Finance Canada said a tax holiday for apartment builders will cost more than $4 billion, according to Blacklock’s Reporter. .“We are talking about $4.5 billion over the next five years,” Finance Assistant Deputy Minister Miodrag Jovanovic told the Senate National Finance Committee. .Expenses are triple those estimated two years ago by the Budget Office. .Independent Senators Group Sen. Eric Forest (Quebec) asked if there has been any assessment of the cost of the tax holiday. .“It represents several billion dollars over the next five years,” said Jovanovic. .“It is mainly recognizing the fact the cost of financing construction has increased hugely over the last 18 months.”.Forest confirmed the cost of the measure is $4.5 billion. .“Do you know what impact it will have?” said Forest. .Jovanovic called this “a really important question, but unfortunately, it is one that is really difficult to estimate.” There are many factors at play. .Cabinet introduced Bill C-56 on September 21 to enact a temporary GST holiday on new purpose-built rental housing that is completed by 2036. The Budget Office estimated in a report in 2021 expenses would be $383 million annually. .The new cost estimate is the equivalent of $900 million annually. .Cabinet and the Canada Mortgage and Housing Corporation (CMHC) have not estimated how many purpose-built apartments will be constructed because of the tax break. .“In terms of impact, we haven’t had the opportunity to assess the potential impact,” said CMHC Chief Economist Bob Dugan. .Critics labelled the tax holiday for new rental construction as being meant for luxury real estate on September 24. .READ MORE: Trudeau's rental construction tax holiday called ‘limousine Liberal measure’.Finance Minister Chrystia Freeland introduced a bill that omitted cabinet's commitment from 2015 to tie it to the construction of affordable rental housing..“We want the builders who qualify for it to have affordable apartment rentals so Canadians could actually live in them,” said Conservative leader Pierre Poilievre.
