Consultation on the Taxation of Vacant Lands

The Canadian Chamber of Commerce welcomes the opportunity to provide a submission as part of the Department of Finance’s consultation on the Taxation of Vacant Lands.

In the interest of housing availability and affordability for all Canadians, the Canadian Chamber of Commerce launched the Housing and Development Strategy Council in 2023. This Council is composed of a diverse array of industry leaders from across the country looking to ensure that federal policies reflect business realities and create an environment where we can build homes more quickly and affordably. We consulted with those industry experts to gather their perspectives and recommendations on this matter.

Simply put, imposing an additional tax on developers who are expected to deliver an unprecedented number of homes in response to a historic housing affordability crisis is a fundamental misunderstanding of the problem our country is facing.

At the Canadian Chamber, we have been unequivocal in urging the federal government to eschew tax-and-spend policies that burden Canadian families and businesses, and instead take bold steps to restore our economic prosperity. Newly announced housing measures in the Fall Economic Statement do not address the fundamental issue; we need to significantly increase housing supply, and those efforts are already being constrained by taxes and fees, which already represent as much as 36 percent of the purchase price of a home.

Per the Canada Mortgage and Housing Corporation, “Canada has built a structural deficit in housing supply that can only be remedied through extensive investment by the private sector. With the private sector providing roughly 95 per cent of housing in Canada, this is especially true to address the affordability challenges of the middle-class, whether for rental or for ownership.”

The last thing our governments should be exploring is the opportunity to layer on an additional tax that will further limit developers’ ability to access the capital they need to invest in building as much housing as possible, and ultimately compound the burden of taxes and fees that drive up the cost of housing that will be paid by Canadian families. Instead, we need all levels of government working together toward removing restrictions and creating incentives to unlock private sector investment rather than chase it away with yet another tax.

We hope that you will acknowledge the additional burden a vacant lands tax would place on those who hold the key to delivering housing, and not proceed with another tax that will jeopardize their ability to build the homes Canadians need