Luxury home sales in two of Canada’s most expensive markets are down from a year, as the high-end real estate market feels the effect of foreign buyers taxes.

TORONTO — Sales of luxury homes in two of Canada’s most expensive cities fell this year, as the high-end real estate market continued to feel the impact of foreign buyers taxes.

Realty brokerage Re/Max says sales of single-detached homes priced from $1 million to $2 million fell 35 per cent from a year ago in both Toronto and Vancouver.

According to the annual report, released Tuesday, sales of single-detached homes in the $2-million-to-$3-million range were down 50 per cent in Toronto and 22 per cent in Vancouver.

Meanwhile, homes that were sold for more than $3 million dropped 44 per cent in Toronto and 45 per cent in Vancouver.

Re/Max says homebuyers have been grappling with the introduction of foreign buyers taxes in Ontario and B.C., along with increased property transfer taxes and school taxes on B.C. homes over $3 million.

“All the new rules that the government implemented, along with the foreign buyers tax and the new lending regulations, it all just put a crunch on the most expensive part of the market,” said Christopher Alexander, executive vice-president and regional director of Re/Max Integra’s Ontario-Atlantic business.

He says luxury homeowners may have also been hesitant to list this year amid signs that the country’s housing market may be cooling, choosing instead to “wait it out.”

Although luxury home sales are weakening, sales in the low-end of the luxury condo market saw increases driven mainly by millennials who are using their inheritances and baby boomers looking to downsize, the report said.

Alexander says condos appeal to baby boomers because they can get more value for their money, especially in the major cities.

“Most of them have put all their kids in school. They don’t need so much space anymore. Their single-detached home is worth a fortune and now they can buy a really nice luxury condo that is not as big in a really great urban area where they have access to a more urbanized lifestyle, more action,” he said.

“Luxury is not just about price. A lot of it has to do with pedigree. If you buy with a million in Toronto or Vancouver, it doesn’t get you a luxury home but if you get a suite in the Four Seasons or the Shangri-La or the Ritz-Carlton. You’re going to get a small condo in a luxury building with all the luxury amenities. You’ve got that pedigree piece that is appealing to the higher end of the market.”

The report says condo sales in the $1-million-to-$2-million range were up two per cent year over year in Toronto and six per cent in Vancouver. Calgary saw their condo sales in this price range jump by three per cent, while Victoria sales climbed 19 per cent.

The most expensive condominium sold in Toronto in 2018 so far was priced at $11.5 million, topping the $8 million that was paid for the most expensive condo sold in 2017. The priciest condo sold in Vancouver so far this year was $11.7 million, up 34 per cent from the top price of $8.7 million paid last year.

Provided by: The Canadian Press

The British Columbia Real Estate Association welcomes the Government of British Columbia’s inclusion of exemptions from the speculation and vacancy tax proposed as Bill 45 today, Tuesday, October 16, 2018. Some of the exemptions directly address concerns BCREA brought to the Province’s attention through its advocacy work.

The Bill allows for exemptions for British Columbians going through traumatic life events such as illness and divorces or separations. It also allows for exemptions for owners of properties that are being developed or undergoing renovations.

It also exempts strata units from a vacancy tax for 2018 and 2019, where strata restrictions prohibit rentals. Further clarity is needed on this exemption and other implications.

BCREA, its 11 regional real estate boards and the 23,000 REALTORS® they represent look forward to providing the Province with REALTOR® insight on the implementation of Bill 45 to ensure that the best interests of BC homeowners are served.

Read the Province’s news release here. Learn more about the speculation and vacancy tax here.

Provided by: BCREA

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Canada and the U.S. have announced a tentative new trilateral trade deal with Mexico that includes some key concessions on issues of import to both countries — and also a reworked name: the United States-Mexico-Canada Agreement (USMCA).

"​USMCA will give our workers, farmers, ranchers, and businesses a high-standard trade agreement that will result in freer markets, fairer trade and robust economic growth in our region," Foreign Affairs Minister Chrystia Freeland and U.S. Trade Representative Robert Lighthizer said in a joint statement released late Sunday.

"It will strengthen the middle class, and create good, well-paying jobs and new opportunities for the nearly half billion people who call North America home," the statement said. "We look forward to further deepening our close economic ties when this new agreement enters into force."

After 14 months of intensive and often fractious negotiations between the two countries, Prime Minister Justin Trudeau convened a late-night meeting of cabinet to brief ministers because a deal had been reached only hours before a U.S.-imposed midnight deadline.

'A good day for Canada'

Leaving the meeting about an hour and 15 minutes after it began, Trudeau said only that it was "a good day for Canada" and that he'd have more to say to reporters on Monday.

In a background briefing with reporters, a senior Trump administration official heralded the USMCA as a win for all three countries.

"This is a big win for the U.S., Mexico and for Canada and it fulfils one of the president's most important campaign promises," a senior Trump administration official said. "We think this is a fantastic agreement. It's a great win for the president and a validation of his strategy in the area of international trade."

At the heart of the deal is a trade-off between greater U.S. access to Canada's dairy market, which is heavily protected by a system of supply management, and Canadian demands for the maintenance of a dispute resolution process.

The two sides have agreed to keep Chapter 19, NAFTA's dispute resolution mechanism, intact. That's a major victory for Canadian negotiators who have long sought to keep some sort of process to challenge anti-dumping and countervailing-duty cases — which Canada has deployed in the past over the softwood lumber file.

Chapter 19 preserved word for word

Chapter 19 will be preserved word for word, though it will be renumbered in the new agreement, U.S. officials said Sunday.

Lighthizer has steadfastly opposed this chapter, as he believes it's a violation of U.S. sovereignty to have a multinational panel of arbiters decide on the acceptability of U.S. tariffs.

A Trump administration official deflected Sunday when asked if preserving Chapter 19 was a win for Canada. "From our perspective we think there's really, really great things in this agreement. We're excited about those parts of it," the official said.

(Chapter 11, however, will be phased out between the U.S. and Canada, Trump officials said. This chapter, which outlines the investor-state dispute settlement, allowed corporations to sue governments at special tribunals for interfering in their business.)

​In exchange for some U.S. concessions on a dispute mechanism, Canada is expected to give U.S. farmers greater access to Canada's dairy market by increasing the quota on foreign imports.

Under the current supply management system, Canada imposes tariffs on dairy imports — which can run as high as 300 per cent — that exceed the established quota. Trump has railed against these tariffs as unfair to American farmers, as they are designed to keep foreign products out while privileging Canadian sources.

Dairy concessions could be politically challenging

Some of what Canada has agreed to could be politically challenging for the Liberal government, especially in Quebec, where dairy farmers hold electoral sway in certain ridings.

Under the new NAFTA, the U.S. will have roughly the same access to the Canadian dairy market as what was given up by Trudeau when he signed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) trade deal with 10 Asia-Pacific countries earlier this year.

Under that agreement, those 10 countries will have market access that equals 3.25 per cent of Canada's annual milk production. The exact percentage extended to U.S. dairy exporters was not immediately clear — but it will be marginally higher than that 3.25 per cent now open to Asian countries.

"We've achieved levels of market access, from the perspective of the U.S., that are a better deal than what the prior administration negotiated in TPP," a Trump administration official said of what former U.S. president Barack Obama squeezed out of the Canadians on the dairy front.

Trump officials say dairy changes major breakthrough

But, perhaps most importantly for dairy producers, Canada has agreed to end what's called class 7 pricing, a milk class created in March 2017 that slashed prices on some Canadian-produced milk ingredients — like protein concentrates, skim milk and whole milk powder — used to make cheese and yogurt. The co-ordinated price cut made the American equivalents uncompetitive.

Trump administration officials pounced on this change Sunday, touting it as a major breakthrough for American farmers, especially in Wisconsin and New York, where dairy farmers are eager to offload some of their product on Canada as they grapple with severe oversupply.

"On the dairy issue, we have a great result for our dairy farmers ... and this was one of the president's key objectives," the Trump administration official said. "Canada has agreed to eliminate the class 7 milk pricing system, which is something that was very problematic."

At the outset of the NAFTA talks, the U.S. demanded Canada dismantle supply management entirely — something that Trudeau has always maintained was a non-starter. Its preservation, save for a few tweaks, will be pitched as a success story by the governing Liberals.

Steel and aluminum imports still an open question

Canada is also expected to sign on to this new NAFTA without any reassurances that the U.S. will lift its so-called "section 232" tariffs on steel and aluminum imports — a coup for the economic nationalists that surround Trump who believe that protectionist measures like these punitive tariffs can help salvage the declining U.S. steel industry.

"There isn't any agreement on that at this point," a Trump administration official said. "There's been talk about potential discussions there, but that's on a completely separate track."

Canadian sources told CBC News they hope to resolve the 232 issue before ratifying NAFTA.

Those tariffs were levied on "national security" grounds using presidential authority granted under Section 232 of the Trade Expansion Act of 1962, which gives the president broad powers to impose tariffs without consulting Congress. Canada responded to Trump's move with counter-tariffs on billions of dollars worth of U.S. goods.

While technically separate from NAFTA talks, the U.S. has used the threat of further 232 tariffs on autos to extract concessions from Canada and Mexico — a frightening proposition for the Canadians.

No hard limit on auto exports

Importantly for Canadian negotiators, Trump has agreed that no hard limit will be placed on Canadian auto exports to the U.S.

That said, should the U.S. move forward with the imposition of worldwide 232 tariffs on autos, they would also apply to Canada.

However, Ottawa has negotiated what is effectively an exemption, as it would still be able to export cars and parts tariff-free up to a certain amount that is well above what Canada sends south of the border.

Sources could not immediately confirm the exact number of cars or parts that would be allowable, but U.S. officials said there has been an "accommodation" reached.

U.S.-Mexico deal came first

Last month, Trump announced his negotiators had reached a bilateral deal with Mexico.

The Canadians have already said they are pleased with what the U.S. had negotiated bilaterally with Mexico on changes to "rules of origin" around autos, championing the changes as good for middle-class workers on both sides of the border.

The revised USMCA deal will require 75 per cent of auto content to be made in North America, up from 62.5 per cent under the current NAFTA.

It would also require 40-45 per cent of auto content made in Mexico to be made by workers earning at least $16 US an hour, placating unions in Canada and the U.S. concerned about high-paying jobs moving to Mexico's low-wage economy.

According to the U.S. Trade Representative, Canada ships more than $56 billion US worth of autos — cars and parts alike — to the U.S. each year. The auto industry employs more than 120,000 people in Canada, with most of those jobs concentrated in southwestern Ontario.

Canada has also secured exemptions for its creative industries.

The existing NAFTA deal includes a cultural exemption clause, which means cultural goods are not treated like other commercial products — and that will continue under the new terms of the agreement. Lighthizer has previously cited Canada's broadcasting content and telecommunication ownership rules as an irritant.

Deal to be sent to Congress

U.S. negotiators have been gunning for a new NAFTA by month's end to get a text of the agreement to Congress for its mandatory 60-day review period. That could allow for a deal to be signed before Dec 1., when Mexico's new, left-leaning president takes office.

Under U.S. law, while Congress can extend fast-track negotiating authority to Trump administration officials — as it has with NAFTA — legislators retain the right to review any proposed trade agreement and decide whether it will be implemented. That relationship is governed by a set of strict, legislated timelines that allow Congress enough time to study a deal before delivering a decision.

A Trump administration official said Trudeau, Trump and Mexican President Enrique Pena Nieto will sign the USMCA at the end of November.

It will then be up to the next Congress — which could be fundamentally reconstituted after November's midterm elections — to ratify the agreement before it comes in to force.

Provided by: John Paul Tasker, Elise von Scheel for CBC News

Photo Credit: © Justin Tang/Canadian Press

The B.C. government is capping rent increases in the province at the rate of inflation, a move that will drastically cut the maximum annual rent hikes that had been allowed under the old formula.

The province dropped the automatic two per cent increase in annual rental costs for renters around the province, starting next year.

The increase will now be limited to the annual rate of inflation, which now stands at 2.5 per cent.

This comes on the heels of recommendations from the Rental Housing Task Force to limit rental increases to the inflation rate alone.

The maximum rent increase that was allowed for next year, under the current formula, was 4.5 per cent.

Landlords will still be able to apply for higher amounts if they prove they are maintaining or upgrading units.

“It’s simply not sustainable for renters, many of whom are on fixed incomes, to see their rent increase by more than inflation each and every year,” said Premier John Horgan in a media release.

“We have to eliminate the risk of such huge increases for renters. Our new approach strikes a balance between giving relief to renters while encouraging people to maintain their rental properties.”

As a result of eliminating the additional 2 per cent increase, the government says people living in a $1,200 per month apartment, which is the average rent in B.C., could save up to $288 in 2019 over what they could have paid under the old formula.

People in an average two-bedroom apartment in Vancouver could have faced paying up to $432 more over the course of the year.

“We recognize supply is key to bringing down rental costs in the long term, but renters have told us they are hurting and need help today,” said Selina Robinson, Minister of Municipal Affairs and Housing in a release.

“That’s why we are taking careful steps to address the housing crisis and ease the pressure on renters, while also making sure that landlords have the tools they need to continue to invest in their rental properties.”

The opposition BC Liberals have attacked the move, which they say will penalize landlords and make it difficult to maintain aging, affordable rental units.

“Landlords are now being told that when they need to do maintenance and renovations they will have to apply to the government to be able to afford it,” said Kamloops-South Thompson MLA Todd Stone in a statement.

“The arduous bureaucratic process to approve them will result in landlords having little incentive to renovate ageing housing stock in cities like Vancouver and Victoria.”

However, BC Green Leader Andrew Weaver and Adam Olsen, Rental Housing Task Force (RHTF) member, applauded the government’s move.

“The lack of affordable rentals has wide-ranging impact in every corner of society, from seniors on fixed income, to young people and students, to small businesses struggling to find employees,” said Olsen in a release.

“I believe this policy strikes the right balance of encouraging affordable rents while giving landlords the ability to apply for justified higher increases. I look forward to releasing the rest of our recommendations soon so that we can continue to deliver on our shared promise to address the affordability crisis.”

Provided by: Amy Judd & The Global News

Vancouver councillors have ended two days of public hearings by voting to allow duplexes in most city neighbourhoods currently restricted to single-family homes.

Mayor Gregor Robertson says the decision is another step toward adding homes in the city for the so-called ``missing middle,'' which includes young families pushed out of Vancouver by soaring property prices.

A news release from the mayor's office says the policy change means duplexes are now permitted on approximately 67,000 single family lots, offering an option that is more affordable than a detached home.

The 7-4 vote was split along party lines with Robertson, five Vision Vancouver members and councillor Hector Bremner approving the motion, while three Non-Partisan Association councillors and the Green party's Adriane Carr voted against.

The vote also marks one of the last major decisions of Robertson's decade-long tenure as mayor because he is not running in next month's civic election.

Robertson agrees the duplex proposal is not a ``silver bullet'' that will resolve Vancouver's housing problems, but says it responds to the demands of residents.

``Over the past two years of consultation for the new Housing Vancouver strategy, we heard loud and clear that Vancouverites want more housing options in single family neighbourhoods,'' he says in the release.

The change aligns zoning in expensive and increasingly unpopulated neighbourhoods such as Kerrisdale, Dunbar and West Point Grey with regulations in crowded and growing areas such as Kitsilano and Strathcona.

Robertson calls the policy a ``modest, but important change.''

Critics predict single-family homes could now be targeted by speculators, adding to already soaring property prices, while Tom Davidoff, associate professor at UBC's Sauder School of Business, says the measure is good, but not enough.

``It's a start. But when you have land that's worth tens of millions of dollars an acre, to really put a dent in affordability, you want to go to at least townhomes or small apartment buildings,'' he says.

As a way to reduce speculation on land values, the mayor's office says the new policy does not allow for an increase in height or density on a single-family property, but it says other measures to add density are being planned.

``Further work is underway as part of the Making Room program to bring forward options for rowhouses, townhouses, and low-rise apartments- with a priority on rental housing and co-ops in low-density neighbourhoods,'' the release says.

That report could be brought to council by next summer.

Provided by: REP for the The Canadian Press