Canada's big bail-out

Housing construction in Canada is set to soar over the next two years...

The Canadian government will provide up to C$7.8 billion ($6.3 billion) in tax breaks and funding to spur housing construction over the next two years, a move it hopes will stimulate the flagging economy and boost hard hit industries such as forestry and building products suppliers.

The government said in its 2009 budget on Tuesday that the plan will include a renovation tax credit that could provide an estimated 4.6 million families with up to C$1,350 each. It will also provide money to build housing for low-income seniors and to renovate existing social housing projects.

Immediate boost to the economy

The new tax credit will be "available for renovations to the house or the cottage, for everything from a new furnace to energy-efficient windows to a new deck," Finance Minister Jim Flaherty said in his budget speech.

"It will give an immediate boost to our economy, and help create jobs."

The spending, including the tax credit, is part of a broader stimulus plan for the Canadian economy, which has been pushed into recession by the global financial crisis and declines in commodity prices.

"It's a good idea, partly because there will be slack freed up in that sector," said Derek Burleton, a senior economist at Toronto-Dominion Bank. "The question is how many households will take advantage of that. I think the jury is out."

Source: www.reuters.com