Finance Minister Chrystia Freeland is pledging that post-secondary students will soon be able to benefit from the government’s goods and service tax (GST) rebate on new rental construction through a planned expansion of the billion-dollar-a-year program to include student housing.
While the details of the expansion are still scant, Ms. Freeland said Budget 2024 would reveal more of the government’s plan targeting housing issues young people are facing.
“We are announcing real, tangible, carefully thought-through measures that are going to help more younger Canadians get those first keys of their own,” Ms. Freeland said at a recent press conference at the College of Carpenters and Allied Trades in Vaughan.
“We are using every single tool in our toolbox to deliver housing without delay—because we need to make the dream of homeownership a reality for younger Canadians.”
Now the federal budget is expected to expand on the GST holiday to include purpose-built student residences constructed by colleges and universities, according to Blacklock’s Reporter. The budget will also raise the capital cost allowance on new construction of rental properties from 4 percent to 10 percent.
“Faced with a shortage of housing options and rent which is just too high and home prices which feel out of reach, too many younger Canadians feel that dream of getting your first set of keys, of owning your own house, is just that—dream,” Ms. Freeland said at the press conference on April 12.
“Too many young Canadians feel as if the deck is stacked against them. They can get a good job, they can work hard, but far too often the reward of a secure, prosperous, comfortable middle class life is out of reach. That is not OK.”
The student housing announcement is one of a string of similar announcements by the Liberals ahead of the April 16 budget.
GST Rebate Plan
The government has yet to give an estimate of how many new rental apartments it expects to be built as a result of the GST holiday, despite the rebate program being announced last fall.Prime Minister Justin Trudeau said on Sept. 14 the measure would see “millions of people, thousands of people, getting into new apartments.”
Housing Minister Sean Fraser testified at the House of Commons’ human resources committee last September that he had seen estimates “as high as 200,000 to 300,000 new homes for Canadians over the next 10 years.”
Canada Mortgage and Housing Corporation CEO Romy Bowers told the Senate national finance committee in December that Canadian builders would have to triple the number of housing starts to restore housing affordability by 2030. She said plans to reach this goal are still in development.
The CMHC has said Canada needs 3.5 million new homes by 2030 to restore affordability in the housing market.
Canada’s population has been growing at an unprecedented rate in recent years and that growth is not expected to slow any time soon. Immigration, Refugees and Citizenship Canada’s revised immigration quotas will see 485,000 arrivals this year, and 500,000 in 2025.
