Yes, Prime Minister (home renovation episode)
Thank you, Jim Flaherty and Stephen Harper. I just finished the first leg of a long-contemplated kitchen renovation that got pushed over the top by February’s federal budget tax credit for home renovations. This year only! Act now before it is too late!
The credit is worth a maximum of $1,350 per family if you spent a full $10,000 or more on the project. In my case, all tallied up the credit will be worth only about $375 (the first $1,000 is exempt). Like much of federal and provincial tax policy in recent years, I have been reaping windfalls though I am not particularly needing the cash. Still, I am not a free rider, either.
And I’m doing my part for the Canadian economic stimulus plan, though my three trips to Ikea make me think that maybe Sweden is getting the better end of this renovation bargain. I (with some family help) have done most of the work so far myself: set up a kitchen-in-exile in a corner of the living room, tore out the old kitchen, built the cabinets, leveled, screwed, adjusted, leveled again, destroyed at least one piece of wood trying to do fine cuts on a table saw, assembled drawers. About five days worth of work for me on my “vacation.” And it has been fun.
As for other employment generated, there is some but not a lot. The folks at Ikea, one of whom spent an hour with us placing the order. The countertops are being done next week, and there is about six hours of work required (contrary to my budget-time quip that the home reno credit was marble countertops for the middle class, we decided in favour of the lower cost laminate). Add another day’s work for a contractor to do our floors (if you are looking for a guy in Vancouver …). Call it two days of work, about $175 per day in tax credits for me to generate that incremental labour.
It will be interesting to assess the full economic impact of the credit and multipliers when all is said and done. It is estimated to be a $3 billion tax expenditure, a lot of money compared to other potential uses. But if there are lots of others out there on the bubble like me, the tax credit may turn out to be a shrewd move that is preventing a bad situation in construction employment from being much worse.
OK, now back to my real vacation.