The Nova Scotia government will match steps announced by Ottawa last week and remove the provincial portion of the HST from new multi-unit apartment building construction projects.
"I would say that Nova Scotians can expect that this is a first step on a journey to solve [the housing crisis]," Premier Tim Houston told reporters following a cabinet meeting in Halifax on Thursday.
"It's an idea and we're in the business of trying ideas to solve problems, so we're trying this one."
Ottawa made the announcement last week in the face of a growing housing crisis across the country caused at least in part by housing construction lagging behind population growth. It's a move the federal Liberals first announced in 2015, but did not act upon.
Nova Scotia's portion of the HST is 10 per cent. Houston estimated the change would cost between $80 million and $100 million a year.
"In many ways, I hope the cost goes up because that means there's more housing starts and more construction happening," said Houston.
His government will reassess the situation after two years, he said.
Passing on savings to tenants
Houston said his government is pursuing other measures, too, and noted that finding enough skilled labour also remains a challenge.
Housing Minister John Lohr said he's hoping the tax change will help. Removing the HST from new building construction is something he's been hearing about since his party came to power and he became minister two years ago, Lohr told reporters.
He said he expects that if the measure helps developers save money, those savings will be passed along to the eventual tenants of the new buildings.
"It's certainly the case that if increased costs are incurred by developers, they're passed on. So we would think that works both ways."
NDP Leader Claudia Chender says the government needs to take more steps to address the housing crisis. (Michael Gorman/CBC)
NDP Leader Claudia Chender said she'd like to see the incentive program be tied to objectives for developers, such as construction timelines and affordability for tenants.
"The main question about this kind of incentive is, you know, is this lining the pockets of developers or is this going to translate into affordable housing for Nova Scotians?" she asked
"And we can have a say over that."
Chender said the government also needs to bring in an enforcement unit to oversee the rental market and institute other protections for renters who have few options in a market with a one per cent vacancy rate.
Liberal MLA Kelly Regan said the decision by Houston's government is a first step in addressing the province's housing crisis, but she said it's also time for the Tories to release their housing strategies for students and the general public.
Those documents were due last spring and do not have updated delivery dates.
"It would be really nice if the government actually showed up and did what they said they were going to do," she told reporters.
Federal Minister hopes for extension
Ottawa has committed to keeping the HST off building projects for a much longer period than Nova Scotia — seven years as opposed to two.
Federal Housing Minister Sean Fraser said he was grateful to the provincial government for matching the program, but he hopes it will be extended when Nova Scotia reassesses it at the end of two years.
"One of the things that I did hear when I was speaking to home builders, when I was speaking to non-profit advocates, was that builders want certainty so that they can plan which projects they're going to get done in order to take advantage of these new tax incentives ... a longer period of time does provide more certainty," Fraser said.
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