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A week after the federal and Ontario governments announced they would cut the HST for new homes bought in Ontario for a year, the federal housing minister said he is in talks to expand the initiative.
“We are in discussions with all of the provinces and territories about taking down the GST for one year on new home purchases,” Housing Minister Gregor Robertson said in an interview with Global News.
The minister did not provide a timeline as to when agreements with other provinces may be announced, but emphasized that provincial governments will be expected to put up their own money or bring forward new legislation.
“That does take some negotiating. The provinces have to do the follow-through, working with local governments,” Robertson said.
“There’s some details to work through here.”
Last week, the federal and Ontario governments agreed to remove the 13 per cent sales tax on new homes in the province, valued up to $1 million for one year.
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The maximum rebate of $130,000 extends to homes valued up to $1.5 million and decreases proportionally for more expensive houses.
Both governments also agreed to split $8.8 billion over 10 years, to pay for infrastructure in Ontario cities that cut development charges, which are municipal taxes levied to pay for things like sewers and roads to new subdivisions.
The federal Conservatives have called for a complete elimination of HST on all new housing, regardless of price, but Robertson said he didn’t think the GST cut would be permanent.
“I think that the point right now is to really infuse some momentum in the market, especially in Ontario and B.C, where they’ve been struggling,” Robertson said.
Vancouver Mayor Ken Sim called on British Columbia Premier David Eby to secure a similar housing deal with the federal government on Thursday.
“We know the only way to improve long-term affordability is to keep building more homes,” Sim said in a statement.
“This is a window of opportunity for the province to partner with the federal government and municipalities to lower costs and deliver the homes people need.”
The Canada Mortgage and Housing Corporation is predicting Canadian homebuilders will continue to face headwinds from higher costs, weaker demand and more unsold homes particularly in the condominium market, with new home construction set to decline through 2028.
When asked if the removal of the HST from Ontario home purchases was done with developers in mind, the minister said he is trying to avoid the worst effects of a sluggish housing market.
“There are going to be very few housing starts in the next couple of years because the pre-sales have been so low. We’re certainly seeing layoffs in the building sector in (Toronto and Vancouver),” Robertson said.
“The construction jobs unfortunately will be impacted in the next year or two, so you know we’re going to see a ripple effect here. That’s what we’re trying to prevent.”
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