The Canadian government, like most governments around the world, is looking for innovative ways to get the country’s economic engine rolling once again. Most of these stimulus projects are large-scale infrastructure developments – roads, bridges and rapid transit lines. Not much chance of the average Canadian tapping into those mega-bucks. If you’re a homeowner, there is one incentive program meant just for you – and you’re living in it!

The federal Home Renovation Tax Credit (HRTC) is one way that homeowners can directly benefit from the government’s attempt to kick start the Canadian economy and get people back to work, especially in manufacturing and construction. It comes in the form of a “tax credit” on home renovations and improvements.  More than 4.5 million Canadian families are expected to benefit. So how can you count yourself in?

There are some things you need to know. First the HRTC is designed as a “family-based” tax deduction and it is for principal residences only. It is a one-time-only program that applies to home renovations and improvements undertaken after January 27, 2009, and before February 1, 2010. A wide range of things can be covered such as fixing a roof or getting a new carpet, installing a more energy-efficient hot water tank or fireplace, or even repairing the swimming pool. The criteria are quite broad – as long the work amounts to an “enduring” improvement to your property. Unfortunately it won’t pay for that big screen TV you’ve been coveting!

Here are the basic numbers: Every Canadian family can deduct 15% of eligible expenditures (the first $1,000 you spend doesn’t qualify) to a maximum of a $1,350 credit.  To be eligible for the maximum credit you would have to spend $10,000. The costs of labor and professional services, building materials, fixtures, rentals, and permits can all be included.

The HRTC makes most sense if you were already wanting or needing to make the renovations to your home. Although by participating in the program you are stimulating the Canadian economy, the expenditures should still make sense for your household budget. This tax credit is just an added bonus. Find out if this incentive program works for you by checking out: Canada Revenue Agency.

Sheila Walkington is co-founder of the Women’s Financial Learning Centre.