Absolutely. Thank you.
I would point out that the question isn't whether it should continue. It is, why was it ever introduced for residential apartment construction? Where we have no input tax credits on revenue, why would we be paying HST or GST?
That being said, that is a decision that long predates my involvement in the industry.
What I can say is that the reduction or the proposed rebate of the GST from our basket of construction costs is a major step forward. I do believe that when the regs are introduced and when we understand—and as importantly, when the lenders to our industry understand—the mechanism for that reduction or elimination of that line item as being major, and ideally with corresponding provincial matching, that will go a very long way. It would serve to reduce a construction budget by, theoretically, something in the 10% range.
That is a major reduction in expense. That should allow projects that were marginal or slightly below a reasonable threshold—both from a developer's perspective, as well as from a financing perspective—to go ahead.
I do think this is a critical lever that is being pulled. I do hope that the regulations relating to it get defined very quickly.
As I've suggested, there are ways it could be broadened to include projects that have not yet made their final HST or GST self-assessment. If there were some way that the potential incentive or the potential reduction in cost could be grandfathered to existing projects, so long as it gets reinvested in a subsequent and incremental new construction project, I think that would serve to bring experienced builders back to the table very quickly and ultimately bring more supply to the table.