WELLINGTON COUNTY – Perth-Wellington MP John Nater calls the 2022 federal budget tabled by Liberal Finance Minister Chrystia Freeland on April 7 “a mixed bag.”
PERTH-WELLINGTON MP JOHN NATER (Advertiser file photo)
“There’s parts of it that … I can see that happen to have a positive influence. I think there’s other things that are cause for concern,” the Conservative MP stated in an April 8 telephone interview.
“Obviously we are seeing extensive deficit spending, we are seeing a lack of focus on some of the priorities that we thought ought to have been included in this budget.”
Measures aimed at calming a soaring housing market were front and centre in the budget.
Specific measures targeting housing include:
– a tax-free savings accounts that would give first-time home buyers the chance to save up to $40,000;
– a new housing accelerator fund to provide $4 billion to help municipalities speed up housing development and create 100,000 housing units over five years;
– a new tax designed to curb “property flipping” and a two-year ban on foreign investors buying houses in Canada.
Other initiatives in the budget include:
– $625 million over four years for child care, to help provinces build new facilities and make new investments;
– $1 billion over five years to create an independent federal innovation and investment agency;
– $8 billion pledged over five years in additional defense spending to upgrade equipment for Canadian military and reinforce cybersecurity;
– $4 billion over six years, starting in 2021-22, to remove systemic barriers to First Nations children receiving services in health, education and social services;
– $5.3 billion over five years and $1.7 billion ongoing to Health Canada to provide dental care to Canadians, starting with children under 12 in 2022; and
– $1.7 billion over five years to help make zero-emission vehicles more affordable and $547 million over four years to help businesses upgrade their fleets to zero-emission vehicles.
Nater said the usefulness of announced measures related to housing will be determined as the details come out.
“Unfortunately, we noticed in recent years, with things like the national housing strategy and the rapid stream of the national housing strategy, we didn’t see these funds flow to smaller and more rural municipalities,” Nater pointed out.
“The vast majority of this funding went to larger urban centers and the rural communities were left out, despite applications being made by many of our local municipalities.”
Nater added, “I’m anxious to see exactly what the details will be. I’m hoping there will be a formula-based process that will allow some of these funds to come to rural communities because we do have a real housing crisis in so many smaller rural communities like ours in Wellington County and Perth County.
“So I’m hopeful that we can see some of that, but if past practices any indication, there should be some concern about how this flows down to rural communities.”
Nater expressed optimism about a two-year ban on foreign ownership of residential properties.
“In the last election the Conservative Party committed to banning foreign, non-resident ownership to help calm the housing market in certain areas where speculation and money laundering has been rampant. I’m glad to see that that’s coming through,” he stated.
“I think that will help in some of the larger urban centres, which of course sometimes flows out to our rural communities as well. So we’ll see how that pans out. But hopefully that will have an impact on the housing market.”
Nater said the creation of a Tax-Free First Home Savings Account may help some people save for a first home purchase.
“But there are similar programs already out there with the homebuyers plan which uses the RRSP system. So I’d be eager to see how this is going to be different from that, how it can be more beneficial, but it doesn’t really address the kind of the root causes of the housing crisis,” he said.
Nater noted that while the initiatives in the budget “may help at the edges, at the margins,” they really don’t address the root cause of the housing crunch: lack of supply.
“Until we start building more houses, until we start making sure there’s more of a spectrum of housing for that first-time owner, for that young family … that person right out of university looking to buy their first home – if that supply isn’t there, especially the affordable, the attainable housing supply on semi-detached homes, the townhouses, the denser housing options – if that’s not there, it doesn’t matter how these programs work, the housing supply simply won’t be there for the first-time home buyer.”
Nater said he is concerned a measure designed to combat house flipping (a tax on the sale of a principle residence owned for less than a year) could be problematic if it’s applied to people who, for legitimate reasons, such as employment change, have to pack up and move on short notice.
However, he expressed support in general for the idea of reducing the impacts of speculation on the housing market.
“I don’t want to see housing be treated as a speculative market,” Nater stated. “Housing is for people to live in. It’s for families. It’s not meant to be a speculation prospect where people use it, and hoard it in some cases, rather than allowing families to have that chance of living in their own home.”
While acknowledging wider forces are at play, Nater said government can have an impact in the housing market.
“The government itself isn’t building houses, but they can put policies in place where infrastructure, where transit, where community-building plans are geared towards that densification,” he explained.
An added benefit of a denser housing footprint, Nater said, is protecting farmland from development.
“I know that’s not related to the housing side, but denser communities, denser housing options does protect farmland in our rural communities as well, because we’re not making any more farmland,” he noted.
Wellington County Warden Kelly Linton said he is “very pleased” to see the federal government “recognizes that affordable housing is one of the most critical issues that we are facing.
Wellington County is currently conducting a campaign to raise awareness among country residents about the need for more diverse housing options to deal with the housing crunch.
“It is good to see that they plan to invest a significant amount of money to accelerate the building of more affordable housing options,” Linton stated in an April 8 email.
“Of course, the details of how this will be rolled out and how this will positively impact Wellington County and Centre Wellington have yet to be determined. This is a step in the right direction for sure,” he added.
The budget indicates the federal deficit is projected to sit at $113.8 billion for current (2021-22) fiscal year 2021-22, down from the $144.5B estimated in a December fiscal update.
The deficit for the 2022-23 fiscal year is also down from past projections and is set to keep reducing, with the 2022-23 deficit estimated at $52.8 billion, and declining annually to $8.4 billion by 2026-27.
However Nater feels the deficit projections are still more than Canadians can afford.
“I think generally the deficit is still too high, particularly with threat of interest rates going up in the immediate term,” he said. “Even a one per cent increase in interest rates is a huge cost added to the government’s books each year.”
An $8 billion boost to defense spending in the budget is “unfortunately, probably a drop in the bucket in the great scheme of things,” said Nater.
However, he added an increase toward a target of 2% of GDP spent on defence is something he views favourably.
“Particularly given what’s happening right now with the Russian attacks on Ukraine. Certainly any added supports that our military get in the fight against Vladimir Putin, I think that will be a positive,” he stated.
Nater indicated he was disappointed with what he sees as a lack of focus on agriculture in the budget.
“We’re coming up to the new Canadian Agricultural Partnership (a $3-billion, five-year investment by federal, provincial and territorial governments to strengthen and grow Canada’s agriculture and agri-food sector) which will take effect in spring of 2022,” he stated.
“We’re less than 12 months away from that, and we saw no firm commitment to changes with risk management programs, to make those changes to AgriStability that those in the agriculture industry have been calling for for a number of years now.
“So not seeing that commitment there I think is a disappointment.”
