Summary#

Bill C-56 (Affordable Housing and Groceries Act) changes two laws. It boosts the GST rebate for new purpose-built rental housing for a limited time. It also strengthens competition rules to address anti-competitive conduct and allow market-wide inquiries.

• Enhances the GST New Residential Rental Property Rebate for qualifying new rental projects started after September 13, 2023 and completed before 2036 (Excise Tax Act s.256.2(3.1)–(3.2)).
• Blocks “efficiencies” defences in reviewable agreements and mergers by repealing key exceptions (Competition Act s.90.1(4)–(6) repealed; s.96 repealed).
• Lets the Competition Bureau run market or industry inquiries with public input and deadlines up to 18 months (Competition Act new s.10.1(1)–(6)).
• Expands abuse-of-dominance tools, including orders for divestiture, higher penalties, and new factors like network effects and consumer privacy (Competition Act s.79(1)–(4), (6)).
• Allows orders against agreements that lessen competition even if the parties are not current competitors (Competition Act s.90.1(1.1), (11)).
• Identifies “excessive and unfair selling prices” as an anti-competitive act (Competition Act s.78(1)(k)).

What it means for you#

• Households and renters

  • The GST on qualifying new purpose-built rental housing is effectively rebated in full at the project level, which can lower total project costs. This applies to construction that begins after September 13, 2023 and before 2031, and is substantially completed before 2036 (Excise Tax Act s.256.2(3.1)–(3.2)). Impact on rents is not mandated by the bill.

• Builders and developers of rental housing

  • Eligible projects receive a rebate equal to the GST paid on purchase/self-supply, calculated as A × B, where A is the total GST under s.165(1) and B is 1 for condo units or the unit’s share of total floor space otherwise (Excise Tax Act s.256.2(3.2)).
  • Applies to sales to non-builders and to certain builder self-supplies and conversions that meet the start and completion timelines (Excise Tax Act s.256.2(3.1)).
  • The measure is deemed in force as of September 14, 2023 (Excise Tax Act s.256.2(4)).

• Public service bodies (e.g., municipalities, charities, non-profits)

  • Prevents “double dipping” between the enhanced rental rebate and the public service body rebate under s.259; you cannot claim the same tax twice (Excise Tax Act s.256.2(9.1)).

• Businesses, retailers, suppliers, and platforms

  • Market or industry inquiries: The Competition Bureau can launch or be directed to launch inquiries, publish terms of reference for public comment (≥15 days), and issue a public report within up to 18 months, with possible 3‑month extensions (Competition Act s.10.1(1)–(6)). You can be ordered by a court to provide records, data, or testimony (s.11 as amended).
  • Draft report review: If you were compelled under s.11, you receive a draft and have 3 working days to flag factual errors or confidential information (Competition Act s.10.1(7)).
  • Agreements that lessen competition: The Tribunal can order remedies even if the parties are not current competitors, if a significant purpose of the agreement is to lessen competition; “competitor” also includes likely future competitors absent the agreement (Competition Act s.90.1(1.1), (11)).
  • Abuse of dominance: The Tribunal can prohibit conduct, order divestitures if needed to restore competition, and impose administrative monetary penalties up to CAD $25,000,000 (and up to $35,000,000 for subsequent orders) (Competition Act s.79(1)–(3.1)). New assessment factors include network effects, non-price competition (quality, choice, consumer privacy), and innovation (s.79(4)). Limitation period is 3 years after the conduct ceases (s.79(6)).
  • “Excessive and unfair selling prices” are listed as an anti-competitive act, which can support abuse-of-dominance cases (Competition Act s.78(1)(k)).

• Companies planning mergers or collaborations

  • The efficiencies defence in merger and agreement reviews is repealed (Competition Act s.96 repealed; s.90.1(4)–(6) repealed). Transitional rules apply to transactions notified before the new provisions take effect or substantially completed before that date (Competition Act Transitional Provision re ss.92 and 96).
  • If Bill C-59 also takes effect, the Tribunal may order payments up to the value of the benefit from the conduct, distributed to private applicants and affected persons, in certain abuse-of-dominance cases (coordinating amendment to Competition Act s.79(4.1)).

Expenses#

• Estimated net cost: Data unavailable.

• Key fiscal elements

  • The bill enhances a GST rebate for qualifying new rental projects, which reduces federal GST revenue for eligible projects (Excise Tax Act s.256.2(3.1)–(3.2)). Data unavailable.
  • The bill contains no explicit dollar appropriations. It allows market inquiries, which will entail administrative costs for the Competition Bureau and related legal processes. Data unavailable.

Proponents' View#

• The housing rebate removes the 5% federal GST burden on qualifying new purpose-built rental projects, which can improve project feasibility and spur rental supply (Excise Tax Act s.256.2(3.2), referencing tax under s.165(1)).
• Clear timelines (start after September 13, 2023 and before 2031; completion before 2036) focus the incentive on near-term construction (Excise Tax Act s.256.2(3.1)).
• Preventing overlapping public service body rebates ensures fiscal integrity and avoids duplicate claims (Excise Tax Act s.256.2(9.1)).
• Market/industry inquiries with public terms and deadlines improve transparency and let the Bureau study sectors like groceries and report within 18 months (Competition Act s.10.1(3)–(6)).
• Stronger dominance rules, including divestiture and high penalties up to $25,000,000/$35,000,000, deter harmful conduct and help restore competition (Competition Act s.79(2)–(3.1)).
• Repealing efficiencies defences and covering non-competitor agreements close gaps that previously allowed harmful deals to proceed despite anti-competitive effects (Competition Act s.90.1(1.1), repeal of s.90.1(4)–(6), repeal of s.96).

Opponents' View#

• The housing rebate may create windfalls for projects that would proceed anyway, with no guarantee of lower rents for tenants; the bill does not require pass-through of savings (Excise Tax Act s.256.2(3.1)–(3.2)). Assumption flagged.
• Fiscal costs are uncertain and could be large over the 2023–2036 window, reducing funds for other housing or social programs. Data unavailable.
• Broad competition powers risk business uncertainty: “excessive and unfair” pricing is not defined in the bill, which may chill aggressive but lawful pricing by dominant firms (Competition Act s.78(1)(k)). Assumption flagged.
• Market inquiries can impose compliance burdens and confidentiality risks; the 3‑day window to review draft findings may be too short to correct errors (Competition Act s.10.1(7)). Assumption flagged.
• Repealing efficiencies defences may block mergers or agreements that lower costs or improve innovation, even if savings could benefit consumers (Competition Act repeal of s.96; s.90.1(4)–(6) repealed). Assumption flagged.
• Allowing orders against non-competitor agreements could deter legitimate vertical arrangements (e.g., supply or distribution) if authorities infer an anti-competitive purpose (Competition Act s.90.1(1.1)). Assumption flagged.