Government introduces legislation to build more rental homes and stabilize grocery prices
September 21, 2023 - Ottawa, Ontario - Department of Finance Canada
Today, the Honourable Chrystia Freeland, Deputy Prime Minister and Minister of Finance, introduced Bill C-56, the Affordable Housing and Groceries Act, the first piece of government legislation introduced in the fall parliamentary sitting.
This legislation would deliver urgent action to help make life more affordable for Canadians by removing the GST on new rental housing construction across the country. This legislation would also increase competition, particularly in the grocery sector.
Bill C-56, the Affordable Housing and Groceries Act would:
- Enhance the Goods and Services Tax (GST) Rental Rebate on new rental housing, to incentivize the construction of more apartment buildings, student housing, and senior residences. This enhancement increases the GST Rental Rebate from 36 per cent to 100 per cent and removes the existing GST Rental Rebate phase-out thresholds, for new rental housing projects. For a two-bedroom rental unit valued at $500,000, the enhanced GST Rental Rebate would deliver $25,000 in tax relief.
- Amend the Competition Act to enhance competition, particularly in the grocery sector. The proposed amendments to the Competition Act will:
- give more power to the Competition Bureau to investigate when industries are behaving unfairly, for example where price fixing or price gouging is occurring, and take enforcement action;
- remove the efficiencies defence, to end anti-competitive mergers that raise prices and limit choices for Canadian consumers; and
- empower the Bureau to block collaborations that stifle competition and consumer choice, particularly in situations where large grocers prevent smaller competitors from establishing operations nearby.
The legislation introduced in Parliament today represents the latest set of affordability measures to support Canadians with the cost of living. The government will continue fighting for the middle class by using every available tool to make life more affordable from coast to coast to coast.
“Our priority since 2015 has been to build a strong middle class so everyone can succeed. That’s why today I introduced our government’s first piece of legislation this fall, the Affordable Housing and Groceries Act, which removes the GST on new apartment construction, and will also help stabilize grocery prices for Canadians. With provinces like Ontario and Newfoundland and Labrador following our lead by eliminating provincial taxes on new rentals, we’ll get more rental housing built faster, and encourage new builds to break ground. We will continue working to deliver for Canadians from coast to coast to coast.”
- The Honourable Chrystia Freeland, Deputy Prime Minister and Minister of Finance
“More competition and less consolidation means lower prices. Our government is taking action to improve competition in Canada because that is the best way to advance the interests of consumers, and it will also make our economy more dynamic. We heard Canadians’ concerns, and we will always have their back.”
– The Honourable François-Philippe Champagne, Minister of Innovation, Science and Industry
“By removing the GST from new apartment construction, we are going to create more units at prices Canadians can afford across Canada. This is going to get builders to build projects that otherwise weren’t going to go ahead.”
– The Honourable Sean Fraser, Minister of Housing, Infrastructure and Communities
To encourage the building of more rental housing, the removal of GST will apply to new purpose-built rentals, such as apartment buildings, student housing, and senior residences built specifically for long-term rental accommodation.
- The enhanced GST Rental Rebate would apply to projects that begin construction on or after September 14, 2023, and on or before December 31, 2030, and complete construction by December 31, 2035.
Today’s legislation builds on other recent measures to make life more affordable for Canadians, including:
- Providing the Grocery Rebate to approximately 11 million eligible low- and modest-income Canadians and families hardest hit by rising food prices across the country, with rebates ranging from $234 for singles without children to $467 for families with two kids.
- Providing a one-time top-up of $500 to the Canada Housing Benefit, delivering $402 million to more than 500,000 individuals and 303,000 families as of June 7, 2023.
- Enhancing and expanding the Canada Workers Benefit by introducing automatic advance payments, to put money in the pockets of Canada’s lowest-paid—and often most essential workers—faster.
- Delivering child care for $10-a-day on average in every province and territory in the coming years and supporting the creation of more child care spaces by the Government of Quebec. Additionally, thousands of much needed child care spaces have already been created in communities from coast to coast to coast.
- Making Canada Student Loans and Canada Apprentice Loans, including those currently being repaid, permanently interest-free, helping an average student loan borrower save $610 per year, based on current interest rates.
- Increasing the federal minimum wage from $15.55 to $16.65 per hour, to keep pace with inflation and help make life more affordable for approximately 26,000 Canadian workers across the country.
- Increasing Old Age Security benefits for seniors aged 75 and older by 10 per cent as of July 2022, providing more than $800 in additional support to full pensioners.
A broad consultation on the future of the Competition Act was first announced in Budget 2022 and undertaken in 2023. A summary of what the government heard through broad, public consultation with stakeholders and citizens on the future of Canada’s competition policy was released September 20, 2023. The report reflects on key points that have helped inform the government’s next steps, including the amendments to the Competition Act prioritized to address the grocery sector.
The government plans to introduce comprehensive legislative reforms to the Competition Act in the coming months.
Media may contact:
Press Secretary and Senior Communications Advisor
Office of the Deputy Prime Minister and Minister of Finance
Department of Finance Canada
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