Prime Minister Justin Trudeau has announced the elimination of the goods and services tax (GST) for new rental apartment construction to reduce costs for builders due to high interest rates set by the Bank of Canada.

According to a report by Global News, Trudeau stressed the importance of encouraging provinces and territories to follow suit in removing the GST on rental construction to address rising rent costs. He aims to promote more rental-oriented buildings instead of Airbnb conversions or sales to foreign buyers. The strategy targets both small communities and major urban centres, with support from the Canadian Home Builders’ Association (CHBA).

The report further states the government also plans to allocate Housing Accelerator Fund to cities such as London, Ontario, which will receive $74 million over three years for 2,000 housing units. Several provinces have expressed intent to eliminate their own taxes on apartment construction as well.

Despite these efforts, the Canadian Mortgage and Housing Corporation (CMHC) predicts a 3.45 million home shortfall by 2030.

According to a report by CBC News, Federal minister for housing, infrastructure, and communities, Sean Fraser, has urged Nova Scotia Premier, Tim Houston, to remove the provincial portion of the HST from rental home construction. Fraser emphasizes the urgent need for increased home construction and believes this tax removal will stimulate building projects affected by global inflation and higher interest rates. Nova Scotia’s liberal party leader, Zach Churchill, supports the proposal to reduce costs for builders and enhance housing affordability.