The federal government’s decision to eliminate the GST on purpose-built rentals is expected to add tens of thousands of units to the housing market. But it’s just the first step needed if Canada wants to actually close the housing gap.
Prime Minister Justin Trudeau this week announced the move to waive the federal portion of the HST on the construction of rental housing.
Mike Moffatt, senior director of policy and innovation at the Smart Prosperity Institute in Ottawa, is still trying to figure out precisely how the elimination of the tax will impact supply. But he crunched the numbers after the federal announcement and says some back-of-the-envelope calculations are encouraging.
“I think this could increase supply by 200,000 to 300,000 by end of 2030, but that was a really rough estimate,” he told CBC News.
That’s encouraging, but industry players say governments at all levels must do more — much more — to build enough housing in this country. The Canada Mortgage and Housing Corporation (CMHC) says 3.5 million new homes are needed by the end of 2030.
That would require Canada to build at a faster rate than this country has seen in decades. But there are some simple steps that can help move things along.