If you look around Saint John, you will notice a massive surge in apartment construction. A pricey gamble by the New Brunswick government is paying off. By offering large financial incentives to developers, the province unleashed a record breaking wave of new housing starts.

Over the summer, New Brunswick led the country in per capita housing starts. Builders broke ground on 2,625 new units between July and September. That equals 297 new housing units per 100,000 people. This pace doubles the national average and marks a 70 percent increase over the summers of 2022 and 2023.

The 10 Percent Incentive

In late 2024, the province introduced a time limited sales tax holiday. If developers start construction on an apartment building before December 31, 2027, and finish by December 31, 2029, they escape the 10 percent provincial sales tax on new housing.

This deal is transforming the Saint John skyline. Local entrepreneur Greg Collins is building a $10 million, 36 unit apartment building on Leinster Street overlooking Courtney Bay. The tax rebate saves him $1 million.

“It’s an incentive to move forward sooner rather than later,” Collins told CBC News.

Just outside Saint John in Grand Bay Westfield, developer Andrew Beal is constructing 72 apartment units across three buildings. The project costs about $18 million. The tax holiday saves him $1.8 million. Beal noted this savings makes up a large portion of his financial margin and drove his decision to purchase the land and commence the project.

Weighing the Costs

Forgiving this tax costs the province up to $75 million a year. This is a significant expense for a government facing a $1.7 billion budget deficit. However, New Brunswick offsets this loss by collecting provincial property taxes on these new buildings once they are complete. Beal’s completed development alone generates about $100,000 a year in provincial property tax.

Over the first 22 months of the incentive, developers started nearly 8,400 apartment units across the province. This compares to just 5,900 in the previous 22 months. New Brunswick Housing Minister David Hickey supports the program despite the high cost.

“We know that we need the supply,” Hickey said. “Our goal is to continue to create the climate for good development here in New Brunswick.”

Frequently Asked Questions

What is the New Brunswick housing tax incentive?
The provincial government offers a time limited holiday on the 10 percent sales tax for new apartment buildings.

What are the deadlines for developers to qualify?
Developers must start construction by December 31, 2027, and complete the project no later than December 31, 2029.

How much is this tax break costing the province?
The province forgoes up to $75 million a year in sales tax revenue. They recoup a portion of this money through future property taxes on the new buildings.

How many new units are being built?
During the summer months alone, builders started 2,625 new units. Over the first 22 months of the program, developers broke ground on nearly 8,400 apartment units across New Brunswick.