Our Conservative federal government has an uncanny ability to find the sin in doing good.

Being responsible and undertaking right action usually merits a reward, but the recently announced Home Renovation Tax Credit (HRTC) just makes one feel dirty.

A 2006 survey by Canada Mortgage and Housing Corporation found that almost 840,000 of the country‚s 12 million private dwellings failed the adequacy standard and required major repairs.

Combine this knowledge with the fact that buildings are the single biggest source of greenhouse gas emissions and energy consumption and one could have anticipated a Civilian Conservation Corps-type program to superinsulate homes and mandate energy efficiency.

Instead we have a program that gives tax credits for putting in a swimming pool, building a fence, resurfacing a driveway, or laying new sod.

Buy an automobile that is super efficient on gasoline use, you are eligible for an ecoAUTO grant from the federal government; buy Energy Star qualified windows, doors, refrigerator, freezer or clothes washer in BC and you save the seven percent provincial sales tax.

But spend $1,000 renovating your kitchen, bathroom or basement, and you get zilch under the HRTC which requires expenditures of between $1,001 and $10,000 to be eligible for the 15 percent tax credit.

The HRTC is administered by the Canada Revenue Agency so the credit reduces the amount of federal tax you have to pay. If you spend the maximum $10,000, you won‚t receive a cheque for the maximum $1,350 credit.

It’s obvious that our federal government didn‚t consult green building guru Alex Wilson who has spent 30 years working to improve buildings and the planet.

In a letter in the March issue of Fine Homebuilding magazine to US President Barack Obama, Wilson urges him to launch a massive superinsulation program to reduce the energy consumption of low-income homes and buildings by one-half to two-thirds.

“Retrofitting existing homes to boost energy performance will create millions of jobs, and by cutting energy use, we will reduce carbon emissions,” says Wilson, author of Your Green Home (New Society Publishers, 2006).

“While public works programs can tackle low-income homes, different programs are needed for middle-class homeowners,” Wilson writes. “To reduce the total energy consumption of their homes by one-half to two-thirds (a challenging but realistic goal), a variety of tax credits, deductions, loan guarantees, and other inducements will be needed.
We need new incentives that are performance-based, unlike most of today‚s tax credits. By basing subsidies directly on improvements in energy performance ˆ not simply on how much money is spent ˆ we can encourage energy conservation retrofits and renewable energy systems that provide an attractive return on investment.”

Wilson suggests the performance-based focus could also apply to mortgages and loan guarantees using the home energy rating system (HERS), a 0 to 100 scale in which 100 equals the energy performance of a home meeting the 2004 Model Energy Code and 0 represents a net zero energy home.

“If the secondary mortgage market required a HERS index of 25 for new homes and 50 for existing home, we would see a dramatic ramping up of energy performance.”

Wilson advocates that building codes should be revised to promote a concept called „passive survivability.‰

“In colder parts of the country, such requirements could include minimum R-40 walls, R-60 ceilings, triple-glazed windows, and passive solar features. By mandating such high levels of energy performance, homes would never put their occupants at risk even with an extended power outage or loss of heating fuel ˆ because the homes would never drop below 50 or 55 degrees Fahrenheit.”

“By targeting as a top priority the energy performance of homes, we could not only put millions of people to work and achieve dramatic reductions in greenhouse gas emissions, but also significantly reduce our vulnerability to wild fluctuations in world energy prices or energy availability while improving the comfort and security of homeowners and renters.”

Another major failure of the HRTC is the fact it doesn‚t apply to rental properties, meaning the homes of low income Canadian renters won‚t be eligible for energy efficiency upgrades.  This takes on added importance because persons with lower incomes spend a higher proportion of their income on energy expenditures.

The HRTC is definitely not a perfect program and we should all inform our MPs of this fact. Since it only applies to the 2009 tax year, there is hope improvements can be made if the program is extended.

If you can afford it, by all means take advantage of the HRTC for eligible home renovation expenditures for work performed, or goods purchased, after January 27, 2009 and before February 1, 2010.

Properties eligible for the HRTC include houses, cottages and condominium units that are owned for personal use. Alterations and additions to new construction are also eligible.

Renovation costs for projects such as finishing a basement or remodeling a kitchen will be eligible for the credit, along with associated expenses such as building permits, professional services, equipment rentals and incidental expenses.

Routine repairs and maintenance will not qualify for the credit, nor will the cost of purchasing furniture, appliances, audio-visual electronics or construction equipment.

Taxpayers will be able to claim the HRTC when filing their 2009 tax return. Receipts do not have to be submitted with the return, but should be kept in case they are asked for by the Canada Revenue Agency.
Eligibility for the HRTC is family-based. For the purpose of the credit, a family is generally considered to consist of an individual and, where applicable, the individual‚s spouse or common-law partner. Family members will be able to share the credit. More information on the tax credit can be found at http://www.cra-arc.gc.ca/gncy/bdgt/2009/fqhmrnvtn-eng.html.

Renovation supply retailers are eager to piggyback on the federal government‚s tax credit and some have already announced offers of additional incentives to attract your spending dollars. Be sure to ask about special deals at your local building supply store. Both Home Depot and Rona have gift card offers.

Canadians who spend money on home renovations will also be eligible to receive an ecoENERGY Retrofit ˆ Homes grant. To be eligible for this grant, homeowners must first have a pre-retrofit evaluation. The grant provides homeowners with up to $5,000 to offset the cost of making energy efficiency improvements.

Before you start your renovation project, it‚s wise to visit the CMHC web page on home renovation. Go to http://www.cmhc.ca/en/co/renoho/ to get started.

The HRTC is better than nothing, but the seriousness of our global warming problem merited more than just a token response.