Summer is usually our members’ busiest time, and while for some parts of the country this hasn’t changed drastically, in others, the alarm bells continue to ring.
Over the summer, CHBA released the results of our Q2 Housing Market Index (HMI) – our quarterly industry sentiment survey that serves as an indicator of future housing starts. For the 12th consecutive quarter, the HMI remained at near-record lows, particularly in Ontario and BC. Lack of consumer confidence driven by ongoing tariff uncertainty, as well as extremely high construction costs – which are strongly influenced by exorbitant municipal taxes and restrictive government policies – continued to hold back sales improvements. This, in turn, continues to stifle much-needed home building efforts.
First-Time Home Buyers’ GST Rebate
While it’s a positive policy move, the delayed implementation of the First-Time Home Buyers’ GST Rebate due to a parliamentary approval process that didn’t get completed before the House of Commons rose for the summer, is keeping buyers on the sidelines (even though they are eligible for the rebate as of May 27, 2025) and delaying new projects. Throughout the summer, CHBA has pushed for implementation as soon as parliament resumes. We’ve also made it clear to federal officials that further enhancements are required to truly drive the construction of new housing projects, while emphasizing that they need to happen as soon as possible. Notably, CHBA is recommending that the GST rebate be extended to all buyers of new homes, applied to secondary suites and accessory dwelling units – important forms of new housing – and raised to higher price thresholds in more expensive markets. All of these would apply to substantial renovations as well.
CHBA reiterated this message, among others, in our pre-budget recommendations to the House of Commons Standing Committee on Finance for the 2025 Federal Budget, to the Department of Finance, and in a variety of consultations with ministers and government officials. Along with our call to fix the GST on new homes, CHBA continued to demand more action on removing the barriers preventing a meaningful boost in homebuilding. In the submission, CHBA continued to encourage the government to work with provinces and municipalities to find alternatives to development charges (DCs), which are a major driver of skyrocketing home prices in many regions across the country. For example, government-imposed costs account for more than 30 per cent of new home prices in Ontario, and as most homebuilders well know, they have grown to pay for more than just “growth.” This unfairly penalizes buyers of new homes and directly impacts members’ ability to invest in building more housing supply. Reform on this issue, as well as on the duplicative and unnecessary red tape that drives up home building costs, continues to be a top priority of CHBA’s government advocacy efforts.
Steady pressure from CHBA
Another area where CHBA continues to apply pressure is on fixing the stress test and expanding access to longer-term mortgages. For more than a decade, the mortgage stress test has locked well-qualified buyers out of homeownership and has had an adverse effect on both the rental market and the social housing system. There is no doubt that this has been a contributor to supply imbalances across the entire housing continuum. Last year, CHBA was pleased that the federal government committed to review the stress test for insured mortgages. And with the Office of the Superintendent of Financial Institutions – which regulates the uninsured mortgage space – hinting that they may also remove it on uninsured mortgages, there is no better time than now for CHBA to keep steady pressure on this issue.
Finally, CHBA is pushing hard to get more support for the residential construction workforce, both by promoting careers in the sector and through adjustments to the immigration system to bring in newcomers with the right skills and affinity for homebuilding. This, coupled with CHBA’s suite of recommendations to scale up factory-built methods outlined in our Sector Transition Strategy, will help equip the industry with the right tools and resources to scale up productivity to truly and meaningfully put a dent in the government’s housing supply targets.
CHBA members, stay up to date on these issues by subscribing to Industry Highlights, our media aggregator, with commentary, by emailing communications@chba.ca.
