How the new federal budget affects cottagers

Canadian-cottage-on-Lake-Huron-federal-budget-vacant-property-tax Photo by Shutterstock/Gus Garcia

Much has been made of so-called luxury taxes in Finance Minister Chrystia Freeland’s federal budget released on April 19th. The new budget not only boosts childcare and COVID relief, it targets buyers of new yachts, private planes, and luxe automobiles. (And in case you want to reload your cigarette holder, they’re hiking taxes on smokes, too.)

But the taxes (projected to take in $604 million over five years) are a small change amidst the document’s $101 billion in new spending over three years—including such cottage-friendly moves as protecting natural areas, fighting climate change, and upgrading federal Small Craft Harbours.

Environmental goals include safeguarding an additional one million square kilometres of land and inland waters, and 30 per cent of the country’s marine and coastal areas by 2030. At least some of that will likely support conservation in cottage country, says Georgian Bay Land Trust (GBLT) executive director, Bill Lougheed. Working with non-profit, private, and government partners, the GBLT already protects more than 7,500 acres. “We’re protecting the watershed and water quality,” he says. “Inland wetlands, rivers, riparian areas—they’re all part of what these funds would go to.”

Also featured in the federal budget’s green agenda is a new Canada Water Agency tasked with keeping the country’s freshwater “safe, clean, and well-managed” and upgrading maps for areas prone to flooding and wildfire. Mapping hazards isn’t flashy, says Terry Rees, executive director of the Federation of Ontario Cottagers’ Associations, but “flood mapping informs local land use plans…so we’re not building in harm’s way.” 

Efforts to buffer climate change include developing North American standards for recharging or refuelling zero-emission vehicles (ZEV), to make charging an electric car as predictable as pulling into a gas station. Meanwhile “off-road residential equipment”—possibly your cottage lawn mower—is targeted for tougher emissions controls. And there’s a new energy efficiency program offering interest-free loans of up to $40,000 for “deep home retrofits.”  No word yet on whether cottages will qualify; the CMHC is working on the details. 

Finally, there’s one tax proposal U.S. and overseas cottagers will watch closely: the “vacant home” levy. Starting in 2022, “non-resident, non-Canadians” owning residential real estate must report its use. If it’s “vacant or underused” then cha-ching, it could be taxed one per cent of the place’s value. But since the measure seems primarily focused on urban homes, the feds promise to consider “special rules” for “small tourism and resort communities.” 

“We wouldn’t want it to apply to seasonal residences,” adds Georgian Bay Association executive director, Rupert Kindersley. Of the association’s 3,000 member families with cottages on the Bay’s northern and eastern shores, about “25 per cent are from the U.S., and we have some international members as well.”

Finally, Rees says he likes the federal budget’s emphasis on “investing in stewardship,” but he cautions the document is a wish list, not a binding contract. “Exactly how all of this will translate into real policies on the ground, we’ll have to see.”

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