London-area renovators fear the new HST will entice more homeowners to turn to risky, under-the-table contractor.

“The council worries that the new tax, which combines the federal 5% GST with Ontario’s 8% sales tax and extends the provincial levy to renovation labour and materials for the first time, will prompt more and more cash-conscious homeowners to risk under-the-table, cash-only handshake renovation deals.

But they may not realize just how big a risk they’re taking, says Zoltan Balogh of London’s Duo Building, a past-chairperson of the LHBA council.

“There is no record-keeping for what has been done and what needs to be done, no contract, no accounting, no tracking of payment,” he says.

“When things go wrong, everything can fall apart . . . (and) if the contractor walks away, the homeowner has no recourse . . .

“When there is no contract, the homeowner becomes the general contractor who has to deal with liability, for example if a worker gets hurt on the job. Liability becomes the responsibility of the homeowner.”

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