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The International Monetary Fund suggests policymakers’ work may not be done in terms of cooling the Canadian housing market.

Specifically, the IMF says policymakers should look at both macroprudential measures, which address the financial system as a whole, and taxes to target “speculative and investment activity.”

The Fund suggests provincial and federal levels of government work together more and intensify efforts to gather data on real estate activity and ownership info.

“Tackling housing market imbalances should be a joint responsibility of both the federal and provincial authorities given the regional divide in housing imbalances,” says the IMF in a recent statement on the Canadian economy.

To wit, excluding the Greater Toronto Area and Greater Vancouver shaves more than $150,000 off the average national home price, which was $559,317 in April, according to the Canadian Real Estate Association (CREA).

That’s up 10.4 per cent compared to the national average in April 2016.

Should the economy take a turn for the worst, the IMF prescribes fiscal stimulus as “the first line of defense.”

Cutting the historically low overnight rate further could increase vulnerabilities related to ballooning household debt, the IMF notes, but adds the risky maneuver might “become necessary if there is a significant contraction in economic activity.”

Canada’s economy has become increasingly dependent on housing-related activity, whether it be from construction and renovation or finance and insurance.

Meantime, the Fund also calls into question previous attempts by provincial governments to rein in markets in Ontario and BC.

IMF says BC’s foreign-buyer tax for Metro Vancouver “discriminates against non-resident buyers,” as does Ontario’s for the Greater Golden Horseshoe.

“Non-resident activity is not the sole driver of housing prices, as residents also contributed to the spike in prices,” reads the IMF report.

The Fund suggests swapping out these taxes in favour of broader tax-based measures.

“This could include a combination of prudential and tax-based measures that discourage speculative activity without discriminating between residents and non-residents,” the report continues.

Some observers have called for a home-flipping taxes for Vancouver and Toronto, while at least one Toronto realtor suggests applying a special tax on buyers snapping up second or third homes.

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