Construction Boom?

in Case Study, Cash, Consumer Advocacy, Economy, Home Expenses, Home Repair, Ontario Government, Provincial

My wife and I spent part of Saturday finding out how much replacing the windows on our house is going to cost (the short answer is HOLY CRAP!), however, I am sure I will have many interesting and poignant commentaries on this issue, but that is not what I am writing about today.

As we finished our discussions with the representative at Home Depot, the comment was made that we most likely would not hear from anyone for at least a week due to the “boom” right now in building in Ottawa (at least in the area of repairing and upgrading existing homes).

At first I took this simply as a “sales pitch” about how we should act soon, but then I looked over and saw something that made me think the advice was valid:

“… all booked before June 30th will not be subject to the HST…”

Then I understood the comment. It seems the impending HST is causing a “bubble” in the construction industry in Ontario (much like the Federal Home Upgrade tax credit did last year). It is interesting to see how government programs which are designed to increase Government revenue and allegedly make retailers jobs simpler can as a secondary effect cause consumers to spend money sooner.

My only question is, is this “rush” valid? Did the Provincial Sales Tax get charged for installing windows? Were windows exempt from these taxes? What about the old “cash discount” that has always existed in the construction industry?

All comments appreciated, to help me understand this “bubble”.

{ 6 comments }

  • James Garcia July 22, 2010, 7:34 PM

    Home repair could really blow a hole in your pocket as it is quite costly theses days.’`*

    Reply
  • SophieW May 17, 2010, 1:10 PM

    I replaced my windows 5 years ago and we found the best way to go about it was to order them direct from the manufacturer. We installed them ourselves and other than my intense fear of heights it was a relatively simple process because it was a straight one-for-one swap. If you’re enlarging the window then definitely go with a contractor.

    You may find it better value to order the windows yourself and hire an outside contractor rather than go through one of the retail stores – they take their cut off the top as well as the contractor they hire to do the job!

    Last thing, the argon filled windows are worth their weight in gold. The sun beats down on the back of our house in the summer and we used to just roast, but now it’s much cooler thanks to the new windows. On the other hand though, less sun to heat in the winter… oh well, pick your battles.

    Reply
  • Michael James May 17, 2010, 10:19 AM

    Coincidentally, I’m looking at replacing my roof and windows. So far the guys giving me quotes haven’t mentioned anything about a bubble due to the HST coming in. I would guess that the PST applies to materials, but not labour. So, there would be an 8% saving on labour before July 1. If labour is half of a job, then the overall savings are 4%. It’s nice to save this money, but not a compelling reason to rush in if you don’t really need the repait yet.

    Reply
    • bigcajunman May 17, 2010, 10:32 AM

      Unfortunately, the windows do need to be repaired.

      Reply
  • MMorgan May 17, 2010, 7:41 AM

    I’m currently in the process of getting my furnace replaced. Other than the fact that the furnace is about 20 years old, one of the main considerations was to get it done before July 1 to avoid HST. The furnace installer indicated that he was very busy and that it was attributable to the HST change. (This was mentioned after I had selected the installer; there wasn’t any mention of this before I made my choice.) I suspect the “bubble” story is probably valid.

    Reply
  • 2Hirondelles May 17, 2010, 7:27 AM

    DS and I, since she works in construction, installed our own in ’02 so I’m not certain, but I do believe the installation cost only gets charged the GST. The one window we had quoted for both, a bay window, was to cost $1000 for the window and $1000 for the installation. We ended up replacing only the one failed thermal pane on that one, as the wood frame is still in quite good shape and it’s a very accessible window for maintenance.

    Since vinyl is a petroleum product I’m sure the price has gone up since we bought ours. I do recall 4 average-sized energy-star double-thermal low-e casement windows (we replaced the original sliders with casements for the increased energy efficiency) and one 5′ patio door cost about $4,000 back then, with no installation. We re-doing the exterior of the house at the same time, so bought windows made for a new build install.

    We chose Bonneville windows, a Canadian-made product, which we purchased through the Reno Depot in Hull, near the Casino. The company drop-ships right to your house. We have been very pleased with the quality.

    Good luck. I know they’re tough on the budget.

    Reply

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