Some provincial budgets have made big announcements regarding renovation tax credits. This is excellent news for everyone, as it could be argued that renovation tax incentives offer as good a return on investment as you are going to see in terms of tax breaks, and here's why:
Tax dollars invested in improving home efficiency stimulates local economies in terms of labour costs as well as material manufacturing and supply. This creates jobs, and the kind that could be defined as 'green energy jobs' that we hear so much talk about. And these jobs are not concentrated in one manufacturing sector or remote location; they are created exactly where they are needed, spread evenly throughout communities.
This money not only helps homeowners improve their homes, they in turn hand it to small businesses and local contractors, which is the size of business that reliably injects money back into local economies. So even if you have no renovations to do and aren't a contractor, this still benefits you because on some level your local economy will pick up speed.
And, next winter when heating bills are smaller, much of that saved money will find its way into local economies as well, which generates tax revenues that go right back where they came from - into government coffers. All this makes that 'tax break' a sound financial investment on behalf of governments, and we happen to get home upgrades in the process.
And how about our carbon emission targets? There's another indirect benefit that could come from these tax credits - less energy leaking out of our houses means less fossil fuels need to be extracted from the ground and burned, and less carbon is released into the atmosphere. This is not to suggest that insulating a few attics will stop runaway climate change, we'd need to do a lot more than just a few. So be a responsible global citizen and accept this money.
Of course it will take more than fixing up some houses before we see noticeable change in our energy consumption, but this draws attention to the abysmal performance we accept from houses, the ones standing as well as most of those being built. It's time to focus and invest more in retaining energy than supplying energy. If the gas tank on your car leaked, would you shrug your shoulders and fill it more often or would you fix the leak? Your house shouldn't be any different.
We hear a lot of Chicken Little talk about the economic turmoil that would come with trying to limit carbon emissions, but through tax incentives like this, helping meet emission targets is just the by-product of a sensible program that will help keep more money in your pocket, more jobs in your community and more carbon in the ground. Everyone wins here.
As for home renovation tax credits in the 2016 federal budget, that was a little disappointing. There is money set aside for adapting homes for seniors, maintaining social housing and badly needed money to improve First Nations housing, just nothing on energy upgrades for the general population. Hopefully the Feds will take a hint from the Provinces for their next budget.
As we get info from other provinces we will add it, but for now here's what we know about Ontario and Quebec:
In the 2016 Quebec budget, $175 million was allocated for a 20 percent tax credit on eco-friendly home or cottage renovations over $2,500 until April 1, 2017, capped at $10,000.
When you do home renovations like changing your furnace or insulating your attic, take the bill from your contractor and pop it right into your tax return and get money back. It will need to include notes from the contractor detailing the work that was done and how it will improve the efficiency of your home.
- Home Audit and Retrofit programs that provide homeowners with incentives to make energy efficiency upgrades. Under the programs, homeowners can receive incentive levels that typically range between $1,000 and $2,500 for energy audits and retrofits such as furnace and water heating systems replacement and insulation.
- Home Winterproofing and Weatherization programs that provide eligible low-income households with a free home assessment, water conservation measures, programmable thermostat and weatherization services (e.g., insulation and air sealing).
- Adaptive Thermostat program for Enbridge customers that offers participants a $75 incentive for the installation of an adaptive thermostat.
The government will be investing $100 million from the Green Investment Fund to help homeowners reduce their energy bills and reduce GHG emissions.
- Are better insulated houses worth the money?
- All about insulation - picking the right type for the right application.
- Other green building financial incentives.