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Winnipeg Free Press - PRINT EDITION
Tax credit boost for business
Manufacturers selling more products for home-renovation market
‘All of a sudden we were saying, 'What recession?' ’ -- Craig McIntosh, chief executive of Acrylon Plastics, with PVC frame windows the company manufactures
RECESSION-WEARY manufacturers in Manitoba have been getting a shot in the arm from an unlikely source -- the federal home renovation tax credit program, which is bolstering sales and saving jobs.
The chief executive of Acrylon Plastics, which manufactures PVC window frames, said the home renovation tax credit (HRTC) program has sent window-frame sales into record-setting territory for the Winnipeg company.
"The renovation side (of the housing market) just really took off in April and May and it hasn't slowed down at all," company president and CEO Craig McIntosh said Tuesday. "It was a record November for us."
Before last spring, when the impact of the two-month-old federal HRTC program really started to be felt, Acrylon had been girding for the worst: Window-frame sales were running 45 per cent behind last year's pace through the first three months of this year as the global recession and the Canadian housing slump took their toll.
Sales were also slumping in two other Acrylon divisions that produce plastic playground equipment and plastic components for the bus and auto-manufacturing sectors, forcing the company to lay off about 40 of its 250 workers.
Then along came the HRTC program, which gives homeowners a 15 per cent tax credit (up to a maximum of $1,350) on eligible home renovations. For firms like Acrylon, it was the perfect tonic.
And what made it even sweeter is that it was completely unexpected.
"We were getting ready for it to be a very slow summer," McIntosh said.
"Then all of a sudden we were saying, 'What recession?' "
Acrylon isn't the only local manufacturer that has benefited from the popular tax-credit program.
"Pretty well anybody that makes stuff for the home-renovations market (has benefited)," said Ron Koslowsky, vice-president and general manager of the Manitoba division of the Canadian Manufacturers and Exporters.
That includes firms that manufacture windows, doors, lumber, drywall, kitchen cabinets and flooring. Koslowsky said he knows of one local millworking firm that stayed busy throughout the recession and the owner credits that to the HRTC.
"He's been talking quite a bit about it and he's wondering what will happen when it runs out (at the end of next month)," Koslowsky said. "Is there going to be a crash that's going to come?"
McIntosh has been wondering the same thing. And while he's not expecting a crash, he is anticipating a post-tax-credit slowdown in home-renovation activity.
"I don't expect it to be as low as it got last year (after the recession hit), but I also don't think it will be much better."
But that's not the way the chairman of the Manitoba Home Builders Association -- Renovators Council sees it.
Brad Sveinson, who is a partner in Character Homes, said local house prices continued to climb during the recession and they're still climbing.
"People have a lot of equity in their homes and they're tapping into it," he said, adding many local renovation firms are already booked up well into next year.
"So I see things staying busy in this industry for a number of years to come."
murray.mcneill@freepress.mb.ca
Republished from the Winnipeg Free Press print edition December 2, 2009 B5
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