The recent federal election in Canada didn’t change the make-up of Parliament much, but the new Liberal government will create lots of controversy in the real estate industry if it follows through on some of its promises.

During the campaign, housing affordability emerged as one of the top issues facing the country. All the parties recognized that the lack of housing supply is the main issue driving the real estate market, with the Liberals promising to “build, preserve or revitalize” 1.4 million homes by 2025-26. The party says it will create a $4-billion Housing Accelerator Fund to grow housing supply in the largest cities by 100,000 “middle-class homes”.

It also pledged to commit $600 million to support the conversion of empty office and retail space into housing, introduce a Multigenerational Home Renovation tax to help families add a secondary unit to their home for a family member, and work with Indigenous partners to develop an Urban, Rural and Northern Indigenous Housing Strategy, supported by “dedicated investments”.

Although real estate and financial sector observers warned that adding incentive programs could make the current situation worse and put even more pressure on prices, there are a few of these goodies in the Liberal promises. The party says it will introduce a First Home Savings Account, sort of a cross between a TFSA and an RRSP, that will allow Canadians under 40 to save up to $40,000 towards their first home and withdraw it tax-free, with no requirement to repay it.

The party also pledged to lower the premiums currently charged by Canada Mortgage and Housing Corp. for mortgage insurance, which is required for homebuyers who have a down payment of less than 20 per cent of the cost of their home. It also says it would increase the insured mortgage cut-off from $1 million to $1.25 million and index it to inflation “to better reflect today’s home prices.”

Where you can expect fireworks is if the Liberals follow through with elements of a new “Home Buyer Bill of Rights” that would ban blind bidding on properties. This is a controversial topic in the industry, but provincial real estate associations and the Canadian Real Estate Association immediately issued statements condemning the idea.

Below a photo of hands gripping the bars in a jail cell, the Ontario Real Estate Association issued a statement that said the ban “would criminalize the ability for hardworking Canadians to choose how to sell their homes, by regulating real estate practices through the criminal code. You cannot fix Canada’s housing crisis by denying millions of hardworking families the choice of how to sell their home and by pitting homeowners against buyers. In fact, this plan would have the opposite effect – negatively impacting Canada’s housing market and making homeownership even more unaffordable.”

The lack of housing supply is responsible for creating multiple offer situations and higher prices, not the way real estate is being sold, says the association. It says open auctions, such as those commonly held in Australia, “creates a three-ring circus on front lawns, as hopeful buyers crowd in front of a home with a live auctioneer, or online, and the bidding begins. Far from making homes more affordable, auctions drive prices higher…”

The proposed bill of rights would also establish a legal right to a home inspection on all deals – currently in the hot market, including a home inspection as part of an offer hinders the buyers’ chances of landing the home.

The Liberals promised to “ensure total transparency on the history of recent house sale prices on title searches” as well as “require real estate agents to disclose when they are involved in both sides of a potential sale to all participants in a transaction.”

The plan would move forward with a publicly accessible beneficial ownership registry, which is already in place in British Columbia and is supported by Realtor associations. It is seen as a major tool in combating money laundering in real estate transactions.

A new anti-flipping tax would apply to properties that were bought and sold again within 12 months.

More election promises included banning foreign money from purchasing a non-recreational, residential property in Canada for the next two years and extending the previously announced tax on non-resident, non-Canadian owners of vacant land to include foreign-owned vacant land in large urban areas.

With some real estate investment trusts recently announcing plans to make big investments in rental housing, the Liberals say they will “review the tax treatment of these large corporate owners and “put in place policies to curb excessive profits in this area, while protecting small independent landlords.”

Many of the promises, such as the blind bidding ban, impose on provincially regulated elements of the real estate industry. The Liberals said they would “convene federal and provincial regulators to develop a national action plan to increase consumer protection and transparency in real estate transactions.”

Prior to the election, affordable housing advocate Generation Squeeze examined all the party platforms. It determined that none of them were proposing measures that would restore housing affordability for all but gave the Liberals the best score for promising to address two-thirds of the action items that the organization says are required.

With another minority government, the Liberals will need help from other parties to push through any new legislation. Now the industry is waiting to see which of the dozens of housing-related election promises are brought forward.