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Wednesday, January 20, 2010

A Taxing year for Ontario Renovators

The Federal "Stimulus" is now done and most renovators in Ontario have a strange echo in their mid-winter offices. Is it phones ringing? Is it customers beating down their doors? No, that will be March when that happens. They are alone with their thoughts for the most part.

The federal government rung out the sponge and every little job (most under $2k), has been done to take advantage of a 15% discount thanks to the feds. It will be quiet until the next sense of urgency and spring season starts.

You will see some very angry customers we have to tell people that the deck or fence they want done before the new July tax comes into effect will carry the tax anyhow.

"Any job not contracted before May 1/2010 and substantively complete by July 1 will have an additional 8% PST on it". In fact it is a May 1 effective start date for the tax--no matter how they spin it.

This is a wrong headed tax change. With a 13% tax on renovations it will have one major effect--It will drive the renovations business underground.

If you think people won't want to save 13% by paying cash to builders working out of old minivans you are sniffing solvents--certainly jobs that run less than 10k anyhow. There are tens of thousands of laid off or recently unemployed carpenters and factory workers with some skills that are happy to take that money. It will serve to punish legitimate renovation contractors.

My prediction-- after the first year of Ontario's HST there will be 50% fewer registered contractors in the province.

I love how politicians always say the same thing... It is a revenue neutral change. If it doesn't get them more money, why would they do it?

The other thing I have heard lately is that Canada has remained relatively unscathed through this whole economic turmoil. Next breath -- but we have the largest provincial and federal deficit in 30 years. Doesn't that mean that less taxes were generated because people and companies made less money? Of course it does. But we are unscathed.

Get those larger jobs booked by May 1/2010.

An old friend used to say, "Carpenters never Starve"
. When you have skills you will make a living. When you are smart and have skills you will do even better.

L