On Tuesday the federal finance minister Bill Morneau, Ontario finance minister Charles Sousa and Toronto mayor John Tory will have their highly publicized meeting about the Toronto housing market.
The Ontario budget is just 10 days away so it is unlikely we will hear anything more than the usual, “we’re concerned but don’t worry, we’re working on it” platitudes.
The problem is multi-layered and if government actions is deemed necessary all three levels are going to have to act in a co-ordinated manner to make it work and lessen the unforeseen consequences.
The Ontario government has already promised measures to cool the market but it has not said what they will be or if they will be included in the up-coming budget. Possibilities include approving its own versions of new taxes like the vacancy levy and foreign buyer tax in British Columbia. The province could also free up more land for development.
Ottawa could take the tax route as well by removing the capital gains exemption loophole. It could also introduce an anti-speculation levy. Further tightening of mortgage rules and changes to mortgage insurance rules remain on the table. There are also growing calls for an interest rate increase. The Bank of Canada does not seem interested in that, but it has ended any talk of a rate cut.
Toronto could reform its property tax regime to make it fairer for renters, change zoning regulations and speed up approval processes. The mayor has also floated the idea of selling off some of the 7,000 buildings the city owns.