The home renovation tax credit that expires Sunday has worked wonders in terms of boosting the country’s economy and ought to be extended.
“As stimulus items go, this one seems to be both a fairly successful one, and also one that worked pretty quickly,” explains University of Toronto economist Peter Dungan.
He told the CBC it’s difficult to get a stimulus going rapidly, “and that’s what we needed through 2009.”
Home renovators and building supply store personnel can’t say enough nice things about the federal program.
“Our last three months of last year improved by about 20 per cent,” said Tom Geoftsidis, a roofing contractor with Megacity Roofing in Toronto.
As for homeowners, those that stand to benefit from the program are tickled pink.
For instance, Toronto homeowner Jim Steinhart, who got a new roof for his residence, said he was happy to be able to get a credit against the amount of taxes he would normally pay.
The program has encouraged homeowners to ask for receipts from tradesmen, helping to ensure that those workers will pay tax on their income.
That’s likely helped reduce the size of Canada’s underground economy, which some experts say is in the billions of dollars.
Of course, even when the federal government has done something that is intelligent and time, there will always be critics.
Queen’s University economics professor Robin Boadway laments that the program only benefits a narrow segment of the population (those who can afford to upgrade their homes) and seemingly does nothing for Canada’s poorest Canadians.
What Boadway forgets is that, every now and then, Ottawa needs to do something for the average taxpayer and not simply provide handout after handout for people who do not pay taxes.
Besides, if the program creates jobs – then perhaps some of our poorest people can benefit by securing employment.
Under the reno tax credit program, homeowners could get a credit of up to $1,350 on home improvements. Renovation costs for a variety of improvements, from a new roof to a new furnace or water heater, qualify.
No credit is granted for the first $1,000 spent, but that’s fair enough. That limitation simply encourages people to spend more than $1,000 on improvements.
Under past Liberal governments, federal spending always seem to benefit big companies like aircraft manufacturer Bombardier Inc. and Grit-friendly advertising agencies based in Quebec.
The reno tax credit is available to the average Canadian and helps buck up one of our most important industries: construction.
The only downside to the reno tax credit is that it’s soon scheduled to end; however, there are plenty of rumours to suggest that the Conservatives are going to extend it.
Let’s hope that they do.
The reno program is likely to help our economy much more than previous bailouts of fat cats sitting behind big mahogany desks.
It’s nice to see the little guy win once in a while, isn’t it?
Lee Giles is an Advocate editor.