Magazine for professional home renovators.

In praise of the former Home Renovation Tax Credit

John Stefanis sent us this post about how Ottawa’s (now discontinued) Home Renovation Tax Credit helped to cut down on the underground economy in our industry.

“Perhaps CRA should (again) consider allowing homeowners to write off a percentage of home renovations and service work? Something like the ”Home Renovation Tax Credit.” This would allow for an even playing field when estimating the job.
I am constantly being asked to match prices submitted by “non-compliant ” companies who ask for a cash payment to avoid HST. With the new (Ontario) WSIB charges and HST percentage I submit, it becomes clear that the cards are stacked against the legitimate contractor.”

Posted by
Steve Payne is the editor of Canadian Contractor magazine
4 total comments on this postSubmit yours
  1. The HRTC tax credit was brilliant . Not only did it immediately pump billions into a struggling economy, it made contractors hand out invoices. A lot of the underground economy is in the smaller jobs, baths, decks etc.. and this all fell into the $10000 range of work. With HST, new comp rules ,college of trades etc , the added burden of taxes is borne by the customer. They feel it is Ok to cheat as the gov’t is taking advantage of them I would love to see a return to some sort of tax credit for homeowners who report as it is an incentive to do the right thing Rest in peace JIm Flarehty HRTC was genius

  2. Amen to that Doug.

  3. Couldn’t agree more. What a wonderful time that was having every customer (existing & prospective) insisting on invoices and doing everything by the books. I didn’t have a single request/demand for a cash job the entire time the HRTC was in effect.

    Making the HRTC a permanent program will do more damage to the underground economy than the CRA hiring thousands of auditors and it won’t cost the government (or taxpayers) a penny.

  4. I now a person that used to be a painting contractor in one of his former lives. What he did to battle the cash only stuff is take two quotes to a client. If they wanted a cash price he would pull that quote out and then the “honest” or tax included quote which was higher by the total taxes. The “cash” price was what he need to do the work and he would declare every cent of it but it lead to the client believing they were getting a deal by paying “cash”. Also help with his cash flow as they would pay as soon as the work was done. He also did the same when working for embassy or other high profile places. Yes sir that is the embassy price any one else would pay this amount and the second quote would show up.
    For me when people ask it is a straight up no to cash. I will explain that it is illegal and against everything I believe in. Could also loose my licence if I get caught. Can’t do that as I need to feed my family. I have never lost a job because of it and have been self employed for over 12 years now. A couple of people have pushed a little but I am not willing to back down from this. I know it is a challenge but everyone I have done work for respects that and my as I am very straight forward about it, oh and honest.
    So who would rather trust on your house, someone that is willing to cheat the government or someone who is honest and straight forward? If I were lose a job because of it that is fine, perhaps I could not trust that person anyway.

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