The federal government introduced new budget measures to help first-time homebuyers who have been shut out of various housing markets across Canada.

A 30-year amortization period for insured mortgages on new construction is a key change. The Home Buyer’s Plan also increased from $35,000 to $60,000 so buyers can use the tax benefits of an RRSP to save $25,000 more for their down payment faster.

The Residential Construction Council of Ontario (RESCON) said these initiatives aren’t quite enough to support first-time homebuyers, especially as incomes aren’t accelerating alongside the housing costs. Housing starts are also expected to decline as prices rise.

“We commend the federal government for seriously trying,” said RESCON president Richard Lyall. “There are positive measures here to assist purpose-built rental housing supply. That much is encouraging. But there is no relief for first-time buyers who have been pushed out of the market.

“They are being taxed on new housing at rates which would have crushed their parents and grandparents. Why are we doing that to them? Housing is a vital need and we are taxing it like alcohol and cigarettes. The cost of housing used to be three times the average household income but now it’s 10 times.”

Thirty-one per cent of the cost of buying a new home is attributable to taxes, fees and levies, according to a study done by the Canadian Centre for Economic Analysis.

Seventy-six per cent of people seeking to buy a home can’t afford to buy and live in what is being built. The average Canadian home costs $741,000 and the minimum income required to qualify for a mortgage is $195,000.

“The government’s failure to take solid steps to help first-time homebuyers is short-sighted and self-defeating in terms of meeting the challenge of the housing affordability and supply crisis,” says Lyall. “To ensure the health of our economy, we must do more to help these homebuyers get a foothold in the market. The budget missed the mark on that front.”