In a bid to address soaring living costs for Canadians, Finance Minister Chrystia Freeland has introduced a legislation aiming to eliminate the Goods and Services Tax (GST) from new rental developments and overhaul the country’s current competition laws. This new bill, branded as ‘The Affordable Housing and Groceries Act,’ or Bill C-56, seeks to provide more affordable housing and groceries for Canadian residents.
Prime Minister Justin Trudeau, who has been recently grappling with political pressures, endorsed the bill’s raft of measures as part of his broader efforts to assuage Canadians’ financial concerns. Following his UN trip in New York City, Trudeau appealed to opposing parties to rally behind the government’s new legislation.
Against a backdrop of burgeoning costs of living issues, Trudeau emphasized the government’s focus on improving affordability for Canadians and reaffirmed their commitment to roll out further solutions in the imminent weeks.
The primary objective of Bill C-56 is to bolster the development of apartment buildings, student residences, and senior living facilities by offering a fully rebated GST paid on new purpose-built rental housing, a significant increase from the current 36 per cent rebate. The tax relief initiative is designed to cater to new residential units with a minimum of four private apartment units with private facilities or at least ten private rooms or suites, reserved primarily for long-term rental.
One of the bill’s forecasted financial impacts is a tax relief of $25,000 for a two-bedroom rental apartment appraised at $500,000, which represents an estimated expenditure of $4.5 billion over the program’s fiscal period.
The government also aims to layer on heightened protection for Canadians dealing with the nation’s grocery sector competition, which is heavily controlled by a select few companies. Delineated in Bill C-56, the government is formulating amendments to give the Competition Bureau wider authority to probe and prosecute unfair practices such as price-fixing or price gouging.
The Competition Bureau will be authorized to request information from companies via court orders, bar partnerships that throttle competition and consumer choice, and bring to a halt anti-competitive mergers that aggravate the expense and limited options Canadian consumers grapple with.
Nonetheless, the Business Council of Canada warned the bill’s competition provisions may potentially deter business investment and adversely affect competition, which might ultimately be detrimental to the consumers. Rebutting this, Industry Minister Francois-Philippe Champagne stressed the need for less consolidation, more competition, and lower prices, affirming that their objective is to promote competition in the nation’s economy.
