Home renovation tax credit proposed by Sask. Party, NDP proposes wealth tax

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Home renovation tax credit proposed by Sask. Party, NDP proposes wealth tax
WATCH: Scott Moe is proposing a home renovation tax credit while Ryan Meili said he would bring in a wealth tax of one per cent on anyone with a net worth of over $15 million – Sep 30, 2020

The Saskatchewan Party promised a new home renovation tax credit while the NDP vowed to establish a wealth tax as the election campaign came to Saskatoon on Wednesday.

Scott Moe, the leader of the Saskatchewan Party, said homeowners would be able to claim a 10.5 per cent tax credit on up to $20,000 of eligible renovations under the proposed tax credit.

“In this year’s budget, we reduced the PST on new home construction,” Moe said in a statement.

“We also want to provide a break to those who are fixing up their existing home. This new home renovation tax credit does just that.”

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The tax credit would include permanent additions to a homeowner’s primary residence, but would not apply to furniture, appliances, hot tubs, tools or maintenance.

The cost of the program — which would run from Oct. 1, 2020, to Dec. 31, 2022 — is estimated by the Saskatchewan Party at $124 million.

The party said the maximum eligible amount allowed to be claimed to the end of 2021 is $11,000 and $9,000 for 2022.

Chris Guérette says a home renovation tax credit could help increase construction activity at a time it is most needed by the industry.

“Residential construction has a significant economic impact in our province, and this is a solid policy when considering the economic recovery required during a pandemic,” said Guérette, CEO of the Saskatoon & Region Home Builders’ Association.

“We know from similar policies implemented federally in the past, that the economic impacts are considerable.”

Moe spent part of the afternoon campaigning in the Saskatoon Riversdale riding. That seat was won by the NDP in the 2016 election by less than 250 votes.

Wealth tax about fairness, Meili says

Meanwhile, NDP Leader Ryan Meili said his proposed wealth tax would bring tax fairness to the province.

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“We can do better — and ask the wealthiest amongst us to help ensure every family has access to the health care they need, when they need it,” Meili said in a statement.

“It’s time for a tax plan that puts people first — not the Sask. Party’s old boys’ club.”

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Under Meili’s plan, a wealth tax of one per cent would be applied to anyone with a net worth of over $15 million — defined as total financial and non-financial assets, less liabilities.

The NDP said figures it received from the parliamentary budget office say less than half of one per cent of people in Saskatchewan would be affected by the proposed wealth tax, which would bring in an additional $120 million annually.

“We have no intention to do any cuts in health and education, in fact, quite the opposite. We plan to invest in those and other key services because that is what we need to do right now,” Meili said.

“If we want this economy to recover, if we want to get through COVID-19 well together, we absolutely need to invest now.”

Meili also pledged to build a new bridge and hospital in Prince Albert during a campaign stop in the northern Saskatchewan city.

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“When we build these projects, we will do so under a Sask First model – meaning Saskatchewan companies and Saskatchewan workers will be on the job site,” Meili said.

“We won’t send those jobs out of the province like the Sask. Party has done with so many projects.”

The NDP did not put a cost on the promise.

The Saskatchewan Party government committed $300 million in March toward expanding and renewing Victoria Hospital.

The project will add 69 beds, increasing capacity from the current 173 beds to 242.

Also part of the expansion is a larger emergency department, a helipad and enhanced medical imaging services, including an MRI machine.

Economist weighs in

Saskatchewan economist Yang Yang highlighted the juxtaposition of the two proposals. The tax credit would reduce provincial tax revenue, she said, while a wealth tax would increase cash flow to government coffers.

Determining the efficacy of either tax program is not yet possible, she said.

“It depends on how people will respond to… these proposals,” said Yang, a lecturer at the Johnson Shoyama Graduate School of Public Policy.

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Future home renovation activity will depend on household incomes, which have been affected by the pandemic, she said.

On the other hand, she said collecting a wealth tax could require substantial administration costs.

-With files from Anna McMillan

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