Written by: BNN Bloomberg

Brian Platt and Laura Dhillon Kane

Published September 14, 2023

Canadian Prime Minister Justin Trudeau said his government would remove taxes for constructing rental apartment buildings and require grocery chain executives to come up with a plan to stabilize food prices as part of a push to make life more affordable.

Trudeau confirmed the elimination of the goods and services tax on new rental developments on Thursday after a government source earlier told reporters about the move. Ontario’s provincial government welcomed the decision and said it would also remove its share of the sales tax on rental projects.

Cutting the federal tax “will make it cheaper and easier to build more of the rental housing we desperately need,” Ontario Finance Minister Peter Bethlenfalvy and Housing Minister Paul Calandra said in a joint statement.


Trudeau also said his government will summon grocery-chain executives to Ottawa to deliver a plan to restore price stability. He said he expected chief executive officers to come up with strategies by Oct. 9.

“If the plan doesn’t provide real relief for the middle class and people working hard to join it, then we will take further action,” he said. “We are not ruling anything out, including tax measures.”

Trudeau said it doesn’t make sense that grocers are making “record profits” while Canadians are struggling to put food on the table and the use of food banks has skyrocketed.

Trudeau also announced steps that he said would enhance competition across the economy, with a focus on the grocery sector. He said his government will amend competition law to remove the so-called efficiencies defense, which allows a merger to go ahead if cost savings outweigh negative impacts on competition.

Canada’s competitive law is remedy-oriented and gives merging companies a powerful legal weapon in the “efficiencies defense,” allowing them to argue that the cost savings are so great that they outweigh the harmful impacts on competition.


Trudeau said the defense allows “anti-competitive mergers” to survive.

He said his government will amend laws to give the Competition Bureau power to compel information to conduct complete market studies, as well as remove the efficiencies defense, which he said “allows anti-competitive mergers” to survive.

He also said he would take steps to protect consumer choice, particularly in situations where large grocers prevent smaller ones from opening nearby.

The prime minister also announced on Thursday that he would extend the repayment deadline for pandemic-era loans for small business by one year to the end of 2024.

Trudeau has been under pressure to act on soaring housing costs and food prices as concerns about affordability have caused his government to sink in opinion polls. He pledged more housing announcements to come. Removing the sales tax on new rental construction was recommended earlier this summer in a report that called for tax changes and cheap financing to spur builders to create about two million rental units in seven years.