Cabinet said a tax holiday for apartment builders will cost about $5 billion, according to Blacklock’s Reporter. “Our country needs more homes, and we need more of them fast,” said Finance Minister Chrystia Freeland in a speech in the House of Commons. “We must build homes in our biggest cities and our smallest towns.”New terms are to include co-operative housing. Cabinet introduced Bill C-56 in September to enact a GST holiday on new purpose-built rental housing constructed by 2036. Finance Canada said in an October 3 submission to the Senate National Finance Committee the tax holiday would cost about $4.5 billion over the next five years. Freeland said the Canadian government’s economic plan is working when she delivered her fall fiscal update in the House of Commons on Tuesday. READ MORE: UPDATED: Freeland throws more money at Canada’s economic 'plan'Despite preaching austerity, Freeland lavished more money on a long list of pet projects, including electric vehicle battery factories, childcare and housing assistance for renters. The Canadian government will be shelling out about 10 cents on every dollar — $52.4 billion a year compared to an initial estimate of $46 billion — on interest to service the debt.Even more money was tossed at housing, with $15 billion in new loan financing from next year to spur apartment construction, an extra $1 billion over three years to fund affordable housing and new mortgage rules for lenders dealing with homeowners at risk amid high interest rates.Finance Canada put costs of the tax holiday at $4.6 billion over five years, including new provisions of Bill C-56 to include co-op housing. “Co-operative housing corporations that provide long-term rental accommodation would also be eligible for the removal of the GST on new rental housing providing the other conditions have been met,” said Finance Canada. “The measure is not intended to apply to co-operative housing corporations where occupants have an ownership or equity interest.”Finance Canada said the removal of the GST will not apply to substantial renovations of existing residential complexes. It added this measure “is intended to stimulate new supply, not take supply off the market.”Cabinet said effective January 1, it will amend the Income Tax Act to disqualify claims for tax credits related to Airbnb vendors or other expenses incurred to earn short-term rental income, including interest expenses. The Airbnb clause would apply in provinces and municipalities prohibiting short-term rentals.Canada requires an additional 3.5 million homes on top of what is proposed by 2030, according to a 2022 report conducted by the Canada Mortgage and Housing Corporation (CMHC). CMHC said the target might be unfeasible. CMHC Chief Economist Bob Dugan called 3.5 million homes “an enormous undertaking.”“I think it is a very ambitious goal,” said Dugan. “It is going to be difficult to attain.”
