Ontario's HST Break, Record Gas Prices, and Canada's Job Market

Three stories are moving the Canadian market right now, and they connect more than you would think. Ontario's move to drop tax on new homes has actually made them more expensive. Gas just posted a historic jump. And the job numbers are quietly shaping what the Bank of Canada does next. Let me take them one at a time.

I'm Moe Asgarian, a senior real estate broker in Toronto, ranked number 47 at RE/MAX worldwide. Here I write about the Toronto and GTA housing market and the wider Canadian economy.

Ontario's HST break on new homes

The first story is Ontario's plan to remove the 13% HST. I covered the full details separately, but here is the short version. Ontario announced it is temporarily removing the 13% HST on new-build homes priced up to $1 million. For homes up to $1.5 million, there is a rebate of up to $130,000. The break applies only to contracts signed between April 1, 2026 and March 31, 2027. One important note: this discount is not limited to first-time buyers. Investors qualify too.

Why a tax cut can push prices up

Here is where it gets interesting. The numbers already show that in several parts of Ontario, developers responded to the news by raising their asking prices. A home that was asking $1,300,000 became $1,450,000. A $950,000 home became $1,000,000. Across brand-new builds we are seeing asking prices climb roughly 10% to 14%.

Why does this happen? Home prices are tied closely to borrowing power. When you can borrow more, the home gets more expensive on its own. A government incentive lets the buyer borrow more, and that pushes prices up. In practice it looks like the builder is pricing the discount in ahead of time, so the buyer ends up paying that money back anyway. One report put it well: this move might give the market a short-term nudge, but it does not solve the core problem. It reads more like help for the builders, with the benefit only appearing to land on the buyer.

Gas prices hit a record

The next story is the jump in gas prices across Canada. This is the largest monthly increase in the country's history. The previous record was around 19%, going back to 1983. The driver is the war involving Iran and its effect on the global oil market. Even though Canada produces its own oil, prices are set globally. When world supply tightens, buyers compete for Canadian oil too, and the domestic price rises with it.

The trouble does not stop at the pump. This increase is set to push inflation up directly. Estimates suggest this gas move alone could add about 0.7% to the inflation index. And the effect spreads: other fuels, fertilizer, and eventually food can all climb. That is how a chain reaction in inflation starts.

Canada's job market in March

The third story is the March labour numbers. About 14,000 jobs were added to the Canadian economy in March, roughly what economists expected. The unemployment rate held steady at 6.7%, so no better and no worse. The important context is that more than 100,000 jobs were lost in January and February. This small gain has not made up that larger drop. Most of the growth came in public services like maintenance and repair, with some gains in specialized fields and natural resources. On the other side, finance, real estate, insurance, and the restaurant and hotel sector saw the biggest losses.

What this means for rates

So what does it all add up to? We do not yet know what the Bank of Canada will do at its April 29 meeting. But this labour data points toward no change in the interest rate. The job market is neither collapsing nor growing strongly. It sits in a semi-weak state that keeps unemployment elevated, job growth thin, and makes it hard for the central bank to cut rates easily. If you are trying to time a purchase or a sale around all of this, the details of your own situation matter more than any single headline. Fill out the form at the bottom of this page or book a free consultation and we will map out your best move together. Stay well and take care.