It recently came to my attention that the province of Ontario had not published any new data on foreign buyers in the residential market since Doug Ford was elected. It wasn’t sitting well with people, and the government responded quickly.
CBC broke the news, and if you take a look at a few of the hundreds of comments on the article, you’ll discover some very unhappy individuals. One of the comments by a Brian Sexsmith, said that “Ford's slogan should be....’Open for (Laundering) Business’.” This lack of transparency regarding foreign buyers made headlines just a couple months after it was discovered that criminals are likely hiding billions of dollars in Greater Toronto Area real estate.
As of data released in April 2018, the 15% tax on foreign buyers had been applied to almost 1,400 transactions, resulting in $173 million for the province. This was just 10 months of foreign buyer activity. According to CBC, when they got in touch with Finance Minister Vic Fedeli, he said he didn’t know why updated foreign buyer statistics hadn’t been made public.
Shortly after the CBC article came out, The Globe and Mail (subscription required) published some foreign buyer data via a Freedom of Information request. They say our market saw a drop in non-resident buyers and brought in $200 million in the first year of the tax.
Then basically within a day’s time, Ontario released current data on foreign buyer activity. From mid February 2018 to the end of March 2019, there were 1,788 homes purchased by non-residents, resulting in $221 million for the province. This means that non-residents spent approximately $1.47 billion on residential real estate in Ontario during this time period.
CBC used sales data from the Toronto Real Estate Board to determine that foreign buyers made up 1.8% of total purchases in the Greater Toronto Area since April 2017, which is much lower than the 5-10% share estimated before the tax was implemented.
So, the foreign buyer tax did exactly what it was supposed to do - it slowed down non-resident sales activity and brought in hundreds of millions of dollars for the province. Why keep it a secret? This seems like something to brag about. But, that’s exactly the issue. Before winning the election, Doug Ford said he was considering getting rid of the 15% non-resident speculation tax. If the Ford government released foreign buyer data and said how successful it was, then he’d be giving the Liberal government credit for their smart initiative.
I can’t see any other reason Ontario would keep foreign buyer data a secret other than they were hiding a Liberal success story. This definitely rubs me the wrong way. Locals and the new home development industry deserve to know how much non-resident speculation is impacting the market.
It’s the duty of the provincial government to work for the people of Ontario, not for their own interests to make them look good. What worries me is that if they kept this data under wraps, how exactly are they spending the $221 million generated by the tax? I think there should be some transparency regarding how the tax money is being invested back into Ontario services and infrastructure. Is the money going towards building affordable housing? Will it be used to supplement the lower development charges proposed in the province’s Housing Supply Action Plan?
I look forward to the day we can all see beyond our political party affiliations and simply do what’s best for the families, students, seniors and all the hard working people who call Ontario home.