Analysists say Prime Minister Justin Trudeau’s plan to removing GST from new rental construction is a step that could help increase Canada's housing supply, but it may not be the 'silver bullet' some are looking for on affordability.
Battaglia says the five per cent GST discouraged developers from pursuing purpose-built rental apartments.
"While the removal of GST on rental construction projects will improve their financial viability – and with it, hopefully spur more development – it isn't likely to lower rents in short order," she writes.. "It's an enormous challenge," he said. "It's taking housing construction growth back to levels we haven't seen since the 1970s. It's a huge challenge."
"Our key message on this front is that if we are counting on supply alone to fix the affordability issue, we are all going to be waiting a very long time indeed. As in, not going to happen," Porter said.
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