The Extreme.

Disallowing Corporations from holding residential properly will result in a collapse in the housing market in the short term, but could offer a rebalancing of the housing market in the long-term. This will result in many Canadians losing a significant value and could even collapse the Canadian market as a whole.

This would likely disrupt the lives of tens of millions of Canadians. This could also help tens of millions of Canadians and start us down the path to correcting our system.

The Problem.

On the other hand, should Canada pop the balloon of of the real estate market in another way, or even at all? It is one of the main pillars of the Canadian economy. And too many Canadian’s have their retirement plans entirely invested in the Canadian housing market. The HELOCs and 2nd mortgages would be called as soon as a policy is announced severely limiting the ownership of residential housing. This is the way many people think, including Canadian politicians.

Justin Trudeau believes homes can be made more affordable while ensuring the housing market remains at an all time high. This literal contradiction shouldn’t need explanation, affordable is not a cash flow issue. Financing of anything does not make it affordable, it makes it obtainable. Lower prices make it affordable based on your income.

This is true for corporations and individuals. If all of the sudden all manufacturing equipment cost 4x. The world would see a lot less restaurants opening, and as more closed those remaining open would think they were doing everything right. If instead of $300,000 to open a restaurant, you needed $1.2m, it would become significantly harder. Less people would maintain the same productivity as they see their dreams becoming unobtainable. Financing anything at 4x the price is a terrible idea. Longer financing periods just mean that you have to be in debt longer than the asset is useful. What if a Honda Civic was $200,000 brand new, does it make sense to finance or lease? Or does it make sense not to participate. You would be paying off that Honda for 20 years and it would be lucky to last 15 without major repairs.

What if a Lexus was still $90,000?

Now just change Honda Civic to Canada, and Lexus to a dozen other countries. This is why many Canadians are looking to leave Canada. Inability to obtain a lifestyle on par or better than the previous generation. If things do not change, we will see a significant drain on the economy of Canada as money and talent flows out while the government is stuck between a hard place, rock, and bankruptcy.

I mean we could always sell the Yukon.

An Alternative.

We as Canadian have not kept up with the curve of technology, especially in government.

We should have a national land title registry that is tracking ownership of each parcel of land or real estate property in Canada.
At the bare minimum a national registry of landlords, allowing us to weed out the scum and have safe renting as a norm.

Both of these can be administered by the municipalities and consolidated by the Provincial Government while being audited by the Federal Government while performing the national consolidation.

We as a country would at least then have accurate data on who owns each property. All individual names can be hidden from general public domain but can be requested through the courts or other official channels. All corporations would be public.

As an aggregate we could then determine the commercial vs domestic property ownership of various regions of Canada. We would see the total corporate, individual, domestic, and foreign ownership statistics. We could also see the usage if cross referenced with the CRA declared address records for rental properties, as well as headquarters, and home addresses. This would allow the CRA to confirm these declarations, but would allow them to find undeclared income from housing rentals. It could also assist the police in finding fraud or identity theft and allowing lenders to verify real estate assets while reducing risks.

Tamed Extreme.

Taking a more tempered approach may work after this, where if the market was still in shambles enacting the extreme approach over a 5 year period and including a government subsidy for anyone selling, the subsidy growing each year of the 5 years. The subsidy could be calculated based on the local housing price decreases from the year before the law achieving royal assent, income, the mortgage balance on the home, number of homes owned, individual, trust or corporation, and several other factors. This would soften the blow, unfortunately this could result in significant inflation again while bailing out banks & real estate millionaires. It would be best to turn down the payouts for non-principal homes, ensuring that individuals are cared for before the private sector.

Those who have family cottages and homes will likely not be affected beyond lower property taxes as these properties are long term holdings. Those affected the most in this scenario will be the corporations, unfortunately many if not most of the corporate real estate holdings in Canada are small businesses with less than 10 properties. These would be hurt the next most to the Principal Residences. The scale on the small businesses could be tiered on the total property value owned by that company as an average of the pre-assent year and sale price.

But enacting that residential properties are to only be held by SIN#s and Family Trusts would still allow the market to stabilize, but would not eliminate the rental market. It would just change the landscape and hopefully not allow such a significant issue to occur again.

The Dream.

Why stop with land title registry. Why can’t we have a federal, provincial & local budget that can be discussed on a Government of Canada forum. A forum that would allow citizens and permanent residents to become verified through their CRA/Service Canada accounts, with the same rules as if you were speaking to someone in person.

Why not have the tax code discussed by CPAs through CPA Canada, or Lawyers on all Canadian laws through the Justice website?

We could have a national crowdsourced economic system. The Members of Parliament, MLAs & Councilors becoming the curators and circuit breakers of change.

Why not allow a non-binding direct vote by the whole population, or at least a bigger sample size voting on each issue, or legislation, resulting in direct statistics for the representative to consider. This could allow an alleviation of many of the issues that are plaguing Canada and the rest of the world.