The Canadian government plans to improve affordability with some new measures being introduced. Chrystia Freeland, Canada’s Finance Minister, brought forth a new bill to enhance the country’s affordability with the House of Commons.
Canadian government plans to improve affordability
There are two parts concerning Bill C-56, which is the Affordability and Groceries Act. The first one is to bring about an improvement within the GST New Residential Rental Property Rebate by making changes to the Excise Tax Act.
The second part of this bill is to develop a proper framework for Canada’s Minister of Industry. This framework will enable the Commission of Competition to organize an inquiry into the competition arena within the market or industry. It will provide authority to the Competition Tribunal to carry out specific orders even if the agreement parties are not competitors.
Additionally, it intends to scrap the present law’s provision for efficiencies gained through mergers.
Tax Rebate for freshly developed rental properties
The Tax Rebate in this context implies that builders will be eligible to access major tax rebates if they invest in the construction of new rental buildings. As a result, Canada will have an increased number of rental properties, and housing costs might be reduced.
The government revealed about the new Act that the improvement will give rise to enhanced GST Rental Debate from 36 percent to 100 percent. Additionally, it eliminates the current GST Rental Rebate with a gradual decline in its entry. This will further lead to new rental projects.
According to Rental.ca, Canada’s one-bedroom apartment costs $2,117. This cost is relatively higher in cities like Vancouver and Toronto, around $2,988 and $2,620, respectively.
As a result, newcomers might face a few challenges if they seek to find their first home to settle in Canada.
Purchasing a home has become challenging for most new immigrants who arrive here. This is primarily due to the lack of affordable houses in response to the demands. Canada’s average cost exceeds $600,000, per the Canadian Real Estate Association.
Conversely, Statistics Canada revealed through its 2021 report that newcomers who came to Canada in 2018 had an average income of $31,900 in 2019. However, in 2023, the average income of a Canadian newcomer is around $41,858.
Details on the Competition Act
The Competition Act’s new updates will likely benefit Canada by authorizing the Competition Bureau with increased power. As a result, the Competition Bureau will be able to inquire about scenarios when industries are acting unjustly. According to the government, it will impact price fixing or price gouging. Also, they will then be able to take action.
Furthermore, the elimination of efficiencies defense will discard the anti-competitive mergers that increase prices and restrict options for Canadian consumers. This Bureau will have the authority to limit partnerships that demotivate consumers from making choices and reduce competition.
Prohibiting these partnerships and mergers will lead to enhanced competition. As a result, prices will be reduced, or at least the costs will remain stable. This way, it will be possible to welcome and retain consumers.
