Rental homes, grocery affordability addressed in new legislation
The federal government has introduced legislation to encourage more rental housing be built across Canada and to take the pressure off people at the grocery store.
Chrystia Freeland, deputy prime minister and minister of finance, introduced Bill C-56, the Affordable Housing and Groceries Act, in parliament Thursday, Sept. 21.
The legislation would remove the five per cent GST on new rental housing construction and increase competition, particularly in the grocery sector.
“Our priority since 2015 has been to build a strong middle class so everyone can succeed,” Freeland said.
“That’s why today I introduced our government’s first piece of legislation this fall, the Affordable Housing and Groceries Act, which removes the GST on new apartment construction, and will also help stabilize grocery prices for Canadians. With provinces like Ontario and Newfoundland and Labrador following our lead by eliminating provincial taxes on new rentals, we’ll get more rental housing built faster, and encourage new builds to break ground. We will continue working to deliver for Canadians from coast to coast to coast.”
The waiving of GST for new rental housing projects, which was announced by Prime Minister Justin Trudeau during the Liberal caucus meeting and met with a positive response from the Central Okanagan Home Builder’s Acssociation, would see the GST Rental Rebate increase from 36 per cent to 100 per cent and remove the existing phase-out thresholds for the materials and labour associated with new rental housing projects. The Canadian government said this measure would deliver $25,000 in tax relief for a two-bedroom rental unit valued at $500,000.
The rebate would apply to projects where construction began on or after September 14, 2023. It will remain in place for projects that are started before December 31, 2030, and completed by December 31, 2035.
“By removing the GST from new apartment construction, we are going to create more units at prices Canadians can afford across Canada,” Sean Fraser, minister of housing, infrastructure and communities, said.
“This is going to get builders to build projects that otherwise weren’t going to go ahead.”
The Competition Act portion of the legislation would see more power given to the Competition Bureau for investigating industries behaving unfairly, such as by price fixing or price gouging, and take enforcement action when these issues are uncovered.
It would also remove the efficiencies defence to end anti-competitive mergers that raise prices and limit choices for consumers, and empower the Competition Bureau to block collaborations that stifle competition and consumer choice, particularly in situations involving the grocery sector.
“More competition and less consolidation means lower prices,” François-Philippe Champagne, minister of innovation, science and industry, said.
“Our government is taking action to improve competition in Canada because that is the best way to advance the interests of consumers, and it will also make our economy more dynamic. We heard Canadians’ concerns, and we will always have their back.”
The change to the Competition Act to give the Competition Bureau more power around grocery prices came following public consultations with stakeholders and citizens.