Business View Magazine - Nov 2023

26 BUSINESS VIEW MAGAZINE VOLUME 10, ISSUE 11 or an approval,” she relates. “That has been a huge uncertainty, which affects the builders’ ability to decide if a project is viable or not because they don’t know how long the process will take.” “It makes building very hard because you can’t go to the bank and say, ‘I have five hectares of land and I want to put 25 units on it.’ And the bank says, ‘Okay, if I give you this loan, when can you pay it back?’ And they say, ‘I don’t know,’ because they don’t know when their plans will be approved and they don’t get paid until the house is done and how are they going to hold millions of dollars to build housing for an undetermined amount of time? And when the banks have so much money out and they don’t know when it’s coming back, it makes it tricky. They can’t lend out more if they’re overextended and then nobody can get housing built,” she expands. Another tricky situation for PKHBA members is the broader consumer economy and how it affects the housing market. “Like most places in Canada, the home prices here have pretty much doubled in the past ten years, so there’s a big gap where there are not many smaller starter homes being built,” Schillemat states. “We don’t have enough homes for everyone and with high interest rates, it’s hard to build them and it’s tough for people to afford them. 2021 was a very good year for housing starts, so a lot of things are coming on the market and available for sale. But with the interest rates rising in 2023, the buyers don’t have the same buying power that they had in 2021. So, things aren’t lining up very well and it’s very tricky right now.” Schillemat also points out another problem currently deterring consumers from buying homes in Canada. “The federal government announced last week that it’s removing the GST (Goods and Services Tax) on purpose-built rentals. That means when a builder builds a new home because they’re renting it and not selling it, they don’t have to pay a tax on that to the government and the provincial government says it’s going to follow suit, so that saves the builder money and it brings down the cost of the unit for the person who’s going to live in it.” “So, that’s a good, positive change. But there’s another issue with the GST– it didn’t exist on new housing until 1991 and they said, ‘When you buy a new house, everyone pays GST if a house is over $450,000. The threshold for that should be doubled because the house price has doubled. It would make it easier for first-time home buyers to get into the housing market. Also, you still pay the GST for every resale of that home. But on a resale house, there is no reason to have a GST on it. It just adds an extra cost to the person buying the house and it should be removed. Saving 15 percent on top of the price tag is a huge saving.” Confronting the labor shortage Another big concern for Schillemat is a weak labor market. “There’s not enough skilled trades in Ontario, right now,” she laments. So, the PKHBA is