With the federal home renovation tax credit ending this month, Centretown businesses say they have greatly benefited from the program and would love to see it extended.
As the recession continues, fears over a sudden drop in clients have left many urging a renewal of the scheme to stimulate home upgrades.
“We’re just not sure that the federal government understands what a huge positive impact this rebate has had,” says John Herbert, executive director of the Greater Ottawa Home Builders’ Association.
“But we continue to remain hopeful that they’ll wake up and make a change at some point to their current philosophy.”
The tax credit motivated customers to go ahead with renovations and construction projects, increasing work for businesses, says Herbert.
However, it will be tough for businesses once the credit ends and the government’s planned introduction of the HST in July adds eight per cent to any renovation cost.
This will decrease business so it would be extremely beneficial to extend the credit, says Herbert.
“In my opinion the home renovation tax credit was the brightest thing the federal government has ever done,” says Kurtis Labelle, owner of Abbott Roofing Inc. on Kent Street.
Last year the recession forced roofers to charge less for work and profits were reduced, says Labelle.
But without the home renovation tax credit, there would have been even less work and even less profit, he adds.
The credit also helped companies increase business and hire more employees. Some companies were able to hold onto staff they would have otherwise had to let go, says Labelle.
Laurie Gagné, of Eco-One Restoration and Renovation on McLeod Street, says since the summer she has been flooded with calls from customers – the majority motivated by the renovation tax credit.
In the past six months Gagné estimates the company’s business has increased by one third.
She says the renovation tax credit has opened up Eco-One’s client base to areas on the outskirts of Ottawa, especially Orléans and Kanata.
While the company was able to double its staff over the tax credit period, a sharp decline in the number of current projects has forced two layoffs.
As spring arrives Gagné hopes business will increase. She says she would be fully supportive of extending the tax credit, as it would help maintain customers and allow Eco-One’s business to expand.
Last fall, the Canadian Home Builders’ Association proposed a new program which would involve a permanent 2.5 per cent GST rebate for home renovation costs, says David Crenna, director of urban issues at the association.
The CHBA is currently waiting for the government to unveil its new budget on March 3, before the plan can be given approval, he says.
Finance Minister Jim Flaherty announced two weeks ago that the government had no plan to extend the credit, stating that it was not an inexpensive initiative. The program cost $3 billion, according to the federal government’s economic action plan.
The credit gave taxpayers up to $1,350 in tax relief for projects worth between $1,000 and $10,000 between Jan. 27, 2009 and Feb. 1, 2010.