Foreign property speculators: a botched law, say the Bloc and NDP

Foreign property speculators: a botched law, say the Bloc and NDP

Despite Ottawa’s good intentions, the Bloc Québécois and the NDP believe the ordinance banning foreigners from buying homes in Canada is missing the mark and are urging the Trudeau government to go back to the drawing board.

Effective January 1, the new policy, which was in effect for two years, had the primary goal of curbing real estate speculation by foreigners to calm the frenzy that was gripping the Canadian market.

However, the law prohibiting non-Canadians from buying residential real estate comes with collateral damage. As the Journal reported on Wednesday, a French family trying to settle in Quebec failed despite a promise to buy signed before the holidays. She’s not the only one in this predicament.

According to Gabriel Ste-Marie, financial critic of the Bloc Québécois, “the law requires quick adjustments” to “better target those who don’t live here and real estate speculation is driving up the price of electricity”.

“This law should target speculators, not families and individuals who want to make a living in Quebec and contribute to our society,” he says. “The government has the power to change the law by regulation: it must do it.”

Alexandre Boulerice of the NDP recalls that “the aim of this measure was not to prevent honest families wishing to settle in Quebec from buying a home” but “to curb speculation by wealthy foreign investors who came to Quebec for increasing House prices worried across the country.

“Liberals need to act and fix this unwanted effect,” he believes.

“Disproportionate” Consequences

Lawyer Me Stéphane Chatigny, who specializes in real estate law, would not be surprised if the federal government changed the regulation with the criteria for the application of the new law because of the “too drastic” and “disproportionate” consequences.

“I wouldn’t be surprised by the reactions in the industry, in multiple industries, notaries, brokers, financial institutions, lawyers, immigration consultants, vendors, buyers. There are so many people who are attacked or affected by the consequences of the law,” he stressed in an interview with our parliamentary office.

The Supreme Court must soon decide the lawsuit of a Montreal real estate developer who sold under-construction apartments to foreign buyers between 2018 and 2020 before the new federal law takes effect.

Only at Desjardins are a hundred buyers who had already made a promise to buy affected by the legislation.

According to Me Chatigny, there is a strong risk of further disputes. “It violates the legal sense to analyze a law that denies buyers in good faith negotiations (…) the stability of their legal position in the purchase negotiations,” he said.

When asked if it was ready to review its policies, Treasury Secretary Chrystia Freeland’s office said the government had “delivered on its campaign promise”.

“But we recognize that we need to do more to make housing fair and accessible to all,” she added.