On January 1, 2023, the Prohibition on the Purchase of Residential Property by Non-Canadian Act came into force. The Real Property, Criminal Justice and Immigration Law Sections, as well as the Ethics and Professional Responsibility Subcommittee of the Canadian Bar Association wrote to the Minister of Housing and Diversity and Inclusion and to the President and CEO of the Canada Mortgage and Housing Corporation, or CMHC, to express concerns about potential overreach in enforcing the Act.
Section 6 is of particular concern. It states that every non-Canadian who contravenes section 4, or anyone who assists them, is guilty of an offence and liable on summary conviction. It is crucial that the person counselling must have knowledge that the purchase is prohibited by law.
The CBA letter recommends the government give “appropriate guidance to the authorities as the Act is enforced to avoid prosecutorial overreach and reflect the position that an offence requires that the lawyer or notary acted in full knowledge of the illegal nature of the transaction.”
Another concern has to do with attracting foreign skilled workers. As currently written, policy directions contained in CHMC’s consultation materials say temporary foreign workers are prohibited from purchasing a home in Canada unless they are authorized to work in Canada, have worked in Canada continuously during three of the past four years and have filed income tax returns in Canada for those years. This, the letter says, “may negatively impact Canada’s ability to attract skilled temporary foreign workers and foreign students, and ultimately may undermine the government’s goal of settling almost 1.5 million immigrants in Canada in the next three years.”
Instead, the CBA Sections recommend allowing foreign nationals who hold a work permit valid for a year or longer and reside in Canada “should be exempt from the prohibition from purchasing a residential property for their personal use.”
Foreign students are similarly prohibited from purchasing homes in Canada unless they have been physically present in Canada for at least 275 days in each of the five calendar years preceding the year in which the purchase is made, and they are limited to a house priced at less than $500,000 which, as the letter notes, is unreasonable in many urban markets across the country. The CBA Sections recommend that students should be exempt from the prohibition provided they hold a study permit valid at least one year, are studying in an approved program and reside in Canada.