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13 Jun

The Government’s Plan To Use The GST Rebate To Help More People Buy

Pre-Construction

Posted by: Michael Greene

The Canadian government wants to help people buy new homes by giving a GST rebate, which means buyers get some tax money back.

But, there’s a big question: How much will it cost?

The government says $3.9 billion over five years, but another group thinks it’ll be about $2 billion. That’s a big difference!

What Are Canada’s Big Challenges in 2025?

Before we look at homes, let’s see what’s going on in Canada this year:

  • Trade wars: The U.S. has put new tariffs on Canadian goods, like lumber and aluminum, making it harder for Canadian companies and builders.

  • Slow population growth: Canada is taking in fewer new people, so fewer new workers and home buyers according to monitory policy report from the Bank of Canada

  • Rising unemployment: Canada’s job trouble continues as more people are without jobs—around 7% in May, the highest it’s been in nearly 9 years

  • Interest rates changing: The Bank of Canada is cutting rates to help, but people still owe a lot and get less spending room. 

In short, Canadians are feeling worried about spending money. Jobs and housing prices haven’t been great lately .

How the GST Rebate Might Help

By giving money back to new home buyers, the government hopes:

  1. More people will buy newly-built homes.

  2. Builders will start more houses and condos—especially in cities like Toronto where condo sales are slow.

  3. This could create jobs for builders and more homes for families.

But Let’s Talk About the Problems

Building things isn’t easy right now. Here’s why:

  • High costs: It costs a lot to borrow money and buy materials.

  • Fewer skilled workers: Many experienced builders are retiring.

  • Paperwork delays: Building permits take a long time.

  • Trade issues: The tariffs make things more expensive

Plus, if people think they’ll get a rebate, builders might raise their prices for materials and labour. That means houses might not get cheaper—just cost more. That could make it harder for everyone.

When Would the Rebate Start?

If the parliament agrees, here’s the idea:

  • Applies to new homes bought from May 27, 2025, to 2031.

  • Construction has to start by 2031 and finish by 2036.

  • It’s packaged with a tax cut that starts July 1, 2025.

✅ Why It Matters

Right now, Canada’s economy is having a tough time—with trade tensions, fewer jobs, and slow population growth. The GST rebate might help by encouraging more homebuilding and giving buyers a break.

🗣️ What Is Being Said

The government believes the GST rebate can help people afford homes and restart construction. But experts warn that unless more houses are built fast, costs won’t come down. We might even see prices go up if builders just raise their prices.

💭 My Opinion

I think the rebate could be a smart start to help Canadians buy homes in 2025—but only if it’s matched with bigger efforts to simplify building permits, train workers, and reduce trade costs. Without that support, it could end up just making houses more expensive—and that’s the last thing people need.