With the Canada election looming, Liberal leader Justin Trudeau has made a new promise to fulfil another. He had previously promised to help young Canadians enter the housing market.
Trudeau’s housing market plan involves billions in funding to try stop ‘home flipping’ and to regulate overseas investors buying properties. Additionally, he would introduce a way for Canadians to save tax free for their first property. He would also make changes regarding bidding clarity.
Trudeau’s expensive housing program would be funded by his newly released strategy to tax the institutions that have benefited the most from the Covid-19 pandemic – large financial institutions. “Our banks will continue to be strong and profitable,” Trudeau said. The banks quick recovery means they will be able to assist in economic recovery without issues.
With the justification that while most other businesses have suffered, it is fair to tax banks that profited to help rebuild the economy post-pandemic. This was decided after seeing the banks’ earnings report which revealed strong profits.
If he were to be re-elected, his plan would be to raise the corporate income tax rate from 15 to 18 per cent on all bank earnings over $1 billion to “support middle-class Canadians in their goal of home ownership.”
His government also would not tolerate any tax avoidance and will ensure banks paid what they’re due. There is the concern that with the higher tax, banks would simply pass the extra cost onto the customer. This could happen in the form of fees and different policies.
Although, the party has considered this and promised also to revisit the federal Financial Consumer Agency of Canada policies to ensure this does not happen.
The general outlook of taxing has shifted to taxing the wealthy and those who profited from the pandemic to support the middle and lower class. Whether individual wealth to now corporate, this campaign is one that has the right intentions.
The real estate market’s instability is something that needs to be addressed, and these plans to help more people buy their first homes would support many young people’s dreams.
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