An Act to amend the Income Tax Act (deduction of expenses incurred by a mechanic for tools required in employment)

This bill was last introduced in the 37th Parliament, 1st Session, which ended in September 2002.

Sponsor

Michel Guimond  Bloc

Introduced as a private member’s bill. (These don’t often become law.)

Status

Not active, as of Feb. 5, 2001
(This bill did not become law.)

Elsewhere

All sorts of information on this bill is available at LEGISinfo, provided by the Library of Parliament. You can also read the full text of the bill.

Business Of The HouseGovernment Orders

May 28th, 2001 / 1 p.m.
See context

Bloc

Michel Guimond Bloc Beauport—Montmorency—Côte-De- Beaupré—Île-D'Orléans, QC

Mr. Speaker, I rise on a point of order. Discussions have taken place among all the parties, and with my colleague from South Surrey—White Rock—Langley, concerning the taking of the division on Bill C-222, pertaining to the deduction provided for mechanics, scheduled today, Monday, May 28, at the conclusion of private members' business.

You will find there is unanimous consent for the following motion:

That at the conclusion of the debate on Bill C-222 on Monday, May 28, 2001, all questions necessary to dispose of the motion for second reading be deemed put, a recorded division deemed requested and deferred to Tuesday, May 29, 2001, tomorrow, at the expiry of the time provided for government orders.

Income Tax ActPrivate Members' Business

May 28th, 2001 / noon
See context

Liberal

Don Boudria Liberal Glengarry—Prescott—Russell, ON

Mr. Speaker, I rise on a point of order. There have been further consultations and a motion that had not been accepted earlier would perhaps be accepted after these consultations. The motion is that the recorded division scheduled to take place at the end of government orders today on second reading of Bill C-222 be further deferred until the end of government orders on Tuesday, May 29.

Income Tax ActPrivate Members' Business

May 28th, 2001 / 11:50 a.m.
See context

Liberal

Marlene Catterall Liberal Ottawa West—Nepean, ON

Mr. Speaker, I rise on a point of order. There is general agreement among the parties that it would be preferable, notwithstanding a previous order of the House, to have the vote on the bill tomorrow evening.

Therefore, pursuant to discussions that have taken place among all parties concerning the taking of the division on Bill C-222 scheduled at the conclusion of government orders today, I believe you would find consent that the recorded division scheduled to take place at the end of government orders today on second reading of Bill C-222 be further deferred until the end of government orders on Tuesday, May 29.

Income Tax ActPrivate Members' Business

May 28th, 2001 / 11:45 a.m.
See context

The Deputy Speaker

It being 11.47 a.m., pursuant to order made on Friday, May 18, 2001, all questions necessary to dispose of the second reading stage of Bill C-222 are deemed put, and a recorded division is deemed demanded and differed until later today, at the ordinary hour of daily adjournment.

Income Tax ActPrivate Members' Business

May 28th, 2001 / 11:40 a.m.
See context

Bloc

Michel Guimond Bloc Beauport—Montmorency—Côte-De- Beaupré—Île-D'Orléans, QC

Mr. Speaker, two years ago the subcommittee on private members' business produced a report in which it recommended to the House that certain criteria be met before a private member's bill could be made votable.

Among these were: that the bill address matters of certain public interest; that the bill and motions address matters not covered by the government's legislative program; and that greater priority be given to measures relating to matters of more than purely local interest and not partisan in nature.

I would respectfully submit to all hon. colleagues on both sides of this House that Bill C-222, despite its imperfections to which my colleague from Portneuf has referred—I know it could be improved—is a matter of fairness to a category of men and women, more often men since this is an untraditional career for women. Mechanics should be able to deduct the purchase cost of their tools.

It is true that the government could think of extending this in future to other categories of workers who might also need it. I believe, however, that there has been unanimous industry support for this for more than 10 years.

I would remind my colleagues that last year in the last parliament we did get the House, all opposition parties and the majority of government members as well to vote in favour of referring this bill to the Standing Committee on Finance.

During the vote to be held today or tomorrow—the government whip ought to introduce a motion to defer it until tomorrow—I appeal to the sense of honour and fairness in all colleagues here in the House. In the division on Bill C-205, we had 218 votes in favour.

I remind the House that Bill C-222 is based on the exact same criteria as Bill C-205, which had the support of 218 members, namely all members of the opposition and a majority of Liberal members. Only 11 Liberals voted against the bill.

I also remind hon. members that the bill goes beyond party lines and that it has nothing to do with partisanship, the right, the left, federalists or sovereignists. In each of our ridings, we have automotive mechanics who work in service stations or car dealerships. We met with them during the election campaign that ended last November 27. We promised we would listen to them and respond to their needs and concerns.

In conclusion, I appeal to the common sense of hon. members who were present in this House during the 36th parliament and who voted in favour of the previous bill to support Bill C-222. I ask the 45 new members who did not have the opportunity to take a stand on the previous bill to support Bill C-222 as well. After the vote at the second reading stage, the bill will be referred to the Standing Committee on Finance where we will have the opportunity to improve it.

All members sitting on the committee will have an opportunity to bring amendments to the bill. I only wish to improve it. I ask that, by the vote, the bill be referred to the Standing Committee on Finance and that automotive mechanics and technicians have, once and for all, their status recognized by the House of Commons. They expect justice and fairness.

Income Tax ActPrivate Members' Business

May 28th, 2001 / 11:35 a.m.
See context

Canadian Alliance

Vic Toews Canadian Alliance Provencher, MB

That is agreeable with me, Mr. Speaker. I rise in support of Bill C-222, an act to amend the Income Tax Act. The purpose of the act is to permit mechanics to deduct the cost of providing tools for their employment, if they are required to have these tools according to the terms of their employment. It allows for a full deduction of costs up to $250 and the capital cost for tools over $250.

The riding of Provencher is a mainly rural riding, yet this was a very big issue in the last election. Steinbach, which is the largest urban centre in my riding, is known as the automobile city because of the number of automobile dealerships. There is also a number of agricultural service centres and implement dealerships, all utilizing the services of mechanics who require tools for their trade. These are hardworking, strong work ethic individuals who want to work and who are also looking for fairness. Canada needs these skilled workers, and this is one step toward attracting more workers to this profession and keeping the existing mechanics working.

I noted with some concern the comments of the Liberal member. His comments were essentially attempting to put up roadblocks rather than assisting in the resolution of the problem. We should not be looking at technical problems because these are problems that we can overcome. We do not need excuses. We need reasons.

The Canadian Alliance supports measures that might in any way lower the tax burden on Canadians. This is one such measure. Since industry is expected to train and educate its workforce, the government can play a role by removing impediments that discourage job seekers from pursuing the training and education needed to find employment.

It has been noted that mechanics have been known to spend many thousands of dollars, certainly in excess of $15,000 or $20,000. Of course, depending on the exact requirements, it could even be in the range of $50,000 or more. They cannot declare these employment related expenses while many other professionals can.

This is an issue of equity. Others, for example artists, chainsaw operators and musicians, can use the tax act to write-off the cost of their tools. The Liberal member knows it. Every member in the House knows it.

I urge the House not to simply set this bill aside again as it has done so often. I urge members on both sides of the House to vote in favour of this commendable bill.

Income Tax ActPrivate Members' Business

May 28th, 2001 / 11:10 a.m.
See context

Canadian Alliance

Joe Peschisolido Canadian Alliance Richmond, BC

Mr. Speaker, it is an honour to speak to Bill C-222.

I would like to tell a story about my growing up in Toronto. My father was a labourer who worked very hard as a painter. His tools were very important to him because they were very expensive and they were his key to advancing in Canada. I can therefore relate to mechanics and to individuals who want to move ahead for themselves and for their children.

I must admit that I am somewhat surprised by the government's reaction to this private member's bill. The government talks about upward mobility and fairness. It talks about educating and training our citizens for the future. Here is a very simple, cost effective and equitable way of doing just that.

We have a situation where mechanics because of their jobs are forced to buy tools. This is a condition of their employment. It seems common sense to me and basic that these individuals are acting like business people. Yes, they are on an employment contract but they are acting as entrepreneurs.

In our tax code we put forth certain elements to deal with the situation. Members on the other side have argued that it is an employment contract. However I point to other sections of the tax code that deal with musicians, loggers or chain saw operators where this type of provision is there to take into account their situation.

I know mechanics in my riding of Richmond who have had to spend $40,000 to $50,000 to get tools for their trade. The bill makes sense, particularly at a time when Canada needs trained mechanics and blue collar workers. I read in a report the other day that there is a shortage of over 60,000 workers in this field alone.

Perhaps this is not the ideal way of dealing with the problem. However it is a reaction to a Liberal government that deals with the rhetoric of upward mobility and education of the workforce but which, when it comes to dealing with concrete situations, does not act.

There is a small, family run automotive parts business in my riding. It has six or seven mechanics. They would love to hire more individuals but they simply cannot find skilled, trained people to hire. Hiring new people would have an impact on the economy. I am not an economist, but I believe there are similar situations across the country.

My colleague from Quebec has talked about situations he knows of personally. I urge all members in the House to go beyond party affiliations and look at the merits of the bill. The bill does not deal with professionals who are making $200,000 to $300,000. It does not deal with individuals who have access to lobbyists. There will not be many wine and cheese parties to discuss this type of thing. The individuals the bill will affect are the backbone of our country. They are the small, middle class people trying to move up.

I am speaking passionately on the issue because it touches me. My parents came here from Italy with nothing. They used this type of work to move up the ladder that I call the Canadian dream. At the end of the day, when we vote as a House, I urge all members to look at the merits of the case and vote positively for it.

Business Of The HousePrivate Members' Business

May 18th, 2001 / 1:35 p.m.
See context

Liberal

Marlene Catterall Liberal Ottawa West—Nepean, ON

Mr. Speaker, we are trying to organize the business of the House collaboratively. Again pursuant to discussions among all parties concerning the division on Bill C-222 scheduled at the conclusion of private members' business on May 28, 2001, I believe you would find consent for the following motion:

That at the conclusion of the debate on Bill C-222 on Monday, May 28, all questions necessary to dispose of the motion for second reading be deemed put, a recorded division deemed requested and deferred to Monday, May 28, at the expiry of the time provided for government orders.

Private Members' BusinessRoutine Proceedings

May 16th, 2001 / 3:30 p.m.
See context

Scarborough—Rouge River Ontario

Liberal

Derek Lee LiberalParliamentary Secretary to Leader of the Government in the House of Commons

Mr. Speaker, on the third item, I believe you would find consent for the following motion. I move:

That Bill C-222 and Motion No. 241, both private members' business items, be substituted for one another in the order of precedence.

Income Tax ActPrivate Members' Business

May 11th, 2001 / 2:25 p.m.
See context

Bloc

Antoine Dubé Bloc Lévis-Et-Chutes-De-La-Chaudière, QC

Madam Speaker, I am very pleased to speak to Bill C-222 that was introduced by my colleague from Beauport—Montmorency—Côte-de-Beaupré—Île-d'Orléans. This is the second time that he has introduced this bill. Unfortunately, it died on the Order Paper because the election was called.

I understand his situation, because I remind the House, without going into this too much, that I myself introduced a bill on shipbuilding that also died on the Order Paper when it was on the verge of being passed at third reading. The government preferred not to pass it.

Again today, during Oral Question Period, we talked about this. The same thing applies to mechanics. At the time, at second reading, only 11 members had voted against the bill. Before the election, many Liberal members had voted for the bill. I hope they will continue to do so. It is simply the election that prevented it from being passed.

I listened to my two Liberal colleagues who spoke about this bill. The parliamentary secretary basically maintained the position he took last time. But I am a little surprised to see the position taken by the member for Durham, who has often shown that he can not only express himself in an independent way, but also vote independently from his government when he had the opportunity—

Income Tax ActPrivate Members' Business

May 11th, 2001 / 2:15 p.m.
See context

Durham Ontario

Liberal

Alex Shepherd LiberalParliamentary Secretary to President of the Treasury Board

Madam Speaker, I am very pleased to speak on Bill C-222, a very important bill brought forward by the member for Beauport—Montmorency—Côte-de-Beaupré—Île-d'Orléans.

As a number of other members have mentioned, a concept of this bill has been before the House many times before. In my previous life I was a self-employed chartered accountant. I had many mechanics, both employed and self-employed, as my clients, so I am very familiar with their concern regarding this issue.

I believe a number of interveners have possibly misunderstood the concept. The first issue is self-employment as opposed to employment. In fact the previous speaker gave many examples of people who were able to deduct tools, et cetera, by virtue of the fact that they were deemed to be self-employed. He was also confused about incorporated and unincorporated businesses. Unincorporated self-employed people are allowed to deduct expenses laid out to earn income.

There is a significant difference in the income tax system between people who are employed as opposed to people who are self-employed. We can have a long debate about that in and of itself, but generally speaking it is considered that people who are self-employed have likely more substantial risk in earning an income than do people who receive a weekly paycheque. Some people dispute that in this day and age when people are getting laid off of their jobs and so forth, but that is some of the foundation that underlies why this situation has occurred.

The issue of fairness was mentioned. A number of interveners said that it was only being fair to do this. I understand that plight and the costs involved in acquiring and even maintaining a tool inventory. However many people who are employed have similar costs related to being employed. Even we have a dress code in the House of Commons. I incur costs for suits and other things related to maintaining my job as a condition of employment, but these costs are not tax deductible.

I have two young sons who are engaged in the high tech sector. While it is not a specific condition of their employment, they feel it is part of their jobs to have computers in their homes. They use those computers as an extension of their work, but they are not allowed to deduct those computers for tax purposes.

The fact of the matter is that if we are going to start talking about fairness, we are going to have to talk about a lot of other people. I am sure people in our audience today or sitting at home watching this debate who are employed can think of things that they incur as well to earn employment income.

Uniforms is another issue that has been around for years. People may be required to wear uniforms such as a waitress or whatever the case may be. They are required to buy the uniform from their employers, but are not allowed to deduct them for tax purposes. That is another idiosyncrasy of the income tax system.

I am sure all of us can think of reasons why we should have a tax deduction. The real issue is why should this group of people be treated somewhat differently than all other people who are employed.

To go over the bill itself, the bill proposes to change the Income Tax Act to help mechanics to pay the costs of providing their own tools when this is a condition of their employment. I think that is very important.

We should also ask ourselves a fundamental question. Why is it a condition of employment for mechanics to buy their own tools? There are a lot of reasons for that but it has developed differently from other industries.

Changes would allow mechanics to deduct the cost of buying, renting, insuring or maintaining their tools. Income deductions would be available for tools costing less than $250 and this could be adjusted in accordance with inflation. That is what the bill says. For bigger amounts it would be subject to capital cost allowance and allowed to be deducted over a period of time.

The Government of Canada understands the difficult issue this bill is trying to address. We appreciate that employed mechanics face work related costs that are sometimes significant. This is particularly true, and it has been brought out in the debate today, of young people who have just become mechanics and have to buy that first investment. It is well known that if people enter a career path as a mechanic, they will have to buy their first set of tools. It does not alleviate the fact that it is very expensive and could be cost prohibitive to people becoming mechanics.

There is some merit that the bill is trying to achieve. However the bill overlooks some very important administrative issues, issues that would need to be considered if the bill went forward.

For instance, the bill talks about the word mechanic. Many people have used the words auto mechanic but it does not say that in the bill. Canada's national occupation code lists many kinds of mechanics. There are automotive mechanics, but there are also auto body mechanics, heavy duty mechanics, small engine mechanics, aircraft mechanics and many varieties of industrial mechanics. That has not been defined in the bill. People have used the analogy automotive mechanics but the bill says mechanics of all kinds.

Many other people would call themselves mechanics as defined under Statistics Canada even though they may not fit in any of those particular categories. In reality the bill has brought forward a great deal of confusion.

Another important administrative issue is how the deduction will work under the bill. I am puzzled by the use of the thresholds. The bill talks about those amounts in excess of $200, I believe, which is different from the current capital cost allowance provisions which is $250. In other words, it would appear that the bill anticipates some other form of capital cost allowance regime. This is a mystery to me.

What is even stranger is the bill talks about the proportionality of tools in excess of $250. I have a hard time reading and understanding it myself. I am assuming if a particular tool was $1,000, the first $250 would be deducted as a regular expense and the $750 would somehow be added to a person's capital cost allowance schedule as a depreciation.

There is no system of the Income Tax Act that treats capital acquisitions in that manner. It does not take part of a car and write it off while the other part is depreciated over a long period of time. It does not take part of a tractor, write it off and depreciate the balance over a long period of time.

The bill is inconsistent and does not fit in with the current income tax regime. Therefore, it is not a simple bill. It is a very complex bill that deals with a whole different method of depreciation and providing for capital cost allowances.

One of the problems is the matter of control. We recognize that in some areas there are already mechanisms which apply to employees who have to pay out of their own pocket for work supplies. The cost of chainsaws is allowed to be written off by loggers because it is recognized that they depreciate quicker than other forms of equipment.

We have to sit back from this issue and think about it for a minute. We talk about fairness but there are other employed people who are treated similarly to mechanics. This is not to say that mechanics are not deserving of some kind of treatment, but if we open up that Pandora's box we will have to open it up for a lot of other people, especially some of the people who are listening to us today.

My preference is that at this time the bill not go forward until it is studied further.

Income Tax ActPrivate Members' Business

May 11th, 2001 / 1:55 p.m.
See context

Bloc

Monique Guay Bloc Laurentides, QC

Madam Speaker, it is with great pleasure that I rise to speak to the bill presented by my colleague from Beauport—Montmorency—Côte-de-Beaupré—Île-d'Orléans, a bill that is being presented for the second time.

I would like to point out his determination—I would even say his endurance and pride—in coming back once more before the House with a bill that will make things much easier for those who work as mechanics.

Moreover, this is a votable bill. As we all know, my colleague presented the same bill in the last parliament, and 213 members voted in favour of the bill. That says a lot, when you think that there are 301 members in the House.

Again, we hope to have the same kind of support for this bill, which is really forward looking in this field, and I want to insist on that.

The purpose of the bill is to allow mechanics to deduct the cost of providing tools for their employment. In the last 15 years, members from almost all parties have introduced private member's bills to ensure that mechanics could deduct the cost of their tools.

It is very important here to consider that—I am going to speak a little about the past—when we began even a few years ago to encourage all our young people to go to university, as my colleague mentioned earlier in his speech, we neglected the vocational sector to some degree.

I was looking earlier at the statistics in my own riding. I have 1,300 mechanics working in the Laurentides riding. That is not insignificant. A look at the work of mechanics reveals it to be fairly hard work, physically difficult and requiring a lot of energy and good health. It is not the sort of job a person can continue doing to age 70. It is the sort of job people retire early from, at age 50 or 55, because it requires an enormous amount of physical energy.

These people will therefore expend their energy differently and much more physically than we parliamentarians here in the House.

It is an absolutely vital trade. We could never do without mechanics. Madam Speaker, if you had a flat on the highway, or if I did, I can tell you I would be very happy to see a mechanic coming to help. Even changing a spare is not something all the members of the House could do.

This is a very important trade, for which I have very great respect. As I was saying, in another decade, everyone went to university. Now we are realizing we have a shortage, especially in areas such as mechanics. Young people get specialized training in schools and colleges. They pay a lot for that, and when they enter the labour market, most private places they go to work for, either garages or institutions, ask then “Listen, do you have your tool chest?”

But a tool chest costs a lot of money. It does not cost hundreds of thousands of dollars, but it still costs several thousands. To work in a garage or a service station, these young people need a solid background, and the necessary tools right from the start.

Sure enough, if we compare with Bombardier, it will supply tools to its workers. Bombardier is specialized in this area. But if you take an independent worker, who works in a small garage in a village or in a local garage, as much as possible he must provide his own basic tools. It is like a hairdresser; she needs her tools to work and she provides them.

So he is considered to be a sort of self-employed worker. These young people are barely into their twenties when they enter the labour market, and they are penalized, often on top of having to pay back their tuition, costs of special training, because they must go into debt just as they are hitting adulthood in order to pay for tools. I think that this is unacceptable.

When we see that the federal government is racking up surpluses on the backs of unemployed workers—we are talking about a whopping $38 billion—when we see that it has so much money and that it is not able to help young people get a start in life, that is unacceptable.

This bill would correct this situation. It would be an excellent beginning for the government. It could stop resorting to parables and show us once and for all that it truly intends to help young people enter the labour market. It could innovate even further because, in other trades, such as plumbing or electrical, in all these fields, it could eventually do almost the same thing.

There are 1,300 mechanics in my riding of Laurentides. We should be able to encourage these people from the beginning; we are not asking for the moon and the stars. There are 115,000 mechanics in this country who invest an average of between $15,000 and $40,000 each for their tools and equipment. Their average pay is not all that much; according to some, they earn an average of $29,000 annually. With $29,000, if a mechanic has to buy a set of tools worth between $15,000 and $40,000, I can tell the House that it will take a mechanic many years to pay for them; this is a form of mortgage for these people and a mortgage takes 20 years to pay off.

I believe that we have the means, the capacity and the cash to help them get a start in life. We keep hearing in committee that young people are important, that women are important, that everything possible is going to be done to help them, so perhaps it is high time the Liberal government made good on its desire to do good deeds. We are still hearing talk in the human resources development committee about loans and scholarships, but that is not what is needed.

What is needed is something tangible. We need the government to take prompt action in matters such as this. We need a majority vote here in this House. The Minister of Finance has the fiscal capacity to accommodate it. It can be calculated, very rapidly even. We need a gesture of good will from this government.

I repeat that I totally support my colleague for Beauport—Montmorency—Côte-de-Beaupré—Île-d'Orléans and sincerely hope we can have as good a vote as we did during the last parliament, that our colleagues will be informed on the issue and will also speak on it. They are, of course, welcome to add their comments on Bill C-222.

We would be very pleased to finally see a tax policy that will help trades people, who often have not had the opportunity to attend university but who work very hard at what they do, who do marvellous work and for whom we have enormous respect. These people absolutely deserve to have help getting off to a good start in life.

Today in the House, the government has an opportunity to provide these young people with the support they so greatly need. We cannot ignore them. We need positive, real and tangible policies so that our young people can get off to a real start toward a better life.

Income Tax ActPrivate Members' Business

May 11th, 2001 / 1:45 p.m.
See context

Canadian Alliance

Cheryl Gallant Canadian Alliance Renfrew—Nipissing—Pembroke, ON

Madam Speaker, it gives me great pleasure to speak in support of Bill C-222, an act to amend the Income Tax Act for the deduction of expenses incurred by a mechanic for the tools required for employment.

I first acknowledge the tremendous leadership my Canadian Alliance colleague from Lakeland has shown in providing information on the issue. He introduced Bill C-244, which is identical in subject matter to the bill before us today, and I know that as a newly elected member of parliament it is issues such as this one and the quality and calibre of representation of members like the member for Lakeland that bring credit to this institution.

During the November 22, 2000, election I had the opportunity to speak to a number of mechanics who were very aware of this issue. In fact I spoke to one mechanic from Petawawa, Ontario who told me that he had been working on this issue for 30 years. It was his wish that while it was probably too late for him to see any fairness on the issue, hopefully this issue could be resolved for his son who is looking to follow in his footsteps now.

What has been very disappointing in regard to this issue is how it so clearly demonstrates the dysfunction of parliament. This is a private member's bill. All members should be allowed to look at the proposal and then decide on behalf of their constituents whether this is an issue that they should support. All members should let their conscience be their guide and vote accordingly. In the last election Liberal members said they supported this legislation.

The government does not care about whether or not its members have an informed opinion about a particular piece of legislation. They are now being whipped into line with the silliest of objections. It is a shame that members of the government party are muzzled in the way they are.

I am proud that I am able to do something that no government member is allowed to do, that is, to speak freely and vote freely in the House of Commons. This sad fact was also brought home with the decision by the Liberal Party to force its members, except for one or two brave souls, to vote against its election promise, something it received votes for as part of its election platform, to vote against an independent ethics counsellor. What a sad day for the democratic process in Canada.

I know that there are some conscientious members on the government side. There were enough of them on the House of Commons finance committee before the last election to direct the Minister of Finance in their report, in prebudget consultations, and tell him to do the right thing and change the tax rules so that mechanics would be treated fairly.

Let us take a look at some of the government's objections. These objections were raised by the government in regard to implementing tax fairness for mechanics. Let us be clear. We are not talking about special treatment. We are talking about fairness.

The Liberal government's first excuse is that mechanics make too much money for this write-off. Frankly that is such a foolish assertion that I am astonished the government even made it. This proposal is not about whether mechanics are charity cases and whether the government should throw them a few scraps. This is about being treated fairly under the Income Tax Act and in relation to how others are treated as well. It is a sad commentary that the Liberal Party should feel this way.

The Liberal government also says it is true that mechanics need to spend anywhere from $20,000 to $70,000 on tools, but that is a cost incurred over maybe 40 years. That may be the way the government does equipment procurement for the military, but I have news for the government: tools wear out or get lost.

That is why some employers make it a condition of hiring that mechanics buy their own tools. If mechanics do not own their own tools, some owners have found, the tools disappear. They get left on vehicles or misplaced. It just happens. I am not talking about theft because I do not believe that to be a problem whatsoever. Tools get misplaced around the home as well. The issue is that mechanics must have their own tools as a condition of employment. Others such as shop owners can write off the cost of their tools. The issue here is tax fairness.

The Liberal government knows this but it persists with the myth that somehow this is a special treatment rule. It is not. It is an issue of tax fairness.

Income Tax ActPrivate Members' Business

May 11th, 2001 / 1:35 p.m.
See context

NDP

Libby Davies NDP Vancouver East, BC

Madam Speaker, I am very pleased to rise in the House today to speak in support of Bill C-222.

I congratulate the member for having brought the bill forward in the last parliament and for having gained such strong support from all sides of the House. The New Democratic Party supported the earlier bill and we will support the new version of the bill. In fact my colleague from Acadie—Bathurst introduced a similar motion in the House.

The basic principle of the bill is about valuing people's work. We should be supportive of the work that mechanics do. They should legitimately be allowed to deduct the tools of their trade as an expense. It is the principle of fairness and of recognizing the importance of this one type of work.

Not everybody can afford an automobile but most of us do rely on automobiles to drive us to different locations. However, we do not really value the work that goes into maintaining those automobiles. Auto mechanics have a thankless task.

We like to complain about auto mechanics and the cost of repairs. Sometimes people do get ripped off but we are talking about an area of work that is highly skilled. Mechanics require an enormous amount of training and initiative in terms of keeping abreast of technological advances in the automobile industry.

My colleague from the Bloc mentioned that many auto mechanics do not make a lot of money. It is not exactly the most highly paid and lucrative job out there. It is very important that we look at this kind of work and recognize that there is a monetary expense involved for auto mechanics. They do not have the advantage, as do some other sectors, of being able to claim the tools of their trade as an expense.

The bill is not only about valuing people's work, it is also about fair taxation. Our tax system is a crazy maze. Most people feel very intimidated by a system that has become incredibly complex but most people understand instinctively, although our system is a progressive tax system, that the less money one earns the worst break one gets.

We have situations where corporate executives can write off all kinds of expenses that are considered to be legitimate expenses of business or employment. Buying hockey tickets, fancy dinners or other kinds of things for entertainment are considered essential costs of a corporate executive of doing business and are recognized by our taxation system. At the other end of the spectrum, when looking at the work of an auto mechanic, no such recognition is provided.

When I was first elected in 1997 I received a number of letters from auto mechanics in east Vancouver. We have a number of successful car dealerships just at the edge of my riding. I received a number of letters from skilled auto mechanics regarding the unfairness in the tax system and the fact that they could not claim their tools which were to them a fair and legitimate expense.

The bill is a very good initiative and an good example of what a positive contribution private member's bills can make in the House. We may not be able to solve the problems of the whole world but we can bring specific concerns forward for debate, seek the support of other members of the House and actually get them approved.

Not only is this a good bill but it is a good example of how we can cut across party lines and actually support a small but very reasonable initiative.

The New Democratic Party most wholeheartedly supports this initiative. We believe it is important to recognize the work that auto mechanics do. The small break they would get as a result of this bill being passed is important to those people. It would not change the total scheme of things. I do not think it would upset any balance. It could be seen as part of a direction to support the idea of fair taxation, which is taxation is based on ability to pay. It is based on the idea that a tax system should be progressive and certainly there are major issues within our tax system that we can hold up as examples of great inequities within the system.

Another constituent of mine brought forward the example of a pensioner or someone with a very low income who is sent a shortened income tax form, even shorter than the regular one. I think it is called a TS1A. If a pensioner or someone on a low income happens to make a political contribution, as many pensioners do, the form itself does not actually contain the appropriate line for the contribution. It has to be put somewhere else. As a result anyone making a $100 contribution would end up getting a credit of only $17 whereas those using the regular tax form would get a full credit of $58.

I bring this forward because to me it is just another example of practices that have gone on within the system. Maybe they go on unnoticed. No one pays attention to them. They are actually discriminatory. They do not recognize that in the case of the pensioner or low income person making a political contribution, the person actually gets ripped off by the tax system relative to those of us who fill out the full length form.

I think the motion is along those lines in terms of wanting to make a small change that will provide some recognition and value regarding the real cost of tools for this work.

I congratulate the member for continuing to press the matter in the House of Commons and for not giving up. It is sometimes through these small advances that working people get a better break. I would hope that all auto mechanics in Quebec, in my province of British Columbia and in other places in Canada would have the benefit of what would come from the approval of this bill.

We would certainly encourage the government to actually translate the bill into the necessary tax system change. I think most people anticipate that the bill would be approved and I thank the member for bringing it forward. All of us in the New Democratic caucus support his initiative in the bill.

Income Tax ActPrivate Members' Business

April 3rd, 2001 / 6:20 p.m.
See context

Progressive Conservative

Scott Brison Progressive Conservative Kings—Hants, NS

Mr. Speaker, it is with pleasure that I rise today to speak on Bill C-222, which would actually address what is a significant inequity in our tax treatment, in this case, of mechanics in Canada.

There are 115,000 mechanics across the country, on average investing between $15,000 and $40,000 each in tools and equipment. The average wage for these mechanics is not as high as what I have heard some Liberal members opposite claim it to be. In fact, the average income is $29,000.

I heard one of those members opposite, and I believe it was the Parliamentary Secretary to the Minister of Finance, say that the average mechanic's wage is $60,000 or something to that effect. I do not know what kind of car he is driving, but I am driving a 10 year old Volvo station wagon and I cannot not afford to pay mechanics who cost that kind of money. Obviously the parliamentary secretary is investing an awful lot more in cars than some of the members here in the opposition.

The fact is that the average income is $29,000 and the investment just to get through the door to become a mechanic and have those tools required averages between $15,000 and $40,000. It is little wonder that we are faced with a critical shortfall of mechanics across the country. This is becoming a real issue. This is a real issue that is going to wreak havoc in the long term and affect every one of us in our own situations as we need the services of mechanics.

It is clear that this piece of legislation is fair. It makes a great deal of sense. It would extend the same treatment to mechanics that we see extended to professionals who, in many cases, have the ability under the tax code to write off professional expenses that are required for participation in their particular job or profession. It is very sensible.

In fact, the House of Commons finance committee in 1996 and 1997 made this recommendation to the Minister of Finance in its prebudget consultation report. It would go a long way toward improving the fairness of our tax treatment, in this case, of mechanics. If we improve the tax treatment or the fairness of our tax system for any segment or group of people within society, we all stand to benefit.

This proposal represents one idea, in this case from one member of parliament, on things we can do with our tax system to make it better, to make it fairer and to make it more effective in creating greater opportunities for Canadians.

I would like to take the opportunity to segue into a related topic, and that is a speech given by Jack Mintz, the president of the C.D. Howe Institute. In the past he chaired a report to the Minister of Finance on tax reform in Canada. Recently he gave a speech where he, not as a parliamentarian but as an individual with a great deal of depth on public policy issues in Canada, provided a four point plan on ways in which he sees Canada becoming a stronger, more prosperous country in the 21st century.

In the same way that the hon. member presented his piece of legislation, this private member's legislation, on a specific means by which to have a better, fairer tax system, I would like to present some other ideas, in this case from Jack Mintz, the president of the C.D. Howe Institute. What he describes is his four point plan.

That four point plan sounds like going to a mechanic or someone servicing a car, again in a related segue. The first point he makes is to reward success, not failure, to judge public programs based on what they accomplish. Successful ones are funded and continue to be funded. Failing programs are not funded. Clearly HRDC or some of the aid programs which have fallen under the purview of the minister of HRDC might find it difficult to achieve funding under this sort of scrutiny.

Public sector workers need to be paid and rewarded in monetary and in non-pecuniary ways according to their success in meeting objectives. This would include civil servants, teachers, professors, medical workers and anyone who is paid from public money. He suggests that we need competition in providing public services and that in fact there has to be a greater ability for market forces to pervade the delivery of public services.

He also suggests as the second point in his plan that of tackling the public debt in Canada. We have a huge debt in Canada that has built up over the years. The total government debt in Canada is $850 billion. Unfunded liabilities for public pensions and public health care, if we add those in, take us to about the $2 trillion mark for the total public debt in Canada. That does not include many of the other contingent liabilities. If the problem is left untouched, we will have to levy taxes equal to eight per cent of our GDP just to service these liabilities by 2015.

Mr. Mintz is suggesting that we take a very aggressive approach to our federal debt. To reduce tax burden in the future, he suggests that we tackle our federal debt and use the returns from tackling the federal debt and those returns coming from the reduced interest payments that we see as an expense every year, paid by the taxpayers of Canada.

If we were to take a more aggressive approach to public debt now, as a result we would engage in what would become a virtuous circle of using that reduced level of expense from paying the reduced level of interest on the principal of our debt to actually fund tax reduction, which would of course benefit Canadians and create greater levels of economic growth.

That would reduce the debt not just in real terms but also as a percentage of GDP, by reducing the debt of course in real terms but also by increasing the GDP through aggressive tax measures which would fuel greater levels of economic growth.

In Canada our governments command well over 40% of the economy. That is higher than Australia, Iceland, Ireland, Switzerland and others countries, which operate on a third or less of the national economies. The U.S. is at about 30%. Clearly we have to reduce the percentage of government participation overall as a per cent of our GDP.

We need to address Canada's dysfunctional tax system. We have a tax system that needs significant reform. The hon. member has presented in this case a specific initiative that would improve the fairness as it relates to mechanics. I would suggest that we need to move much further and actually provide a comprehensive, holistic approach to tax reform and in fact start using tax policy and tax reform measures as vehicles to create greater levels of economic growth and opportunity for Canadians.

Mr. Mintz is now president of the C.D. Howe Institute. In a previous incarnation, he was the author of the Mintz report, commissioned by the Minister of Finance but subsequently shelved by the Minister of Finance because it did not contain purely politically palatable recommendations. As he had the courage to address some of the long term competitiveness issues facing Canadians, he has a great deal to offer in this regard.

From a tax perspective he goes further to suggest we need to significantly reduce areas of taxation in Canada that are most out of line with those of our competitors. They include corporate and capital taxes which deny business the necessary capital to achieve greater levels of productivity and competitiveness in the hypercompetitive global economy.