Real Estate MarketPublished on 11 April 2017 Hansard and Statements by Senator Art Eggleton (retired)
Hon. Art Eggleton:
Welcome, minister. The average price of homes sold in the Greater Toronto Area in March of this year was 33 per cent higher than in 2016. The average selling price of all homes in Toronto is $916,567, with the average price of a detached home above the $1.5 million mark.
The CEO of the Royal Bank of Canada recently remarked on the housing market:
. . . we believe that if this issue goes unchecked, it could drag on consumer spending, locking up too much capital unproductively, and potentially becoming an inhibitor to Canada’s future economic growth.
He further noted that the three levels of government “. . . coordinate their interventions and do so reasonably quickly.”
Minister, it is known that you have requested a meeting with the Ontario Finance Minister, Charles Sousa, and Toronto Mayor John Tory to address this issue.
What do you think should be the specific measures from each order of government in addressing the issue?
Hon. Bill Morneau, P.C., M.P., Minister of Finance: First, let me thank you for asking that question; it’s a very important discussion. One of the important roles I have as Finance Minister is to ensure we have a healthy, competitive and stable housing market across the country.
One of the first things I had the opportunity to focus on in my role in late 2015 was the challenge that we have with some pockets of risk in the housing market, specifically in Vancouver and Toronto.
We’ve taken two important actions to ensure the stability of that market since we’ve been in office. Of course, there had not been enough action in the years before we came into office, in my estimation, to make sure we were dealing with that market appropriately. We have increased the amount of down payment on homes between $500,000 and $1 million. We have put a stress test on mortgages to ensure that people are only seeking to have houses or mortgages within the boundaries of what they can afford to pay, providing more stability for themselves and their families.
We set out to have policy coordination at a technical level with our officials by setting up a group between Vancouver, Toronto — Ontario and B.C. — to talk about different policy measures that can be done across the country, but specifically in those markets. What we’ve seen right now is that in the Greater Toronto Area market in particular, the dramatic house price increases that you refer to are certainly threatening affordability for families and presenting an economic risk.
So my intent in calling a meeting with Mayor John Tory and Ontario Finance Minister Charles Sousa was to ensure that we are taking coordinated and coherent policy actions. In fact, the decisions and actions we’ve taken federally apply nationally, of course, so we need to be careful about what actions we take federally because they don’t only apply to Vancouver and Toronto; they also apply to Calgary, where the housing market is more challenging, and markets like Ottawa or Montreal that are more stable.
We do need to be careful in federal actions, but we do, I believe, have a convening role for other levels of government to make sure we act in a coordinated fashion.
I don’t want you to think I’m dodging your question, but I don’t think it’s appropriate for me to dictate the terms that should be considered for Ontario or for Toronto. We want to make sure that if the City of Toronto takes an action, if the Government of Ontario takes an action or if we decide there’s something we need to take federally, we don’t work at cross-purposes, having potentially different impacts on the market. My intent was to have a discussion at the political level so we can consider the way forward.
This will continue to be a challenging file. It’s one which we will continue to pay very close attention to. I expect this political dialogue will be one that will start very soon, because we will have a meeting very soon. But it may be one that we will have to continue having as we try to make sure that we’re taking the appropriate response to the challenge.