Saskatchewan Home Builders Call for Provincial Tax Cuts on New Rental Construction

Saskatchewan Home Builders Call for Provincial Tax Cuts on New Rental Construction

Addressing Housing Affordability and Availability

Home Builders’ Associations in Saskatchewan are urging the provincial government to remove taxes on new builds for rental buildings. This call comes in the wake of the federal government’s decision to eliminate Goods and Services Tax (GST) from rental construction, a move aimed at meeting the increasing demand for rental units across the country. To qualify for the GST cut, buildings must consist of at least four private apartment units or 10 private rooms or suites, and 90% of the units must be allocated for long-term rentals.

Chris Guérette, CEO of the Saskatchewan Realtors Association, believes that this approach could be beneficial in Saskatchewan, where housing availability and affordability are becoming increasingly critical issues. However, the provincial government has no plans to implement a similar tax cut, arguing that the broad application of the provincial sales tax (PST) ensures a reliable and sustainable source of revenue for financing essential public services.

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Provincial Government’s Stance

Instead of tax cuts, the Saskatchewan government is promoting its Rental Development Program. This initiative provides one-time funding for housing organizations to develop affordable units for low-income households. The government believes that this approach, rather than tax cuts, is a more sustainable way to deal with the housing crisis.

The government’s position is that a broad application of PST ensures a fair, reliable, and sustainable source of revenue to finance vital public services. They argue that the province is one of two that have seen a decrease in rental asking prices in recent months, indicating that their approach is working.

Industry Advocacy for Tax Removal

The Saskatoon and Region Home Builders’ Association has praised the federal tax removal and called on the province to eliminate the PST for all new construction, including homes and rentals. The association warns that the industry needs all the support it can get to stimulate housing amidst a looming housing and affordability crisis.

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Criticisms and Counterarguments

Despite the optimism surrounding potential tax cuts, critics argue that while they could improve the vacancy rate in Saskatchewan and stabilize rental costs, such moves do not promote home ownership. They contend that the tax cut is a significant win only for a segment of the industry and fails to address the challenges Canadians face in accessing home ownership.

Looking Forward

As the discourse around housing affordability and availability in Saskatchewan continues, it remains to be seen if the provincial government will yield to the pressure to remove PST from new rental builds. For now, the government is sticking to its Rental Development Program as a solution to the housing crisis, while industry stakeholders continue to advocate for broader tax cuts to stimulate the housing market.

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