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.