Several housing industry stakeholders are citing grave concerns with aspects of Prime Minister Mark Carney’s first budget, saying itdoesn’tgo far enough for the struggling sector.
The Large Urban Centre Alliance, co-facilitated by the Building Industry and Land Development Association (BILD),stated“what was once a promise to deliver 500,000 new homes annually has now become a plan that will cost 100,000 jobs. Canadians are now facing the prospect of a worsening crisis that willimpacthousing supply, employment, economic activity,and ultimately, middle-classfamilies.”
David Wilkes,presidentandCEO of BILD, saidthe budget is providing false reassurancesthat the nation’s housing situation is “prospering” with affordability improving.
“The latest figures show that new home sales have evaporated across all housing types in every major city across Canada,” said Wilkes. “(The)budget missed an opportunity to address the historic downturn that the housing industry is experiencing with sales at near crisis levels. The lack of urgency to confront the current situation is committing us to a future of fewer jobs and less housing of all types in the years ahead.”
Budget 2025, coined Canada Strong, sets out several initiatives the government states will improve the housing supply and affordability gap in the country. This includes a previous promise to eliminate the GST for first-time buyers at or under $1 million;reducing the GST for first-time home buyers on new homes between $1 million and $1.5 million; launching the new Build Canada Homes agency with an initial investment of$13 billionover five years starting in2025-26; and$12 billionover 10 years for housing enabling infrastructure.
For the alliance,it’sthe nuances that make all the difference,statingthe GST/HST components are“only for first-time buyers –a very smallfraction of the market.
“With this narrow application, the GST/HST on new homes will continue to erode affordability for Canadians in large urbancentreswhere the need is greatest, leaving middle class buyers behind.”
Another aspect that is “troubling” pertains to Development Charges (DCs).
“Not only has the federal government’s language changed markedly, backing away from the commitment to reduce DCs by 50per cent, but the commitment is now only a framework for federal, territorialand provincial agreements, not an actionable plan to reduce municipal housing fees with any sense of urgency.”
The Canadian Home Builders’ Association (CHBA) shares in the alliance’s concerns.
“The budget unfortunately retreats from the Liberal platform’s commitment to work with municipalities to reduce development taxes by 50 percent. Over the past two decades, these taxes have soared by 700per cent, pricing countless Canadians out of the market,” the CHBA notes, adding the budget also missed the mark on supporting skilled workers.
“It only announced training measures that support unions, when only about10percent of residential construction workers outside of Québec are unionized,” it adds.
The Residential Construction Council of Ontario (RESCON) said it waslargely pleasedwith Budget 2025, adding itsolidifies pledges and programs the federal government announced earlier to spur new housing construction, especially the commitment to cut sales taxes.
“Eliminating the GST on new homes at or under $1 million and reducing it on those up to $1.5 million for first-time buyers is a step in the right direction because exorbitant taxes, fees and levies are crippling the residential construction industry,” says RESCON president Richard Lyall. “First-time buyersrepresenta substantial segment of the market, and we are already seeing increased traffic at salescentresas a result ofthe move. It is a step in the right direction.”
Habitat for Humanity echoed RECON’spraise,butis urging Ottawa to share how the measures “will meet Canadians’ aspirations to own a home.”
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