June 28, 2022
CMHC Estimating Supply Gaps Report
On June 23rd, CMHC released a Canada’s Housing Supply Shortages: Estimating what is needed to solve Canada’s housing affordability crisis by 2030 Report. They utilize an economic analysis that includes factors such as income growth to estimate the needed supply of housing by 2030 to keep affordability levels to what they were in 2003/2004.
CMHC projects that the county will “… need to 3.5 million additional housing units beyond current projections,” and “Two-thirds of the 3.5 million housing unit gap is in Ontario and British Columbia where housing markets are least affordable.” For British Columbia, the gap will be 570,000 homes, and this is with a target affordability in which 44% of household pre-tax incomes are spent on housing (the other provinces range from 30% to 37%).
CMHC points out that “Many other potential explanations to explain high house prices on the demand side have been advanced with policy actions taken to address them, but these measures have had little long-term impact on house prices and affordability.”
Constraints on housing supply is main issue. CMHC states that “There have been a multitude of reports on Canada’s housing system over the last few years. Government panels have been struck and the answer is now clear: we need more housing supply,” and “… achieving housing affordability for everyone in Canada will be done with increasing supply in the rental and homeownership market, and having this supply respond more quickly to greater demand.”
CMHC also points out that “More and diverse supply across the housing system enables households to better match with housing they want – and can afford, rather than stretching their budgets to bid for living spaces in limited supply.” This includes the need for “… additional supply … to meet the demand from middle-income households.”
They make clear that the housing shortage is a significant problem and much more needs to be done:
“Canada’s approach to housing supply needs to be rethought. It needs to be done differently. There must be a drastic transformation of the housing sector — including governments — and priority given to increasing the supply of housing to meet demand. To solve the issue of housing affordability, we need an ‘all-hands-on-deck’ approach to increasing the supply of housing to meet demand.”
CMHC adds that “We need to take drastic measures now to produce more housing—not more reports.” They call on governments to speed up approval times and the development industry to become more productive. They also recognize that there are skilled worker shortages, supply-chain challenges, and construction cost pressures, which “… are big hurdles to overcome to meet the 2030 target.”
Please also see the CMHC blog post on the Report.
April 5, 2022
2022 Editions of the National Model Codes
On March 28th, the updated editions of the National Codes were published by the National Research Council of Canada. This includes the National Building Code of Canada 2020, the National Fire Code of Canada 2020, the National Plumbing Code of Canada 2020, and the National Energy Code of Canada for Buildings 2020. The National Codes were provided to the Provinces and Territories in December of 2021, so they could be adopted into each jurisdiction’s regulations.
2030 Emissions Reduction Plan
On March 29, the Federal Government released is 2030 Emissions Reduction Plan “… that outlines a sector-by-sector path for Canada to reach its emissions reduction target of 40 percent below 2005 levels by 2030 and net-zero emissions by 2050.” The Plan includes $9.1 billion in new investments, including approximately $1 billion for “Greening Canada’s homes and buildings,” and $2.9 billion to speed the switch to Zero Emission Vehicles (ZEVs).
With regard to the building sector, emissions increased from 84 million tonnes of carbon dioxide equivalent (Mt CO2 eq) in 2005 to 91 (Mt) in 2019, and the Government’s goal is to reduce it to 53 (Mt) by 2030 and to net zero by 2050. To achieve this, they will be developing a Canada Green Buildings Strategy, which will include:
- Regulatory standards and incentives to transition to zero carbon energy for heating systems;
- Mandating “… EnerGuide labeling of homes at the time of sale …;”
- Developing a Climate Adaptation Home Rating Program;
- A “Net Zero Building Code Acceleration Fund to accelerate adoption and implementation of the highest performance tiers of the national model energy codes …;”
- Improving climate resiliency in the built environment;
- $458.5 million in contributions “… and loan funding to support the low-income stream of the Greener Homes Loan Program …;”
- $233 million of funding to retrofit buildings through a Greener Neighbourhoods Pilot Program and a deep retrofit program for large buildings; and
- “$183 million to support a decarbonized and climate resilient construction sector through the development of standards and building codes, the establishment of a Centre of Excellence, research and development activities — including a concrete and cement R&D initiative, timber construction R&D initiative, and multi-sector collaboration challenges — and a procurement challenge.”
With regard to Zero Emission Vehicles, they will be investing $400 million to support their objective to add 50,000 ZEV chargers to the national network, and another $500 million for ZEV charging and refueling infrastructure through the Canada Infrastructure Bank. The Government will also be providing $1.7 billion incentives for ZEVs, and they will be mandating that “… at least 20 percent of new light-duty vehicle sales will be zero-emission vehicles by 2026, at least 60 percent by 2030 and 100 percent by 2035.” They are also targeting 35% of medium and heavy-duty vehicles sales to be Zero Emission Vehicles by 2030, and there will be a 100% requirement by 2040.
February 23, 2022
CMHC Rental Market Report
On Friday, February 18th, the Canada Mortgage and Housing Corporation (CMHC) released their annual Rental Market Report. This report provides insights from the fall Rental Market Survey data including information on vacancy rates, average rents for purpose-built rental and condominium apartments, pandemic impacts on supply and demand, and economic recovery information. At a glance, Vancouver’s vacancy rate decreased to 1.2% in 2021 from 2.6% in 2020. The report notes the impacts of demand and supply between 2020 and 2021 markets, beginning on page 12 of the report.
For more information on the pandemic impacts on the rental market, please see CMHC’s bulletin linked here.
February 8, 2022
KPMG Underused Housing Tax Bulletin
On January 18th, KPMG released a bulletin expanding on the new legislation to implement the Federal Underused Housing Tax (UHT), which came into effect on January 1, 2022. The UHT is a national, annual 1% tax on the value of non-resident, non-Canadian owned residential real estate that is considered to be vacant or underused. The bulletin covers the background of the tax and the exemptions.
There are several aspects of the new tax that remain unclear, some examples are listed below:
- It is not clear why partnership and trust structures are put at a disadvantage relative to corporate structures as corporate structures allow for up to 10% of votes or value to be held by foreign entities whereas partnerships and trust are not allowed any foreign direct or indirect ownership at all before triggering the UHT.
- Foreign-controlled developers and local developers funded by foreign investment may be subject to the UHT but there may be other exemption available for such developers. One such exemption would include property that is not suitable for year-round use as a place of residence or newly constructed residential property. In addition, there also exemptions available during the period of construction, although there appears to be a technical issue involving the interaction between two exemptions for newly constructed residential property as they have overlapping time periods. In particular, there is an exemption for the construction of residential property that is not substantially completed before April of the calendar year under paragraph 6(7)(k) of the UHT Act and an exemption for construction of residential property that is substantially completed after March of the calendar year (where the property is offered for sale to the public during the calendar year and the property has never been occupied as a residence during the calendar year), under paragraph 6(7)(k) of the UHT Act.
- It is not clear what the term “construction” means in the context of these rules. More guidance on this term would be welcome. In particular, if the CRA interprets “construction” similar to its interpretation of “period of construction” for the purposes of subsection 18(3.1) of the Income Tax Act, then some foreign-owned developers may be subject to the UHT during the first few years when they still have a physical building but are going through the permitting process. In contrast, the B.C. Speculation and Vacancy Tax (SVT) regime uses the term “building activity” to provide exemptions for properties under construction that covers various stages of the development cycle, such as permitting or rezoning enquiries.
- The definition of “residential property” in these rules does not appear to include vacant or bare lands.
UDI will keep members updated on any additional guidance received on this Tax.
2022 Canadian Cost Guide
Altus Group has released its 2022 Canadian Cost Guide to contribute to industry understanding of Canadian real estate development and infrastructure construction costs. High demand, broken supply chains, volatile commodity prices, and persistent labour shortages have all contributed to rising costs and decreased predictability. The full Cost Guide can be viewed here.
January 11, 2022
Federal Mandate Letters
On December 16th, the new Federal Mandate Letters were published. The Minister of Housing and Diversity and Inclusion Mandate Letter includes the overarching goal to improve housing affordability and outlines commitments to:
- Develop a Fairness in Real Estate Action Plan with new tax measures, policy development, preventing renovictions, and transparency and regulation requirements;
- Invest in a new Housing Accelerator Fund to “support municipalities in increasing the housing supply in Canada’s largest cities through measures such as inclusionary zoning, increased densification, reductions in construction approval timelines, and the rapid development of vacant or underused lands.”;
- Make investments and policy decisions to expand housing supply;
- “Help make it easier for renters to get on the path to home ownership”; and
- Various measures to address the usage of Federal Lands under the Federal Lands Initiative.
The Deputy Prime Minister and Minister of Finance Mandate Letter includes economic recovery and growth commitments and climate commitments that accelerate the goal of a net-zero economy by 2050.
We encourage our members to read the Federal Mandate Letters and continue to engage with UDI as key policy issues arise.
If you have questions regarding the Federal Mandate Letters please contact Lily Shields-Anderson at email@example.com.
September 21, 2021
Federal Underused Housing Tax Consultation
As noted in the last newsletter, the Federal Government conducted a consultation on the Underused Housing Tax (UHT) – which just ended. The UHT is “… a national, annual 1-per-cent tax on the value of non-resident, non-Canadian owned residential real estate that is considered to be vacant or underused.” The Department released a background paper on the UHT, and UDI has provided the attached response. In the letter, UDI makes several recommendations:
- Extending the timeframe for the implementation of the tax;
- Not applying the UHT to British Columbia;
- Adopting the exemptions introduced in British Columbia’s SVT legislation for development lands and unsold inventory;
- Clarifying that the UHT only applies to the effective foreign component of the ownership of property – no matter the entity that owns it;
- Not applying the UHT to vacation properties;
- Not beginning the UHT compliance review until enough resources are in place; and
- Completing an education and communications plan for the implementation of the UHT.
UDI will keep members updated regarding the progress of the UHT, as it may impact those with non-resident/non-Canadian investors in projects. The Government stated that they plan to release draft legislative proposals for the tax later this year, so the UHT would come into effect on January 1, 2022.
September 7, 2021
Federal Election – Party Platforms on Housing
In reviewing the party platforms for the upcoming federal election, UDI has looked for proposals that will impact our members and the industry as a whole. These details include:
- Linking housing targets to transit initiatives;
- Creating incentives for purpose built rental;
- Funding for training within the building sector including green building; and
- Support for new housing supply through incentives, partnerships, and funding for social housing.
This table outlines the platforms of the three primary parties and how they relate to support for first time home buyers, below market housing initiatives, increasing housing supply, social and environmental factors, demand side initiatives, and market regulation and criminal activity.
Department of Finance – Underused Housing Tax Consultation
As noted in previous newsletters, the Federal Government is planning to implement an Underused Housing Tax (UHT), which is “… a national, annual 1-per-cent tax on the value of non-resident, non-Canadian owned residential real estate that is considered to be vacant or underused.” Despite the Federal election, the Department of Finance is currently conducting a consultation on the proposed UHT until September 17, 2021. They plan to release draft legislative proposals for the tax later this year, so the UHT would come into effect on January 1, 2022.
As part of the consultation, the Government released a background paper on the UHT. The tax “… would apply to underused housing in Canada owned directly or indirectly, whether in whole or in part, by non-resident, non-Canadians.” It would only be applied to residential land. A non-resident/non-Canadian owner would be charged the 1% tax based on the proportion of their interest in an underused property.
Although there would be an annual declaration requirement, most people and entities would be exempt from it. The list of excluded owners includes Canadian Citizens, permanent residents, corporations (“…incorporated under the laws of Canada or a province and the shares of which are listed on a Canadian stock exchange); charities, housing co-ops, government entities and other broader public service bodies. However, Canadian citizens and permanent residents with interest in properties through partnerships or trusts would need to make the annual declaration.
The declaration would be required before April 30th of every year. The declaration would be made for the previous calendar year, and would include key information regarding the owner, the property, the ownership structure as well as the value of the property. The value of the property would be the greater of either the property tax assessment or the most recent sales price; although there is an option for the owner to obtain an appraisal. The UHT for the previous year would also have to be a paid by April 30th.
There are several proposed exemptions for paying the UHT, including:
- When the property is occupied by a “qualifying occupant” for six months of the calendar year “… in periods of at least one month …;”
- “Depending on whether an owner is a corporation incorporated in Canada, a partnership or trust, owners may also be exempt depending on the status of direct and indirect shareholders, partners or beneficiaries, respectively” (from KMPG’s bulletin on the UHT);
- When the property is not suitable for year-round use or is uninhabitable due to disasters/hazardous conditions;
- If major renovations make the property uninhabitable;
- For the first year a property is acquired;
- If there is a death;
- “… if the property is a newly constructed property that was not substantially completed before April 1 of the calendar year due to the property being under construction;” or
- “… if the property is held by the owner as inventory on December 31 of the calendar year,” although this only applies for the calendar year the housing units could first be occupied.
The Government is also seeking feedback on how the UHT should apply to smaller resort/tourism communities.
The background paper includes the penalties for non-compliance and the Department of Finance also notes that starting in 2023 there will be a UHT compliance review whenever there is a disposition of residential property by a non-resident through the certificate of compliance process under Section 116 of the Income Tax Act.
UDI will be providing comments to the Government on the UHT, and will continue to reiterate that the tax should not be applied in British Columbia, as the Province already has a Speculation & Vacancy Tax (SVT). If UHT is implemented, it should include similar exemptions for “building activities” and unsold inventory that B.C. adopted in its SVT legislation. UDI will also support the need to exempt the tax for properties in resort/tourism communities.
The Department of Finance’s Tax Policy Branch is asking for comments via email by September 17. If you would like to provide your comments to UDI for its submission, please contact Cassandra McColman at 604.661.3032.
August 24, 2021
Canada Post Parcel Locker Program
Canada Post has contacted UDI regarding their program for the installation of Indoor Parcel Lockers in buildings, which are already being placed in apartments/condos/seniors’ residences throughout the country. Please note that Canada Post installs and maintains the Parcel Lockers free of charge.
The Parcel Lockers are standalone units that don’t require drilling or retrofitting for installation, with six parcel compartments in various sizes. For a full description please read here. They are installed in the lobby or other common area of a multi-unit dwelling where they can provide secure, convenient 24/7 access to parcels. With regard to convenience, residents no longer have to have to go to a retail post office to pick up parcels. In addition, the boxes include an outgoing mail slot.
Once installed, Canada Post sends residents a letter explaining how to use it:
- Residents get a locker key delivered to their existing mailbox when they have a package delivered and use the key to unlock the compartment to retrieve it.
- For security purposes, a compartment can’t be used for another delivery until its key has been returned. Keys are to be returned directly in the locker.
Canada Post is available to consult with building owners and managers on the installation of Parcel Lockers – to help select a location, take measurements and schedule installations. If you have any questions or would like to explore the Parcel Locker program further with Canada Post, please contact Mike Lee or the Parcel Locker inbox at firstname.lastname@example.org.
August 10, 2021
National Construction Waste Report
The National Zero Waste Council’s Construction and Demolition Working Group released a new report on reducing construction waste across Canada. It was found that by weight, concrete is the latest contributor to construction-related waste at 41.3% of the total, with wood contributing to 17% of total waste. The report highlights opportunities within the construction and demolition industry to divert wood waste and upcycle it for further use. This video looks at the different ways wood waste diversion can be achieved and possible uses for upcycled materials.
July 27, 2021
Canada Green Building Council (CaGBC)
CaGBC will be releasing its fifth World Green Building Trends 2021 Smart Market Report in August/September of this year, and is asking for those “… who are involved in building design and/or construction (as architects, engineers, consultants, contractors or building owners) to participate by taking the survey.” The Report will provide information on “… green building activity, drivers and benefits …”. Data from the survey will be aggregated, so it is confidential.
July 13, 2021
New Funding Announced for Surrey-Langley SkyTrain
On July 9, Prime Minister Justin Trudeau announced $1.3bn in new funding to go towards the Surrey-Langley SkyTrain extension. This funding announcement represents the final piece of the puzzle needed to secure the project out to 203rd Street in Langley, as both Provincial and TransLink portions had already been secured.
The Federal government also announced that it would invest up to 40% of eligible costs toward future planning and business case development for a proposed extension of the Millennium Line from Arbutus Station to the University of British Columbia (UBC).
April 20, 2021
Proposed New Minimum Qualifying Rate for Uninsured Mortgages
Due to the COVID-19 pandemic, OSFI suspended a consultation on the benchmark for the qualifying rate for uninsured mortgages under their Guideline B-20 in March 2020. On April 8, they relaunched this policy work, and are proposing additional restrictions: “The qualifying rate for all uninsured mortgages should be the greater of the mortgage contractual rate plus 200 basis points or 5.25 percent.”
Currently, their “… Guideline B-20 establishes that the qualifying rate for uninsured mortgages (i.e., those with a down payment of greater than 20 percent) should be the greater of the mortgage contractual rate plus 200 basis points or the Bank of Canada five-year benchmark rate.”
If you are interested in providing comments, please contact OSFI by email by Friday, May 7, 2021.
February 23, 2021
Federal Pre-budget Consultations 2021
On February 19th, the Government of Canada concluded consultations on Budget 2021, which will be released later this year. UDI submitted a formal letter outlining several priority areas for our members in the upcoming budget.
This budget follow’s the government’s Fall Economic Statement 2020.
February 10, 2021
Canada Mortgage and Housing Corporation (CMHC) Rental Market Survey
On January 28, CMHC released its 2020 Rental Market Survey (RMS). Of note, vacancy rates across the country have increased, including in Metro Vancouver where it grew from 1.1% in 2019 to 2.6% last year. Also, in Metro, rents increased by 2% in 2020 – less than half the 4.7% increase reported in 2019. With regard to COVID-19, “… 6.11% or 116,929 apartment units were in arrears out of a total universe of 1,912,290 units,” amongst Canada’s Census Metropolitan Areas. The RMS also includes additional information across country and in Vancouver, including:
- “Analysis of primary and secondary rental markets;
- Information covering new and existing structures;
- A review of rent and vacancy trends and their economic and demographic drivers;
- Analysis on the impacts of COVID-19 on rent arrears; and
Indicators of affordability conditions for the primary rental market.”
December 1, 2020
UDI Success at the Supreme Court of Canada
On June 9, 2020, UDI appeared as an intervener in the Supreme Court of Canada appeal between The Owners, Strata Plan LMS3905 (as appellant) and Crystal Square Parking Corporation (as respondent).
The case involved a mixed-use development in Burnaby in which the appellant strata corporation was seeking to enforce the right to enjoy certain parking rights by way of an airspace parcel easement agreement without having to be bound to an obligation in the same agreement to make payments associated with the parking rights.
UDI participated in the appeal to support the arguments of the respondent and to resist the positions of the Condominium Home Owners’ Association (CHOA), who appeared as an intervener in support of the strata corporation to argue that strata corporations in BC are deserving of unique protections, as distinct from other corporations, because of their supposed vulnerability to unscrupulous developers.
The Court unanimously dismissed the strata corporation’s appeal and in doing so not only found the strata corporation to be bound to the agreement that it had assumed from the developer but also noted BC’s existing fulsome legislation that protects strata lot purchasers. See here for a case summary and here for the Court’s judgement.
November 17, 2020
Housing Supply Challenge – Round 1
The Federal Government has opened the first round of its Housing Supply Challenge. The theme of this round is Data Driven – Data solutions for informed decision-making. In this round, applicants can submit, “technology solutions or methodologies that improve the collection, sharing, analysis and integration, and/or presentation of data in regards to housing supply.”
The Challenge will provide seed funding to 25 finalists ($100,000 each) and implementation funding for successful innovations from a pool of up to $22.5 million.
For more details and to apply, please visit the CMHC National Housing Strategy website.
October 6, 2020
Federal Throne Speech
On September 23, the Governor General presented the Speech from the Throne – A Stronger and More Resilient Canada. The priorities of the government are outlined in the Speech. There was a focus on managing the COVID-19 crisis – both from a healthcare and economic perspective. The Government will also have a clean growth agenda for “… creating jobs and building long-term competitiveness.” Policies that they will be bringing forward include:
- Updating the COVID-19 Economic Response Plan this fall;
- Providing “… additional financial support directly to businesses which have to temporarily shut down as a result of a local public health decision;”
- Jobs programs with direct investments infrastructure (including transit and building energy retrofits) and the social sector (e.g. funding for childcare), as well as providing “… incentives for employers to hire and retain workers;”
- Extending the Canada Emergency Wage Subsidy to summer 2021;
- Moving the Canada Emergency Response Benefit into the Employment Insurance (EI) system, so “… the EI system will become the sole delivery mechanism for employment benefits, including for Canadians who did not qualify for EI before the pandemic;”
- “Expanding the Canada Emergency Business Account to help businesses with fixed costs …” and “… improving the Business Credit Availability Program;”
- Identifying “… additional ways to tax extreme wealth inequality …;”
- Taking “…additional action to help people stay in their homes longer,” to assist older Canadians;
- Increasing affordable housing investments to not-for-profits and co-ops;
- Enhancing “… the First-Time Home Buyer Incentive, including in Canada’s largest cities …;”
- Making “… the largest investment in Canadian history in training for workers;”
- Developing a plan on climate change that will exceed the 2030 goals of the country, and legislating the target of having net-zero emissions in Canada by 2050;
- Investing in measures to minimize the impact of floods/fires;
- Reducing the costs of electric vehicles and expanding charging stations;
- Establishing a fund and providing tax incentives to assist the development of Canada’s clean technology sector;
- Expanding urban parks and planting two billion trees; and
- Encouraging immigration.
Prior to the Throne Speech, the Government also announced $1 billion to address homelessness as part of their goal to eliminate chronic homelessness across the country.
September 22, 2020
Aluminum Tariff Countermeasures against the U.S.
As noted in the last newsletter, the Federal Government posted a list of United States sourced aluminum and aluminum-containing goods it was considering adding tariffs against as a result of U.S. tariffs being imposed on Canadian aluminum. On September 15, the United States withdrew its tariffs, and as result, the Canadian Government did not proceed with its counter measures. The issue is not fully resolved, because the U.S. Government indicated that it will monitor aluminum import volumes from Canada six weeks after the end of each month.
September 8, 2020
Countermeasures action against the United States in response to tariffs on Canadian aluminum products
On August 6, 2020, the United States (U.S.) announced the imposition of tariffs of 10% on imports of certain aluminum products from Canada, which took effect on August 16, 2020. In response, the Government of Canada has posted a list of U.S.-sourced aluminum and aluminum-containing goods it is considering retaliation against. Any retaliatory measures would take place on September 16, 2020. Goods identified in the table could be subject a 10% surtax.
July 28, 2020
CEWS Update & Extension
On July 17, the Government of Canada announced proposed changes to the Canada Emergency Wage Subsidy (CEWS) program. The changes would extend and broaden the program by:
- Permitting the extension of the CEWS until December 19, 2020, including redesigned program details until November 21, 2020.
- Allowing employers with a revenue decline of less than 30% to apply for benefits, with a gradually decreasing base subsidy to qualifying businesses.
- Creating a top-up subsidy of up to an additional 25% for businesses hardest hit by the pandemic.
For additional information please see the news release here.
June 16, 2020
CMHC Mortgage Lending and Refinancing Changes
The Canada Mortgage and Housing Corporation (CMHC) has made two recent changes to their lending practices.
CMHC has reviewed their underwriting criteria for insured mortgages and issued the following changes, effective July 1, 2020:
- Limiting the Gross/Total Debt Servicing (GDS/TDS) ratios to our standard requirements of 35/42;
- Establish minimum credit score of 680 for at least one borrower; and
- Non-traditional sources of down payment that increase indebtedness will no longer be treated as equity for insurance purposes.
A second change has been made for projects with pending CMHC applications for re-financing insurance related to CMHC’s Multi-Unit Mortgage Loan Insurance (5+ units). The change creates new restrictions on the use of funds as a condition of insurance for market refinance loans.
According to the Canadian Federation of Apartment Associations (CFAA), who have been engaging with CMHC on this new change:
Under the new rule, refinance proceeds must be used for a permitted purpose in relation to residential housing. This could include one or more of the following:
- capital repairs/improvements (including for increased energy efficiency and accessibility),
- securing permanent financing (including take-out financing to pay off a short-term construction loan).
- certain other uses permitted on a case-by-case basis (such as funding to deal with COVID-19 rent shortfalls).
The notice said that “in no event shall equity take-out or distributions to equity holders be permitted, pending industry consultations.” The notice referred to guaranteeing refinancing for equity take-out as an improper use of government resources, and urged CMHC clients to seek private sector solutions for these uses.
This has resulted in the suspension of, “refinancing for multi-unit mortgage insurance except when the funds are used for repairs or reinvestment in housing,” while consultations are ongoing around the repositioning of CMHC multi-unit mortgage insurance.
Supreme Court of Canada – Crystal Square Parking case
On June 9, 2020 UDI participated as an intervener in the appeal at the Supreme Court of Canada of Owners, Strata Plan LMS 3905 v. Crystal Square Parking Corporation. The outcome of the case will impact the enforceability of easement and shared facility agreements (including airspace parcel agreements) established prior to the formation of strata corporations. These types of agreements are critical for mixed use projects, phased or master planned communities and projects involving air space parcels (among others). These types of agreements are also important for meeting municipal rezoning and permitting requirements, such as providing electrical vehicle charging, low carbon energy systems and day care facilities in projects.
The Crystal Square Parking case centres on whether an adjoining strata can avoid paying for easement benefits established under a shared facility agreement made prior to the formation of the strata corporation and not expressly assumed in writing by the strata corporation (while the strata corporation retains the benefits of the easement). There have been a number of similar cases in B.C., but this one was successfully appealed to the Supreme Court of Canada. Judgment has been reserved and UDI will provide an update once it is released.
June 2, 2020
CECRA applications now open
On May 25, the Federal Government announced that applications are now being accepted for Canada Emergency Commercial Rent Assistance (CECRA) for small businesses. Over the course of the program, property owners who reduce rent by at least 75% the months of April and May (retroactive), and June, for their small business tenants can apply for the CECRA. The CECRA will cover 50% of the rent, with the tenant paying up to 25% and the property owner forgiving at least 25%. The CECRA loans to landlords will be forgivable if the landlord complies with program terms and conditions, including an agreement to not recover forgiven rent amounts from tenants when the program is over.
Small businesses tenants eligible for this program must be paying less than $50,000 per month in gross rent, with annual consolidated revenues of less than $2 million, and that have experienced at least a 70% drop in pre-COVID-19 revenues. It will also be available to non-profit and charitable organizations.
Landlords can apply for the program through the Canada Mortgage and Housing (CMHC) website.
March 24, 2020
UPDATED: Mortgage “Stress Test”
Planned changes to the B-20 Mortgage Stress Test that were scheduled to take effect on April 6 have been put on hold. This means that the current benchmark rates to qualify for an insured mortgage will remain unchanged. Consultations by the Office of the Superintendent of Financial Institutions (OSFI) regarding the minimum qualifying rate for non-insured mortgages have also been suspended.
February 25, 2020
Mortgage “Stress Test”
As noted in previous newsletters, UDI has written Federal officials to amend the mortgage “stress test”, so it is more flexible because it has significantly eroded the purchasing power of homebuyers.
On February 18, the Minister of Finance, the Hon. Bill Morneau, announced that on April 6 changes to the benchmark rate used to determine the minimum qualifying rate for insured mortgages (i.e. the “stress test”) will come into effect. Currently, the benchmark is the Bank of Canada’s 5-year benchmark posted mortgage rate, which will be changed to “… the weekly median 5-year fixed insured mortgage rate from mortgage insurance applications, plus 2%.”
According to the Globe & Mail, if the policy were currently in place, there would be a 30 basis point change in the “stress test” rate, which “… would give most borrowers upward of 3 per cent more buying power.” The new approach will also be more reflective of market conditions as they change.
In addition, the Office of the Superintendent of Financial Institutions (OSFI) is seeking input from stakeholders regarding whether the new benchmark coming into place in April for insured mortgages should also apply to uninsured mortgages. OSFI is seeking comments by March 17. UDI will be supporting the new approach, and requesting further relaxations in the “stress test”.
November 25, 2019
New Federal Cabinet Appointed
On November 20, 2019, Prime Minister Justin Trudeau announced his refreshed Cabinet, reflecting the government’s priorities for the new minority parliament. Key appointments relevant to British Columbia and the housing sector include:
- Chrystia Freeland becomes Deputy Prime Minister and Minister of Intergovernmental Affairs
- Ahmed Hussen becomes Minister of Families, Children and Social Development
- Catherine McKenna becomes Minister of Infrastructure and Communities
- Bill Morneau remains Minister of Finance
- (B.C.) Joyce Murray becomes Minister of Digital Government
- (B.C.) Carla Qualtrough becomes Minister of Employment, Workforce Development and Disability Inclusion
- (B.C.)Harjit Sajjan remains Minister of National Defence
- (B.C.) Jonathan Wilkinson becomes Minister of Environment and Climate Change
- Full list available here.
UDI would like to congratulate all members appointed to the Federal Cabinet, including the Honourable Ahmed Hussen, who will serve as the Minister responsible for housing and CMHC. We look forward to working with the Prime Minister, Minister Hussen and his colleagues to increase housing options for British Columbians.
October 15, 2019
BC Housing Sector Urges Federal Parties to Act on Housing Priorities
Ahead of the Canadian federal election next Monday, October 21, 2019, six leading organizations representing the BC housing sector, have partnered to make housing affordability recommendations that focus on much-needed solutions. UDI and the partner organizations are calling on the next federal government to improve affordability by exempting or fully rebating the GST on new rental homes, linking housing targets to transit funding and amending mortgage underwriting rules to make it more manageable and competitive for homeowners.
The participating organizations include the British Columbia Real Estate Association, the Canadian Mortgage Brokers Association – British Columbia, LandlordBC, the Mortgage and Title Insurance Industry Association of Canada, the Real Estate Board of Greater Vancouver, and the Urban Development Institute. For more information, please visit bchousingaffordability.ca.
May 27, 2019
Steel Tariffs Lifted
On May 17, both Canada and the United States agreed to eliminate tariffs on steel and aluminum products. UDI is pleased with Federal Government’s announcement, as the tariffs were adding to the costs of housing and other projects. Please also see the:
- Statement by the Prime Minister welcoming the decision by the United States to remove tariffs on Canadian steel and aluminum
- Joint Statement by Canada and the United States on Section 232 Duties on Steel and Aluminum
UDI remains concerned that the Federal Government still has in place steel safeguards (tariffs or quotas) for concrete reinforcing bar and certain other steel products from other countries. Last month, the Canadian International Trade Tribunal (CITT) ruled that the safeguards were not needed. However, the Federal Government has not yet acted on the decision. On April 17, UDI, the Independent Contractors and Businesses Association of BC, and the Vancouver Regional Construction Association wrote a letter to the Minister of Finance, the Hon. Bill Morneau, urging the Government to adopt the CITT decision.
April 1, 2019
Federal Government tables 2019 Budget
On March 20, the Federal Government tabled its fourth budget containing a number of new housing initiatives. UDI – Pacific Region supports many of the housing measures that were introduced, however concerns remain about the future of the housing market and affordability. For more information, please read UDI’s statement here.
The Budget did not address UDI’s previous concerns regarding the mortgage stress test rules, however certain measures, such as the First-Time Home Buyer Incentive, have been suggested as a way to balance the impact of the stress test. Due to program restrictions, it is unlikely that many prospective homebuyers in major urban centres such as Vancouver and Toronto, will be able to take advantage of the new incentive.
March 18, 2019
Federal and Provincial Governments Launch Expert Panel on the Future of Housing Supply and Affordability
On March 15, federal Finance Minister Bill Morneau, British Columbia Finance Minister Carole James and British Columbia Municipal Affairs and Housing Minister Selina Robinson announced their intention to create an Expert Panel on the Future of Housing Supply and Affordability. This new Expert Panel will examine housing trends for both rental and home ownership, looking for opportunities to create greater affordability. Panelists will be selected jointly by the federal and provincial governments and are to represent expertise in a range of fields. Once active, the Panel will conduct interviews with housing experts and stakeholders. For more information, the Government of Canada’s news release can be found here.
March 4, 2019
Office of the Superintendent of Financial Institutions Mortgage Stress Test Rules
UDI has submitted a letter to the OSFI regarding the Mortgage Stress Test which continues to significantly erode the purchasing power of many young families including many first-time homebuyers. UDI has continually advocated for a reduction in the requirements of OSFI Guideline B-20 to mitigate the impact on housing affordability.
December 10, 2018
New Flexibilities for the National Housing Co-Investment Fund
CMHC is introducing new flexibilities to the Co-Investment Fund’s minimum criteria. Their intent is to make it easier for partners to access funding in order to build new and repair existing housing units across the country. For more information on the changes please contact CMHC’s local affordable housing specialist.
November 26, 2018
Co-ordinated Response to Eradication Japanese beetle in Vancouver
As part of the coordinated response to the detection of Japanese beetle, the Canadian Food Inspection Agency has established a regulated area for Japanese beetle around the False Creek area of Vancouver. The Regulated area is bounded by 12th avenue on the South, Clark drive on the East and Burrard on the West, and Burrard inlet on the North. Given the damage that Japanese beetle can do, if you are moving soil or plant material with soil out of the Regulated Area call CFIA at 604.292.5742 or email to get a movement certificate. There are exemptions for certain materials. For more information please visit the CFIA Japanese Beetle website.
November 13, 2018
UPDATED: Safeguard Actions (Tariffs and Quotas) for Imported Steel Products
On November 7, UDI, the ICBA, and VRCA sent a joint letter addressed to Prime Minister Right Hon. Justin Trudeau and Minister of Finance, Hon. Bill Morneau regarding the recently enacted Safeguard Actions for Imported Steel Products. The letter requested that the Government ensure that steel products already in transit to Canada be excluded from the quota now in place. The letter also urged the regional remission of 100,000 tonnes of rebar be allowed for BC without being included in the quota.
Earlier this year UDI wrote a separate letter to Minister Morneau regarding these Safeguard Actions, prior to their implementation.
October 15, 2018
The Federal Government announced on October 9 that it would be imposing a tariff-rate quota, with a 25% surtax applied to imports of the seven products: heavy plate, concrete reinforcing bar (rebar), energy tubular products, hot-rolled sheet, pre-painted steel, stainless steel wire and wire rod. These measures will apply in cases that that exceed a specified quantity threshold and take effect on October 25, 2018. They will remain in place for 200 days, pending the result of an inquiry by the Canadian International Trade Tribunal (CITT). Further details can be found on the Ministry of Finance website. Earlier this year, UDI wrote a letter to the Hon. Bill Morneau, Minister of Finance, opposing the safeguard actions because of the impacts on our industry and housing affordability.
September 17, 2018
Financial Transactions and Reports Analysis Centre (FINTRAC) Regulations/Guidance
As noted in the August 7th Newsletter, UDI participated in a FINTRAC/Department of Finance consultation on new anti-money laundering requirements on August 1st. Based on these consultations, UDI submitted a response to the Federal regulations on September 7, 2018.