The federal Liberals are having second thoughts about a 2015 campaign promise out of concern that expanding the popular Home Buyers’ Plan would throw fuel on overheated housing markets.
An internal document suggests high housing prices are a key reason the Liberals don’t appear to be in a hurry to fulfil an election pledge that would enable Canadians to dip back into their registered retirement savings to help pay for a home.
The detail surfaces as policy-makers consider new measures aimed at cooling real estate markets and to slow rising household debt loads, which have climbed to historic levels.
During the election campaign, the Liberals promised to expand the Home Buyers’ Plan to allow those affected by major life events — death of a spouse, divorce or taking in an elderly relative — to borrow a down payment from their RRSPs without incurring a penalty.
The current plan enables first-time buyers to borrow up to $25,000 tax-free from their RRSPs to put towards the purchase of a home. The amount must be repaid within 15 years.
The Trudeau government recently signalled that its promise to modernize the plan was still in progress, but that it faced “challenges.”