By Nick Taylor-Vaisey and Kyle Duggan

Thanks for reading Ottawa Playbook.

In today's edition:

→ JUSTIN TRUDEAU's government scored some good press. Which, given the state of the polls and the anxiety in the Liberal caucus, is something.

→ Trudeau managed to make homebuilders happy and some small businesses relieved in the space of a single news conference.

→ Prepare for the return of raucous parliamentary committees.

Prime Minister Justin Trudeau re-announced a Housing measure first pitched by the Liberals eight years ago. | Eduardo Munoz Alvarez/AP Photo

WHAT'S OLD IS NEW — JUSTIN TRUDEAU's caucus roared in appreciation as the prime minister re-announced a housing measure pitched by the Liberals eight years ago and rejected halfway through the prime minister's first term.

All the buzz before the Liberal caucus retreat in London, Ont., a city once described by Reader's Digest as the most average place in Canada, was about the grumbling.

Liberal MPs were said to be anxious about three Ps: PIERRE POILIEVRE and the polls. They reportedly hashed it all out behind closed doors. "Frank" was the adjective of the day in Averagetown, Canada. By the time the caucus stood behind the surprisingly energetic PM — when did this man have time to get over jet lag? — they were ready to clap.

— This time with feeling: Every political analyst in the country was looking to Trudeau to do something, anything, to respond to drooping polls. Abacus Data said Thursday that barely more than one-fourth of respondents approve of the PM's performance.

Pundits demanded deliverables, perhaps the cringiest euphemism in politics. Trudeau brought an armful to the podium in a choreographed sequence that showcased a pair of high-profile ministers in SEAN FRASER and FRANÇOIS-PHILIPPE CHAMPAGNE.

→ Housing: The Liberals will remove the GST from purpose-built rental housing construction, an idea hatched in 2015 but later abandoned because "research and evidence" favored a low-interest loan program as an incentive for homebuilders.

Economists, housing advocates and homebuilders rejoiced. They've wanted this for years.

Trudeau asked premiers to eliminate their own sales taxes from the same construction projects. Fraser said he'd already heard commitments from Ontario, B.C. and Newfoundland and Labrador — three provinces where, coincidentally, Team Trudeau is particularly vulnerable in the polls.

Ottawa will also "require local governments to end exclusionary zoning and encourage building apartments near public transit" as a means of unlocking federal funding.

If that sounds vaguely familiar, take another look at Poilievre's housing plan: "Require cities seeking federal funds pre-approve building permits for high-density housing and employment on all available land surrounding transit stations."

→ Groceries: The PM pinned the blame for frustratingly high grocery prices on the companies that sell them, complaining that large grocers have raked in cash as families "are struggling to put food on their tables."

The feds are hauling the major players to Ottawa for a meeting, where Champagne will demand a plan to lower prices. The announcement came with a threat: "We are also looking at all tools at our disposal, and we are not ruling out the use of tax measures, in order to restore the grocery price stability that Canadians expect."

Trudeau also teed up changes to the Competition Act that would allow Ottawa to compel grocers to provide data for market studies and tighten the rules on mergers deemed anti-competitive.

Here's some food for thought: Maru Public Opinion reported in July that 39 percent of Canadians blame grocery chains and food outlets for high prices.

A Bank of Canada report in August poured cold water on the so-called "greedflation" narrative: "The fact that markup growth was not aligned with the dynamics of inflation indicates that the recent rise in inflation was driven primarily by changes in costs rather than by firms leveraging their market power to increase prices."

→ Small business: For months, the Canadian Federation for Independent Business had practically begged Ottawa for a repayment extension on federal pandemic loans known as the Canada Emergency Business Account.

The loans were due to be paid in full by the end of the year. Trudeau announced a one-year extension. Did indebted entrepreneurs across the nation sigh in relief? Not according to the CFIB, which said the extension was "not enough" for businesses struggling to repay.

— In sum: A popular tax change that will make it easier to build rental housing. A popular attack on grocery giants. A popular extension of a small-business loan program (with some grumbles).

Over to you, pollsters.

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SUPPLY, SUPPLY, SUPPLY — Housing Minister SEAN FRASER has the job that could make or break his government. As he recently told Playbook, Fraser feels the urgency. He's pumping out letters to municipalities who want a piece of the C$4 billion Housing Accelerator Fund, and he's attaching conditions to the opening of taps.

Calgary Mayor JYOTI GONDEK published Fraser's letter to her city on X. In it, Fraser talks tough. "In order to receive a positive decision from me on your application," he writes, "you must end exclusionary zoning in your city."

— Message received: "We will jeopardize or lose federal funding if we do not approve the full strategy. We must act now," Gondek wrote on X.

— The big picture: A new report this week from the Canada Mortgage and Housing Corporation warned policymakers that the gap between housing supply and demand in 2030 could range between 3.07 million homes (in a low economic growth scenario) and 4.07 million (in a high population growth scenario).

Daunting numbers.

THE BUILDERS' VIEW — The Liberals are leaning on that accelerator fund and a newly announced plan to take the GST off of purpose-built rental housing — with a promise of more to come — to convince voters they're serious about speeding up homebuilding.

Playbook talked through the GST change with KEVIN LEE, the CEO of the Canadian Home Builders' Association. Lee welcomed the announcement, which the CHBA had requested for years. He said the business model on rental construction "broke a couple of decades ago."

This conversation has been edited for length and clarity.

Why is the business model for rental construction broken?

In most businesses, you pay GST but then you get to reclaim GST, so it doesn't become part of your operational expenses. Whereas with purpose-built rental, you weren't able to do that.

You're paying GST, but not able to reclaim the GST because you have no income to charge it against with rent — because there's no GST on rent. And so what ended up happening was that [cost] just ended up having to be built into the price of rent, which made rents too high in many instances. So it didn't make sense to [build].

Conversely, you could get all your input tax credits with condominium development with much less risk, and so the market largely moved to condos, because it just made more sense from a taxation perspective.

The Liberals campaigned on this GST measure, but instead launched the Rental Construction Financing Initiative, a low-interest loan program for purpose-built rental apartment projects.

The problem with that is it was just for a small portion of the market. When you can only service a small portion of the market and you have more constraints on it, you don't get the volume. What this tax measure will do, because it's for all purpose-built rentals, it'll make the model work for many, many more units. There's not a complicated application system for financing. It'll be much broader and will enable a lot more construction.

Do you have a sense of how many units this will build over the next decade?

We don't have statistics of that nature. But we do know, from talking to all of our members, that this is a game-changer. We do expect it'll result in a lot of new projects. And, importantly, it'll result in some projects that currently have been shelved getting back on track.

I can say it's tens of thousands of units this year that have come off the books. We do expect that with this measure, those will come back online. That's a big reversal.

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— Prime Minister JUSTIN TRUDEAU is in Toronto.

— Deputy Prime Minister CHRYSTIA FREELAND is in Toronto for private meetings.

9 a.m. International Trade Minister MARY NG delivers opening remarks for a meeting with provincial and territorial trade ministers at Global Affairs Canada HQ before booting out reporters. Doors open again for her 2:55 p.m. closing remarks. No reporters’ questions will be allowed “due to scheduling.”

11:30 a.m. Trudeau meets Portuguese President MARCELO REBELO DE SOUSA for a one-on-one meeting and working luncheon in downtown Toronto.

1 p.m. Fridays For Future Ottawa hosts the 2023 Global Climate Strike on Parliament Hill.

1:45 p.m. Trudeau will will attend the opening ceremony for a Portuguese Diaspora photo exhibit.

2 p.m. Trudeau will convene the Incident Response Group to discuss the response to Hurricane Lee.

9:30 p.m. (6:30 p.m. YT) Conservative Leader PIERRE POILIEVRE holds a rally in Whitehorse, Yukon.

Up: Canadian rage, according to Pollara Strategic Insights. The firm's "Rage Index" recently hit a 13-month high of 56 percent, including record levels of anger at the federal government. "Young Canadians are angriest about the economy," says Pollara. "This is largely due to the housing market, which half (49%) of Canadians under 35 are very angry about."

Down: The country’s grocery CEOs, who learned Thursday they're about to get a tongue-lashing in Ottawa — and nothing is off the table for the government to quickly stabilize prices, including a vague threat of tax measures.

Raucous parliamentary committees are set to return. | AFP via Getty Images

ETHICS CHECK — It’s down to the wire before the House of Commons revs up its parliamentary engines again, and committee listings are already starting to pop up.

The fun starts Monday afternoon, when the new interim Ethics Commissioner, KONRAD VON FINCKENSTEIN, appears before the ethics committee.

The job was vacant for much of the year, until the former CRTC honcho took up the role.

The previous permanent ethics watchdog, MARIO DION, retired in February, and was nearly replaced by MARTINE RICHARD, but she quickly stepped down as interim commish amid furor over her family ties to Liberal Cabinet minister DOMINIC LEBLANC.

— Get in line: Official investigations have been on hold in the absence of anyone heading the office.

Among the complaints and letters that have piled up on his desk include one from Democracy Watch alleging the prime minister violated conflict of interest rules by giving DAVID JOHNSTON, a Trudeau family friend over the years, a gig as “special rapporteur” on foreign interference.

Most of the other committees are in planning mode, but the natural resources committee kicks off early with policy talk on Canada’s clean energy plans.

— From the Toronto Star: Candidates in Ontario Liberal leadership debate take aim at BONNIE CROMBIE

— LAWRENCE MARTIN spills some Liberal tea in the Globe: “In the unlikely event that he does leave, sources tell me we should keep an eye on Public Safety Minister DOMINIC LEBLANC, a close friend of the Prime Minister who is interested in succeeding him; he would have Mr. Trudeau’s blessing.”

— Tory MP MICHELLE REMPEL GARNER implores THERESA TAM to acknowledge a post-pandemic trust gap with ordinary people.

— The Lunenburg Barnacle talks Bill C-18 with Tory MP RICK PERKINS.

— Angus Reid polling finds Albertans supportive of Premier DANIELLE SMITH’s pushback against Ottawa with her moratorium on renewables, but many worry pressing pause on those projects will hurt jobs and the economy.

— ANDRÉ PICARD gets outgoing Vancouver Mayor GREGOR ROBERTSON to reflect on Canada’s response to the opioid crisis. Meanwhile, NPR’s SCOTT MAUCIONE reports drug cocktails of fentanyl mixed with cocaine or meth are driving the fourth wave of opioid overdoses in the U.S.

— ALLISON HANES writes in the Montreal Gazette why she’s supporting Friday’s Facebook boycott by journalists, unions and others over Meta’s decision to pull out of news sharing.

If you’re a subscriber, don’t miss our latest policy newsletter from SUE ALLAN and KYLE DUGGAN: Clock is ticking on action to save Canada’s soil

In other news for Pro subscribers: 

— Auto strike could threaten Biden’s blue wall

— DOE launches interactive map detailing clean energy investments

— What you need to know about the EU investigation into Chinese e-cars

— ‘Hero work’: how a savvy digital tripwire helped State uncover a Chinese hack

— U.S. Forest Service plans to spend $1B on urban forests, efforts to green communities

Birthdays: HBD to former Conservative MP GARY SCHELLENBERGER. HBD + 1 to the CBC’s KATE MCKENNA.

Send birthdays to [email protected] .

Spotted: Toronto Mayor and former MP OLIVIA CHOW, sharing an Empire Club stage with former parliamentary foe and Tory foreign minister JOHN BAIRD. Said Baird afterward: "While we come from different political viewpoints we can both agree that Toronto is being short changed by the current federal government."

Cyberattacks targeting Quebec and P.E.I. government websites.

Reporter BOB MACKIN, finding the local angle on MICHAEL CHONG’s trip to Washington … Former NDP MP ANDREW CASH comparing PIERRE POILIEVRE’s Quebec moves to JACK LAYTON’s.

MARSHA LOBBAN, Jamaica’s new high commissioner to Canada, presenting her credentials in Ottawa … A full house witnessed Conservative SHUV MAJUMDAR being officially sworn in as MP for Calgary Heritage.

MMA practice dummies, posted for auction on GCSurplus.

Movers and shakers: ALEX KOHUT, former head of public opinion research and advertising in the Prime Minister's Office, joined Spark Advocacy as senior director of spark*insights. (Fun fact: Kohut circumnavigated the planet after leaving the PMO.)

LADE OGUNSANYA, a former curation desk lead for Twitter North America and co-chair of an in-house group focused on "fostering belonging, community and empowerment for Black employees," is lobbying for Google Canada.

Umicore, the vehicle battery manufacturer planning a C$1.5 billion plant in southern Ontario with help from the federal Strategic Innovation Fund, met in late August with Innovation Minister FRANÇOIS-PHILIPPE CHAMPAGNE and IAN FOUCHER, his chief of staff.

The pharma lobbyists at Innovative Medicines Canada posted summertime meetings with SIMON KENNEDY, deputy minister at Innovation, Science and Economic Development Canada; NANCY HAMZAWI, executive vice president at the Public Health Agency of Canada; STEFANIA TROMBETTI, assistant deputy minister at Health Canada; SUSAN FITZPATRICK, the CEO of Health Canada's Canadian Drug Agency Transition Office; and YASH NANDA, a policy adviser to Finance Minister CHRYSTIA FREELAND.

Thursday’s answer: Conservative MP CHRIS WARKENTIN tried to table a cardboard cutout of JUSTIN TRUDEAU in the House of Commons in 2017.

Props to BOB GORDON, PATRICK DION, GEORGE SCHOENHOFER, BRANDON RABIDEAU, WAYNE EASTER, DOUG RICE, QASIR DAR, CAMERON RYAN, ROBERT MCDOUGALL, GANGA WIGNARAJAH, SARA MAY and STACEY NORONHA.

Today’s question: On this day in 1993, Canada fought its "biggest battle since the Korean War" up to that point. In what country were troops doing the fighting?

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Think you have a harder trivia question? Send us your best.

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