The COVID-19 pandemic has had a significant impact on Ontario’s economy. During the height of the pandemic, almost 800,000 Ontarians found themselves out of work. While there has been some improvement since that time, it is likely going to take several years for the economy to fully recover. For that reason, decision makers at Queen’s Park should look to implement bold, forward thinking policies to help drive economic recovery and get Ontarians back to work.
The idea of a Home Renovation Tax Credit (HRTC) is not new – the Government of Canada implemented a similar policy in 2009 to help aid economic recovery following the 2008 financial crisis.
The 2009 HRTC provided consumers with a 15 per cent tax credit on eligible expenditures supporting home improvements. The credit covered costs exceeding $1,000 but not more than $10,000 for a total maximum credit of $1,350. The HRTC policy was an unequivocal success which generated nearly $3 billion in consumer spending, helped 3 million Canadians upgrade their homes, and created $4.3 billion worth of economic activity.
Ontario REALTORS® are asking the provincial government to implement a one-year provincial version of the HRTC program in Ontario. Given that the Government is looking to drive Ontario’s economy forward, this type of tax credit, with its demonstrated history of success, including a historically high take-up rate, is an extremely suitable policy tool. A made-in Ontario HRTC program would drive economic growth across supply chains, supporting those in the construction, retail, raw material, services, and transportation sectors.
It is estimated that a provincial HRTC would cost the provincial treasury approximately $1.2 billion over a one-year period.
Some of the specific challenges brought about by the COVID-19 pandemic make a provincial HRTC a particularly appealing policy for the Government to consider. To start, many Ontarians will likely be considering working from home more regularly and will be looking to improve home office spaces. Additionally, many seniors may be anxious about the possibility of entering long care facilities during the COVID-19 pandemic. An HRTC would support those Ontarians in making changes that would allow them to stay in their homes longer.