(London) The government is recycling a promise it made in 2015 before abandoning it: the elimination of the goods and services tax (GST) on the construction of new residential buildings intended for rental.
Prime Minister Justin Trudeau will announce this measure among others following his caucus meeting in London, Ontario, a senior government source said. The measure will come into force this Thursday, the same day of the announcement, added this same person.
The announcement will be made in the company of the Ministers of Housing, Sean Fraser, of Innovation, François-Philippe Champagne, and of Finance, Chrystia Freeland.
The Trudeau government made a commitment in 2015 to fully exempt all new capital investments in affordable rental housing from the GST, but the promise was abandoned.
“The government has concluded, based on research and evidence, that there are more effective ways to encourage the construction of affordable rental housing than through sales tax rebates,” reads a site that was created to track ministers’ mandate letters.
“The government has instead invested directly in the construction and renovation of affordable housing,” it is also written under a section entitled “No longer considered”.
Pressure is strong on the Trudeau government to do more to facilitate access to housing. A month ago, the issue was identified as the priority for the Cabinet retreat, but no announcement was made following the meeting.
The day before, the Prime Minister announced a concrete project on the sidelines of his caucus meeting, which is being held in London: an agreement with the City of London for the creation of 2,000 additional housing units over the next three years.
This agreement is the first funded by the Accelerate Housing Fund, launched in March to provide local governments with money to accelerate the construction of 100,000 new homes across Canada
In doing so, he called on mayors across the country “to show ambition” to receive the funds.