Bill C-222 (Historical)

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

Business Of The House

[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 Act

[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.

[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.

[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.

[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.

[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.

[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 House

[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' Business

[Derek Lee, Liberal, Parliamentary 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 Act

[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—

[Alex Shepherd, Liberal, Parliamentary 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.

[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.

[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.

[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.

[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.

[Yvon Godin, NDP, Acadie—Bathurst, NB]

Mr. Speaker, first, I wish to congratulate my colleague from Beauport—Côte-de-Beaupré—Île-d'Orléans on his bill, Bill C-222. It is the second time he introduces such a bill in the House of Commons.

It is also interesting to see that it is the second time the bill is made votable. There is a political will to make the necessary changes to allow mechanics to write off the expenses incurred for their tools.

Members will probably recall that I tabled a motion, Motion No. 248, dealing with this very subject. When that motion was debated, the parliamentary secretary made the same speech. Instead of coming to the House of Commons, he could simply press a button and we could hear what he has already said. He could spend his time doing other things for his riding.

The parliamentary secretary was saying then “It is not right because people who earn less money, who make $20,000, can pay more for their tools because they are apprentices. They will receive less money from the government, from Revenue Canada. Someone earning $35,000 may only spend $1,500 a year, and that is not fair”.

I wonder if the government applies the same standard to big companies making billions of dollars and those making much less or even losing money. Everyone within companies is entitled to tax deductions.

The parliamentary secretary used these arguments in the debate on my Motion No. 248, when I asked that the GST on tools of all trades be abolished in order to eliminate discrimination. Today, he is saying “It is unfortunate, but it would only apply to mechanics”.

A few weeks back, he used the same argument when I was talking about all the various trades. The parliamentary secretary may have a small problem here. In all fairness, it must be that the finance minister, who is the one who has the money, tells the parliamentary secretary “This is what I want you to say. Tonight, at 5.30 p.m., you will stand up in the House and tell everyone that there is no money left for the workers”.

The government member mentioned wages earlier. I did some research back home. Mechanics working in the Brunswick mine spend $2,500 a year on tools. It may not be the end of the world, but I think a mechanic who leaves for work in the morning, carrying his lunch box, has a tough workday in front of him. He will be covered in grease by the end of the day. The work he does is important for the output of our country. He will be repairing equipment, whether it is in a mine or in a garage. As far as wages are concerned, a service station, not just in New Brunswick but anywhere in the country, is certainly not the place workers are going to get the highest pay, especially when they are still apprentice mechanics.

The hon. member who introduced this bill is merely asking that the government give some recognition, out of respect, for these people who will be expected to produce on the job all their lives. Give them a little. Someone earning $35,000 will pay, I don't know, maybe $10,000 or $12,000 in income tax. This worker might well say “With all the taxes I pay, I could at least get a little back, say $175”.

The government says “We cannot do so because we are afraid of discriminating against others. We cannot do so because we know some mechanics earn less than others. We cannot do it”.

This is ridiculous. The government never has that problem, as I have said, when it is comes to corporations that are making money and ones that are not. They amend the formula for the unprofitable ones, instead of them being penalized. There is nothing more for them to do.

On the other hand, if a mechanic has the good fortune to find a job with a company that supplies tools, the company has a tax deduction.

A mechanic who must buy his own tools, who earns a small salary, who spent four years at a community college, who learned his trade and who incurred debts totalling $40,000 cannot get this break. He cannot get an annual deduction of $175 or $200 even though he has to buy tools. This is not right because he is just an ordinary worker.

As was mentioned earlier, lumberjacks got a deduction, and I am glad they did. For example, a lumberjack has to spend about $750 or $850 on buying a chainsaw. He does not work all winter, but come spring, he has to buy one. At least, he will get a small tax deduction to buy his next chainsaw.

A few weeks ago, when I introduced my Motion No. 248, I said that all tradespeople should get a deduction for the GST.

The parliamentary secretary, the same one who is here this evening, said at the time that it would be too hard to manage. I told him that it would not be difficult if the Liberals would follow up on what they had in mind in 1992. When they prepared their platform for the 1993 election, they said they would eliminate the GST. It would be easy to manage such a program, since that tax would simply be removed.

However they did not do that. So, under the bill proposed by our colleague from the Bloc Quebecois, these workers would at least get this small tax deduction.

As the hon. member said, whether a private member's bill is presented by a Bloc Quebecois, NDP, Canadian Alliance, Liberal or Progressive Conservative member, it is a personal thing. It is something that each member can have a view on.

If the Liberals across the way refuse to pass Bill C-222 to give mechanics a tax break, this will mean that they are telling all mechanics in Ontario who work in the automotive industry that they do not give a damn about them.

In the November 27, 2000, election, the Liberals must have received some votes from mechanics in Ontario. We know that there are members from Ontario on the other side of the House.

Do mechanics in Ontario know that the Bloc Quebecois member introduced a bill calling for a paltry $175 tax break for them? I am sure that some automotive industry workers have paid taxes as high as $20,000. Others have perhaps paid more because of overtime.

Hopefully, this bill will bring the members from Ontario now in the House to their senses. I know they do not know which way to look right now. I wonder if they are embarrassed. Usually, they are right in there.

I hope that the speeches today will shake them up a bit and that they will support the bill, that they will stop complaining that they are backbenchers and that they do not get a chance to vote and must do as the Prime Minister tells them. That is a real shame. The members are on the government side. They could get things through, but they whine that they are not allowed to take decisions.

This evening, I want Canadians to know that each of these members can make up his own mind about this private members' bill. They cannot hide behind the excuse that the parliamentary secretary is against Bill C-222, that the Minister of Finance does not wish to make changes to tax credits for mechanics. They cannot hide. Each decision will be an individual one.

I just want to make sure, and I will repeat this here, that the decision will be an individual decision when it comes to a vote on Bill C-222. It is a bill and will become the law.

For those members of parliament who hide and say they have to follow the party line, this is one where they do not have to follow the party line.

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

moved that Bill C-222, 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.

Mr. Speaker, first, I would like to thank my colleague from Sherbrooke who seconded this bill. On behalf of my constituents of Beauport—Montmorency—Côte-de-Beaupré—Île-d'Orléans whom I am the privilege of representing, it gives me great pleasure to speak to this bill.

For the benefit of the members present and of our viewers, I should mention that this is a private member's bill that will be voted on after a three hour debate at second reading.

I also want to take this opportunity to thank my colleagues on the Subcommittee on Private Members' Business for accepting my arguments that this bill is so important that it should be made votable so that we can get clear directions from parliament.

This subcommittee is non partisan by definition. The best proof of that is that the government is represented by only two members and that all four opposition parties are represented. Therefore, the subcommittee makes its decisions by consensus.

This is the second time that I have introduced a bill on this issue. Members will remember that, before the election, I had introduced Bill C-205, but I will come back to this later on.

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.

In fact, in the last parliament, I introduced Bill C-205, which was exactly the same as this one. It was not only voted on, since it was made a votable item, but it was supported by a majority of members, with 213 members voting in favour and only 11 against.

I see across the way the Parliamentary Secretary to the Minister of Finance and member for Etobicoke North, who criticized my bill at second reading. But members were able to rise above partisanship and members from all parties ignored the directions coming from the finance minister.

I think the vote on Bill C-205, where 213 members voted in favour of it and 11 against, demonstrated that members understood the hardships faced by young mechanics and came together to offer them a modest tax break.

However, since the bill died on the order paper after the November 27 election was called, here I am once again promoting my bill.

There is so much support for the provisions of this bill that, in the last parliament, even the Standing Committee on Finance with its Liberal majority recommended in its prebudget report that this tax break be granted to automotive mechanics in Canada and in Quebec.

However, the support given to this bill is only one aspect of the importance of issues involved. Several other issues deserve to be addressed once again in the House of Commons and drawn to the public's attention.

We could talk about the inability of the auto industry to attract young people. We could talk about the pressure that mechanics, most of whom earn a very modest living, have to face to buy the best tools possible at a reasonable price.

We could also talk about the lack of fairness in a tax system that allows some tradesmen, but not others, to write off the cost of their tools and equipment.

This bill is becoming more and more necessary as time goes by. The amount of money mechanics had to pay to buy their tools when this issue was first brought before the House 15 years ago has increased tremendously.

We know that cars were far less sophisticated 10 years ago. Computer assisted components, which are now standard on most cars, are as much part of the new economy as the most recent Internet technologies and services provided by new high tech companies based in Montreal or in Ottawa.

I appeal to the common sense of my colleagues on both sides of the House because, after all, the main purpose of this bill is to help young people who choose this trade.

In our society, we cannot have white collar workers only, people who work with computers or in businesses where working conditions are exemplary. Our society cannot be made up of white collar workers and professionals only.

Some young people do not mind getting their hands dirty. Because they love auto mechanics, they are prepared to slide under cars. With our climate in Canada, cars often leak and oil and engine coolant literally drip onto the mechanics' faces. Just imagine what mechanics with 20, 25, 30 and 35 years of experience have gone through.

Unfortunately, since this has traditionally been a man's job, the field has been dominated by men and there are very few women auto mechanics. There are a few but, unfortunately, not many.

By the time auto mechanics reach the age of 50 or 55, their quality of life has dropped. For years on end, these people work hard to remove transmission parts, engine parts and tires and they wreck their backs or develop disc problems. They must be recognized for the value of the work they do.

Young mechanics, fresh out of school, often have to pay between $3,000 and $4,000 for the most basic toolbox. To get a job at a service station or a car dealership, an apprentice must have his own toolbox.

The first thing that a personnel director, or a garage owner or manager is going to ask is “Do you have your own set of tools?” In order to get hired, he must shell out $3,000 to $4,000 for his own tools, not to mention what he has often spent on tuition.

Some young people studying automobile mechanics may have parents who are comfortably off, who have paid all their tuition, but others are graduating with huge debts at the end of a lengthy occupational training course, such as we have in Quebec.

As for specialists, they must come up with close to $40,000, and this is no exaggeration.

When my office staff and I prepared this speech, and I take this opportunity to thank my parliamentary intern, Jonathan Weier, who worked very hard doing the research for it, I must say that I found $40,000 a bit steep.

But I checked this amount out. I went to service stations and car dealerships and I asked to see the toolkit of an experienced mechanic. They opened all the drawers.

When I mention the amount of $40,000, do not think, Mr. Speaker, that I am exaggerating because a set of tools for a specialist can easily cost as much as $40,000. I do not wish to suggest that you would do such a thing because I am sure that, like the member for Stormont—Dundas—Charlottenburgh, you too have had occasion to visit car dealerships and realize that I am right.

Cars have hybrid propulsion systems now. In all likelihood, in the future, the more cars will have computerized components or hybrid traction systems, the more parts and the toolkit of mechanics used to repair these hybrid systems will have to be adapted accordingly. As we will recall, last year Toyota introduced the Prius , which is part electric, part gasoline. This means more expenses.

The only difference between a newly hired mechanic and a young worker at Bombardier or somewhere else is that the Bombardier employee earns a fair amount more and has all the tools he needs supplied by his employer.

Interestingly, in its throne speech on January 30, 2001, the present government made a commitment “to support training programs, support the new economy and encourage continuing education among Canadian workers”. However, the government could give workers in traditional sectors some sign of its respect. Ongoing education and training programs seem to apply only to this new active population.

However, it is unfair and shortsighted to ignore those who play such an important role in the economy of Quebec and Canada in the 21st century, even though they work in a more traditional sector.

In a much more egalitarian, more fair society we must recognize that we need all professions. I paid for my studies by doing custodial work at the Chicoutimi hospital. I was just a student, but I was still in a position to understand that while a hospital had its physicians and surgeons, it still need its cleaners. Without a “mopologist”, as we called them at that time in Chicoutimi, to clean the ER and the OR, no great surgeon would operate, unless he was prepared to do so in conditions of minimal hygiene.

As parliamentarians, we have a duty to acknowledge the contribution of certain categories of workers in the rather more traditional jobs. We need to be open to the new economy and to make way for new employment sectors. I am not saying we should go back to horse and cart days. We need to recognize that there are workers who are entitled to help, even if they work in more traditional sectors.

The high costs associated with mechanical work will continue to put pressure on the automobile industry and will make it hard for young people to get into the trade.

In a June 1999 publication, the Canadian Automotive Repair and Service Council stated that “The biggest challenge facing the industry as the 20th century comes to an end will be to attract young people to its ranks”. This is one of the major issues in this sector: the serious shortage of young people wanting to join the trade, a shortage that does not seem likely to improve any time soon.

Among the factors that influence the attraction of this industry directly is the cost of tools for young apprentices and mechanics.

As I said earlier, a young person who graduates from high school at age 21 or 22 and wants to apprentice will have to invest several thousand dollars in his work. After paying off thousands of dollars in student debts, he will earn an average of $23,000, that is what apprentices make in Canada, while a mechanic with some experience earns $29,000. Whether it is $23,000 or $29,000, we are not talking about workers who earn $50,000 or $60,000.

Before being elected to the House, I was a director of personnel in the pulp and paper industry. I know the salaries that are paid in the pulp and paper industry. I am not saying these workers do not work hard; they work conscientiously and do quality work. These people are not at the top of the salary scale, with apprentices earning $23,000.

Most professionals in Canada are provided with the tools they need for their work, but not mechanics. For one reason or another, the automotive industry, gas stations, garages and other businesses employing mechanics decided that providing one's own tools was a condition of employment.

The idea is that mechanics will be more careful with their own tools and will maintain and adapt them to best do the work that they have to do. This is particularly unfair, since there are many other professions where workers are allowed to deduct, for income tax purposes, expenses incurred for their tools.

I know that the Parliamentary Secretary to the Minister of Finance will say: But what about electricians? What about plumbers? An electrician does not have the same tool kit as an automobile technician.

I do hope the parliamentary secretary has changed his mind after seeing 213 members voting in favour of my bill, but we will see soon enough. During his speech, I would like him to think about the performers, the musicians and the chainsaw operators who are entitled to deduct the cost of the tools of their trade.

What we and the auto mechanics and the automotive industry associations are asking for is simply justice and fairness.

This legislation has the support of members from all political parties. It has nothing to do with the differences of opinion between the right and the left, the sovereignists and the federalists. With this bill, and I am glad I was able to convince the Subcommittee on Private Members' Business, I want to rise above party lines. We have to put politics aside. Yes, I am a member of the Bloc Quebecois and I am the one who raised the issue. I was able to convince my colleagues in the House. I was fortunate to win out in the draw. However, I am just a messenger here trying to move forward a vision of fairness and justice.

By the way, I am not a car buff. I invite members to drop by my place and have a look at my toolbox. It is very basic. I have a hard time just putting oil in my car engine. I am not good around cars. However the people I have met during election campaigns and parliamentary breaks have convinced me that something has to be done about this important issue.

I would remind those who have doubts about the possibility of Bill C-222 being passed that the Income Tax Act is amended regularly throughout the year in order to bring it into line with new social realities. As for authorities being able to prevent the use of tools for personal projects, I say that we must trust people. There is no reason to question their honesty and goodwill.

Although the government expressed a certain sympathy, it has still not taken action to resolve the problem by introducing this tax credit in the budgets it has brought down since the 1997 report by the Standing Committee on Finance.

In addition to the broad support enjoyed by this measure in the House of Commons, I have received many letters of support from organizations in the industry, private citizens, labour unions and almost all groups with an interest in the issue. The Automotive Industries Association of Canada, for instance, pointed out the growing difficulty of finding qualified mechanics.

The increase in the number of car owners in Canada and in Quebec is increasing our dependence on the automotive industry. We must address this serious problem facing the industry. In my view, the bill is a matter of common sense, justice and good financial planning. Obviously, the majority of members on both sides of the House agree with me.

I call on all members who voted in favour of my last bill to vote in favour of this one. In the name of justice and common sense, I call on the 45 new members elected in the last general election on November 27, 2000 to vote in favour of this bill.

Finally, I call on the 11 Liberal members who voted against a similar bill to reconsider their decision.

Tax On Tools

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

Madam Speaker, I am pleased to join the previous speakers in commending the hon. member for Acadie—Bathurst for the motion he has brought forward.

We can tell that the hon. member for Acadie—Bathurst has a strong social conscience. So do I. This motion is consistent with his concerns and those of some workers who do not necessarily feel supported by society.

I am not saying that these people are working for minimum wage. However, contrary to popular belief, these people spend a lot of money to buy the tools they need to do their job. The key words here are “tools they need to do their job”.

To get a job, any electrician, pipefitter, welder, building painter, blue collar worker or carpenter needs a tool kit. Members will see what I mean when I thank the hon. member for Acadie—Bathurst for standing up for the workers who do not necessarily get all the support they need, who do not earn high wages but still have to incur major expenses.

As the Parliamentary Secretary to the Minister of Finance, the member for Etobicoke—North, pointed out earlier, there are before the House other bills addressing the same issue, including one of mine. I introduced my bill in the 36th parliament. It was called Bill C-205. I have again introduced this bill, which a committee of MPs has judged to be a votable item. Eventually, sometime during March I imagine, we will be discussing my bill, Bill C-222, which is aimed at allowing automobile mechanics to deduct from their income the cost of purchasing their tools.

The amounts involved are considerable. I am talking about the tools required by auto technicians. I will take this opportunity to raise the awareness of all colleagues in this House. In order to work, an auto technician requires a tool kit worth at least $15,000, and the amount can easily be as high as $25,000, $30,000 or $40,000. He has to have that tool kit in order to be able to work. Today, with all the computers and electronic sensors, a person has to have quite a tool kit in order to work.

This is a heavy burden for a young apprentice, who has just finished a course and is saddled with student debts, whose parents may not be well off and often have gone into debt to help him get the minimum tool kit he needs to get a job. From my meetings with those working in the automotive industry, I know that the apprentice's tool kit costs at least $4,000.

A young person just finishing his course and already in debt has to go into further debt or ask his parents to co-sign a $4,000 loan for him. When he goes looking for work at an auto dealer or a service station, he will have to have his own tools. The first thing the owner will ask him is “Do you have your tool kit?” He cannot be constantly begging tools from others, going into other people's tool kits. That is not the way it works.

I am glad that the parliamentary secretary said earlier that there were other bills before the House. I hope that when we debate Bill C-222 he will not tell me what he did when we debated Bill C-205. I listened very carefully to what he said. He said “We cannot agree to deductions for mechanics. What will we tell electricians, plumbers, pipefitters and welders?”

He has found a way to distance himself from the entirely reasonable and legitimate motion by the member for Acadie—Bathurst. I do not want to start taking a dislike to the parliamentary secretary, because I would like this motion and mine to be approved, but he cannot have it both ways.

He tells the member for Acadie—Bathurst “Perhaps we would not be ready to go with your approach, because there are other bills that will cover the deductibility of tools”. I am anxious to see what will happen.

I had discussions beforehand with the Parliamentary Secretary to the Minister of Finance. He held this position and he told me that he could not vote in favour of the motion. I met with members individually and brought the problem to their attention. I urge the member for Acadie—Bathurst to bring this problem to his colleagues' attention, because we each of us have in our ridings pipefitters, plumbers, automobile technicians, welders and house painters. These are ordinary people who are not floating in money and who are listening now, over supper in the case of those on eastern standard time. These people are eating their supper and saying to their spouse “That is right. A motion like that should be agreed to, because we need this”.

I brought this problem to the attention of members of the House and the vote at second reading was 180 for and 11 against. I therefore hope that when it comes time to continue the discussion on the mechanic's bill, we will remember the fine words of the parliamentary secretary.

I will close because it is getting late. Once again, I point out that in an earlier life, before I was elected, I worked in the field of human resources for 16 years, 14 of them in the pulp and paper industry. I think that such a deduction for the cost of tools required in employment is important.

In my work, the necessary tools have always been a pencil, an eraser and a calculator, to some extent. I am not a mechanic buff and my toolbox at home only includes a minimum number of tools. But I know that there are workers who need something like Motion No. 248, which was tabled by the hon. member for Acadie—Bathurst. It is simply a matter of equity, of social justice.

There are other categories of workers who are already allowed a deduction, including musicians and people who must use their car to work. These people can take full advantage of the deduction. Whether or not they pay the GST does not really change things, because they can deduct the amount from their income.

It is simply a matter of social justice and equity. We just had an election campaign last fall. Members from all parties in the House, including myself, worked hard to get elected. We visited many companies, small and medium sized businesses and plants.

The member for Acadie—Bathurst introduced this motion in the House. Of course, he is intelligent enough to have thought of it on his own, but I think he will honest enough to recognize that he did so because people have made him aware of that issue. It must be understood that our role as members is to act as messengers, as spokespersons for the citizens whom we represent. This motion only asks for greater justice.

[Roy Cullen, Liberal, Parliamentary Secretary to Minister of Finance]

Madam Speaker, I thank the member for Acadie—Bathurst for his initiative in bringing the motion before the House of Commons.

I also congratulate him on his good news.

Mechanics' tools and tools required for work seem to be a very topical debate right now. The motion proposes that the Excise Tax Act be amended to eliminate the application of the goods and services tax and the harmonized sales tax for employees in trades who are required as a condition of their employment to provide on the job tools.

Currently GST-HST relief is provided via a rebate mechanism for the GST-HST paid on those employee expenses that are deductible in computing an employee's income from employment for income tax purposes.

It is recognized that presently there are a number of private members' bills, as I mentioned before, Bill C-222, Bill C-244 and Bill C-225, before the House with respect to the income tax treatment of the tools of mechanics and others.

As the GST and the HST rules should be consistent with those for income tax purposes, it is prudent to await the outcome of the debates and the outcome of the discussions on these private members' bills. I am sure the hon. member would agree.

Nevertheless, it should be stated that any tax policy with respect to the matter of employee tools should be fair. In addition, any changes should also be relatively simple to administer and enforce for the Canada Customs and Revenue Agency, and easy to comply with for taxpayers. In this regard, any changes with respect to the tax treatment of employee provided tools should take into account a number of factors.

First, any measure in this regard should be targeted to extraordinary expenses. In other words, the cost of the tools in question should be beyond those that most employees must incur in the normal course of employment. The motion before the House today would provide GST and HST relief to all employees irrespective of the size of their expenditures instead of targeting relief to those who incur extraordinary expenses relative to their income.

For employees with tool expenses comparable to those incurred by other employees this would be unwarranted as tax relief for normal employment expenses is provided through the basic personal exemption amount. That is the case with apprentices. Perhaps a special case needs to be considered for those with low incomes and high tool costs.

Second, effective control mechanisms would have to be put in place. Under existing rules for income tax purposes the employer must certify certain expenses as eligible for deduction from employment income. This is important as many items provide a personal benefit even when they are required for work. One would need to ensure that any tax relief is provided only for items required as a condition of employment and not for those purchased for personal use.

This would be very difficult to do because many items could be purchased mostly for personal reasons even if they are used for work. For instance, the computers home based employees need to purchase are available outside working hours for personal use. In these circumstances providing full tax recognition and a GST-HST employee rebate would be unwarranted.

Finally, any new measures would have to both take into account the existing capital cost allowance provisions and appropriately deal with change of use and transfers to other arms length persons.

The provisions needed to address these issues would inevitably be very complex since they would need to account for the large variety of items for which tax relief may be claimed and the different work situations in which such items are used.

To understand this, let us consider the extensive provisions needed to ensure the equitable recognition of automotive expenses. Provisions governing the deductibility of employee equipment expenditures and corresponding GST-HST employee rebates would apply to hundreds of disparate items and numerous occupations.

As members can see, this is a complex issue with many aspects that need to be examined carefully. In particular, with respect to the GST-HST employee rebate, I hope the hon. members agree that it is essential to ensure that the GST-HST rules be consistent with those for income tax purposes.

As a result, I think members of the House would agree, given the number of other private members' bills dealing with the tools of mechanics and others, that it is prudent to wait for the outcome of the aforementioned private members' bills, for the deliberations of the House and for any government response that might deal with the issue of income tax deductions for employee tools.

Income Tax Act

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

moved for leave to introduce Bill C-222, an act to amend the Income Tax Act (deduction of expenses incurred by a mechanic for tools required in employment).

Mr. Speaker, the purpose of this bill is to permit mechanics to deduct the cost of providing tools for their employment.

For the benefit of my colleagues, I should point out that during the previous parliament, this bill passed second reading, members supported it by a vote of 180 against only 11. So, my purpose today is to ensure that this bill is deemed adopted immediately, if possible.

(Motions deemed adopted, bill read the first time and printed)