The federal government said Thursday it will eliminate the GST on the construction of new rental apartments immediately in an effort to make housing more affordable.
Reporters at the Liberal caucus retreat in London, Ont., were told that the measure is one of a number aimed at bringing down the cost of living that will be announced later in the day.
The announcement will be made by Prime Minister Justin Trudeau and Deputy Prime Minister and Finance Minister Chrystia Freeland.
CBC.ca will be carrying the announcement live at 4 p.m. ET.
The NDP, which has been calling for the federal portion of the GST/HST to be removed from new rental housing, welcomed the move.
A spokesperson for the party told CBC News that the Liberal government should have moved on the idea months ago.
Prime Minister Trudeau and his government have faced increasing pressure in recent months to deliver a response to the housing shortage.
That pressure increased late last month after the Liberal cabinet retreat in P.E.I. ended without an announcement of new measures to tackle the crisis.
On Wednesday in London, Ont., Trudeau announced that the city had become the first in Canada to reach a deal with his government under the Housing Accelerator Fund.
Housing gap remains high: CMHC report
The deal will see London get $74 million in exchange for the city’s agreement to pursue a series of measures, including a change to local zoning rules that should make it easier to build more rental units.
According to federal and municipal officials, the agreement will result in the construction of 2,000 housing units over the next three years and will help build “thousands” more in the years after.
The Liberals’ announcement comes as the Canada Mortgage and Housing Corporation (CMHC) released a new report estimating how many units are required to make housing affordable again.
The CMHC Supply Gaps Estimate report said another 3.5 million housing units are required by 2030, over and above the number of units expected to be built by that time, in order to restore affordability to 2004 levels.