Bill C-56

Affordable Housing and Groceries Act

An Act to amend the Excise Tax Act and the Competition Act

Part 1 amends the Excise Tax Act in order to implement a temporary enhancement to the GST New Residential Rental Property Rebate in respect of new purpose-built rental housing.
Part 2 amends the Competition Act to, among other things,
(a) establish a framework for an inquiry to be conducted into the state of competition in a market or industry;
(b) permit the Competition Tribunal to make certain orders even if none of the parties to an agreement or arrangement — a significant purpose of which is to prevent or lessen competition in any market — are competitors; and
(c) repeal the exceptions in sections 90.1 and 96 of the Act involving efficiency gains.

Affordable Housing and Groceries Act

[Chrystia Freeland, Liberal, Deputy Prime Minister and Minister of Finance]

moved that Bill C-56, An Act to amend the Excise Tax Act and the Competition Act, be read the second time and referred to a committee.

Mr. Speaker, before I begin, I would like to seek unanimous consent to share my time with the member for Guelph.

[The Deputy Speaker, Conservative, Chris d'Entremont]

Is it agreed?

[Some hon. members]

Agreed.

[Chrystia Freeland, Liberal, University—Rosedale, ON]

I am pleased to rise today to introduce Bill C‑56, the affordable housing and groceries act.

I would like to explain why it is so important that we work together to pass this bill. This bill includes urgent measures to make life more affordable for Canadians, including removing the GST on the construction of new apartment buildings, which would help get more rental homes built faster.

The bill would also enhance competition across the economy, with a focus on the grocery sector to help stabilize food prices for Canadians.

Specifically, this legislation would increase the GST rental rebate from 36% to 100% and remove the existing GST rental rebate phase-out thresholds for new rental housing projects. That means for a two-bedroom rental unit valued at $500,000, our plan would deliver $25,000 in tax relief. This is about encouraging developers to build homes that otherwise would not get built. It is a game-changer for housing in our country. Mike Moffatt, one of Canada's leading housing experts, called this “a fantastic transformative step.” and Toronto's former chief city planner, Jennifer Keesmaat, said that this measure could be “the beginning of a sea change."

This is the newest measure in our ambitious housing plan, one that is about building more homes faster, cracking down on unfair practices by investors and ensuring that Canadians can afford a safe place to call home. Our plan includes the new tax-free first home savings account, which is already helping tens of thousands of Canadians save up to $40,000 tax-free toward that first down payment. Our plan also includes the $4 billion race-to-the-top housing accelerator fund, which is already breaking down barriers and encouraging municipalities to build more homes.

With Bill C-56, we are doing even more with provinces like Ontario, Newfoundland and Labrador, and Nova Scotia already following our lead by eliminating provincial taxes on new rentals. We will build even more of the rental homes that Canadians need.

This bill also seeks to amend the Competition Act to give more power to the Competition Bureau so that it can investigate price gouging and price fixing.

It would put an end to anti-competitive mergers that drive up prices and limit Canadians' choices. It would also enable the Competition Bureau to ensure that big grocery stores cannot prevent smaller competitors from opening stores nearby. Our government is relentlessly focused on building an economy with stable prices, steady growth, and abundant, well-paying, middle-class jobs.

There are currently 980,000 more Canadians in the job market than before the pandemic. Both the International Monetary Fund and the Organisation for Economic Co-operation and Development predict that, on average, Canada will see the strongest economic growth in the G7 this year and next. DBRS Morningstar also confirmed our AAA credit rating earlier this month.

Since we were elected, 2.3 million Canadians have been lifted out of poverty. In 2015, 14.5% of Canadians were living in poverty. By 2021, that number had dropped to 7.4%. Our affordable Canada-wide early learning and child care system is supporting a record labour force participation rate of 85.7% for working-age women. It is also helping to grow the economy and make life more affordable for families from coast to coast to coast.

Furthermore, whether by enhancing the Canada workers benefit or by creating the Canada child benefit or the new Canada dental care plan, we have strengthened the social safety net that millions of Canadians rely on, while ensuring that Canada maintains the lowest deficit and the lowest debt-to-GDP ratio in the G7.

We are working hard for Canadians, but we know we have more work to do. Bill C-56 will deliver real, concrete solutions. More competition will help with the sticker shock at the grocery checkout counter. Eliminating the GST on rental housing will get more homes built faster, so that more Canadians have an affordable place to call home.

Bill C-56 is an important step in our plan to continue delivering on what matters most to Canadians, and I encourage my colleagues to support its swift passage.

[Jasraj Singh Hallan, Conservative, Calgary Forest Lawn, AB]

Mr. Speaker, three years ago, the finance minister said that interest rates would stay low for a very long time. Then she dumped hundreds of billions of dollars of fuel on the inflationary fire, giving Canadians the most rapid interest rate hikes seen in the last three decades.

In November she said she would balance the budget and would be careful not to pour fuel on the inflationary fire that she started. She then turned around and dumped a $63 billion jerry can on it.

Two months ago, she was doing victory laps, saying that she stopped inflation. It has gone up 43% since then.

Now her deficits have fuelled inflation and put Canadians most at risk in the G7 for a mortgage default crisis. When will she balance the budget so Canadians will not lose their homes?

[Chrystia Freeland, Liberal, University—Rosedale, ON]

Mr. Speaker, I would like to point out that the question has absolutely nothing to do with the legislation we are presenting. However, let me take a moment to clarify some of the incorrect assertions embedded within it.

It is really important to be honest and truthful with Canadians. The truth is that Canada has an AAA credit rating, which was reaffirmed by DBRS Morningstar this month. It is also important to be clear with Canadians that we have the lowest deficit in the G7 and the lowest debt-to-GDP ratio. Those are the facts. Everything else is a partisan muddying of the waters.

When it comes to our legislation, it speaks to the immediate needs of Canadians today: getting more rental housing built now and bringing more competition into the economy, including the grocery sector, to keep prices down.

[Maxime Blanchette-Joncas, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Mr. Speaker, I commend the Deputy Prime Minister on her speech, which seemed to be full of good intentions.

The Canada Mortgage and Housing Corporation, or CMHC, released some alarming and very troubling statistics. By 2030, Quebec will need 1.1 million housing units. It will be the hardest-hit region of Canada. The Government of Quebec also released some statistics. Homelessness has gone up 44% in the past five years. Those are the numbers. We are in the midst of a housing crisis, but for the past six months, the federal government has been withholding $900 million and taking a paternalistic and irresponsible attitude. In the midst of a housing crisis, the cities, which the federal government is once again accusing of dragging their feet, are unable to submit applications to build new housing projects.

I would like the Deputy Prime Minister to explain to us today why the government has been withholding money for new housing projects for six months, if housing is truly one of its priorities.

[Chrystia Freeland, Liberal, University—Rosedale, ON]

Mr. Speaker, I agree with my hon. colleague from the Bloc Québécois that there really is a housing crisis. That is why we introduced our bill last week, the first week after the summer break. We are absolutely certain that this bill is urgent. We agree that there needs to be more housing. We agree that more rental housing needs to be built and that it must be done quickly.

I hope that every member in the House, including the members of the Bloc Québécois, will support us because I agree with them that Quebec also needs more housing and more rental housing.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Mr. Speaker, New Democrats are very aware of the fact that we need non-market solutions, as well as market solutions, in order to address the housing crisis. The minister, in her remarks, mentioned three planks of the government's housing plan: a tax-free savings account for down payments; the housing accelerator fund, which talks a little bit about affordability but does not talk about social housing or make affordability a requirement of the program; and this bill's GST measure. All these things have in common that they are largely market-based initiatives.

The NDP has called for a non-profit acquisition fund and a replenishment of the coinvestment fund. These are things that really ought to happen hand in hand with any market-based measures. Therefore, what measures is the government planning on presenting this fall alongside the legislation that will lead to the creation of new social and affordable housing units in Canada?

[Chrystia Freeland, Liberal, University—Rosedale, ON]

Mr. Speaker, I would like to thank the member for Elmwood—Transcona for the work that he has been doing alongside our government, together with me, on the housing crisis. I believe that this measure of lifting the GST on all rental construction would help all Canadians with housing, including affordable housing. The fact is that we need to add to supply. That is what this measure would do, and this would have a positive impact on everyone who rents, as well as on people looking to buy.

[Lloyd Longfield, Liberal, Guelph, ON]

Mr. Speaker, it is a pleasure to rise in the House for the first time this session to discuss the very important bill that we have in front of us.

This summer, I spoke to many constituents of mine in Guelph who had concerns about the price of housing, the price of groceries and big business taking over the marketplace in many areas. I am really pleased that the first piece of legislation of the session that we have in front of us to talk about is Bill C-56, the affordable housing and groceries act.

The government understands that many Canadians are struggling to make ends meet in these times of high inflation. Many measures that we have been introducing have been to help people who are unfairly affected by the inflationary winds that are blowing globally right now. We need to do more than we have been doing in terms of targeted support. The bill in front of us today addresses what we could do to help build more rental housing, as well as to try to curb the inflation that we see in the grocery market in particular.

Families across the country are relying on parliamentarians to do what we can to help with measures such as those we have outlined in Bill C-56 and the ensuing debate that we will have.

Making housing more affordable is something that we need to look at, including where the federal government can influence the activities within the marketplace, so that young people, young Canadians, have the dream of owning a home again. Right now, it is increasingly out of reach, and paying for rent has become more expensive across the country. This is really affecting younger Canadians, as well as people who are just trying to get their foot into the market.

The housing crisis has an impact on our economy. When people are not succeeding, our economy does not succeed. Without more homes in our communities, it is difficult for businesses to attract the workers they need to grow and succeed. When people spend more of their income on housing, it means less money is being spent in our communities for necessities such as groceries. This has a direct impact on small business.

Bill C-56 would enhance the goods and services tax rental rebate on new purpose-built rental housing; this would encourage the construction of more rental homes, including apartment buildings, student housing and seniors' residences across Canada. The enhanced rebate would apply to projects for which construction began on or after September 14, 2023, and on or before December 31, 2030, with construction completed before 2036.

Working on the supply is an important part of what the federal government could do to help. For a two-bedroom rental unit valued at $500,000, for a developer, the enhanced GST rental rebate would deliver $25,000 in tax relief to incent the developer to make the numbers work. This tool could help create the necessary conditions to build the types of housing that we need and that families want to live in. This, in turn, would open up the opportunity for renters to have a reduction in the cost they are paying for the units that are constructed.

The measure also removes a restriction on the existing GST rules to ensure that public service bodies, such as universities, public colleges, hospitals, charities and qualifying not-for-profit organizations, could build or purchase purpose-built rental housing and be permitted to claim 100% of the enhanced GST rental rebate.

The government is also calling on provinces that currently apply provincial sales tax or the provincial portion of the harmonized sales tax to rental housing to join us by matching our rebate for new rental housing. It was very encouraging to hear that Ontario, the province where my riding exists, will be participating in this program.

We are also requesting that local governments put an end to exclusionary zoning and encourage building apartments near public transit in order to have their housing accelerator fund applications approved. I know that Guelph has worked hard on this application. We have had many community discussions around this, but sometimes the numbers just do not work. In those cases, programs such as the one we are initiating today, through this bill, would help the numbers to work.

Launched in March 2023, the housing accelerator fund is a $4-billion initiative designed to help cities, towns and indigenous governments unlock new housing supply, targeting about 100,000 units across the country; speed up development and approvals, like fixing out-of-date permitting systems; introduce zoning reforms to build more density; and incentive development close to public transit. Last week, the government announced that London, Ontario is the first city to benefit from this fund. Of course, Guelph is watching that very closely. The fund also supports the development of complete low-carbon and climate-resilient communities that are affordable, inclusive, equitable and diverse. Every community across Canada needs to build more homes faster so we can reduce the cost of housing for everyone.

We are also looking at how we can help Canadians with their grocery bills, and we need to stabilize the price of groceries in Canada. Through the one-time grocery rebate in July, we delivered targeted inflation relief for 11 million low- and modest-income Canadians and families who need it the most. It was up to an extra $467 for eligible couples with two children and up to $234 for single Canadians without children, including seniors. This support was welcomed by Canadians, but we knew that more needed to be done to address the rising cost of groceries. The interim measure was really to address the increase in groceries and not actually the groceries' being purchased at a higher price every week. This is why we are taking immediate steps to enhance competition across the Canadian economy, with a focus on the grocery sector, to help stabilize costs for middle-class Canadians.

Through Bill C-56, the government would be introducing a first set of legislative amendments to the Competition Act, intended to provide the Competition Bureau with powers to compel the production of information in order to conduct effective and complete market studies and to remove the inefficiencies defence, which is currently allowing anti-competitive mergers to happen if the corporate efficiencies are being used as a reason for them to go forward. Canadian customers would still pay higher prices even if these efficiencies are realized. The bill would empower the bureau to take action against collaborations that stifle competition and consumer choice, in particular, in situations where larger grocers prevent smaller competitors from establishing operations nearby.

This bill would build on our other measures that have been introduced to make life more affordable for Canadians. These include delivering the automatic advance payments of the Canada workers benefit, starting July 2023, to provide $1,518 total for eligible single workers and $2,616 for an eligible family, split among three advance payments and the final payment after a person has completed their 2023 tax return. We are also supporting three and a half million families annually through the tax-free Canada child benefit, with families this year receiving up to $7,437 per child under the age of six and $6,275 per child for children aged six through 17. Increasing old age security is another measure we have taken, including indexing that to inflation. We have also reduced fees for regulated child care by 50% on average, moving towards the cost of $10 a day by 2026, with six provinces and territories already reaching that goal.

We are looking at what we can do to influence the market to help people who are facing these costs. We are working on helping Canadians put food on their table, pay the rent and be successful within their communities. We want to ensure that Canada remains the best place in the world to live, work, go to school and raise a family. Making life more affordable is a key part of that.

I urge hon. members to support this legislation, and I am open to questions.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Madam Speaker, I was very honoured in June 2022 to host a round table on housing in Calgary, where I welcomed such individuals as Craig Dickie from Anthem United; Kory Zwack from Calgary Housing; Michele Ward from Homes by Avi; Cliff Stevenson and Jackie Stewart, both from BILD Calgary; and Brian Hahn from BILD Calgary. I apologize; Cliff Stevenson is from CREA. Of course, there was my favourite councillor, Dan McLean, from ward 13. To share with my colleague, since we are both working on solutions together to solve the housing crisis, the problems identified at that time included lack of supply due to land release, approval timing and not enough lead time or certainty for those who wish to build homes. There was also the cost of utilities, with the carbon tax now really adding to that.

I would like to ask my colleague why the government always does too little too late.

[Lloyd Longfield, Liberal, Guelph, ON]

Madam Speaker, we have had similar discussions in Guelph, with round tables that have the service providers, the builders and the community agencies focused on housing solutions. In fact, similar to Calgary, we have identified supply as being one of the major issues, as well as approval. How can we speed up the approvals process? The housing accelerator fund will be addressing the approvals process by providing funds for communities to increase their support for the approvals process. This bill in particular is looking at supply. In particular within that, it is looking at supply of rental housing, and within rental housing, making sure that 30% of the rental housing is affordable.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

Madam Speaker, I did not have a chance to ask the Minister of Finance a question earlier when she made her speech. Since my colleague across the way is from the same party, I assume he may be able to answer my question.

In her speech, the Minister of Finance mentioned that the proposed cut to the GST on housing construction with the rebate system would help lower the cost of building a housing unit. For example, for a housing unit valued at $500,000, the rebate would be $25,000.

The cost of building a home will be reduced for the person building it, but after that, the housing unit will be sold to the person who will start renting it out.

What incentive does that person have to lower the rent if the market price remains the same? We know that if the market price for rent is $2,000 to $3,000—

[The Assistant Deputy Speaker (Mrs. Alexandra Mendès), Liberal, Alexandra Mendes]

The hon. member for Guelph.