Liberals Table Bill to Help Stimulate Rental Builds, Stabilize Food Prices

by EditorK

The Liberal government has tabled a bill aimed at addressing housing and food prices.

Minister of Housing, Infrastructure and Communities Sean Fraser then Minister of Immigration, Refugees and Citizenship at a press conference with United Nations High Commissioner for Refugees Filippo Grandi in Ottawa, Ontario, Canada April 6, 2022. REUTERS/Blair Gable

Updated: September 21, 2023

The Liberal government tabled its first piece of legislation of the parliamentary session aimed to address housing and grocery prices.

“This legislation will enhance competition across the economy, with a focus on the grocery sector to help stabilize grocery prices for Canadians, and remove the GST on the construction of new apartment buildings to help get more rental homes built faster,” said Deputy Prime Minister and Finance Minister Chrystia Freeland on Sept. 21.

Ms. Freeland announced Bill C-56, the Affordable Housing and Groceries Act, flanked by other ministers in Ottawa.

The government has blamed high food prices on profits made by grocers and it will try to address the issue by amending the Competition Act to increase the powers of the Commissioner of Competition.

Industry Minister François-Philippe Champagne met with Canada’s five largest grocers on Sept. 18 to tell them to find a solution to stabilize prices, under threat of sanctions.

“We will give more power to the Competition Bureau to conduct and complete more effective investigations to compel the production of information,” Mr. Champagne said during the press conference. “Second, we will make it easier to block mergers that are not in the best interest of consumers.”

Section 96, or the so-called “efficiencies defence”—which essentially permitted anti-competitive mergers if they were offset by greater economic gain—would be rescinded.

The amendment would also empower the Bureau to prohibit collaborations between companies that would stymie smaller competitors’ abilities to operate within their vicinity.

The Retail Council of Canada, which communicates on behalf of grocers with regard to federal action, has called on the government to bring other stakeholders in the food supply chain to the table to properly address price issues.

Canada’s largest grocers have been in the Competition Bureau’s crosshairs since at least last year. In June, the agency released findings of a report it commissioned in October 2022 that revealed the country’s three largest grocers—Loblaw, Sobeys, and Metro—collectively grossed $100 billion, and netted $3.6 billion, in 2022.

But industry specialists, like Dalhousie University professor Sylvain Charlebois, note that some of those companies are deeply integrated, with food being just one of their products, and that profit margins are typically thin for grocers.

Bill C-56 also seeks to put a seven-year moratorium, retroactive Sept. 13, on GST surcharges developers pay on purpose-built rental construction—provided the projects are delivered by Dec. 31, 2035, exactly five years after the GST freeze expires—in the hope their building pro formas improve enough to boost rental inventory.

The GST freeze will be enhanced from a 36 percent rebate, which the government hopes will also incentivize new student and senior housing.

Scuttling the GST on purpose-built rentals—an idea similarly proposed by the Conservatives—until the decade’s end will renew interest in building projects that Housing Minister Sean Fraser says have been shelved as economic activity softened and interest rates began rising.

“It’s important because the financial landscape for homebuilders has changed,” he said. “With the increasing costs of materials and supplies, with the challenges that people are dealing with not only with inflation, but interest rates, there are hundreds of thousands of homes that have already been approved, [but] that have been put on pause.”


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