April 2015
CHBA Welcomes Home Accessibility Renovation Tax Credit and Transit
Investment in Federal Budget
This month’s Federal Budget brought very welcome news with the
introduction – of the Home Accessibility Tax Credit and the new Public Transit
Fund; both of which will support affordability and choice in housing for
Canadians. CHBA was very pleased to see two of its priority issues – a home
renovation tax credit to combat the underground economy and federal
investment in transit – contained in the Budget.
Finance Minister Joe Oliver's first budget included a wide range of measures
SEAN KILPATRICK / THE CANADIAN PRESS
significant to the home building industry, many of which responded to CHBA's
Finance
Minister
Joe Oliver
advocacy efforts. These important “wins” also include sustained infrastructure
funding, lower small business taxes and employment insurance payments,
industry training support, and a commitment to crack down on underground “cash” contractors.
The targeted home renovation tax credit will not only help seniors make necessary changes to their
homes, but by requiring receipts it will help protect them from poor – sometimes dangerous –
workmanship, and outright fraud by cash operators. “To qualify for a tax credit requires a receipt.
A receipt keeps both the contract value and the revenues in the legitimate economy,” said CHBA
President Jane Morgan. “This measure protects legitimate businesses and will also contribute to
adapting and sustaining Canada’s housing stock as an asset for the future.”
CHBA was also pleased to see continued federal leadership in financing the cost of core
infrastructure. “Strong communities require high-quality and efficient infrastructure, including
transit,” said CHBA CEO Kevin Lee. "The announcement of a Public Transit Fund should help relieve
the need for municipal development-charge taxes on new homes to fund transit projects that
benefit the entire community.” CHBA views proper infrastructure investment as an essential
component to economic prosperity that should be supported by all three levels of government.
Industry Leaders, Minister Findlay Tackling Underground
Economy
Federal Revenue Minister Kerry-Lynne Findlay met with members of the
Underground Economy Advisory Committee this month to discuss actions
and opportunities for collaboration to tackle the underground economy
across the country. The Committee is comprised of representatives from
key industry sectors and academia and is the first of its kind in Canada. It
was created by Minister Findlay to provide industry input to the federal
government’s efforts to combat the underground economy, particularly
in higher-risk sectors of the economy.
Lee, Foster, Minister Findlay, the CRA
Commissioner, and others at the
Minister’s Advisory Committee meeting
on Monday, April 27th
As members of the Committee, CHBA's Kevin Lee and David Foster
emphasized the need to target "paperless" businesses that cannot be
tracked by conventional compliance measures. CHBA applauded the new Home Accessibility Tax
Credit announced in the Budget that will also move consumers away from doing “cash” deals. At
the meeting, Minister Findlay again recognized the value of collaborative action involving
government and industry, like CHBA’s Get it in Writing! Campaign.
Skilled Workers – New Report Says More Than 129,000 Needed Over
Next Decade
With Canada’s home renovation industry continuing to grow, new
construction holding steady, and an aging workforce, Canada’s
residential construction industry will need more than 129,000 new
skilled workers over the next decade. That was the finding in a new
residential construction labour market report, the first report of its
kind, released this month by BuildForce Canada in collaboration
with CHBA.
The report shows the biggest challenge across all provinces is the
aging workforce and the need to replace about 114,000 skilled
workers retiring this decade. Another 15,000 workers will be
needed for new jobs in the sector. The report, which focuses
exclusively on supply and demand for home builders and
renovators, provides support for CHBA's advocacy efforts on our
industry's workforce needs.
CHBA is pleased to be partnering with BuildForce Canada to secure this important data. “We’re
delighted by this new partnership and the insights this work will bring to our industry,” said Kevin
Lee, CHBA’s CEO. “This new report includes market indicators not found anywhere else, ensuring
our industry is better equipped to anticipate and respond to changing conditions.”
BuildForce Canada’s first annual Labour Market Assessments for the Residential Construction
Industry 2015-2024 report, including details for each province, can be found at
www.constructionforecasts.ca.
Plans for CHBA Forum for Growth Taking Shape
On May 12, Association leaders from across the country will meet with Ministers, MPs and senior
government officials to discuss housing, communities and Canadians as part of CHBA’s Forum for
Growth 2015. And, with a federal election scheduled for October 19, the timing couldn’t be better.
This year’s Forum kicks-off CHBA’s pre-election activities. Getting more Parliamentarians up-tospeed on our industry’s issues is an important step in CHBA’s ongoing advocacy efforts. At the top
of the list will be taxes on new houses and other factors that add unnecessarily to the cost of a new
home, and the role the federal government can play to alleviate this burden. CHBA will also be
launching an ongoing social media campaign to focus public attention on the affordability issues
that are affecting home buyers today.
Home Buyer Preference Survey a Huge Success
The first-ever CHBA Home Buyer Preference Survey is now available for
purchase. This survey provides members with in-depth insights into what
new home buyers are looking for. More than 1,500 home buyers
participated in this first-of-its-kind CHBA survey carried out by Avid Ratings
Canada. The survey covers more than 50 in-depth areas of home design,
building features, buying preferences, and demographics.
CHBA members receive a 40% discount on the survey – only $295! For the CHBA member-builders
who took part in the survey, it’s an even better deal – $195, plus these builders get free custom
reports based on their customers’ input. To order your copy, go to www.chba.ca/buyersurvey.
Valuations
The health of housing markets is becoming more varied, both regionally, and by dwelling type. Price
gains are also mostly in single-family homes, and are happening primarily in larger markets,
limiting the choice for prospective homebuyers. This month saw nearly daily proclamations on the
valuation of housing, with virtually no consensus:

The Governor of the Bank of Canada said that the
housing market hasn’t been underpinned by rampant
speculative buying that is the hallmark of an asset
bubble, but the market could see a 10-to-30-per-cent
downturn to bring it back into balance.

The Economist magazine warned that homes are more
than 25% overvalued in seven countries “notably in
Australia, Britain and Canada.”

Most recently, CMHC declared that Regina and Winnipeg were at the highest “risk of
problematic market conditions” due to overvaluation and overbuilding. Vancouver, Calgary
and Edmonton were labeled low risk while Toronto, Montréal, and Québec were considered to
have risk just slightly above the national average.

Re/Max sees no end to housing activity, and has revised its forecasts upward for 2015. It has
home sales rising across the country at 4%, and in Toronto and Vancouver, it has home sales
rising 7% and 6%, respectively.
In March, home year-over-year prices were up 10% in Toronto and 11% in Vancouver. Taking
Canada’s two biggest real estate markets out of the equation, however, means home prices only
climbed by 2.4% nationally.
Despite all the analysis, three key variables remain to be addressed when considering valuation of
houses: existing equity and “gifting”; urbanization plus intensification and lagging infrastructure
investment pushing up land values; and development-charge taxes coupled with slow approval
processes for projects geared to "family-oriented" housing demand. In brief, prognosticators need
to attend to the "new fundamentals" influencing housing markets.
It’s important to remember that valuation is also not uniform amongst markets, often breaking
down by type of housing and neighbourhood. Most analysis, once you get past the headlines,
reinforce the conclusion that house prices are justified by demographic and economic factors (like
population, immigration, and income) in most markets, while some markets continue to settle into
new activity levels.
Dwelling Starts Q1 2014 compared to Q1 2015,
for Centres of 10,000 Population and over, by Province
Period
2014 – 1Q
2015 – 1Q
Percentage
Change
NL
179
216
17%
PE
30
79
62%
NS
290
263
-10%
NB
102
115
11%
QC
ON
5,789 10,571
4,013 11,181
-44%
5%
MB
587
867
32%
SK
AB
BC
1,208 7,729 5,560
903 9,794 6,167
-34% 21% 10%
Data from CMHC