Liberals drop pledge to waive GST on rental hous­ing

The Globe and Mail (Ottawa/Quebec Edition) - - NEWS - BILL CURRY

The fed­eral gov­ern­ment is drop­ping a cam­paign pledge to waive the GST on the con­struc­tion of new rental units, claim­ing re­search has shown there are bet­ter ways to boost the sup­ply of af­ford­able hous­ing.

The GST plan is one of just three pledges out of 364 gov­ern­ment com­mit­ments that are listed on a new track­ing web­site as “not be­ing pur­sued.” The fed­eral web­site, launched on Tues­day, lists the gov­ern­ment’s progress on the items in the man­date let­ters pro­vided to cab­i­net min­is­ters.

Most of the man­date-let­ter pledges re­flect po­lit­i­cal prom­ises made by the Lib­eral Party dur­ing the 2015 elec­tion cam­paign. The dis­clo­sure of man­date let­ters and fol­low-up track­ing is part of a broader pledge to be more trans­par­ent about gov­ern­ment ob­jec­tives and whether or not they have been achieved.

The new web­site places pledges into six cat­e­gories: Sixty six were listed as “com­pleted fully met”; one – the re­set­tle­ment of 25,000 Syr­ian refugees – is listed as “com­pleted mod­i­fied” be­cause the tar­get was not achieved as quickly as promised; 218 are listed as “un­der way on track”; 13 are “un­der way with chal­lenges”; three are “not be­ing pur­sued”; and 21 are listed as an “on-go­ing com­mit­ment.”

The clas­si­fi­ca­tion was the re­sult of con­ver­sa­tions be­tween pub­lic ser­vants in de­part­ments and pub­lic ser­vants at the cen­tral Privy Coun­cil Of­fice, but the ul­ti­mate de­ci­sions are po­lit­i­cal and made by cab­i­net.

Some will clearly raise eye­brows. For in­stance, rather than list­ing it as an aban­doned pledge, the gov­ern­ment’s orig­i­nal plan to bal­ance the bud­get in 2019 is listed as “un­der way with chal­lenges.”

Fi­nance Min­is­ter Bill Morneau’s 2017 bud­get pro­vided no in­di­ca­tion of a plan to bal­ance the bud­get by then. The Min­is­ter’s Oc­to­ber fall eco­nomic state­ment es­ti­mates there will be a $17.3-bil­lion deficit that year.

The re­lease of the track­ing tool marked the first time the fed­eral gov­ern­ment has said it would not be fol­low­ing through on its pledge re­lated to the GST and af­ford­able rental hous­ing.

The rev­e­la­tion comes as the fed­eral Liberals are pre­par­ing to re­lease a ma­jor pol­icy doc­u­ment that will out­line a na­tional hous­ing strat­egy. The strat­egy re­ceived a bud­get of $11.2bil­lion over 11 years in the most re­cent bud­get and the pol­icy doc­u­ment will show how that money will be spent.

The Lib­eral Party plat­form es­ti­mated that waiv­ing the GST on new rental hous­ing would cost $125-mil­lion a year.

Mr. Morneau’s press sec­re­tary, Chloé Lu­ciani-Girouard, said the hous­ing strat­egy will de­tail how the gov­ern­ment in­tends to pro­mote af­ford­able hous­ing.

“The Gov­ern­ment con­cluded, based on re­search and ev­i­dence, that there were more ef­fec­tive ways of en­cour­ag­ing the con­struc­tion of af­ford­able rental hous­ing,” she said in an e-mail.

Jeff Mor­ri­son, who ad­vo­cates for more af­ford­able hous­ing as ex­ec­u­tive di­rec­tor of the Cana­dian Hous­ing and Re­newal As­so­ci­a­tion, said on Tues­day that he hopes the fed­eral gov­ern­ment will “re­con­sider” its po­si­tion on the GST.

The Cana­dian Home Builders As­so­ci­a­tion had rec­om­mended that the GST should be ex­empt from all new rental con­struc­tion, not just for af­ford­able hous­ing.

David Foster, a spokesper­son for the as­so­ci­a­tion, said the GST is­sue is just one as­pect of what needs to be a broad pol­icy re­sponse to ad­dress a tight­en­ing rental mar­ket and hous­ing pres­sures gen­er­ally.

Mr. Foster said the as­so­ci­a­tion is re­serv­ing judg­ment on Ot­tawa’s plans un­til the new hous­ing strat­egy is re­leased shortly.

In ad­di­tion to the GST is­sue, the two other pledges that the gov­ern­ment listed as “not be­ing pur­sued” are elec­toral re­form and a prom­ise to pro­vide a 12-month break on Em­ploy­ment In­sur­ance pre­mi­ums for firms that hire younger work­ers into per­ma­nent po­si­tions.

The gov­ern­ment is planning to re­lease a sec­ond round of per­for­mance track­ing data next month that will fo­cus on gov­ern­ment-wide pri­or­i­ties – such as In­dige­nous is­sues and the en­vi­ron­ment – and as­sess­ing whether re­sults have been achieved.

Four of the 13 pledges listed as “un­der way with chal­lenges,” re­late to In­dige­nous is­sues. These in­clude im­prov­ing es­sen­tial in­fra­struc­ture for In­dige­nous com­mu­ni­ties, im­ple­ment­ing the rec­om­men­da­tions of the Truth and Rec­on­cil­i­a­tion Com­mis­sion, in­vest­ing in First Na­tions ed­u­ca­tion on re­serve and un­der­tak­ing an in­quiry into mur­dered and miss­ing In­dige­nous women and girls.

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