Majority of Canadians willing to pay to fix housing crisis, health-care system: poll

A person walks by a row of houses in Toronto on Tuesday July 12, 2022. (THE CANADIAN PRESS/Cole Burston)

New data shows a majority of Canadians — regardless of income, political beliefs, or area code — support the idea of putting a surtax on properties priced north of $1 million if it would help alleviate the crises in health care and housing.

According to a poll by B.C.-based Research Co. and Generation Squeeze, 68 per cent of Canadians support “implementing a modest surtax paid by the 10 per cent who own the most expensive homes.”

The wealth of that demographic is currently protected by Canada’s 50-year-old homeownership tax shelter, which Generation Squeeze’s founder refers to as “HOTS.”

“We’re hot for HOTS!” Dr. Paul Kershaw, who is also a policy professor in the UBC School of Population Health, joked before turning serious.

“It’s a harmful policy that incentivizes us to want home prices to rise,” Kershaw said. “Do we want housing a place to call home, or do we want it to be an investment strategy where many, like me, get rich?”

Kershaw is among the 10 per cent of Canadians who benefit from the homeownership tax shelter--the country’s largest housing subsidy. Each year, the policy costs Canadians $10 billion on the federal level, while costing provinces another $5 billion, Finance Canada reports.

 

SURPRISING SUPPORT FOR SURTAX

One of the most surprising findings from the poll, according to Kershaw, is that 57 per cent of high-value property owners showed support for “modest price on housing inequity.” However, their support dropped to 15 per cent when it is described as a “surtax.”

“We have to frame the issue really carefully from a surtax into the idea they could be contributing slightly more,” said Kershaw.

The polling shows Canadians are more likely to support adding a surtax if the revenue goes towards improving housing affordability or the health-care system, especially if it would benefit long-term care.

Kershaw believes that’s because high-value homeowners are more likely to be older people who got into the housing market when prices were low and have since benefited from them skyrocketing.

“While they’re willing to invest in themselves, they’d also be investing in their children and grandchildren by making the housing market easier to enter,” said Kershaw.
 

TAX SHELTER EXPOSES REGIONAL FRUSTRATIONS

Data by Generation Squeeze shows Ontario has earned more housing wealth than any other province since the half-century-old tax shelter was brought in, with B.C. close behind. Kershaw uses the example of two different retirees--one in Fredericton, N.B., the other in Vancouver--to highlight the amount of wealth that’s sheltered regionally.

“That retiree in Fredericton has every reason to be frustrated that Canada shelters high-value homes from taxation,” said Kershaw. “Both retirees may have entered the housing market at the same time, but the Vancouver home is now worth more than $1 million, while the Fredericton one is worth $360,000.”

In Canada’s two most-expensive housing markets, Ontario and British Columbia, one in two people polled shows support for implementing a modest surtax on high-value properties.

 

PUBLIC POLL PAVES PATH FOR POLITICIANS

The poll also found 55 per cent of Canadians who vote Conservative in federal elections support a modest surtax, as do 63 per cent of Liberal voters and 64 per cent of people who vote NDP.

Kershaw hopes those findings will encourage policy makers to implement Generation Squeeze’s surtax recommendation, which was first made in a report published in January.

“Politicians will rarely be able to lead where the public isn’t going,” said Kershaw, explaining the purpose of the poll was to gauge Canadian attitudes and encourage political action. “We aren’t proposing to get rid of the tax shelter, this is literally just taking the sharpest edges off.”

The surtax recommendation also includes a deferral option for people with modest incomes and high-value homes.

“We’re not going to push retirees out of their homes. We can adapt while acknowledging the difference between income wealth and property wealth.”

Fixing the housing system through a surtax is a faster solution than adding new homes to the supply, as Vancouver saw in 2017 when the city brought in an empty homes tax.

Generation Squeeze is the same think-tank that helped the City of Vancouver develop that tax, which is now priced at three per cent tax on a home’s assessed value.

“People are recognizing we’ve done many of the easy things,” Kershaw said. “We tried to stop other people ruining our housing market –foreign buyers, developers, mean-spirited NIMBYers--It hasn’t been enough,” Kershaw said.