The equity in your very own home may be the very next thing that Mark Carney and his liberal you will own nothing cronies will be coming for. Yes, we have talked about this on this show in the past. The potential for a home equity tax in Canada, but it just got a lot higher. If you own a home in Canada, I need you to remember a single person's name. I need you to remember Evan Siddle because Mark Carney's government has just put him in an enormously influential position over Canadian housing. You guessed it. And when I saw that name, I immediately thought, hold on a second. Just wait one moment. Where have I heard the name Evans Siddle before? And then it hit me like a ton of bricks. The home equity tax. That's right. He's been involved with it. Remember that? Remember when we talked about this strange idea that was floating around Ottawa that Canadians, yes you, have accumulated far too much wealth within your personal residence. that perhaps it isn't quite fair that you bought a house, paid for the mortgage, paid for all the property taxes over the years, paid for all the repairs to maintain the home, paid interest on all of that, potentially even the mortgage, the home equity line of credit, the credit cards it took to keep that house in good repair. And if you're lucky enough to eventually sell your principal residence for more than you paid for it, you don't pay capital gains tax on that appreciation. Remember that's how it is right now. Remember when I told you though we needed to pay attention to the language being used around your home ownership about 6 months ago? Well, guess what? Everything's come back to roost because look who's back. It's Evan Siddle. Evan Siddle has just been appointed the inaugural chair to the board of Build Canada Homes. That's the new federal crown corporation at the center of Mark Carney's government's housing strategy. And Siddle is not the guy you want in that spot. Siddle isn't some random housing executive that they found on LinkedIn. He used to run the Canada Mortgage and Housing Corporation and he ran it when they were looking at home equity taxes. He has been talking about housing, wealth, and intergenerational inequality for years now. And perhaps most importantly of all, he and Mark Carney go way back. Let's tap into the truth. >> Welcome to Bakes on Things. Are we getting it slightly wrong in letting it be that important? In other words, this notion that people should be able to buy a home. Uh in many cities of the world, they rent happily forever for life. >> That's exactly right. And there and I mentioned behavioral issues. You know, in places like Paris and Sydney and Hong Kong, Buenos areas, people rent. Y >> Yeah. New York, >> people rent. Whereas here, we glorify home ownership and we think it's the only vehicle for savings. Well, that's that's looking at the last 100 years. And unfortunately, savings are in the future, not in the past. And I think, you know, this party ultimately comes to an end. Welcome back to a very important episode of Tap the Maple here on Bakes on Things. If you're not subscribing to this channel, as we saw over the weekend, you might not get these episodes in your suggested episodes for each day. So, please subscribe and that will make sure you see these episodes. Now, Mark Carney was government of Bank of Canada in 2011 and the bank announced that Evan Siddle had been appointed special advisor to the governor. So, this is before CMHC. Carney himself praised Siddle's experience, leadership, and connections with Canada's business community. Siddle began that job in January of 2012. So, when you hear that Evan Siddle has now been appointed to the chair of Build Canada Homes, understand a couple of things here. The first is that Carney knows this man quite well. This isn't somebody whose thinking on economics and housing should be a mystery to Mark Carney. What do you mean he likes home equity taxes? Well, he would know this. Siddle subsequently became the president and CEO of CHC, serving from 2014 until 2021. And it was while running Canada's National Housing Agency, that Siddle made some extremely interesting comments about Canadian home ownership. Most importantly, that you own too much. I want to show you something, and this is something you're not going to love. I promise you that. But it's important to pay attention to because you don't need me to characterize Evan Siddle's philosophy. We have his own words. Yes. In April of 2018, while president and CEO of CMHC, Siddle actually delivered a speech with the following title. Too much of a good thing on housing, wealth, and intergenerational inequality. That's the actual title. And listen to how the speech begins. Siddle talks about his own 76-year-old mother living alone in a three-bedroom home in suburban Toronto. He says that it is much more housing than she even needs at this stage in life. And then he goes on to say the house would be better suited to a working family that needs to have the bedrooms that the house has. Think about the philosophy embedded in making that statement in that speech. His mother owns a house, probably the one he grew up in. Presumably, she's paid for it. I would assume it's probably paid off. It is now her property. But the head of Canada's housing agency was publicly contemplating whether his own mother was occupying more housing than she really needed. And the speech didn't even stop there. It didn't. It rolled right on. Siddle turned to Canada's tax treatment of principal residents as well, saying it's unfair for those who don't own homes. He discussed the fact that appreciation on a principal residence generally receives too much favorable tax treatment compared with many other investments that you may have made over your life. And his broader argument was the housing wealth had contributed to growing inequality between the generations and different factions of our society. Now, fast forward, fast way forward, because this is where the story gets really, really interesting. And the reason for that is Evan Siddle didn't stop there. Let's talk about his $250,000 project with the CHC. In fact, CHC provided $250,000 to a project called Generation Squeeze. The project was called the Housing Wealth and Generational Inequality Solutions Lab. That's what it was called. And eventually documents surrounding that project finally did become public. We've talked about them before. Listen very carefully to the wording contained in the project's charter. It identified as a source of intergenerational inequality tax policy that shelters housing wealth, especially in principal residents, from taxation compared with other assets you may hold. There it is. Evan Siddle has constantly been on home equity taxes. This was not something on Twitter. It's not a conspiracy theory. Those words appeared in an actual project charter commissioned by the CHC while Evans Siddle led it. They would examine home equity taxes publicly financed study. But it's sure suspicious. It absolutely means that questions surrounding the preferential tax treatment of housing wealth were being examined in a CHC funded project and the guy who ran it is now leading housing in this country today. When Paul Kershaw from Generation Squeeze later appeared before the House of Commons finance committee, he was asked how his organization and CHC came together on all of this. When he appeared before that finance committee, Kershaw said one of the most people who had been most eloquent about generational equity, housing, and wealth was, you guessed it, Evan Siddle. That's right. Kershaw said he reached out to Siddle about partnering as he pursued the CHC Solutions Lab. That was actual parliamentary testimony you can find in the history books. So when Canadians raised concerns about where this conversation could eventually lead with regard to their own personal residence, they weren't inventing the underlying discussion at all. The wealth that I have gained in my home in Metro Vancouver is not because my building is any nicer. It's a, you know, a 1500 square foot home. It's 20 years older now than when I bought it, but the land has gone up by more than a million bucks. It's that land value surge that is making it more costly to build new housing, affordable housing, cooperative housing, because it's hard for nonprofits to buy it when the value has gone up. So, absolutely, we need to engage in a conversation in this country, those who have benefited from rising home values. Now, they often would have worked hard as doc as nurses and bus drivers and and people, you know, doing uh regular blue and white collar jobs back in the 70s and 80s and bought homes in in Victoria and Hamilton or Vancouver and Toronto as regular folks. But because what's happened to their land values that they've soared so much that they now have millions in assets and they're actually part of the global 1%. Now, we don't necessarily feel that way, but the reality is that the wealth that has come from rising home uh land values has done just that. And so, we need to be having the next national housing strategy talk seriously about your very question. Land values have surged. They're creating winners and losers. How can we soften that imbalance in part by asking those who've benefited to be a bigger part of the solution? And that may be contributing more into it may be as I'm suggesting today uh taking less in subsidies from government when you're financially secure and you've gained that housing wealth. I suspect that's the easier political path forward. It's absolutely been discussed. The discussion about housing wealth and taxation is absolutely real. But then came the denials for a time. This is where the story became controversial because the CHC was clearly driving at at the time and Sid himself the home equity tax. But then they started pushing back hard against the characterization that they were studying a home equity tax at all. The government said it wasn't considering one. Just because it appears in the study doesn't mean they're going to do it. Siddle rejected the suggestion because the backlash was already huge. And that distinction matters. There is a difference between the government is implementing a home equity tax and the government is studying a home equity tax. I totally understand that. But when you now place the same person who was looking at that before into the high housing office and you are building more rental housing in this country and trying to discourage ownership, something feels icky, doesn't it? But here's my problem with all of this beyond it. If you're studying whether housing wealth receives preferential tax treatment, if you're even discussing the idea of intergenerational inequality because of equity in your personal residence, if you're examining tax policy at the same time and you are now taking the lead on the country's housing office and the principal residence exemption is part of that conversation, which it will be, Canadians are perfectly entitled to be worried here and to ask Where exactly do you think this conversation should end? Build Canada Homes isn't a little advisory committee Canada. It's a new crown corporation. Its mandate involves federal financing, loans, loan guarantees, partnerships, and construction of housing across Canada, most of it rental to bring more equality among all of us. And there's an especially important detail about Sid's appointment. During this transitional period, until the board is sufficiently populated, Siddle reportedly holds the board's entire level of powers. So, let's assemble this. The man Mark Carney once personally brought into the Bank of Canada, who later ran CHHC, who publicly raised concerns about housing wealth on principal residences and intergenerational inequality, whose CMHC, at the time he ran it, funded a $250,000 solutions lab, examining home equity, taxes, and housing wealth, has now been chosen to become the inaugural chairman of Carney's new federal housing crown corporation. Those are the puzzle pieces the puzzle has put together. Are we supposed to look at history and say, "Well, nothing interesting here. Nothing to worry about. Nothing to see." Well, no, of course not. Because this guy is all over home equity taxes. I think Canadian homeowners should know exactly who is helping shape federal housing policy. And by the way, he has the entire reigns of the office until there's a board. He has all the permissions. He has all the power. He can make any decision he wants. He's the only vote. Work hard, save, pay off your house. That was the goal. That could be a big part of your retirement strategy. Pay off your mortgage, build up the equity, and perhaps utilize some of it if you needed to. Or if you needed to downsize, you could sell it and receive that equity taxree. And eventually, when you're older, perhaps that's what would happen. But now we have somebody getting an office with all the power that believes in home equity taxes. Canadians have made so many sacrifices over the last 10 years. Think about somebody who brought a home equity tax in as a thought 15 years ago. I mean, you guys didn't simply write one check when you bought your house, did you? No. You spent decades paying your mortgage interest. That doesn't count. What about the property taxes you paid to your municipality? What about the exorbitant home insurance costs you had to deal with? What about the new roof you put on the house three times while you've owned it? How about the furnaces you've bought or the windows you've had to replace? How about the renovations that you've had to do to keep things modern? How about the maintenance of the home just to keep basement water from coming in? And they did all of that. You as Canadians have done all of that with the money that you already earned. Then one day Ottawa looks at the value of that house and starts describing that appreciation as housing wealth. My ears perk up at this because it's the most asinine thing I've ever heard. Governments have an extraordinary ability to change the vocabulary surrounding something before they change the policy surrounding it. So they won't call it a home equity tax. Your home will become an asset. Your equity will become wealth. Think of how much Mark Carney changed the language just around the budget investment, right? They're going to do the same here. Suddenly, keeping the money your house accumulated isn't simply the normal tax treatment Canadians have come to rely on for generations. No, it will be in framed as an issue of intergenerational inequality and wealth. And since it's wealth, you should be taxed for it. Words matter. It's important to start paying very close attention to what words they're going to use around this, especially as Evans takes over. Canada's federal government needs money, a lot of money. We are in tremendous debt and they are running out of places to get it. Federal spending is out of control. The debt servicing costs alone exceed our GST HST the provinces and government collect. The government wants to build housing here as well. Infrastructure. They want to build up defense. Mark Carney has been spending since the day he got into office. Industrial projects. He's promised. Every new promise requires revenue from somewhere Canada. But we don't have revenue from coming in in a surplus from anywhere. But sitting inside Canada's residences is a tremendous amount of equity or quote unquote wealth. So ask yourself a very simple question. Do you think governments are going to become more interested or less interested in your pool of wealth sitting in your home? especially when influential policy thinkers have already spent years debating whether housing receives too much preferential treatment when it comes to your wealth. That's why I'm paying very close attention to this. That's why we've had multiple episodes on this. Not because Mark Carney has yet announced a home equity tax. He hasn't. Not because Evan Siddle announced one himself the day he took over this housing office because he hasn't yet. But what I'm watching for is the language around all of this. I'm watching because the person Carney's government just placed in an influential housing position with unlimited power has a documented history of thinking deeply about precisely these questions. >> What we've been told by people who deal with clients on a daily basis is that what you have done is you've done the exact reverse. people who were about to qualify, first-time home buyers, [snorts] for a mortgage could not qualify under these new rules. So, they've gone out and taken their dollars and spent it on vacation or on a on on a car. Do you What would be your comment to that? >> I haven't seen those data, sir. >> Well, read the testimony then that came before us. >> I've seen the testimony. I I can't distinguish between opinion and facts, so I'm not I haven't seen the data. >> Well, you you're not you're going by opinion. You're not going by facts. You've got no facts to justify what you did. You are going simply on the basis that something could happen. So, we're going to take this action now. That's hardly data, sir. And appointments tell you something about governments, don't they? You don't just examine the job. It's not like he's coming in to see whether the person before him did a good job or not. He's coming in to do the job in the first place. and he will examine the world view of the person that's giving the job or that's given the job or we should examine rather the world view of that person and wonder what he's going to do there because if this idea ever becomes a serious problem in Canada I can almost guarantee you it won't be called the home equity tax nobody would sell it that way are you kidding me even Mark Carney is not that stupid but it would be called something like the housing fairness reform plan Or maybe they'd give it some other fancy name like the intergenerational equity measure. They'll give it something like that to take away the feeling that it's a home equity tax. Perhaps it's housing tax modernization since Mark Carney loves the word modernization. And Canadians would be told it isn't aimed at ordinary homeowners. No, no, no, no, no, no, no. It would begin with the expensive houses because that's how it always starts. the jumbo houses, 2 million, 3 million, they're the ones that'll be affected. Certain transactions or a limited group of wealthy households will experience this to begin with. But politically, that's how you introduce controversial tax changes, isn't it? You don't begin by telling 10 million homeowners across this country, you're coming after all of their equity. You'd lose all your votes. You begin by defining somebody else as wealthy, not the regular Canadian. and they go, "Well, that doesn't apply to me." And then you just keep moving the line. That's why Canadians need to understand the philosophy before this even arrives. Because if this does arrive, it's not going to arrive to you first. We all know how the Liberal government works. They don't want to lose power. So, they'll bring this to the ultra wealthy first and and just gradually move that line toward you year after year. We saw what happened when housing prices went through the roof. Population growth outran housing construction. Municipal barriers restricted supply. Construction costs exploded on homes. Taxes and development. Those charges all increased for our builders. Interest rates hammered affordability. And then all of a sudden, everything started to drop again. So, a lot of you might be thinking, well, I've lost a whole bunch of equity over the last number of years now that the Liberal government has killed the housing market altogether. But imagine responding to all of that failure by looking at the Canadians who actually managed to buy a house during that time and saying, "You've accumulated too much housing wealth. We need some of it. We need some of it to pay down the federal debt. We need some of it to f finance these programs. Excuse me. Canadians didn't create the housing shortage. Why would you be coming after our money? A retired couple in Burlington didn't establish federal immigration targets. A family in Calgary didn't create municipal zoning bylaws and policy. A homeowner in Halifax didn't invent development charges. A senior in Vancouver didn't decide Canada should chronically underbuild housing across this nation. Yet somehow the equity accumulated by those homeowners we just referenced becomes part of the inequality problem. I don't think so, Libs. That is a completely backwards way of looking at all of this. So I ask you, Canada, pay close attention. They won't call it a home equity tax. I promise you that. They will call it something fancy, something else, the wealth inequality catalyst, whatever you think Mark Cardi is going to use for it. Trust me, it's out there and it will be discussed because with Evan Siddle in the high up housing office and no board surrounding him yet, giving him all of the powers, we should be very nervous as Canadian homeowners of what's to come. That's how you tap into the truth. Don't forget to like, subscribe, and join the conversation down below. What would you do if the government came a knocking for the equity on your home? Let's have that conversation. I want you to have a fantastic Monday as well. Thanks for being here. Thanks for living and listening. We will see you Tuesday, tomorrow morning at 6:00 a.m. Eastern Daylight Time for your newest edition of Tab the Maple. For now, coffee. Cheers. and we'll see you tomorrow.