On March 26, Ontario announced a partnership with Ottawa to fund tax relief on new housing.
On June 18, three months after Ontario’s deal, Prime Minister Carney and Premier Eby announced a deal for BC.
But BC homebuyers, paying the highest home prices in Canada, did not get the GST relief agreed to in Ontario.
Carney proposed dropping the 5% GST in BC but Eby declined, despite high levels of housing inventory and declining sales.
Instead, Eby plans to spend more than a billion dollars buying condos, allegedly for rental or purchase, although there is no transparent plan.
Carney has distanced himself from Eby’s plan as have developers, builders and the industry in general, which prefer removal of the GST on new homes.
A GST rebate would directly benefit the public, boost sales and significantly reduce inventory. In other words, let the market resolve the challenges by removing sky-high government taxes creating unaffordability in the first place.
Instead of providing a GST rebate, it appears Eby is using federal funding to plug holes in his $13.3 billion deficit.
For example, Carney has agreed to provide up to $3 billion to replace the Massey Tunnel. The original project estimate was a total of $4.5 billion. Now it appears costs have doubled.
Major cost overruns are common for the BC govt’s projects including the Cowichan Hospital, Surrey Hospital, Skytrain extension, Pattullo Bridge and Massey Tunnel replacements.
The projects are part of the govt’s Community Benefits Agreement (CBA) policy introduced in 2018. The CBA requires all workers to be members of the govt’s preferred unions, eliminating the majority of construction workers in BC.
This significantly reduces project suppliers and increases costs, demonstrated by overruns, delays, and the highest budget deficits in BC history.
In other words, politics and fiscal mismanagement are why the BC deal took so long and why homebuyers have been cut out of tax relief.
Instead, BC taxpayers are spending over a billion dollars buying condos – a housing policy nobody wants, including the condo builders.
This column appears Wednesdays in the Times Colonist.
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