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Removing sales tax from rental construction good first step

Author: Franco Terrazzano 2023/09/14

OTTAWA, ON: The Canadian Taxpayers Federation welcomes reports the federal government is removing its sales tax from new rental housing construction. 

“This is a good first step,” said Franco Terrazzano, CTF Federal Director. “Cutting taxes is the fastest, easiest and most effective way for the feds to provide relief and the government should do way more of it.”

“The federal government will remove GST from new rental apartment buildings,” the Globe and Mail reported today. “The move makes good on a promise the Liberals made in the 2015 federal election but then dropped and didn’t include in their 2019 or 2021 platforms.”

“GST is the largest single tax or fee in a rental project budget,” according to a 2023 Urban Development Institute report. “In the Vancouver rental analysis, GST could account for nearly 10 per cent, or $250.60, of the average unit starting rent paid per month.”

Budget 2023 projects this year’s GST revenue will total $51.4 billion. That’s $6 billion higher than last year’s sales tax revenue and almost $2 billion more than what Budget 2022 projected for this year.

“It’s good to see the feds finally realize cutting taxes makes life more affordable,” Terrazzano said. “Inflation is fattening federal coffers so the government should be cutting taxes more to make life affordable.”


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