Open Letter to the Minister of Finance about HRTC

March 6, 2009

The Hon. Jim Flaherty
Minister of Finance
House of Commons
Ottawa, Ont.
K1A 0A6

Dear Minister Flaherty,

As President of the Walls Windows Furnishings Association, a registered non profit trade organization representing many of the participants of the window covering industry, I feel that the government has erred in the exclusion of draperies and curtains from the Home Renovation Tax Credit (HRTC). This could provide important help to our industry in these difficult times.

I believe that draperies, and especially custom draperies, are exactly the type of product that should be covered in this program. The HRTC states that an eligible expenditure “must be of an enduring nature and integral to the dwelling”. Custom draperies, as well as other custom window treatments, are manufactured for the specific dwelling and remain there for years. They are produced in such a manner to provide the necessary light control, privacy and insulation required by the family in the home (custom draperies have the ability to provide the highest insulating factor of any window treatment). This certainly meets the standards of “enduring” and “integral”.

Due to the structure of our industry, the inclusion of window treatments (particularly custom draperies) could provide the type of benefit to our economy that I believe is the intent of the HRTC.

• This is a retail industry with the vast majority of custom draperies sold by small independent business including decorators, designers and small retail stores.
• Custom draperies have a very high labour content and 100% of the custom draperies sold in Canada are sewn in Canada, primarily by small businesses. One order can keep a small workroom busy for a week or more.
• Most of the fabric and hardware used in the manufacture and installation of custom draperies is supplied by independent Canadian distributors.
• Many of the participants in this industry are family businesses whose family members are ineligible for Employment Insurance should their business fail. This program could literally help keep some of these businesses from closing.

On February 25, 2009 the government’s web site (www.cra-arc.gc.ca) modified the example of eligible and ineligible expenditures. Unfortunately the definition listed would exclude most window treatments because few are “directly attached to the window frame”. In order to provide effective insulation and light control they are usually attached to the ceiling or wall of the dwelling. In addition, the clause “whose removal would alter the nature of the dwelling” sets a standard that no product can satisfy. The removal of wall to wall carpeting in a home does not alter the nature of the dwelling. Does that mean wall to wall carpeting should be ineligible? Why should window coverings be required to meet this standard?

A person could go to a large retailer, purchase flooring and install it themselves. The flooring cost would be an eligible expenditure. The economic benefit would go to the retailer which is likely foreign owned and the plant in China that produced the goods for the retailer. We have a Made in Canada proposition that is not eligible for the HRTC. This is not fair.

On behalf of the thousands of small business people who depend on this industry to survive, I am asking that the HRTC be amended so that custom window coverings are an eligible expenditure and not subject to any qualifying clause such as the one on your web site. I appreciate your taking the time to review this issue and would be pleased to discuss it with you or any other member of the government should you require further clarification.

Respectfully

Richard Turner BBA, MBA, CMA
President

cc Chisholm Pothier
Press Secretary
Office of the Minister of Finance

Cc Jack Aubry
Media Relations
Department of Finance