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News & resources / Media / CPA: Feds must work to ensure affordable home heating
OTTAWA, September 6, 2022 – As the Prime Minister meets with his federal cabinet to look at ways to make life more affordable for families, his government should strongly re-consider a recommendation by the Canadian Propane Association (CPA), to make HST/GST zero-rated for residential energy.
“In November 2021, the CPA wrote to the Prime Minister proposing that the government make a legislative change to Part IX of the Excise Tax Act that would categorize residential heating fuels such as propane, as zero-rated for purposes of the GST/HST. In Canada, winter heating is essential and our members feel strongly that tackling heating costs is one direct way to address the higher cost of living in 2022 and beyond,” said Shannon Watt, President and CEO of the CPA.
In announcing the cabinet retreat, the Prime Minister noted that after spending the summer talking to people in communities across the country, he is looking forward to a productive cabinet meeting that will build on the government’s efforts to make life more affordable for Canadians.
“Over the past several months we have seen 30- to 40-year highs in the inflation rate with no indication of a return to two per cent levels anytime soon. With the winter season coming, immediate action is needed to reduce the cost of residential energy,” said Watt. “Our 400 plus members are hearing from their customers that they are alarmed at the rising residential heating costs, which is why we propose immediate government action to make essential residential heating more affordable for Canadians.”
Currently, residential energy is subject to the full GST/HST. The zero rate could apply to residential houses, condominiums and other similar dwellings, senior care facilities, hospices, school and university residential accommodations, monasteries, nunneries, and similar religious communities, as well as armed forces housing.
The change would see low-emission propane and other heating fuels that are marketed exclusively to domestic consumers for residential purposes be zero-rated. The application would be similar for goods such as most groceries, as well as agricultural and fish products, among others.
“While government coffers benefit from higher energy prices, this cannot be on the backs of hard-working Canadians. There should be agreement by this government to make essential residential heating HST/GST zero-tax rated, at least until the inflation rate returns to two per cent. That would be a crucial step in helping make life more affordable for all Canadians this winter,” said Watt.
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