The Liberal government is looking to spur the construction of new rental stock and increase competition in industries like Canada’s heavily concentrated grocery sector as part of a new bill aimed at improving affordability for Canadians facing a cost of living crisis.
Finance Minister Chrystia Freeland tabled Bill C-56, the Affordable Housing and Groceries Act, in the House of Commons on Thursday.
It includes two announcements previously signalled by Justin Trudeau’s government: giving a rebate for GST paid on the construction of new purpose-built rentals and reforms to the country’s competition laws aimed at giving more teeth to the federal watchdog.
Government officials briefed the media on the details of the bill on Thursday.
According to officials, the GST rebate will apply to any building with at least 90 per cent of its units designated for long-term rental where construction started as of Sept. 14, when Trudeau first announced the proposal. Projects must have at least four private units to qualify for the rebate, or 10 individual units for student or senior living residences.
There are no quotas for affordable housing or otherwise below-market rents to be included in the approved projects.
According to the finance department, the measure will provide $25,000 of tax relief for a two-bedroom apartment valued at $500,000. Projects funded via the rebate must be “substantially completed” by 2036, according to the text of the bill.
The GST rebate is expected to last until the end of 2030 — the year that the Canada Mortgage and Housing Corp. has flagged the country will need to add some 3.5 million additional homes on top of the current pace of building to restore affordability to the national housing market.
Changes to the Competition Act proposed in the bill would be the first major review of that legislation since 2009, according to government officials who spoke to media Thursday.
The bill will give the Competition Bureau the ability to compel documents from subjects as part of its probes — something that was cited as a barrier to the watchdog’s investigation of concentration in the grocery sector earlier this year.
The changes would also remove the “efficiencies defence” in approving proposed mergers. The logic underpinning this argument had been that deals ought to be approved if the efficiency gains in a business’s operations would offset the drop in industry competition as a result of a merger or acquisition.
The new bill, touted over the past week by Liberal ministers, headlines the fall sitting at the House of Commons where affordability issues have thus far dominated debate.
Freeland is expected to speak to the media later this afternoon.
More to come.
— with files from the Canadian Press
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