Home builders urge Ottawa to index new housing rebate LAKE LO U ISE, A lberta, February 25, 2006 D avid Benbow, incom ing President o f the C anadian H om e Builders' Association (CHBA), today called on the new federal governm ent to index the GST rebate for new homes to k^ep pace w ith rising prices. H e welcomed the governm ent's com m itm ent to reduce the G ST to five per cent as "a really significant step forw ard." H e said Prime M inister H arper him self has pointed out that, on a $200,000 new hom e, this reduction com bined w ith the new housing rebate will result in a $4,000 saving to the hom ebuyer. ' T he reduction o f the G ST provides' an opp o rtu n ity to index GST rebate thresholds - as prom ised 15 years ago - to keep pace w ith rising hom e prices. "Right now is the tim e to do it," Mr. Benbow said. Never again should new hom e buyers face a tax penalty because they live in a com m unity where house prices have risen, he said. T he full rebate of about 2.5 per cent applies to homes priced up to $350,000. A reduced rate applies up to $450,000. T here is no rebate for homes prices above $450,000. W hen the tax was introduced, the gov ernm ent prom ised to index the thresholds, a prom ise that "has never been kept." Mr. Benbow urged the governm ent to address a serious shortage o f skilled labour, "a situation that gets worse every day." He said the previous governm ent consistently refused to im plem ent a plan to overcome the shortage. "For m any years, Canada has not come cloSe to training enough skilled tradespeople to meet dem and." In his inaugural address to the 63rd CHBA N ational Conference, Mr. Benbow said the industry is frustrated by im m igration program s th at discrim inate against, or sim ply fail to recognize, skilled tradespeople. "T he CHBA is very encouraged by the new governm ent's 'com m itm ent to support apprenticeship programs, and to make im m i gration policies more responsive to real needs." Mr. Benbow also called for action to com bat the underground economy. For m any years, he said, the governm ent has prom ised to take effective action but hasn't deliv ered results. "Frankly the `good guys' who play by the rules are tired o f being chased by the tax collector, while the `bad guys' are laughing at us." "There has been a real problem getting the governm ent to go after those who are actually breaking the law." He said the previous governm ent saddled legitim ate builders w ith a costly and tim econsum ing C ontract Paym ent R eporting System (CPRS) that has failed to solve the problem . "In the m eantim e, the governm ent continues to lose billions o f dollars every year to the cash economy." Mr. Benbow said the CHBA supports federal investm ent in m unicipal infrastructure but urged the governm ent to insist on transparency and accountability in the allo cation o f funds. Infrastructure spending should enhance housing affordability and choke. "U nfortunately, we don't know if housing consum ers are going to get these benefits. O nce the gas tax m oney leaves O ttaw a, there is real concern about transparency and accountability." T his is a good example, he said, o f the value o f the federal govern m ent applying a "housing lens" to its actions and initiatives. It's im p o rtan t to set clear objectives, m onitor progress and measure results. Speaking about rental housing, Mr. Benbow said comprehensive tax reform and ac tion to address affordability issues are needed. T he lower GST, when com bined w ith the governm ent's proposal for a rollover o f capital gains tax, would create a more positive environm ent for private rental investm ent. "We believe this opens the door to serious discussion about other tax reform measures th at are required." For m any in core housing need the problem is n o t availability o f accom m odation but inability to pay the rent. "T his is an incom e problem , not a housing problem ," he said. Providing households w ith direct assistance through portable housing allowances is the m ost cost-effective way to help them . D avid Benbow is President o f Balmoral Lifestyle Hom es Inc. of E dm onton. T he C anadian H om e Builders' Association (CHBA) is the national voice o f the residential construction industry, representing more than 7,000 m em ber firms across the coun try. M em bership comprises new hom e builders, renovators, developers, trade contrac tors, building m aterial m anufacturers and suppliers, lenders and other professionals in the housing sector.