What's our generation's nation-building, major infrastructure project? It's housing

Globe and Mail

4 days ago

Brad Carr is the chief executive of Mattamy Homes Canada.
Prime Minister Mark Carney has an ambitious agenda, supported by the provincial premiers, to get Canada building more homes. This is good. The matter requires urgent, national attention to help more Canadians afford their own homes while building our economy.
We have to be conscious of how our country is falling short right now compared with what the country was once able to do. Canadians have been talking about this a lot lately in terms of nation-building projects. Where's our generation's Canadian Pacific Railway or St. Lawrence Seaway?
The answer: A townhome might not have a lot in common with a multibillion-dollar infrastructure project, but it does if it's one of tens of thousands. This is the kind of ambition the country needs. But we're not going to get to where we need to be unless all governments help by providing faster approvals and cutting government-building costs.
It's going to take a nation-building effort to unwind decades of stasis.
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I'm encouraged by the federal government's proposed measure to eliminate the federal portion of the sales tax on new homes worth up to $1-million bought by first-time buyers, with the GST rebate phased down as the home price approaches $1.5-million. But it's not enough.
With a few key changes we could improve the GST policy to make it fairer to consumers, no matter what stage of the buying process they're in or where they live in Canada.
First, Ottawa should apply the rebate at the closing of a home, not at the time of purchase. Right now, if someone bought a home under construction in early May, before the tax cut kicks in, but they don't close until after the cut is implemented, they won't receive it. This is creating confusion for buyers and challenges for builders who will have to explain to homebuyers why they will not receive the GST rebate, but someone who bought just weeks after them will. By applying the rebate to the closing date instead, we can create immediate certainty and motivate people to act now. Stimulating demand in the short term is critical.
Secondly, for the next 24 months the sales tax rebate should be expanded to include everyone buying a new home, not just first-time buyers; this time-limited change in policy will help incentivize demand at a time when housing sales are at a more than 30-year low. We can't build more homes if we aren't selling the ones already under construction. This temporary expansion will also allow the government to study the impact to home sales and the federal treasury – while giving Canadians much needed assistance to buy a new home.
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Additionally, while we want to make it easier for young adults to buy their first home, many Canadians are also struggling to afford a different home to fit their changing needs. It's tougher for young people than it was for my generation. But what about the person who bought a small condo a few years ago and now needs to buy a bigger home for their growing family? Or the senior who needs to downsize for one reason or another. Both situations would free up supply for another buyer, in turn helping more Canadians find a home they can afford.
Finally, home prices vary a lot across the country. A $1-million luxury home in Saskatoon costs a lot more in other markets. For example, the average price of a new home in the Greater Toronto Area is $1.12-million. So, someone buying an average home in the GTA will get less of a rebate on their federal sales tax than someone buying a luxury home in places like Saskatoon for $1-million. Ottawa should apply the rebate toward the first $1-million of the price of a home, so that Canadians in higher-cost regions of the country benefit as well.
Taking these three strategic steps, as well as the provinces agreeing to match the federal sales tax policy, would go a long way toward making all kinds of housing more affordable, while driving economic growth. This is especially important at a time when in the GTA alone, nearly 41,000 jobs and $10-billion in investment are at risk because of weakening home sales.
The new federal government is nothing if not ambitious. Let's go big together.