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News Analysis

Ottawa in Talks With All Provinces to Expand GST/HST Cuts on New Homes Nationwide: What It Means for Buyers

Housing Minister Gregor Robertson says the federal government is in discussions with every province and territory to extend GST/HST relief on new home purchases — then his office issued a correction. Here's what we know about the Ontario deal already in effect, province-by-province savings potential, and whether these tax cuts will actually make housing more affordable.

By Refdesk Team

Ottawa in Talks With All Provinces to Expand GST/HST Cuts on New Homes Nationwide: What It Means for Buyers

What This Means for You

If you are considering buying a newly built home anywhere in Canada, a significant policy shift may be heading your way. On April 7, 2026, Federal Housing Minister Gregor Robertson told Global News that Ottawa is "in discussions with all of the provinces and territories about taking down the GST for one year on new home purchases." Coming just one week after Ontario and the federal government launched a landmark deal to eliminate the full 13% HST on new homes in that province, the statement signaled that the biggest tax break for homebuyers in a generation could soon expand coast to coast.

Then came the walkback. Robertson's office issued a "correction" the following day, clarifying that discussions with provinces actually cover "a variety of measures that will improve housing supply, not limited to a GST cut." The contradiction raises a fundamental question: is a nationwide GST/HST cut on new homes genuinely on the table, or was the minister getting ahead of his government?

Here is everything we know about the Ontario deal already in effect, how much buyers in every province stand to save, what the opposition parties are saying, and the critical debate over whether these tax cuts will truly make homes more affordable or simply push prices higher.

The Ontario Deal: How It Works

On March 25, 2026, Premier Doug Ford announced that Ontario would eliminate the provincial portion of the HST on new homes, and five days later, on March 30, Prime Minister Mark Carney formalized the federal-provincial partnership. The combined deal removes the full 13% HST (the 5% federal GST plus the 8% provincial portion) on eligible new home purchases.

Here is the savings structure now in effect:

Home ValueCombined HST SavingsNotes
Up to $1,000,000Up to $130,000Full 13% HST eliminated
$1,000,001 - $1,500,000$130,000 (maximum maintained)Full maximum rebate preserved
$1,500,001 - $1,850,000$130,000 down to $24,000Proportional phase-out
Above $1,850,000Up to $24,000Minimum rebate amount

Eligibility Requirements

The program applies to agreements of purchase and sale signed between April 1, 2026, and March 31, 2027. Both primary residences and rental properties qualify. Construction must begin on or before December 31, 2028, and the home must be completed before December 31, 2031. The home must be a new build or have undergone substantial renovations.

Ontario estimates the total tax relief at $2.2 billion over the program's duration. The partnership also includes $8.8 billion in federal-provincial cost-matched funding over 10 years to reduce municipal development charges by up to 50%, targeting municipalities covering 80% of Ontario's population.

The Minister's Statement and the Correction

On April 7, in an interview with Global News reporters Mackenzie Gray and Jillian Piper, Housing Minister Gregor Robertson made what appeared to be a significant policy announcement. "We are in discussions with all of the provinces and territories about taking down the GST for one year on new home purchases," he said.

The next day, Robertson's director of communications, Mohammad Hussain, contacted Global News to issue a correction: "To provide a correction to the Minister's comment: as per the legislation, Bill C-26, An Act to authorize certain payments to be made out of the Consolidated Revenue Fund for the purpose of improving housing supply, we are actually in talks on a variety of measures that will improve housing supply, not limited to a GST cut."

The distinction matters. Bill C-26, introduced on March 26, 2026, authorizes $1.7 billion to provinces and territories for housing supply measures. The legislation is broad enough to fund GST/HST relief but does not specifically mandate it. The correction suggests that while tax cuts are one option on the table, the federal government is not yet committed to replicating the Ontario model nationwide. Robertson did not provide a timeline for when agreements with other provinces might be announced, but emphasized that provincial governments would be expected to contribute their own funding or legislation.

Understanding Current GST/HST Rates on New Homes by Province

To understand how much a nationwide expansion could save buyers, you first need to understand the patchwork of sales tax regimes across Canada. Here is the current breakdown:

HST Provinces (Combined Federal-Provincial Tax)

ProvinceHST RateFederal PortionProvincial Portion
Ontario13%5%8%
New Brunswick15%5%10%
Newfoundland & Labrador15%5%10%
Prince Edward Island15%5%10%
Nova Scotia14%5%9% (reduced from 10% in April 2025)

GST + Separate Provincial Tax Provinces

ProvinceGSTProvincial TaxTotal
British Columbia5%7% PST (not applied to new homes)5% effective
Quebec5%9.975% QST~15%
Saskatchewan5%6% PST11%
Manitoba5%7% PST12%

GST-Only Jurisdictions

Alberta, Yukon, Northwest Territories, and Nunavut charge only the 5% federal GST with no provincial sales tax component.

The Old Rebate System: Outdated Thresholds

Before the recent changes, the federal GST New Housing Rebate had thresholds that were widely criticized as absurdly outdated in today's housing market. The existing program provides a rebate of 36% of the GST paid, up to a maximum of just $6,300 — and only for homes priced under $350,000. The rebate phases out entirely for homes above $450,000.

In a country where the average new home price exceeds $700,000 in most major markets, these thresholds meant the vast majority of new home buyers received zero federal rebate. Provincial rebates varied significantly: Ontario offered up to $24,000, Saskatchewan up to $11,340, Quebec up to $9,975 (for homes under $200,000), and Nova Scotia just $3,000 for first-time buyers only.

The first-time home buyer GST/HST rebate, which took effect in March 2026, began to address this gap by eliminating the federal GST component for first-time buyers on homes up to $1 million, with a phase-out up to $1.5 million. The Ontario deal went much further by extending relief to all buyers, not just first-timers.

Province-by-Province: How Much Could Buyers Save?

If Ottawa replicates the Ontario model nationally — removing the full GST/HST on new homes up to $1 million — the potential savings vary dramatically by province. Here are the estimated maximum savings on a $900,000 new home:

Province/TerritoryCurrent Tax on $900K New HomePotential Savings if Full Tax Removed
Ontario~$117,000 (13% HST)Up to $117,000 (already in effect)
New Brunswick~$135,000 (15% HST)Up to $135,000
Newfoundland & Labrador~$135,000 (15% HST)Up to $135,000
PEI~$135,000 (15% HST)Up to $135,000
Nova Scotia~$126,000 (14% HST)Up to $126,000
Quebec~$135,000 (GST + QST)Up to $135,000
Saskatchewan~$99,000 (GST + PST)Up to $99,000
Manitoba~$108,000 (GST + PST)Up to $108,000
British Columbia~$45,000 (5% GST only)Up to $45,000
Alberta~$45,000 (5% GST only)Up to $45,000
Territories~$45,000 (5% GST only)Up to $45,000

The savings are most dramatic in the Atlantic provinces and Quebec, where combined tax rates of 14% to 15% translate to six-figure tax bills on even moderately priced new homes. Alberta and BC buyers would see smaller savings since they already have lower effective tax rates on new construction.

However, these figures assume provinces would agree to eliminate their own portion of the tax — and that is far from guaranteed. The federal government can only unilaterally remove the 5% GST. Removing provincial portions requires bilateral agreements, and each province has its own fiscal pressures and political considerations.

Real Estate Industry Reaction: "Game-Changing"

The building and real estate industries have responded to the Ontario deal with enthusiastic support and are lobbying hard for national expansion.

TRREB (Toronto Regional Real Estate Board): CEO John DiMichele called the HST elimination "a major step forward," stating that "removing this tax burden will help lower the cost of new housing, improve the feasibility of bringing new projects to market, and support greater housing supply across Ontario, especially supply of missing middle housing, including multiplexes and mid-rise development units."

OHBA and BILD (Ontario Home Builders' Association and Building Industry and Land Development Association): In a joint statement, the organizations called the announcement "game-changing." OHBA CEO Scott Andison said it "provides meaningful relief for homebuyers and much-needed support for Ontario's residential construction sector, professional renovation industry, and their workers to restore the pipeline of much needed new homes across the province." BILD President Dave Wilkes added: "At a time where we are facing huge economic uncertainty and a slowing housing industry, this is a major step toward unlocking affordability in Ontario's housing market and supporting the broader economy."

The industry data underscores why builders are so supportive. BILD's 1,000+ member companies represent an industry that provides 256,000 jobs and $39.3 billion in investment in the Greater Toronto Area alone. OHBA's 4,000 member companies have built over 700,000 homes since 2007, and Ontario residential construction employs over 500,000 people, contributing $66.6 billion to the provincial economy. Government charges now account for 25% to 30% of new home purchase prices in many GTA communities — a burden the industry says has made many projects financially unviable.

Opposition Responses

Conservative Party: Leader Pierre Poilievre was the first major party leader to propose eliminating GST on new homes, announcing his plan in October 2024 for homes under $1 million. He later raised the threshold to $1.3 million. The Conservatives have characterized Carney's policy as copying their proposal — a claim with some merit, given the timeline. However, the Ontario deal goes further than the original Conservative plan by also eliminating the provincial portion, something Poilievre's federal-only proposal could not accomplish without provincial cooperation. Poilievre proposed funding his plan by cutting the Housing Accelerator Fund and Housing Infrastructure Fund.

NDP: Leader Jagmeet Singh and the NDP have been more critical of both parties' approaches. The NDP position is that "tax cuts alone do not guarantee affordability" and that both the Liberal and Conservative plans amount to "tax breaks for millionaires and cuts for everyone else." The NDP has argued for using public land to build affordable housing rather than relying on tax incentives that primarily benefit those already able to purchase new homes. Housing advocates aligned with the NDP position point out that the HST relief does nothing to address rental affordability or social housing shortages.

The Critical Debate: Will This Actually Help Affordability?

This is where the analysis becomes complicated, because credible experts disagree sharply.

The Case That Tax Cuts Help (Supply-Side Argument)

Proponents argue that the HST on new homes is fundamentally a supply-side problem. A 13% tax creates approximately $70,000 in additional costs (after existing rebates) on a $725,000 home, making new construction uncompetitive with resale homes that face no HST. This artificial disadvantage prevents builders from offering moderately priced new units that could compete with and put downward pressure on resale inventory.

The Missing Middle Initiative, a housing policy research group, argues that "eliminating the GST or HST on new homes lowers the price of resale homes" by allowing new construction to compete directly with existing inventory. Their analysis notes that ground-oriented housing starts in Ontario have declined over 60% since 2002 despite population growth, with construction taxes increasing 500% over the same period.

The Case That Tax Cuts Get Absorbed by Builders (Demand-Side Concern)

The counterargument already has real-world evidence. Better Dwelling reported in early April 2026 that some Ontario builders began raising prices immediately after the HST rebate was announced — before it even took effect. Specific examples include a Toronto-area builder increasing a home from $1.3 million to $1.45 million (an 11.5% jump), a mortgage broker's clients seeing a $950,000 home jump to $1.05 million (10.5%), and a Toronto realtor reporting a client's target home going from $1.4 million to $1.6 million (14.3%).

Toronto realtor Rachna Purohit warned: "Some builders are already increasing prices. The rebate that was supposed to help buyers could actually end up benefiting builders instead." Mortgage broker JD Lee described the pattern: government provides rebate, builders factor it into purchase prices, buyers effectively pay it back through higher asking prices.

This is not without precedent. Under the previous, smaller HST rebate structure, builders routinely advertised "HST-included" prices and required buyers to assign their rebate rights back to the builder — effectively capturing the government subsidy.

The Construction Slowdown Context

The timing of these tax cuts is not coincidental. CMHC data paints a concerning picture of the construction sector. Housing starts declined 15% in January 2026 to a seasonally adjusted annual rate of 238,049 units, down from 280,668 in December. The six-month trend declined for a fourth consecutive month to 254,794 units.

CMHC's 2026 Housing Market Outlook forecasts continued decline through 2026 to 2028, driven by high construction costs, tighter financing, trade uncertainty, and weakening demand. The condo market is particularly stressed, with presales collapsing and unsold inventories rising. Toronto saw a 2% decline in starts while Montreal recorded a 44% drop. Only Vancouver posted gains, with a 37% increase.

In this context, the HST elimination serves a dual purpose: it is both a consumer-facing affordability measure and an industry stimulus designed to prevent further deterioration of the construction pipeline. Whether you view that as good policy depends largely on whether you believe the primary barrier to housing affordability is insufficient supply or insufficient purchasing power.

What Happens Next

Several key questions remain unanswered:

Timeline for other provinces: Robertson did not provide any timeline for when deals with other provinces might be announced. The Bill C-26 funding of $1.7 billion is available, but each province must negotiate its own agreement and contribute matching resources.

Atlantic Canada's fiscal capacity: The Atlantic provinces, with HST rates of 14% to 15%, would offer the largest savings to buyers — but these are also provinces with smaller tax bases and less fiscal room to absorb the revenue loss from eliminating their provincial portions.

Quebec's unique situation: Quebec operates its own QST system separately from the federal GST, adding complexity to any potential deal. At 9.975%, the QST is among the highest provincial rates, meaning Quebec buyers have the most to gain but the province has the most revenue at stake.

Alberta and BC: Alberta, with no provincial sales tax, would see only the 5% GST removed. BC does not apply PST to new homes, so the impact would similarly be limited to the federal GST. These provinces might argue they need less federal support since their effective tax burden on new construction is already lower.

Duration and permanence: The Ontario deal is explicitly temporary — one year from April 1, 2026, to March 31, 2027. If the policy works as intended and stimulates significant construction activity, there will be enormous political pressure to extend it. If it primarily results in builder price increases, the case for extension weakens considerably.

The Bottom Line

The federal government is clearly signaling that GST/HST relief on new homes is a priority, even if the minister's office walked back the most definitive version of that message. The Ontario deal is already the most significant tax change for homebuyers in a generation, and the political incentives to expand it are strong — the construction industry is lobbying hard, housing starts are declining, and both major federal parties have committed to the concept.

But prospective buyers should approach this with clear eyes. The experience of the first two weeks of the Ontario program suggests that builders are already adjusting prices upward to capture some of the tax savings. The net benefit to buyers may be substantially less than the headline $130,000 figure. And for anyone buying a resale home rather than a new build, these programs offer no direct benefit at all.

If you are considering a new home purchase in Ontario, the current one-year window is real and the savings can be significant — but shop carefully, compare pre-announcement pricing where possible, and do not assume the full HST savings will flow to you. If you are in another province, watch for announcements but do not make purchasing decisions based on a policy that may or may not materialize. The minister's correction is a reminder that talks about housing supply measures are broader than just tax cuts, and each province will chart its own course.

This analysis is based on information available as of April 12, 2026. Policy details may change as federal-provincial negotiations progress. This article provides general information and does not constitute financial or tax advice. Consult a qualified professional before making purchasing decisions.

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