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BILD, OHBA urge stimulus, action to boost homebuyer liquidity

Don Wall
BILD, OHBA urge stimulus, action to boost homebuyer liquidity

Three residential building stakeholder associations have released a study with 20 recommendations they say will encourage housing demand, boost building capacity and lead Ontario’s post-COVID-19 economic recovery.

The Canadian and Ontario Home Builders’ Associations (CHBA and OHBA) and the Building Industry and Land Development Association (BILD) submitted the plan to the Ontario Jobs and Recovery Committee. BILD president and CEO David Wilkes noted the plan is focused on the Greater Toronto Area, which he argues must be the driver of the recovery, and contains stimulus, liquidity and job creation proposals targeted at all three levels of government.

“We believe there is an opportunity to offer an approach that leads to more efficient decision-making, stimulating construction and undertaking some much-needed infrastructure, as we indicated in the report, and also some concerns that we have had on impacting new ownership,” said Wilkes in an interview.

“There are new ideas recognizing two key components: that a healthy GTA is going to be fundamental to a healthy Canadian and Ontario economy, given the fact that we are 20 per cent of the nation’s GDP in the GTA and 50 per cent of the province’s, and the multiplier that the industry has within, for example, the GTA. For every thousand housing starts, that generates some $600 million in economic activity and associated tax revenue.”

The report was submitted to the Jobs and Recovery Committee in May and released to the public June 8. Proposed measures include eliminating security deposits for Ontario Land Transfer Tax on affiliated transfers, transferring mortgage tenancy to the date of occupancy for new condominiums and freezing municipal increases to property tax reassessment and development charges.

The stakeholder associations also call for measures to replace traditional municipal agreements that hoard refundable deposits paid by developers with surety bonds, freeing up billions in potential investments that otherwise would remain parked.

Another measure to encourage demand calls for introducing 30-year amortizations for insured mortgages.

“They are all designed to recognize the challenges people have had the last two to three months, but also recognize there is a responsibility to get the economy back up and running. That’s why we believe the suite of tools that we offer to governments…will help achieve that goal, through streamlined decision-making, through kickstarting some much-needed infrastructure projects and providing direct incentives to homebuyers,” explained Wilkes.

Other stimulus measures proposed include removing GST/HST on new home purchases and related rebates; allowing interest deductions on a current basis rather than being capitalized to land inventory; and removing GST from the construction costs of new rental housing and costs of renovating rental housing.

The report notes that since 2006, home completions in the GTA have fallen over 100,000 units short versus demand projected by the 2006 Provincial Growth Plan. Streamlining municipal decision-making — and continuing to harness the spirit of innovation and resourcefulness some municipal planning departments have displayed during the pandemic — could speed up residential development, Wilkes argues.

So would major infrastructure spending outside of the residential sector, he said.

“By undertaking major infrastructure projects such as the GTA West Corridor and the Upper York Sewage Solutions, these will facilitate housing in those areas.”

Other proposed job creation programs include infrastructure spending to repair and build new roads, bridges, potholes and schools; introducing a home renovation tax credit for 2020 and 2021, plus a permanent energy retrofit tax credit; and launching a refundable tax credit for expenses for upgrading buildings in Ontario and for repurposing facilities in Ontario because of COVID-19.

Homebuilders are eager to get back to full capacity, Wilkes added.

“Without a doubt there were slowdowns. We did a survey of our members to look at what was happening and reported on 498 projects, of which 276 were in the city of Toronto. Not surprisingly, regardless of the stage of projects, below-grade or above-grade etc., three-quarters of those projects were experiencing delays of three to six months and in some cases longer,” he said.

“So the sector is ready and willing. There is a need to get underway and respond to the demand that comes back into the market.”

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