Remarks by the Deputy Prime Minister on putting homeownership back within reach and supporting Canadian homeowners

April 11, 2024 – Toronto, ON

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Good morning, everyone.

I would like to start by acknowledging that we are gathered on the traditional territories of many nations, including the Mississaugas of the Credit, the Anishinaabeg, the Chippewa, the Haudenosaunee, and the Wendat Peoples.

Today, too many younger Canadians feel as though the deck is stacked against them. They can get a good job, they can work hard, but far too often, the reward of a secure, prosperous middle class life remains out of reach.

We want their hard work to be rewarded. And we have a plan to help every generation—especially younger Canadians—get ahead.

One of the biggest pressures on Canadians right now is housing. And we know that this is especially true for younger Canadians.

Faced with a shortage of housing options and increasingly high rent and home prices, many younger Canadians feel that the dream of homeownership is just that—a dream.

Our government is changing that. We want homeownership to be a reality for younger Canadians. And the measures I am announcing today will help set them up for success.

One of the first steps to getting those first keys of your own is saving for a downpayment. We know this step is also one of the biggest hurdles to homeownership.

That’s why, in the spring of last year, our government introduced the Tax-Free First Home Savings Account. The Tax-Free First Home Savings Account allows Canadians to contribute up to $40,000 towards the purchase of their first home. Like an RRSP, contributions are tax deductible, and like a TFSA, withdrawals to purchase a first home are non-taxable. It’s tax-free in, and tax-free out.

Today, only a year after the launch, I am really glad to announce that more than 750,000 Canadians have opened a Tax-Free First Home Savings Account. This account is making a real difference for Canadians and it’s clear that younger Canadians want to buy a first home of their own. And they are saving their hard-earned dollars to turn that dream into a reality.

Another program our government has in place to help Canadians pull together a downpayment is the Home Buyers’ Plan. It allows Canadians to withdraw funds from their RRSP to buy their first home. Like the Tax-Free First Home Savings Account, RRSPs are great vehicles to save for a downpayment because contributions are tax deductible and any income earned in the RRSP is tax exempt.

Right now, you can withdraw up to $35,000 from your RRSP to use toward a downpayment. In many cities in Canada, though, that’s not enough. Younger Canadians know they need to save more, for longer, to afford that first downpayment.

So, to help Canadians purchase their first home, today I am announcing that we are increasing the withdrawal limit for the Home Buyers’ Plan from $35,000 to $60,000, effective April 16th this year.

This, plus the Tax-Free First Home Savings Account, can be combined, which will give younger Canadians more tools to save what is actually needed for a downpayment.

We are also giving Canadians an extra three years to repay the amount they withdraw under the Home Buyers’ Plan. Canadians who made withdrawals any time between January 1st, 2022 through to December 31st, 2025 will now have a full five years before they need to start repayment—so they can focus on their mortgage payments and other costs.

Once you’ve saved for that first downpayment, the next step to owning a home is qualifying for a mortgage. A big part of qualifying for a mortgage is ensuring you can pay the monthly costs that come with it. For many younger Canadians, these costs are a significant barrier to homeownership.

That is why today we are announcing new enhancements to the Canadian Mortgage Charter.

The Charter details the tailored mortgage relief that Canadians can expect from their banks if they are in a challenging financial situation.

Effective August 1st this year, we are allowing 30-year amortizations on insured mortgages for first-time home buyers purchasing newly built homes. That, of course, includes condos and townhouses. First-time home buyers will now have 30 years to pay off their mortgage instead of 25 years. That translates to lower monthly payments—so more younger Canadians can afford to pay that monthly mortgage on a new home.

After you get those first keys of your own, we also want to make sure Canadians who own their home are protected.

We know that some homeowners are concerned about their mortgage payments and about renewing their mortgages at a higher rate.

To further support these Canadians, we are announcing stronger measures through the Canadian Mortgage Charter that include making sure lenders contact borrowers up to 24 months in advance of a homeowner’s mortgage renewal, so that homeowners have ample time to learn about the options available to them and to make informed decisions.

The new, stronger measures in the Canadian Mortgage Charter also include providing permanent amortization relief to all homeowners—including insured homeowners at risk—without any fees or penalties.

For example, let’s say a homeowner with an insured, 25-year mortgage is experiencing financial hardship. Last year, that homeowner worked with their bank to have their mortgage amortization temporarily extended to 35 years to lower their monthly mortgage payments. Now, with the strengthened Canadian Mortgage Charter, depending on the homeowner’s circumstances, this extension can be made permanent—so that their monthly costs stay low for as long as they need.

Because Canadians work really hard to be able to buy and afford their homes. It is only fair that mortgage lenders should help Canadians do everything they can to afford their homes at a time of higher interest rates.

These are all real, tangible measures that are going to help more Canadians get into the housing market and buy their first home, while protecting Canadians who already own their home.

Our government first came to office with a vow to strengthen and expand the middle class. We delivered on that pledge by reducing poverty, especially for children and seniors, and creating millions of good jobs for Canadians. Our work isn’t over.

Our focus today is unlocking the door to the middle class for millions of younger Canadians. In all we do, we dedicate ourselves to making a better life within reach for our younger generations. Because it is what you deserve. And it is what your parents and grandparents want for you, too.

Thank you very much.