Crane and Hoist Canada

Removing GST/HST from new apartment construction applauded by RESCON

September 18, 2023  By Don Horne

The Residential Construction Council of Ontario (RESCON) is pleased that leaders at both the federal and provincial government levels are planning urgent actions to tackle the housing crisis.

“The stark and deeply troubling fact is that we are in a housing crisis and face an acute shortage of supply, so it is critical that government leaders come up with steps to spur construction of more housing and purpose-built rentals,” says RESCON president Richard Lyall. “We need millions more units and must pull out all the stops to make that happen. The moves proposed today are a good start.”

The federal Liberals have announced the GST will be removed on construction of new rental apartment buildings, which will lead to a five-per-cent reduction on the cost of goods and services. The Ontario government, meanwhile, has indicated that it plans to follow suit with the HST.

“We haven’t built enough purpose-built rentals to accommodate our growing population, yet projects were still being saddled with whopping sales taxes on the fair market value of a building upon completion,” says Lyall. “When encumbered with such formidable financial hurdles, developers often find it difficult to proceed with apartment building projects. These adjustments are clearly a step in the right direction as it will shave costs from constructing apartments and lead to more building.”


The GTA alone needs more than 300,000 new rental homes in the next decade, according to an earlier report released by the Building Industry and Land Development Association, the Federation of Rental-housing Providers of Ontario (FRPO), Urbanation Inc. and Finnegan Marshall Inc. The rental housing deficit in the GTA is expected to double in the next 10 years to 177,000 units. Meantime, the supply of purpose-built rentals will need to rise from a projected 47,000 units to a minimum of 124,000 units in the next decade to keep up with demand, according to the report.

Conservative Party leader Pierre Poilievre also announced that he will be tabling a Building Homes, Not Bureaucracy Act next week that will give more money to municipalities that are building and meeting housing targets and take funds away from cities and gatekeepers that aren’t hitting goals. Cities will be required to increase the number of homes built by 15 per cent each year or a percentage of their funding would be withheld. Cities that exceed that figure would get a bonus.

He has also proposed removing the GST on the building of any new homes with rental prices below market value and is addressing municipal level barriers.

“We need quick and bold action on the housing front to bring us back from the dark abyss,” adds Lyall. “Mr. Poilievre’s proposal would encourage cities to reach their housing targets, speed up the construction of much-needed new condos and homes, and make it easier for developers and builders to get shovels in the ground as soon as possible. Such a situation is a win-win for everyone.”

RESCON is also advocating for tax incentive programs that eliminate the collection of taxes on profits emanating from residential construction projects where the funds are re-invested into advancing similar projects. Programs like this resulted in tens of thousands of housing units in the 1960s and 1970s.

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