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construction tax holiday
April 2, 2020

Construction industry seeks tax holidays as COVID-19 vice tightens

COVID-19 has changed the way Ryan Leech’s company works.

He owns Brxton Masonry, a commercial and industrial masonry contractor. To keep his workers safe from infection, he’s imposed policies for daily cleaning of equipment, trailers, lunch facilities and vehicles. Employees are constantly hand sanitizing.

Meetings that used to be face to face are now happening in the virtual world, creating“communication breakdowns” that slow down work.

“We have no idea how long we’re able to continue working in the inefficient manner that we are,” he said.

That means higher costs. At the same time, contracts are drying up. Leech just lost a contract on Tuesday, and expects to get a lot more emails cancelling projects in the days ahead.

He’s convinced he’ll have no problem demonstrating the 30-per-cent revenue decline the federal government is asking for to grant 75-per-cent wage subsidies.

That will help. But it might not be enough. Caught between the vice of higher costs and lower revenues, construction companies are pushing the provincial government to grant tax holidays as they struggle with cash flow and fear bankruptcy.

Mark Cooper, president of the Saskatchewan Construction Association, said the COVID-19 pandemic is another hit to an already-beleaguered industry. He called the situation “bleak.”

A recent survey he sent out to members showed that 53 are already in moderate to severe financial distress, and fully 92 per cent expect to be there within three months if things don’t change. Almost two-thirds have already laid off workers as a result of the pandemic.

SCA members report shuttered suppliers, customers cancelling jobs and shortages of protective equipment also coveted by healthcare workers.

So far, the province has granted tax and utility deferrals to help take the pressure off business. But Cooper called that “a really bad plan.”

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