I think it certainly helps.
The GST applies only to new homes to begin with. There's nothing to rebate on resale. The $1 million works for most of the country, but it is a problem in the GTA, southern Ontario and the Lower Mainland in B.C., where a high proportion of new homes are over $1 million. That portion of it does carve out some homes.
I think the biggest issue is that it's only for first-time homebuyers, who make up about 20% of primary residence purchasers. It leaves out some very important folks. Think of a couple who own a one-bedroom condo and would like to upgrade into a three-bedroom home that's suitable for raising kids. They have been excluded from this. Seniors who would like to downsize into a new home—which not only helps them but frees up a home for the next generation of families—are not eligible for this.
I do think that limiting it to first-time homebuyers really diminishes the effectiveness.