QUESTION PERIOD — Finance
New Residential Rental Property Rebate
November 29, 2023
My question is for the Government Representative in the Senate.
Senator Gold, on September 14 the Prime Minister announced an enhanced Goods and Services Tax Rental Rebate on new purpose-built rental housing to incentivize construction of much‑needed rental homes for Canadians. Some provincial governments have also announced the cancellation of provincial sales taxes for similar reasons. What is the estimated cost of this announcement to the federal government? Has there been an assessment of the potential impact of this announcement on rental housing supply? If so, what is this assessment?
Thank you for your question, senator. The government estimates that this measure will cost $4.565 billion in the period from 2023-24 to 2028-29. I understand further that private-sector economists have reported figures of 200,000 to 300,000 homes being created as a result of the GST rebate if the benefit is expected to be further amplified through provincial actions to lift their tax on rental housing.
Thank you for that answer. The government claims that on a two-bedroom rental unit valued at $500,000, the rental rebate would deliver $25,000 in tax relief. That is great news. But there is no guarantee who will enjoy these savings, and there is no mechanism in place to ensure that these savings are passed down to the tenant who, in the end, is the person this measure seeks to help. Will the savings go back to tenants and increase affordability? We must continue to strive to increase housing affordability.
Thank you. This is about, obviously, making more houses available at better prices for tenants. The GST rebate is a solution aimed at making the math of construction work for the builders, and economists predict that hundreds of thousands, as I said, of new builds will result, and that will increase the supply of rental housing. Supply and demand should benefit tenants.
