Federal Budget Uses Housing Crisis to Pay the Rich

The federal government is using the housing crisis to further entrench and enrich the imperialists involved in the financing, building, selling and renting of housing. The Federal Budget 2024 provides $8.5 billion for various pay-the-rich schemes for developers to build housing for sale or rent for private profit.

Everything is predicated on private enterprise building, selling and renting housing as commodities for profit. The aim of these policies is to serve the private interests of developers, not solve the housing problem and guarantee housing as a right. Public involvement is limited to financing projects through direct subsidies, low interest loans and helping individual buyers put together enough money for a down payment and become captured with a home mortgage sold to them by one of the big financial institutions and guaranteed by Canada Mortgage and Housing Corporation (CMHC).

The Freeland budget, corresponding speeches and media presentations do not initiate any discussion towards a new pro-social direction to solve the housing crisis. A new direction would include establishing a public construction, maintenance, finance and administrative enterprise to build housing to sell or rent and maintain at amounts workers can afford at a maximum percentage of their income, say 20 per cent. None of the policies in the budget are new as they all continue to enslave the people and economy to the supranational rich. They have all been employed before in various forms and all have failed to solve the housing problem.

In its attempt to cling to power, the Liberal government is going all out to use its tenure to pay the rich. The flurry of policy objectives for housing is not meant to solve the problem but rather to serve the private developers and banks, and possibly attract voters for the Liberal Party. The mass media use words and phrases that are designed to mask the true intent of the measures to pay the rich and consolidate their power over the economy. The ruling elite only allow their political representative to serve their private interests and aim for maximum profit in one way or another.

Housing is presented as a commodity to buy and sell for private profit rather than a necessity of life that is a right. The people, by putting forward their claims to the right to housing are challenging this outdated outlook. In the socialized economy in which we all live, housing at a modern cultured level is a right that the society and its leadership are obligated to fulfil. The neo-liberal concept of "fending for yourself" is self-serving, corrupt, anti-social and anti-national.

Housing should not be viewed as a commodity to enrich those who own and control the socialized economy. Housing is a right, full stop, and cannot be predicated on income, ability or any other feature that some individual may or may not possess. How this is accomplished is a project the people are taking up by defending their own interests and organizing for it to become a reality. The affirmation of housing as a right is a step forward to bring the democratic personality into being and build the New.

Protest against renovictions, Waterloo, 2023

All the housing measures in one way or another seek to enrich the imperialists who see housing and all that goes into it as commodities to sell to serve their private interests and block the people from affirming in practice that housing is not a commodity but a right, which society must guarantee for every resident. The budget allocates $8,524 million in handouts for the imperialists to enrich themselves by using housing as a commodity and tens of billions more dollars in loans.

Various pay-the-rich policies in the budget that are also an attempt to divert and block the people from organizing to make housing a right in practice include:

Interest deductibility limits for purpose-built rental housing

The budget introduces an elective exemption from the excess interest and financing expenses limitation rules for certain interest and financing expenses incurred before January 1, 2036, in respect of arm's length financing used to build or acquire eligible purpose-built rental housing in Canada. This exemption would apply to taxation years that begin on or after October 1, 2023.

The limit on the amount of interest and financing expenses that can be deducted, generally 30 per cent, established in the 2021 federal budget is eliminated, meaning all interest and financing expenses are tax deductible for eligible projects.

Accelerated Capital Cost Allowance (CCA) for purpose-built rental housing

The budget introduces an accelerated CCA of 10 per cent, increased from 4 per cent, for new eligible purpose-built rental projects that begin construction on or after April 16 and before January 1, 2031, and are available for use before January 1, 2036. Eligible property includes projects that convert existing non-residential real estate into a residential complex or add to an existing structure that meets the definition.

A new Public Lands for Private Homes Plan

The budget seeks to transform public land into 250,000 housing commodities. This includes Canada Post properties, National Defence land and government office buildings. The program will be financed through an additional $15 billion in new loan funding for the Apartment Construction Loan Program.

Canada Builds

Canada Builds combines federal low-cost loans with provincial and territorial investments to scale up construction of private rental homes. The program provides a $400 million top-up to the $4 billion Housing Accelerator Fund to increase construction of over 750,000 new homes to be sold over the next decade.

Canada Rental Protection Fund (CRPF)

The budget launches a $1.5 billion CRPF to grow the stock of private rental housing.

This provides loans and contributions to: "non-profit organizations and other partners" to buy up housing units from its current owners. Co-led and co-funded by the federal government and other partners, the Fund will mobilize investments and financing from the charitable sector and the private sector which the Budget says is "to protect and grow affordable housing."

Affordable Housing Fund

The budget provides $1 billion for the Affordable Housing Fund to build homes for sale.

Reaching Home

The budget provides an additional $1.3 billion for Reaching Home: Canada's Homelessness Strategy to address homelessness and encampments. [Details were not provided as to how this would be done in the face of tent encampments appearing everywhere and the criminalization of poverty becoming the norm more and more -- TML Ed.]

Canada Housing Infrastructure Fund

The budget allocates $6 billion over 10 years for private contractors to upgrade housing-enabling infrastructure.

The budget proposes to streamline foreign credential recognition in the construction sector and create more apprenticeship opportunities to help skilled trades workers build more homes for sale. [No mention was made to reimburse the foreign countries that paid for the education of workers coming to Canada -- TML Ed.]

The budget ensures the removal of GST on newly-built student residences.

Home Buyers Plan

The budget enhances the Home Buyers' Plan by increasing the withdrawal limit from $35,000 to $60,000 for first-time home buyers to use the tax benefits of an RRSP.

The Canadian Mortgage Charter will allow 30-year amortizations for first-time home buyers to purchase newly-constructed homes from private builders with mortgages supplied by approved big financial institutions.

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This article was published in

Volume 54 Number 29 - April 2024

Article Link:
https://cpcml.ca/Tmlm2024/Articles/MS54294.HTM

Website:  www.cpcml.ca   Email:  editor@cpcml.ca