House of Commons Hansard #102 of the 36th Parliament, 2nd Session. (The original version is on Parliament's site.) The word of the day was c-16.

Topics

The House resumed from March 30 consideration of the motion that Bill C-205, an act to amend the Income Tax Act (deduction of expenses incurred by a mechanic for tools required in employment) be read the second time and referred to a committee.

Income Tax Act
Private Members Business

May 29th, 2000 / 11:10 a.m.

Bloc

Michel Guimond Beauport—Montmorency—Orléans, QC

Madam Speaker, I rise on a point of order. There have been consultations among representatives of all the parties, and I seek unanimous consent for the following motion:

That, at the conclusion of today's debate on the motion for the second reading of Bill C-205, An Act to amend the Income Tax Act (deduction of expenses incurred by a mechanic for tools required in employment), all questions necessary to dispose of the said motion shall be deemed put and a recorded division deemed requested and deferred until Tuesday, May 30, 2000, at the expiry of the time provided for Government Orders.

I remind the House that there have been consultations among the leaders of all the parties.

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11:10 a.m.

The Acting Speaker (Ms. Thibeault)

Does the hon. member have unanimous consent to move the motion?

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11:10 a.m.

Some hon. members

Agreed.

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11:10 a.m.

The Acting Speaker (Ms. Thibeault)

Is it the pleasure of the House to adopt the motion?

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11:10 a.m.

Some hon. members

Agreed.

(Motion agreed to)

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Private Members Business

11:10 a.m.

Bloc

Benoît Sauvageau Repentigny, QC

Madam Speaker, I am pleased to speak to this bill presented by my friend and colleague from Beauport—Montmorency—Côte-de-Beaupré—Île-d'Orléans.

As my colleague has pointed out in his press releases, as well as in his speeches, this is a non-partisan bill. Too often in this House we have to debate bills on which our party line obliges us to take a given position rather than another. Here, we are dealing with a bill that directly affects taxpayers, their budgets and their wallets or purses. It affects Quebecers, and it affects Canadians, equally.

The bill in question is Bill C-205, an act to amend the Income Tax Act (deduction of expenses incurred by a mechanic for tools required in employment).

I will read the summary of the bill for the information of our audience as well as those MPs who have not yet reached a decision and who will, we hope, be favourable in a vote free of party lines—this not being a highly controversial subject:

The purpose of this enactment is to permit mechanics to deduct the cost of providing tools for their employment if they are required to do so by the terms of the employment. The deduction encompasses maintenance, rental and insurance costs, the full cost of tools under $250 or such inflation-adjusted limit as is set by regulation, and the capital cost allowance of tools over $250, set by regulation.

Some will say “Yes, but mechanics will be able pull a fast one”. First, who is a mechanic? Are all of those who tinker a bit with their cars in their garage mechanics? Are those of us who can do a bit of maintenance on our cars from time to time mechanics? Is this going to be a bit difficult to manage?

Not really, because a precedent exists in the federal government's Income Tax Act. My colleague, the member for Beauport—Montmorency—Côte-de-Beaupré—Île-d'Orléans, is not proposing to create a precedent in the Income Tax Act. A precedent exists in the case of forest workers, musicians, doctors, dentists and certain businesses.

Today, a young person decides to become a mechanic—a trade in which there is a shortage at the moment, but one that is vital to Quebec and Canada where the number of family cars keeps growing and maintenance is necessary for environmental and financial reasons. They decide after finishing technical training or high school to go and work as a mechanic in a garage. The day after earning their diploma they have to pay out somewhere between $15,000 and $40,000 in order to practice their trade.

Very few young people have between $15,000 and $40,000 to spend on equipment for their work. However, as a musician or a dentist, I can buy equipment, and the government will give me a tax credit when I buy the equipment I need for my work. As a mechanic, I cannot. Often these young people, and the not so young, are asked to spend considerable amounts in order to be able to do their work.

So, in terms of the complexity of applying the law, there is already a precedent. In financial terms, do we have the money? How much will it cost and do we have the funds to enable these young and not so young people to exercise their profession and to get tax relief?

We have been told, to the thunderous applause of the Liberal Party, that there will be a $95 billion surplus for the next five years. If we have such surpluses, we should not spend all our time debating bills on endangered species, not because such bills are not important, but because we must also deal with other issues and take concrete measures for people in our communities. As I said earlier, a bill such as this one can have a direct bearing on people in our ridings.

The funds are available. In fact, the Minister of Industry even wanted to use it in a preposterous fashion by offering owners of professional hockey teams financial compensation to help them remain in Canada, to help them increase their share of the market. The minister's idea was so ludicrous that, for the first time, we saw a minister backtrack within 24 or 48 hours and withdraw his bill.

There are funds available in the government's coffers and they must be appropriately invested, spent and earmarked.

Bill C-205 would allow each and every member of this House to do something concrete for an important group of workers in their communities, regions, ridings and cities, particularly since these workers are often not among the most well-off. The average hourly rate for mechanics is around $15 an hour. This may come as a surprise, since it often costs us a little more than that when we bring in our vehicle for repairs. Still, the hourly rate for mechanics is around $15 an hour.

This is a bill which, and this is rare, would show the public the concrete nature of our work in this place. The public would see that we do not only ponder abstract concepts, as it often believes is the case, but that we also make decisions which, as was the case with forestry workers, doctors, dentists and musicians, have a direct and personal impact on people. I hope that the party line will not come into play regarding this issue—although I do not know whether or not this will be the case.

The member for Beauport—Montmorency—Côte-de-Beaupré—Île-d'Orléans has asked that the division be deferred until tomorrow evening. I hope that on something such as this, which does not involve sovereignty or federalism, whether of Quebec or of Canada, or globalization or any other such matter, but is nothing more than an attempt to help honest folk enter the job market or prosper there, we will not see party lines imposed on certain parties and have unanimous voting against this non-partisan bill. Naturally, if members were to vote unanimously in favour of this bill, there would be no problem.

Passage of Bill C-205 would encourage the creation of jobs in the automobile industry. It is clear from the number of high school graduates, especially in trades programs, that there is a serious shortage in this sector right now. Passing this bill is one way of helping this important sector of economic activity.

With the prospect of a tax break, young people might be more tempted to go into automobile mechanics.

Several Bloc Quebecois members attended a reception hosted by the National Automotive Trades Association of Canada and, to our great surprise, we were, if I am not mistaken, the only party represented at this event, which was intended to bring this issue home to MPs, who hold the fate of the bill in their hands.

I urge members to support this bill. I invite those who did not attend this information session on the various aspects of such legislation and hear the arguments put forward by the association to take a hard look at the bill and its implications for their respective communities before voting, I hope, in favour of the bill.

Income Tax Act
Private Members Business

11:20 a.m.

Reform

Rick Casson Lethbridge, AB

Madam Speaker, it is a pleasure to speak to this private member's bill. I commend my colleague from the Bloc for bringing it forward.

The bill was introduced in the last session by the member for Lakeland. He did a lot of work on the background of this and I am glad to see that it has been carried forward. The last time it was debated it was a non-votable. This time it is votable.

I believe this is an issue of which everyone in the House is aware. It has been brought to their attention that this is an inequity in our tax laws that needs to be addressed. At a time when we are seeing surpluses in our revenues, the government needs to take a look at our tax laws and change the areas that need to be changed, address the inequities and recognize a trade that has been singled out to not receive the same treatment as others.

I am glad the bill is before the House and that it is votable. I hope all members in the House will support it.

The message is clear. The member for Lakeland has received 7,000 letters from mechanics from across the country who have pointed out the shortcomings of this part of the tax laws and that in this day of changing technologies it is becoming more and more onerous, because of the amount of money it takes to buy the tools, to get into the trade.

The trade is changing rapidly. The technology and equipment these people have to repair, whether it is heavy-duty tractors, large machinery, automobiles or whatever, is changing. It is computerized now. There are fewer people who can even look under the hood of a vehicle and do anything with it. It takes specialized people and specialized equipment.

Some mechanics estimate they need to invest $20,000 to $30,000 into equipment just to do their jobs. Having their own tools is one of the conditions of employment.

As recently as two weeks ago, I visited a young man in a shop in my riding. He informed me that it was necessary for him to supply $5,000 to $10,000 worth of tools to move into a journeyman position. He told me that was a big hurdle to overcome and that he may not be able to do that. This is an example of a trained and eager young man who is interested in getting into the workforce but because of the amount of money it will take for him to invest he may not be able to do that.

The government needs to look at the fact that this is happening. It needs to offer these people a tax credit for the tools they have to purchase as a condition of employment.

The last time this bill was brought forward there were a number of issues raised by the Parliamentary Secretary to the Finance Minister and some of the statements need to be clarified or argued with. One statement that he made was that:

—mechanics are not the only occupation that incurs substantial expenses as a requirement of employment.

Of course not. There are many. However they are the ones who cannot use this purchase of equipment as a deduction in their business. What we are saying is that farmers and other businessmen, as well as artists, musicians and chainsaw operators, incur substantial expenses as a requirement of employment but they are able to deduct these costs. Why can mechanics not also be added to this group? The government could then ensure that other groups that incur expenses as a requirement of employment will be treated fairly by the tax system.

We are now in a position where we can step back and have a look at our tax system to see where we could improve it. There are many ways to improve our tax system and mechanics' tools is one area that needs to be looked at.

The policy is supported by the all party House of Commons finance committee. In its last report it stated:

The committee recommends that the government provide targeted tax relief for all those who must bear large expenses as a condition of employment, such as is the case with mechanics' tools.

All opposition parties are supportive, and I hope members of the government, when it comes time to stand to vote on this issue, will support it as well. I am sure they are aware that this situation exists and that it needs to be changed.

The parliamentary secretary also stated that:

This private member's bill would also provide tax relief to all mechanics irrespective of the size of their expenditures instead of targeting relief to those incurring extraordinary expenses.

That is a pretty poor statement. As we know, businessmen, farmers, all people who are involved in a business, are able to deduct their expenditures so why should mechanics be treated differently? Not being compensated for small expenditures, whatever the level, is a matter for regulation that could be sorted out rather easily.

He also stated that:

—provisions would need to be developed to ensure that tax relief is provided only for those items genuinely required as a condition of employment and not for those purchased for personal use.

That applies everywhere. If we are buying something to carry on our business, that is separate from our personal lives. That is minute nitpicking. The true issue is that we have people who are putting out tens of thousands of dollars to get started and then supplementing that every year by $1,000, $2,000, $3,000 per year in purchases of specialized equipment to keep their jobs and they are not able to deduct that expense. That is totally unfair.

When the bill was brought forward in 1998 by the member for Lakeland it received overwhelming support from people in the industry. I have quotes from mechanics, people who hire mechanics and general managers of automotive dealerships who say that this is something that would go a long way in helping to improve the ability of their people to do a decent job.

The minor change in Bill C-205 from the previous bill is that the amount of the deduction be changed to $250 from $200. It is just a minor tweaking to bring it back. This time it was brought back as a votable bill which will give it more debate in the House and more time for people to put their ideas forward.

I had a private member's bill drawn last week, thank goodness. It is like winning a lottery. The whole scheme of things here is to get a private member's bill drawn and to have it made votable. To bring it to the House to make members stand on the issue is important. This bill has made that one hurdle and has gone that one step further.

We will be supporting this initiative by the member. We believe it is an inequity that needs to be addressed. The overwhelming positive response by people in the industry to this bill is a clear indication that it is needed. I hope that government members of the House, when the bill comes to a vote, will realize that, will listen to the people and will support the bill.

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Private Members Business

11:30 a.m.

NDP

Yvon Godin Acadie—Bathurst, NB

Madam Speaker, I am pleased to speak today to Bill C-205, an act to amend the Income Tax Act. It is time this House reached a final decision in order to help out the mechanics of this country, the workers, by reducing their expenses when they start working.

To begin a career as a mechanic, a person has to go to trade school, to community college, in order to learn his trade. He graduates with a debt load. Then, when he arrives at his first job, the first thing he needs is a tool set. He needs a great many tools to do his job; otherwise he will not be hired.

People who are starting up a new company meet with government representatives and tell them “We are prepared to create x number of jobs”. As hon. members are aware, this involves the transitional fund or some other such fund. Mention of this brings out some nervous smiles in the House, but transitional funds are necessary tools for economic development.

It is the same thing here. A mechanic who wants to work needs a tool box and tools, and these are very expensive. It would not be the end of the world if a mechanic were entitled to a tax reduction. For example, a woodsman who needs a chain saw in the spring in order to go out and work in the bush can get an income tax reduction for it.

Mechanics are getting it on all sides. We have seen how much this all costs. We are talking several thousands. I know, because I have worked with mechanics myself, and they were constantly having to purchase tools. When we changed from the British system of weights and measures to the metric system, two types of tools were needed, doubling the costs. Because of changes in Canada, it cost them double.

Mechanics have asked me “Why are we as workers not entitled to a tax credit for our tools? We pay taxes when we work. If we need a tool for our work, why are we not entitled to tax relief?” When companies have costs, they get tax breaks. Workers pay their taxes but want help with the cost of their tools, because they are expensive.

I am going to tell members about an experience I had last week. I took my car to the dealer's for repairs. Two days ago, we found two of their tools in the car as we were washing it. We know where our car was, so we will return the tools to the mechanic.

How often, however, with the number of tools they use in repairing people's cars, do mechanics leave their tools in cars, not because they want to leave them there of course, but because there are a lot of tools and a person can forget them. Someone working on an engine can forget a tool. That costs a lot.

These are not once in a lifetime purchases. A person does not just buy a wrench to use forevermore. Regularly during the year other tools have to be bought. They have to be bought all the time, because they get lost or are not the right tools.

I think we will always need mechanics. I have a car, I am sure you have a car, Madam Speaker, everyone has a car. If we are going to help the mechanics we need in this country, this would be the way to go about it.

We are not asking for reductions on the price of their tools, but that the government at least give them tax deductions. It is normal for certain trades to get tax deductions. For example, fishers are entitled to certain deductions.

Tools cost a lot of money, and mechanics lose many through no fault of theirs. Let me give you the example of mechanics who work underground, in mines. There is rock, water and mud. They sometimes lose tools without even noticing it. They will never see these tools again. Each year, these mechanics lose many tools like that.

There was also the conversion to the metric system. For our mechanics—I am repeating myself, but it is important to stress that point—that change means that their costs have doubled, since they now need two sets of tools: one for the British system and another for the metric system.

We are talking about people who must spend between $10,000 and $15,000 for their tools, depending on what type they need. Mechanics need these tools, otherwise they cannot work. Nowadays, companies that get started do not say “we will hire people and pay for their tools”. It is a known fact that, in Canada, mechanics must pay for their own tools.

Our party will certainly support this bill. There are mechanics in every riding represented in this House, whether it is by Liberal, Bloc Quebecois, Conservative, NDP or Canadian Alliance members. Service stations, mines or industry—they all have mechanics.

As the Canadian Alliance member said earlier, thousands of people have signed petitions calling for a tax break for mechanics. The government has surpluses right now. It is time to help workers in this sector.

As I mentioned earlier, there is no need to worry about companies. If something breaks or they need new equipment, sometimes they do not even have to ask for help because the government is only too quick to suggest one of its programs. I do not know whether public servants need to hang on to their jobs, but they are going after these companies and telling them: “We have one program here and another there. We will work on this program and we will be able to help you”.

We support the Bloc Quebecois member for Beauport—Montmorency—Côte-de-Beaupré—Île-d'Orléans. His bill is truly important because it concerns a problem affecting all of Canada. There are mechanics everywhere. These are not isolated jobs in one part of the country. They are everywhere.

It is important that government members, and all members, regardless of their party affiliation, take a stand and do the right thing, in order to show that we believe in our workers and that we can help them.

Young graduates have had to spend a lot on their training. Many of them work in service stations at minimum wage. They work for $5.75 an hour. In some provinces, they work for $7, $8, or $10 an hour until they get their mechanic's licence, and that takes four years. But while waiting to get their licence, they need their tools.

Once again, I urge members to vote tomorrow evening in favour of the bill introduced by the Bloc Quebecois member, because it is important for our Canadian mechanics.

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Private Members Business

11:40 a.m.

Progressive Conservative

Greg Thompson Charlotte, NB

Madam Speaker, I stand today on behalf of our finance critic, the hon. member for Kings—Hants. I know that he has spoken passionately on this issue. We support Bill C-205, which would amend the Income Tax Act to allow the deduction of expenses incurred by a mechanic for tools required in employment.

The tax system is very unfair to mechanics. As we well know, many professionals can deduct the cost of the tools required to perform their work. One of the exceptions is mechanics.

Mechanics are being supported by members on this side of the House as well as by many members on the other side of the House.

This issue has been around for a long time. Ten years ago, when I was sitting on that side of the House, I was approached by mechanics. It was waved in front of the government then. Much to my displeasure, the government which I represented at that time did not give this issue the attention it deserved. It is time the government did.

The politics of this issue are the politics of governing. Governments are very reluctant to introduce tax measures which would appear to cost the government revenue. Most of us would argue that is not the case. If the economy is to grow and if we are encouraging people to work, they must have some breaks along the way.

It is interesting to note that representatives of the Canadian Automobile Dealers Association support this move. They appeared before the finance committee on behalf of mechanics to seek tax deductibility of technicians' tools. They have appeared before the committee many times. Since 1992 they have been onside. They made this public and appeared before the finance committee for the first time in 1992.

The committee stated in its 1997 pre-budget report:

The Committee recommends that the government provide targeted tax relief for all those who must bear large expenses as a condition of employment, such as is the case with mechanic's tools.

In its 1996 pre-budget report the committee stated:

The Committee recommends that the Government consider measures to provide targeted tax relief for large expenses incurred as a condition of employment, such as mechanic's tools.

Basically it is saying the same thing.

The finance committee, which is an all parliamentary committee, supports the request.

There are over 115,000 mechanics in this country who could benefit from such a measure; the measure being tax relief for those who have to buy their tools in order to work. The average mechanic spends approximately $15,000 on tools once they have received their training just to begin working in the profession. Some invest up to $40,000.

As we well know, mechanics need to replace worn out equipment, and they must replace it at great expense.

The interesting statistic, from the point of view of public sympathy, is that the average wage of a mechanic is only $29,000 per annum. What would be the cost to the Government of Canada if it were to do this?

The cost would not be high in the grant scheme of things, but it would send a signal to our young professionals, and mechanics are professionals and that we care about them, that we think their services are important. They should be able to deduct the cost of their tools as many other professional people can. This is a case of fairness, and we want to see that fairness exercised by the government of the day.

Leaving politics behind, I remind the House that this issue has been before the House for at least 10 years. Given the fact that the all party parliamentary committee and automobile dealers across the country can agree, surely to goodness the Government of Canada can do something to give our mechanics the tax relief they deserve.

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Private Members Business

11:45 a.m.

Bloc

Ghislain Lebel Chambly, QC

Madam Speaker, I am pleased to rise to speak to Bill C-205, introduced by my colleague, the member for Beauport—Montmorency—Côte-de-Beaupré—Île-d'Orléans and intended to enable mechanics to deduct the cost of purchasing or replacing tools from their income.

I was fortunate enough to work as a mechanic for 15 years with a North Shore mining company, IOC, in Sept-Îles. Fortunately, this company sometimes replaced lost tools. If we had had to pay for them out of our pocket, it would have been hard. Those not familiar with the job of mechanic, especially, that of heavy engineering, have no idea of the costs involved.

In 1980, a vernier used in measuring diameters cost a minimum of $150. With inflation and the rise in costs of all sorts, I am pretty sure that today it would cost $250. A mechanic's tool box has several such tools in it.

Not always through negligence, sometimes through misfortune, because of the location of the work and the conditions, tools, which are vulnerable, can get lost. I worked on a ship loader, on ocean going vessels, some 200 feet or 60 metres above the water and I have dropped tools into the water. At the time it represented several hundred dollars. It was accidental. Fortunately, this company, which I have always respected and which I was proud to work for for 15 years, replaced our tools.

I heard what the hon. member for Acadie—Bathurst had to say about cleaning his car after it had been repaired and finding two mechanic's tools. I had the same experience last year. When we are talking about Snap-On tools, they are quality tools, but I have seen screwdrivers cut in two by the spark produced when a mechanic touched two terminals, thus joining negative and positive. There went $15. That may not seem like much, but it adds up when the same thing happens a number of times in a year.

I think that it is doing justice to blue collar workers, to people who work with their hands, to recognize certain rights for them, the right to replace their tools and the right to acquire tools in order to get a job. This is doing them justice when other professionals of all kinds have obtained the right to replace or upgrade their equipment without having to ask for it.

Reference was made earlier to dentists. There are a number of different self-employed workers and professionals who have to replace their tools. When I was a notary, I bought pencils by the case. I did not have to fight to get them included in my operating expenses. This was taken for granted and no one disputed it. In my case, it is just about the only thing that was not disputed.

As for the mechanic, for whom the toolkit represents a major investment, all the more so because the tools are subject to loss or breakage, he is not entitled to this deduction, although he is probably a long way down on the scale of earnings.

I believe that the hon. member for Beauport—Montmorency—Côte-de-Beaupré—Île-d'Orléans is showing respect for workers. I believe his bill must be supported. I am delighted that it was introduced here by one of us.

I am all the more delighted that the other parties, those in opposition at least, seem prepared to espouse my colleague's cause.

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Private Members Business

11:50 a.m.

Bloc

Michel Guimond Beauport—Montmorency—Orléans, QC

Madam Speaker, I rise on a point of order. Considering that the debate will conclude in about four minutes, as the sponsor of this bill, which will be voted on tomorrow, I am asking for the unanimous consent of the House to conclude my remarks, for a maximum of four minutes. I need the unanimous consent of the House, since I already spoke on this bill.

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Private Members Business

11:50 a.m.

The Acting Speaker (Ms. Thibeault)

Does the hon. member have the unanimous consent of the House to conclude the debate in five minutes?

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11:50 a.m.

Some hon. members

Agreed.

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11:50 a.m.

Bloc

Michel Guimond Beauport—Montmorency—Orléans, QC

Madam Speaker, I thank members from all parties for agreeing to give me the floor.

In conclusion, I wish to inform this House and those who are listening to us that this bill transcends party lines. It is not about diverging political options or diverging views on Quebec-Canada relations, not at all.

In the course of their parliamentary activities in their ridings, all 301 members of this House have opportunities to visit car dealerships and to meet with mechanics in their riding offices. We are already aware of this issue of deducting the cost of providing tools for their employment.

As the Prime Minister said, we are perhaps 12 or 15 months away from the next election. All members of parliament who decide to run again will have to visit automobile dealers and will be questioned on this issue.

I am therefore appealing to their common sense. Judging by the three hours of debate, Canadian Alliance, Bloc Quebecois of course, NDP and Progressive Conservative members are all in favour of the bill.

I appeal to the Liberal majority. The Parliamentary Secretary to the Minister of Finance—perhaps he was expressing a personal opinion—did not seem too inclined to vote in favour of the bill. But I appeal to the Liberal members. This will not be a vote along party lines, but what is called a free vote. I am certain that they will follow their conscience and vote in favour of the bill.

In closing, I remind the House that, in 1997, the Standing Committee on Finance, composed of a majority of Liberal members, made the following recommendation:

The committee recommends that the Government consider measures to provide targeted tax relief for large expenses incurred as a condition of employment, such as mechanic's tools.

I remind my Liberal colleague from Vaughan—King—Aurora, who was the committee chair, that he voted for the recommendation. My Liberal colleague from Gatineau, my colleagues from Sarnia—Lambton, Provencher, Niagara Falls, Kitchener Centre, Mississauga South and Stoney Creek, who were on the Standing Committee on Finance representing the Liberal majority, that they voted in favour of the recommendation.

I think that automobile technicians expect us as parliamentarians to recognize finally the importance of their profession to society and to give it its true worth.

It is simply a matter of establishing some balance in relation to other job categories that can deduct the cost of their tools. It is also a matter of encouraging our young people who might be tempted to join this profession, if we gave them a tax break. It is also a matter of young men and women seeing that the government is listening to their concerns and promoting the development of this profession.