MP and President of the Treasury Board Anita Anand communicated two major announcements to Oakville News at the close of the recent Liberal caucus retreat, both of which are designed to improve affordability: the first by improving housing supply and the second by increasing loan forgiveness for small businesses.
Housing
The country's housing crisis is a high priority for Canadians and the government has responded with a $4.1 billion dollar housing accelerator fund. To that was added yesterday the removal of the GST on rental accommodation construction. "This will mean the building of thousands of new rental units," Minister Anand told the News.
Given the dramatic recent rises in rents, this supply is desperately needed, so it is to be hoped the industry will be able to respond quickly. Industry spokespeople cite building permit approval delays and the challenge of finding enough tradespeople as barriers. The potential return on investment will improve with the GST removal, which should make it worthwhile for developers to work hard to overcome these barriers. There is also considerable pressure on Oakville Town Council, and all other municipal governments, to cut red tape and speed up the process of readying developments. It is to be hoped this measure will get more shovels in the ground and sooner.
The reduction in cost brought about by the GST removal will help to offset rising interest rates and high development charges. "It goes a long way in making these projects more viable," said one commentator. It remains to be seen if the Province will come in and make this an HST removal, which would make even more difference, which the Prime Minister has encouraged, and the industry would welcome. "In any case we definitely give them a point for this action," he said.
In our view, this supply-based initiative is better targeted than the first-time homebuyers' incentives, which make purchasing easier in a sellers' market and thus contribute to inflating the price of homes. The private sector will ultimately need to meet the demand, but making the economics of doing so more attractive should have a meaningful impact.
Small business
The second announcement was an extension for businesses to repay their Covid (CEBA) loans for a full year, into 2026, and with partial forgiveness, from Dec. 31st to Jan. 18th. While some business organizations felt the delay was too little, it does mean more businesses will qualify for forgiveness for some part of the funds they borrowed during the pandemic. Oakville's Chamber of Commerce, along with the Canadian Chamber, were instrumental in lobbying for more time for businesses to pay, said Minister Anand. This extension will allow businesses to use proceeds from holiday season activity to fund the repayment, if they can qualify. There has been a further extension of a full year for the ultimate loan repayment.
Minister Anand reiterated that in her new role she will be focused on the economy and affordability for Canadians, aligned with controlled government spending now that the focus on the pandemic is past and Canada has mobilized in support of the Ukraine. In a recent Chamber event, she said that all initiatives will be passing her desk, and will be subject to two criteria: is it good for Canadian taxpayers; and is it prudent.
The ability to refocus government attention on the economy is expected to result in further announcements with respect to housing policy and affordability.