MONTREAL — Rona Inc. (TSX:RON), Canada’s largest home renovations company, says government home tax credits and its own incentive program are showing early signs of stimulating business before an expected economic recovery in mid 2010.
Chief executive Robert Dutton said it’s too early to quantify the financial impact of the federal and Quebec rebates, but he said 1,000 customers have signed up so far to take advantage of the company’s merchandise credit program.
The program allows you to receive store gift cards on 10 per cent of eligible purchases between $1,000 and $10,000, before taxes.
Dutton also said more than 1.6 million have logged onto the company’s website, which “means that people are curious.”
“After a couple of weeks, for us, it’s positive,” he told reporters Wednesday after speaking to a business luncheon.
The federal government announced a home renovation tax credit in its late January budget, hoping to stimulate the construction, lumber and retail sectors and create jobs.
Canadians can receive up to $1,350 in tax relief on home improvement projects. Renovations must be worth at least $1,000, but not more than $10,000, and must take place between Jan. 27 and Feb. 1, 2010.
Quebec’s program would pay for 20 per cent of renovation expenses up to a maximum of $2,500. Homeowners must use qualified contractors and have a total project budget of more than $7,500.
“It starts to be interesting. One shouldn’t minimize that,” Dutton said of the combined government and Rona programs.
Rona’s program will last the duration of the tax credits, while rivals such as Home Depot are offering limited time incentives.
Dutton said many people don’t understand how the programs operate so Rona has trained employees to help customers to take advantage of them.
He also expects the federal advertising campaign on its tax credit will encourage people to complete projects.