Higgins: Canada's proposed tax on US property owners could damage longstanding binational economic relationship

Congressman urges Canada to exempt US citizens

Congressman Brian Higgins, a staunch advocate for measures aimed at strengthening the relationship between the U.S. and Canada, expressed concern about a measure in Canada’s budget 2021 that imposes an additional 1% tax on non-Canadian residential property owners.

Higgins, who serves as co-chair of the congressional northern border caucus and is a member of the House of Representatives Ways and Means Committee – which handles tax policy – wrote a letter to Canada’s ambassador to the U.S. stating, “The imposition of this proposal as contemplated could result in a significant financial burden on many of my middle-class constituents who own homes in Canada and weaken the bond between our two countries at a time when we should be looking for ways to strengthen it. As your government begins the consultation process toward implementation of this proposal, I strongly urge you to reject its application to American citizens who own property in your country.”

Canada’s proposed budget document reads: “Budget 2021 announces the government’s intention to implement a national, annual 1 per cent tax on the value of non-resident, non-Canadian owned residential real estate that is considered to be vacant or underused, effective January 1, 2022. The tax will require all owners, other than Canadian citizens or permanent residents of Canada, to file a declaration as to the current use of the property, with significant penalties for failure to file.”

Higgins pointed out the longstanding tradition of U.S. and Canadian citizens owning vacation property across the border and said he would hate to see a situation that requires the U.S. to respond by imposing similar taxes on Canadians owning property.

“Our country welcomes ‘snowbirds’ and other Canadian guests who own property here for both personal and investment purposes,” he said. “We value their financial contributions and their contribution to our culture. If the government of Canada were to implement this 1% property tax as proposed without a categorical exemption for American property owners, as a member of the U.S. House of Representatives Committee on Ways and Means, I would be forced to contemplate reciprocal measures on Canadian owners of real property in the United States.”

Higgins’ Western New York district includes the cities of Buffalo and Niagara Falls and borders Southern Ontario.