The federal government's GST/HST legislation must meet the needs of the GTA housing market
A few weeks ago, the federal government tabled its proposed GST/HST reduction measures on new homes. Unfortunately, like many federal housing policies, the proposal to exempt first-time new home buyers from the GST for homes under $1 million and provide a declining exemption to homes for $1.5 million does not recognize the realities of the Greater Toronto Area (GTA) and will have little impact on housing supply and affordability in this region.
Article content
Article content
The fact that the government is proposing even this limited measure is a tacit acknowledgement that the tax, along with the other myriad of government fees and taxes heaped onto new homes, is now one of the barriers to affordability. This is compounded by the failure to keep structural mechanisms, such as the GST/HST new housing rebate program current to market property values. That said, the current federal proposal is lacking in many ways.
Article content
Article content
First, is the comparatively small number of new home buyers who are first-time buyers in the GTA. While the number may be higher in other jurisdictions, in the GTA, estimates of first-time buyers as buyers of new homes are between five and 10 per cent. Recognizing that resale homes do not attach GST/HST means that the total number of people who would benefit in the GTA ranges between 1,500 and 3,000 in an average year, and a paltry 500 to 1,000 people based on 2024 annual sales. In a metropolitan area that represents 20 per cent of the Canadian population — and is one of the fastest growing regions in North American — this is a symbolic drop in the bucket.
Article content
Second, the dollar figures used are geographically biased. While $1 million will buy a very well-heeled detached single-family home in almost every other part of Canada, except the GTA and the lower mainland of B.C., the average price for a new condominium in the GTA in April was $1,019,120 and $1,530,126 for a single-family home (including townhomes, semis and detached). So, while a purchaser in Ottawa can buy a fully detached single-family home in the mid-$800,000s and pay no GST, a comparable product in the GTA would cost in excess of $1.5 million and attract nearly $70,000 in GST. And before you say, 'but salaries in the GTA are higher,' the average annual household income in Ottawa is $125,700 and in the GTHA it is $129,000. By selecting dollar thresholds that are not reflective of high-property value jurisdictions, the federal government is basically ignoring the regions where the need is the greatest.
Article content
Last, when the GST was introduced, it had a corresponding rebate program that applied to 95 per cent of purchasers so that it would 'not pose a barrier to the affordability of new housing in Canada (page 21).' Now, with properly values effectively excluding anyone in the GTA from a GST rebate, and such a narrow federal proposal, effectively 90 to 95 per cent of homes are subject to the GST and receive zero rebate. This means less incentive to move up in new housing as families grow and expand, or down in new housing as seniors age and look to downsize, limiting mobility within existing housing stock and impeding the addition of appropriately sized new supply.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
CTV News
30 minutes ago
- CTV News
Third Link: Quebec again beguiles possibility of new project
Quebec Transport Minister Geneviève Guilbault talks about the Third Link on June 12, 2025. (LA PRESSE CANADIENNE/Jacques Boissinot) With less than a year and a half to go before the provincial election, the Coalition Avenir Québec (CAQ) government is once again dangling the prospect of a Third Link project – without committing to any potential costs. The corridor, chosen by Transport Minister Geneviève Guilbault, is farther west and closer to the two existing bridges than previous proposed routes. A third link farther east would have been more expensive, according to the minister. The proposed project is a bridge-tunnel that accommodates both freight trucks and public transportation. The precise route and 'target budget' are not expected to be unveiled until the fall. From east to west The CAQ government has been very indecisive about the Third Link project in the past. In 2019, it proposed a tunnel to the east that would pass under Île d'Orléans. Then, the government changed its mind and floated the idea of a route farther west that would connect the two city centres of Quebec City and Lévis. In April 2023, Guilbault announced that her government was abandoning the project for a highway link between the cities. Instead, she proposed a tunnel dedicated to public transit. Then, in October 2023, less than 24 hours after his crushing defeat in Jean-Talon by the Parti Québécois (PQ), Premier François Legault took everyone by surprise by announcing that he, again, wanted to consult the people of Quebec City about the Third Link, and all options were on the table. The project was revived in June 2024 despite an unfavourable report from the Caisse de dépôt et placement du Québec, which had analyzed several potential corridors. – This report by The Canadian Press was first published in French on June 12, 2024.
CBC
31 minutes ago
- CBC
Bike lane proponents decry 'overreach' after committee votes not to hear them until July
Social Sharing Proponents of a protected bike lane along Winnipeg's Wellington Crescent accused city council's public works committee of a "gross overreach of power" after dozens of people slated to speak at city hall on Thursday had their delegations cancelled and put off until a meeting in July. No fewer than 27 people signed up to speak to the committee about a proposal to create a temporary bike lane on Wellington, where cyclist Rob Jenner was killed last year by a speeding motorist who lost control of his vehicle. The item was on the agenda to allow the committee to consider a request by city transportation engineers to have another month to complete a report about the temporary bike lane. Citing the request for the extension, committee chair Janice Lukes (Waverley West) moved to suspend city council rules and hear the delegations at the next public works committee meeting, slated for July 3. Lukes, as well as councillors Markus Chambers (St. Norbert-Seine River) and Ross Eadie (Mynarski), then voted not to hear the delegations. The fourth member of the committee, council speaker Devi Sharma (Old Kildonan) left the committee floor and did not take part in the vote. The decision led some people watching in the council gallery to shout at the committee, prompting Chambers to ask security to clear the council gallery of some spectators. This proved to be temporary. Linda van de Laar, who took a day off from her job as a cardiac nurse at St. Boniface Hospital to attend the meeting, said she was upset city councillors effectively silenced people unhappy with the time the city is taking to improve safety along Wellington Crescent. She accused the committee of overreaching its powers and engaging in an unprecedented move by shutting out registered delegates. "The councillors are here to represent the citizens and the residents, so I do not understand it," van de Laar said outside city hall. "A lot of people here took time off from work to be here. I personally cannot make it on July 3. I'll be on a night shift," she said. Ian McCausland, a Bike Winnipeg board member who was able to address the committee because he also registered to speak about another item on the agenda, said he is concerned about the message sent by the committee to people who take the time to engage with city councillors. "It speaks to how much the city might value the input from the average citizen," he said. "I'm hoping that this is a one-time thing and that they actually continue to engage with all stakeholders on the project." Van de Laar said she was especially upset Lukes told CBC Radio on Wednesday she would hear delegates on Thursday. 'I'm disappointed too,' councillor says Lukes, who volunteered as a bike and pedestrian trail activist prior to running for council in 2014, said she knows what it's like being on the outside of council, looking in. "I don't think there's anyone here that understands the level of frustration like I do, because I was an advocate and came down 50 to 60 times, very frustrated," she said during a break in the committee meeting. "Then I actually decided to put my name on a ballot and see if I can make change on this side of the table. Making change is not easy, I've come to learn, on either side of the table." Lukes said she was the councillor who originally pushed to reduce the speed on Wellington Crescent and she too is disappointed. "Everyone's disappointed. I'm disappointed in some of the things that have been said to me and to the committee members. They're disappointed that we don't have a plan in place," she said, referring to the delegates. "I'm disappointed too, but we will have a full report next month." Lukes said the city is moving more quickly on a protected bike lane on Wellington Crescent than it has on other protected lanes. She said a temporary barrier is the only option right now because permanent barriers are built when streets undergo full renewals — and Wellington Crescent is not slated for this work any time soon.
CBC
31 minutes ago
- CBC
City of Hamilton infrastructure deficit is somewhere between $3 billion and $8 billion
Social Sharing The City of Hamilton could be short $5.2 billion needed to replace and repair existing infrastructure over the next 10 years – but that number could also be as low as $3.18 billion or as high as $7.42 billion. City officials don't really know. "We're focused on improving data confidence," Amber Dewar, a senior program analyst in corporate asset management, told city councillors at Wednesday's General Issues Committee meeting. "Our data confidence is low-to-medium, indicating these values could change," she added, noting they could swing up to 40 per cent in either direction. According to Dewar's presentation to councillors, "the 10-year infrastructure funding gap represents the difference between the total available budget and the estimated lifecycle forecast needs over 10 years to maintain current levels of service targets. If the forecasted lifecycle needs exceed the available budget, it indicates there is a funding shortfall between what is required and what is available to fund service levels." Deficit estimate increased due to new data and inflation: analyst City infrastructure includes water and wastewater systems, roads and city-owned buildings and properties, among numerous other categories. The total replacement value for the assets in question is valued at $39.4 billion. The biggest gaps are in CityHousing Hamilton, roads, water and Hamilton Police. Dewar said there are other ways to move forward than jumping immediately to hiking residential taxes, noting that making up the gap all at once would require a significant jump. "We can prioritize different projects differently," she said. "We can consider reducing expected levels of service where we are not seeing value… We are going to have to increase funding allocations but if we do all this work first, we know what areas we have to be targeting." Dewar said the infrastructure deficit jumped from the city's previous estimate of $3.8 billion because of data improvements that helped assessors better understand the situation, but also because of inflation. She added that there are areas where the gap has decreased since the last update, also due to access to more precise data from some departments, as well as budget allocations from council that reduced the gap between what was needed and what was allocated. The update was included in a report on the city's asset management plans, part of a process mandated by the provincial government. Councillors were presented with multiple, dense documents as well as several recommendations. Ward 4 Coun. Tammy Hwang noted that the information isn't presented in a way that helps her know how to apply it to city budgeting and decision-making, something other councillors appeared to concur with. "Is there a way to make this a little more legible to me, and also to members of the public" she asked. "How would we understand how to adjust levels of service given these recommendations?" Earlier this year, the city earned a failing grade in a think-tank report on budget transparency, partially because its reporting was difficult to understand for the average person. Dewar told councillors that the latest reports and updated numbers are just one step along a longer-term journey to create a financial plan that addresses the shortfall. Mike Zegarac, the city's general manager of finance and corporate services, noted that council directed staff to begin to address this funding gap last year, a practice that had not taken place with past councils. He said that about 20 per cent of this year's residential tax increase is going toward addressing these needs. Councillors voted Wednesday to have a special, full-day GIC session solely focused on asset management, service levels, and the city's financial plans. That will be scheduled sometime before July 1, when the province requires all municipalities to submit their proposed levels of service and a financial strategy. Ward 1 Coun. Maureen Wilson noted that needs such as road repairs are much greater in the lower city. She said there is a "narrative on social media that this council doesn't have its head on straight and is not tethered to reality," and that "the city is falling apart and is neglecting its core assets," but council should in fact be recognized for making plans to tackle the problem. "It is this term of council that has made the adult decision, based on evidence, that we are not going to ignore this reality anymore," she said.
