Kiss The Home Renovation Tax Credit Good Bye

by Tax Guy - Burlington Accountant on September 2, 2009 Print This Post Print This Post

Update: We received confirmation from Liberal Finance critic, John McCallum that the Liberals would honour the HRTC if elected. Please see the Liberal Party’s position on the Home Renovation tax Credit here.

200x300_badgeLiberal leader Michael Ignatieff announced today that the Liberal will no longer prop up the Conservative minority government. If the Conservatives fail to table the Home Renovation Tax Credit (HRTC) before an election Canadians may not have any HRTC to claim.

The HRTC Is Not Law

The Canada Revenue Agency (CRA) takes the administrative position that if tax law is tabled before the House of Commons (but not yet passed), the CRA will take steps to enforce the bill as if it were law. However, when the budget was announced earlier this year, there was no draft legislation introduced to the House of Commons for the HRTC. Therefore if the government falls before the bill is introduced into Parliament, the HRTC will be effectively dead.

Political Suicide For the Liberals or The Conservatives



If the government is allowed to fall before the HRTC is tabled, will this be political suicide? The sheer volume of questions about the home renovation tax credit posed to Canadian Tax Resource and those posed directly to the CRA suggest that thousands of Canadians may be affected if the bill is not tabled.

This may be political suicide for the Liberals if they fail to introduce similar legislation immediately after an election. This could also cause problems for the Conservatives since they failed to introduce the bill in the first place. Only time will tell for sure.

Canadian Tax Resource emailed Conservative Finance Minister Jim Flaharety and opposition Finance critic John McCallum but neither had responded at the time of writing.

About The Tax Guy...

Dean Paley CGA CFP is a Burlington accountant and financial planner who services individuals and business owners locally, nationally and internationally. Dean has appeared in the National Post, Toronto Star and Metro News.

To find out more, visit Dean's website Dean Paley CGA CFP or connect via Twitter @DeanPaleyCGACFP.

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Sean September 2, 2009 at 10:20 am

Interesting politics at play here… I blogged about the prospects of this perviously, but now it will be really interesting to see what happens!

Tax Guy September 2, 2009 at 10:41 am

I still haven’t had any responses from the Minister of Finance or the Liberals.

Erick September 3, 2009 at 2:19 pm

I guess this would also apply to the accelerated depreciation for computer equipment and systems software:

Tax Guy September 4, 2009 at 7:42 am

@ Erick:

These measures were in draft form, which means the government changed the existing law and presented it to parliament. The CRA administratively can enforce draft legislation to the accelerated depreciation still stands.

The HRTC was only talked about and there was no draft law presented to parliament. The CRA can’t administer something that has no draft!

So the accelerated depreciation would stand but the HRTC would not.

wj holtom September 3, 2009 at 6:38 pm

Just like Harper; confidence votes on everthing. Mean spirited.
Set up a kiss of death for the opposition on a nonconfidence vote.
I do not want my children influenced by this man.

Tax Guy September 4, 2009 at 7:13 am

@ WJ:

I’m not sure if we could squarely point this at Harper. They announced the HRTC during the budget and had to act quickly. Thre was not enough time to prepare legislation.

M in MB September 15, 2009 at 7:19 pm

We most definitely were influenced by all the government ads/store promos regarding the HRTC. We spent the full claimable amount ++. To top it off, I have been operating on the assumption that the $1350 would be in my pocket come next tax time. Even though it is definitely labeled a credit, I was thinking rebate. So that puts us up the creek without a paddle, we had plans for that extra cash. I’m sure our story is mirrored by many other Canadian families.

And why wasn’t this passed long ago? I was looking at the Action Plan website and some 4-5 million Canadians would benefit from the HRTC. Interesting how the Cons now are saying the Libs are trying to take this away from the people, even though they haven’t taken the steps to get it passed. What are they waiting for?

Personally, the Cons won’t buy my vote for ‘$1350’ (but maybe that will work for the other 4 million) and I just don’t have confidence in the Libs either. What options does that leave for a disappointed voter? NDP or Green?

Tax Guy September 15, 2009 at 8:28 pm

@ M in MB:

I received confirmation from the Liberals that they would introduce the HRTC if elected.

The issueseems moot as the NDP and Block will support the govenrment Friday when introduces the HRTC.

Hannah December 31, 2009 at 10:38 am

Was the HRTC bill ever passed ? Today is Dec. 31, and there is talk that all unpassed bills will die if the Parliament is prorogued. Can you tell us what happened to the HRTC?

Tax Guy December 31, 2009 at 3:59 pm

@ Hannah – The bill was introduced and the CRA will act as if is law. I had confirmation from the Liberals that they would re-introduce the HRTC is the government falls.

Tax Guy January 2, 2010 at 10:49 am

@Hannah – See the following link. The HRTC has received Royal Assent and is now law.

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