Poilievre's plan to remove the GST on new homes gets mixed reaction on P.E.I.

Some on P.E.I. say Conservative Leader Pierre Poilivere's proposed tax cut would help people buy homes, but would bring other problems if current federal housing programs have to be sacrificed.

Poilievrehas pledgedto remove the five per cent GST on the sale of new homes valued at less than $1 million if his party forms the government after a federalelection that must be held by the end of 2025.

He also wrote to provincial premiers, including Dennis King, pushing them to remove the provincial sales tax too. In P.E.I.'s case, that's 10 per cent.

Alex Davidson, owner of Holmes Construction, said the tax burden on homebuyers is significant and poses a barrier to building for some Islanders.

He thinks taking those taxes away will encourage more folks to build new houses.

Mixed reaction on P.E.I. to Poilievre's plan to axe GST on new homes if his party is elected

3 days ago

Duration 2:28

A Prince Edward Island builder tells the CBC's Steve Bruce that the sales tax savings should spur more development, though municipalities worry a tax cut could put other kinds of federal funding housing support in jeopardy.

"Whenever we're looking at pricing out houses and building houses we're into entry level and that percentage difference is the difference between them being able to get into a house or not," Davidson said.

"We struggle to hit those budgets with being able to find the material inputs at a good price. The tax savings will then be able to bring our prices back into line so we'll be able to put people with those limited budgets into a house."

Poilievre and the Conservatives say cutting the taxes would save Canadians $40,000 on a $800,000 house and drive the construction of an additional 30,000 homes in Canada every year.The announcement was praised by the CEO of the Canadian Home Builders' Association.

However, federal Employment Minister Randy Boissonnaultcalled Poilievre's letter to the premiers "reckless" and decried his plan to cut existing housing programs to fund the proposed tax cut.

That includes the Trudeau government's Housing Accelerator Fund, through which municipalities like Summerside and Charlottetown have been promised millions of federal dollars for infrastructure upgrades to support the building of more houses.

"We've got to be really careful that [a tax cut] isn't at the expense of some other tools and other funding programs that are really valuable and important for municipalities," said Summerside Mayor Dan Kutcher.

"A home by itself doesn't have any value unless you have all the things that go with a home. That's what a lot of these funding programs are there for."

In a statement to CBC News, a spokesperson for the City of Charlottetown echoed those concerns about the potentialcancellation of programs like the Housing Accelerator Fund.

"The demand for affordable housing has outpaced available resources and infrastructure, leaving municipalities struggling to keep paceand bolster infrastructure and other essential services," the statement said.

"Beyond this proposal, we would need to see a sustainable plan and funds to enable our community to not only expand housing options but also enhance transportation networks and other vital amenities essential for sustainable growth."

It has to be multiple things that come together so that we can build homes in an effective manner. Alex Davidson, Holmes Construction

A spokesperson for the P.E.I. government said in a statement that the province is interested in any programs that help speed up the supply of housing.

"While the policy initiative being proposed would need thorough review to assess what the impact and cost to the province would be, we would be very open and interested in working with leaders in Ottawa who are focused on Islanders paying less for housing and keeping more of their hard-earned money in their pockets," the statement said.

Poilievre is, of course, merely pitching an idea to voters and the provinces.

Davidson thinks it's a good one, though he says there are many layers to the housing crisis.

"It's a lot bigger than just one thing; it has to be multiple things that come together so that we can build homes in an effective manner," he said.

"Both [parties] have ideas that are working to what they're looking to achieve. Which one is going to be better is dependent on your situation and where you are."