Conservative Leader Pierre Poilievre is calling on Canada’s premiers to match his pledge to remove the federal sales tax on new homes under $1 million by doing the same with provincial sales taxes.
“This is a significant step in fixing what has been broken and making home ownership more than just a dream for young Canadians again,” Poilievre said in the letter to all provincial and territorial premiers, which was shared with CBC News.
“But there’s more that can be done, and you can help.”
Poilievre sent the letter on Sunday. It comes one week after he promised to remove the GST on the purchase of entry-level new homes. He argued the tax was not intended to apply to necessities like food and housing, and that removing the GST would spur more housing starts.
The Conservatives say the move would save Canadians $40,000 on a $800,000 house and would spur the construction of an additional 30,000 homes in Canada every year. The announcement was lauded by the CEO of the Canadian Home Builders’ Association.
In the letter to the premiers, Poilievre asked them to match his proposal “by axing the provincial sales tax (where applicable) on new homes under $1 million.”
Neither Alberta nor the territories have a provincial sales tax. Provincial tax rates range from six per cent, in Saskatchewan, to 10 per cent, in the Atlantic Canadian provinces.
Days before he called an election, Nova Scotia Premier Tim Houston promised to lower the harmonized sales tax to 14 per cent next year,
Other provinces, including New Brunswick, Saskatchewan and British Columbia, held elections this fall. Ontario could be heading to an election in the spring.
The cost of housing has been an issue across the country, as experts point to a crisis spurred by a surging population, higher interest rates, and insufficient housing supply. Canadian house prices are estimated to have increased an average of more than 30 per cent since April 2020.
“I understand that all provinces are different. But if you match my announcement with a provincial sales tax cut of your own on new homes, you will save your residents tens of thousands of dollars,” Poilievre wrote in the letter.
Conservative Party Leader Pierre Poilievre announced a plan to remove the GST from new-construction homes under $1 million, if his party forms government.
Cutting the tax would come with significant costs.
Poilievre has said he would finance the cost of cutting the GST – which he estimates to be about $8 billion annually – by cutting federal programs he calls bureaucratic, including the Housing Accelerator Fund.
Provinces would have to find savings elsewhere.
Housing minister fires back
Last week, Housing Minister Sean Fraser responded to Question Period barbs from Poilievre by revealing that some members of the Conservative caucus advocated for their communities to receive funding from the same programs Poilievre has vowed to cut.
The House Accelerator Fund gives money to towns and cities that commit to reducing red tape to build more homes. To date, 177 deals have been struck between municipalities and the federal government.
Poilievre has called the program “disastrous” and bureaucratic, saying it hasn’t led to more homes being built.
Conservative Leader Pierre Poilievre and Housing Minister Sean Fraser had an increasingly heated exchange in question period Tuesday, which started with Poilievre asking about his own promise to remove the GST on new homes sold for less than $1 million. The two men went on to call each other arrogant and incompetent.
“What [Poilievre] doesn’t know is his caucus colleagues have been going behind his back, writing me letters advocating for their communities to receive funding through the Housing Accelerator Fund because they believe it will get more homes built,” Fraser said.
“My question for the Conservative members of his caucus, will they have the courage to stand up and tell him he is wrong?”
Fraser’s office provided letters to CBC News from Conservative MPs Adam Chambers, Rob Moore, Michael Cooper, Dan Albas and Lianne Rood. The letters, which asked Fraser to grant their communities funding from the Housing Accelerator Fund, were sent to the minister between September 2023 and February 2024.