The federal government has announced a plan to put up $1.7 billion in an effort to get more homes built across the country.

The announcement on Thursday of last week (March 26) was a bit anti-climactic because the provincial government in Ontario revealed what it intended to do with its share of the money a day earlier.

On Thursday federal finance minister Francois-Philippe Champagne tabled legislation that would hand money to the provinces to use, in almost any way they see fit, to get more homes built.

“With respect to this particular program, we’re going to rely on our provincial and territorial partners to use that money in the most efficient way to increase the supply,” Champagne said.

The minister also said the money would be ready to deploy this spring, but that did not stop the Ontario government from stealing some of Ottawa’s thunder, the day before the announcement.

On Wednesday Premier Doug Ford revealed Ontario would be using its share of the funding to expand a harmonized sales tax (HST) rebate program.

The measure, which was included in the Ontario budget on Thursday, will offer a year-long HST rebate program to all buyers of qualifying homes.  Previously only first-time buyers were eligible under the federal GST/HST First-Time Home Buyers Rebate.

As of April 1, 2026, newly-built, homes in Ontario, valued at up to $1.5 million, would be eligible for a maximum of $130,000 in HST relief.

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World events and domestic economic reports are rekindling speculation about the Bank of Canada’s interest rate policy.

The BoC’s Policy Rate came to rest at 2.25% back in October and the central bank has been “hands off” since then.  That has been the expectation of most analysts going forward.  But there are some who are now saying there is a case to be made for a rate increase this year.  The broader markets have also been pricing-in a rate increase during the second half of this year.

They cite the potential for growing consumer uncertainty about rising inflation.  They suggest that worries about shaky trade relations with the U.S. are being exacerbated by the U.S.-Israel war against Iran.

Policy makers say inflation is largely under control and is heading toward the Bank’s 2.0% target.  But persistently high grocery costs and, now, rapidly rising gasoline prices could have an increasingly negative effect on consumer expectations.

“This is always a risk during oil supply shocks given consumers keep a close eye on prices at the pump.  But this is especially the case now with food inflation having also surged in recent months, given that the two make up roughly one-fifth of household spending between them,” Bradley Saunders, of Capital Economics wrote in a recent note.

Those who continue to call for no rate changes until 2027 say the economy may be too weak to tolerate higher interest rates.  They point to the latest Statistics Canada employment numbers.  The economy lost 84,000 jobs in February and the unemployment rate edged up to 6.7%.

Published by First National Financial LP