The illusion of tax credits, rebates and tariffs
Casey Edge offers up a Hallowe’en trick or treat of magic and deception
October 31, 2018 by Casey Edge
Canada’s wizards, sorceresses and illusionists are creating a House of Horrors. Trudeau, the Great Illusionist, recently made a carbon tax rebate magically appear while promising to return approximately 90 per cent of the anticipated $2.3 billion revenue to Canadians. However, the audience must be careful. Is this is not just another case of GHG smoke and mirrors?
Trudeau, the Great Illusionist, also recently imposed tariffs on steel after the Astonishing Trump made tariffs suddenly appear on imports to the U.S., thus making U.S. steel the most expensive in the world.
John Bleasby, Amazing Illusionist Debunker, recently revealed in Canadian Contractor magazine that Ottawa is collecting millions of dollars in tariffs on home building materials, everything from rebar to drywall. They are adding to the cost of housing in both Canada and the United States. They serve no useful purpose except to pad the coffers of political wizards, sorceresses and illusionists.
A new housing rebate made invisible through inflation
Almost 30 years ago, Ottawa the Omnipotent launched a FST (Federal Sales Tax) New Housing rebate designed to make new housing more affordable. Renamed the GST New Housing rebate, today it’s vanished before our eyes through the magic of inflation!
When introduced in 1990, the full rebate was applicable to about 90 per cent of new homes in Victoria. However, today a search on www.realtor.ca reveals that no single detached homes now qualify for the rebate — it disappears at a home price of $450,000. In fact, according to the Canadian Real Estate Association, the average home price in Canada is $475,591. Therefore the rebate’s cap is actually less than the average price.
When introduced, Ottawa the Omnipotent said the rebate would be indexed to inflation. We kept our eyes on the index-to-inflation pea, but it too disappeared.
Now the collective hand-wringing concerning the lack of housing affordability by wizards, sorceresses and illusionists at every political level is wearing thin with the audience. Meanwhile, Trudeau the Great Illusionist’s affordable housing strategy doesn’t really kick-in until sometime down the road, provided he is elected again. Now you see it, now you don’t!
Even that strategy does not address market housing affordability for the large generation of millennials trying to start families. The potion of rising interest rates and the new mortgage stress tests will make buying a home that much harder to achieve. What Canadians don’t realize is that mortgages have become the latest trick from which political Illusionists pull endless streams of dollars.
West Coast hocus-pocus
Over in British Columbia, Hocus-Pocus Horgan collects $2 billion annually from the Property Transfer Tax, creating a House of Horrors for purchasers. It may, in fact, be charged several times over during the development of a single new home, yet it deceives the audience into thinking they pay it only once. Speculation Taxes and School Taxes are being added to Premiere Horgan’s bag of tricks, neither of which have anything to do with speculation or schools.
As well, common sleights-of-hand by municipal Illusionists are merely taxes that generate million dollar surpluses — based on value of construction rather than a simple fee for service, as required.
Trudeau the Great Illusionist’s magical appearance of a carbon tax rebate while the GST housing rebate languishes reveals what is really behind the curtain, and it’s not housing affordability. A recent study by the C.D. Howe Institute reveals that regulations, taxes and fees add $644,000 the cost of a single family home in Vancouver, $264,000 in Victoria, $168,000 in Greater Toronto, and $152,000 in Calgary.
Canada’s political wizards, sorceresses and illusionists will continue to collect billions in taxes, tariffs and fees from housing until the audience realizes that they are not only paying income taxes, but also unsustainable government costs that, amazingly, almost double over the life of their mortgages.
Ottawa the Omnipotent’s offer of a carbon tax rebate is small comfort, since it too will likely disappear right before our eyes. Poof!
Casey Edge is CEO of the Victoria Residential Builders Association and a passionate advocate for the home building industry in Canada.