Ontario Premier Doug Ford is being urged to take bold, independent action to address the province's severe housing shortage by eliminating the provincial sales tax on all new home purchases, not just those for first-time buyers.
A Call for Gutsy Action on Housing
In a recent commentary, writer Randall Denley critiqued Premier Ford for talking about big ideas but failing to implement them. Ford stated on Monday that removing the sales tax from all new homes would be a significant economic stimulus, spurring purchases of appliances, furniture, and other goods while creating jobs in the construction trades.
Ford argued that such a move would powerfully boost the economy, yet his government has so far only committed to a much more limited plan.
The Limited Scope of Current Proposals
Currently, both the federal and Ontario governments have proposed a full sales tax rebate, but exclusively for first-time home buyers. This policy mirrors an initiative the federal government announced in late May, which Ontario did not adopt until the end of October. Neither rebate has been formally passed into law yet.
Scott Andison, CEO of the Ontario Home Builders' Association, emphasized the ineffectiveness of this narrow approach, telling Global News that the first-time buyer exemption would affect less than five per cent of the market. He called for a specific "Ontario-led" solution: removing the provincial sales tax from the price of all new home purchases.
The Cost of Inaction Versus Action
Denley points out that the first-time buyer plan is a classic piece of political performance. It creates the appearance of action without the substantial financial cost of a broader rebate.
The projected cost for Ontario's first-time buyer program is relatively small:
- $35 million in 2025–26
- $190 million in 2026–27
- $245 million in 2027–28
In contrast, a rebate for all buyers would be far more expensive, a point Ford himself acknowledged after he first floated the idea in the summer. He later retreated, noting that the provincial finance minister had "rapped his knuckles" over the significant revenue loss.
At the federal level, the Parliamentary Budget Office estimates the first-time buyer tax break will cost $1.9 billion over six years, though the government claims it will save Canadians $3.9 billion over five.
While a combined 13% sales tax rebate is substantial, Denley concludes that restricting it to a tiny segment of the market means it will do little to solve Ontario's overarching housing supply crisis. A full rebate, while costly, would be a smarter and more impactful policy.
