What Is Private Equity, and Why Is It Booming in Canada?

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Private equity isn’t just a buzzword thrown around on Bay Street — it’s a powerful investment model that’s reshaping how Canadians build wealth, fund businesses, and diversify portfolios.

At Rabideau Law, we help clients cut through the complexity and launch investment structures designed for long-term success. Whether you’re an entrepreneur raising capital or an investor seeking returns beyond the stock market, understanding private equity is the first step.

What Is Private Equity?

Private equity refers to capital investments made directly into private companies — companies that are not publicly traded on a stock exchange. Investors provide funds in exchange for ownership, often through structured vehicles like limited partnerships (LPs) or mutual fund trusts (MFTs).

These investments are typically:

  • Illiquid (not easily sold)
  • Long-term
  • Higher risk, higher reward

Why Is Private Equity Booming in Canada?

1. Low Interest Rates & Market Volatility

Traditional investments (like bonds or index funds) haven’t been yielding high returns. Private equity offers a compelling alternative — one where investors have more control and upside.

2. Tax-Efficient Structures

Canadian law supports tax-efficient entities like LPs and MFTs. Investors can defer taxes or reduce exposure through customized structures — something we regularly advise on at Rabideau Law.

3. Innovation & Startups

Canada’s startup ecosystem is thriving. From tech to real estate, private equity is fueling the next generation of growth.

4. Institutional Momentum

Pension funds, family offices, and HNWIs are allocating more to private equity than ever before. This trend is trickling down to emerging fund managers and experienced entrepreneurs alike.

How Can You Participate?

To get involved, you need more than capital — you need the right legal structure to protect your interests, attract investors, and stay compliant with tax and securities laws.

The most popular structure? The LP/GP model — which we’ll explore in detail in our next blog.

How Rabideau Law Can Help

We’ve helped clients across Canada structure:

  • Private equity funds
  • Real estate syndications
  • Mutual fund trusts
  • Cross-border investment vehicle

Let us help you build the foundation — from setting up the GP to drafting your Limited Partnership Agreement to registering your Mutual Fund Trust with CRA.

Book a consultation today. Let’s turn your vision into a fund.

Can You Buy a Home in Ontario After Separation But Before Divorce Is Finalized?

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Separation marks a major transition, not just emotionally, but also financially and legally. One of the most common questions we receive is whether someone can buy a new home in Ontario after separation but before a divorce is finalized, especially when no separation agreement has been signed.

The short answer is yes. Yes, you can legally buy a home after separation. But the long answer is that you need to proceed with caution. Without proper planning, you could face complications with mortgage approval, property division, or even tax exposure down the road.

Can You Buy a Home Without a Separation Agreement?

Under Ontario law, there’s no legal restriction preventing someone from purchasing a new home after separation, even if the divorce is not yet finalized or a separation agreement hasn’t been signed. However, banks and mortgage lenders often require a signed separation agreement to approve financing. This is because lenders want to understand your ongoing financial obligations, such as spousal or child support, as well as how existing property (like the matrimonial home) is being dealt with.

Why the Separation Date Matters

In Ontario, the division of property is governed by the Family Law Act. The value of each spouse’s net family property is calculated as of the date of separation. Any asset acquired after this date is generally not subject to division. However, if there’s no formal agreement, disputes about the actual separation date can arise, putting your newly purchased property at risk of being included in the division of assets. See: Family Law Act, R.S.O. 1990, c. F.3 – https://www.ontario.ca/laws/statute/90f03

Can You Be Added to a New Partner’s Property While Separated?

It’s not uncommon for someone who is separated to move in with a new partner and consider being added to their property title. While this may seem like a fresh start, it carries potential legal and financial risks.

If you’re added to your partner’s title before your divorce is finalized and without a separation agreement in place, your ownership interest in the new property could be included in the equalization process, especially if your ex-spouse disputes the separation date.

There’s also the risk that your ex-spouse could allege that joint marital funds were used to support expenses or renovations on the new property, potentially triggering a resulting or constructive trust claim.

To protect both parties, we strongly recommend executing a cohabitation agreement before being added to a partner’s title. This agreement should outline your respective ownership interests and financial obligations, which helps clarify intent and prevent future disputes.

Capital Gains Tax Implications When You Own Two Homes

If you purchase a new home while still owning the former matrimonial home, you may unintentionally trigger a future capital gains tax. This is because the Canada Revenue Agency (CRA) allows only one property per family unit to be designated as a principal residence for each tax year. See: https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/personal-income/line-12700-capital-gains/principal-residence.html

However, there is a helpful transition rule often referred to as the ‘plus one rule.’ This rule allows a taxpayer to treat both the old and new properties as eligible for the principal residence exemption in the same year, but only if, one home is sold and another is acquired in that same calendar year. For example, if you sell your previous home in 2025 and purchase a new one that same year, the CRA allows you to designate the sold property as your principal residence for all the years it was owned, including 2025, even though you also lived in the newly acquired home during that year. This essentially gives you one tax year where both homes qualify for the exemption, avoiding partial capital gains exposure during the transition.

Important caveats:

  • This rule only applies in a year where a principal residence is sold.
  • You must still file the appropriate forms, Schedule 3 and Form T2091(IND).
  • If you continue to own both properties beyond the year of transition, you must designate one property per year moving forward.

Misunderstanding this rule could result in unexpected tax liability. Always consult with a tax advisor to correctly report the sale and strategically plan your principal residence designations. Source: CRA Principal Residence Exemption – https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/personal-income/line-12700-capital-gains/principal-residence.html

Practical Considerations Before Buying a Home Post-Separation

  1. Document the Separation Date: Emails, affidavits, or other proof may be critical if there’s a dispute.
  2. Avoid Using Joint Funds: Using shared accounts or matrimonial assets could expose the new property to claims.
  3. Cohabitation Agreements: If you move in with a new partner, formalize your ownership and obligations with legal documentation.
  4. Get Professional Advice: Speak with a member of the Rabideau Law team, a mortgage broker, and tax advisor to mitigate risk.

Final Thoughts

Yes, you can legally buy a home in Ontario after separating from your spouse, but without a finalized divorce or a signed separation agreement, you must be extremely careful. Issues related to mortgage qualification, property division, and tax exposure can all complicate what should be a fresh start. As a real estate lawyer, I regularly assist clients navigating the overlap between separation and property acquisition. If you are considering buying a home or being added to someone else’s title while separated, we can help ensure your interests are protected and structured properly.

Contact Rabideau Law today to book a consultation.

Supporting GST Reform: What Proposed Changes to the New Home Rebate Could Mean for Ontario Buyers

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As housing affordability continues to dominate national headlines, one proposed federal measure could offer immediate relief for many homebuyers: a full GST rebate on newly built homes priced up to $1 million. If enacted, this would represent a major update to Canada’s long-standing Goods and Services Tax (GST) housing rebate rules under the Excise Tax Act, and could mean thousands in direct savings for Ontario buyers.

At Rabideau Law, we support this potential reform. A streamlined, expanded rebate would directly reduce closing costs and promote access to more affordable, newly built homes, especially in markets like the Greater Toronto Area, where the average cost of a new-build often disqualifies buyers from receiving the full rebate under current rules.

We also believe the Province of Ontario should follow suit. The provincial portion of the HST New Housing Rebate, which currently uses similar price thresholds, should be updated in tandem to reflect today’s pricing realities. Without provincial alignment, buyers could still face substantial closing costs even if the federal portion is modernized.

Current Law: How the GST New Housing Rebate Works

Under the Excise Tax Act, RSC 1985, c E-15, purchasers of a newly constructed or substantially renovated home may be eligible for a GST New Housing Rebate under section 254. The rebate refunds a portion of the 5% federal GST paid on the purchase of:

  • A new or substantially renovated owner-occupied home;
  • A new leasehold interest in land;
  • Or the construction/renovation of a home on land you already own.

To qualify, the home must be used as the primary place of residence by the purchaser or a close relative.

Under current law:

  • Homes priced $350,000 or less (before tax) qualify for the maximum federal rebate of 36% of the GST.
  • Homes priced between $350,000 and $450,000 are eligible for a partial rebate on a sliding scale.
  • Homes priced above $450,000 are not eligible for any federal GST rebate.

The provincial portion of the HST rebate in Ontario follows a similar structure, offering a 75% rebate of the Ontario portion of the HST (up to $24,000) but capping eligibility at $350,000 with a sliding scale up to $450,000, beyond which the provincial rebate is eliminated entirely.

How Much Could Buyers Save?

Let’s compare potential scenarios for a buyer purchasing a new-build home at $749,000:

Under Current Rules:

  • GST (5%): $37,450
  • Rebate: $0 – not eligible (over $450,000)

Under Proposed Federal Reform:

  • GST (5%): $37,450
  • Rebate: $13,482 (36%)
  • Savings: ~$13,500

If the provincial government matched this structure:

  • Ontario HST portion (8%): $59,920
  • Full 75% rebate (up to $24,000) applied to homes up to $1M
  • Buyer would receive an additional $24,000 rebate on top of the federal portion

Total savings if both levels align: potentially over $37,000 on a $749,000 purchase—an amount that could cover legal fees, land transfer tax, and closing adjustments entirely.

Why the Current Rules Are Outdated

The existing thresholds were introduced in an era when $450,000 could buy a fully detached home. In 2024, the average price of a new home in Ontario, particularly in major cities like Toronto, Kitchener-Waterloo, or Ottawa, often exceeds $800,000. Even townhouses and starter condos now fall outside the rebate range, effectively excluding the very buyers these rebates were designed to support.

Without an update, the HST system penalizes affordability: new homes come with a full 13% HST burden, while resale homes are exempt. This discourages new development and disproportionately affects first-time buyers who are looking at newly built entry-level housing.

Rabideau Law’s Position

We fully support the proposed federal reform to extend the GST New Housing Rebate to homes priced up to $1 million. It reflects a much-needed modernization of the Excise Tax Act and would bring the rebate system in line with today’s housing market.

We also call on the Province of Ontario to update the provincial rebate structure to match the proposed federal changes. Without provincial alignment, buyers will still face significant closing costs and financial uncertainty, even under a revised federal framework.

What Buyers Should Know

If these changes are adopted, buyers of homes of up to $1 million will benefit from:

  • Predictable and accessible rebates, removing the current sliding scale;
  • Lower closing costs, which can improve mortgage qualification ratios;
  • Faster financial decision-making for builders and purchasers;
  • Legal clarity, especially in pre-construction agreements.

But until changes are formally passed and proclaimed, buyers must structure agreements carefully. At Rabideau Law, we review builder contracts to ensure buyers are protected regardless of whether the rebate changes move forward.

Buying Pre-Construction? Let’s Talk Strategy

We offer:

  • Pre-construction contract review
  • HST/GST clause guidance
  • Flat-fee closing packages
  • Virtual signing across Ontario

info@rabideaulaw.ca | www.rabideaulaw.ca | 519.957.1001

Three images side-by-side, a photo of the post WWII federal housing involvement, followed but the 1960s-1980s and the 1990s pullback.

Will Build Canada Homes Be Any Different?

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The new Build Canada Homes initiative signals a return to direct federal participation—on public land, with federal coordination and financing, and through partnerships with private builders. While the details are still emerging, the core promise is bold: to double the country’s homebuilding output.

But will it work?

The answer depends on several key factors:

1. Scale and Coordination

The postwar programs worked because they were nationally coordinated and locally executed. If the new initiative fails to work seamlessly with provincial approval processes or municipal zoning, it could get bogged down—especially in Ontario, where local red tape is a known issue.

2. Speed of Delivery

In the current market, timing matters. Even if funding is secured and land is allocated, homes take years to approve and build. If the rollout is too slow, it risks missing the window where it could actually cool demand or meaningfully expand supply.

3. Market Response

There’s a risk of oversaturation in areas where public housing projects are concentrated—especially if units are not aligned with actual buyer preferences or if resale and rental conditions are constrained. The private sector must remain engaged for mixed-use and economically diverse communities to thrive.

4. Execution Consistency

Unlike CMHC programs, which spanned decades, this initiative’s long-term viability depends on political continuity. If the next government scraps or underfunds the program, it may collapse mid-build—leaving unfinished homes and stranded buyers.

Legal Insight: What Buyers Should Consider

From a legal standpoint, federally-backed housing projects may come with unique contractual frameworks, particularly around tax treatment (e.g., GST/HST exemptions), restrictions on resale, or public-private development terms. Buyers considering participation in future Build Canada Homes projects should have their agreements of purchase and sale reviewed carefully, especially where affordability covenants or rebate eligibility is involved.

At Rabideau Law, we assist clients across Ontario with all aspects of residential and pre-construction purchases, including government-incentivized housing and layered title arrangements involving public land. Our role is to ensure that buyers remain protected, informed, and contractually sound in an evolving regulatory landscape.

Final Thoughts: Will It Work This Time?

History suggests that federal intervention can work—but only under the right conditions. Where past programs succeeded, it was because they were paired with strong local coordination, clear objectives, and long-term commitment. Where they failed, it was due to poor planning, top-down policies, or a lack of community integration.

If Build Canada Homes stays focused on enabling—not replacing—the private market, and removes key obstacles like zoning and approval delays, it could ease the supply crisis. But buyers should temper expectations: this is not a quick fix, and the legal and regulatory frameworks will need careful navigation.

Need legal guidance on pre-construction or public-private housing deals?
Connect with Rabideau Law to ensure your real estate purchase aligns with today’s—and tomorrow’s—housing policy shifts.

Serving clients across Ontario | Virtual closings available info@rabideaulaw.ca | www.rabideaulaw.ca

Small conceptual home on a table with a ribbon cutting in front of it.

Build Canada Homes: What the New Federal Housing Program Means for Ontario Buyers

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Canada’s housing affordability crisis is not new, but a new national initiative, Build Canada Homes, aims to tackle it head-on. Set to launch later in 2025, the program is part of a larger federal strategy to double the country’s annual housing output to 500,000 homes per year. The government plans to act as a developer itself, building homes directly on public lands, financing affordable projects at below-market rates, and fast-tracking modular and mass-timber construction across Canada.

This represents a major departure from Canada’s traditional reliance on municipal and provincial governments, and the private sector, to build housing. Instead, the federal government is stepping back into the role of housing builder, a position it hasn’t meaningfully occupied since the postwar period.

But while the ambition is bold, the execution will be everything. There are reasons to be optimistic, and many reasons to be cautious.

Why This Program Matters

One of the most pressing issues in the Canadian housing market over the last few years has been affordable supply. For years, demand has far outstripped new construction, particularly in population-dense cities like Toronto. However, interest rate hikes have dramatically cooled price growth and substantially increased temporary supply. But this is not a long-term solution and doesn’t solve the underlying problem: too few homes, especially in the affordable segment.

Build Canada Homes attempts to address that gap directly. If successful, it could not only increase housing availability but also improve affordability for first-time buyers, renters, and low- to middle-income families. It could also help stabilize the market by providing long-term inventory growth—something the private sector alone has struggled to achieve.

Potential Benefits for Buyers

One of the clearest advantages for homebuyers is increased access. More inventory means less competition and fewer bidding wars, particularly in overheated markets like Toronto, Kitchener-Waterloo, and Ottawa. That could put downward pressure on entry-level home prices.

Additionally, the proposed GST rebate on new homes up to $1 million—if enacted—could significantly reduce upfront costs for first-time buyers. This would make new construction

a far more viable option, especially in urban areas where older resale homes often require extensive renovation.

There’s also promise in the program’s use of modular and prefabricated construction methods, which could reduce build times and improve environmental performance. These homes can often be delivered more quickly and at a lower cost than traditional builds, offering a pathway to affordability without sacrificing quality.

Legal and Practical Risks to Consider

Despite its potential, the Build Canada Homes initiative is not without significant risks—particularly for buyers who may rush into the market without understanding the fine print.

First, there’s the issue of implementation lag. While the program may be announced in 2025, large-scale development takes time. Land assembly, zoning approvals, and servicing infrastructure are complex, often jurisdictional matters. Buyers expecting immediate relief could be disappointed if projects are delayed by red tape, intergovernmental conflict, or supply chain bottlenecks.

Second, there’s a question of market distortion. Injecting billions of dollars in subsidized financing into the housing sector could unintentionally distort pricing, crowd out private builders, or shift risk onto taxpayers if government-backed developments underperform or face financial shortfalls.

Third, buyers should be cautious about contractual terms in new-build projects. Builders working under public-private partnerships may impose unusual clauses related to construction timelines, cancellation rights, or HST/GST liability. Without legal review, buyers could find themselves on the wrong side of a one-sided agreement—especially if government policy shifts mid-project.

Finally, there is the risk of political and policy volatility. Major housing initiatives often change shape—or stall entirely—depending on economic conditions or electoral cycles. Buyers making decisions based on proposed rebates or eligibility criteria should ensure flexibility in their contracts and consider legal safeguards such as subject-to-clause protections.

What Buyers Should Do Now

For Ontario buyers, Build Canada Homes could unlock new opportunities—if approached with strategic foresight. Now is the time to prepare. Understand your rights and responsibilities in pre-construction purchases. Stay informed about changes to HST treatment on new homes. And most importantly, work with a legal advisor who can guide you through the complexities of new government-backed developments.

At Rabideau Law, we help clients navigate Ontario’s real estate landscape with clarity and precision. Whether you’re planning to purchase a new-build, considering an assignment sale, or exploring whether you qualify for an HST rebate, we provide the legal insight to ensure you close with confidence.

The Build Canada Homes initiative marks a rare moment of federal re-engagement in housing development. But like any major program, it brings risks as well as opportunities. The buyers who benefit most will be those who take a clear-eyed, informed approach to the changes ahead.

519.957.1001
info@rabideaulaw.ca
www.rabideaulaw.ca
Real estate closings across Ontario. Virtual services available.