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Ontario eyes potential tax changes to spur rental construction

Ontario’s municipal affairs and housing minister says he is looking at potential tax changes to spur the creation of rental units.

Speaking Tuesday at the Association of Municipalities of Ontario conference, Steve Clark reiterated a call for the federal government to defer the HST on all new, large-scale purpose-built rentals.

He also said if Ottawa does not take that step, Ontario will take action itself, though he did not offer details.

Clark also announced that he will be updating the definition of “affordable” housing when it comes to reductions and exemptions to fees developers pay when building those units.

Legislation last year from Clark introduced cuts to those fees for building affordable, attainable and non-profit housing units in a bid to see savings passed along to homebuyers and renters.

That law defined “affordable” as 80 per cent of the average market rent or purchase price.

Clark says he plans to introduce new legislation in the fall to incorporate income factors into the definition to ensure low- and moderate-income Ontarians can find a truly affordable home.

He says the new definition would largely be based on language in the 2020 Provincial Policy Statement and would take local income levels into account.

In that land use planning document, affordable is defined as either housing that costs no more than 30 per cent of gross annual household income for low- and moderate-income households or is below average prices in the area – whichever is lower.

“Over the past year, my ministry has been working very closely with municipalities and stakeholders to arrive at the definition of affordable housing that’s genuinely affordable, but which doesn’t stand in the way of getting shovels in the ground,” Clark said.

“I heard very clearly about the need to provide both clarity and stability so affordable homes can be built without delay.”

The president of the Association of Municipalities of Ontario welcomed Clark’s announcement.

“Any definition of affordable housing needs to consider everyone’s ability to pay the rent,” Colin Best wrote in a statement.

Clark also said that facilitators to assess six regional governments in Durham, Halton, Waterloo, York and Niagara regions and Simcoe County will be appointed by Sept. 11.

“These facilitators will be tasked with reviewing the structures of local governance in these fast-growing areas to ensure that they are up to the job of delivering the efficient, effective and accountable government that residents expect and deserve,” Clark said.

Earlier this year the province passed legislation to dissolve Peel Region, which is made up of Brampton, Mississauga and Caledon.

This report by The Canadian Press was first published Aug. 22, 2023.

Allison Jones, The Canadian Press

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