Law to Change Taxes and Competition Rules
Tax and Competition Law Changes
This new law, now approved, aims to make housing and groceries more affordable for Canadians. First, it changes the tax rules around building new rental apartments. It removes the Goods and Services Tax (GST) on new rental housing construction, encouraging builders to create more rental units. This should help increase the supply of rental housing and potentially lower rental costs for people. This change applies to rental projects that start construction between September 14, 2023, and the end of 2030, and are finished by the end of 2035. Second, it changes competition rules to give the government more power to investigate industries where prices seem unfair. The government can now order investigations into markets like the grocery industry, even without proof of specific wrongdoing. This allows them to look into potential anti-competitive practices that could be driving up prices. It also makes it easier to stop companies from working together to limit competition, even if they aren't direct competitors. These changes are meant to ensure fair prices and more choices for consumers.
Where this proposed law falls on the policy spectrums that Canadians care about
The bill changes tax rules to address the cost of housing and food, suggesting a slight increase in government spending or targeted tax relief measures.
The bill directly addresses housing affordability and the cost of living, indicating a move towards government intervention to improve these areas.
The bill changes competition rules, which could be interpreted as a slight move towards minimizing regulations on businesses to foster competition and potentially lower costs.
This proposed law aims to help with affordable housing by providing tax rebates for new rental construction and allows for inquiries into the state of competition in a market or industry. However, the rental rebates have a limited time frame, and the competition inquiries rely on ministerial direction, which could limit their scope.
Things to Watch For
- The rental housing rebate program is only available for projects started before 2031 and completed before 2036.
- The Minister decides whether to direct the Commissioner to conduct an inquiry into competition.
- The law does not specify how the public can suggest markets or industries for competition inquiries.
- The extension of the inquiry period is at the Minister's discretion.
- The exception for non-competitors in agreements that lessen competition may have unintended consequences.
- The changes to the Competition Act come into force one year after royal assent.
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