Labelled one of the most widely anticipated and important budgets of our time, Budget 2021, delivered on April 19th, lived up to its promise. The first budget in over two years and first since the outbreak of the global pandemic, Budget 2021: A Recovery Plan for Jobs, Growth, and Resilience represents a $101.4 billion plan focused on Canada’s post-pandemic economic recovery.


Not unexpectedly, Canada’s housing market didn’t figure prominently this year when health care, unemployment and economic stimulus measures took centre stage. Moreover, hot housing markets across the country, regarded as a significant pillar to much-needed consumer confidence and a vital boost to the economy, seemingly eliminated the need for any real change. Even so, would-be buyers forced to sit on the sidelines a bit longer probably feel otherwise. 


The longest budget in Canadian history did include a few housing-related items worth mentioning.


Interest-free loans for green retrofits 

Interest-free loans up to $40,000 will be available to help homeowners undertake energy-efficient home improvements. The total $4.4 billion investment will apply to retrofits identified through an authorized EnerGuide energy assessment, and will enable homeowners to make more substantial modifications that have a significant impact in reducing a home’s environmental footprint and energy bills. 


Tax on unused, foreign-owned housing 

In an effort to alleviate the pressure on Canada’s low housing inventory, and increase supply, a country-wide 1% tax will be added to foreign-owner, non-resident residential real estate that’s deemed to be vacant or underused. 


Homeowners, who aren’t Canadian citizens or permanent residents, will be required to file a declaration as to the current use of the property and taxed accordingly. Revenues generated will help support government investments to make housing more affordable for all Canadians and ensure that Canadian housing represents a place to live and grow rather than simply an unused investment. If passed, the tax will take effect January 1st, 2022.


Budget 2021 also includes new and reallocated funding for the development of additional low-income and rental housing, which will help boost overall supply and provide assistance to vulnerable populations.


Recent stress test change proposed for uninsured mortgages

Another recent announcement, outside of the current budget, is the proposed change by Canada’s banking regulator, the Office of the Superintendent of Financial Institutions (OSFI), which would strengthen the stress test applied to uninsured mortgages – typically those with less than 20% down payment. The new rules would require borrowers to qualify at their mortgage contract rate plus 2% or 5.25%, whichever is higher. This represents a qualifying rate increase of nearly 50 basis points – the current stress test minimum qualifying rate is 4.79%.


The public is invited to provide feedback to OSFI via email ( by May 7th. OSFI will then communicate some of that feedback and any final amendments to the qualifying rate by May 24th – prior to the new stress test taking effect on June 1st.


Have questions about if/how these proposed changes could impact you? Answers are a call or email away!