Ontario’s revised plan for the tax treatment of new housing under a Harmonized Sales Tax (HST) is a significant improvement over its original proposal in the 2009 Budget, with lower economic cost and less impact on homebuyers’ decisions.

The author evaluates the fiscal stimulus policies of 20 OECD countries within a simple benefit-cost framework. Among his findings: in Canada, to be justifiable on a benefit-cost basis, a fiscal stimulus project that improves consumptive public services must provide at least 73 cents in benefits...