Fort Erie Mayor Says Tax on Foreign Property Owners Will Hurt Community

Mayor Wayne Redekop says seasonal residents feel they are being unfairly punished by tax targeting off-shore investors

Fort Erie Mayor Wayne Redekop is expressing concern about the federal government's new foreign-owned property tax. 

Redekop has written a letter to Finance Minister Chrystia Freeland, asking the federal government to make changes to the Underused Housing Tax.

"(Seasonal residents) feel that they're being treated unfairly, and they're being lumped in with those who are really creating the problem the federal government is trying to deal with. And that is investors who are simply looking at housing as a commodity."

The tax, which took effect last year, requires foreign property owners to pay a one percent annual tax on the value of any residential property the Canada Revenue Agency deems "Vacant" or "underused."

The tax looks to prevent foreign investors from buying properties that end up sitting empty. 

While there are exemptions for seasonal property owners, they mostly apply to vacation and rural communities, and some cottages in more populated areas don't qualify. 

Redekop is suggesting an additional exemption based on time spent residing on the property. 

He says since many Americans who own cottages in Canada spend the spring and summer months here, he's calling for an exemption for anyone who spends at least three months a year at the property.

"Most of these residents have been coming to Fort Erie, some for generations, and they have owned these properties for generations. So they're very much a part of the community. And when they're here, they're spending money on our community. They're going out to the restuarants, they're patronizing the local businesses."

Freeland's office says the government is sticking by the policy for now, but will continue to monitor the impact of the tax. 

Meanwhile, U.S. Congressman Brian Higgins says the U.S. should retaliate by putting a new tax on Canadians who own property south of the border.