Trudeau announces new measures to deal with housing, grocery prices

Under pressure to respond to widespread concerns about the cost of living and faced with questions about his leadership, Prime Minister Justin Trudeau announced new measures Thursday aimed at rising housing and grocery prices.

Trudeau's announcement came at the conclusion of a Liberal caucus meeting in London, Ont. that included what one minister called a "robust" discussion of the government's challenges and sagging political fortunes.

Flanked by the entire Liberal caucus, Trudeau said the federal government would remove the GST from the construction of new rental apartments to spur new development. The Liberals also will now require municipalities to repeal or amend exclusionary zoning policies in order to access the government's housing accelerator fund. 

The federal government is also calling on major grocers to come up with plans to stabilize grocery prices in the "near-term."

Trudeau warned that if grocery giants are unable to produce such plans by Thanksgiving, the Liberals "will take further action and we are not ruling anything out, including tax measures."

The federal government also announced it will bring forward legislation to empower the Competition Bureau to ensure that corporate mergers and acquisitions do not have an adverse effect on the affordability of goods and services.

"Canadians are struggling right now," Trudeau told reporters, "and we're going to be there as we always have been to have people's back, to invest in the kinds of things that support Canadians and grow the economy at the same time."

The new measures come a day after the federal government announced the first of what it hopes will be a series of agreements with Canadian cities to speed up the construction of new housing.

The NDP, which has been calling for the federal portion of the GST/HST to be removed from new rental housing, welcomed the move but criticized the Liberals for taking so long to implement it.

"These are actions that should have been taken months ago," NDP Leader Jagmeet Singh said in a statement.

Speaking in Vancouver, Conservative Leader Pierre Poilievre said a limited change to the GST will be included in legislation he plans to introduce when Parliament reconvenes on Monday. The Conservatives would remove the GST from the construction of new rental homes priced below the local market average.

"Justin Trudeau promised to do this eight years ago. Six years ago he said 'just kidding, promise broken,' and now this morning, just as he got wind this was going to be in my bill, he flip-flopped again," he said.

The GST change announced on Thursday was part of the Liberal party's election platform in 2015, but the Liberal government abandoned that policy in 2017, saying there were better ways to increase rental construction.

Asked to explain the decision to revive the proposal now, Trudeau and Housing Minister Sean Fraser pointed to new circumstances, including higher interest rates, that are standing in the way of construction.