Government misses important opportunity to enact critical housing campaign promise in Throne Speech

OTTAWA, ON – Tuesday, May 27, 2025 – Today, the federal government missed its opportunity to use the Speech from the Throne to make good on its election promise to immediately implement the removal of the GST on new homes at or under $1 million and lower it on homes between $1 million and $1.5 million. The lack of actual implementation of this measure is keeping would-be home buyers on the sidelines, which is negatively impacting the construction of new homes.

“While CHBA is encouraged by this election promise and reference to it in the speech from the throne, as we have long called for fixing the GST on new housing to help address affordability challenges, the effect of making this announcement without actual implementation is causing a further slowdown in sales and therefore housing starts,” said CHBA CEO Kevin Lee. “We are hearing from builders across the country that purchases have stalled since prior to the election because of home buyers’ expectation that GST will soon be removed. Canadians wishing to enter the housing market will continue to hold out on purchasing new homes until they can receive the GST relief. It is critical that this measure go into effect immediately, and it should further apply to all buyers, not just first-time buyers.”

In many parts of Canada, the home construction industry is operating in a very challenging business environment with slow sales and low builder sentiment stemming from affordability challenges. This includes the rising cost of construction, exorbitant development charges in Canada’s larger urban centres, mortgage rates remaining higher than inflation, and ongoing economic uncertainty due to tariffs. In the provinces with the largest housing deficits, and particularly in Ontario and British Columbia, times are extremely difficult, with CHBA’s Housing Market Index (HMI) posting record lows.

While the promise of GST relief should be good news, it is instead having the opposite effect: keeping buyers on the sidelines as they wait for the government to implement this promise. This is further slowing already sluggish sales and, in turn, housing starts. The quick removal of GST on new homes would be a very positive improvement in an extremely challenging environment, for both home builders and Canadians.

To enable move-up buyers to purchase new homes and ensure a further boost of housing supply, CHBA is also recommending that the government extend their GST relief policy to all buyers of new homes (not solely first-time buyers) and include Accessory Dwelling Units (ADUs) and secondary suites, which are important forms of new housing. Further, the relief should be applicable to all new homes under the thresholds whose sales have not closed (i.e. where legal ownership of the property has not yet transferred to the buyer).

In the absence of a spring federal budget, and without individual mandate letters for ministers outlining specific and immediate actions, it is not clear when this key election promise will be implemented. “There is talk of a tax relief package by Canada Day, but in the meantime the industry is losing precious time during what should be an improving construction season – implementation of the GST measure is needed right now and can’t wait,” said Lee. “With the housing supply gap widening, CHBA’s 8,500 members from coast-to-coast, as well as Canadians wanting to fulfill their dream of homeownership, are awaiting urgent action from the government.”

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MEDIA INQUIRIES
Journalists wishing to interview Kevin Lee, Chief Executive Officer of the Canadian Home Builders’ Association are encouraged to submit their request by email to media@chba.ca.

About the Canadian Home Builders’ Association
The Canadian Home Builders’ Association (CHBA) is the voice of the residential construction industry in Canada, representing some 8,500 member firms across the country. Our membership spans new home builders, renovators, developers, trade contractors, building material manufacturers and suppliers, lenders, and other professionals in the housing sector.