Home / Around Canada / Tax incentives, GST removal, favourable financing still on table as government hopes to ease housing pain

Tax incentives, GST removal, favourable financing still on table as government hopes to ease housing pain

Housing Minister Sean Fraser says the government is still considering a wide range of potential moves to help ease the acute housing insecurity Canadians across the country are feeling. 

Poilievre calls current situation “fundamentally unjust and wrong,”

Sean Fraser, Minister of Housing, Infrastructure and Communities, prepares to speak during a housing announcement outside a rental housing building being developed by the University of British Columbia Properties Trust, in Vancouver, on Wednesday, August 16, 2023.

Housing Minister Sean Fraser is keeping a wide range of options on the table as he looks to make a dent in a national housing shortage that is tarnishing both the wellbeing of Canadians and the political fortunes of the governing Liberals.

“There’s a range [of incentives] that we’re considering right now. Some could include potential tax incentives for builders to build. Some could include other low-cost financing arrangements,” Fraser said in an interview on Rosemary Barton Livethat aired Sunday.

He said removing the GST on affordable housing projects and dedicating federal lands to rental housing were also on the table, though the government needed to proceed with caution.

“We want to be very careful about how we design some of these programs because we don’t want to be in a position where we create tax incentives that end up subsidizing luxury apartments,” he said.

Trudeau promises housing solutions, defends immigration numbers

Under pressure in the polls, Justin Trudeau’s new cabinet began a three-day retreat in Charlottetown, where the prime minister promised housing affordability solutions and defended Canada’s immigration numbers.

Housing has ascended to be perhaps the foremost political issue in the country, with the federal government under fire from opposition parties to move more quickly. Housing is primarily a provincial and municipal responsibility, though the federal government does play a role through the Canada Mortgage and Housing Corporation and its own housing strategy.

Conservative leader Pierre Poilievre continued to hammer the Liberals over housing on Friday, when he delivered an address to party faithful at his first policy convention as leader.

Poilievre, whose party has taken what polls suggests to be a double-digit lead over the Liberals, recounted one story of a construction worker in Sault Ste. Marie who was struggling to find a new affordable apartment.

“An economy where the people who build our homes can’t afford to live in them is fundamentally unjust and wrong,” he told the crowd in Quebec City.

NDP leader Jagmeet Singh has also called on the government to make rapid changes, including the removal of the GST on affordable housing developments.

Interest rate crunch

Fraser told Barton that a primary focus was to spend money already allocated for existing programs more quickly and efficiently, ensuring Canada could grow its construction workforce, and encouraging relatively underdeveloped industries like factory-built homes.

Fraser, the former federal immigration minister, made waves last month when he said the government might consider capping the number of international students entering Canada as a way of easing some pressure on the housing system. Immigration generally has become entwined with housing as a political issue, though the government argues immigration is necessary to boost Canada’s economy and fill key jobs, like construction.

Fraser said the overall fight to fix the situation had taken a blow with recent hikes in the interest rate.

According to the CMHC, Canada needs to build 3.5 million more homes by 2030. So what’s it going to take? Paul Haavardsrud finds the answer is simple and complicated.

“Look, the interest rate environment has me deeply concerned on a number of different fronts,” Fraser told Barton.

That included the potential that people lose their homes, Fraser said, but also that developers would now find it economically disadvantageous to build during a high-interest environment.

“Though I respect completely the independence of the bank, I was pleased to see that they paused any rate hikes at this particular interval. And I’m hoping that we can continue to fight inflation to have the bank bring those interest rate down over time,” he said.

Problem extends beyond traditional pricey cities

The housing situation is biting across the country, even in regions where homes have traditionally been cheaper than citeis like Toronto and Vancouver. In Calgary, for example, Mayor Jyoti Gondek said she was unfortunately not surprised by a recent report that revealed soaring rent and home prices in city.

“We are in a situation where many people are doing fine and you know, they’re not really paying attention to the crisis that we have upon us,” Gondek told Barton in a separate interview airing Sunday.

Gondek said a range of policies were needed to address the complex situation.

“It all matters. We have to deliver market-based housing that people can afford. We also have to have the affordable housing for people who need support. So we’re looking at all of it holistically so that we’re not forgetting one segment of the population.”

A major ad campaign launched by the Alberta government advertised the province as a low-cost housing area.

“Yeah, if you if you’re calling people to come here, you have to make sure that they’re able to live with dignity in a great community that’s got great amenities,” Gondek said.


  • The article has been updated to clarify the proposal of some advocates to remove GST from affordable housing projects.
    Sep 10, 2023 3:58 PM ET


Christian Paas-Lang


Christian Paas-Lang covers federal politics for CBC News in Ottawa as an associate producer with The House and a digital writer with CBC Politics. You can reach him at christian.paas-lang@cbc.ca.

With files from Rosemary Barton, Lisa Mayor and Sarah Ramsaran

Credit belongs to : www.cbc.ca

Check Also

India tells Canada to withdraw 41 diplomats, report says, as diplomatic fight worsens

India has told Canada that it must repatriate 41 diplomats by Oct. 10, the Financial …