Seeing new apartments everywhere? Why residential construction is booming in N.B.

Behind me is a new apartment building under construction on St. John's Westside. Lately it's become a pretty common sight in most New Brunswick communities. Over the last year housing starts in New Brunswick are way up and it's being led by record apartment building construction. This past summer in New Brunswick, over three months, work started on more than 2,600 new housing units, including more than 1,800 new apartment units. It's nearly a 70% increase in housing starts from the same period three years ago. And per capita, it was the most new residential construction in Canada among all 10 provinces. So what's going on? How did New Brunswick come to lead the country in new housing starts? Well, there are a few reasons, but a major one is a provincial tax break given to developers over the last two years. And it hasn't been cheap, but as far as getting housing built quickly, So far, it's been effective. We have also been working to help tackle the housing crisis. Two years ago, Finance Minister René Legacy announced New Brunswick would join other provinces and drop the 10% sales tax developers have to pay on the value of every new apartment building they construct. But unlike other provinces, the deal only lasts for three years. That has fueled a building boom. This is a $10 million, 39-unit apartment building going up on Leinster Street in St. John. Developer Greg Collins said the limited chance to save a million dollars in provincial sales tax on the project caused him and builders like him to get started right away. An incentive to move forward sooner than later, trying to determine when the best time to go is. It's a very, very tricky situation and it depends on many factors, but I think that HST program really had some incentive for a lot of guys that were ready to go or very close to ready to go. Rapidly building new housing supply is something many jurisdictions are trying to restore affordability to housing markets. And lately, New Brunswick has been putting up better numbers than most. In the 22 months since the apartment building sales tax holiday began, the province has had work begin on about 8,400 apartment units. That's a 40% increase over the 5,900 units started in the 22 months before the incentive. It's a lot more housing, but it doesn't come cheap. There are a lot more apartment units under construction in New Brunswick than there used to be. That much is obvious. But New Brunswick used to collect up to $75 million a year in provincial sales taxes on new apartment buildings. That is dropping to zero for three straight years. New Brunswick will recover some of that lost revenue with provincial property taxes on all those new buildings. But the province insists that whatever the net Costs will be the social benefit of thousands of new housing units will be worth it.