.
To get there, being all thesehomes built, each party proposes
various methods to persuademunicipalities to allow more
home construction.
persuade municipalities yes somuch of the roadblock is at the
municipal level now i gave youthat example at the onset for a
reason the developer basicallybeing threatened by a city
(20:02):
councillor who says myconstituents don't want
fourplexes we are going to fightyou build single town homes and
i go back to my cynical sidethat says politics is about
staying in power that isabsolutely what you have to do
look in the united states wheresomeone makes 300 grand a year
puts together a super packfunded with 55 million dollars
that's what it's about so theThe Liberal Party campaign
(20:22):
document talked about buildingon the success of the federal
government's existing housingaccelerator fund launched in
2023.
Building on the success.
Building on the success.
Building on the success.
Was that successful?
No, no, it wasn't.
Basically, it's providing$4billion over four years,
primarily towardshousing-related infrastructure
(20:43):
in cities that agree tohigher-density housing and
faster permit approvals.
The federal government issaying, if you do a better job,
Billy...
We will give you this cupcake.
Now, whether or not that'sactually going to motivate
cities to do that, it depends onthis local city councillor
wanting to get reelected andblocking this development over
here.
Politics is about staying inpower.
(21:04):
There is no grand plan.
When you are in power for fouryears, it's very hard to plan
something that's 30 years downthe line.
Now, continuing here, the NDP...
I don't know why we're havingthis conversation, their housing
plan.
It's kind of like the GreenParty's plan.
Like the Green Party, I know youvote Green Party, like plastic
straws.
Yeah, you're doing your part.
(21:24):
I mean, there's 100 billionpounds of plastic waste from all
the lawn signs all over Canada.
But I'm glad you're not usingthat plastic straw.
Now, the Green Party, for themto have a plan, I don't know.
You're not going to form agovernment.
But the NDP, for what it'sworth, hey, okay, their housing
plan proposed to double the sizeof the accelerator fund to$8
billion.
(21:45):
Okay.
You know what?
Why not triple?
I got an idea.
Six-minute abs.
It's faster than seven-minuteabs.
Yes.
Why not just double it to$8billion?
Why not triple it to$12 billion?
The NDP said they're going todouble the size of the
accelerator fund.
They're just going to take thatfrom somewhere over four years
(22:05):
and make it permanent and renameit the Canadian Homes Transfer.
God, that's sexy.
The NDP says they would requiremore cities to allow more
multi-unit homes in allneighborhoods.
Didn't I just tell you aboutthat developer where the local
city councilor said they can'tbuild multiplex?
Okay, yeah, I got it.
Build more housing near publictransit routes and speed up
permits and approvals.
(22:26):
I love how the NDP in this, andto be fair, the liberals and the
conservatives, feel like theycan do anything about it.
A conservative party housingplan would require all cities to
increase the number of homesbuilt by 15% each year and would
withhold a portion of federalfunding from those
municipalities that fall shortof the mark.
I mumbled over that part becauseI was already thinking about my
response.
(22:46):
They would require all cities toincrease the number of homes
built by 15%.
Oh, you would?
Oh, you would require it?
Okay.
Guys, what are we doing here?
None of this makes any sense.
Every single political party hadan idea of pressuring
(23:09):
municipalities.
You're talking about withholdingfederal funding for
municipalities that fall shortof the mark.
Billy, if you don't ace yourtest tomorrow, I'm not giving
you dinner for the next week.
What effect do you think that'sgoing to have?
The article says that this is acarrot and stick approach.
(23:30):
Mr.
Pomeroy contrasts these andsays, you catch more bees with
honey.
We are lost in the analogieshere today, folks.
He said, I think being positiveand proactive and working with
the municipalities is probablygoing to get you further than
the case of penalizing them fornot doing things.
It sounds like he likes my Billynot getting dinner example.
He questions whethermunicipalities, or municipal
(23:50):
policies rather, are truly toblame for the slower pace of new
construction.
As much as government wantsindustry to build more homes,
industry basically has put thebrakes on.
Municipalities in the GTA havefully approved projects
amounting to tens of thousandsof housing units, and Pomeroy
says it would be unfair topenalize municipalities when
developers don't startconstruction.
The builders are choosing not toproceed with those developments
(24:12):
because the market circumstanceshave changed.
So again, here comes the issuewhere the kid that didn't go to
school for economics or justdoesn't care, the same one that
Doesn't want to drink from aplastic straw, even though every
night at Rogers Center, there's100,000 disposable plastic beer
cups.
Enjoy that soggy straw.
But point is here, when you lookat this, and I'm going to read
(24:35):
this quote again, the buildersare just not choosing to proceed
with those developments becausethe market circumstances have
changed.
You can't force a developer tobuild at a loss.
It's just not going to work.
Okay, the kid with the plasticstraw doesn't care, didn't go to
school for economics.
He does not care.
He says, you should be forced tobuild.
So when a developer launches apre-construction project and
(24:57):
everybody buys into it, it getscanceled.
And I've always complained aboutthis, but I complain about the
fact that people act like thiscan't happen.
If the market changes, the priceof labor goes up, the price of
goods goes up, everything elsegoes up, that developer's not
going to build for$100 millionloss.
So how is the federal governmentgoing to force municipalities
(25:17):
and force developers to build?
If a developer owns a piece ofland and they rezone it and
they're ready to build, andguess what?
The world economy collapses,we're going to force that
developer to build?
Because there are ideas outthere in that school of thought,
which I don't want to use leftand right, but this idea that if
a developer owns a piece of landand it's ready to be built on,
they can't just sit on it.
(25:39):
Okay, well, now my libertarianviews are going to start to
show.
I don't think that we can tellpeople what to do all the time
everywhere.
I also don't think, and thismight be an unpopular opinion
given where we are in thiscountry, that it's the
government's job to solveeverything.
In fact, whether it's their jobto do it or whether or not they
actually can is kind of thenexus of where we're at with
(26:01):
critical thought.
in this country.
So when you have a developersitting on a piece of land
that's ready to go, ready tobuild, and that developer looks
at interest rates and the costof labor, the cost of materials,
and says, well, I can't go aheadand build because I'm gonna lose
$100 million, the idea thatwe're gonna force them to build
is absolutely ludicrous.
Now, again, going back to theelection, Carney proposed to
(26:22):
create a crown corporationcalled Build Canada Homes that
would finance affordable housingconstruction across the country.
The agency would provide$25billion in financing to the
builders of prefabricated homesand allocate$10 billion towards
affordable housing, including$6billion in direct funding of
projects and$4 billion inlow-cost loans.
Billion, billion, billion,billion.
(26:44):
The money has to come fromsomewhere.
I think it's great.
A crown corporation called BuildCanada Homes.
So...
Are we on the same page here?
The private sector is moreefficient than the public
sector.
If you take a dollar and youfilter it through government, I
think like 81 cents comes out.
That's just how it works.
(27:04):
Now, again, the capitalist in meis going to say the private
sector is more efficient and canbuild at a lower cost.
And the counter argument isgoing to be Oh, it's for profit
and oh, they're greedy and allthat wonderful stuff that comes
with that critical school ofthought.
I do not believe that thegovernment at this juncture
should be getting into buildinghomes.
(27:25):
I think builders build homes.
So if you look on my streetright now, the government is not
paving the road.
That's contracted out.
Jimmy from the city of Torontois not out there throwing down
asphalt and rolling over top ofit.
It's contracted out.
Everything the government does,snow shoveling, snow clearing,
tree trimming, it's contractedout.
(27:47):
Now, we're talking about thegovernment getting into the
business of building homes.
And that scares theyou-know-what out of me.
Because I just don't think thegovernment is that efficient.
Depending on who you voted for.
and what your political leaningsare, you might think that I'm
crazy.
You might say, David, in 1950,the government, I don't want to
(28:08):
hear it.
That was a long time ago.
I'm just being honest.
Now, Pierre Pelliev'sconservatives have dismissed
this Crown Corporation as moreliberal bureaucracy.
and instead proposed to sell6,000 federal buildings at an
unspecified thousands of acresof federally owned land to
developers of market andnon-market housing with
preference for housing deemed tobe affordable.
(28:29):
The issue with this becomes thegeneral public does not trust
this.
The general public, and this iswhy I love politics and tangent
time, Donald Trump, I mean, it'sjust wild.
It's absolutely wild.
He will say things and peoplejust listen and believe it.
the stock market tanks, and hesays, this is Joe Biden's fault.
(28:51):
This is Joe Biden's fault.
This has nothing to do withtariffs.
And you know that there are alot, what, 40, 50, 80, 100
million people that are like,yep, absolutely.
Now, by the same token, here,we've always had this idea that
Doug Ford's developer buddiesand the croonies, and it's all
insiders.
When I read this and I say thatPierre wants to sell federal
(29:13):
buildings and land todevelopers, I already know the
argument.
It's going to be that it's allinsiders and it's crooked and
they're giving deals and they'replaying favoritism.
I mean, look, you can thinkthat.
I don't blame you.
And in fact, I've always gone onrecord that saying that I don't
believe that anytime a pavingcontract is awarded at the city
of Toronto, like you don't thinksomeone's making money off of
(29:34):
that.
That's how politics works.
So people are not going to likethat idea.
But then, okay, Jagmeet Singhsays, hold my beer.
NDP leader Jagmeet Singh says,all surplus federal land should
only be used for buildingaffordable housing and not sold
to private developers.
And there you go.
And then he gets in hisbrother's Maserati and drives
away.
(29:55):
So other NDP proposals onhousing include making the
temporary ban on foreign homebuyers permanent.
UNKNOWN (30:01):
Oh my God.
SPEAKER_00 (30:02):
It's like they read my blog.
The biggest red herring ever.
Trying to discourage propertyflipping by taxing profits from
selling a non-primary residencewithin five years of purchase as
income.
rather than a capital gain.
God, I'm just waiting.
I'm waiting one day for someone.
Hello, we're from thegovernment.
We hear you have 10 pairs ofshoes and that's too many.
(30:24):
We're here to take some becausethere's some people that don't
have any.
I think some people might notlike the cut of my jib today.
No, look, we're all politicallycharged.
Come on, give us a break.
That was a tough election.
Can we not have fun with this?
Because I definitely am today.
Now, John Pesalis, our friendfrom Realosophy, is skeptical
that the Liberals' Build CanadaHomes proposal, which Carney is
(30:45):
calling the most comprehensiveand ambitious housing strategy
since the Second World War,works in the GTA in the 2020s.
Yeah?
Our worlds are very different,Pesalis said.
You mean from 1950?
Back then, the people who boughthomes were families.
And in that environment, we hadthis natural anchor that homes
(31:05):
could not exceed what theaverage household could afford.
So here's where, right, the guywho doesn't like plastic straws
is going to start to say, right,right.
And that's why, and he's goingto give his ridiculous example
of we need to build homes for$100,000.
Like labor and materials andland and all that stuff doesn't
count.
John Pasalis says, that anchorhas been cut off because houses
(31:27):
become a global financial assetand the money flowing into them
is disproportionately comingfrom investors.
John's not necessarily wrong.
I think a way smaller percentagethan it used to be because no
one's buying pre-constructionbecause that was primarily
driven by investors.
We've done so many blogs overthe years of why we got it in
this situation where we onlybuild once we pre-sell.
(31:47):
Topic for another day.
People buying homes not to livein but as an investment have
driven up prices, Pasalisargues.
pushing home ownership out ofreach for many younger would-be
buyers.
Now, another issue Posales seesin the GTA is limited
availability of sites that wouldsuit the liberals' focus on
prefab homes.
This is exactly what I'm talkingabout.
Mr.
Posales calls out, I'm sorry Ikeep laughing, but Carney's
(32:10):
saying, we used to build in thiscountry 80 years ago, and you're
trying to compare that to now?
It's such a soundbite, and y'allvoted for it.
Now, Posales says, of course,limited land that suits the
liberals focus.
He says this idea that we canjust take prefabricated plans
and drop them in everywhere, Ithink is unrealistic.
I think they have a place, but Idon't think they're going to
(32:32):
play the same role they playedin our housing market in the
1940s.
I had to laugh a lot during thiselection.
And we're talking about realestate of which I'm an expert
because I'm in the business.
So I understand it.
The average person out there hasno idea.
So when someone sits there, youknow, like, Canada's dad, that
was kind of like what he wasgoing for, right?
(32:52):
He dressed like my buddy Chrisover here, who's got kind of
like the sweater over top of thebutton down.
And he's talking about, let'sget back to the good old days
where we build houses, you know,80 to 90 years ago.
People don't understand.
It's just not possible.
You don't have the amount ofland.
And if you do, right, becausethe average person, you know,
the housing crisis, the housingshortage, what they mean is that
they don't have the red brickGeorgian.
(33:14):
in Rosedale, readily availablefor$600,000.
When you say, hey, we have thegreat piece of land, it's in
between Toronto and Barrie,people are like, well, I don't
wanna live there.
How am I gonna get to work?
So all these proposals in theend, they're exactly what I
expected.
You know, Steve Pomeroy said,addressing the housing
affordability crisis requiresserious policy.
(33:36):
It can't be solved with one-offinitiatives.
Everything I just described toyou, they're all sound bites.
They're talking about removingthe HST.
We just debunked that.
One quarter at the peak of allsales are for pre-construction.
Now it's non-existent and it'sdriven by investors.
So how are you helping familiesthere?
You have all of these ideas,right?
(33:56):
I just laugh at some of these.
Even the conservatives, it'sacross the board.
Every single one of these ideas.
We're gonna build 500,000 homes.
We're gonna build 600,000 homes.
We're gonna build a millionhomes today.
None of this meant anything.
Now, one more point here.
John Pesalis says, thegovernment should invest in
subsidizing the construction ofaffordable housing, provide
(34:18):
incentives to encourage morepurpose-built rental housing,
and reduce the scope forinvestors to fuel price
increases in the residentialmarket.
John said, I do think there's arole that the governments have
in making home ownershippotentially more affordable by
discouraging investment andspeculation in houses so the
younger generation can have abit of a chance.
Now, if John Pasalis and StevePomeroy were running this, I
(34:43):
think we'd be doing a hell of alot better than Jagmeet, Pierre,
or Mark.
It is like those threegentlemen, wasn't there a Green
Party?
Yeah, I don't know why.
When they weren't invited to thedebate, I was like, yeah, and?
So I think between those threegentlemen who basically just
(35:04):
gave us sound bites throughoutthe campaign, which has made me
laugh through an entire podcast,and I'm sorry, not sorry, none
of them have really doneanything in terms of policy.
And I want to go to a couple ofnotes here before we finish off
about the confirmed liberalhousing planks.
Continuation of the HousingAccelerator Fund.
(35:24):
with incentives formunicipalities to increase
housing supply.
I think we talked about that.
Extension of the foreign buyerban to 2027 with tighter
exemptions.
Again, what I might say is a bitof red herring.
No immediate changes to the 50%capital gains inclusion rate,
but a fairness review isscheduled for later this year.
Boy, I'd love...
Love to know what's going to goon in the fairness review.
You know what would be fair?
(35:45):
More than a 54% marginal taxrate in this country.
Why not just all of it?
Now, maintenance of immigrationlevels at 500,000 per year with
a forthcoming cap on temporarypermits.
I think what would be reallyinteresting is to know of all of
the people that come overtemporarily, how many of them
stay?
because the government doesn'ttrack that.
(36:06):
I would also look at the numberof students that come over, how
many of them actually go toschool, because there was a
report on that.
I wish I had pulled that.
Maybe we'll Google that later.
And last but not least,initiation of a national flood
insurance program funded throughthe CMHC.
So good to know that that iswhat they're spending their time
on.
Cynicism.
It's the theme today.
It's what I'm good at.
(36:26):
So some key dates to watch.
May 10th, the cabinet sworn in.
The housing minister expected toreintroduce the foreign buyer
extension bill.
To me, This is absolutegrandstanding.
We look back at 2017 when westarted talking about foreign
buyers.
It has still continued.
This idea that we're keepingprices where they are, we're
doing it, it's because we'vebanned foreign buyers.
(36:48):
Absolutely ludicrous.
And I mentioned earlier thatstory where I've got two clients
that are highly sought aftermedical professionals, can't
come here and buy a home fromtheir family because the
speculation taxes are 35% of thepurchase price.
I do believe that we really needto look at this idea of banning
foreign buyers.
And when we're not banned andthey are exempted, the
municipality and the provinceare taxed them to death.
(37:10):
We're stopping people fromcoming here who we need to come
here.
Now, June 12th to 19th is thebudget If passed, there are
potential enhancements to theGST HST rebate for new builds,
but that remains to be seen.
And to me, that's the first timewe're really going to know these
promises during the campaign.
(37:31):
Are they actually going to cometo fruition?
July 2nd, the CRA is going topublish rebate regulations.
Closings, real estate closingson or after August 1st may
qualify for new incentives.
July 16th, the Bank of Canadawill, excuse me, announce their
interest rate decision.
25 basis point cut will probablystimulate midsummer activity.
And I think this could lead intoa fall, which, well, far be it
(37:52):
for me to say, might be busy.
August 15th, CMHC announcesmunicipalities receiving
accelerator fund grants,anticipate zoning changes in
areas like Scarborough Centre,Markham and Brampton.
So I think we beat this horse todeath and beyond the idea of the
government using the carrotapproach or the stick approach.
I just don't know how this isgoing to play out over the next
(38:13):
four or five years.
Early September, Parliamentreconvenes, foreign buyer ban
bill moves to the secondreading, potentially influencing
luxury market activity.
Again, remains to be seen justhow much activity from the evil
foreign buyers there actuallyis.
And last but not least,mid-September, the IRCC will
release details for immigrationlevels for 2026 to 2027,
(38:34):
including caps on study and workpermits, which is critical
information for downtown condoinvestors.
So folks, if I were to sum thisup, and this is gonna sound
cynical, but it's about ashonest as I can be, I would say
this.
There is very little that thefederal government can do to
actually make housing moreaffordable.
(38:56):
Sorry, not sorry.
And again, you've put up with alot of laughs and smirks and
smiles and cynicism and sarcasmso far today.
But I'm coming to you hat inhand and I'm saying that, guys,
honest to goodness, the way thatreal estate is in this country,
it is just too big to fail.
The overwhelming number ofseniors that voted liberal in
the last election tells me thisgovernment is not going to take
(39:20):
away their wealth.
Their wealth is in their homes,their nest eggs.
Seniors own homes.
And again, part of the nextgeneration is saying that's not
fair.
You have, you know who, Dr.
Paul Kershaw, Generation SqueezeFairness, that's out there
talking about home equity taxand trying to force seniors from
their homes.
I understand that if a seniorpaid$100,000 for their house and
(39:44):
now it's worth$3 million, thatdoesn't sound fair.
But we also covered the factthat it's not 1940 anymore.
It's not 1950.
The idea of building post-WorldWar II homes in 2025 doesn't
make any sense.
Neither does this idea offairness as it pertains to
somebody that all they reallydid was just buy a house and
live in it.
So I don't believe that thegovernment can take away that
(40:04):
wealth and that nest egg fromtheir biggest voter pool.
I also don't believe that CMHCcan allow housing to fail in
this country because the CMHChas backstopped All of this that
is on the back of the taxpayersis simply too big to fail.
(40:24):
Now, you want to put yourtinfoil hat on and think
conspiracy theory here.
The government has conspired tokeep real estate prices where
they are.
No, it's not that.
It's that if magically realestate prices across the country
drop 50%, the country wouldimplode because the CMHC is
backstopping all of the bank'sloans.
So when I look at ideas likethis, Makes absolutely perfect
(40:47):
sense.
A lot of sound bites.
Grant here, eliminate here,motivate here, stimulate here.
What's actually going to happenin the next couple of years, in
my honest opinion, is a wholelot of the same.
We're going to have gridlock atthe municipalities because one
politician doesn't wantfourplexes built in their area.
(41:07):
Because the constituents havesaid, you're not doing that
here.
And I've told you a story oncebefore.
I did a land consolidation inMidtown Toronto.
And although 30% of that condodevelopment was going to be
affordable housing, a local citycouncilor, extremely well known,
said to the developer, quote,over my dead body.
That's what politics is about.
It's about self-preservation.
There's no 40-year plan.
(41:27):
And on a micro level here, wesee that there are a lot of
roadblocks at the municipallevels.
And the government's best ideaso far has been The Housing
Accelerator Fund, we will giveyou money if you build.
That's what we'll do.
And even the conservatives'ridiculousness of 15% target and
we'll punish you if you don'tachieve it, right across the
(41:48):
board, you can see the best ideathe three parties had with
respect to the HousingAccelerator Fund is to say, if
you don't, then we will.
We will hold funds if you cannotbuild X.
That's not a plan.
And I didn't see a plan fromanybody.
of these parties.
So I wish I could end on abetter note, guys, other than to
say, come on, that was a lot offun.
(42:08):
That was a lot of laughs.
And you know what?
Sometimes it's a little bit moredry, a little bit more concise
here on The Last Honest Realtor.
But I think that today was areflection on the election that
we had.
If laughter is the bestmedicine, and some of these
ideas were pretty funny, thatwas a tough election.
And elections can be extremelydivisive.
I mean, I can't believe thefights that people pick with
their friends on Facebook.
Sometimes I read that.
(42:29):
I don't know why.
The algorithm thinks that Ishould.
But that's what's happened overthe last little while.
And I think We need to moveforward.
So no matter who you voted for,this is where we are.
This is who our leaders are.
Let's now hold them accountable.
Let's monitor their activity,their promises, both those that
were during the campaign andwhat they actually talk about
moving forward.
Let's, from the list of datesthat I just identified there,
(42:52):
monitor the activity as itpertains to the intersection of
government and housing.
And let's hope that we're movingforward in the right direction.
Folks, thank you so much forwatching.
As always, feel free to drop mea comment there in the YouTube
section below If you'relistening to this, Spotify,
Apple Music, wherever you getyour podcasts, please remember
to like, comment, or subscribe.
And we'll see you next week onThe Last Honest Realtor.
The election is over and so too is the real estate
market decline in Toronto.
Maybe, or perhaps not at all.
Hello and welcome back to theLast Honest Realtor podcast.
I'm your host, David Fleming.
Thank you so much for joining mehere today, the first podcast
post-election, where, of course,we're going to delve into the
election promises that weremade, a lot of the legislation
(00:20):
that has been enacted or isexpected to be enacted, and what
this means for you.
Now, before I jump into this, Iwant to tell you a very quick
story.
This story seemingly will havenothing to do with a federal
election, but it is a microcosmof the intersection of politics
and real estate.
Now, let's say that there's avery big developer, and let's
(00:42):
say that they own property inthe Golden Horseshoe.
As you can tell, I'm trying toprotect the people involved
here.
Now, let's say, as a fact, theproperties that they own are
zoned as of right forfourplexes.
As of right, as you would think,means that you don't need to do
anything.
You don't need to change anyzoning.
(01:02):
They are as of right.
This is what you may do.
Now, the local city councilorhas told the developer
privately, we would reallyprefer if you just built
single-family dwellings here.
Now, whether or not thedeveloper was going to build
fourplexes doesn't matter.
But say they wanted to buildtowns.
Say they wanted to build semis.
(01:23):
Why is the city councilortelling them, We would prefer
for you to build singles becausethat's what the constituents
want.
And here is the problem with theintersection of real estate and
politics.
And I have long stated thatpolitics is not about serving
the best interests of thepeople.
It is about staying in power.
That is the point.
Because if a politician is nolonger a politician in office,
(01:46):
they're unemployed.
So in this particular case, Theas of right land, you can build
four units on there.
The constituents said, we don'twant four plexes.
They want single familydwellings.
The developer said, we have theright to do this.
And the local city councilorsaid, you absolutely do, but we
will fight you every step of theway, and we will make this
(02:09):
process miserable.
Now, why would a city councilordo that?
Well, it's aboutself-preservation.
That's my cynical side, sayingthat that's what politics is
about.
And here you see a situationwhere, and this city councillor
said, publicly, I will supportit.
Privately, I will fight it.
Yeah, what did Voltaire say?
(02:30):
about politicians.
You can Google that on your owntime.
So that story, folks, is a trueone.
It is just simply to lead usinto the conversation, which, as
you can tell, I might have alittle bit of a cynical
viewpoint.
What people say publicly andwhat happens privately or what
you say before or during anelection and what happens
afterwards does not always lineup perfectly.
Now, the Liberals have wonagain.
(02:50):
They have yet another term.
What does this mean for realestate in this country and more
specifically in Toronto?
Let's have a basic recap just tosay that we did.
The Liberal Party has secured$100 It is a minority.
It is 17 shy of a majority.
Conservative leader PierrePolyev lost his own seat in
Carleton, marking a very bigsetback for the party.
And I will say that as far aspolitics goes, it is dirty.
(03:13):
Having 89 independents run inPierre's riding, that was
absolutely brilliant strategy.
Exceptionally dirty.
But hey, the dirtiest usuallywins.
Now, the election wasinfluenced, as we know, by
President Donald Trump'saggressive trade policies,
annexation threats, whichgalvanized Canadian voters and
bolstered liberal support.
But I do want to make one pointhere.
(03:35):
And no, this isn't a politicalpodcast, but if you did not read
this article in the NationalPost, this is fascinating.
Tristan Hopper, first reading,if this had been any other
election, Polyev would have beenprime minister.
Folks, listen to this.
This is fascinating.
Conservative leader PierrePolyev captured 41.4% of the
vote.
(03:55):
This has never been equaled byany of the seven prior elections
contested since the party's 2003founding.
Now, what does this mean?
This 41.4% vote is higher thanthe 39.6% that Stephen Harper
needed to win a majority in2011.
More importantly, this 41.4%vote that the Conservatives just
(04:17):
gained in 2025 is higher thananything ever won.
by Prime Minister JustinTrudeau.
Trudeau's only majority win in2015 was delivered with just
39.5% of the vote.
Now, if this doesn't make senseto you, well, there's something
missing.
The NDP.
So the NDP had their absoluteworst showing.
(04:37):
The article says the NDP'swholesale collapse saw the
progressive vote consolidatearound the Liberals unlike any
time since the 1950s, ensuringthe Conservative Party at the
top of its game was not onlydenied power, but isn't likely
to increase its caucus size morethan a dozen seats.
If Polyev had brought a votetotal of 41.4% to any other
(04:59):
federal election in the last 45years, he would be prime
minister.
Polyev's Conservatives received3.2 million votes in Ontario,
which is 1 million higher thanthe 2.2 million ballots that
Doug Ford wrote to a majority inthe provincial election.
So essentially it is this.
(05:20):
The problem for the Tories isthat the greatest electoral
performance in their historycoincided with the worst-ever
performance by the NDP in theirparty's history.
In conclusion, And this is fromthe article.
Although multiple pundits notedthe Conservatives had lost a
20-point polling lead that wasrecently as December, their
performance on Monday was on parwith what had been projected.
(05:42):
It's just that the Liberalopposition surged 30 points in
the interim.
That is the true story of whatjust happened in this election.
And most of the story is thatthe Conservatives collapsed,
Pierre dropped the ball.
No, what happened was that theOrange team...
became completely irrelevant,which if I'm going to be honest,
I've always kind of thought theywere.
(06:02):
I don't want to be like theUnited States.
They have a two party system andit has made them so incredibly
divisive.
But here we are in Canada wherebasically orange went red and
that made all the difference.
Now I can tell you this, and Idebated whether to have this
conversation with you, theviewer, knowing that half the
country voted for the liberals.
I don't want to alienate theviewers and say, listen, I voted
(06:24):
conservative.
I have always thought I'm asocial liberal and a fiscal
conservative.
I still maintain that.
I did not enjoy the last 10years from an economic
standpoint.
I did not think the governmentdid a good job.
But I'm Canadian.
I have a maple leaf tattooed onmy back.
I am eager to move forward.
No, I don't love Mark Carney.
No, I don't love the liberals.
(06:46):
But I want to know what is instore for this country.
Let's move forward.
That was such a divisiveelection.
And...
To be honest, I'm still nothappy about it.
I do not like the party that isin power, but I am ready to move
forward and I hope everybodyelse in this country is as well.
So having said that, guys, oneof the things I want to talk
about is a CBC article that wasabout removing GST off of new
(07:12):
home sales.
And so I can tell you that...
having just said, you know, openpublicly and not everyone wants
to opine about politics.
No, I don't love the party inpower.
I think that over the last fewyears, there were so many
mistakes made just from aneconomic standpoint by that
government that when we see MarkCarney come in and everybody's
touting his business acumen,everyone's talking about, you
(07:34):
know, he was the governor of theBank of England.
And of course, Liz Truss doesn'tlike him, but I mean, she had
the shortest tenure in thehistory of anybody in England.
So what we want to know is,What, among other things, that
has already been discussed orannounced by Justin Trudeau is
Mark Carney going to do?
And so, again, not to make thistoo political, and part of the
reason why I'm really notenthused by the Liberal Party in
(07:55):
general over the last 10 yearsis because—and I know all
politicians lie.
That's just what they do.
Pauliev is no different, eventhough he had my support.
Mark Carney supported— all theclimate change initiatives that
have now been walked back.
Mark Carney supported theincrease in capital gains tax,
which has now been walked back.
So when you have a party and youhave Krista Friedland and you
have Mark Carney, who both say,here are our bright ideas, and
(08:17):
then once they get into apolitical race, they walk them
all back, it's very, verydifficult to trust or listen to
all of the things that have beensaid up to this point.
And again, as I said, allpoliticians lie.
It is part of what they do.
But this article in the CBC Ifound very interesting.
Now, this goes to before theelection.
I wrote a this in my blog andit's a very simple conversation
(08:38):
which I want to have today justas an example of how one small
idea can have a monumentalimpact on the real estate
market.
Now this was in the CBC and itwas called removing GST off of
new home sales.
So Mark Carney and Pierre Polyevboth promised to eliminate the
5% GST off the purchase of somenew homes, but the promises
(09:02):
differ.
The liberal proposal is limitedto homes under a million and for
first-time buyers only.
The conservative proposal wouldcover a wider range of
purchases, all new homes under1.3 million, regardless of the
buyer.
So again, elections are allabout promising.
I have often maintained that youare basically buying people's
votes.
And I'll go off on a tangenthere, because why not?
(09:24):
There's this school of thoughtthat free...
means that you don't pay for it.
Free is not a real thing.
If you take a dollar of revenueand put it up against a dollar
of expenditures, okay, we havean equilibrium.
Now, if you have a party thatsays, we're going to have free
dental and free daycare and freethis and free that, it's not
actually free.
You have to pay for it somehow,either through a big budget
(09:45):
deficit or more taxation.
And so when you have politicalparties that are saying
everything's going to be free, Ijust say, guys, come on, what
are we really doing here?
So when I look at theseproposals, And I say that Pierre
is saying all new homes pricedunder$1.3 million regardless of
the buyer will be exempt fromthe GST.
And Mark Carney is saying, no,it's only going to be first-time
(10:06):
buyers.
It's only going to be under$1million.
The first thing I think of is,what are you going to do to
replace that revenue?
So take something as simple asDoug Ford saying, hey, I'm going
to eliminate the little stickerthat you pay for, the vehicle
registration, and it's going toput$250 into your pocket.
Okay, great.
Where are you going to get that$250 from?
It's that simple.
And that's what people don'trealize.
(10:27):
When a government says, hey,today we're announcing a$1
billion Pharmacare plan.
That's great.
Where are you getting the moneyfrom?
That's what politicians neverreally explain.
So we can talk about the budgetdeficit in the United States and
that everything Donald Trump isdoing is a bit of a look here
while I do this thing over here.
They have, what, a$20 trilliondeficit.
(10:50):
Here in Canada, much was made ofthis liberal government policy
basically taking us from a 40billion deficit and pushing us
towards a 60 billion deficitwhen the original promise was to
balance it.
It's worth noting that neitherCarney or Polyev said they were
going to balance this budget atany time.
So back to this story here.
There are questions about theseproposals and what they would do
(11:12):
to make the housing market moreaffordable.
Now, I have long maintained thatthere is very little that the
federal government can do or theprovincial or the municipal to
make housing more affordable.
And when we have written onToronto Realty Blog in the past
about the ridiculous amount oftaxes that are buried into the
price of new construction, Icontinue to make that point
that, hey, if you eliminate itall, you've got to make it up
(11:33):
somewhere.
So if the average million dollarproperty would cost$750,000, if
not for all the collectivetaxes, if you To eliminate those
taxes, well now you have toeliminate, I don't know, snow
shoveling or crossing guards orwhat, raise taxes.
It's a zero sum game.
You have to take a dollar fromPeter to pay Paul.
(11:54):
That's how it works unless youwant to run a ridiculous budget
deficit.
So as this article continues,and I'm going to read this here.
GST is not charged on resalehome purchases, and resale
accounts for three quarters ofthe residential real estate
market Toronto, and this isbased on TREB data.
Now, what I would say is thathistorically correct, three
(12:14):
quarters of sales are resale,and one quarter would be
pre-construction where you havethis GST, HST.
But if you look at the statsover the last 18 months, and
we've written about this a loton Toronto Realty Blog,
pre-construction sales havehalted.
They're down 80%, 90%, 99%.
So as both of these politiciansare making this promise, I'm
(12:34):
going to make housing moreaffordable.
I'm going to eliminate the GST.
We have to look at this and say,okay, but if a tree falls in the
woods and no one's around tohear it, does it make a sound?
If pre-construction is down 90%,then who are you really helping?
Not only that, if you're onlydoing it for first-time buyers,
(12:55):
then, well...
What if on the other side of it,it's for all buyers?
Are we talking about investors?
Because who buys?
pre-construction.
And I'm going to come back tothat because the people
interviewed in this do as well.
Now, Steve Pomeroy, a professorat the Canadian Housing Evidence
Collaborative at McMaster, whereI went, says the GST cuts will
help stimulate some new homeconstruction, but says that the
(13:15):
liberal and conservative claimsthe move would save new home
buyers$50,000 or$65,000 offtheir purchases are not
accurate.
He says, quote, it's a good10-second political soundbite.
The reality is it's not going tohave that big an effect, which
I, of course, agree with.
He says that's becausedevelopers build the sales tax
into the market price of a newhome.
He says you negotiate with thebuilder for a price and let's
say you agree to$700,000 whichwould be a relatively modest
(13:37):
condo in Toronto.
You don't actually add the taxon top of that.
It's absorbed into the pricebecause that's the price you've
negotiated.
Now I wrote on my blog last weekthat if you take a million
dollar property and HST isburied in and it would be
$885,000 without it.
On the flip side if you postedsomething for$885,000 and then
you walked up to the proverbialcash register and said, I'm
(13:58):
going to pay 13% and now it's amillion dollars, I think that
would drastically affect sales.
We can all walk up and buy aGatorade for$1.99 and then pay
$2.26 or whatever it is, 13% ofthat.
Sorry, that's actually a lotmore.
But I was quoting the blog thatI wrote the other day when I
said you take something that's adollar and now it's$1.13, okay?
(14:19):
That's fine.
But when you do it on a milliondollars, that's really
expensive.
heavy.
Now, that is why developers havealways buried HST in the price.
Now, John Pasalis, as we knowfrom Realosophy, has said, how
do we make it more affordablefor the next generation to own?
He says, I tend to think apolicy that gives a tax benefit
to first-time buyers, youngerfamilies, rather than people who
(14:41):
are using homes as aninvestment, is a way to get that
down the road.
The Liberals, the Conservatives,the NDP have all set up targets
upping the pace of new homeconstruction in Canada, which
only totaled 245,000 last year.
Now, the Liberal Party doubledthe current pace of construction
to 500,000 new homes per year ina decade.
The Conservative Party, a 15%increase in the number of new
(15:03):
homes built each year, whichwould double the current pace in
five years.
The NDP, 3 million homes builtover the next five years.
This is all absolute nonsense.
Don't you just picture AustinPowers, 1 billion homes.
No offense, okay?
Do you think Jagmeet Singh hasany plan on how to build 3
(15:24):
million homes over the next fiveyears?
These guys are basically justplaying poker and saying, I'll
raise you, I raise you.
There's no plan.
And if you were to boil it downto how many homes has to be
built per minute, It'sludicrous.
So back to this idea of the HSTand connect all the dots here
because as I'm explaining this,I'm having so many thoughts and
(15:45):
trying to veer off withdifferent examples.
But Mr.
Pasalis and Mr.
Pomeroy are absolutelypositively correct.
Here's how this looks.
First, who primarily buyspre-construction?
Investors.
So if you're going to eliminatethe GST on pre-construction, you
are helping investors.
(16:05):
Now, Pre-construction is down90%.
It won't always be like that.
But right now, if you're sayingwe're going to make housing more
affordable by eliminating GSTportion of HST on new
construction, how many peopleare you really helping?
So you put this all together,and then you say, well, is it
first-time buyers or is it allbuyers?
And you take what John Pisalissaid, and it makes perfect
(16:27):
sense.
If you actually want to help thenext generation, then you've got
to do more than just give asoundbite.
And that is exactly what Carneyand Polyev did.
I don't know if they put a lotof thought into that.
I don't know what their advisorswere telling them, but the HST
portion on new construction isnot going to move the needle.
Now, if this was in 2022, whenthe market was ripping, yes,
(16:49):
back then, one quarter of allsales were in fact
pre-construction.
Okay, so you're helping onequarter of all home buyers.
But most of them are investors.
So I wrote on my blog last weekthat if you really want to help
the next generation, you want tohelp first time buyers, look at
the ridiculous amount of landtransfer tax that people pay.
(17:10):
And I use the example on myblog.
If you're buying for$1.2 millionin Toronto, which is about an
average property, you're paying$40,000 in land transfer tax to
the municipality and to theprovince.
Now, if you were to buy aproperty and there's HST buried
into it, you're amortizing that.
You don't know the difference.
But when you're paying$40,000 inland transfer tax, that forms...
(17:30):
money up front.
You're taking that from yourdown payment and that is in part
what makes it so much lessaffordable.
So as I wrote on my blogthroughout last year, there was
a report that said 35.6% of theprice of a new piece of real
estate is made up of taxes.
We have owe so many taxes.
I mentioned the land transfertax.
(17:51):
That is provincial and that ismunicipal.
We have development levies andcharges and fees like crazy
through the municipalities.
And while someone roasted me onmy blog, I wouldn't say roasted
because I don't care, somerandom blog reader in their
mother's basement said somethingabout, of course developers
should be paying for this.
They're building theinfrastructure.
They're using the roads.
Of course they should pay forit.
What this person is missing iswhat I always say.
(18:14):
Look past, look, you know, playchess, not checkers.
The developers paying for itmeans that the buyer pays for
it.
They just pass the cost along.
Unless, as this person woulddescribe, I don't know, the
government just takes control ofeverything, which will probably
be the case in 15 years afteranother three terms of a liberal
government.
We will all work for thegovernment.
That is probably where thiscountry's headed.
(18:35):
I'm kidding.
I'm kidding.
A little.
Sort of.
Maybe.
But point is, this gentlemanthat posted on the blog saying,
hey, developers should pay forit.
Of course they should.
It is passed along to the buyer.
Look one step further.
And that is what I am sayingwhen you consider what Carney
and Polyev are talking about,reducing the HST, GST portion of
that And in the end of the day,you're just helping speculators
(18:55):
because that is who buyspre-construction.
So with every promise comes agreat soundbite.
And from there, we've got totake the next step and look.
And as this article continues,and I'm sorry to just roast
this, but it's so insane.
These promises of building allthese houses, the government's
not in the business of buildinghouses.
And Carney went on and he talkedabout, we need to get building
homes again.
And I was downtown on theweekend with my family and stuck
(19:18):
on a pole was some...
website about how we need tobuild more not-for-profit and
more co-ops and it should belike 1950.
A lot's changed since 1950.
And you can't just sort ofexpect the government to just
start doing what they did 80years ago again, post-World War
II.
And yet that is what a lot ofwhat Carney was promising
(19:39):
sounded like to me.
So...
Continue with this article.
To get there, being all thesehomes built, each party proposes
various methods to persuademunicipalities to allow more
home construction.
persuade municipalities yes somuch of the roadblock is at the
municipal level now i gave youthat example at the onset for a
reason the developer basicallybeing threatened by a city
(20:02):
councillor who says myconstituents don't want
fourplexes we are going to fightyou build single town homes and
i go back to my cynical sidethat says politics is about
staying in power that isabsolutely what you have to do
look in the united states wheresomeone makes 300 grand a year
puts together a super packfunded with 55 million dollars
that's what it's about so theThe Liberal Party campaign
(20:22):
document talked about buildingon the success of the federal
government's existing housingaccelerator fund launched in
2023.
Building on the success.
Building on the success.
Building on the success.
Was that successful?
No, no, it wasn't.
Basically, it's providing$4billion over four years,
primarily towardshousing-related infrastructure
(20:43):
in cities that agree tohigher-density housing and
faster permit approvals.
The federal government issaying, if you do a better job,
Billy...
We will give you this cupcake.
Now, whether or not that'sactually going to motivate
cities to do that, it depends onthis local city councillor
wanting to get reelected andblocking this development over
here.
Politics is about staying inpower.
(21:04):
There is no grand plan.
When you are in power for fouryears, it's very hard to plan
something that's 30 years downthe line.
Now, continuing here, the NDP...
I don't know why we're havingthis conversation, their housing
plan.
It's kind of like the GreenParty's plan.
Like the Green Party, I know youvote Green Party, like plastic
straws.
Yeah, you're doing your part.
(21:24):
I mean, there's 100 billionpounds of plastic waste from all
the lawn signs all over Canada.
But I'm glad you're not usingthat plastic straw.
Now, the Green Party, for themto have a plan, I don't know.
You're not going to form agovernment.
But the NDP, for what it'sworth, hey, okay, their housing
plan proposed to double the sizeof the accelerator fund to$8
billion.
(21:45):
Okay.
You know what?
Why not triple?
I got an idea.
Six-minute abs.
It's faster than seven-minuteabs.
Yes.
Why not just double it to$8billion?
Why not triple it to$12 billion?
The NDP said they're going todouble the size of the
accelerator fund.
They're just going to take thatfrom somewhere over four years
(22:05):
and make it permanent and renameit the Canadian Homes Transfer.
God, that's sexy.
The NDP says they would requiremore cities to allow more
multi-unit homes in allneighborhoods.
Didn't I just tell you aboutthat developer where the local
city councilor said they can'tbuild multiplex?
Okay, yeah, I got it.
Build more housing near publictransit routes and speed up
permits and approvals.
(22:26):
I love how the NDP in this, andto be fair, the liberals and the
conservatives, feel like theycan do anything about it.
A conservative party housingplan would require all cities to
increase the number of homesbuilt by 15% each year and would
withhold a portion of federalfunding from those
municipalities that fall shortof the mark.
I mumbled over that part becauseI was already thinking about my
response.
(22:46):
They would require all cities toincrease the number of homes
built by 15%.
Oh, you would?
Oh, you would require it?
Okay.
Guys, what are we doing here?
None of this makes any sense.
Every single political party hadan idea of pressuring
(23:09):
municipalities.
You're talking about withholdingfederal funding for
municipalities that fall shortof the mark.
Billy, if you don't ace yourtest tomorrow, I'm not giving
you dinner for the next week.
What effect do you think that'sgoing to have?
The article says that this is acarrot and stick approach.
(23:30):
Mr.
Pomeroy contrasts these andsays, you catch more bees with
honey.
We are lost in the analogieshere today, folks.
He said, I think being positiveand proactive and working with
the municipalities is probablygoing to get you further than
the case of penalizing them fornot doing things.
It sounds like he likes my Billynot getting dinner example.
He questions whethermunicipalities, or municipal
(23:50):
policies rather, are truly toblame for the slower pace of new
construction.
As much as government wantsindustry to build more homes,
industry basically has put thebrakes on.
Municipalities in the GTA havefully approved projects
amounting to tens of thousandsof housing units, and Pomeroy
says it would be unfair topenalize municipalities when
developers don't startconstruction.
The builders are choosing not toproceed with those developments
(24:12):
because the market circumstanceshave changed.
So again, here comes the issuewhere the kid that didn't go to
school for economics or justdoesn't care, the same one that
Doesn't want to drink from aplastic straw, even though every
night at Rogers Center, there's100,000 disposable plastic beer
cups.
Enjoy that soggy straw.
But point is here, when you lookat this, and I'm going to read
(24:35):
this quote again, the buildersare just not choosing to proceed
with those developments becausethe market circumstances have
changed.
You can't force a developer tobuild at a loss.
It's just not going to work.
Okay, the kid with the plasticstraw doesn't care, didn't go to
school for economics.
He does not care.
He says, you should be forced tobuild.
So when a developer launches apre-construction project and
(24:57):
everybody buys into it, it getscanceled.
And I've always complained aboutthis, but I complain about the
fact that people act like thiscan't happen.
If the market changes, the priceof labor goes up, the price of
goods goes up, everything elsegoes up, that developer's not
going to build for$100 millionloss.
So how is the federal governmentgoing to force municipalities
(25:17):
and force developers to build?
If a developer owns a piece ofland and they rezone it and
they're ready to build, andguess what?
The world economy collapses,we're going to force that
developer to build?
Because there are ideas outthere in that school of thought,
which I don't want to use leftand right, but this idea that if
a developer owns a piece of landand it's ready to be built on,
they can't just sit on it.
(25:39):
Okay, well, now my libertarianviews are going to start to
show.
I don't think that we can tellpeople what to do all the time
everywhere.
I also don't think, and thismight be an unpopular opinion
given where we are in thiscountry, that it's the
government's job to solveeverything.
In fact, whether it's their jobto do it or whether or not they
actually can is kind of thenexus of where we're at with
(26:01):
critical thought.
in this country.
So when you have a developersitting on a piece of land
that's ready to go, ready tobuild, and that developer looks
at interest rates and the costof labor, the cost of materials,
and says, well, I can't go aheadand build because I'm gonna lose
$100 million, the idea thatwe're gonna force them to build
is absolutely ludicrous.
Now, again, going back to theelection, Carney proposed to
(26:22):
create a crown corporationcalled Build Canada Homes that
would finance affordable housingconstruction across the country.
The agency would provide$25billion in financing to the
builders of prefabricated homesand allocate$10 billion towards
affordable housing, including$6billion in direct funding of
projects and$4 billion inlow-cost loans.
Billion, billion, billion,billion.
(26:44):
The money has to come fromsomewhere.
I think it's great.
A crown corporation called BuildCanada Homes.
So...
Are we on the same page here?
The private sector is moreefficient than the public
sector.
If you take a dollar and youfilter it through government, I
think like 81 cents comes out.
That's just how it works.
(27:04):
Now, again, the capitalist in meis going to say the private
sector is more efficient and canbuild at a lower cost.
And the counter argument isgoing to be Oh, it's for profit
and oh, they're greedy and allthat wonderful stuff that comes
with that critical school ofthought.
I do not believe that thegovernment at this juncture
should be getting into buildinghomes.
(27:25):
I think builders build homes.
So if you look on my streetright now, the government is not
paving the road.
That's contracted out.
Jimmy from the city of Torontois not out there throwing down
asphalt and rolling over top ofit.
It's contracted out.
Everything the government does,snow shoveling, snow clearing,
tree trimming, it's contractedout.
(27:47):
Now, we're talking about thegovernment getting into the
business of building homes.
And that scares theyou-know-what out of me.
Because I just don't think thegovernment is that efficient.
Depending on who you voted for.
and what your political leaningsare, you might think that I'm
crazy.
You might say, David, in 1950,the government, I don't want to
(28:08):
hear it.
That was a long time ago.
I'm just being honest.
Now, Pierre Pelliev'sconservatives have dismissed
this Crown Corporation as moreliberal bureaucracy.
and instead proposed to sell6,000 federal buildings at an
unspecified thousands of acresof federally owned land to
developers of market andnon-market housing with
preference for housing deemed tobe affordable.
(28:29):
The issue with this becomes thegeneral public does not trust
this.
The general public, and this iswhy I love politics and tangent
time, Donald Trump, I mean, it'sjust wild.
It's absolutely wild.
He will say things and peoplejust listen and believe it.
the stock market tanks, and hesays, this is Joe Biden's fault.
(28:51):
This is Joe Biden's fault.
This has nothing to do withtariffs.
And you know that there are alot, what, 40, 50, 80, 100
million people that are like,yep, absolutely.
Now, by the same token, here,we've always had this idea that
Doug Ford's developer buddiesand the croonies, and it's all
insiders.
When I read this and I say thatPierre wants to sell federal
(29:13):
buildings and land todevelopers, I already know the
argument.
It's going to be that it's allinsiders and it's crooked and
they're giving deals and they'replaying favoritism.
I mean, look, you can thinkthat.
I don't blame you.
And in fact, I've always gone onrecord that saying that I don't
believe that anytime a pavingcontract is awarded at the city
of Toronto, like you don't thinksomeone's making money off of
(29:34):
that.
That's how politics works.
So people are not going to likethat idea.
But then, okay, Jagmeet Singhsays, hold my beer.
NDP leader Jagmeet Singh says,all surplus federal land should
only be used for buildingaffordable housing and not sold
to private developers.
And there you go.
And then he gets in hisbrother's Maserati and drives
away.
(29:55):
So other NDP proposals onhousing include making the
temporary ban on foreign homebuyers permanent.
UNKNOWN (30:01):
Oh my God.
SPEAKER_00 (30:02):
It's like they read my blog.
The biggest red herring ever.
Trying to discourage propertyflipping by taxing profits from
selling a non-primary residencewithin five years of purchase as
income.
rather than a capital gain.
God, I'm just waiting.
I'm waiting one day for someone.
Hello, we're from thegovernment.
We hear you have 10 pairs ofshoes and that's too many.
(30:24):
We're here to take some becausethere's some people that don't
have any.
I think some people might notlike the cut of my jib today.
No, look, we're all politicallycharged.
Come on, give us a break.
That was a tough election.
Can we not have fun with this?
Because I definitely am today.
Now, John Pesalis, our friendfrom Realosophy, is skeptical
that the Liberals' Build CanadaHomes proposal, which Carney is
(30:45):
calling the most comprehensiveand ambitious housing strategy
since the Second World War,works in the GTA in the 2020s.
Yeah?
Our worlds are very different,Pesalis said.
You mean from 1950?
Back then, the people who boughthomes were families.
And in that environment, we hadthis natural anchor that homes
(31:05):
could not exceed what theaverage household could afford.
So here's where, right, the guywho doesn't like plastic straws
is going to start to say, right,right.
And that's why, and he's goingto give his ridiculous example
of we need to build homes for$100,000.
Like labor and materials andland and all that stuff doesn't
count.
John Pasalis says, that anchorhas been cut off because houses
(31:27):
become a global financial assetand the money flowing into them
is disproportionately comingfrom investors.
John's not necessarily wrong.
I think a way smaller percentagethan it used to be because no
one's buying pre-constructionbecause that was primarily
driven by investors.
We've done so many blogs overthe years of why we got it in
this situation where we onlybuild once we pre-sell.
(31:47):
Topic for another day.
People buying homes not to livein but as an investment have
driven up prices, Pasalisargues.
pushing home ownership out ofreach for many younger would-be
buyers.
Now, another issue Posales seesin the GTA is limited
availability of sites that wouldsuit the liberals' focus on
prefab homes.
This is exactly what I'm talkingabout.
Mr.
Posales calls out, I'm sorry Ikeep laughing, but Carney's
(32:10):
saying, we used to build in thiscountry 80 years ago, and you're
trying to compare that to now?
It's such a soundbite, and y'allvoted for it.
Now, Posales says, of course,limited land that suits the
liberals focus.
He says this idea that we canjust take prefabricated plans
and drop them in everywhere, Ithink is unrealistic.
I think they have a place, but Idon't think they're going to
(32:32):
play the same role they playedin our housing market in the
1940s.
I had to laugh a lot during thiselection.
And we're talking about realestate of which I'm an expert
because I'm in the business.
So I understand it.
The average person out there hasno idea.
So when someone sits there, youknow, like, Canada's dad, that
was kind of like what he wasgoing for, right?
(32:52):
He dressed like my buddy Chrisover here, who's got kind of
like the sweater over top of thebutton down.
And he's talking about, let'sget back to the good old days
where we build houses, you know,80 to 90 years ago.
People don't understand.
It's just not possible.
You don't have the amount ofland.
And if you do, right, becausethe average person, you know,
the housing crisis, the housingshortage, what they mean is that
they don't have the red brickGeorgian.
(33:14):
in Rosedale, readily availablefor$600,000.
When you say, hey, we have thegreat piece of land, it's in
between Toronto and Barrie,people are like, well, I don't
wanna live there.
How am I gonna get to work?
So all these proposals in theend, they're exactly what I
expected.
You know, Steve Pomeroy said,addressing the housing
affordability crisis requiresserious policy.
(33:36):
It can't be solved with one-offinitiatives.
Everything I just described toyou, they're all sound bites.
They're talking about removingthe HST.
We just debunked that.
One quarter at the peak of allsales are for pre-construction.
Now it's non-existent and it'sdriven by investors.
So how are you helping familiesthere?
You have all of these ideas,right?
(33:56):
I just laugh at some of these.
Even the conservatives, it'sacross the board.
Every single one of these ideas.
We're gonna build 500,000 homes.
We're gonna build 600,000 homes.
We're gonna build a millionhomes today.
None of this meant anything.
Now, one more point here.
John Pesalis says, thegovernment should invest in
subsidizing the construction ofaffordable housing, provide
(34:18):
incentives to encourage morepurpose-built rental housing,
and reduce the scope forinvestors to fuel price
increases in the residentialmarket.
John said, I do think there's arole that the governments have
in making home ownershippotentially more affordable by
discouraging investment andspeculation in houses so the
younger generation can have abit of a chance.
Now, if John Pasalis and StevePomeroy were running this, I
(34:43):
think we'd be doing a hell of alot better than Jagmeet, Pierre,
or Mark.
It is like those threegentlemen, wasn't there a Green
Party?
Yeah, I don't know why.
When they weren't invited to thedebate, I was like, yeah, and?
So I think between those threegentlemen who basically just
(35:04):
gave us sound bites throughoutthe campaign, which has made me
laugh through an entire podcast,and I'm sorry, not sorry, none
of them have really doneanything in terms of policy.
And I want to go to a couple ofnotes here before we finish off
about the confirmed liberalhousing planks.
Continuation of the HousingAccelerator Fund.
(35:24):
with incentives formunicipalities to increase
housing supply.
I think we talked about that.
Extension of the foreign buyerban to 2027 with tighter
exemptions.
Again, what I might say is a bitof red herring.
No immediate changes to the 50%capital gains inclusion rate,
but a fairness review isscheduled for later this year.
Boy, I'd love...
Love to know what's going to goon in the fairness review.
You know what would be fair?
(35:45):
More than a 54% marginal taxrate in this country.
Why not just all of it?
Now, maintenance of immigrationlevels at 500,000 per year with
a forthcoming cap on temporarypermits.
I think what would be reallyinteresting is to know of all of
the people that come overtemporarily, how many of them
stay?
because the government doesn'ttrack that.
(36:06):
I would also look at the numberof students that come over, how
many of them actually go toschool, because there was a
report on that.
I wish I had pulled that.
Maybe we'll Google that later.
And last but not least,initiation of a national flood
insurance program funded throughthe CMHC.
So good to know that that iswhat they're spending their time
on.
Cynicism.
It's the theme today.
It's what I'm good at.
(36:26):
So some key dates to watch.
May 10th, the cabinet sworn in.
The housing minister expected toreintroduce the foreign buyer
extension bill.
To me, This is absolutegrandstanding.
We look back at 2017 when westarted talking about foreign
buyers.
It has still continued.
This idea that we're keepingprices where they are, we're
doing it, it's because we'vebanned foreign buyers.
(36:48):
Absolutely ludicrous.
And I mentioned earlier thatstory where I've got two clients
that are highly sought aftermedical professionals, can't
come here and buy a home fromtheir family because the
speculation taxes are 35% of thepurchase price.
I do believe that we really needto look at this idea of banning
foreign buyers.
And when we're not banned andthey are exempted, the
municipality and the provinceare taxed them to death.
(37:10):
We're stopping people fromcoming here who we need to come
here.
Now, June 12th to 19th is thebudget If passed, there are
potential enhancements to theGST HST rebate for new builds,
but that remains to be seen.
And to me, that's the first timewe're really going to know these
promises during the campaign.
(37:31):
Are they actually going to cometo fruition?
July 2nd, the CRA is going topublish rebate regulations.
Closings, real estate closingson or after August 1st may
qualify for new incentives.
July 16th, the Bank of Canadawill, excuse me, announce their
interest rate decision.
25 basis point cut will probablystimulate midsummer activity.
And I think this could lead intoa fall, which, well, far be it
(37:52):
for me to say, might be busy.
August 15th, CMHC announcesmunicipalities receiving
accelerator fund grants,anticipate zoning changes in
areas like Scarborough Centre,Markham and Brampton.
So I think we beat this horse todeath and beyond the idea of the
government using the carrotapproach or the stick approach.
I just don't know how this isgoing to play out over the next
(38:13):
four or five years.
Early September, Parliamentreconvenes, foreign buyer ban
bill moves to the secondreading, potentially influencing
luxury market activity.
Again, remains to be seen justhow much activity from the evil
foreign buyers there actuallyis.
And last but not least,mid-September, the IRCC will
release details for immigrationlevels for 2026 to 2027,
(38:34):
including caps on study and workpermits, which is critical
information for downtown condoinvestors.
So folks, if I were to sum thisup, and this is gonna sound
cynical, but it's about ashonest as I can be, I would say
this.
There is very little that thefederal government can do to
actually make housing moreaffordable.
(38:56):
Sorry, not sorry.
And again, you've put up with alot of laughs and smirks and
smiles and cynicism and sarcasmso far today.
But I'm coming to you hat inhand and I'm saying that, guys,
honest to goodness, the way thatreal estate is in this country,
it is just too big to fail.
The overwhelming number ofseniors that voted liberal in
the last election tells me thisgovernment is not going to take
(39:20):
away their wealth.
Their wealth is in their homes,their nest eggs.
Seniors own homes.
And again, part of the nextgeneration is saying that's not
fair.
You have, you know who, Dr.
Paul Kershaw, Generation SqueezeFairness, that's out there
talking about home equity taxand trying to force seniors from
their homes.
I understand that if a seniorpaid$100,000 for their house and
(39:44):
now it's worth$3 million, thatdoesn't sound fair.
But we also covered the factthat it's not 1940 anymore.
It's not 1950.
The idea of building post-WorldWar II homes in 2025 doesn't
make any sense.
Neither does this idea offairness as it pertains to
somebody that all they reallydid was just buy a house and
live in it.
So I don't believe that thegovernment can take away that
(40:04):
wealth and that nest egg fromtheir biggest voter pool.
I also don't believe that CMHCcan allow housing to fail in
this country because the CMHChas backstopped All of this that
is on the back of the taxpayersis simply too big to fail.
(40:24):
Now, you want to put yourtinfoil hat on and think
conspiracy theory here.
The government has conspired tokeep real estate prices where
they are.
No, it's not that.
It's that if magically realestate prices across the country
drop 50%, the country wouldimplode because the CMHC is
backstopping all of the bank'sloans.
So when I look at ideas likethis, Makes absolutely perfect
(40:47):
sense.
A lot of sound bites.
Grant here, eliminate here,motivate here, stimulate here.
What's actually going to happenin the next couple of years, in
my honest opinion, is a wholelot of the same.
We're going to have gridlock atthe municipalities because one
politician doesn't wantfourplexes built in their area.
(41:07):
Because the constituents havesaid, you're not doing that
here.
And I've told you a story oncebefore.
I did a land consolidation inMidtown Toronto.
And although 30% of that condodevelopment was going to be
affordable housing, a local citycouncilor, extremely well known,
said to the developer, quote,over my dead body.
That's what politics is about.
It's about self-preservation.
There's no 40-year plan.
(41:27):
And on a micro level here, wesee that there are a lot of
roadblocks at the municipallevels.
And the government's best ideaso far has been The Housing
Accelerator Fund, we will giveyou money if you build.
That's what we'll do.
And even the conservatives'ridiculousness of 15% target and
we'll punish you if you don'tachieve it, right across the
(41:48):
board, you can see the best ideathe three parties had with
respect to the HousingAccelerator Fund is to say, if
you don't, then we will.
We will hold funds if you cannotbuild X.
That's not a plan.
And I didn't see a plan fromanybody.
of these parties.
So I wish I could end on abetter note, guys, other than to
say, come on, that was a lot offun.
(42:08):
That was a lot of laughs.
And you know what?
Sometimes it's a little bit moredry, a little bit more concise
here on The Last Honest Realtor.
But I think that today was areflection on the election that
we had.
If laughter is the bestmedicine, and some of these
ideas were pretty funny, thatwas a tough election.
And elections can be extremelydivisive.
I mean, I can't believe thefights that people pick with
their friends on Facebook.
Sometimes I read that.
(42:29):
I don't know why.
The algorithm thinks that Ishould.
But that's what's happened overthe last little while.
And I think We need to moveforward.
So no matter who you voted for,this is where we are.
This is who our leaders are.
Let's now hold them accountable.
Let's monitor their activity,their promises, both those that
were during the campaign andwhat they actually talk about
moving forward.
Let's, from the list of datesthat I just identified there,
(42:52):
monitor the activity as itpertains to the intersection of
government and housing.
And let's hope that we're movingforward in the right direction.
Folks, thank you so much forwatching.
As always, feel free to drop mea comment there in the YouTube
section below If you'relistening to this, Spotify,
Apple Music, wherever you getyour podcasts, please remember
to like, comment, or subscribe.
And we'll see you next week onThe Last Honest Realtor.
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