The Ontario Liberals are urging the Ford government to drop its share of the harmonized sales tax on all new homes, pushing a policy Premier Doug Ford briefly flirted with over the summer before abandoning it.
Hot on the heels of the release of new housing data, which shows Ontario has built only 26 per cent of its housing goal so far this year, the Liberals said the province needs to take drastic measures to turn the tide.
Canada Mortgage and Housing Corporation figures, published this week, revealed Ontario is now the only province in the country where housing starts are lower this year than they were in 2024.
“When you’re this far behind, you don’t jog, you sprint,” Ontario Liberal MPP Adil Shamji said.
The policy pitched by the Liberals on Thursday calls for the province to drop its share of HST (which is eight per cent) on all new homes purchased as primary residences.
The suggestion would waive tax on the value of homes up to $1 million, with partial reductions up to $1.5 million. The party suggested it should be in place for five years, and not apply to investment properties.
It’s a suggestion the Building Industry and Land Development Association, a homebuilders lobby group, appears to be in favour of.
“As part of our Federal submission into the pre-budget consultation process, BILD’s number one ask is the time-limited removal of the GST/PST on the sale of all new homes under $1 million to address affordability and support consumer confidence,” the organization said in a statement.
Get daily National news
Get the day’s top news, political, economic, and current affairs headlines, delivered to your inbox once a day.
Shamji said the move was necessary to fix the province’s homebuilding log jam.
“Developers and builders aren’t incentivized to propose new projects or, frankly, even to complete new projects right now,” he said. “The economics are not working out.”
Liberal MPP Adil Shamji attends question period at Queen’s Park in Toronto on Tuesday, May 13, 2025.
THE CANADIAN PRESS/Cole Burston
The policy is one Ford mused about in mid-August, only to walk it back two days later, apparently after an intervention from Finance Minister Peter Bethlenfalvy
“Let’s get rid of the HST,” Ford said at a news conference on Aug. 12.
“I will follow that — on anyone that buys a home, not just new homebuyers — on anyone. And let’s do it to a point of two years, so it puts pressure on the market…. That’s massive amounts of savings for people.”
Asked about the decision again at a separate news conference on Aug. 14, the premier abandoned the pledge — suggesting he had been told it was a move his government couldn’t afford.
“As for the HST, I got my knuckles rapped a little from the finance minister because he’s doing his job,” he said. “That’s a lot of money, but that’s something we’ll sit down with the finance minister and the prime minister and see how we can look at the HST for certain sectors.”
The Liberals said the policy would cost around $1.7 billion per year over five years.
The call comes as the province’s finances face increasing pressure and housing starts hit new lows.
A report issued this week by the Financial Accountability Officer of Ontario found that the provincial deficit could explode next year as the effects of tariffs and the U.S.-Canada trade war hit unemployment and growth.
The FAO said falling revenue, combined with slower economic growth, is expected to “significantly increase” the province’s deficit from $1.3 billion in 2024-25 to $12 billion in 2025-26.
Ontario’s debt is also expected to balloon to $549.3 billion in 2029-30 — meaning Ford’s government is projected to add $141 billion to Ontario’s debt load by the end of the decade.
The budget hawk warned that the temperamental trade situation will threaten the government’s ability to balance the books, leading to a projected $9-billion deficit in 2029, “as spending growth, led by the health sector and interest on debt, is expected to exceed revenue growth.”
A spokesperson for the Ministry of Municipal Affairs and Housing said the government was urging Ottawa to take the lead on removing the cost to build.
“We have been clear — we need partnership from the federal government to continue reducing HST and GST on homes,” they said in a statement.
Asked if there were any technical barriers to stop Ontario from giving up its eight per cent of HST on all new homes, the spokesperson replied, “The statement stands.”
© 2025 Global News, a division of Corus Entertainment Inc.
