Federal Liberals Pledge GST Removal on New Rental Housing Constructions


The federal Liberals are planning to introduce a legislation that will remove GST from the construction of new rental housing, with the intent to backdate the change to mid-September, regardless of its enactment date, as per Housing Minister Sean Fraser in his statement on Monday.

The proposed bill will also emulate Prime Minister Justin Trudeau’s vow to extend the deadline by one year for small businesses to repay COVID-19 emergency loans. It aims to revise the federal competition law to effectively deter mergers that could lead to price escalation for Canadian consumers.

However, this bill marks one of at least three different bills, tabled by various political parties this fall, in response to the growing concerns about the housing shortage and affordability issues. As MPs resume after their summer break, they demonstrate their resoluteness to alleviate the inconvenience caused by inflation to Canadians.

Despite the summer break, the political ambiance remains heated in the House of Commons. The Conservatives capitalized on the summer to refurbish Leader Pierre Poilievre’s image and strategically enhance their attack against the government, blaming it for transgressing the values cherished by Canadians.

Before MPs convened again on Monday morning, government members lashed out against Poilievre and his political party, who appear to be gaining popularity in the polls at the Liberals’ expense. “We will not let self-serving partisan obstruction impede the results for Canadians,” asserted House Leader Karina Gould outside the House of Commons on Monday morning as she exhorted Poilievre and his party to rally with the government in addressing the housing shortage and rise in grocery prices.

The Conservatives also plan to present a housing legislation this week that will waive off the GST on some rental construction. This bill aims to withhold federal funding from cities that fail to facilitate more housing, and to retract infrastructure and transit funding when cities permit NIMBYism, an acronym for ‘not in my backyard,’ hindering new developments.

Conservative leader Poilievre announced plans to establish a system for Canadians to file formal complaints about NIMBYism with Ottawa. He highlighted one of his party’s main targets as reversing the “housing hell that Justin Trudeau has caused for Canadians paying mortgages, buying homes or renting apartments.”

Criticizing Liberal programs for their voluminous paperwork and sluggish implementation, Poilievre also mocked the Liberals “housing accelerator fund,” which took more than a year to be functional.

In contrast, Housing Minister Fraser acknowledged some agreement with the Conservative plan after studying it over the weekend, including the proposal to ensure decision-making on housing programs within 60 days by the Canada Mortgage and Housing Corp.

However, Fraser vehemently criticized the rest of the Conservatives’ plan as hastily developed ideas lacking concrete solutions to the very real problems with Canadian housing. He termed the NIMBYism reporting system as a neighborhood snitch line that won’t contribute to new home construction. He also pointed out the Conservative GST promise would primarily apply to low-cost rentals, while the Liberals aim to eliminate the tax from all new rental construction.

Besides seeking changes to the Competition Act, the Liberals are pressing the heads of the biggest grocery chains to devise a plan to reduce grocery prices, with potential tax measures as a contingency plan.

Meanwhile, NDP Leader Jagmeet Singh proposed a bill to vest more powers in the Competition Bureau to clamp down on price gouging by grocery stores and grant them more tools to safeguard consumers. He criticized the Liberal government’s inertia and offered an effective law solution before the festive season intensifies the demand for groceries.

The Liberals also plan to table a legislation this fall to establish a national pharmacare program, aligning with their agreement with the NDP. As part of the agreement inked in 2022, the NDP agreed to back the Liberals on significant votes in the minority Parliament in return for the enactment of some NDP priorities.

The House agenda firstly addressed a bail reform bill which intends to tighten the eligibility criteria for violent offenders to receive bail, in line with the demands of the Premiers for the past several months.


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