The Residential Construction Council of Ontario (RESCON) notes there are some items in the federal budget that will help young people enter the housing market but it doesn’t address the root of the problem, which is how to rapidly increase housing supply across the country.
“We have a crisis on our hands and need to build more homes quickly and make them affordable,” says RESCON president Richard Lyall. “The budget is nibbling around the edges of the problem and doesn’t fully address the systemic problems that are delaying construction of much-needed housing. We need to get more housing underway quickly as demand is expected to continue.”
The Canada Mortgage and Housing Corporation (CMHC) estimates that an additional 3.5 million housing units must be built by 2030 to achieve affordable housing for everyone living in Canada. However, the trend in housing starts was 255,735 in February, down slightly from January figures. With immigration on the rise, demand for housing is expected to increase substantially.
The government signalled it intends to move funding from the National Housing Co-Investment Fund’s repair stream to a new construction stream, as needed, to boost the construction of new affordable homes. It also proposes to commit an additional $4 billion over seven years, starting in 2024-25, to implement a co-developed Urban, Rural and Northern Indigenous Housing Strategy.
To help tradespeople invest in equipment, the budget proposes to double the maximum employment deduction for their tool expenses to $1,000 from $500. This change takes effect for the 2023 taxation year.
There was no mention in the budget of providing HST relief for new housing projects as RESCON had suggested in its pre-budget submission. The idea was also proposed by the Ontario government in its recent budget.
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