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In a statement, Sousa said the Ontario government “recognize(s) that all levels of government have a role to play” in addressing housing affordability and the stability of the market.

“That is why we are participating in a working group with the federal government, the B.C. government, and the cities of Toronto and Vancouver,” the statement says. “We remain open to options that would help relieve the burden of housing affordability and make everyday life easier for the people of our province. We will continue monitoring the housing market in both Ontario and British Columbia over the course of the next few months to see the impacts of this decision.”

Doug Porter, the chief economist with Bank of Montreal, has suggested Ontario look at a similar tax, especially given its fiscal position and the revenue the tax would generate.

“It comes down to who the potential buyers are,” said Porter, referring to whether those buyers will shift their purchases to Toronto from Vancouver. “Are they completely indifferent to where they are buying? I can’t believe they are all falling into that. I think the city actually matters. Over time there might be some spillover.”

Alyssa Furtado, chief executive of RateHub, said she can see some of the foreign investment trickling over to Toronto, but predicts that if it happens Ontario will see a similar tax.

“If we continue to see prices or rate of appreciation go up in Toronto, it has to be looked at as a lever,” said Furtado, adding that there are indications foreign ownership in the city may already be higher than some think.