Highlights

• Canadian families can now undertake renovations that will be eligible for the Home Renovation Tax Credit. The Canada Revenue Agency has posted details on the credit on its website at www.cra-arc.gc.ca.
• By April, Canada Mortgage and Housing Corporation will be in a position to process loan applications through the Municipal Infrastructure Lending Program for housing-related infrastructure initiatives.
• By April 1, funding will be available for provinces and territories who have signed new agreements for renovation and retrofit of social housing units.
• By April, funding will be available for provinces and territories who have signed new agreements for the construction of new housing units for low-income seniors and persons with disabilities.
• By April, funding will be available to support new housing, the renovation of existing social housing and for complementary housing activities on reserve.

Support for Home Ownership and the Housing Sector

Canada's Economic Action Plan proposed:

• Implementing a temporary Home Renovation Tax Credit that will provide Canadian families with up to $1,350 in tax relief. The Home Renovation Tax Credit will apply to eligible home renovation expenditures for work performed, or goods acquired, after January 27, 2009 and before February 1, 2010.
• Increasing the Home Buyers' Plan withdrawal limit to $25,000 from $20,000 for 2009 and subsequent calendar years in respect of Registered Retirement Savings Plan withdrawals made after January 27, 2009.
• Providing up to $750 in tax relief through the First-Time Home Buyers' Tax Credit for individuals who acquire a qualifying home after January 27, 2009 (i.e., the closing is after that date).
• Providing an additional $300 million over two years to the ecoENERGY Retrofit programs to support an estimated 200,000 additional home retrofits.

"[Budget 2009] helps keep skilled workers on the job at a time when home building starts are sagging. I think it's a great opportunity to stimulate the renovation business across Canada."

-Canadian Home Builders' Association, January 27, 2009

What Are Eligible Renovation Expenditures?

To be eligible, expenditures incurred in relation to a renovation or alteration to an eligible dwelling (or the land that forms part of the eligible dwelling) must be of an enduring nature and integral to the dwelling, and include the cost of labour and professional services, building materials, fixtures, rentals and permits. A dwelling will generally be considered eligible if it is used for personal purposes.

Eligible

• Renovating a kitchen, bathroom or basement.
• New carpet or hardwood floors.
• Building an addition, garage, deck, garden/storage shed or fence.
• Re-shingling a roof.
• A new furnace, woodstove, boiler, fireplace, water softener or water heater.
• A new driveway or resurfacing a driveway.
• Painting the interior or exterior of a house.
• Window coverings directly attached to the window frame and whose removal would alter the nature of the dwelling.
• Laying new sod.
• Swimming pools (permanent-in ground and above ground).
• Fixtures-lights, fans, etc.
• Associated costs such as permits, professional services, equipment rentals and incidental expenses.

Significant progress has been made in implementing these measures:

• A general Notice of Ways and Means Motion was tabled in Parliament with the Budget on January 27, 2009, followed by the tabling of a detailed Notice of Ways and Means Motion for select measures on February 4, 2009. The Canada Revenue Agency is administering the new measures in accordance with these Motions.
• Implementing legislation was tabled on February 6, 2009 (Budget Implementation Act, 2009) and included amendments to implement the increase in the Home Buyers' Plan withdrawal limit.
• Funding under the ecoENERGY Home Retrofit program will be available starting April 1, 2009 to reimburse home owners that undertake eligible retrofits to make their homes more energy efficient.

The June report will provide further updates on the status of legislation to implement the higher Home Buyers' Plan limit and progress towards tabling of legislation for the implementation of the Home Renovation Tax Credit and the First-Time Home Buyers' Tax Credit.

Benefits From the Home Renovation Tax Credit

Wanda is planning to redo her kitchen and bathroom this year, rather than later next year, in order to take advantage of the new credit. Because her projects will involve more than $10,000 of eligible expenditures, she will get the maximum tax credit of $1,350.

Investments in Housing for Canadian

Canada's Economic Action Plan proposed a one-time federal investment of $1 billion over two years for renovation and energy retrofits, $475 million over two years for the construction of social housing units for low-income seniors and persons with disabilities, $400 million over two years for new social housing and remediation of existing housing stock on reserve, and $200 million to support social housing in the North.

There will be an emphasis on projects that are ready to go and flexibility to reallocate resources where take-up is slow. The spending authorities for 2009-10 are in the Budget Implementation Act, 2009.

These housing initiatives will be delivered through existing Canada Mortgage and Housing Corporation (CMHC) and Indian and Northern Affairs Canada (INAC) programs and existing arrangements with provinces and territories and direct CMHC and INAC delivery. Program terms and conditions have been completed and approved, as have amendments to CMHC's Corporate and Business Plans. Discussions have been held with provincial and territorial officials laying out the parameters of the initiatives, and amending agreements for federal-provincial-territorial arrangements have been prepared. They include reporting requirements for the new funding and are expected to be in place by April. A number of provinces have already submitted proposals for housing initiatives.

Royal Assent of the Budget Implementation Act, 2009 and signed agreements with provinces will enable CMHC to implement the following measures by April 1, 2009:

• Renovation and Retrofit of Social Housing: The Economic Action Plan provides a one-time federal investment of $1 billion over two years to address the backlog in demand for renovation and energy retrofits of the social housing stock ($850 million to be cost-shared with provinces and territories and $150 million to address needs of existing social housing which CMHC administers). The $850 million will be allocated on the basis of each province and territory's share of units and will be cost-shared. Once provinces and territories have signed the amended Affordable Housing Initiative agreements, CMHC will be in a position to accept and approve proposals. A number of provinces have already identified projects that are ready to go, including proposals for social housing renovation and retrofit work. Arrangements are also in place for the implementation of measures for the CMHC-administered social housing units. Projects will be selected though a Request for Proposals process.

Affordable Housing-A Recent Success Story

More individuals with a disability now have access to more affordable, barrier-free housing in Summerside, Prince Edward Island.

Independence Place, which is an affordable housing project that meets the needs of people with physical disabilities and makes a positive difference in their lives, is the result of a partnership between Scotcor Construction Ltd., the City of Summerside, the PEI Council of the Disabled, and the Government of Prince Edward Island and Government of Canada, through the Affordable Housing Initiative.

Independence Place has 11 units designed to meet the particular needs of the tenants, and has energy-efficiency features such as geothermal heat pumps and insulated concrete forms that keep electricity costs down for residents, while being environmentally friendly.

The Canada-Prince Edward Island Affordable Housing Agreement supports the creation of additional affordable housing units for low- to moderate- income Islanders through rental, conversion and home ownership initiatives.

• First Nations Housing: Canada's Economic Action Plan provides $400 million over the next two years to support new on-reserve housing, renovations of existing social housing and for complementary housing activities. $250 million will be provided through CMHC, with the funds to be delivered through existing CMHC programs. CMHC is working with INAC, First Nations and the National First Nations Housing Liaison Committee on proposed projects. The delivery of funds will start following this engagement strategy, likely in early April. $150 million will be provided by INAC to First Nations for complementary housing activities such as lot servicing, creating new high-density developments, renovating existing housing units, and assisting in the transition of band-owned units to market-based units.
• Northern Housing: Canada's Economic Action Plan provides $200 million over the next two years to support the renovation of existing and construction of new social housing in the three territories. One half of the total allocation will be provided to Nunavut in recognition of its greater needs and $50 million for each of the other territories. Once territories have signed amended Affordable Housing Initiative (AHI) agreements, CMHC will be in a position to accept and approve proposals.
• Housing for Low-Income Seniors and Persons With Disabilities: The Government recognizes that in difficult times, low-income seniors and persons with disabilities may have increased difficulty finding affordable and suitable housing. In recognition of this reality, the Economic Action Plan provides $475 million to support the construction of new housing units for low-income seniors and persons with disabilities. The $475 million will be allocated on the basis of each province and territory's share of total population and will be cost-shared. Once amended AHI agreements have been finalized, CMHC will be in a position to accept and approve proposals.
• Helping Municipalities Build Stronger Communities: Canada's Economic Action Plan makes available up to $2 billion over two years in direct, low-cost loans to municipalities through CMHC for housing-related infrastructure. This infrastructure includes water lines, sewers and neighbourhood regeneration projects. CMHC's Corporate and Borrowing Plans have been amended to allow implementation of the application process to begin. Loan applications have been developed and will be posted on the CMHC website in March. CMHC will be in a position to process applications by April.

Table 4.4
Action to Stimulate Housing Construction

	2009-10 Stimulus Value (millions of dollars)	Authorities in Place	Next Steps	Funding to Flow/Benefits Available
Support for Home Ownership and the Housing Sector
Home Renovation Tax Credit	3,000	Notice of Ways and Means Motion	Table legislation.	February
Enhancing the energy efficiency of our homes	150	April	Process applications from homeowners.	April
Increasing withdrawal limits under the Home Buyers' Plan	15	Part of BIA	Royal Assent to BIA.	February
First-Time Home Buyers' Tax Credit	175	Notice of Ways and Means Motion	Table legislation.	February
Investments in Housing for Canadians
Renovation and retrofit of social housing	425	Upon Royal Assent to BIA	Effective upon Royal Assent. Amended AHI agreements have been provided to provinces and territories. Funding will flow once agreements have been signed.	April
	75	Supplementary Estimates (A)		June
Housing for low-income seniors	200	Upon Royal Assent to BIA	Effective upon Royal Assent. Amended AHI agreements have been provided to provinces and territories. Funding will flow once agreements have been finalized.	April
Housing for persons with disabilities	25	Upon Royal Assent to BIA	Effective upon Royal Assent. Amended AHI agreements have been provided to provinces and territories. Funding will flow once agreements have been finalized.	April
First Nations housing	200	Upon Royal Assent to BIA	Effective upon Royal Assent. CMHC and INAC working with National First Nations Housing Liaison Committee. Funding will flow once this engagement has been completed.	April
Northern housing	100	Upon Royal Assent to BIA	Effective upon Royal Assent. Amended AHI agreements have been provided to territories. Funding will flow once agreements have been finalized.	April
Loans to municipalities	1,000	Yes	Loan applications have been developed and will be posted on CMHC's website in March. CMHC will be in a position to process applications in April.

For more information contact Service Canada at 1-800-622-6232