I'm sorry. How many?
Evidence of meeting #4 for Finance in the 45th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was measure.
A recording is available from Parliament.
Evidence of meeting #4 for Finance in the 45th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was measure.
A recording is available from Parliament.
Director, Real Property and Financial Institutions, Sales Tax Division, Department of Finance
Off the top of my head, it typically runs somewhere between 200,000 and the high two hundred thousands in a given year. I don't know what the specific number is for these last 12 months.
Conservative
Director, Real Property and Financial Institutions, Sales Tax Division, Department of Finance
As I said, I don't have the specific figure for the past 12 months, but generally it's around, let's say, 250,000 per year.
Conservative
Sandra Cobena Conservative Newmarket—Aurora, ON
Of these new homes built, how many are less than $1 million and being purchased by first-time homebuyers?
Director, Real Property and Financial Institutions, Sales Tax Division, Department of Finance
I have a chart for that. We're not looking at the 250,000, just so you know, because a certain portion of housing starts are purpose-built rental units, and those aren't included in the calculation for the purposes of this rebate. Among the ones that are.... Oh, actually, I don't have the total here. I can get that to you, but the idea is that 97% or so are under $1 million, and 3% are between $1 million and $1.5 million.
Conservative
Sandra Cobena Conservative Newmarket—Aurora, ON
Given that the homes above $1 million are not eligible for the 100% GST rebate, would you agree, then, that the majority of first-time homebuyers in large urban centres like Toronto, Vancouver and Montreal would not actually benefit from this rebate?
Director, Real Property and Financial Institutions, Sales Tax Division, Department of Finance
No, I don't think that's true. First-time homebuyers in Vancouver and Toronto might not be buying single-family homes: They're probably buying newly built condos when they're buying a newly built home. In general, even first-time homebuyers in the more expensive markets are expected to benefit from the rebate.
Conservative
Sandra Cobena Conservative Newmarket—Aurora, ON
Has there been a statistically measurable increase in housing starts that can be attributed directly to the GST rebate policy?
Director, Real Property and Financial Institutions, Sales Tax Division, Department of Finance
We don't have figures like that, because when you introduce a measure like this amongst many other measures that are being introduced, not just tax measures but other types of federal measures, and not just at the federal level but also at the provincial and municipal levels, and then a variety of factors that have nothing to do with the government at all, such as interest rates, economic conditions, the availability of labour, costs of inputs, etc., those all impact housing prices and, in turn, demand. It's very difficult, if not impossible, to put a precise estimate on the number of newbuilds that will be created as a result of this one singular measure.
However, directionally, we expect it to increase demand for new homes by first-time homebuyers. That increased demand, if those new homebuyers are encouraged to buy a new home rather than an older home that has no GST on it, would be expected to generate a supply response from builders.
Conservative
Sandra Cobena Conservative Newmarket—Aurora, ON
On the flip side, has there been any observable reduction in average home prices or rents since this rebate was introduced?
Director, Real Property and Financial Institutions, Sales Tax Division, Department of Finance
We wouldn't expect a reduction in the price of homes as a result of this rebate, because the rebate is claimed directly by the purchaser of the home. As I said, the purchasers don't even have to disclose if they're first-time homebuyers to the builder. The builder is going to charge what the builder is going to charge, whatever the market will bear. They can either assign that rebate to the builder and have it reflected in the contract, or they will be able to claim it directly with the CRA.
Conservative
Sandra Cobena Conservative Newmarket—Aurora, ON
Can you confirm whether the CRA can legally administer or apply a tax change before Parliament has passed the enabling legislation?
Director, Real Property and Financial Institutions, Sales Tax Division, Department of Finance
I'd like to defer that to my CRA colleagues.
Director General, Legislative Policy Directorate, Legislative Policy and Regulatory Affairs Branch, Canada Revenue Agency
As I mentioned previously, in the case of a rebate or a refund, the CRA must wait for royal assent of the enabling legislation. The CRA is not able to speak to the impact of the measure, nor to its application, since it is still being considered by Parliament.
Conservative
Sandra Cobena Conservative Newmarket—Aurora, ON
In the case of the digital sales tax, the CRA began collecting the tax before the legislation received royal assent.
Can you confirm that the government had to refund those collections later because the law wasn't yet in force?
Conservative
Director General, Legislative Policy Directorate, Legislative Policy and Regulatory Affairs Branch, Canada Revenue Agency
Refunds require royal assent, so those have not taken place.
Conservative
The Vice-Chair (Jasraj Hallan) Conservative Jasraj Singh Hallan
That's time.
Next, we have Mr. Lavoie.
Liberal
Steeve Lavoie Liberal Beauport—Limoilou, QC
I'd like to thank the witnesses for being here today. I'm very happy about that.
Given my professional background, I find it very interesting to be able to question the witnesses. I worked in banks for 20 years, so I'm familiar with the issues of the GST and purchasing a first home. When I started my career, my job was to look at mortgages, so I know what young families can go through in that kind of situation.
I've rarely seen such a direct measure. It's a GST rebate of up to $50,000 for the purchase of a first home. We all know that buying a house is financial leverage, if I can put it that way, for the future of young families, so I think the government is doing the right thing. Earlier, I heard that a large portion of the market is targeted by this measure, 32%, if I'm not mistaken. I find that interesting.
I'm going to come back to what my colleague was talking about earlier regarding the implementation of the GST-related measure.
Basically, this measure has been in effect since May 27, 2025, hasn't it?
Director General, Legislation, Sales Tax Division, Department of Finance
Once the measure is approved by Parliament, the agency will indeed be able to issue reimbursements for eligible contracts that were entered into on or after May 27, 2025.
Liberal
Steeve Lavoie Liberal Beauport—Limoilou, QC
So it's as of May 27, 2025.
As I understand it, the banks take this into account for the contracts they currently enter into. I worked in banks for 20 years, and I know they take that into account.
That said, we are caught in a kind of administrative mess. However, since May 27, 2025, the issue has been resolved for first-time homebuyers who have taken steps to get mortgages, and they will be able to take advantage of this leverage.
Is our understanding the same thing on this?
Director General, Legislation, Sales Tax Division, Department of Finance
Bank loan arrangements vary from one first-time homebuyer to another, but—
Liberal
Steeve Lavoie Liberal Beauport—Limoilou, QC
I can confirm that they have been able to take advantage of it since May 27, 2025 and that no one is penalized. Since that date, a first-time homebuyer who has signed a contract can already benefit from this rebate of up to $50,000. As for the rest, like the issue of delays, it's an administrative mess. I've worked in banks long enough to know that. This measure is very relevant at this time.
My next question is about the middle-class personal income tax cut. We all know what's going on south of the border, and we can see the instability that's creating.
Let's take the example of tax cuts. In the current context, could other unforeseen events occur, which would mean that the planned tax cuts would not have the desired effect for Canadians?
Are there things we may not have seen that could have an impact on the measures you're presenting to us today?
I'll allow you to indulge in your creativity, since that's what our neighbour to the south has been doing from the start.
Several witnesses can answer my question, if they wish.