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Trudeau Backs Down On Punitive Tax After Backlash


Trudeau Attack On Housing Investors Ends In Defeat

Another day, another misguided policy was defeated. Justin Trudeau recently decided on new taxes targeting real estate investment trusts in Canada. But after fierce pushback, Trudeau ultimately backed down. 

Though details are still emerging, this apparent win for the REIT industry and investors reveals much about the state of policymaking under Trudeau’s leadership.

This latest proposed tax increase was aimed at the residential real estate sector. But like other plans under Trudeau’s leadership, it risked unintended economic consequences. In this case, new supply could be restricted when housing availability is already low.

Some see this approach as unchecked government overreach. Canadians across generations seem increasingly frustrated with attacks on profit and enterprise. The policies often appear politically motivated, only to be abandoned when public outcry rises.

The full story behind this reversed decision remains unclear. Perhaps it will be seen as another misstep by a government quick to demonize economic success. Or possibly a sober lesson will be learned about balanced policymaking.

In any case, with still over a year left in Trudeau’s term, this likely won’t be the last proposal that stokes controversy. The temptation to score political points by targeting profitable industries may prove too great to resist.

REIT Pressure Forces Trudeau To Abandon Tax Proposal

A new day, a new defeat against Justin Trudeau and his government’s reckless and useless policies and plans, the Real Estate Investment Trusts, or the REITs in Canada, successfully organized and lobbied against Prime Minister Justin Trudeau’s proposed tax changes. 

When Trudeau decided to hit REITs with new taxes to curb “excessive profits”, the industry pushed back hard. They argued that the uncertainty around the tax changes was already increasing their cost of capital and hurting new development.

After a lot of push and pull, Trudeau has now finally backed down from his threat to change the tax treatment of the REITs in Canada.

With Canada facing extremely low rental vacancy rates, policies discouraging apartment construction would only worsen affordability, this is not only a win for those defending property rights and free markets against government overreach, it’s also a win for all Canadians who are tired of Trudeau’s endless taxes and would like to see someone, anyone stand up against the PM and take action, which is exactly what the REITs did. 

The government should not punish productive investment in order to score political points.

Many Canadians also opposed Trudeau’s plan, seeing it as an overreach and attack on property rights. With both the REITs and average Canadians standing together against the tax proposal, Trudeau ultimately backed down.

When Trudeau and Singh started their doomed coalition, part of that deal was that Trudeau would crack down on the “financialization of the housing market” by targeting large corporate apartment owners. 

However, the real estate industry rightly pushed back, arguing that the uncertainty around new taxes was already making it harder to raise capital for new housing development.

While the desire for affordable housing is understandable, increasing taxes on residential real estate investment is not the solution. 

Heavy-handed government intervention in housing markets often backfires by restricting supply. A better approach is deregulating zoning and construction rules that make it so difficult to build.

REITs provide an important channel for investment in rental housing. Changing the tax rules to make them less attractive would likely lead to less development of new units. 

At a time of incredibly low rental vacancy rates, policies that discourage apartment construction would only make affordability worse. Trudeau’s demagogic campaign rhetoric about “curbing excessive profits” of REITs demonstrated his limited understanding of how free enterprise works. 

Profits incentivize people to take risks and make investments that benefit society as a whole. Politicians should not punish success in order to score political points.

Trudeau’s willingness to threaten new taxes on firms providing essential rental housing demonstrates his desire to placate the far-left at the expense of economic progress.

Conservative, market-oriented policies such as deregulation and zoning reform are the best way to improve housing affordability over the long-term. Punitive taxes born of envy and populism will only restrict supply and make the problem worse. Trudeau should reconsider anti-business rhetoric and policies.

Young Voters Abandon Trudeau’s Unaffordable Housing

On the other hand, and not surprisingly, Trudeau is rapidly losing support among young voters despite riding a wave of youth of enthusiasm to power in 2015. Trudeau has promised to address issues important to young people but has failed to deliver on housing affordability. 

While this is the biggest main issue within the millennials and gen z, Pierre Poilievre has been effectively discussing housing costs, polls now show conservatives with a 2-1 lead over liberals among voters from 18 to 29 years of age. 

Trudeau’s slide among young voters is an ominous sign for his re-election hopes. Failing to deliver on affordability for millions of millennials and Gen Z threatens to make him a generational let-down. 

Trudeau rode to power on youth support and progressive promises. Yet after almost nine years as Prime Minister, he is rapidly losing millennial and Gen Z voters who propelled him to victory. 

Why? Because Trudeau failed to implement policies truly addressing the economic issues most important to young Canadians – housing affordability and cost of living.

Despite pledging action on housing, home prices have soared 60% under Trudeau’s watch. Millions of young people now feel priced out of the market. Is it any wonder Conservatives like Poilievre, targeting Trudeau’s housing record, now hold a huge lead among Canadians under 30?

Rather than punitive taxes, Trudeau should have focused on policies to increase housing supply, such as deregulating zoning and construction rules that make building difficult. He should have provided incentives to developers to build more affordable starter homes for young buyers. 

While Trudeau ultimately backed down from this anti-REIT tax proposal, the episode demonstrated his government’s hostility toward free enterprise. Markets do not operate to serve politicians’ electoral interests. Profitable firms meeting market demand should be applauded, not threatened and demonized.

Conservatives must continue defending free markets against left-wing government overreach. Policies punishing residential real estate investment would backfire by reducing rental housing supply. Deregulation and streamlining approvals, not punitive taxes, are the path forward for affordable abundance.

The Trudeau government’s anti-business mindset aims to punish success to score political points. But profitable firms meeting market demand should be applauded, not threatened. Conservatives must keep advocating for free enterprise over socialist policies that restrict supply and choice. Market-oriented solutions are the path to affordable housing.

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