Reaction to the federal budget’s passing nod to housing in Canada ranged from lukewarm to total failure.
Derek Holt, vice-president and head of capital markets at Scotiabank, blasted Budget 2023 as being “divisive” representing “an assault on relatively wealthy folks,” reports Canadian Mortgage Professional, adding, at best, it was confusing when it came to housing.
“The Bank of Canada is trying to contain inflationary pressures and soften previously raging house prices,” said Holt. “The Feds have thrown open the immigration doors into a market with no supply while another tax subsidy to housing starts up on April 1.”
Holt fears Canadian housing markets are heading into a phase of volatility that could undermine the bank’s efforts to date.“Governments did a fantastic job in the early days of the pandemic,” he said. “The problem is that they are now addicted to high spending and delivering divisive jabs at certain interests. Nothing is being done about productivity and competitiveness pressures that are mounting year by year. Big spending, big deficits, big debt, high taxes, high inflation, and bond market challenges are not the path to prosperity.”
“Government policy, especially at the federal level, has typically been targeted on the demand side; freeing up more money to buy a house. While the thinking is this should improve affordability, counterintuitively, it mostly just helps prices increase,” said the Conference Board of Canada in a statement.“At a time of sky-high immigration, governments need to focus on how to increase housing supply, and this budget does little on that front.”