I've been telling this to anyone who will listen...

At the federal level, any income, personal or corporate, from property rentals or short term rental of any single family residental property is taxed at the highest marginal rate, PLUS a surcharge of 1%, increasing at 2x the rate of inflation every year. All taxes raised from the surcharge go to federal housing programs.

At the provincial level, any property that isn't your primary residence gets taxed at 1% of the total property value. The tax rate increases at 2x the rate of inflation every year. All taxes raised go to provincial housing programs, including rebates for first time home buyers.

At the municipal level, cities should be able to tax any property used as a short term rental at whatever rate they feel is fair. Also, any vacant property is taxed at least double the provincial rate.

This immediately stops individuals and companies from investing in single family residential properties, forces individuals and companies to divest their residential property portfolio as they become unprofitable as the tax rates increase, and slowly creates a steady flow of residential homes onto the market. It shouldn't create a housing crash, it should stop and slowly reverse the upward trend of housing over the course of 5 to 10 years.

Please steal this idea.

I'm not sure if you mean "residency" as in residents of Canada, or residency as in living in the property.

Assuming it's the former: Removing some investors from the pool of buyers would probably help a bit, but I'm not sure it would have a significant impact outside of a few markets.

Assuming it's the latter: NB taxes non-primary residences at a higher rate and has still seen significant price growth.

The vast majority of the money being made is being made by single home owners who live in the property. Until you start dealing with that, nothing will change.