Ottawa urges Saskatchewan to ditch PST on new rental builds until 2030

Kayle Neis/Regina Leader-Post. Construction crews work on new builds in Regina's south east on Friday, September 15, 2023 in Regina.

Alec Salloum, Leader-Post

A Saskatchewan-based construction company says the federal government dropping GST from new rental builds is a “great first step.”

Alex Miller, CEO of Big Block Construction in Saskatoon, said the news that the federal government is knocking GST off new rental construction is heartening and could signal additional change for the sector.

 “I believe that it should be that catalyst for all three levels of government,” said Miller on Friday.

Construction labour became subject to PST in 2017, with pushback from Saskatchewan Urban Municipalities Association and construction companies.

“It has had a major negative impact, adding PST to construction,” said Miller. “I believe that type of tax has made us less competitive than other markets.”

On Thursday the federal government announced that to “build more rental housing, the removal of GST will apply to new purpose-built rental housing, such as apartment buildings, student housing, and senior residences built specifically for long-term rental accommodation.”

That same day federal Minister of Housing, Infrastructure and Communities Sean Fraser, in a letter addressed to Premier Scott Moe and Minister of Social Services Gene Makowsky, urged Saskatchewan to mirror the action and drop PST from similar builds

There “are many measures we could advance to help restore affordability in the housing market,” Fraser wrote.

“However, at risk of oversimplifying the challenge before us, success will escape us all if we fail to work across party lines and between levels of government to achieve one overarching goal together. We must build more homes — and we must build by the millions.”

But Minister of Finance Donna Harpauer responded to the letter saying the decisions around PST application will be done at budget time.

“PST changes introduced over the last number of years were intended to shift away from an overreliance on volatile natural resource revenues and more toward a stable revenue base,” said Harpauer in an emailed statement.

She added that the federal government “continues to implement significant national policies with no regard for consultation or engagement,” and that Saskatchewan will continue with existing programs that are currently in place.

As for the expectation that the province follows suit as the federal government makes changes to the scope of GST, Harpauer took a chance to air a long-standing grievance.

“Saskatchewan does not have a provincial carbon tax and we believe the federal government should follow suit and repeal their ineffective and costly carbon tax which impacts families and businesses in all aspects of their lives,” said Harpauer.

In a statement from the NDP caucus, the Opposition said it has been calling for an end to PST on construction since it was brought in back in 2017.

“The recently announced GST change at the federal level is welcome, and the Sask. Party government should follow suit by removing the PST from construction labour on all projects, including rental projects,” read the statement.

On Sept. 8, Opposition critic for Economy and Jobs Aleana Young said “take the PST off construction labour. We want we want more buildings being built in Saskatchewan. We want more people at work. We want more skilled labour.”

Miller said getting rid of these taxes would be a big help but there exist other barriers buried within building codes, zoning and other matters across levels of government. But, for his company which operates in other provinces, there is a clear competitive bonus in dropping GST and PST from rental builds.

“We’re doing work in B.C., we’re doing work in Alberta. I love Saskatchewan. This is home. This is where I’m from. I’m from south of Regina,” he said. “At the end of the day, if we’re not competitive here, there’s other markets that are more attractive. We’re doing work in other areas but I would love to see our own province succeed.”