"Foreign capital is playing an important role in the real estate markets of Toronto and Vancouver, and has for some time."
This is the biggest pile of BS I have read in ages.  Note, this quote is NOT BASED ON FACTS.  There is absolutely no proof that 'foreign capital" is playing a role in the Toronto real estate market.  The anecdotal claims that foreign, i.e. Chinese money, is playing a role in purchasers of house ignores the fact that the Toronto area is a destination of legitimate Chinese immigrants, many of them want houses.
Second, in Toronto there is no evidence that housing is stilling empty.  If the houses are not sitting empty then they are providing housing to families.   
The answer to soaring real estate prices is simple,  raise interest rates.  That is the cause of the "frenzy" of buying and it will be the answer, along with changes the rules to allow the supply to adjust to the rising demand, from the Toronto CMA is growing faster than any other part of the country.