The Canadian government on Sunday announced it is extending a ban on foreign ownership of housing for two more years, saying the step will help address the country's housing crisis.
The rule, first announced in 2022, will now be extended until the beginning of 2027. Under the legislation, foreign nationals and commercial enterprises are prohibited from purchasing residential property in Canada. However, some international students, refugee claimants, and temporary workers are exempted from the ban.
In a statement, Canada's Finance Minister Chrystia Freeland said the ban would make sure Canadians are not being priced out of housing markets in cities and towns across the country.
"By extending the foreign buyer ban, we will ensure houses are used as homes for Canadian families to live in and do not become a speculative financial asset class," Freeland said. "The government is intent on using all possible tools to make housing more affordable for Canadians across the country."
The extension comes as Canada is facing a housing affordability crisis that has been blamed on an increase in migrants and international students. Many claimed the rapid population growth fueled by immigration increased the demand for housing and drove up housing costs.
However, some experts question whether the ban on foreign home ownership will have a significant effect on housing affordability, arguing that there is a relatively small share of homes owned by non-Canadians.
"A lot of the public has been convinced over the last few years that it's foreign investors and foreign money that are driving home prices, rather than what's actually doing it: low interest rates and very low supply," Brendon Ogmundson, chief economist at the British Columbia Real Estate Association, told CBC.
Canada's Efforts To Address the Housing Crisis
The Canadian foreign government previously set a cap on the number of international students admitted to the country for two years, reducing it by 35% to 364,000 this year. The new measure, which also aims to address housing affordability, will apply to students in a diploma or undergraduate program. However, those applying for study permit renewals would not be affected by the cap.
Additionally, Canada has also set a limit on post-graduate work permits for foreign students and will no longer grant work permits to students graduating from colleges operating under a public-private partnership model.
