Mr. Speaker, residential rents are already exempt under the GST, meaning that the GST is not charged on residential rents paid by tenants. The Tax Expenditures and Evaluations 2012 report indicates that the exemption for residential rent reduced government revenues by about $1.3 billion in 2012.
Qualifying non-profit organizations, or NPOs—i.e., non-profit organizations that receive at least 40% of their total revenue through government funding or charities—are entitled to recover 50% of the GST they pay in respect of certain types of housing. This situation occurs when more than 10% of the residential units in the housing complex are intended for certain groups, such as seniors, youths, students, individuals with a disability, individuals in distress or in need of assistance, or individuals whose eligibility for occupancy or rent amount is dependent on a means or income test.
When charities or qualifying NPOs submit rebate claims for GST paid to the Canada Revenue Agency, they are not required to provide any information on the purchases that gave rise to the rebate entitlement. They just claim a rebate for 50% of the GST they paid on eligible purchases. Therefore, data are not sufficiently detailed to provide for the determination of the portion of the existing rebate that relates to this type of housing. While the value of the total rebate for charities and qualifying NPOs is known and was $355 million in 2012, there is no way to know what portion is attributable to housing for the underprivileged.
Depending on how affordable rental or non-profit housing is defined, providing full GST relief could result in substantial additional fiscal cost to the Government of Canada.