Conservative Leader Pierre Poilievre is urging Canada’s provincial leaders to adopt a new approach to housing affordability by matching his proposal to eliminate federal sales tax on new homes priced below $1 million. He is calling on provincial governments to do the same with their respective sales taxes.
“This is a pivotal step towards making homeownership accessible again for young Canadians,” Poilievre expressed in his letter to provincial and territorial premiers. The letter, shared publicly, encourages provinces to support his vision.
Call for Provincial Sales Tax Cuts on New Homes
Poilievre’s letter, sent on Sunday, follows his recent commitment to remove the GST from entry-level new homes. He argues that basic needs like food and housing should not carry sales tax and believes eliminating the GST would drive new housing development. According to his estimates, this tax cut could save Canadians $40,000 on an $800,000 home and boost new housing starts by 30,000 units annually.
He requested provincial leaders to “axe the provincial sales tax (where applicable) on new homes under $1 million.” Since Alberta and the territories have no provincial sales tax, this measure would affect provinces with tax rates ranging from 6% in Saskatchewan to 10% in Atlantic Canada.
Housing Affordability: A National Crisis
The high cost of housing is a widespread issue in Canada, fueled by rising interest rates, limited housing supply, and rapid population growth. Housing prices have increased by more than 30% since April 2020, intensifying the demand for affordable housing solutions.
“Each province has unique circumstances, but if you match my announcement with a provincial tax cut, you’ll help residents save significantly,” Poilievre stated in his appeal.
Funding and Potential Cost Implications
Poilievre has proposed funding the GST cut, estimated to cost $8 billion annually, by cutting certain federal programs he considers inefficient, such as the Housing Accelerator Fund. If provinces adopt similar sales tax cuts, they would need to adjust budgets accordingly.
Housing Minister Responds to Poilievre’s Critique
Housing Minister Sean Fraser addressed Poilievre’s comments in Question Period, noting that members of Poilievre’s own party have requested funds from the Housing Accelerator Fund for their constituencies. Fraser highlighted that this fund supports municipalities that reduce bureaucratic barriers to accelerate housing construction, with 177 agreements already signed.
“Some Conservative MPs have privately advocated for funding from the same programs Poilievre criticizes,” Fraser stated, sharing letters from several Conservative MPs asking for housing funding to support their communities.
