New Affordable Housing and Groceries Act introduced
The Canadian Ministry of Finance has formalized Prime Minister Trudeau's proposals legally.
Today, Finance Minister Chrystia Freeland introduced Bill C-56, aka the Affordable Housing and Groceries Act. This starts the process of legalizing Prime Minister Trudeau's promises made at last week's Liberal Party meeting.
The law will have a positive impact on the well-being of Canadians for the foreseeable future. It will eliminate the GST, a special tax on new rental housing across the country. The Act should also increase competition, especially in the grocery sector. How will it work in practice?
As for the housing issue
The increase in GST rebate for construction of rental housing is officially enshrined: from 36% to 100%. That is, for this category of construction, the tax is canceled, which, according to the government's plan, should trigger a boom in the construction of apartment buildings, student hostels and hostels for the elderly.
For example, for a two-bedroom rental apartment worth CA$ 500,000, the tax credit under the updated law will be CA$ 25,000. The new rules will apply to objects, the construction of which will begin from September 14, 2023 and later — but not later than December 31, 2030. And construction must be completed by December 31, 2035.
Measures to curb the growth of grocery prices
Amendments to the Competition Act give the Canadian Competition Bureau more leverage over business. Now, in case of unacceptable behavior of giants in different industries (primarily in the grocery sector), the Competition Bureau can:
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