Finance Committee on Oct. 27th, 2025

[Ryan Turnbull, Liberal, Whitby, ON]

I have a very quick point.

It's unclear to me whether the report produced will be able to meet the timelines that are useful. Although I do appreciate NDP-2, I think it will have to rely on historical data, and I don't think it will be that useful, because it will be based on 2025 or previous tax years. That's the reason we'll be voting against it.

Otherwise, I think it's a relatively reasonable and helpful amendment. I just don't think we can support it, because I don't think it can meet reasonable timelines for this particular measure.

[The Chair, Liberal, Karina Gould]

Thank you, Mr. Turnbull.

Would anyone else like to speak to NDP-2?

We're voting on NDP-2.

(Amendment agreed to: yeas 5; nays 4 [See Minutes of Proceedings])

(On clause 3)

We'll move to amendment BQ-1.

Monsieur Garon, did you want to introduce it?

[Jean-Denis Garon, Bloc, Mirabel, QC]

Thank you, Madam Chair—

[The Chair, Liberal, Karina Gould]

I'm sorry. We're going to CPC-2.

You said you were withdrawing that, so we skipped it, but go ahead.

[Pat Kelly, Conservative, Calgary Crowfoot, AB]

Yes, I think I have to do that clearly for the analysts and the record.

We withdraw the amendment.

[The Chair, Liberal, Karina Gould]

Thank you, Mr. Kelly.

CPC-2 is withdrawn. My apologies for that. I was just trusting you.

We'll go to Monsieur Garon for BQ-1.

[Jean-Denis Garon, Bloc, Mirabel, QC]

Thank you, Madam Chair.

When the government announced a goods and services tax rebate for the purchase of a new home upon signing the contract, it obviously intended to incentivize people to buy a newly built home rather than an existing home on the market. We wanted to create demand for new housing, and we know that first-time buyers don't necessarily prefer newly built homes.

On March 20, 2025, when we weren't in an election campaign, the Prime Minister announced the measure in a press release. We have since heard from representatives of the Association des professionnels de la construction et de l'habitation du Québec, or APCHQ, and the Residential Construction Council of Ontario. They clearly told us that a number of people, having believed the Prime Minister, had signed a contract to buy a new home only to realize, when the notice of ways and means was tabled and, subsequently, when the bill was introduced, that what had led them to make the purchase wasn't there.

The purpose of amendment BQ‑1 is therefore to recognize the situation these individuals are in. All we're proposing is to change the date on which people who signed a contract will be able to get a refund. I assume the government has some apprehensions since, even if the amendment is in order, there are some costs associated with it. However, the amendment would add only two weeks to a program that will last several years. The government's credibility with respect to its announcements is also at stake. In my opinion, this is entirely in line with the bill, and I invite my colleagues to support the amendment.

[Ryan Turnbull, Liberal, Whitby, ON]

I have a point of order, Chair.

[The Chair, Liberal, Karina Gould]

Go ahead, Mr. Turnbull.

[Ryan Turnbull, Liberal, Whitby, ON]

Chair, I would like to raise a point of order respecting the admissibility of BQ-1, concerning part 2 of Bill C-4, the proposed making life more affordable for Canadians act. Part 2 proposes to amend the Excise Tax Act and other related regulations to implement a temporary GST new housing rebate for first-time homebuyers. This measure was accompanied by a royal recommendation to authorize the GST rebate, for first-time homebuyers in respect of the purchase of a new house. The royal recommendation authorizes the CRA to draw from the consolidated revenue fund to pay to buyers who meet the terms, conditions and qualifications under part 2 of Bill C-4, once that bill receives royal assent, an amount equal to the GST that the buyer paid to the builder of the house.

Let me explain how this scheme operates. First-time homebuyers who qualify under part 2 of Bill C-4, who purchase a new house from a builder, pay that builder the price of the house as well as the GST related to that purchase. In respect of BQ-1, the key condition that governs the rebate is that the buyer must have entered into and signed a purchase agreement on or after May 27, 2025. Provided that condition, and the other qualifying conditions in part 2 of Bill C-4 are met, and the bill receives royal assent, the qualifying buyer could file a claim with the CRA for the GST rebate portion of the purchase. CRA would process the claim and, provided that the conditions are met under part 2 of Bill C-4, CRA would be authorized, by the royal recommendation, to draw funds from the consolidated revenue fund to issue a rebate payment for the GST portion to the buyer.

BQ-1 proposes to move the start date of the scheme as set out in part 2 of Bill C-4 from May 27, 2025, to March 20, 2025. This would allow first-time homebuyers who purchased a new house on or after March 20, 2025, to claim the GST rebate. This would represent an expansion of the scope of the rebate in a manner that is inconsistent with the terms and conditions of the rebate contained in the bill at first reading, is not authorized by the bill and exceeds the maximal charge authorized by the royal recommendation. This amendment requires a new royal recommendation, which could be provided only at the report stage by a minister of the Crown with the accompanying amendment.

This is not a novel matter for the House to consider in respect of a GST rebate for the purchase of housing. In the previous Parliament, on February 1, 2024, the Speaker ruled on the need for a royal recommendation for Bill C-356, respecting a GST rebate on housing, standing in the name of the former member for Carleton. The Speaker stated:

In raising his point of order, the parliamentary secretary argued that the bill would infringe on the Crown's financial prerogative by repurposing $100 million from the housing accelerator fund and by implementing a 100% GST rebate on new residential rental property for which the average rent payable is below the market rate. Page 838 of House of Commons Procedure and Practice, third edition, states:

A royal recommendation not only fixes the allowable charge, but also its objects, purposes, conditions and qualifications. For this reason, a royal recommendation is required not only in the case where money is being appropriated, but also in the case where the authorization to spend for a specific purpose is significantly altered. Without a royal recommendation, a bill that either increases the amount of an appropriation or extends its objects, purposes, conditions and qualifications is inadmissible on the grounds that it infringes on the Crown's financial initiative.

Following a careful review of Bill C-356, the Chair is preoccupied with some elements that would cause a withdrawal from the public treasury for new and distinct purposes.

The bill seeks, among other considerations, to authorize a minister to disburse up to $100 million to municipalities that surpass identified housing targets. This amount would be withdrawn directly from the consolidated revenue fund, although the bill requires a minister to table a plan to reallocate funds from the housing accelerator fund program to offset that amount. Moreover, the bill also proposes certain circumstances for which a 100% GST rebate on new residential rental property may be paid out.

The aforementioned elements would cause new and distinct charges against the consolidated revenue fund, thus constituting an infringement on the financial initiative of the Crown.

Accordingly, Bill C-356 must be accompanied by a royal recommendation, and without one, the Chair will not put the question at the third reading stage of the bill in its present form.

This is the situation which this committee now has before it, Chair. BQ-1 would alter the terms, conditions and qualifications of the royal recommendation that is attached to part 2 of Bill C-4, specifically including individuals who entered into and signed a purchase agreement with the builder from March 20, 2025, to May 26, 2025, who would not otherwise be eligible for the GST rebate under the parameters of part 2 of Bill C-4.

This expands the eligibility requirements and thus infringes upon the Crown's financial prerogative. This amendment is inadmissible to be moved in committee because it requires a royal recommendation. I therefore submit to the chair that BQ-1 is not admissible on the aforementioned grounds.

Thank you, Chair, and thank you to the members for their patience and for indulging me.

[The Chair, Liberal, Karina Gould]

Thank you, Mr. Turnbull.

I'm going to consult with the legislative clerk.

To the officials, could you clarify how the GST rebate would work in terms of the impact on the consolidated revenue fund and whether this is considered to be a payment or a tax credit? Could you explain that, please, for this amendment?

[Gervais Coulombe, Director General, Legislation, Sales Tax Division, Department of Finance]

Thank you, Madam Chair.

The goods and services tax, or GST, rebate for the purchase of a first home provided in Bill C‑4 operates as a payment from the consolidated revenue fund. Legislatively, it is not forgone tax revenue that would otherwise be payable. Therefore, any increase in the number of applicants eligible for repayment as of the new date proposed by the amendment would result in additional payments from the consolidated revenue fund. Furthermore, the Canada Revenue Agency has consistently maintained that no rebates could be processed before Bill C‑4 receives royal assent, as these are payments to be made from the consolidated revenue fund.

[The Chair, Liberal, Karina Gould]

Thank you. I'd like to get a better understanding, because I'm not a tax policy expert. Is this the same thing Mr. Poilievre proposed in Bill C‑356, or is it something else?

[Gervais Coulombe]

It's the same concept. Bill C‑356 proposed a new rebate on new housing. Here, we're in exactly the same legislative environment, and the same provisions of the Excise Tax Act are involved. If you look at the exact wording of the proposed amendments to Bill C‑4, it's really about a payment and not a tax reduction. That was the ruling made in February 2024 based on case law as to whether or not amendments on GST rebates were admissible.

[The Chair, Liberal, Karina Gould]

I have another question for food for thought. Will what is being proposed change the royal recommendation that accompanied Bill C‑4?

[Gervais Coulombe]

Our experts at the Department of Finance have estimated the additional costs associated with this measure. As I said, more homes would potentially become eligible and the increase would be in the order of $50 million over the five years of the tax planning period. That is certainly an order of magnitude exceeding the royal recommendation that accompanied the introduction of Bill C‑4 in June.

[The Chair, Liberal, Karina Gould]

Okay. Thank you, Mr. Coulombe.

I'm going to take a moment to confer with the clerk.

Mr. Garon, do you want to speak to Mr. Turnbull's point of order?

[Jean-Denis Garon, Bloc, Mirabel, QC]

Madam Chair, I beg to differ.

The parliamentary secretary referred to Bill C‑356, a private member's bill that requires a royal recommendation from the outset, and it was never granted. That is completely different from what is before us today. Bill C‑4 is already covered by a notice of ways and means. I understand the officials' opinion, which is clearly at odds with that of the legislative clerks who studied the proposal in advance. Obviously, the officials are here to advise you, Madam Chair, but in my opinion, independent opinion should prevail.

It's not a question here of whether or not it involves an expense, but whether it involves an expense within the meaning of parliamentary jurisprudence. Every tax cut or tax exemption, on the fund or on the form, has an effect on the public treasury. In this case, it's clear that the rebate associated with these new homes is directly related to the amount of GST paid. It's a rebate on a tax that was paid, and consumers feel they're owed that. We're of the opinion that, within the meaning of existing parliamentary jurisprudence, this amendment doesn't require a royal recommendation and that the comparison with Bill C‑356, a private member's bill that was never supported by a notice of ways and means adopted by the House, isn't admissible in the case before us.

[The Chair, Liberal, Karina Gould]

Thank you, Mr. Garon.

We have reflected on this, and thank you to the officials for sharing. I appreciate both Mr. Turnbull's and Mr. Garon's interventions.

House of Commons Procedure and Practice, third edition, states on page 772:

Since an amendment may not infringe upon the financial initiative of the Crown, it is inadmissible if it imposes a charge on the public treasury, or if it extends the objects or purposes or relaxes the conditions and qualifications specified in the royal recommendation.

In the opinion of the chair, the amendment proposes a new scheme that will affect government revenues and expenditures. It was clear that this is both a payment and would exceed the royal recommendation which accompanies Bill C-4. Therefore, I rule the amendment inadmissible.

Mr. Garon.

[Jean-Denis Garon, Bloc, Mirabel, QC]

Madam Chair, I would like to challenge your ruling and put it to a vote.

[The Chair, Liberal, Karina Gould]

Shall the decision of the chair be sustained?

(Ruling of the chair overturned: nays 5; yeas 4)

Is there debate on the proposed amendment?

Seeing none we'll go straight to a vote.

(Amendment agreed to: yeas 5; nays 4 [See Minutes of Proceedings])

(Clause 3 as amended agreed to: yeas 5; nays 4)

(On clause 4)

[The Chair, Liberal, Karina Gould]

We have amendment CPC‑3.

Mr. Hallan.

[Jasraj Singh Hallan, Conservative, Calgary East, AB]

We will withdraw the amendment.

[The Chair, Liberal, Karina Gould]

Thank you, Mr. Hallan.

Amendment CPC‑3 on clause 4 is withdrawn.

Next is NDP‑3.

Ms. Kwan, would you like to introduce it?

[Jenny Kwan, NDP, Vancouver East, BC]

Madam Chair, NDP‑3 essentially proposes that the first-time homebuyers' GST exemption be applied based on the closing date of a home purchase rather than when the date the purchase agreement is signed.