In an effort to spur the construction of more housing, Premier Tim Houston announced on Thursday that Nova Scotia will drop the provincial portion of the HST on new builds.
That reduces the cost by 10%, and follows last week’s announcement by Prime Minister Justin Trudeau to eliminate the 5% federal tax (GST) on multi-unit buildings.
It’s a significant cost developers in Nova Scotia will no longer have to pay, at least for the next two years after which the province will reassess the policy. The federal discount extends for at least five years. Houston said a preliminary estimate suggests dropping the tax may reduce revenue to the province by $80 million to $100 million a year. Houston said he’s okay with that.
“I hope that number goes up because that would mean we are actually seeing more housing get built,” Houston said.
‘Necessary move,’ Liberals says
Liberal leader Zach Churchill said in a written statement he was pleased to see the Houston government act on the measure. Churchill said the Liberals have been advocating for dropping the provincial portion of HST since the federal government made its announcement last week.
“Our province is facing severe challenges with the highest rates of inflation and rental increases in the country,” Churchill said in the statement.
Braedon Clark, the Liberal housing critic, said this was a “necessary move,” but said the Houston government has more work to do.
“The government should keep the momentum going by finally releasing their overdue housing strategy to chart the path forward for our province. Affordable housing may not be a top priority for the Houston government, but it is for Nova Scotians.”
The housing strategy was originally promised for spring. It’s now fall. On Thursday, Houston acknowledged that dropping the HST on the new construction of apartment buildings is only “the first step on a journey to solve this.”
A lot of people want to build, Houston said, but cost isn’t the only issue. Labour shortages and timelines around obtaining permits are also problems Houston said the government will be addressing over the next few weeks. He hinted that there are are other initiatives coming.
NDP leader Claudia Chender described dropping the 10% tax as “the low-hanging fruit.”
“Anything that will incent housing is good. We’re interested to know if that waiver of HST could be tied to specific objectives, such as timelines and affordability — these are things we haven’t seen with other government programs, like the special planning areas,” Chender told reporters in a cabinet session Thursday.
“As a result, we haven’t seen the needle move during the housing crisis… so I think the main question is: is this lining the pockets of developers or is it going to translate into affordable rent for Nova Scotians?”
Houston’s position is that no one policy will solve the housing crisis but, on this issue, he said, “the province is aligned with the federal government” and will support Ottawa by dropping the provincial portion of the HST on new construction. Other provinces are considering similar action while Ontario and Newfoundland and Labrador have announced they will also drop the HST on building new apartments.
Houston begins 10-day trip to Asia
Houston and three staff members leave today for a trip to Japan, the Philippines, and Singapore.
“It’s a trip to talk about trade opportunities, health care innovation, and generally promote Nova Scotia,” Houston said.
The premier will attend a series of health care recruitment events in the Philippines and Singapore focused on attracting continuing care assistants to work in hospitals, nursing homes, and home care settings. The Philippines is the province’s third largest source of newcomers to Nova Scotia.
Houston will also meet with Tan Chong Meng, Group Chief Executive Officer of PSA International. PSA is the company that owns and operates both container terminals at the port of Halifax. Meetings are also scheduled with Canada’s ambassadors to Japan and the Philippines.
A news release put out by the premier’s office said the Nova Scotia delegation will also host industry roundtables focused on health care innovation and renewable energy. Houston said offshore wind and ammonia from proposed green hydrogen projects are potential exports.
Asked by reporters why he is not going to China — one of Nova Scotia’s largest trading partners for sales of seafood and a frequent destination for former premier Stephen McNeil — Houston said, “It’s a big world and we need to diversify and develop other relationships as well.”
The premier’s office declined to provide a cost estimate for the Asian trip, saying those expenses will be filed as required by legislation and will become available to the public through the usual disclosure following the trip.
Those accompanying Houston includes Nicole LaFosse Parker, the premier’s chief of staff and general counsel, Dana MacKenzie, deputy minister of Intergovernmental Affairs, and Mike McMurray, executive director, International Relations.