Discover Your Canada Act
An Act to amend the Income Tax Act (travel expenses)
Massimo Pacetti Liberal
Introduced as a private member’s bill. (These don’t often become law.)
Introduction and First Reading
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Discover Your Canada Act
Private Members' Business
May 9th, 2013 / 5:25 p.m.
Guy Caron Rimouski-Neigette—Témiscouata—Les Basques, QC
Mr. Speaker, this bill is truly based on good intentions, to encourage tourism in Canada by Canadians. Of course, taxpayers are in favour of more tax credits, especially when this would enable them to reduce the cost of their family vacations by a considerable amount.
However, before saying that this deduction would be good for both families and businesses, we should look closely and weigh several factors, including the cost of the bill itself, and thus its consequences for the government's revenue, Canadians' expected participation rate, the real effects of such a deduction on Canada's tourism industry and the additional complexity of the tax system.
The cost of this bill was estimated by the former Parliamentary Budget Officer, Kevin Page. He responded to a request by the House of Commons Standing Committee on Finance for an estimate of the lost revenue to the government if such subsidies were granted. His conclusions were not really surprising.
Since no revenue source was proposed to counterbalance the expenditures related to this bill, Bill C-463 would result in reduced tax revenue.
Thus, according to the Parliamentary Budget Officer, the net impact of Bill C-463 on federal tax revenue would be between $90 million and $120 million in 2017, in constant 2013 dollars.
Yet the hon. member for Saint-Léonard—Saint-Michel claims confidently that the economic spinoffs from this bill would be sufficient to cover the cost of these deductions or, in the worst case, would be revenue-neutral for the government.
It is undeniable that such a bill would generate economic spinoffs. How big will they be? That is the question. If the hon. member has some calculations or more information on this, it could be interesting to hear about them, because even the Parliamentary Budget Officer was not able to establish an estimate.
We must determine how much use the taxpayers would make of this tax credit and what impact it would have on tourism. Will there really be new travel? Will people simply change their means of transportation or decide to go across one more provincial border in order to claim the tax credit? If they lengthen a planned trip in order to cross three provinces instead of two, only one part of the trip should be counted.
The Parliamentary Budget Officer added that he made his calculations based on the assumption that the proposed deductions would not cause carriers to increase prices, since if that were the case, a corresponding decline in induced demand could be expected.
It is a matter of aligning complex calculations with behavioural factors that are rather subjective. As it stands, we do not really have any credible figures, except those from the Parliamentary Budget Officer. Those are the figures we will use to make a decision.
It is not enough to simply bring in this measure. The public must know that it exists to be able to take advantage of it.
The costing of the bill is based on the assumption that all those who are eligible will use the tax credit. We know that is not true, but we have no choice but to take that into consideration. However, that assumption skews the figures in favour of the proposal.
On the one hand, travellers who do not use the tax credit will save the government money by not claiming the money they are owed. On the other hand, their travel cannot be included in the statistics used for costing Bill C-463, since they would have travelled anyway.
Something really bothers me about my colleague's logic. He claims that the bill is meant to encourage Canadians to explore, appreciate and discover their country, to meet other Canadians and experience culture. He said the following when he introduced the bill:
We should remove some of the financial barriers that stop them from exploring this great land and tell them to go out and discover your Canada...
With all due respect, I do not see how families with financial struggles would prioritize travel across the country. They may want to, but times are tough for many people.
My NDP colleague from Abitibi—Témiscamingue also questioned why the member chose the rule of crossing at least three different provincial boundaries, and she did so very eloquently. I agree that if we want Canadians to travel more within the country, they should be able to choose their destination. In her example, she explained that someone who crosses three provincial boundaries does not necessarily travel further than someone who goes from the far north of the Northwest Territories to southern Saskatchewan.
Acknowledging the limitations of his bill, the member said that the main reason for his bill was as follows:
Canadians have to start getting to know one another and discovering Canada. The only way to do that is to get them to travel as far as possible in the regions. When I talk about the regions, I am not talking about going from an urban area to a rural area. I am talking about travelling to eastern, western and central Canada. That is how people can get to know one another.
To be honest, I do not see the difference. In fact, from what I understand, Canadians will prove they want to visit Canada and get to know their fellow Canadians by travelling across three provinces. That is rather ridiculous. He spoke at length about Canadian tourists who buoy up American tourism, so he should be happy simply that someone decides to travel in Canada.
After looking at the tax credit requirements, it is clear to me that the three-province rule was put in place to try and restrict accessibility and eligibility in some way. According to statistics from the Parliamentary Budget Officer, 92% of trips within Canada are taken by plane, train or bus, and the vast majority of those, 88%, are not work-related and would therefore be eligible for the tax credit proposed in Bill C-463.
However, as far as the distance criterion is concerned, travellers cross at least three provinces in only 23% of travel by airplane within Canada. That being said, people who can afford to travel in three provinces are, for the most part, relatively well off. What is more, to benefit from this tax credit, a person would need a high enough income to pay taxes and for this non-refundable credit to make a difference in the taxable income. This is an important aspect of the bill that, I hope, in no way reflects what the member was getting at.
Travel, within the meaning of this bill, is considered a luxury for many Canadians. Many do not have the means to travel very far, or at least not far enough to benefit from the tax credit. According to the Parliamentary Budget Officer, a maximum of 10% of tax deductions for travel would come out of this bill, which is equivalent to roughly $110 million out of $1.1 billion.
Is it worth the trouble? There may be less expensive and more sustainable ways of encouraging tourism and helping people to travel. I am not sure this is the best way to go about it, especially at a time when we are trying to have the government simplify the tax system and reduce economic inequality. I think it would be hypocritical to encourage a new tax credit that goes against the primary goal of the tax system, which is to distribute wealth, and makes it less progressive.
The Parliamentary Budget Officer confirmed that when he said that “the benefits of tax measures proposed under Bill C-463 are anticipated to concentrate to higher income earners”. I am not necessarily talking about this credit in particular, but the direction of the tax policy in general. To be more progressive and more effective, the tax system has to remain as simple as possible.
To conclude, despite what the hon. member thinks, I believe that many trips that do not follow the three-province rule contribute just as much to helping people learn about socio-cultural differences. As a result, I do not see why they are completely disregarded. If the intent really is to have people travel and discover Canada, simply travelling from one province to another should be enough. Whether a person leaves from downtown Toronto or from Calgary to get to Chaleur Bay, the trip will be no less memorable.
With that thinking, the member is minimizing the unique character of each province and is reinforcing certain cultural stereotypes, like the idea that western Canada is all the same, regardless of the province, when that is not true. I truly hope that everyone has an opportunity to travel; not only is it pleasant, but it is also enriching. However, I am not sure that it should be a government priority, quite frankly. I think the $200 million or thereabouts could be better invested right now.
In short, I understand the member's intent, which is commendable. It is very important to encourage Canada's tourism industry. We support the intent of the bill. My riding in particular, Rimouski-Neigette—Témiscouata—Les Basques, depends largely on tourism, an important industry. However, the bill and its tax credit will do nothing to achieve the objectives or to help Canadians get to know each other better. This bill creates a tax credit that will benefit the wealthy more than everyone else.
The House resumed from March 27, 2013, consideration of the motion that Bill C-463, An Act to amend the Income Tax Act (travel expenses), be read the second time and referred to a committee.
Discover Your Canada Act
Private Members' Business
March 27th, 2013 / 8:05 p.m.
Christine Moore Abitibi—Témiscamingue, QC
Mr. Speaker, that is too bad because I have a lot to say.
Bill C-463 seeks to amend the Income Tax Act to give taxpayers a deduction for the expense of purchasing tickets for themselves and their children for leisure travel by airplane, train or bus if the travel involves crossing at least three different provinces. We understand that the hon. member is trying to encourage Canadians to travel within Canada and to discover other regions. This intention to promote travel within Canada and to have people discover other provinces that they might not otherwise is good.
However, is this the right solution? Absolutely not. I would say this is a flop. First, this bill targets people who already travel within Canada or who are likely to do so. For many Canadian families who are already struggling to make ends meet, this measure will not make much of a difference. In my riding, families tell me they would like to come see me in Ottawa, but they do not have the money to get here.
In this bill, they are being asked to travel through three different provinces. That makes absolutely no sense. Families who are struggling financially are not going to discover Canada. This measure does not help them one bit because it is a non-refundable tax credit. In order to benefit from it, one has to pay taxes. Families with a very low incomes will never be entitled to this credit, so this is of no use to them.
It is very clear that only well-off families would benefit from this bill. If you are poor, you will not travel across Canada, but if you are rich and you can afford it, the government will help you visit Canada. This makes absolutely no sense to me and it is not the right approach to presenting a bill.
Let me focus for a minute on people living in Quebec and Ontario. The bill talks about crossing three borders, which means going to four different provinces. We estimated the distances involved using Google maps. I used as an example someone living in my riding, in the city of Rouyn-Noranda near the Ontario border. In order to qualify for the tax credit, that person would have to travel at least 2,300 km. However, someone living in B.C. or Alberta would only need to travel 1,500 km. The province of origin creates inequalities.
Things get even worse for people from Whitehorse, Yellowknife and Nunavut: since they are travelling south, crossing three borders becomes a near-impossible feat. The distances involved are truly vast. Obviously, it does not make much sense to base a tax credit on a requirement to cross three borders.
One only has to look at a map of Canada to see that the three-border rule is illogical, given the sheer size of our country and the way it is divided, with huge territories and smaller provinces. Logic alone shows that the bill would be very difficult to implement, and that it would create inequality between provinces.
Second, it is true that travelling can be a hassle. It is important to note that Canada's domestic transportation networks are not ideal. Transportation services are lacking and often costly for Canadian families, and even for tourists. For example, the Northlander, which recently shut down, serviced northern Ontario communities as well as communities adjoining my riding. Obviously, rail service is a provincial responsibility; nevertheless. there used to be a train where now there is none.
Often, passengers who take the bus are looking to head in a specific direction. That said, the fact that there are no buses that run from one end of Ontario to the other makes no environmental sense. One has to get to Montreal first and then cross Ontario before heading north. The bus routes make no sense. What is more, the tax credit does not apply to cars. People have to make a few detours in order to qualify for the tax credit. That makes absolutely no sense. We are penalizing those who live in remote places where trains and buses are scarce. We are forcing them to make a bunch of detours in order to qualify for the tax credit.
This penalizes people who live close to a transit line, in areas regularly serviced by public transit.
Discover Your Canada Act
Private Members' Business
March 27th, 2013 / 7:55 p.m.
Tilly O'Neill-Gordon Miramichi, NB
Mr. Speaker, thank you for the opportunity to speak about Bill C-463, which is sponsored by the MP for Saint-Léonard—Saint-Michel. Before I get into the details of the bill, I would like to begin today by taking a few moments to speak about the important contributions tourism makes to our economy in every region of our great country.
Each year, millions of visitors from around the world and from across Canada travel our great country to discover its many natural and man-made wonders. The industry that serves those people is an important part of our economy. Indeed, thousands of Canadians rely on tourism for their jobs and livelihoods.
While large hotel chains, airlines and tour operators are important, about 98% of Canada's tourism sector consists of small and medium-sized businesses, such as lodges, wineries and spas. As such, it is mostly made up of thousands of private sectors and not-for-profit organizations and associations, as well as departments and agencies at all three levels of government.
In 2011, tourism accounted for approximately 2%, or $31.1 billion, of Canada's gross domestic product, some $78.7 billion in revenues, over 600,000 direct jobs and 3.5% of total employment in Canada. Tourism-related businesses often work with destination marketing organizations, which exist at the municipal, regional, provincial and national levels. These organizations promote development and market Canada's various tourism destinations and experiences.
Through various agencies, the three levels of government directly run many of Canada's most important tourism attractions, including parks, museums, sports stadiums and convention centres. Governments also establish policy and legislative frameworks and administrative practices that support and affect how our tourism businesses operate.
The diversified nature of the tourism sector makes it critical that all partners find ways to collaborate to build world-class destinations that offer first-class services and uniquely Canadian experiences. In the fall of 2011, after consulting with the men and women who help to make Canada such a great place to visit, it became very clear that a new federal tourism strategy was needed to help position Canada's tourism sector for long-term growth and global competitiveness.
The strategy focused on four priorities. The first was to increase awareness of Canada as a premier tourist destination. Second was to facilitate the ease of access and movement for travellers. Third is encouraging product development and investments in Canadian tourism assets and products. Fourth is fostering an adequate supply of skills and labour to enhance visitor experiences through quality service and great hospitality.
Canada's tourism industry has expressed support for the four priority areas and recent federal actions to foster tourism, including investments in tourism, infrastructure and marketing, through Canada's economic action plan and the signing of an approved destination status agreement with China.
In 2008 to 2009, during the global economic crisis, we invested more than $530 million in direct support for the tourism sector. This included more than $360 million in product development and tourism infrastructure, such as convention centres, and $113 million in tourism marketing. An additional $782 million was spent, largely on artistic, cultural and sports-related activities that have an indirect impact on tourism. We also made significant infrastructure investments in roads and bridges in support of this industry.
In addition to this ongoing support, Canada's economic action plan provided economic stimulus to the visitor economy through direct funding from our key tourism events, national parks, cruise infrastructure and marketing. Under the plan, we also invested billions of dollars in transportation and community infrastructure and in economic development that will provide enduring benefits to the sector. These actions supported the tourism industry through the economic downturn, and the sector continues to be resilient in the face of today's frequently volatile environment.
Given these strengths, we do not believe the proposed amendments to the Income Tax Act would be necessary. Although Bill C-463 would be intended to encourage Canadians to discover Canada by recognizing the costs of travel involving the crossing of at least three provincial boundaries, it is unclear whether and to what extent the proposal would motivate individuals to travel more, or to change their travel plans to take advantage of the tax deduction. Moreover, the proposal would have a number of deficiencies and would raise a number of equity and fairness concerns. In particular, it would recognize only the costs of tickets for travelling by bus, train or air. Other travel expenses, such as lodging, which may be significant for travel outside an individual's home province, may well present a deterrent for people who might otherwise take advantage of the proposed deduction. This deficiency would likely create pressure to extend tax relief to travel expenses that are not eligible under this proposal. Such extended tax relief would come at a significant fiscal cost. The deduction would provide significant benefits to those who would have incurred eligible travel expenses in any case. As such, it would represent a windfall gain to these individuals without increasing tourism.
The proposed deduction would apply only for airplane, train or bus transportation. It would not apply to travel by other modes of transportation, such as motor vehicle or boat, which may favour certain urban centres or regions over others. The bill would also stipulate that the percentage that could be deducted from income would vary, depending on the mode of transportation: 100% for travel by bus; 75% for travel by train; and 40% for travel by airplane. There is no policy rationale for why particular modes of transportation should be provided different tax treatment. Those travelling by air or train would view the measure as unfair, and rightly so.
In addition, the proposed measure would likely provide more tax relief to higher-income individuals, for two reasons. First, the deduction would apply to discretionary travel expenses that are typically incurred by higher-income individuals. Second, the value of the proposed deduction would be greater for individuals who are in higher personal income tax brackets.
To conclude, the bill would be inconsistent with existing tax policy, which generally does not allow taxpayers to deduct personal expenses and could entail significant costs. Indeed, implementing this deduction could cost about $215 million annually in foregone federal revenue, starting in 2017. It would also entail a cost for the provinces that use the federal definition of “taxable income”, in other words, all provinces except Quebec. It is unclear to what degree the proposal would induce individuals to travel more or to change their travel plans. For all these reasons, and others, my colleagues will mention as this debate progresses that our government opposes Bill C-463.
Discover Your Canada Act
Private Members' Business
March 27th, 2013 / 7:45 p.m.
Scott Brison Kings—Hants, NS
Mr. Speaker, it is with pleasure that I rise today to speak to Bill C-463, the discover your Canada act. I want to thank my colleague from Saint-Léonard—Saint-Michel for introducing this legislation and for giving the House an opportunity to discuss the importance of our tourism sector and to address Canada's travel deficit.
The goal of the bill is to make it easier for Canadians to travel within their own country. It would amend the Income Tax Act and create a tax credit of up to $2,000 for Canadian taxpayers who cross at least three provincial or territorial borders on personal travel. This credit would help reduce the cost of holiday transportation by covering eligible travel expenses. Taxpayers would be able to claim the amount not only for their own expenses but also for their children. This would provide much needed support for Canada's tourism sector.
According to the Tourism Industry Association of Canada, this sector represents more of Canada's GDP than the agriculture, forestry and fisheries combined. It generates $78.8 billion of economic activity annually. It is responsible for more than $15.9 billion of export revenue despite this growing travel deficit. It generates $10 billion in federal government revenue and fosters over 600,000 jobs across the country.
Tourism plays an important role in the economy in my riding in Nova Scotia. People come to Kings—Hants from all over the country and all over the world to marvel at the world's highest tides, to come to the beautiful Annapolis Valley, to come to Windsor, the birthplace of hockey, and also to enjoy our growing food and wine industries.
Many of us in the House represent Canadians who make a living in the tourism sector. We know how vital this sector is to the Canadian economy. We also know how worried participants in this sector are about the future of this industry and the growing travel deficit.
There is a gap between how much money Canadian tourists are spending abroad and how much money international tourists are spending here in Canada. This gap is growing, and the government used budget 2012 not to address it but to slash support for tourism in Canada. By cutting the Canadian Tourism Commission's budget by $14.2 million each and every year, the government is cutting the commission's ability to promote Canada abroad and to attract international tourists to Canada.
David Goldstein, president of the Tourism Industry Association of Canada said:
The travel deficit has widened dramatically since 2002.... We used to be the seventh in the world in 2007 when it came to international arrivals. We are now the 18th. We used to have 20 million international visitors in 2002 and now have 16 million....
The fact that we are now contributing almost a third to Canada’s trade deficit is somewhat shocking....
Last December Mr. Goldstein told The Globe and Mail the Conservative cuts are hurting the sector.
While other countries are making tourism a priority and investing in marketing to attract international visitors, Canada lags behind. Australia, for instance, outspends Canada by three to one in terms of tourism marketing dollars, yet according to the Canadian Tourism Commission every dollar invested in direct advertising is actually earned back 37 times over.
The Canadian Chamber of Commerce has also asked the government to make tourism a priority. In a recent report on tackling the top 10 barriers to competitiveness, the chamber identified uncompetitive travel and tourism strategies as one of the most serious barriers to success in the Canadian economy. That report cited that tourism is a major industry in every reach of the country, but it is struggling.
Instead of damaging the sector's ability to market itself abroad, the government should recognize the risks associated with Canada's travel deficit and reverse these cuts to our tourism sector. We need a real tourism strategy and this legislation could be part of that. Bill C-463 gives the House the opportunity to help reduce our travel deficit by encouraging more Canadians to discover their country and spend their tourism dollars here at home. Canadians are onside. According to Harris/Decima, a public survey conducted last fall showed 70% of Canadians support the idea of a tax credit for travel within Canada.
It is not just about dollars and cents and business. It is about national unity and the reality that encouraging more Canadians to travel within our country and to understand regions within our country is important.
I have heard some of my colleagues from both the Conservative Party and the New Democratic Party speak to the bill. I can accept that perhaps they can identify a design flaw or a problem that could be addressed at committee. However, the reality is that the intention of the bill is sound. The direction of the bill makes sense. Canadians want to find more ways to support their ability to travel within Canada.
I would urge members from all parties to support the legislation and to send it to committee. If there are technical design flaws that could be addressed at committee, that is fine. We are open to that. My colleague is open to that. However, we need to send it to committee in order to have a broader discussion on how we can strengthen tourism in Canada and, more fundamentally, how we can unite the country by giving more Canadian families the opportunity and the incentive to travel within Canada.
I heard my Conservative colleagues say earlier tonight that it would complicate the tax system by providing an incentive for somebody to do something. My goodness gracious, the Conservatives have grown the tax code by one-sixth since coming to power, with tax incentives for almost everything. The reality is that they have done that because people like a tax incentive to pursue one behaviour or another. The reality is that travel within our own country is a meritorious and positive economic activity, but it is also good for national unity.
Why would we not support any initiative that would enable Canadian families to spend more time within their country and spend more of their money in other regions of the country? What a boon to national unity.
I was born in 1967. A few months before I was born, my parents were at Expo 67. Now I cannot say that their trip to Montreal that summer was totally responsible for what happened, but how many Canadians, in 1967, went to Montreal as part of Expo 67? At what point in our nation's history were we as united as a country as we were when families from across the country went to Montreal in 1967?
I am not saying that this private member's bill would achieve the same level of national unity that Expo 67 did, but it is a start. It is a beginning. It is a recommencement of that spirit of voyageur that unites Canadians so that we will travel to other parts of our country and we will experience other cultures. God knows how many more parliamentarians would be born as a result of that.
I want to tell members that I am proud to be voting for and supporting Bill C-463 because I want it to be sent to committee. I want it to be studied. I want all parties to be able to contribute to shaping a national tourism strategy, the genesis of which might just be part of this legislation.
I think if there is a concern about eligibility, if there is a concern about progressivity and about how we could ensure that low-income people would benefit from this, let us address it. Perhaps if we would ensure it is fully refundable, that would address the concerns, for instance, for low-income Canadians. Certainly the tax credits offered by the government for disability tax credits, caregiver tax credits, firefighter tax credits, all these different tax credits, have been non-refundable. I do not support that. I believe full refundability makes sense in order for this to be progressive.
Whatever the issues that exist, they could be addressed at committee. However, it is important that we support this piece of legislation, that we send it to committee so we can have a fulsome debate on how to move Canada's tourism industry forward and also how we could unite this country around the majesty and the beauty of her geography.
Discover Your Canada Act
Private Members' Business
March 27th, 2013 / 7:30 p.m.
Bernard Trottier Etobicoke—Lakeshore, ON
I know that the member for Saint-Léonard—Saint-Michel is a proud Canadian, and I commend his efforts to give Canadians the opportunity to get to know their country better.
This bill is really just a novelty, a gimmicky distraction costing taxpayers over $200 million a year, without really encouraging tourism within Canada. While the member says his intent is to promote tourism, not only is his ill-considered proposal unfair, but there is absolutely no evidence it would have any effect whatsoever.
In fact, the Tourism Industry Association of Canada has already dismissed this Liberal idea as completely out of touch with the challenges faced by the Canadian tourism sector, saying, “we don’t think this is a particularly useful mechanism because Canada’s challenge is not a lack of domestic travel”. Indeed, our challenge is finding ways to compete in the international travel market.
In contrast, our government promotes travel in Canada by funding cost-effective programs and events proving that, unlike the Liberals, the Conservative government supports the tourism sector, while safeguarding taxpayer dollars.
Let me start by briefly highlighting our government's role in supporting the tourism industry in Canada.
Canada's strong economic performance during the global recession has been the envy of the world. While these initiatives may not have always been the most talked about, Canada's economic action plan provided funding to several organizations to stimulate the growth of tourism during the global economic downturn and it helped promote our country as a destination for Canadians and visitors alike.
During this time, economic action plan funding was provided to things like the National Trails Coalition, Parks Canada and its National Historic Sites, the Canadian Tourism Commission for greater domestic and international marketing and a grand total of 79 festivals and events through the marquee tourism events program. Our economic action plan also increased tourism-related infrastructure through investments in everything from local parks to convention centres.
Furthermore, our government already supports programs to discover Canada, programs geared to encourage Canadians to explore what is happening culturally outside their own backyards.
In particular, the Department of Canadian Heritage invests over $105 million every year to provide almost 100,000 youth with opportunities to learn about their country and connect with one another through its youth programs. I should add that these programs can benefit all Canadians, regardless of what region they live in, a point I will return to later in my speech.
In addition, the government supports programs to foster Canadian identity for people of all ages such as celebrate Canada, which encourages Canadians to come together in their communities to discover and appreciate the wealth and diversity of Canadian society and understand the significance of the rich heritage Canadians all share. These types of measures and programs achieve two important results: they boost our economy and they promote tourism in Canada.
Beyond what our government already does to boost tourism in Canada, the bill before us today is fundamentally flawed. Providing an income tax deduction for travel expenses of up to $2,000 for individuals and each of their dependants under the age of 16 raises concerns about fairness.
Let me explain.
Under the proposal, only travel within Canada that crosses three provincial boundaries is eligible. Here is the first problem with that. This requirement may disproportionately benefit some regions and favour particular travel routes. Given the shorter distances between provinces in Atlantic Canada, less travel would be required to meet the eligibility criteria.
Furthermore, the three provincial boundaries rule would unquestionably favour particular routes. For example, travelling from Halifax to Toronto by train or bus would cross three provincial boundaries and qualify for tax relief, whereas air travel, assuming the flight uses U.S. airspace, might not qualify.
The list of inequities continues. The value of the deduction would depend on the mode of travel: 100% for travel by bus; 75% for travel by train; and 40% for travel by airplane. From the onset, this makes no sense.
It bears repeating that the breakdown of how the deduction would be calculated makes no sense. Why should someone travelling by bus get a higher deduction than someone travelling by train or plane? Why does it exclude travelling by car or even by boat? There is no question this bizarre distinction is completely unfair.
Not only that, but Bill C-463 would provide more tax relief to higher-income individuals who tend to travel more and spend more on travel than lower-income families. Not only would higher-income individuals generally claim more, but the tax relief stemming from the proposed deduction would also be higher for individuals who were in higher personal income tax brackets, which vary from 15% to 29% federally.
Our government has been very clear. We believe in tax fairness for all Canadians. This discrimination alone is reason enough to vote against the bill, but there are many other reasons to vote against this bill.
On this side of the House, that is the government side, we believe a law that is meant to encourage interprovincial travel should, at the very least, encourage Canadians to travel. With respect to Bill C-463, there is no evidence that the proposal would encourage individuals to travel more often, over $200 million a year with no result. Not only that, but individuals who plan to travel anyway would gain significant benefits from the deduction. It would represent a windfall, again an unfair tax advantage without actually increasing tourism within Canada.
Furthermore, the proposal only recognizes the cost of tickets for traveling by bus, train or air, not other major travel expenses, such as lodging or car rentals, that may continue to be an obstacle for people to travel.
Finally, as I have already mentioned, the cost of the proposal would be significant. Preliminary estimates suggest that based on existing travel patterns and expenditures, the passage of Bill C-463 would cost about $215 million a year.
In a time of a certain fiscal restraint that we have now, it is not the time for a novelty Liberal subsidy, or as National Post columnist Kelly McParland put it, “silly ways to spend even more borrowed money trying to manipulate Canadian behaviour, just like the old days”.
Our government has been working diligently to keep taxes low and the economy strong in the face of turbulent economic challenges from across the world. Our economic action plan has delivered results for Canadian families. We will stay the course.
I would ask every member of the House to vote against the bill. It is plainly not in the best interests of Canadians.
Discover Your Canada Act
Private Members' Business
March 27th, 2013 / 7:10 p.m.
Massimo Pacetti Saint-Léonard—Saint-Michel, QC
Mr. Speaker, I am pleased to speak about my private member's bill, which I call “Discover Your Canada”.
This bill seeks to amend the Income Tax Act in order to make travel within Canada more affordable for Canadians by providing income tax deductions on the expense of purchasing tickets for taxpayers and their children, for non-business travel by airplane, train or bus, if travel covers at least three different provinces.
During the many speeches we will be hearing on this bill, some members of Parliament will erroneously discuss the potential high cost of the bill. However, this bill is intended to be about unifying Canadians and not about finances. As an accountant and former chairman of the finance committee, I am usually the first person to want to ensure that the numbers add up. I have written Bill C-463 in order that the federal treasury would not be impacted and that this bill would be revenue neutral, while perhaps even being an economic generator.
Therefore, the primary focus of this bill would not be financial. As is evident in the name “discover your Canada act”, I want more Canadians to have the option to travel across this country, something that is usually only an option for the more affluent. I want as many Canadians as possible to be able to visit other parts of their great country, and not as a layover to a foreign destination, not as a two-hour drive up to the cabin, and not as a business trip, where all they will see is an airport or perhaps a conference room. We want Canadians to see a part of Canada that is as distant and as different from their own little corner of this great land as possible.
I first got this idea years ago while I was in Vancouver chairing the finance committee during its pre-budget consultations. Anyone who has been to Vancouver can tell us that there are some impressive sights to behold. As a visitor walking the streets after a long day of witnesses telling us how the government should spend its money, I looked up and was astounded by what I saw. I thought that if more Quebeckers would see what I am seeing right now, none of them would want to separate. It was every bit as beautiful as my hometown of Montreal, but it was also very different. The vastness of the Pacific Ocean was different from the charm of the St. Lawrence River. The grandeur of the Rocky Mountains was different from the soothing humility of Mount Royal. The modern architecture was different from the classic beauty of Old Montreal. Pictures can never do justice to Canadian scenery, and one can never truly appreciate and feel like it is part of his or her natural heritage until he or she can see it and touch it in person.
In the past, even prior to being a member of Parliament, and afterwards of course, I have been to places in Canada as far east as Newfoundland, as far west as British Columbia and as far north as Yukon and the Northwest Territories. I have found in each place a newer and deeper appreciation for Canada. I am certain that all Canadians would have a better sense of their own national identity if they just had a chance to see parts of this country that are out of reach for some of them now. This is why I have chosen to refer Bill C-463 to the heritage committee instead of the finance committee. The discovery of Canada act would not be about dollars and cents; it would be about allowing Canadians to take ownership of their national heritage by providing them with a bit of assistance and incentive to see their own country.
Having said all this, it would be unlike me not to discuss costs at least a little bit. The deductions I propose in the Discover Your Canada Act are not extravagant. The deductions are also capped, and conditions to ensure that the deductions are not abused are written into Bill C-463.
As a result, the upper threshold of deductions will not be reached by most eligible travellers, as was confirmed by a Parliamentary Budget Office study I requested for this bill soon after it was introduced.
According to newspaper articles, the government says that this bill will cost money. However, even if the government is able to justify its estimate of the cost of this bill, nothing can compare to the $5.2 billion that Canadians spent in the United States in 2012.
During the second quarter of 2012, during trips to the United States, Canadians spent $3.4 million, the most money in 20 years. In June, they spent a record $1.9 million. This increased spending is a result of the increase in duty free allowances, which went from $50 to $200 for a stay longer than 24 hours, and from $400 to $800 for a stay of 48 hours. We are talking about travel abroad.
According to the government, this will result in the loss of hundreds of millions of dollars in 2013-14. This is another gift for the American industry.
It is easy to add tax deductions. Administering them will cost the Canada Revenue Agency nothing extra. The Parliamentary Budget Office said so as well.
The last thing I want is for this bill to create more red tape.
When a new income deduction is proposed, there is always a measurable cost, but it is not so easy to calculate the economic spinoffs.
The Parliamentary Budget Office acknowledges that Bill C-463 will generate economic and financial spinoffs, but it cannot calculate those with certainty.
Generally speaking, I can say with confidence that increased travel within Canada is bound to generate positive economic and financial spinoffs.
Increased revenues from provincial and federal sales taxes are one such fiscal benefit.
I know that when I travel, I need to stay somewhere, I need to eat, and I want to take in some local attractions. I like to enjoy a night out on the town, and I enjoy bringing souvenirs back to family and friends. All this costs money and all this will contribute to government revenues in the form of federal and provincial sales tax.
Increased economic activity from more Canadians travelling domestically will also benefit the tourism industry in Canada in addition to industries that see spinoff benefits from increased tourism.
According to Industry Canada, almost 600,000 jobs in Canada are directly generated by tourism in every province and region of the country.
If that is not specific enough, I encourage each member in this chamber to visit the Tourism Industry Association of Canada website, where a breakdown of tourism jobs per riding is available.
I took examples from the ridings with the largest cities in the country. Tourism represents 4,905 jobs in Elmwood—Transcona, 5,460 jobs in Dartmouth—Cole Harbour, 9,445 jobs in Vancouver South, 10,080 jobs in Calgary Centre, 11,150 jobs in Trinity—Spadina, and 11,170 jobs in Laurier—Saint-Marie in downtown Montreal. These are just a few examples. There is a list of all the ridings across Canada.
These are real jobs for real people in each and every one of our communities. We need to be cognizant of what stimulating this industry can mean to local economies and the national economy as a whole. The possible benefits are too big to ignore in my opinion.
I could go on, but as I stated earlier, the bill is not about dollars and cents.
Since I introduced the bill back in November, what has struck me most of all is how much Canadians have rallied around this idea. According to a Harris/Decima study released on November 7, 2012, total support for the discover your Canada act stood at 70%, and it enjoyed strong support throughout the country.
For example, the Atlantic region registered 78% approval, Quebec registered 68% approval, Ontario registered 69% approval, Saskatchewan and Manitoba registered 66% approval, Alberta registered 76% approval and British Columbia registered 74% approval.
The same study showed that 39% of Canadians would be more likely to consider travelling within Canada if the discover your Canada act were to become law, while only 5% would be less likely to consider travelling within Canada if the discover your Canada act were to become law, for a net gain of over 34%.
The same study also notes that the bill has the potential to address Canada's growing international travel deficit, which grew by $91 million in the second quarter of 2012 alone.
Beyond the numbers, I have been humbled by messages of support I have received from Canadians from all over the country who want to see the bill pass. One lady from Alberta wrote to tell me that “Despite not being one of your constituents, I am writing to tell you that I support your recent private member's bill, the discover your Canada act. I live in Alberta. However, I have strong ties to Quebec through my maternal grandparents. In such a vast country as Canada, I would welcome this initiative in assisting my travel within our own borders. Canada has so much to offer”.
I cannot go on all day quoting letters and emails, but this is just one of several letters of support I received. They all have the same theme: a desire for us as Canadians and as parliamentarians to implement this idea.
It is not because they want to save money or because they are looking for a handout, but simply because they love their country and like the idea of more Canadians visiting more places within Canada to strengthen their bonds to this country and to each other, especially when we have a travel deficit in this country.
It has long been said that Canada has too much geography and not enough history. In 2017, Canada will have precisely 150 years of history behind it. Our nation's history is no longer in question, but our geography remains both a source of pride and a challenge to our nation's cohesiveness. Facts are facts: there is no inexpensive way for people to traverse such a massive country as Canada. As parliamentarians, we should recognize this reality and react accordingly.
I have chosen 2017 for the coming into force of the bill, because I believe that for Canada's 150th birthday, we should give Canadians the greatest gift we could possibly give them: we should give them Canada.
The government will be investing all kinds of money in celebrating Canada's 150th anniversary, so I am asking the government to think about offering Canadians a choice of where they choose to spend their money and not have the government decide for them.
We do not know how much money the government will put towards the anniversary, but this investment is minimal. There will events across Canada, as I just stated. We should have Canadians plan today where they want to travel to get to know Canada much better so that they will not be watching the events on a TV screen because they cannot afford the trip. They will be able to watch and participate in these events, up close and in person.
We should remove some of the financial barriers that stop them from exploring this great land and tell them to go out and discover your Canada, because one thing I have learned is that financial incentives are one way to get people to change their behaviour.
Thank you for your time, Mr. Speaker. I am open to questions.
The House resumed from November 6, 2012, consideration of the motion that Bill C-463, An Act to amend the Income Tax Act (travel expenses), be read the second time and referred to a committee.
(Bill C-463. On the Order: Private Members' Business:)
November 6, 2012—Second reading of Bill C-463, An Act to amend the Income Tax Act (travel expenses)—Mr. Massimo Pacetti.
November 28th, 2012 / 3:30 p.m.
Bill C-463 would amend the Income Tax Act and it would enact the Discover Your Canada Act. It would provide a new deduction for travel expenses for travel within Canada.
This bill does not concern questions that are outside of federal jurisdiction. It does not appear to clearly violate the Constitution, including the charter. It does not concern questions substantially the same as ones already voted on in the current session, and it does not concern questions currently on the order paper as items of government business.