Tim Bailey

Government initiatives toward affordable housing should start from within.

Government-imposed charges on new homes are expected to exceed 20 percent of the total home price in some parts of Canada in 2010. Whether it is at the municipal level, provincial level, or federal level of government, there appears to be no end in sight to the charges and increases that are imposed.

Housing affordability is a hot topic as the Canadian government considers inclusionary zoning policies and other regulations to address the issue, while concurrently adding to the burden of costs on new homes. The upcoming Harmonized Sales Tax implementation for Ontario and British Columbia, along with the 2 percent rate increase for the already implemented HST in Nova Scotia, further encumbers affordability for new homes priced above rebate thresholds.

The whole issue becomes even more mind-boggling when you factor in that the federal tax portion — GST — on new homes continues to use rebate thresholds that were originally implemented and based on home prices in 1991, thereby capturing an ever-increasing share of new homes above threshold prices (as well as an ever increasing amount of tax revenue) as new home prices have continued to increase over 19 years.

At what point is enough finally enough? Is it reasonable for governments to impose even more policies and regulations on builders and developers in an attempt to improve affordability before first trying to contribute to the solution by reducing some of their own excessive charges? Let me know what you think.

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