Weeks after Ontario’s finance minister offered first-time home buyers a new tax discount, Premier Doug Ford is doubting how effective the policy will be in reigniting the province’s sluggish housing construction sector.
In early November, the province announced it would waive the provincial portion of the HST for new homes under $1 million, mirroring the federal plan announced in the Carney government’s November budget.
The combined incentives, the province said, would save prospective first-time homebuyers up to $130,000 off the cost of a new home.
Limiting the policy to first-time home buyers, however, appears to be a sticking point between the person who runs the government and the person in charge of the government’s spending plan.
As Ford spoke about affordability measures during an unrelated news conference at Queen’s Park on Monday, he gently chided the finance minister’s policy, suggesting it was too narrow.
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“Why don’t we give it to everyone, not just first-time homebuyers, anyone who buys a new home,” Ford said. “We have massive inventory out there, as you all know, and zero plus zero equals zero.”
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Ford, who raised the issue with the prime minister during a First Ministers’ Meeting call, argued the policy could also help drive up the economy as the country feels the weight of the trade war with the United States.
“If we allow everyone to buy a new home, look at the economy, new fridges, new stoves, new microwaves, new televisions, new carpets, new couches, new beds, new everything,” Ford said. “That’s my argument, and if we do that, then we’ll be able to move forward.”
The premier’s criticism of his own government’s program comes after the Ontario Home Builders Association downplayed the impact of the tax rebate.
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“The first-time homebuyer exemption in Ontario will have very little effect, less than five per cent,” association CEO Scott Andison told Focus Ontario.
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“We need a very specific Ontario-led approach and that is to remove the provincial sales tax off the price of all new home purchases.”
Finance Minister Peter Bethlenfalvy — who had previously dismissed the premier’s broad-based proposal as being too expensive — claimed home builders “are very happy with the move.”
“We have a lot of requests, and of course, we’ll continue to work with all stakeholders,” Bethlenfalvy said.
As for the disagreement over the policy, the finance minister insisted he “didn’t overrule” the premier but instead said the two politicians “work together” on the budget.
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