Canadian Prime Minister Justin Trudeau has people talking after he recently posted a video discussing changes the federal government plans to make to help renters purchase a home.
“Having a good credit score means they [the bank] can offer you a better mortgage, which will give you more choice when buying a home, more options to choose from because the bank trusts you to pay it back,” he said in a video posted on Saturday.
“For most young people, the biggest and most important payment you make is on rent. And if you’ve been paying that on time for years it should count towards your credit score,” the prime minister continued. “I think it should work to your advantage. Soon it’s going to.”
“We’re going to change the rules of the game so you can report your rent payments towards your credit score. So you can get a better mortgage, so you can get a place of your own, sooner.”
The video comes after an announcement on March 27 where the federal government shared measures from the 2024 Budget, including the proposed Canadian Renters’ Bill of Rights, that aims to “make the playing field fairer for renters and make it easier for them to become homeowners.”
The federal government said renters will be able to receive credit for paying their rent on time by amending the Canadian Mortgage Charter and calling on landlords, banks, credit bureaus, and fintech companies to make sure that rental history is taken into account in people’s credit score.
CANADIANS REACT TO TRUDEAU VIDEO
After watching Trudeau’s video, Canadians took to social media to share their thoughts on the new measures.
Some people are in favour of the proposed measures.
“I agree with Trudeau on this. Renters should have both rights and credit score reporting for making rent payments, just like mortgage holders. After all, they are paying the mortgages of those landlords who leverage real estate and use renters to do it,” one person posted on X.
“It sounds like there’s a plan in motion to address housing affordability or access to homeownership. Making changes to the rules can potentially open up new opportunities for individuals and families to achieve their goal of owning a home,” another person wrote.
While others feel that it is not enough.
“Building credit through rent is a good move but … it doesnt address the biggest barriers – including unaffordable rent! If you’re young and you’ve been paying rent you’re likely not to have been able to save enough money for a downpayment of $145,000 (required to avoid mortgage insurance) on a 720,000$ home (average cost in Canada), especially if you’re paying off your university loans,” wrote one X user.
“I think the biggest hurdle for people to not be able to afford a house is the down payment so could you do something about that and either offer a lump sum for being a good renter or offer them rent to own opportunities for being a good renter,” one social media user shared.
“Its not enough at all. How can two professional-class partners (170k income) buy a two bedroom appartment for 750k??? While childcare is effectively 1600/month,” another person questioned.
While others are concerned about the implications of your rent payments impacting your credit score.
“This policy will absolutely screw vulnerable people. Late on rent due to communist policies and resultant inflation? Too bad, can’t get a house now!” one X user wrote.
“Young adults will never ever have a good credit rating. Why? Majority of young renters end up being late with a payment. It’s a new responsibility, jobs aren’t as good when young, roommates don’t pay up….. TRUDEAU IS DESTOYING THE CREDIT RATINGS OF CANADIAN YOUTH,” another person commented.
ADDITIONAL CHANGES FOR RENTERS
Additional measures announced in March include a new $15 million Tenant Protection Fund that will provide money for legal aid and tenants’ rights advocacy organizations to better protect renters from unfair rent hikes, bad landlords, and evictions due to renovations.
The government also announced plans for a new Canadian Renters’ Bill of Rights, that will be developed and implemented in partnership with provinces and territories. The bill would mandate that landlords share a history of apartment pricing so renters can bargain fairly. The bill will also crack down on “renovictions” and create a nationwide standard lease agreement.
