Waiving GST on new housing will benefit Vernon: Builders’ Association

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The measure announced by the federal Liberals would see the GST waived for construction materials and labour related to purpose-built rental projects, which Winer said Vernon is moving more and more towards.

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“I think there’s going to be a lot of bright news ahead for Vernon and it’s a place we’re definitely focusing a lot of our energy and efforts because Council and staff are aligned in getting more projects started and getting more shovels in the ground, there’s a common mission and vision there,” Winer said, adding the City of Vernon has been doing a good job of ensuring the new rental housing projects built locally are market rate or affordable and not exclusively high-end properties.

“I think Mayor Victor Cummings and Council have been very clear on the construction that they want to see and they want to incentivize. I think purpose-built rental has been the name of the game throughout even the pandemic and post-pandemic in terms of new home construction, so I think we’re going to see that continue.”

Winer stated he expects to see more densification locally as a result of the new federal measure, especially in Vernon’s downtown core, which will take some pressure off developers in terms of infrastructure costs, which he noted was a “crucial piece” in ensuring projects stay affordable.

In his announcement, Trudeau also called on the provinces and municipalities to find ways to reduce taxation that impacts the construction of new housing.

“There’s still a provincial sales tax on lumber and other essential construction goods, there’s still development cost charges that need to be taken into account, but if the province and the municipality follow suit and answer that call then it is going to amount to a more than 10 per cent price reduction for the end consumer.”

Winer added the promise to support purpose-built rental housing projects is a great starting point to address the housing crisis.

“We don’t tax apples but we tax Oreos, so taxing purpose-built rentals just seems unfair because those are people that need homes and will eventually move up the housing ownership continuum,” Winer added.

Along with having positive impacts on Vernon, Winer suspected waiving the GST would benefit the Okanagan as a whole.

“If you were to cut interest rates by five per cent today we’d be at zero per cent interest, and imagine how happy mortgage holders would feel at that point in time,” Winer said.

“That five per cent cut when you’re looking at multi-million dollar projects is significant and it adds up over time. So I think we’re going to see a lot of shovels in the ground.”

He noted if the cut does lead to more construction projects taking off it will mean a need for more tradespeople working, but added recent provincial data showed there has been growth in the number of people working in all trades sectors who can help make these projects a reality.

Winer also said the Okanagan will look different when built up instead of out, but said it would ultimately be more sustainable by keeping taxes low and improving people’s access to amenities, adding “it overall means good things for the community if it they can get behind supporting buildings going a little bit higher.”

Looking ahead, Winer said another measure the federal government could take to move people from renting to owning would be adjusting the GST rebate for first-time home buyers, adding the Canadian Home Builders’ Association will be advocating for that change.