Scott Costain, director of the Canadian Home Builders' Association on P.E.I, was one of the people to address the Standing Committee on Education and Economic Development on Thursday in Charlottetown.
Home builders, realtors tell legislative committee HST hurting businesses, ask for rebates
The HST is decimating the construction and renovation industry in P.E.I.
That's what developers and realtors told the Standing Committee on Education and Economic Development on Thursday in Charlottetown.
When asked if developers were in danger of going out of business, Summerside developer Peter Brown told the committee "we're not far away''.
They're asking the province to bring in HST rebates for new homes and renovations to help offset the impact.
Scott Costain, director of the Canadian Home Builders' Association on P.E.I, said money has become so tight in his house that his wife has had to take a second job.
"It's pretty evident being here that everything is not OK,'' Costain said.
The number of building permits issued between 2012 and 2014 has dropped from 1,086 to 665, a dip of more than $85 million.
There are other factors at play, the developers say, but the harmonized sales tax is the trigger point. The HST was implemented in P.E.I. on April 1, 2013, combining a previous five per cent GST and 10 per cent PST.
The construction industry says it has been hit hard with sales tax on a new home jumping from five to 14 per cent.
Brown says he believes it has created a growing underground economy, where contractors are working under the table on housing renovations.
Andrew Garth, a member of the association, told the committee that there has been a 40.7 per cent decrease in housing starts in the province between 2011 and 2015. In terms of housing starts, there were 940 in 2011, 941 in 2012 and a drop to 558 last year.
"Fewer starts means fewer employed. That's fewer workers, plumbers (and) architects,'' Garth said. "People will be employed for shorter periods . . . drawing (employment insurance) from the system.''
Charging HST on forms of home heating also came up.
The P.E.I. Real Estate Association made a presentation where it says HST isn't fair to homeowners who don't heat with oil, asking for an exemption on all forms. When it comes to heating homes, Nova Scotia, for example, exempts all forms of heating from HST.
Green Party Leader Peter Bevan-Baker noted the irony in exempted furnace oil, considering it is among the least environmentally-friendly methods of heating a building.
In the end, Tory MLA Matthew MacKay wanted to pass a motion asking government to not raise the HST even further in the upcoming budget, which many have speculated is going to happen.
That led to a testy exchange with Liberal MLA Jordan Brown, who suggested an amendment, asking the province to consider presentations made at Thursday's standing committee hearing. Liberal MLA Bush Dumville, chairman of the committee, was forced to bang his gavel down and admonish the two MLAs to stop.
Bevan-Baker declined to vote, telling The Guardian after the meeting that all the politicians once again lost sight of doing what is in the best interests of Islanders.
"This is what Islanders are tired of,'' Bevan-Baker said of the political bickering.
The committee voted to ask the province to consider the presentations.