New government means changes

In the heat of a close election battle, leaders’ comments are made that tip you off to what before was never openly said.

In the most recent federal election, Liberal Leader Paul Martin went on a tirade about the dangers of entrenching property rights in the constitution. He took an incredibly expansive view on his interpretation of property rights and said new Prime Minister Steven Harper’s plans to protect property rights would “leave workers, children, the poor and the environment to fend for themselves.” 

It seems a bit overstated, if not a gross exaggeration, of what the real estate industry has always viewed property rights as embracing. Quite simply, the Canadian Real Estate Association’s position on property rights is that it means the right to own and use real property. And, if there is government expropriation or restriction of one’s property through government actions, there should be reasonable expectation to be fairly compensated for the loss incurred. 

In fact, CREA has not being pushing for a constitutional amendment to the Charter of Rights and Freedoms for many years. However, it has remained steadfast and determined to urge the federal government, or any level of government for that matter, to be mindful of property rights and provide compensation where property rights have been removed or diminished. 

For example, CREA joined forces with the Winnipeg Real Estate Board in 2004 to oppose a special provincial charter provision in a proposed city of Winnipeg vacant and derelict building bylaw that would effectively confiscate a property after a series of fines and steps were taken.

As much as property rights remains a top priority for CREA, it only focused on two issues for 2006 federal election candidates. They included REALTOR support for a strong role in housing and sound fiscal management. 

In the first case, CREA believes there should be a federal minister of housing in  cabinet and a multi-dimensional housing policy designed to:

• Make better use of existing stock in meeting housing needs.

• Provide new options for homeownership to low-income earners.

• Implement tax and regulatory changes to remove barriers to the affordability of housing.

• Encourage a transformative change in First Nations housing.

• Combat homelessness.

REALTORS have long advocated that the federal government include systematic national debt reduction, spending restraint and tax reduction as the basic underlying principles to guide the management of the nation’s finances. A sound fiscal policy directly relates to better national productivity and economic growth. Repayment of debt principle should always be explicitly included in total expenditures before calculating the budgetary balance. 

CREA also strongly recommends that the federal budget for 2006 and beyond make tax cuts a higher priority than spending increases. 

The following is the press release the WREB sent out last week under the heading, Conservative Platform can Impact Real Estate:

“Several planks included in the Conservative Party platform could have an impact on real estate and encourage real estate as an option for small investors in Canada, according to the Winnipeg Real Estate Board. 

“The board’s 1,100 member REALTORS will be ready to work with the Canadian Real Estate Association and the new government on several public policy priorities during the next session of parliament. 

“Real estate is a major factor in the Canadian economy. A study prepared by Clayton Research for CREA shows that between 2002 and 2004, residential sales made through the Multiple Listing Service® generated $10.8 billion in ancillary consumer spending annually.  

“The Winnipeg Real Estate Board REALTORS® point out that the Conservative proposal to reduce the Goods and Services Tax (GST) will reduce the cost of new homes, and the cost of services associated with a real estate transaction. The proposed first-phase reduction in GST would save a homeowner $3,000 on a new home selling for $300,000. Setting the GST rate at five per cent, as the Conservatives propose, would restore the effective rate of federal sales taxes on new homes to the level that applied prior to the introduction of the GST in 1991, when the new rate is combined with the new housing rebate.

“‘It all helps keep housing affordable,’ said Walter Boni, president of the Winnipeg Real Estate Board.

“The Conservative Party platform also calls for the elimination of capital gains tax for individuals who reinvest profits earned from selling real estate or financial investments within six months. The move would apply to physical and financial assets, potentially benefiting people who sell stocks and bonds, or properties such as cottages and family businesses. 

“Currently, Canadians who have financial assets or property other than a principal residence must pay tax on the capital gains resulting from the sale of a financial asset or property.

“According to the National Commercial Council (NCC) of the Canadian Real Estate Association, small-scale investors are often unable to ‘grow’  their real estate investments because of the tax consequences when selling a small asset to buy a larger one.

“‘A capital gains rollover provision for small-scale investors, which REALTORS® have been proposing for several years, would introduce greater flexibility into the small-scale residential rental investment sector,’ added Mark Thiessen, local WREB REALTOR member and current chair of the NCC of the CREA.  ‘If this tax change is implemented effectively, it will encourage more Canadians to look at real estate investment opportunities, especially with small and medium sized income opportunities.’

“The Conservative Party platform also proposes to amend the Constitution to include the right to own property, and promises to enact legislation to ensure that full, just and timely compensation will be paid to all persons who are deprived of personal or private property as a result of any federal government initiative, policy, process, regulation or legislation.

“‘Property owners often take their property rights for granted, but all levels of government enact countless rules and regulations that restrict property rights,’ said Boni. ‘REALTORS® believe that property rights should have the same legislative status as other rights in Canada.’

The Canadian Real Estate Association has also surveyed Canadians about property rights issues. In the 2005 survey conducted by Pollara Research,  the majority of Canadians polled (88 per cent) said it was important or very important that compensation be paid to a property owner when restrictions are placed on the use of their land. More than 90 per cent of respondents said it was important or very important that compensation be paid when property was expropriated.

“The Winnipeg Real Estate Board is a professional industry association representing over 1,200 real estate brokers, salespeople, appraisers, and financial members active in the local real estate market. It exists to serve its members and to promote the benefits of organized real estate.  It represents its members by being active on local issues and matters that affect real estate.

“The Canadian Real Estate Association (CREA) is one of Canada’s largest single-industry trade Associations, and represents more than 83,000 REALTORS across Canada. CREA’s primary mission is to represent its members at the federal level of government and to act as a watchdog on national legislation affecting or impacting the real estate industry.” 

Note: Most dates have been set for the local school board budget consultations with some already being held. Given the WREB’s keen interest in keeping a lid on property taxes, you can rest assured it will be following these deliberations with a watchful eye, especially because  of the new reassessment.