CHBA Central Alberta - New Homes, Consumer Tips, Home Building, Red Deer Home Show, Construction

Our Priorities

CHBA-Central Alberta has identified four "key" priorities for the Office's active support:


Enhancing housing affordability and choice	Addressing serious shortages of skilled tradespeople	Vigorously tackling the underground economy in the residential sector	Environmentally responsible housing and development

Ongoing Office priorities for 2007-2008 (ongoing commitments):

Working to promote and protect interests of consumers. Members believe that all Canadians have the right to decent, safe and appropriate housing. We also believe that all Canadians have the right to a reasonable opportunity to own a home.
Working to support professionalism of Members. We believe that skills, experience and integrity are the cornerstones of professionalism. CHBA-Central Alberta provides Members with opportunities to learn, grow and take pride in what they do.
Working towards a stable business environment for Members. The CHBA-Central Alberta is committed to a fair and competitive marketplace where all members have the opportunity to operate their business profitably.
Better alignment of association resources (human, financial, physical and technological) in support of regional policy objectives and program delivery both internally and abroad.

Last updated: 22-08-2007

Enhance Housing Affordability and Choice – Reduce the Tax Burden

Until recently, Central Alberta has enjoyed an unprecedented period of widespread housing affordability and choice, the result of low interest rates, high employment, and very competitive housing markets. However, a combination of government actions is driving up housing costs and prices in every market in the region. Foremost among them is rising levies, fees and charges - a form of taxation on growth.

Growth is extremely important to our communities. Nonetheless, the benefits which communities and regions enjoy as a result of growth – and the fact that new development is an integral part of growth – are not always clearly understood. Some perceive new development from a negative perspective. They view it as being detrimental for both themselves and their community.

At the same time, there is recognition that growth and development brings positive benefits to a community – for example, through economic development departments, municipalities aggressively pursue private sector investment in their communities. Nevertheless, negative perceptions may impede and undermine growth.

New development brings enormous benefits to a community – both economically and socially. Municipal officials often understand this, but the link is less clear to others – especially with respect to the importance of residential development in our economy and society, and the quality of life of our community. In assessing the role of growth and new development, it is important to recognize that:

Development supports growth – which promotes prosperity. Without development, there can be no growth. Communities that do not grow do not prosper and do not offer an attractive quality of life.

The provision of infrastructure requires funding. The federal and provincial governments provide some funds for infrastructure, but the majority of the funding must come from municipal sources – through borrowing, taxes on existing properties, or from charges on new development. In fact, research studies carried out by Canada Mortgage and Housing Corporation have shown that most municipal infrastructure is financed through charges on new development which are paid by developers.

Some argue that development should pay its own way, however, such an approach does not recognize the community-wide benefits of growth and development. Unless the benefits of growth and development are understood, municipalities risk losing these benefits for their residents over the long-term. Making development pay its own way is a short-term answer to perceived financial pressures – it will result in serious long-term losses for the community.

In addition to losing the benefits of growth, making development pay its own way has significant short-term negative effects as well – principally by raising the cost of development. Higher costs discourage development and are reflected in higher prices for homebuyers – and reductions in the affordability of homeownership.

The increase in new housing prices resulting from increased costs (whether for municipal charges or for other costs) has a follow-on effect on housing prices in the resale market. New and resale homes are substitutes, so they tend to move up and down together. So, increased municipal charges have the perverse effect of providing a benefit (higher housing values) for existing owners, while the higher housing prices raise the bar for families seeking to purchase their first home. Making development pay its own way works at cross-purposes with promotion of access to homeownership.

The argument that development should pay its own way also neglects the fact that development does finance most (if not all) of the infrastructure required for new development.

Growth requires infrastructure for new development. Requiring new development to pay for all or most of the cost of new infrastructure is in fact a tax on growth – a disincentive for the future prosperity of the municipality.

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Address Serious Shortages of Skilled Tradespeople – Attract and Retain the “Best and Brightest”

Development generates benefits across the community and the local economy – by creating jobs for skilled workers and opportunities for a variety of local businesses.

In the construction sector, of course, residential development creates employment for the skilled trades that produce our buildings – carpenters, electricians, plumbers, concrete formers, roofers, and many others. While many of the building materials used in construction will necessarily come from other parts of the country, jobs will be created in the lumber-yards, among the suppliers of specialized building components, and in the other services required for the development – architects, engineers, consultants, and public servants. The incomes of these workers will predominantly be spent in the local community – on goods and services such as groceries, clothing, recreation, etc. – which, in turn, create jobs for other residents.

Residential development is a key component of overall development. Data from Statistics Canada indicates that the development of a new home, including construction of the home plus acquisition costs and the cost of land development, generates an average of roughly 1.9 person-years of employment per home. These include:

Direct (on-site) jobs – 1.0 person-years. These are the trades people and other workers involved in the actual construction of the homes
Indirect jobs – 0.9 person-years. These are the jobs created in other industries which supply inputs to the construction – e.g. architectural services, building materials, lumber dealers and other suppliers of inputs.

Last year, a total of 1,429 new housing units were started in Red Deer – generating a total of 2,514 jobs. Much of this employment is generated right here in Red Deer – a total of 2,514 person-years were created directly in the construction industry alone.

In addition, suppliers to the construction industry (including materials as well as services like planning, design, marketing, etc) create “indirect” jobs. Moreover, as workers in construction and related industries spend their earnings, there is a “multiplier effect” creating jobs locally and across Canada. The indirect and multiplier jobs generated by new residential development are spread more broadly across the province and country; however, many are located in central Alberta as well.

Construction is an important component of any municipality’s economy. Employed residents of a community or new development add to the local tax base. Creating the conditions to attract and retain the “best and brightest” creates sustainable economic prosperity, which leads to further growth.

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Vigorously Tackle the Underground Economy – Focus Enforcement Resources on Cash Transactions

Governments are losing billions of dollars annually through the activities of underground operators. For example, the Government of Ontario estimated in 2001 that average annual government revenue losses from underground activity in the residential sector likely exceeded $1.3 billion in that province alone.

Municipal Governments need to create the conditions and meet its’ obligations to ensure a “level playing field” for honest contractors who file their tax returns and play by the rules.

Local governments cannot rely on the Federal Government’s Contract Payment Reporting System (CPRS), which does not address the huge cash transactions in the underground economy.

Indeed, the Canadian Revenue Agency (CRA) has no way of determining whether the CPRS is having any impact on the underground economy. In a government evaluation of the CPRS, its results in encouraging people to fulfill their tax obligations are “unknown”. Contrary to Federal Government commitments, the CPRS has served no useful purpose in redirecting enforcement resources to those areas of non-compliance where cash transactions are prevalent. In short, the CPRS is both in effective in addressing the underground economy and a source of significant cost to the industry.

Municipal Governments can

Lobby the Federal Government to replace the CPRS with an effective approach to address the underground economy.
Lobby the Federal Government to change the definition of “substantial renovation” to expand the range of work that would qualify for rebates of the GST, which would encourage homeowners to engage professional renovation contractors rather than underground operators.
Encourage homeowners to engage professional renovation contractors rather than underground operators.
Encourage home buyers to engage professional new home builders rather than underground operators.
Require ALL firms and individuals in the construction industry to register for the GST, even if they wish to take advantage of the exemption for companies which operate below the $30,000 annual sales threshold.
Require ALL firms and individuals in the construction industry to be professional home builders or renovators with minimum qualifications.

With the complexity, and intellectual and technological requirements to build a new home or renovate an existing one to the Alberta Building Code and environmental performance benchmarks, and protect the health and welfare of workers, a professional and dedicated home builder or renovator is required.

Professional home builders or renovators don’t just dabble in home building or renovating, this is their livelihood and they have made significant investments of time and money to develop that livelihood.

By not introducing measures for home builders and renovators, the municipality is supporting an underground economy of unreported business transactions and robbing itself, and other governments of a corporate tax base; a tax base that could be used by provincial and federal governments to provide to municipalities for infrastructure funding.

However, without that injection of provincial and federal government infrastructure funding, the municipality is forced to invest more funds in capital works – or through borrowing, or more taxes on existing properties, or from more charges on new development – once again, a tax on growth – a disincentive for the future prosperity of the municipality.

By not introducing measures for home builders and renovators, the municipality creates an “un-level playing field. For example, for the professional home builder or renovator this has a negative effect on affordability for first-time buyer, renters and owners – costs for new home warranty, liability insurance, operating health and safety programs, utilizing legitimate building materials, paying for skilled personnel, environmental performance, design charettes, waste management, corporate tax, etc. are passed on to the buyer, renter or property owner.

For the “rogue” home builder or renovator, this leads to windfall gains because they do not purchase new home

warranty, or purchase liability insurance, or operate health and safety programs, or utilize legitimate building materials, or pay for skilled personnel, or consider environmental performance, or participate with community planning processes, or pay for waste management, or pay corporate taxes, or pay GST, or contribute to the social fabric of a community, etc. etc.;

The housing industry is a key part of your municipality’s economic infrastructure. Professional home builders are critical to a healthy viable economy in a community. Our industry is a key part of each municipality’s social and economic fabric – an essential resource for building and maintaining our homes.

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Develop Environmentally Responsible Development and Housing Policy – For Future Generations

The CHBA Member Builder’s Statement of Business Values and Commitments includes the commitment titled Environmental Commitment which includes the following statements:

“We acknowledge that the development of new communities, and the construction and renovation of homes, has a range of impacts on the environment, both today and in the future. We work with governments and others to develop environmentally responsible housing solutions.
We are committed to developing communities, and to building and renovating homes, in an environmentally responsible manner through utilizing appropriate technologies, materials, building practices and techniques.
We pursue continuous improvement and innovation in our processes, practices and products, in order to meet our environmental responsibilities.
We have criteria for selecting suppliers of goods and services which reflect our commitment to social, environmental and human rights principles and values.”

CHBA-Central Alberta is very concerned about environmental issues not just in Central Alberta but throughout Alberta given our commitment to the environment, existing water shortages, and increasing population growth leading to competition for available resources, and the Region’s and Province’s low ranking in Canada and developed world with respect to energy and resource consumption.

Municipal investment must be robust to meet timeframe requirements. The Subsidiary Body for Scientific and Technological Advice for the 1997 Kyoto Protocol and the United Nations Framework Convention on Climate Change, which Canada ratified, have established specific objectives for achievement by 2010 for urban planning and development including transportation; energy efficiency including industry and residential and commercial end-use; power generation including clean fossil fuels and renewable energy. Municipalities have obligations.

Collaboration is essential for success. Industry, businesses, service clubs, community organizations, media and other agencies can enhance municipal programs by providing human, financial and other resources, and other valuable input.

CHBA-Central Alberta has solutions that work. CHBA-Central Alberta’s Built Green™ program has a checklist of 179 options to address residential operational systems including among many others water conservation, waste management and indoor air quality.

Your Municipality, including Department Managers, can collaborate with Industry, businesses, service clubs, community organizations, media and other agencies to develop an Environmental Performance Implementation Strategy with objectives on:

Developing principles for your Municipality, its Citizens and Industry to adopt in addressing their environmental performance;
Developing clear environmental performance objectives and potential benefits;
Developing features of a Community Environmental Performance Strategy reflective of:

Clearly identified Water Conservation and Water Efficiency Measures and Incentives;
Support for water-use efficiency objectives in the National Building Code and National Plumbing Code;
Permitting innovation in Storm and Waste Water Management and Treatment;
Clearly identified Waste and Pollution Prevention Measures and Incentives;
Permitting innovation in waste reduction, diversion, recycling, and improving outdoor and indoor air quality;
Clearly identified Energy Efficiency Measures and Incentives in Building and Transportation Operations;
Permitting innovation in Operational Systems, Energy Production, Transportation Access and Transit Service;
Clearly identified Open Space Planning, Landscaping, Vegetation, Sedimentation Measures and Incentives; and,
Permitting innovation in Community Enhancements and Development including Land Use, Density, Green Construction, Site Planning, Unit Orientation, Pedestrian-friendly, and Environmental friendliness of building materials.

Developing clear, continuous, public education on community environmental performance.

CHBA-Central Alberta has a long tradition of advocating measures to encourage environmentally responsible housing, and will continue to support actions and strategies for influencing the development of environmentally responsible housing.

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