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The Ontario Home Builders released this statement regarding the 2025 federal budget.
The Ontario Home Builders Association is deeply disappointed with the lack of support for Ontario’s home builders and buyers in the 2025 Federal Budget. Canada’s housing market needed a bold move to unlock supply and restore affordability, but this budget does not deliver that.
The budget presented no new measures to unlock supply and restore affordability as Housing Minister Gregor Robertson has previously indicated; the federal approach remains focused on incremental change rather than transformative action. The government of Canada continues to prioritize social housing, with no new measures to support the construction of market housing — the segment where most Ontarians seek to buy or rent homes.
Disappointingly, the government of Canada will not expand the GST rebate to all new home sales – still only providing the tax break to first time homebuyers on homes valued up to $1.5 million and excluding renovations that create additional housing units. OHBA research done earlier this year shows that the threshold being used by the federal government will impact less than five percent of home sales in Ontario.
Eliminating the full GST on all new home sales in Ontario specifically is estimated to have a fiscal impact of approximately $1.8 billion. This projection assumes that a full PST exemption would stimulate the construction of an additional 53,000 new homes, on top of the roughly 80,000 homes already expected to be available for sale by 2026 — bringing the total to approximately 132,000 units.
Indexing the current GST relief caps, which have not been updated since it was introduced in 1991, would provide an additional average GST relief on a new home transaction for ALL home sales in Ontario of approximately $35,300 on a typical home valued at $1.1 million.
During his budget speech, Finance Minister Francois-Philippe did not indicate when the GST rebate would begin, only mentioning that it is working its way through the legislative process as part of Bill C-4, which was introduced in the House of Commons on June 10, 2025. By not sharing tangible details on when consumers can expect this rebate to begin, potential home buyers continue to sit on the sidelines.
Budget 2025 introduced a new Build Communities Strong Fund, which will allocate $17.2 billion over 10 years, beginning in 2026-27, to support infrastructure projects across the country. The fund will target housing-enabling infrastructure (such as roads and water/wastewater systems), health facilities, and post-secondary infrastructure.
Of this, $12.2 billion will be distributed to provinces and territories that agree to cost-match federal contributions and commit to reducing development charges and avoiding other taxes that restrict housing supply.
The budget unfortunately remains incredibly vague regarding the Liberal platform’s commitment to work with municipalities to reduce development charges (DCs) by 50 percent.
Despite the platform commitment to reducing DC’s, the Budget document contains no mention of this serious issue, no clear targets, timelines, or accountability mechanisms to ensure municipalities follow through on reducing these costs — a missed opportunity to meaningfully address one of the key barriers to housing affordability.
The government’s continued inaction has put 40,000 jobs in Ontario at risk – from architects and engineers, to trades and sub trades across the residential construction sector. The estimated direct and indirect economic impact from these job losses on Ontario economy is $5.3 billion.
Other notes from the 2025 Budget include:
- The federal deficit is projected at $78.3 billion for 2025, declining to $56.6 billion by 2029-30. This is a significant deterioration from the December 2024 Fall Economic Statement, which projected a $42-billion deficit. Economic growth is now forecast at roughly half of what was previously expected.
- The government will launch a comprehensive program spending review, expected to save $60 billion over five years, primarily through reductions in the federal civil service. This includes a 10 percent reduction in public sector positions, with 16,000 jobs cut in 2025 and a total reduction of 40,000 positions by 2028-29.
Key messages related to our industry if you are speaking to your Member of Parliament can be found here.