Canada (WBEN) - Things are going to get more costly for non-Canadians who have vacation properties or residences north of the border.
Canadian lawmakers, last June, passed a 1 percent tax imposed annually on the value of non-Canadian-owned residential properties that is considered under the legislation to be “underused," in attempts to combat the housing shortage in major Canadian cities and prevent Americans from buying houses and leaving them vacant.
"The explicit reasoning for this, according to government officials, was to address a problem specific to Toronto and Vancouver," said Congressman Brian Higgins. "Not Southern Ontario, the Niagara region, including places like Bay Beach, Crystal Beach, Thunder Bay and other areas along both the Lake Erie shoreline and Lake Ontario shoreline in Canada."
The congressman is referring to spots where many Americans own property near our Western New York border, who occupy the houses when they are on holiday. Congressman Higgins believes that this is unjust.
"We're gonna fight it, I believe it's in direct violation with the United States- Mexico-Canada free trade agreement," said Rep. Higgins. "I have communicated with the Secretary of State informing him of this and I asked for his assistance to address this directly with the President and the Prime Minister." The congressman tells WBEN President Biden and Prime Minister Trudeau have a meeting in Ottawa this March.
This is not the only piece of legislation used to deter Americans from housing in Canada. The Prohibition on the Purchase of Residential Property by Non-Canadians Act was passed by the the parliament in Canada last June as well, with regulations relating to the act released in December.
According to the act, non-Canadians can not purchase residential property in Canada for a two-year period starting on the beginning of this year.
The congressman reacts, "These kinds of prohibitions, I don't know what the where they're coming from, or what the rationale is. But they seem to be punitive. We can take the same action as it relates to residents of Ontario owning property in Ellicottville, 60 miles south of Buffalo, or in Florida. We don't want to do that. It's just indicative of the cross border relationship that both Canadians and Americans have enjoyed, for many, many years. We don't want to be retaliatory, but it that's leverage that we have to use, we will use it."
Moving forward, Congressman Higgins will continue to speak with both American and Canadian officials to address this issue.
"I have [spoke] with members of parliament, with senior officials at the Canadian Embassy in Washington. I will be in front of the US Trade Representative next month at a ways and means committee hearing. I brought it up to her previously, I will bring it up again. We will continue to work toward a diplomatic solution to this problem. It's unfair. I don't think it was ever intended for people that own cottages and the places that we had made reference to before. So again, we'll continue to put pressure on we will not go away. We will be persistent, and in the end I think we will prevail."