Poilievre calls on premiers to remove sales taxes on new homes under $1M

Conservative Leader Pierre Poilievre is urging Canada's premiers to align with his commitment to eliminate the federal sales tax on new homes priced under $1 million by also abolishing 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 stated in a letter addressed 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, just a week after he pledged to remove the GST on the purchase of entry-level new homes. He argued that the tax was not intended to be applied to necessities like food and housing and that its removal would stimulate the construction of more homes.

According to the Conservatives, this initiative would save Canadians $40,000 on an $800,000 home and generate an additional 30,000 homes constructed in Canada each year. The announcement received praise from the CEO of the Canadian Home Builders' Association.

In his letter to the premiers, Poilievre requested that they match his proposal "by axing the provincial sales tax (where applicable) on new homes under $1 million."

Neither Alberta nor the territories impose a provincial sales tax. Provincial rates range from six percent in Saskatchewan to 10 percent in the Atlantic provinces.

Before calling an election, Nova Scotia Premier Tim Houston pledged to reduce the harmonized sales tax to 14 percent next year.

Several provinces, including New Brunswick, Saskatchewan, and British Columbia, held elections this fall, while Ontario may be approaching an election in the spring.

The issue of housing affordability has become prominent nationwide, as experts highlight a crisis driven by a growing population, rising interest rates, and a lack of housing supply. Since April 2020, Canadian house prices are estimated to have risen by an average of over 30 percent.

"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.

Implementing this tax cut would entail considerable costs.

Poilievre has indicated he would cover the estimated annual $8 billion cost of eliminating the GST by reducing federal programs he deems bureaucratic, such as the Housing Accelerator Fund.

Provinces would need to identify savings in other areas.

Housing Minister Sean Fraser responded to Poilievre's comments during Question Period last week, revealing that some members of the Conservative caucus had requested funding from the same programs Poilievre plans to cut.

The Housing Accelerator Fund provides financial support to municipalities that agree to streamline processes for constructing more homes. So far, 177 agreements have been made between municipalities and the federal government.

Poilievre has criticized the program as "disastrous" and overly bureaucratic, asserting it has not resulted in increased home construction.

"What [Poilievre] doesn't know is that 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 lead to more homes being built," Fraser remarked.

"My question for the Conservative members of his caucus is, will they have the courage to stand up and tell him he is wrong?"

Fraser's office shared letters with CBC News from Conservative MPs Adam Chambers, Rob Moore, Michael Cooper, Dan Albas, and Lianne Rood. These letters, requesting funding from the Housing Accelerator Fund for their communities, were sent to the minister between September 2023 and February 2024.