Canadian Government Amends Prohibition on Residential Property Purchase by Non-Canadians
Originally published on April 5, 2023, by Leona Savoie for NAIOP Newsletter.
The Canadian government enacted legislation on Jan. 1, 2023, that disrupted commercial and residential real estate development across the country. The Prohibition on the Purchase of Residential Property by Non-Canadian Act (the “Act”) was originally intended to be a demand-side solution to make housing more affordable for Canadians by prohibiting residential purchases by non-Canadians over the next two years. However, the regulations under the Act, released only a week before enactment, unintentionally halted commercial investment in current and future residential and mixed-use projects in major metro areas.
The NAIOP Research Foundation issued a report last August highlighting the importance and contributions of commercial real estate to the Canadian economy. The report, specifically, found that the industry generated the following economic benefits in 2021:
- Generated $148.4 billion in net contribution to GDP.
- Created and supported 1.0 million jobs, of which 372,710 are direct jobs.
- Generated $67.5 billion in labor income for workers.