Despite the turmoil caused by a global pandemic, the sheer resilience demonstrated by the REALTOR® community has been an encouraging silver lining.
There were lofty expectations coming off a highly successful 2019, where REALTORS® saw historic advocacy progress with the expansion of the Home Buyers’ Plan and the launch of the First Time Home Buyer Incentive. Momentum from CREA’s ongoing lobbying carried right into 2020, as then-Finance Minister Bill Morneau announced changes to the mortgage stress test in February that would make it more dynamic, by setting the new benchmark rate at the weekly median five-year fixed insured mortgage rate from mortgage insurance applications, plus 2%.
Mortgage stress test changes coming, Morneau announces, in move that may make buying a home easier https://t.co/RK1z4oDjXz
— National Post (@nationalpost) February 18, 2020
The world was then struck by the COVID-19 pandemic, plunging Canada into economic uncertainty with mandatory lockdowns meant to contain the spread of the virus and manage the strain on our public health system.
Changes to the stress test were suspended in the interest of building the resilience of federally regulated financial institutions and improving the stability of the Canadian financial system.
Since the emergence of COVID-19, CREA has been in ongoing discussions with government departments and agencies. We have had meaningful conversations about the unique challenges facing REALTORS® and brokerages, as well as the potentially devastating outcomes of any interruptions to their day-to-day business. Government responded to our calls for significant action with the following measures:
- the Canada Emergency Response Benefit (CERB), a taxable benefit to eligible workers who lost their income due to COVID-19;
- the Canada Emergency Wage Subsidy (CEWS), a wage subsidy to help businesses keep and re-hire employees and avoid layoffs;
- the Canada Emergency Business Account (CEBA), providing interest-free, partially forgivable, loans to small businesses and not-for-profits that have experienced diminished revenues due to COVID-19 but face ongoing non-deferrable costs, such as rent, utilities, insurance, taxes and wages;
- the Business Credit Availability Program (BCAP) to provide additional support through the Business Development Bank of Canada and Export Development Canada;
- the Canada Emergency Commercial Rent Assistance (CECRA), a program that lowered rent for small businesses that have been affected by COVID-19;
- deferral of GST and HST remittances and customs duty payments for businesses, including self-employed individuals, to June 30, 2020; and
- the Bank of Canada lowered its target for the overnight rate to 0.25%.
Please note: The Canada Revenue Agency encourages CERB recipients to return their payment before December 31, 2020, if they return to work earlier than expected (and are paid retroactively), applied for CERB but later realized they weren’t eligible, or applied for and received the CERB from CRA and Service Canada for the same eligibility period.
Since those measures were announced, CREA has worked with government officials to underline any program shortcomings, as well as propose solutions that make them accessible to Canadian businesses needing it most. Many of our recommendations were adopted, resulting in enhancements to existing programs and the launch of new initiatives, such as:
- the Canada Recovery Benefit (CRB), providing income support to employed and self-employed individuals who are directly affected by COVID-19 and are not entitled to Employment Insurance (EI) benefits;
- the Canada Recovery Sickness Benefit (CRSB), for workers who are unable to work due to the effects of COVID-19;
- the Canada Recovery Caregiving Benefit (CRCB), for workers who are forced to take care of a family member for reasons related to COVID-19;
- the Canada Emergency Rent Subsidy (CERS), replacing the CECRA, providing rent subsidies directly to businesses, rather than landlords, with a base subsidy rate of up to 65% available on eligible expenses until March 13, 2021;
- the CEBA withdrawal amount and forgivable portion was increased, while also being made available to businesses that have been operating out of a non-business banking account; and
- the CEWS was extended until June 2021, with a proposed increased maximum rate of 75% for the period beginning December 20, 2020, extended until March 13, 2021.
Priority on Housing Reaffirmed
The summer also brought a noteworthy Cabinet shakeup and the dissolution of Parliament. Despite limited availability, CREA continued to trumpet the importance of housing, and was pleased to see REALTOR® priorities reflected in the contents of the agenda setting Speech from the Throne upon Parliament’s return.
“For the middle class, the government will also move forward with enhancements to the First-Time Home Buyer Incentive, including in Canada’s largest cities, so families can afford to buy their first home,” said Governor General Julie Payette.
As advocacy from CREA staff had proven critical in securing support for our members, it was just as important for our members to remind MPs of the significance of housing to their constituents, and so we proceeded to host the first-ever virtual PAC Days in the fall.
The event proved to be a huge success, as it was the most well-attended PAC Days in CREA’s history. In nearly 150 meetings, members of the REALTOR® community provided updates on the state of housing in their communities, while also conveying the need to tackle the pressing issue of housing supply, as well as making homes more energy efficient and climate resilient.
— CREA | ACI (@CREA_ACI) November 5, 2020
Minister of Families, Children and Social Development Ahmed Hussen, who addressed the audience at PAC Days, took the opportunity to discuss some of the government initiatives rolled out since that submission, leading into National Housing Day and REALTORS Care® Week 2020. Excerpts from his conversation with CREA CEO Michael Bourque were included in Episode 9 of REAL TIME, following a conversation with Jesse Thistle, Métis-Cree author of From the Ashes and assistant professor at York University.
Year-End Advocacy Wins
With the year drawing to a close, Deputy Prime Minister and Minister of Finance Chrystia Freeland tabled government’s Fall Economic Statement, which included a few final advocacy wins for REALTORS®:
- A firm commitment to expanding the First-Time Home Buyer Incentive in Toronto, Vancouver and Victoria. Changes include the eligible buyer’s income threshold being raised from $120,000 to $150,000 as well as their ability to purchase a home up to 4.5 times their household income—an increase from the current limit of four times their household income.
- $2.6 billion over seven years to help homeowners improve their home energy efficiency through up to 700,000 grants of up to $5,000 to make energy-efficient improvements and up to one million free EnerGuide energy assessments.
- An additional $12 billion in new lending available through the Rental Construction Financing Initiative, to tackle the issue of housing supply.
Despite the ongoing challenges presented by the COVID-19 pandemic, REALTORS® can look forward to building on a highly successful 2020, assured in the knowledge their voices will continue to cut through the noise on Parliament Hill, making progress on housing issues for Canadians across the country.