Thursday, January 29, 2009

Budget '09: Concrete Example of Helping Vulnerable, Saving Jobs, Creating Jobs of Tomorrow

I was talking today about the budget with a relative and came up with one concrete example of how Prime Minister Stephen Harper and Finance Minister Jim Flaherty, with the endorsement of their new coalition partner Michael Ignatieff, could have better met their stated goal of helping the vulnerable, saving jobs, and creating jobs for tomorrow.

The home renovation tax credit has everyone talking. It's aimed at everyone, but only the well off middle class and rich can use it, most of whom were already planning a renovation. A maximum of $1,350 for a maximum of $10,000 reno cost, is not enough to help the less well off pay for a renovation. Furthermore, the tax credit is aimed at most kinds of renovations, not just ones considered green.

Now, if the home renovation tax credit was targetted at homeowners on fixed incomes or low incomes, let's say less than $30,000, and was for energy efficient or green renovations only, you could then increase the tax credit to let's say 50 percent, $5,000 off a $10,000 renovation. And if the tax credit would be paid regardless of whether the income was too low to take advantage of a credit or not, then it would be possible for us low-income homeowners to pay for needed green renovations.

Low-income homeowners can't afford to waste money, and so are much more likely to make changes to their homes that would result in lower heating and electrical costs. They also can't afford to pay for a power audit, as under current programs, to tell them what they already know: install new windows, replace the 25-year-old furnace, put in insulation like Icynene, replace an electrical-powered water heater with a solar-powered one or a tankless hot water heater. By having a tax credit for only certain kinds of renovations like those green ones, the government would facilitate the decrease of greenhouse gas emissions and stimulate the creation of jobs in green sectors. By targetting the tax credit at low-income homeowners, they would help the vulnerable afford badly needed repairs and reduce their home operating costs. And by making it large enough to get people who only dream of renovating to actually do it, they would save construction and manufacturing jobs. The government could ice this opportunity cake by also rewarding contractors and homeowners who use Canadian-made products in their renovations, thereby creating more jobs of tomorrow here.

But as is so glaringly evident to all but politicians and many journalists, both the Conservatives and Liberals are good at missing opportunities.

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