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Ottawa to remove GST on new rental housing, ask grocers to stabilize prices: PM

London, Ontario. – The Liberal government is dusting off a measure it promised years ago and pulling other parties’ proposals for cheaper groceries and more housing as it struggles to deal with affordability concerns for many Canadians. Still working.

“Canada’s promise is that every generation will rise above the last,” Prime Minister Justin Trudeau said Thursday.

“Our job as a government, as a team, is to deliver on that promise.”

He spoke to reporters at the end of a three-day caucus retreat in London, Ontario, with most of his party’s 158 MPs standing in the background and clapping as the announcement was made and Trudeau took questions from reporters.

MPs said there was a frank discussion at the return about why the Liberals are polling at their lowest level since taking power eight years ago.

Those polls show that Canadians believe the Conservatives would do a better job tackling affordability and housing concerns, while the NDP has aggressively called out corporations for the high cost of food.

Thursday’s announcements sought to address both issues.

Industry Minister François-Philippe Champagne said he will ask Canada’s five largest grocery companies to come up with a plan by Thanksgiving to stabilize prices, and that he will avoid forcing them to do so through tax measures. Not denying.

In a press release, the Liberals also said they would take steps to “increase competition in the Canadian economy”, giving the Competition Bureau the power to crack down on corporations that work together to suppress consumer choice – Exclusive Citing relatively large grocery stores that have prevented competition. Competitors were prevented from setting up shop nearby.

But most of Thursday’s measures relate to housing, with the federal government promising to remove the GST on construction of new rental apartment buildings — a move Trudeau first promised in the 2015 election that brought the Liberals to power.

On Thursday, Trudeau said the Liberals deliberately scrapped that promise because it did not respond to the needs of the moment.

Fraser said other housing policies were delivering “a better return on our investment” at the start of the Liberals’ tenure, but he said the GST cut is now a better tool to fix the problems that have arisen due to the COVID-19 pandemic. “which has made it more expensive to build the type of homes that people can actually afford.”

The measure will reduce labor and material costs for homebuilders, and Trudeau said he hopes other provinces will follow Ontario’s Thursday announcement that they will impose their own limits on the cost of building new rental homes. Will also remove sales tax.

The Liberals have also followed Conservative leader Pierre Poilievre in pointing the finger at municipalities for exclusionary zoning policies that prevent homes from being built.

Housing Minister Sean Fraser sent a letter to Calgary’s mayor on Thursday urging city council to make it easier for homeowners to rent out their basements. The current process involves a lot of paperwork and attempts to change the policy have led to heated council meetings.

“We will never solve the housing crisis in Calgary if it is not legal to build the homes needed right now,” Fraser wrote in a letter to Mayor Jyoti Gondek. Which he released on X, formerly known as Twitter.

The letter says cities should encourage building apartments near public transit in order to receive federal funding through the Housing Accelerator Fund.

On Wednesday, London became the first city to approve its funding. While $4 billion of funding was announced in the 2022 budget, applications opened in July. Trudeau blamed mayors for the delay on Wednesday.

Trudeau stressed that any progress on housing would require intergovernmental cooperation and time.

“This is something that all Canadians are concerned about,” the prime minister said.

“We know that housing is a problem that takes decades to solve.”

The opposition says the liberals are reacting too late.

At a press conference of his own, Poilievre promised similar measures that would reward and punish municipalities based on whether they have policies in place to encourage home building.

His proposals include removing the GST from the construction of new, affordable rental apartments, and he took aim at Trudeau for breaking his 2015 promise.

“He’s flopped again and he expects you to believe it,” he told reporters in Vancouver.

The NDP said they called for removing the GST on new, affordable rental buildings six months ago and said an entire construction season has passed since then.

He also questioned whether the measures would be targeted at affordable homes or include “luxury condos”.

Meanwhile, the Liberals are promising further, unspecified action on affordability this fall.

Champagne said it had noted moves by French supermarket chain Carrefour to achieve lower prices than global brands such as Nestlé and Unilever.

This week, supermarket chains started using “shrink inflation” warning stickers slapped on products that have shrunk in size but increased in cost while raw material prices remained stable.

This report by The Canadian Press was first published Sept. 14, 2023.

Dylan Robertson, The Canadian Press


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