EDMONTON — Today, the Parliamentary Budget Officer released a report showing that if tax exemptions for corporate Real Estate Investment Trusts (REITs) were removed, the federal government would collect a total additional $285.8 million in estimated revenue over the 2023 to 2027 tax years. This analysis points to the urgent need for stronger regulations of REITs, beginning with closing tax loopholes and enforcing a guaranteed, statutory tax rate of 38 per cent. With rents in Calgary rising about 25 per cent in the past year, Public Interest Alberta renewed its calls for immediate interventions in housing for Albertans.
“Canadians are living through the biggest housing squeeze in a generation, and REITs, which make up between 20-30 per cent of the country’s apartment stock, are a major culprit in this crisis,” said Bradley Lafortune, Executive Director of Public Interest Alberta. “The federal government should move immediately to close tax loopholes, regulate REITs to reverse market takeover, and ensure it is receiving its fair share of corporate taxes from assets currently owned by these massive financialized entities.”
A REIT is a pool of capital from numerous investors, which seek to maximize profit from real estate, including the residential rental market in Canada. The trusts are modeled after mutual funds and pool capital for the sole purpose of extracting profit, not providing housing — a basic human right that Canada recognized in their 2019 National Housing Strategy Act.
According to the new federal report , total REITs assets grew from $80 million in 1993 to $76 billion in 2021 and the number of rental suites owned by REITs increased from zero in 1996 to nearly 200,000 in 2021.
“While rents in Alberta have skyrocketed as the UCP reject any action for tenants, it’s clear that the rapid expansion of REITs in the Canadian rental market has had horrible effects for affordability for renters,” said Lafortune. “In this climate, it’s absolutely necessary the Federal and Alberta governments work together to strengthen affordability and security in housing for Albertans.”
Public Interest Alberta is demanding three immediate actions be taken by the federal and provincial governments:
- The federal government must move to close tax loopholes and ensure the base 38% corporate tax rate applies to all REITs and financialized housing actors.
- The federal government should put a temporary moratorium on the acquisition of any new housing stock by REITs while the new Federal Housing Advocate begins and conducts its review of the financialization of housing and its effects on the market.
- The provincial government should immediately institute rent control to curb the rampant increases in costs for renters.
“We know that Albertans are struggling with affordability. We know that tens of thousands of households in our province are in core housing need, and that over half of Albertans are $200 or less away from paying their bills. We have thousands of Albertans sleeping rough on our streets,” said Lafortune. “In this housing crisis, it is absolutely unacceptable that corporate entities aren’t even paying their taxes. The time is now for real leadership.”
Public Interest Alberta continues to advocate for more social housing, renters rights and stronger tenant protections, with real interventions into the REIT side of the market to ensure a path to adequate housing for all Albertans and Canadians.