Restrained spending in the federal budget on April 7 still adds up to more than $452 billion in expenditures, but development groups in B.C. are finding little to cheer about.
“The federal budget falls short on investments in critical infrastructure that is essential for the health and well-being of all Canadians,” Chris Atchison, president of the B.C. Construction Association, told Western Investor. “BCCA welcomes investments in labour mobility and training, and improvements in municipal permitting systems, but these are small commitments that will not help to build the strong foundation needed to ensure Canada remains resilient.”
Primary industries will benefit from new spending, including $3.8 billion to implement Canada’s first Critical Minerals Strategy, which aims to secure domestic supplies of nickel, copper, cobalt, rare earths and uranium.
The budget also allocates $2.6 billion over five years for a new investment tax credit to encourage investment in carbon capture and storage in the oil and gas sector. The credit gives businesses a tax break of up to 60% on the purchase of eligible equipment. The real spending, however, will have to be done by business not government.
By far the biggest amount of new spending is on housing, with Ottawa flagging the role of infrastructure funds in supporting new affordable housing development across the country through the Canada Community Building Fund and other initiatives. A further $4.4 billion is allocated for construction of 6,000 units of new housing through the Canada Mortgage and Housing Corp. and the repair and renewal of 17,800 existing units through the National Co-Housing Investment Fund.
But similar to the oil and gas sector, many of the budget’s measures focus on policies rather than pots of government money.
These include a ban on foreign investment in Canadian housing and the implementation of an “underused housing tax” for non-residents and non-Canadians who leave residential property vacant.
Speculative purchases will also be subject to new taxes.
The budget document says any profit that accrues to owners of properties purchased and sold again within 12 months will be taxed as business income, unless the sale was due to a change in life circumstances, such as a birth, death, divorce or other significant transition. A public consultation will be undertaken to determine the details.
All assignment sales of new homes will also be subject to GST/HST as of May 7, closing a loophole that allowed “speculators to be dishonest” about their reasons for purchasing a residence.
The budget estimates the two new tax measures to garner $114 million in additional revenue over the next five years.
Similar tax measures have been implemented on a regional basis in BC. But the prospect of new national measures drew little comment from the Urban Development Institute, Pacific Region.
The organization did not issue a statement on the budget, and chapter president Anne McMullin was not available for interviews.
