New Brunswick housing minister calls for GST/HST relief targeted at affordable housing, not luxury builds
New Brunswick housing minister David Hickey says he’s open to joining federal efforts to eliminate the sales tax on new homes, but not if the benefits extend to buyers of million-dollar properties.
Both the federal Liberals and Conservatives are proposing to scrap the federal portion of the HST on some new single-unit housing. The Liberals have pledged to remove the GST on new homes priced up to $1 million for first-time buyers and offer a partial tax break on homes priced between $1 million and $1.5 million. The Conservatives, meanwhile, have promised to remove the tax on new homes priced up to $1.3 million.
Hickey says he would support a federal deal that removes New Brunswick’s provincial portion of the HST, about 10%, but only if it reflects the province’s more affordable housing market.
“I’m not interested in giving people who are paying a million dollars-plus for housing a break,” he said. “But what I am interested in is that the $400,000 market, that $300,000 market, and that $200,000 market—if it even exists—is more attainable for folks.”
The province is hoping to tailor any federal-provincial deal to local housing costs. According to Fredericton-based contractor Jordan Kuhn, building a 1,200-square-foot starter home now costs roughly $400,000, including $300,000 in construction costs and $100,000 for land. He blames the rising cost of building materials and labour shortages for the increase.
“It’s a scary number,” Kuhn said. “What I could do eight years ago and what I can do now is completely different.”
Housing goals and political plans
While federal parties have framed tax relief as a way to stimulate construction, some experts question the feasibility of their targets. The Liberals have committed to nearly doubling annual housing starts to 500,000 over the next decade, while the Conservatives are aiming for 2.3 million new homes over five years.
But housing researcher Julia Woodhall-Melnik, who leads the University of New Brunswick’s HOME-RL lab, is sceptical.
“People don’t tend to build a lot during a recession,” she said, pointing to economic uncertainty and tariff-related trade concerns. “We don’t know what’s going to happen really with the tariffs, and that will have a big impact on the economy and the investment.”
In New Brunswick, housing starts reached 6,100 in 2024, the highest number since 1976. The Holt Liberal government has pledged to build 30,000 new homes in the province by 2030 and has already scrapped the PST on new multi-unit housing, mirroring moves in Nova Scotia and Prince Edward Island.
“We’ve seen tremendous success from the removal of the 15% on new multi-unit construction,” Hickey said. “It’s getting major developers off the sidelines and getting more construction in more communities.”
Hickey wants to replicate that success by expanding the tax relief to single-unit homes, but only those that reflect New Brunswick’s price realities.
First-time buyer impact
While removing the HST could benefit some buyers, Woodhall-Melnik notes that wages still haven’t caught up with the rising cost of housing.
“Do I think it’s going to magically shoot people into the realm of affordability? Likely not,” she said. “Most first-time buyers aren’t building new for a starter home.”
Read next: Tax updates that may affect the mortgage industry
Hickey agrees that no single policy will solve the province’s housing affordability crisis, but sees targeted tax relief as an essential step.
“There’s no question that it isn’t a silver bullet,” he said. “But it’s an important piece of the puzzle to make sure that we’re getting more supply on the market to get that flow in that type of housing.”
Make sure to get all the latest news to your inbox on Canada’s mortgage and housing markets by signing up for our free daily newsletter here.
