Budget Breakdown: No Change in Capital Gains Taxation and No Hit to Housing

Matt Chan • April 10, 2017

Budget 2017 continues the government’s commitment to support the middle class by enhancing Canada’s long-term growth potential. Investments to foster innovation, skills and the ability to attract top talent from around the world are included. An important and growing competitive advantage is Canada’s openness to trade and immigration, having a broader range of free trade agreements than any other G-7 country. This is particularly potent today as the U.S. is aiming to retrench from free trade and even potentially impose trade restrictions and border adjustment taxes. Ottawa is also targeting a few high-potential sectors for government support. These targeted areas are advanced manufacturing, agri-food, clean technology (a sector that the Trump Administration might well be abandoning), digital industries, health/bio sciences and clean resources (also very different from proposed U.S. policy), with the hope of enhancing growth and creating jobs.

Housing Initiatives

Many were concerned that the government would take additional action to slow the housing market, particularly in Toronto where it continues to be very strong. No such action was taken. The budget document does comment on the high level of household debt relative to income and the affordability concerns in Vancouver and Toronto, however Budget 2017 suggests that “recent government actions (announced in October 2016) will help mitigate risk and ensure a healthy and stable housing market.”

Budget 2017 proposes to invest more than $11.2 billion over 11 years in a variety of initiatives to build, renew and repair Canada’s stock of affordable housing. A new National Housing Fund will be administered through Canadian Mortgage and Housing Corporation (CMHC) to expand lending for new rental housing supply and renewal, support innovation in affordable housing, preserve the affordability of social housing and support a strong and sustainable social housing sector. More federal lands will be available for affordable housing. Details to come later this year.

What Budget 2017 does do is to allocate just shy of $40 million to Statistics Canada over five years to develop and implement a new housing data base, the Housing Statistics Framework (HSF). The HSF builds on the money allocated in last year’s budget to collect data on foreign ownership of housing. “The HSF will leverage existing data from provincial-territorial land registries, property assessment programs and administrative records to create a nationwide database of all residential properties in Canada, and provide up-to-date data on purchases and sales. Statistics Canada will begin publishing initial data in the fall of 2017. The HSF will represent a significant jump forward in the quality and type of housing data available and will yield significant ongoing benefits by enhancing the ability of housing participants, commentators and policy-makers to monitor and analyze the housing market.”

Fiscal Prudence

Notably, this budget posts deficits as far as the eye can see. However, the good news is that Ottawa re-introduced a contingency reserve to adjust for potential risk of $3 billion per year. This reserve fund was a long-standing practice of prior governments and was absent from Budget 2016. Ottawa, however, continues to focus on a reduction in the debt-to-GDP ratio rather than deficit elimination. This will no doubt be criticized by conservatives.

Tax Measures

Basically, there aren’t any major tax measures. Specifically, there is no change in the tax treatment of capital gains, a red-hot issue in the media for the past few weeks. The finance ministry is cracking down on the use of private corporations to sprinkle income among family members to reduce taxes. These private corporations are subject to lower tax rates than personal income tax rates. Similarly, passive investment portfolios held inside private corporations will be audited. Clearly, the Canada Revenue Agency will be scrutinizing these private corporations in the future, to assure tax fairness for the middle class. Eliminating tax loop holes, evasion (both domestically and internationally) and avoidance is expected to increase revenues by $2.5 billion over five years.

There will also be a renovation to the current caregiver credit system and extension of the eligibility for the tuition tax credit. Measures will also be taken to strengthen the financial services sector, although these are technical and supervisory and do not affect mortgage lending specifically as some in the industry had feared.

Bottom Line: Budget 2017 does no harm. The Canadian economy has improved considerably since last year’s budget. While oil prices, the Canadian dollar and U.S. interest rates are uncertain, it appears that the economy could grow at roughly a 2.3 per cent annual rate with the jobless rate in Canada remaining below seven per cent. The resilience of the Canadian economy has been supported by government actions in the 2016 budget as well as accommodative monetary policy.

While I would like to see a plan to return to a balanced budget, Canada will have no trouble in funding its debt or maintaining its triple-A credit rating.

 

This article was written by DLC Chief Economist Dr. Sherry Cooper, and appeared as part of the Dominion Lending Centres April 2017 Newsletter. 

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New to Credit? Let’s Build a Solid Foundation

By Matthew Chan • November 5, 2025
Starting from Scratch: How to Build Credit the Smart Way If you're just beginning your personal finance journey and wondering how to build credit from the ground up, you're not alone. Many people find themselves stuck in the classic credit paradox: you need credit to build a credit history, but you can’t get credit without already having one. So, how do you break in? Let’s walk through the basics—step by step. Credit Building Isn’t Instant—Start Now First, understand this: building good credit is a marathon, not a sprint. For those planning to apply for a mortgage in the future, lenders typically want to see at least two active credit accounts (credit cards, personal loans, or lines of credit), each with a limit of $2,500 or more , and reporting positively for at least two years . If that sounds like a lot—it is. But everyone has to start somewhere, and the best time to begin is now. Step 1: Start with a Secured Credit Card When you're new to credit, traditional lenders often say “no” simply because there’s nothing in your file. That’s where a secured credit card comes in. Here’s how it works: You provide a deposit—say, $1,000—and that becomes your credit limit. Use the card for everyday purchases (groceries, phone bill, streaming services). Pay the balance off in full each month. Your activity is reported to the credit bureaus, and after a few months of on-time payments, you begin to establish a credit score. ✅ Pro tip: Before you apply, ask if the lender reports to both Equifax and TransUnion . If they don’t, your credit-building efforts won’t be reflected where it counts. Step 2: Move Toward an Unsecured Trade Line Once you’ve got a few months of solid payment history, you can apply for an unsecured credit card or a small personal loan. A car loan could also serve as a second trade line. Again, make sure the account reports to both credit bureaus, and always pay on time. At this point, your focus should be consistency and patience. Avoid maxing out your credit, and keep your utilization under 30% of your available limit. What If You Need a Mortgage Before Your Credit Is Ready? If homeownership is on the horizon but your credit history isn’t quite there yet, don’t panic. You still have a few options. One path is to apply with a co-signer —someone with strong credit and income who is willing to share the responsibility. The mortgage will be based on their credit profile, but your name will also be on the loan, helping you build a record of mortgage payments. Ideally, when the term is up and your credit has matured, you can refinance and qualify on your own. Start with a Plan—Stick to It Building credit may take a couple of years, but it all starts with a plan—and the right guidance. Whether you're figuring out your first steps or getting mortgage-ready, we’re here to help. Need advice on credit, mortgage options, or how to get started? Let’s talk.

Bank of Canada Rate Announcement Oct 29th, 2025

By Matthew Chan • October 29, 2025
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How to Access Your Home Equity Wisely

By Matthew Chan • October 22, 2025
Need to Free Up Some Cash? Your Home Equity Could Help If you've owned your home for a while, chances are it’s gone up in value. That increase—paired with what you’ve already paid down—is called home equity, and it’s one of the biggest financial advantages of owning property. Still, many Canadians don’t realize they can tap into that equity to improve their financial flexibility, fund major expenses, or support life goals—all without selling their home. Let’s break down what home equity is and how you might be able to use it to your advantage. First, What Is Home Equity? Home equity is the difference between what your home is worth and what you still owe on it. Example: If your home is valued at $700,000 and you owe $200,000 on your mortgage, you have $500,000 in equity . That’s real financial power—and depending on your situation, there are a few smart ways to access it. Option 1: Refinance Your Mortgage A traditional mortgage refinance is one of the most common ways to tap into your home’s equity. If you qualify, you can borrow up to 80% of your home’s appraised value , minus what you still owe. Example: Your home is worth $600,000 You owe $350,000 You can refinance up to $480,000 (80% of $600K) That gives you access to $130,000 in equity You’ll pay off your existing mortgage and take the difference as a lump sum, which you can use however you choose—renovations, investments, debt consolidation, or even a well-earned vacation. Even if your mortgage is fully paid off, you can still refinance and borrow against your home’s value. Option 2: Consider a Reverse Mortgage (Ages 55+) If you're 55 or older, a reverse mortgage could be a flexible way to access tax-free cash from your home—without needing to make monthly payments. You keep full ownership of your home, and the loan only becomes repayable when you sell, move out, or pass away. While you won’t be able to borrow as much as a conventional refinance (the exact amount depends on your age and property value), this option offers freedom and peace of mind—especially for retirees who are equity-rich but cash-flow tight. Reverse mortgage rates are typically a bit higher than traditional mortgages, but you won’t need to pass income or credit checks to qualify. Option 3: Open a Home Equity Line of Credit (HELOC) Think of a HELOC as a reusable credit line backed by your home. You get approved for a set amount, and only pay interest on what you actually use. Need $10,000 for a new roof? Use the line. Don’t need anything for six months? No payments required. HELOCs offer flexibility and low interest rates compared to personal loans or credit cards. But they can be harder to qualify for and typically require strong credit, stable income, and a solid debt ratio. Option 4: Get a Second Mortgage Let’s say you’re mid-term on your current mortgage and breaking it would mean hefty penalties. A second mortgage could be a temporary solution. It allows you to borrow a lump sum against your home’s equity, without touching your existing mortgage. Second mortgages usually come with higher interest rates and shorter terms, so they’re best suited for short-term needs like bridging a gap, paying off urgent debt, or funding a one-time project. So, What’s Right for You? There’s no one-size-fits-all solution. The right option depends on your financial goals, your current mortgage, your credit, and how much equity you have available. We’re here to walk you through your choices and help you find a strategy that works best for your situation. Ready to explore your options? Let’s talk about how your home’s equity could be working harder for you. No pressure, no obligation—just solid advice.