It was promised during the election campaign. It was announced in the 2022 budget. Its coming into force on April 1 was confirmed in the last budget. However, only one bank in Canada is ready to offer it.
The fact that you haven’t heard too much about it says it all.
Because it is all brilliant, all beautiful. An absolutely flexible savings tool, another way to save tax while getting richer. However, it is only intended for the very small proportion of citizens who are not yet homeowners AND who have the means to save an additional $8,000 per year!
In terms of public policy, let’s say it’s very niche. But it was sold to us as a solution to deal with the crisis of rising property prices.
I am of course talking about the CELIAPP, a great gift for those who need it the least.
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beautiful promise
The cocooning of the pandemic has sparked a quest for space, for well-being. Property prices have skyrocketed, overbidding has become toxic. Add the meteoric rise in interest rates, buying a first home has become an increasingly inaccessible luxury.
The Trudeau government, already too often accused of being disconnected from real life, therefore had to promise a “housing plan” during the last campaign.
This is how the CELIAPP was born, half-RRSP, half-TFSA, contributions of $8,000 up to $40,000 are tax deductible AND non-taxable when withdrawn for the purchase of a first home.
The message was simple: the government will help you become a homeowner! The Liberals have a solution for the housing crisis.
It’s beautiful on paper, but a far cry from real life.
The current high cost of living is not particularly conducive to saving $40,000 in five years. A sum that is clearly insufficient to cope with the 17% increase in real estate prices since 2019.
A solution, therefore, which attacks the symptom rather than the evil itself.
Vicious circle
The problem is simple: there is a lack of housing.
According to the CMHC, 3.5 million more should be built by 2031 in Canada. That would mean doubling the pace of construction. However, rising interest rates oblige, construction is slowing down at the moment.
Quebec and Ottawa will tell you that they invest billions in social housing. Very good, but until the issue of access to property is resolved, rising rents will continue.
Because to balance the market, people have to buy, to free up rental housing.
We prefer not to talk about this problem. Finding a solution is far from simple.
The Conservative leader suggests tackling the surreal bureaucracy of cities. I doubt it’s as easy to implement as it suggests.
But let’s face it, stimulating construction is the solution. Not subsidizing the better off to save more.