The federal government is considering what to do with Canada’s foreign home buyer ban as the temporary restrictions approach their scheduled expiry at the beginning of 2027. Finance Minister François-Philippe Champagne said Wednesday that Ottawa is reviewing the options available to the government rather than committing to simply extending the existing prohibition. “We’re looking at all the options that we have in front of us,” Champagne said, pointing to changes in the housing market over the past several years and the government’s goal of increasing housing opportunities for Canadians. The Prohibition on the Purchase of Residential Property by Non-Canadians Act was introduced in 2022 amid concerns that foreign investment was contributing to rising housing prices and making home ownership increasingly difficult for Canadians. The measure was originally scheduled to expire in January 2025, but the previous federal government extended it by two years. Under the current legislation, the ban is scheduled to expire on January 1, 2027. The restrictions generally prohibit non-Canadians from purchasing residential property in Canada, although a number of exemptions apply. These include certain temporary residents, protected persons and people purchasing a home with an eligible Canadian spouse or common-law partner. Other prescribed circumstances and property types are also exempt. The government is now assessing whether the existing approach remains appropriate as housing conditions have changed significantly since the policy was introduced. Canada’s housing market has cooled considerably from the pandemic-era peak, when extremely low interest rates and strong demand pushed prices sharply higher. Higher borrowing costs subsequently weakened demand and contributed to a significant correction in many markets. At the same time, affordability remains a major concern, particularly for younger Canadians and first-time homebuyers who continue to face high prices and borrowing costs in many communities. The government also faces competing arguments over the role of foreign investment. Housing advocates have argued that limiting foreign demand can help protect homes for Canadians, while some economists and developers say foreign capital can contribute to the construction of new housing when directed toward development. The government has previously indicated that it would examine approaches used in other countries, including Australia, where foreign buyers can face restrictions while still being allowed to invest in certain new housing developments. A possible change could therefore involve moving away from a blanket prohibition toward a more targeted system, although the federal government has not announced a specific replacement policy. Champagne said the government is considering not only federal measures but also actions being taken by provincial and municipal governments, noting that housing markets vary considerably from one region and community to another.
The decision will likely be closely watched by the real estate industry, developers, foreign investors and Canadians hoping to enter the housing market. With the January 1, 2027 expiry date approaching, Ottawa will have to decide whether to extend the current ban, modify it, replace it with a different framework or allow it to expire. For now, the federal government has not committed to any of those options, with the finance minister saying discussions are continuing as Ottawa assesses the changing housing market and the government’s broader housing objectives.