Ottawa, ON – On the heels of a federal budget with one singular new investment in housing, the Parliamentary Budget Office (PBO) has found a measure proposed by MP Mike Morrice would generate between $285.8 million and $670.2 million over the next five years to be invested in affordable housing.
Morrice’s Private Members Motion 71 calls on the federal government to end tax exemptions for real estate investment trusts (REITs) and to redirect the revenues into affordable, non-profit, and co-operative housing projects. Multiple studies have pointed to this tax loophole contributing to the financialization of the housing market and called for it to be ended.
“Homes should be places for people to live, not commodities for investors to trade. Motion 71 is one simple, reasonable measure that moves us in that direction,” said Morrice, the Green MP for Kitchener Centre.
“REITs are in housing not for what they can contribute, but for what they can take out of it: the largest return possible. So, let’s tax them fairly, and use the revenue generated to invest in the affordable housing we need.”
Last week’s federal budget included a welcome $4 billion in funding for Indigenous housing initiatives, but that was the only new investment in housing in Budget 2023 and doesn’t take effect until next year.
“We are in a housing crisis and we need all levels of government acting with urgency to address it. With Motion 71, we are offering the federal government a critical solution that needs to be part of a larger strategy to address the financialization of housing.”
In the Federal Housing Advocate’s reaction to the budget, Marie-Josée Houle stated: “The newly unveiled Federal Budget is a sorry disappointment. It completely misses the mark on addressing the most pressing housing crisis this country has ever seen. There are no new ideas, and not nearly enough new money announced for housing.”
The Office of the Federal Housing Advocate is one of at least ten non-partisan organizations that have called for ending the REIT tax exemption, alongside Citizens for Public Justice, Canada Without Poverty, and Waterloo Region Yes In My BackYard (WR YIMBY).
Matt Clark of WR YIMBY said members of their advocacy group agree Motion 71 would make an impact.
“WR YIMBY believes taxing REITs will help level the playing field for all buyers. Using the proceeds of this tax to invest in sustainable, non-precarious housing such as non-profits and co-operatives will ensure as many people as possible from all stages of life have a place to call home.”
Canadian Centre for Policy Alternatives' political economist Ricardo Tranjan showed some REITs were posting double-digit revenue growth in the first year of the pandemic, while the rest of the Canadian economy was expected to shrink.
The PBO provides independent economic and financial analysis to Canada’s Parliament. Their report on Morrice’s Motion 71, released today, states:
“The PBO’s report states: “Unlike most Canadian income trusts, which were subjected to entity-level taxation since the legislative change of 2011, REITs are allowed to flow through their income to their unitholders and pay taxes only on the non-distributed portion of their income. These tax advantages have benefited REITs’ investors, particularly non-resident investors and non-taxable Canadian investors.”
For more information or to arrange an interview:
Office of MP Mike Morrice
Senior Communications Advisor
MP Mike Morrice
Office of the Parliamentary Budget Officer
Parliamentary Budget Officer