GST Rebates for First Time Buyers

Starting June 5th, The Liberal government has finalized the legislation to eliminate the GST portion on new home sales of up to $1 million. This applied to first-time home buyers. This will equate to as much as $50,000 off the cost of a new build.

The new policy takes a big step beyond the existing New Housing Rebate, which is open to more than just first-time buyers, however; has long been capped at homes priced up to $450,000.

Roughly 92% of new builds in Toronto are expected to qualify for a full or partial tax relief for homes priced up to $1.5 million. 75% of new units in Vancouver would qualify.

May Employment Numbers

The labour market continues to struggle.

The 8,800 rise in employment in May was better than the consensus but still means the labour market is yet to fully reverse March’s 32,600 drop off. The largest rise came from wholesale and retail trade, where employment increased by 43,000. This may reflect a boost to demand for domestic businesses amid tariffs, as well as the return of students to the labour market ahead of the summer period.

The flip side of these tariff effects was a 12,000 fall in employment in the manufacturing sector, as well as a 16,000 decline in transportation and warehousing employment.

The largest drag came from a 32,000 decline in public administration employment, reversing the similarly-sized boost in April from the federal election.

Positively, the number of employees in the private sector rose, on net, by 61,000 – the first rise since January.

Toronto Employment Numbers

More locally, Toronto’s unemployment rate hit 9% in May.

Outside of COVID, that’s the highest since 2012.

Toronto Pre-Construction

Toronto pre-construction sales continue to reach crisis level.

The months of inventory for pre-construction condo’s in Quarter 1 were more than 14X higher than that of 2022.

It will now take a staggering 58 months to sell the available stock at the current rate of sales.

Cash Flows Slow Rental Purchases

“During the low-rate era, investors could overlook some negative cash flow because equity was still getting built up below the surface – that no longer applies. Until cash flow dynamics improve (and we’re not there yet), the investor will remain absent from the market,” BMO Economics reports.

For our office, the only rental files we are completing are well outside of the GTA core (North Bay, Pembrooke, Sudbury, Hamilton, etc).

Rate Odds For July

Update rate odds for next month are below:

• For the Bank of Canada meeting on July 30:
  • 25 bps cut: 36% chance
  • No change: 64% chance
• For the Federal Reserve meeting on June 18:
  • 25 bps cut: 3% chance
  • No change: 97% chance

Equifax Reporting on Mortgages

The numbers below are based on the average’s across Canada. GTA balances would clearly be much higher than the below.

• $271,000: The average mortgage balance per mortgage account.
• $354,400: The average mortgage origination amount. Originations are logged as first-time home buyers, repeat buyers, renewals, and refinancers.
• 28% – The share of existing borrowers who switched lenders in Q1.
• $134,200 – The average increase in loan balance (per mortgage) for estimated refinances.

Canada Increases Defence Spending

Prime Minister Mark Carney announced on Monday that the Department of National Defence would receive an additional $9.2 billon (0.4% of GDP) this fiscal year, raising total defence spending to NATO’s 2% of GDP target.

This is five years ahead of the timeframe laid out in the Liberals’ election platform, reflecting the pressure on the new government to prepare the country for life in a world absent of an implicit US military guarantee.

Gen Z Spends

According to TransUnion, Gen Z consumers debt in Canada hit $2.5 trillion in Q1. This is a staggering 30.6% year-over-year increase in outstanding credit balances.

Meanwhile, newcomers to Canada accounted for $2.6 billion in new credit balances, at a 6.3% yearly increase.

Manufacturing Numbers Begin to Drag

Data released on Friday showed manufacturing sales volumes fell by 2.8% m/m in April. Motor vehicle sales plunged (-8.3% m/m), with the sector’s demand woes compounded by shutdowns at assembly plants in Ontario. Primary metal sales also dropped sharply (-4.4% m/m) in response to US steel and aluminum tariffs.

Current Interest Rates

CONVENTIONAL

• 5 year fixed, 30 yr amortization – 4.39%
• 3 year fixed, 30 yr amortization – 4.35%
• 2 year fixed, 30 yr amortization – 4.84%
• 5 year variable, 30 yr amortization – Prime – 0.40% = 4.55%
• 5 year fixed, 25 yr amortization – 4.29%
• 3 year fixed, 25 yr amortization – 4.30%
• 2 year fixed, 25 yr amortization – 4.74%
• 5 year variable, 25 yr amortization – Prime – 0.50% = 4.45%

INSURED

• 5 year fixed, up to 30 yr amortization – 4.19%
• 4 year fixed, up to 30 amortization – 4.24%
• 3 year fixed, up to 30 amortization – 4.04%
• 5 year variable, up to 30 amortization – Prime – .75% = 4.20%

Fast Facts

• 1,600 – Beers that were entered into the 2025 Canadian Brewing Awards, Canada’s oldest beer competition. Godspeed Brewery in Toronto captured Best in Show for its “Irori” lager.
• 49,300 – Refugees Canada welcomed last year, making it the second-largest resettlement country in the world. Canada led the world in permanent residency granted to refugees.
• US $22 billion – Revenue that the U.S. government collected from duties last month, driven by the Trump administration’s tariffs. Revenue was up 42% from April.
• 12% –  The total amount Canadian rents have increased since 2022, despite falling year over year in May.