Steve Payne
Say goodbye to the Home Renovation Tax Credit (HRTC)
Canadian ContractorEarly in the campaign, both the Conservatives and the Greens got behind the idea of a permanent HRTC. But it's highly unlikely that a tax credit for home improvements will be part of Prime Minister Justin Trudeau's multi-billion-dollar spending spree.
Now that they have been elected with a majority, expect the Liberals to be busy writing cheques re: their multi-billion dollars-worth of campaign promises. But the cheques won’t be flowing into our industry via the return of the Home Renovation Tax Credit (HRTC).
The idea of a permanent HRTC (15 per cent of reno spending up to $5,000) was introduced by Stephen Harper – seemingly out of nowhere – on the second day of the election campaign. A similar program had run very successfully in 2009 (when the spending limit was $10,000).
A permanent HRTC was, perhaps surprisingly, also a major policy plank for Elizabeth May’s Green Party.
The program would probably cost about $1.5-billion a year, before factoring in how many projects would now be tax-paid projects rather than under-the-table projects. The Liberals made little reference to Harper’s HRTC promise during the campaign, while the NDP consistently mocked the idea as being, in essence, just a boutique tax credit for rich people. (Mulcair said: “You can’t renovate a home you do not have.”)
Here is a recap of our writer John Bleasby‘s summary of the Liberal’s campaign promises, as they affect our industry. As John points out, the Liberals focused most of their housing platform around affordable housing and seniors housing, most of it rental.
*The Liberals pledged $125 million per year in tax incentives for landlords and developers to build and renovate rental units in order to make investment in affordable housing and residences for seniors.
*The Liberals pledged to increase the new residential rental property rebate on the GST to 100 percent, eliminating all GST on new capital investments in affordable rental housing.
*The Liberals pledged to direct the Canada Mortgage and Housing Corporation (CMHC) and the new Canada Infrastructure Bank to provide financing to support construction by the private sector, social enterprises, co-ops, and the not-for-profit sector of new, affordable rental housing for middle- and low-income Canadians.
*The Liberals pledged to increase Ottawa’s existing Home Buyers’ Plan to help more Canadians finance the purchase of a home and by allowing Canadians impacted by sudden and significant life changes, such as job relocation, the death of a spouse, marital breakdown, or a decision to accommodate an elderly family member, to access and use money from their Registered Retirement Savings Plan to buy a house without tax penalty.
*The Liberals pledged $500-million to the provinces for skilled trades training.
Advertisement
Print this page
I expected this to happen when liberal came to power because most of the liberal promises are false, and we will be the one to pay. Justin Trudeau wants to charge the small buisness which is the back bone of the economy. We are the one who generate jobs and pay taxes so that the government empolyees get paid high salaries.
Justin Trudeau is a kid in politics when he faces Russian president Putin he will be eaten like a breakfast sausage.
Hi Steve,
When the HRTC was here people got $10,000 worth of work done thinking they were getting a dollar off their taxes for every dollar spent. That was wrong! It was a credit and when they put it into their income tax return it gave them a break of only a few hundred dollars, not $10,000. Many people were very upset as it was not well explained and they felt misinformed. The winners were the Home Renovator with the extra work and the federal government as tax had to be paid to get the credit. In the end the homeowner spent $10,000, paid the tax (which now would be $1300) and got a few hundred dollars break at tax time. I like a win/win situation in a job and this was not it! This was my experience with the HRTC. Caused me alot of grief from people who really could not afford the work in the first place but did not want to miss out by missing the deadline.
Sounds like some great moves by JT and the Libs. Look forward to growth in Canada in all sectors. Have a great day Steve.
Wayne, thanks for your viewpoint, and I note that it’s a viewpoint that worries about whether your customers were getting a deal they understood or was good for THEM – regardless of its impact on you. No wonder you have been thriving in business for over 30 years (longer?). Well done, sir.
I’m not excited about government grants ,as that money actually comes from all of us …we are where the government gets that money from!So people do home renos & we all help to pay for it …even people who need renos but can’t afford to do their own . Why should their tax dollar help to pay renos they themselves can’t even afford ????
The promises of a governing body to meet the needs of a particular issue, in this case a lack of affordable housing, shouldn’t be met by solutions that are to the contrary of achieving good and positive results.
Recently, I’ve been talking to mortgage brokers, banks and lending institutions to no avail. or positive response. But it didn’t even stop there. Check out the policies of insurance companies and then read new bills of increased/double land transfer tax. I’m nearing my retirement and have an exceptional credit rating and have never felt so stumped. It appears the government wants to make sure anyone in the trade isn’t laundering money through “legitimate” means. In the mean time they’ve helped create a larger problem and more opportunities for more, need I say, taxes and “under ground economy”. What a paradox. In regards to the HRTC, it worked well for me because people wanted to see an invoice for which I was pleased to provide with a thought that the “under ground economy” didn’t get this one (job).