CANADA – March 2020

CANADA – March 2020 Contents HOME SALES ACTIVITY CRASHED LAST MONTH, BUT HERE'S WHY PROPERTY PRICES WILL NOT — FOR NOW ........................................ 1 ALBERTA ................................................................................................................................................................ 2 PROVINCIAL BUDGET WILL INCREASE CALGARY PROPERTY TAXES: REPORT ................................................................................... 2 EDMONTON EYEING PROPERTY TAX DEFERRALS, NOT DECLARING LOCAL STATE OF EMERGENCY ....................................................... 4 BANFF TO RE-EXAMINE BUDGET, TAXES IN WAKE OF GLOBAL COVID-19 PANDEMIC ..................................................................... 4 ALBERTA FREEZES EDUCATION PROPERTY TAX IN RESPONSE TO COVID-19 ................................................................................. 5 UCP BUDGET ALMOST DOUBLES 2020 TAX HIKE FOR CALGARY HOMEOWNERS ........................................................................... 7 BRITISH COLUMBIA ................................................................................................................................................ 9 SIDNEY RETAIL EXPERT CALLS FOR PROPERTY TAX DEFERMENT BY MUNICIPALITIES ......................................................................... 9 COVID-19: B.C. GOVERNMENT OFFERS ASSISTANCE TO STRUGGLING MUNICIPALITIES ................................................................. 9 SMALL BUSINESS OWNERS NOT IMPRESSED WITH B.C.'S NEW PROPERTY TAX RELIEF PLAN ............................................................ 11 PARTNERSHIP EXEMPTION FROM PROPERTY TAX OF FOREIGN BUYERS, BRITISH COLUMBIA ........................................................... 12 NEW BRUNSWICK ................................................................................................................................................ 12 PROVINCE'S STALE PROPERTY ASSESSMENTS SHORTCHANGE SAINT JOHN, COUNCILLOR SAYS ........................................................ 12 NORTHWEST TERRITORIES ................................................................................................................................... 14 CITY OF YELLOWKNIFE WAIVES LATE FEES FOR PROPERTY TAX BILLS .......................................................................................... 14 ONTARIO ............................................................................................................................................................. 14 SARNIA MAYOR CALLS FOR MPAC TO DELAY UPDATED ASSESSMENTS DUE TO COVID-19 ........................................................... 14 WE NEED A MAIN STREET BAILOUT PLAN ............................................................................................................................ 15 ________________________________________________________________________________________________________ Home sales activity crashed last month, but here's why property prices will not — for now The federal government's income and wage subsidy programs appear to have kicked in and homeowners aren't being forced to sell — yet Canadian real estate sales activity was predictably down in March, as buyers remained on the sidelines and social distancing led to fewer showings. National home sales fell 14.3 per cent in March, compared to February, but were up 7.8 per cent compared to the same period last year, according to the Canadian Real Estate Association. Canada’s largest markets saw sales plunge as the coronavirus lockdown took hold, with transactions in the Greater Toronto Area down 28 per cent, Montreal contracting 13.3 per cent and Greater Vancouver edging 2.9 per cent lower. Calgary (-26.3 per International Property Tax Institute IPTI Xtracts- The items included in IPTI Xtracts have been extracted from published information. IPTI accepts no responsibility for the accuracy of the information or any opinions expressed in the articles. P a g e | 2 cent), Edmonton (-13.2 per cent), Winnipeg (-7.3 per cent), Hamilton-Burlington (-24.9 per cent) and Ottawa (-7.9 per cent) also saw some considerable declines. “March 2020 will be remembered around the planet for a long time. Canadian home sales and listings were increasing heading into what was expected to be a busy spring for Canadian realtors,” said Jason Stephen, president of CREA. “After Friday the 13th, everything went sideways.” But amid buckling sales, home prices managed to inch up from last month. CREA’s home price index rose 0.8 per cent in March compared to February, marking its 10th consecutive monthly gain. Over the past 12 months, average Canadian home prices have risen just under 7 per cent. Bank of Montreal senior economist Robert Kavcic believes the reason prices have held up lies in the 12.5 per cent decline in the number of newly listed homes during March. That suggests the federal government’s income and wage subsidy programs have kicked in and homeowners are not forced to sell their houses — just yet. “Contrast that to 2008/09, when sales fell by almost 40 per cent from the end of 2007 to the 2009 lows, but new listings rose by 15 per cent through the early stages of that period — that’s how you get a quick and meaningful decline in prices.” While there is little room for complacency, CREA senior economist Shaun Cathcart notes that preliminary data from the first week of April suggest new listings were only about half of what would be normal for that time of year. Based on a comparison of the sales-to-new listings ratio with the long-term average, two-thirds of all domestic markets remained in balanced market territory in March 2020, said CREA. “Virtually all of the remainder continued to favour sellers,” the association said in a statement. We may get a clearer picture with April figures, as CREA notes that both home price and sales figures may be skewed in March given that activity in the first half was relatively stable before the complete freeze witnessed in the second half of the month. “The numbers that matter most for understanding what follows are those from mid-March on, and things didn’t really start to ratchet down until week four,” Cathcart said in a statement. While prices have held up, a protracted shutdown could lead to price weakness eventually. “The longer the shutdown (and potential persistent economic damage) lasts, the more likely prices are to start falling,” Kavcic said. “But, for now, the market looks to be effectively on hold as listings are falling too, and support measures aim to prevent forced selling.” ALBERTA Provincial budget will increase Calgary property taxes: report On Monday, Calgary City Council received a rundown of the financial impacts of the new provincial budget. The area causing the most concern — property tax increases. After learning about the 11.3 per cent increase residents will now see on their property tax bills, Ward 11 Councillor Jeromy Farkas said it’s important for the government to be transparent on where the money is going. “When there are increases, I think it’s really important for us to be accountable and transparent in terms of where those increases are going,” Farkas said. International Property Tax Institute IPTI Xtracts- The items included in IPTI Xtracts have been extracted from published information. IPTI accepts no responsibility for the accuracy of the information or any opinions expressed in the articles. P a g e | 3 “At minimum, we should have two different bills, one making very clear what’s the city’s portion and what is the province’s portion.” “When we’re talking about property taxes a lot of Calgarians assume it’s all city council or city hall collecting those property taxes. Whereas at this point, a significant portion of that is going directly to the province.” The increase is due to the UCP government raising education taxes for Calgarians. The median assessed home with a value of $455,000 will see an extra $11 a month go to provincial coffers with these new increases. Several council members are asking for property tax bills to provide clarification on how much money stays in the city and how much goes to the province. “We need to be very clear about what stays in the city and what leaves the city,” Ward 6 Councillor Jeff Davison said. “The unfortunate part is that we are the tax collector and we want to make it clear: While you live in the city of Calgary, you also live in the province of Alberta, and we’re just the facilitator who goes out to collect on behalf of everybody.” The municipal portion of the property tax bill will also be going up. Because of the moves made by council in November to accommodate the tax shift problem and a provincial funding shortfall of $13 million for police, the municipal portion of residential taxes are increasing 7.51 per cent. For the median assessed home that’s an extra $12.50 a month going to the city. The positive news from the provincial budget is that non-residential taxes are not increasing. Non-residential ratepayers will see a drop of 12.25 per cent in their property taxes. For a property valued at $5 million that means a decrease of $13,356 a year in taxes. Cuts in maintenance to affordable housing units was also a topic of discussion at Monday’s meeting. There was a forewarning that 100 affordable housing units — owned by the province but maintained by the city — could be closed this year without maintenance. Ward 7 Councillor Druh Farrell, also chair of the Calgary Housing Company, said there are units in appalling condition.

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