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The Ontario government has little choice left but to enact a 15 per cent tax on foreign home buyers, says CIBC World Markets deputy chief economist Benjamin Tal.

More than a month after the British Columbia put into effect a similar tax, Ontario has made no mention on what action it will take to cool the red hot Toronto housing market. The Greater Toronto Area is now the lone market experiencing a rapid price surge in Canada, says Tal, as evidence emerges Vancouver’s market is now cooling.

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“With other centres taxing foreign investment, Ontario will have little choice but to do the same,” he said in a note to clients.

The economist goes on to explore a few other housing policy options that both provincial and federal governments will potentially need to use to fix the current market. Tal notes that even if home prices in Canada stop increasing today, the imbalance has left the Canadian economy in a dangerous imbalance.