Home builders call on province to eliminate PST from residential construction

Days after the federal government announced that GST would be removed from new rental construction projects, there are calls for a similar move from the Saskatchewan government.

Nicole Burgess, CEO of the Saskatoon & Region Home Builders’ Association, said she’s requesting an even bolder move from the province, calling for the Scott Moe government to eliminate PST from all new residential construction, whether or not it’s for rentals.

Burgess said Saskatchewan’s PST was added to all new residential construction, for both labour and materials, back in 2017. She said the added tax had a “dampering” effect on industry at the time.

In 2020, a PST rebate program was introduced, which she called “fantastic.” That didn’t last, however.

“The end of that PST rebate program was just this past April, and already we’re seeing quite a bit of impact,” Burgess said.

The CEO said doing away with the PST on residential construction would help make Saskatchewan more competitive with other markets across the country.

“When the PST rebate went away, what we saw was some of our builders and developers leaving the province in order to seek more attractive markets to build in,” she explained.

“And that’s a huge concern, given our current inventory situation.”

Burgess said there’s been a shift in Saskatchewan to build more rental structures, given rising inflation and interest rates and fewer people able to qualify for mortgages.

“With substantially low vacancy rates in rentals, it is an attractive thing for builders and developers to move on to,” she said.

Another incentive Burgess said her organization is waiting on is an announcement regarding the Canada Mortgage and Housing Corporation’s Housing Accelerator Fund. That fund offers incentives to local governments to encourage initiatives aimed at increasing housing supply.

The $4-billion federal program was announced in the spring of 2022, but applications weren’t accepted until July of this year. The deadline for applications was Aug. 18.

The Saskatchewan NDP has also long opposed PST on construction labour in the province, arguing that it drives up the cost and leads to delays or cancelled projects.

– With files from 980 CJME’s Lisa Schick