An Act to amend the Income Tax Act (exclusion of income received by an athlete from a non-profit club, society or association)

This bill was last introduced in the 38th Parliament, 1st Session, which ended in November 2005.

Sponsor

David Anderson  Conservative

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

Status

Not active, as of April 14, 2005
(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.

Committees of the HouseRoutine Proceedings

October 24th, 2005 / 3:10 p.m.
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Liberal

Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC

Mr. Speaker, I have the honour to present the 16th report of the Standing Committee on Finance requesting an extension of 30 sitting days to consider Bill C-285, an act to amend the Income Tax Act , exclusion of income received by an athlete from a non-profit club, society or association.

Income Tax ActPrivate Members' Business

April 14th, 2005 / 3:20 p.m.
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Conservative

David Anderson Conservative Cypress Hills—Grasslands, SK

Mr. Speaker, discussions have taken place between all parties concerning the recorded division that was requested yesterday on my private member's Bill C-285, and I believe that you would find consent for the following motion. I move:

That the motion for second reading of Bill C-285 be deemed carried on division.

SupplyGovernment Orders

April 14th, 2005 / 3:15 p.m.
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Bloc

Paul Crête Bloc Rivière-Du-Loup—Montmagny, QC

Mr. Speaker, indeed, before question period, I set out the reasons justifying the Bloc motion, which, I believe, will be supported by the Conservative Party and the New Democrat Party. I would like to reread it to remind us.

That the House call on the government to immediately establish a trust account into which the Liberal Party of Canada can deposit all funds received from companies and individuals tied to the sponsorship scandal and identified in testimony before the Gomery Commission.

A trust account is an account for money that cannot be withdrawn without special authorization. It has sufficient transparency so that the money in it is used appropriately when it is withdrawn.

Following the very serious allegations made at the Gomery commission, where we have been shown clearly that millions of dollars were diverted to the Liberal Party under a system set up to make use of public money, it seems important to us to make sure the Liberal Party of Canada does not undertake a fourth election with dirty money. The polls are currently showing that this situation is unacceptable.

The Prime Minister himself has said, in a letter to his supporters, that he laid off the heads of agencies who were involved in this scandal. They initiated legal action too, before the conclusion of the Gomery commission. One fact remains. A lot of money has been misused and may possibly have served to fund the Liberal Party of Canada.

The Minister of Transport has said that the dirty money should be returned. If this were the case, and in view of the public's dissatisfaction, I think it would be important for the government not to reuse this money in the next election. Finally, as this is a minority government, I think it is important to have this money taken out of circulation so that it cannot skew the rules of democracy.

Another important reason we have tabled this motion is that if we do not make such a move, the Prime Minister will not budge. Since 2002, we had to ask him repeatedly to set up a commission of inquiry in order to finally get one.

So, every time we put forward arguments or ask questions, in the final analysis, running out of arguments, he ends up admitting that he has to act. We have no choice but to adopt the same attitude in the current matter, so that the money will not be used again in the next election and the Liberal Party will not be able to benefit from it.

The Prime Minister must undertake to respect Parliament's decision. Throughout the last election campaign, he talked about the democratic deficit. Well, to ensure the democratic quality of life, there will be a vote at the end of this debate and we will then be in a position to observe what sort of majority emerges.

In fact, the Prime Minister should commit himself to showing his good faith and demonstrate clearly that he wishes to get out of the current situation. He should demonstrate that the Liberal Party of Canada has no intention to—once again—use money obtained through illegal means.

It is absolutely unnecessary for the Prime Minister to wait for the end of the Gomery commission hearings, since we are not asking him to give the money back to the government. We are simply asking him to deposit this money in a trust account. Thus, when the hearings are over, if indeed it is confirmed that this money is dirty, as we have heard at the Gomery Commission, the government will be able to give it back. Meanwhile, we must ensure that it does not use this money for electoral purposes.

We are also introducing this motion because the amount involved is very large. We are talking about approximately $2.2 million. This is the amount that we know of so far. For example, the amount officially collected by the Liberal Party of Canada by Mr. Brault's firms is $166,000. There were salaries and other payments made to Mr. Alain Renaud, for the Liberal Party of Canada, in the amount of $1 million. There were also payments made to several companies, of several hundred thousands of dollars, for a total, at this time, of $2.2 million.

This motion is aimed at ensuring that the dirty money cannot be used for the next election campaign and will not distort the democratic process. Therefore, I ask all members in this House to support it.

The way for the Liberal government to demonstrate its good faith would be to step forward and vote for this motion, so that, ultimately, we would clearly see its real willingness to get to the bottom of the current situation. If the Liberals do the opposite, they will show us that their actions are aimed at getting them out of trouble, not at creating proper transparency.

Consequently, I invite all members of this House to vote in favour of the Bloc Québécois motion so that we can, as soon as possible, ensure that this money is set aside and cannot be used for the next election.

(Bill C-285. On the Order: Private Members' Business:)

April 13, 2005--The hon. member for Cypress Hills--Grasslands--Second reading and reference to the Standing Committee on Finance of Bill C-285, an act to amend the Income Tax Act (exclusion of income received by an athlete from a non-profit club, society or association).

Income Tax ActPrivate Members' Business

April 13th, 2005 / 7:10 p.m.
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Conservative

Cheryl Gallant Conservative Renfrew—Nipissing—Pembroke, ON

Mr. Speaker, I would like to speak in favour of Bill C-285. This is to change the Income Tax Act, so that income for the year not exceeding $8,000 received by an athlete from a non profit club, society or association that is operated exclusively for the purpose of improving athletic performance and promoting amateur athletics is excluded.

In my riding of Renfrew—Nipissing—Pembroke we are home to a junior A hockey team, the Pembroke Lumber Kings. In fact, Pembroke, Ontario is known as “Hockey Town Canada”.

I want people to understand what exactly the tax department is doing. This may be localized right now to Saskatchewan, but it is considering the actual billeting of these students as income and, therefore, taxing the club and the students accordingly.

These are not professional athletes making thousands or millions of dollars a year. These are young men who have come from all across the world to fulfill their dream. They have been embraced by the community, giving them a home setting in which to go to school, and in their spare time live out their dream of playing hockey.

In addition to providing healthy entertainment and supporting a rich culture of Canada in hockey, they also participate in community services. For example, the Lumber Kings, together with Spectacle Lake Lodge, have put together breakfasts and have raised money for the United Way. On occasion the Pembroke Lumber Kings go into the schools and libraries to teach other students how to read.

We are not asking for money here for a sector of society. We are only asking that the tax department leave these students with the money that they have and not tax the people who are supporting them.

We have a problem in this country with obesity, for example, and encouraging active participation in sports should be emphasized right now.

We have the Olympics coming to Canada in the year 2010. We should be supporting amateur sports in any way possible. One simple way that is not going to cost the government any money is to support this bill put forth by the member for Cypress Hills—Grasslands

Income Tax ActPrivate Members' Business

April 13th, 2005 / 6:45 p.m.
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NDP

Pat Martin NDP Winnipeg Centre, MB

Mr. Speaker, I am pleased, on behalf of the NDP, to join in the debate on Bill C-285 and to hopefully build on the comments of some of my colleagues.

We too feel very strongly that Bill C-285 is a good bill. It speaks to the very direction that we should be going in trying to promote more young people to go into sports, whether it be at the highest level or at the lowest level, in neighbourhood hockey rinks or soccer fields.

As my colleague said, Olympic athletes, the high level athletes, have to start somewhere. They do not start at age 25 to seek to be a medal winning Olympian. They start at knee-high to a grasshopper, and that is when they need encouragement.

Bill C-285 is an example of a way we could use our taxation system for a number of things such as paying for necessary services. We could also use it to nudge people in the direction we want them to go and to steer them away from things we do not want them to do. For example, we put heavy taxes on cigarettes because we would rather people did not smoke.

We could also use positive taxation measures to encourage people to do things for their general well-being, for their health and their happiness and for the sake of our health care system which is already burdened with a generation of people who are less than healthy.

Bill C-285, put forward by my colleague from Cypress Hills--Grasslands, in some small measure recognizes the fact that we could encourage amateur athletics with our taxation system, with a very modest proposal.

I notice the bill is only one page long. In fact, it is only one paragraph long. It says that an individual could deduct income up to $8,000 donated to an amateur athlete from a non-profit club, society or organization. In other words, if the Manitoba Speed Skating Association donated $8,000 to a champion like Clara Hughes to subsidize her training, then Clara Hughes could write that money off. The $8,000 would not be viewed as income. It would be an acknowledgement by the federal government that it would be in all our interests to encourage Clara Hughes to continue making Winnipeg proud of her.

A world-class speed skating oval is in the heart of my riding of Winnipeg Centre which is heavily subsidized by volunteers, non-profit organizations, charity clubs and community centres. Imagine on a crisp cold Winnipeg night of -20° or -30° the sound of those long blades cutting into that flawless ice. To stop for a moment and watch somebody of the calibre of Clara Hughes carve that ice in that long track speed skating is a thing of beauty. I myself do not grace that ice because I would not want to spoil it with my clumsy efforts. However, there are people in Winnipeg who make us very proud.

If we reach our Olympic goal in the 2006 Winter Olympics of 25 medals, I am will say right here and now, and I can be quoted on this, that 10 out of those 25 medals will be won in speed skating. I also believe that seven out of ten of those medals will be awarded to Winnipeg speed skaters because where I come from we take that seriously.

The only thing holding amateur sports back in this country is the lack of financial support. In the absence of any real commitment to comprehensively subsidize amateur sport, the government should at least consider measures such as Bill C-285 which would put a bit more money in the pockets of our amateur athletes who struggle for their craft and art in spite of overwhelming financial adversity and sacrifice and who continue to maintain their craft and make Canadians proud.

An hon. member asked me when I skate on a skating rink, if I skate to the right or skate to the left. One has to be creative or else the ice wears out. We could view this as a metaphor for the political arena. If we only skated in one direction, we would wear a path or a rut in the ice. It would not be effective and we might trip and fall, so we try to balance things from where I come.

This is a type of creative measure. I should recognize that my colleague from Sackville—Eastern Shore has a very similar private member's initiative saying that all money spent on amateur sport should be tax deductible. He thinks that if $100 is spent for one's child to play soccer, then it should be deductible. I would go that far, too. I would support my colleague from Sackville—Eastern Shore. We know we have a generation of kids who are not as healthy as even we were when we were playing freely outdoors.

I know young parents now will not let their kids just go out and play on the front street the way we used to, or run around until dark, horsing around in the neighbourhood. They have to be supervised for their own safety. I do not think they get the same amount of physical activity that we did in our schools.

I have talked to family doctors who have said that they have 10 year old and 12 year old children coming in overweight with high cholesterol. Imagine a 10 year old or 12 year old child whose arteries are clogged with cholesterol because of their diet, lifestyle and lack of physical activity. Not only can we pretty well count on those people not being a medal winning Olympic athletes, but the quality of their lives are going to be jeopardized throughout their entire lives. Kids who cannot participate in sports do not enjoy life as much and do not become such well-rounded children.

If this in any way helps our amateur athletes to carry on with their first love, the sport that they have chosen, or in the case of someone like Clara Hughes, the two sports that she has chosen, and then won Olympic medals in both I should point out, then for heaven's sakes those of us in the House of Commons should be willing to entertain it at least to the point of passing it at second reading and getting it to committee where we can do a careful analysis and perhaps some messaging to ensure that it is practical, feasible and realistic.

I believe this measure could be costed out fairly accurately so we would know the cost to the Government of Canada in terms of lost revenue. I do not suspect it is a huge amount of money. I know the Government of Canada plans on spending a fair amount of money on amateur sport. It does not want to be embarrassed at the 2010 Winter Olympics, which we are hosting in Whistler, B.C. However, it could factor into its overall subsidization of amateur sport perhaps the cost of this measure, which is a realistic way to put money back in the hands of the athletes.

It also is a motivation for non-profit fundraising organizations to raise more money for amateur sport, knowing that the money they give to the athlete will not be taxed. In other words, if we raise $1,000 to subsidize Clara Hughes in her speed skating efforts, we would know that the whole $1,000 would go to Clara Hughes. I think it is more of a motivation for people who donate money if they know the money will not be gobbled up in administration or, God forbid, be taxed back by the federal government.

There are a multitude of benefits to the bill. We would be wise to look at it . If we listen to the amateur athletes across the country, they are telling us they can do it if we support them. They say they can deliver, make us proud and affect a whole generation in terms of health.

I suppose one thing we cannot ignore is the benefit it would be to our public health system. As we know, it is creaking under the strain of aging baby boomers who are putting unbelievable stress on the system. If can create a generation of young people who are healthier, they are going to be happier. They will not be the burden on our health care system. In other words, it is a penny wise and pound foolish situation. If we can find a way to promote amateur sport, we will all benefit in the near and distant future.

Income Tax ActPrivate Members' Business

April 13th, 2005 / 6:25 p.m.
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Bloc

Robert Bouchard Bloc Chicoutimi—Le Fjord, QC

Mr. Speaker, I am pleased to speak today in support of Bill C-285, which will have a major impact on all elite or developmental athletes.

My speech will, essentially, address three points: the situation facing current athletes, the positive impact of Bill C-285, and the funding of amateur sports in Quebec and Canada. It is important, however, to consider the situation facing our athletes in this country.

Developmental or elite athletes in Quebec or Canada must go to great lengths to find the funds they need to train and improve their performance.

In my opinion, sports provide a learning experience that helps each individual in our society grow. Unfortunately, playing a sport in Quebec or Canada remains a privilege because of the cost. Playing a sport, particularly at an elite level, requires an athlete to invest many thousands of dollars. To reach the top, athletes need their parents' support for their development. Parents have to make sacrifices and major investments to pay for travel expenses, competition entry fees, training and many other things.

For years, these parents have made the same sacrifices as their children, having to get up for the early-morning practices before school and on weekends.

The problem worsens as the young athletes move up, because then parents are often unable to afford the cost of travel so that their children can compete further afield. The children have to drop out when the money is not there. Despite the lack of assistance to parents, I do feel that implementation of Bill C-285 would be profitable to the people of Quebec and Canada and would have direct impacts on society as a whole.

This is why the Bloc Québécois is very much in favour of this bill. I repeat, the situation of our athletes must be improved if they are to remain competitive, not only nationally but internationally as well.

The impact of this bill would, moreover, be beneficial to the community in a variety of ways. True, there is no money being provided directly to the 1,400 or so athletes targeted by this bill, those at the elite and developmental levels, but passing this bill will be a step in the right direction.

At the moment, an athlete who receives contributions from his or her regional association or any other non-profit body, up to a total of $8,000, is taxed at a rate of 16%. If this bill is passed, that athlete will have an annual tax saving of $1,280.

Clause 2 of this bill provides retroactivity. This means that, for the past five years, an athlete with an income in excess of the marginal tax rate of $8,000 would get back $6,400.

Needless to say, implementation of such a bill would cost Quebeckers and Canadians several million dollars. However, the positive impact for athletes and the population as a whole must be considered.

When our athletes distinguish themselves at international events, the impact is felt in the community directly. There is a feeling of pride that contributes to people's sense of who they are.

Athletes become role models for young people and have an influence on the way sport is played.

I would also like to put forward other arguments. In fact, implementing such a bill is only a start—it should be only a start, because there has to be more help for athletes.

Our athletes need more grant money and financial assistance in order to compete internationally. Despite the increase in the amounts allotted to the athlete assistance program, there is a long way to go yet.

As I mentioned earlier, even though the bill does provide a tax exemption for athletes, more must be done for them.

The Canadian government must provide more support for athlete development. This financial help must not go only to athletes at the top of the pyramid, but to athletes at the bottom of it, too. How can we expect to develop athletes if we do not promote this group and encourage more people to participte in sports?

This bill renews the entire debate on funding for amateur sports. The athlete assistance program is unable to meet the needs of various Canadian and Quebec athletes. Currently, the program gives precedence to elite athletes over developmental athletes.

It is important to know that the maximum monthly stipend for developmental athletes is only $900. Some will say that this is a huge sum to meet all the needs of such athletes. However, given that athletes at this level must train extensively, up to 30 or 40 hours per week, there is not a lot of time left for them to work for a living. As a result, many young athletes must abandon their training, because they can no longer pay for food or housing.

Even with the recent announcements by the Minister of State for Sport on increased monthly stipends for carded athletes, elite athletes receive 70% of the funding, while developmental athletes receive 30%. Fewer athletes at the top are sharing 70%; more athletes at the bottom are sharing 30%. Only 30% of athletes receiving stipends are at the developmental level.

In Canada, many athletes receive funding only once they have obtained top results. Many companies then want to be associated with the winners. So this is a major problem that needs to be addressed.

In closing, I want to reiterate my support for Bill C-285. This is an excellent initiative to develop our rising hopes, as well as the values we want to instill in our society and our communities.

Income Tax ActPrivate Members' Business

February 3rd, 2005 / 6:05 p.m.
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Liberal

John Maloney Liberal Welland, ON

Mr. Speaker, I am very happy to rise to speak to Bill C-285. I would agree that the member opposite who sponsored the bill, his heart is in the right place, but it is time he also put his head where his heart is.

I am quite frankly surprised that the Conservative Party is so strongly in favour of the bill. This is a party that is opposed to grants because they are bad. It is opposed to subsidies because they are bad too. It is opposed to any government intervention because that is awful. However, this has curb appeal. It is glitzy. It appeals to the heartstrings and frankly that is so superficial. We should look a little deeper into this legislation.

I would like to provide some input regarding the bill which, if enacted, would give athletes and exemption of up to $8,000 of the income they receive from non-profit organizations operating exclusively for the purpose of promoting amateur athletes. We have heard about youth, but as I look in the bill, I see nothing about youth. It is athletics and amateur athletics of any age. It could be an octogenarian and also qualify for this. Let us look at it in all honesty.

As my colleagues opposite have already made the case for not supporting the bill, I will speak to a few issues which I believe merit further attention.

First, they suggest that the bill would support our amateur athletes by exempting up to $8,000 of their income received from non-profit organizations from tax. That is leaving more money in their pockets. Let me note that our tax system already provides a basic personal tax credit of approximately $8,000 to all taxpayers. Therefore, the extent that an athlete has revenue of less than $8,000, he or she will pay no tax.

Take the example perhaps of a junior hockey team as has been referenced opposite. A living allowance of $4,000 given to a player would not be taxable because it would be below the basic personal threshold of $8,000. In this regard the bill is unnecessary because the tax system already provides a mechanism to ensure that a basic amount of income is not taxable. However, the effect of the bill is to provide an exemption to Canadians who, in addition to earning another source of income, also receive income from a non-profit organization. If that is true, let me submit that it would run counter to basic tax policy to enact the bill.

On what basis can we justify exempting $16,000 of an athlete's income from tax when other low income taxpayers receive only an $8,000 basic personal exemption? As is shown from this example, the bill does not stand the test of scrutiny.

Second, it is my understanding that the bill is intended to aid amateur athletes who are struggling financially by exempting part of their income from tax. The manner in which the bill is drafted leaves me to wonder who it is really supposed to help as there are no limits as to who can take advantage of this exemption. In other words, and it was alluded to earlier, the exemption would apply to an athlete whether he or she earns $10,000 or $100,000 of income. It goes without saying that to allow the exemption to apply to someone earning $100,000 would be just totally unjustifiable.

Has the member costed out what the financial impact would be on government revenues and where the additional revenue would come from to pay for our health care expenditures, our child care expenditures, perhaps our seniors' pensions and our military? Frankly, it would be difficult to speculate because there are so many Canadians participating in so many types of sporting activities. We all wish to encourage sporting activities, but this initiative I submit is not well thought out.

Lastly, I agree with my colleague when he mentioned that providing a tax exemption is not the best way to support amateur sports in Canada. The practice of a sport is primarily an individual and perhaps a family decision. To the extent that the government should involve itself, it should not be through the tax system.

In short, the bill fails as a good alternative for supporting struggling amateur athletes and amateur sports in general.

That is dealing with the bill as it reads, but let me speak just on the general principle.

The Minister of Finance will not be supporting this private member's bill that introduces tax measures outside the budget process. Tax decisions should be made in the budget not as one-off initiatives, as in this case, pre-empting consideration of all priorities outlined in the Speech from the Throne. This is a fundamental principle from which we should not waver.

The current minority situation raises significant concerns with regard to private members' tax measures and their pressures on the fiscal framework. At present, there are currently 13 private members' tax measures before the House which total a very conservative estimate of $2.5 billion per year worth of tax reductions. That is a lot of money.

If we take $2.5 billion out of our general revenues, where will we make up the deficit to pay for much needed programs such as our health care, our pensions, our seniors pensions, child care, the military, all these items which members opposite think are so important, and they certainly are.

The majority of these initiatives are well-intentioned targeted tax reductions, such as making the cost of tools for employment tax deductible, creating a deduction for volunteer emergency service, creating a deduction for adoption expenses, which I would personally support. We also have the current one, better tax treatment for our athletes in amateur sport. Again, we all agree with that principle, but not to do it through the tax system.

Which of these does not have merit in some aspect? Which one would we pick in priority if that were possible? These private members' bills, while in some instances have merit on their own, present a very serious challenge because of their cumulative impact, $2.5 billion. Where does one draw the line? I respectfully suggest the line must be drawn on Bill C-285. As we have heard, the bill has serious flaws as drafted.

For all the foregoing reasons, the bill should not receive the support of the House. I encourage all members of the House to get over the emotional aspects of the bill. Let common sense and reason prevail. That is a comment we have often heard from members opposite. We were elected to do that. Vote no to Bill C-285. It is common sense.

Income Tax ActPrivate Members' Business

February 3rd, 2005 / 5:45 p.m.
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NDP

Peter Stoffer NDP Sackville—Eastern Shore, NS

Mr. Speaker, I want to thank the hon. member for Cypress Hills—Grasslands for bringing this bill forward in order for us to have a proper debate on something that we do not debate often in this House, which is what to do with physical activity and sports in this country.

I absolutely believe in what the hon. member is trying to do. The member believes that we can enhance sports activities and encourage further sports activities through the taxation system.

As the member knows and as the House knows, I have a private member's bill myself on a similar issue, Bill C-252, which I hope to be able to debate one day in the House. My bill would offer a tax deduction to any citizen in the country who participates in a physical activity, be it in a dance club or a gym, be it hockey, soccer or baseball, whatever physical activity it is.

For argument's sake, I will use the example of a soccer registration fee of $100 a year. That $100 should be tax deductible. This is similar to the limit we have for charitable donations. For example, if a person gives the Red Cross $100, the Red Cross provides a tax receipt for a certain amount. At the end of the year we are able to file that with our income tax. I believe that the same principle should apply to the registration for sporting fees as well.

We in this House all know that all members of Parliament have been hit up many, many times by various groups and organizations in order to support individuals going somewhere in an individual sport or a team sport.

At this time, I want to convey on behalf of the House our sincere condolences to the hockey team from Windsor that had the unfortunate accident and suffered the loss of life of four great residents and some injuries. We extend our condolences to their families and their friends and to the teams as well.

We in the NDP will be supporting the initiative of Bill C-285. We do know, as was pointed out by one of the Liberal members, that there are a couple of preambles that need to be expanded upon. This is why it is so important to bring this bill to a committee. Then the committee itself can look at the concerns that have been addressed. It can look at furtherance in terms of expansion in allowing the committee, in an all party sense, to really seriously look at the bill.

If we really sit down and think about it, the Olympics of 2010 will be here in Vancouver and Whistler. Everyone is talking about how if we put in x number of dollars we will be able to have more athletes standing on the podium. The reality is that this is very important for the Olympic athletes and for those training for that high level, but what about the athletes and the sports enthusiasts who will never achieve that level? What about the athletes that play sport for the pure love of the sport, be it team sports or individual sports? We need to support those organizations that in turn support those athletes.

The definition of an athlete is a bit of a misnomer. That is something we can work out. We notice that every single time an initiative comes from the opposition through the tax system in order to assist our citizens, the Liberals generally oppose it. They absolutely oppose it. Yet when it comes to tax incentives for the oil and gas industry, let us say, to make it more competitive, to bring in more investment or to have more economic activity in the country, there is no problem. Right away those incentives are put through.

If we look at physical activity, not economic activity but physical activity, we should be trying to get our citizenry more active physically in order to prevent the obesity that is increasing in our country at a rapid rate, to prevent the health issues that occur with it, and to prevent justice issues and social issues because of that. I believe that every kid in this country has a right to play. I believe that every community should have facilities for its citizens to participate in, regardless of the age of the individuals and regardless of the activity they wish to participate in, be it curling, lawn bowling, be it whatever. If we can get Canadian citizens more active and more cohesive as a society in terms of team and individual sports that would be a very good thing for this country.

There is no question about it: as Canadians we are generally out of shape. There is no question about that. In fact, I would question if the average grade 12 student could run a mile around a track. I question whether a person of that age could do it.

This particular type of initiative is something that we need to expand upon, not only in the committee but in the general discussion of this country.

The hon. member who introduced the bill may or may not realize this, but the fact is that federal government investment in sport in this country is one-tenth of 1% of total GDP. That is one-tenth of 1% of the total GDP for the federal investment into sport in this country.

The hon. member and his party know what that means. Volunteers and sporting groups of all kinds are picking up that slack by doing bottle drives, by standing in front of the grocery stores with their cans and their bottles asking for donations, by holding bake sales, and name it, they do it. These are the activities that Canadians have from coast to coast to coast. They will support their individual athletes and their team sports because it is the Canadian thing to do.

There is nothing better than watching teams from across the country competing in sports, not only at the adult level but at the children's level as well. I have coached soccer for over 30 years in British Columbia, Yukon and in Nova Scotia. Being with those kids has been a tremendous experience. I play organized sports as well, but I do know that there are many people who cannot participate in a sport, not because of physical infirmities but because of financial reasons.

Various organizations, as we know, are “volunteered out”. Our volunteers are getting burnt out. They are getting to the point where, after raising funds and money time after time, they are looking for assistance and leadership from the government, not just at the federal level but at the provincial and municipal levels as well.

One thing I have been advocating for quite some time is to have the provincial governments use the lottery funds for their initial purpose: sports, culture and recreation. We know that the initial lottery of Montreal in 1976 was for sports, culture and recreation. That is what the 1976 lotto was all about. In the mid-1980s the responsibility was transferred to the provinces and territories and now most of the provinces put that revenue into general revenues, whereas in our own province of Nova Scotia less than 2% of those total revenues actually goes to sports, culture or recreation. That has to change.

The federal government cannot just do it on its own, but it can show leadership in an initiative by the bill that was brought forward by the hon. member. It can also encourage dialogue with the provinces, the territories and the municipal governments to see what can be done not only to advocate changes within the tax system to assist our athletes and their organizations, but also in the development of fields, arenas and sporting events. We owe this to our future.

I know that my hon. colleague from Cape Breton who has just come into the House has been a long-time advocate of sports and especially the great sport of hockey. I will say that his reputation as a coach far exceeds his reputation as a member of Parliament, but that is just my own political view. The reality is that he knows, on the Liberal side, the value of sport. He has his own children involved in sports, as I do my own.

It is very clear that we thank the hon. member for bringing the initiative forward. We would hope that in turn when our bill comes up that party would support our initiative as well. The member is absolutely correct when he says that we can increase physical and sporting activity in this country through the taxation system.

If there are any concerns within this bill that the Liberals would like to discuss, we believe that instead of voting it down they should be supporting it and working with us in bringing this bill to committee so that we can enhance its opportunities and intentions for the good of all Canadians. Once again I thank the House for this opportunity and I thank the hon. member for bringing forward this important initiative. He has the NDP's total support for this initiative.

Income Tax ActPrivate Members' Business

February 3rd, 2005 / 5:15 p.m.
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Conservative

David Anderson Conservative Cypress Hills—Grasslands, SK

moved that Bill C-285, an act to amend the Income Tax Act (exclusion of income received by an athlete from a non-profit club, society or association), be read the second time and referred to a committee.

Mr. Speaker, I am glad to be able to bring the bill to the House today. The bill has actually been a collaborative process and it has come from a number of MPs in Saskatchewan. I want to recognize some of them. My colleague from Battlefords—Lloydminster is seconding the bill today. He has been involved with this right from the beginning. The MP for Prince Albert has been involved with this, as has the MP for Saskatoon—Humboldt. Actually Mr. Roy Bailey, before he retired, was instrumental in bringing forth this issue.

I think it is going to be an interesting discussion today. This whole bill actually rises out of an ethic that this Liberal government has, which is basically that it has never seen a dollar that it did not want to tax. What has happened here is that it has gone out of control and we are trying to remedy a situation that has taken place.

For several years we know the government has been hiring more auditors. We have often heard the government brag that for every dollar it spends on auditors it can gain $7 back. Clearly, that is what it is trying to do here. As it has hired those auditors it has stretched its reach further and further into the Income Tax Act trying to grab more money, and that is certainly what has taken place in this situation.

I would like to give the House a little history behind the bill. It involves amateur athletes, particularly tier two junior hockey league players. From 1969 until 2002 there was no problem. There was not an issue or anything that would have come up from this issue. However, in June 2002, Revenue Canada walked into Saskatchewan and decided that it was going to audit all the SJHL teams, the tier two junior hockey teams, in Saskatchewan.

There is a difference between tier one junior A hockey teams, which would be teams like the WHL, the OHA, the Quebec major junior hockey league, and the second level of hockey leagues, the tier two junior teams.

The tier one teams have always been considered to be employees of the team. They pay EI and CPP. The tier two teams have always been considered to be amateur athletes.

One of the first problems that arose from this is that Revenue Canada only walked into Saskatchewan, nowhere else, and targeted the 12 teams in Saskatchewan. What it did was tell the players that it thought the players were receiving income and so it was going to tax them on that income.

The reality is that on some of the teams the kids receive from $50 to $200 as a monthly allowance. They also receive about $300 that goes to billets. Anyone who has ever fed young people knows that $300 does not go very far in feeding a teenager. The billets are not even getting the money to cover the cost of what they are spending on the players. The players are not getting enough money to cover the cost of the expenses that they have had through their hockey career as well.

By October 2003, the teams had been audited and Revenue Canada tried to say that the players were employees of those teams. Because of that, it assessed the teams and players for EI and CPP. What is frustrating about that is that of the 12 teams that were assessed in Saskatchewan, the average taxes that Revenue Canada wanted to put on them were $8,000 to $10,000 each.

I just want to read from an article in the Melfort Journal at the time that talked a bit about the situation. It reads:

Our Saskatchewan junior hockey league and 10 of its 12 teams are locked in a legal battle with Canada Customs and Revenue over payments to their players and billet families. Auditors from the government agency are going through the books of SJHL teams and assessing penalties of between $10,000 and $15,000 per team.

The chairman of the SJHL's Board of Governors said:

It is very scary to each and every team. There are teams that have told us they can't handle it (financially). If you haven't got the money to pay it you get locked up.

One team in the SJHL, the Melfort Mustangs, said that they were subjected to an audit on November 12. The team president said that the auditors arrived at the team's office mid-morning and by mid-afternoon the Mustangs were informed they owed $13,000. That is a pretty efficient use of auditors, going in that quickly and attacking the teams.

He went on to say, “surprise doesn't even begin to describe what the organization was feeling”. He went on to say:

It was something completely unexpected. If you expect it you can plan for it, budget for it. We were unable to plan for it so this becomes an out of budget expenditure. If the ruling goes ahead we will have to figure out how to pay for it.

Of course it caused some excitement and consternation in Saskatchewan when Revenue Canada declared that these employees were subject to taxation and, actually, people stepped in. Dave King, who was the coach of the Columbus Blue Jackets at the time, stepped in and talked about the fact that these were non-profit teams and that there was no reason that the government should be going after them and after their players.

One of the good things that happened was that members of Parliament got involved and I mentioned some of their ridings earlier. They stepped forward, got involved and raised a real stink over the fact that the government had targeted only one province. Saskatchewan was the only place where it was taking place. We assume that the government was going to begin there, establish its grounds for taxing and then spread out across the country. That seems to be what it is doing now. Also, the players were clearly amateurs. We believed that the government was way out of line by trying to tax these young players.

The Canada Revenue Agency because of the pressure from the MPs stopped the audits. We thought common sense would prevail but it did not because it took the SJHL to court. They are still in court fighting over about $100,000 worth of tax money. It is very frustrating to the league. In fact one of their officials told me, “It seems like they are just trying to grind us down”. The league is running up legal bills that it says it cannot pay. The government has all the money it needs to continue pushing the league. It is getting to the point where the league cannot fight it any longer.

The present situation is that the government is still pressuring the SJHL. It has not backed off on this at all. Worse than that, it seems that the government intends to continue to press this issue and spread it out across Canada.

The revenue minister actually sent out a notice on Tuesday, January 18 to all MPs and senators; everyone in the House would have received it. When I read it I got very alarmed very quickly because it is a re-release of the government's 2003 position. It talks about the fact that the government considers these young men to be employees of the team. It gives a number of criteria of why it thinks that in the case of hockey players the CRA has found that employer-employee relationships exist.

I just want to talk for a minute about the four criteria the CRA uses, the four criteria that must be met to form an employer-employee relationship. First, there needs to be control from one of the parties. Second, there needs to be an ownership of tools. If it was not so ridiculous it would be funny because the team, I guess, owns the hockey sticks or whatever. Third, there needs to be a chance of profit or risk of loss, and the employee cannot suffer that risk of loss. Fourth, there needs to be an integration between the commercial activities of the worker and the person who is paying the bills.

I started thinking about that and it would fit a whole number of things. I was thinking about private schools that take kids on school trips. If the kids are receiving any kind of indemnity for doing that or any kind of help, it could get so ridiculous as to try to tax even that kind of thing.

There is a lot more that I would like to say, but we do not have a lot of time today. I want to talk about the fact that we need a balance. We believe that balance is in this piece of legislation. The bill is very short; it has only one paragraph. It is an amendment to the Income Tax Act. The bill simply says that we would like to exclude income for the year, not exceeding $8,000, received by an athlete from a non-profit club, society or association that is operated exclusively for the purpose of improving athletic performances and promoting amateur athletics. It is very straightforward. It gives amateur athletes a chance to get up to $700 a month from a non-profit association or club. That would be excluded from the athlete's income.

We find this to be very important for a number of reasons. We have really looked to the government to provide a balance and it has not happened. Most disappointing, and I think some of my colleagues from Saskatchewan would agree, is that the finance minister has been of absolutely no use to us at all. We heard earlier today that he does not seem to want to provide Saskatchewan with any kind of an equal deal on equalization. For some reason his home province is not important to him. This issue is something that costs hardly anything, yet he does not seem to be willing to move in any direction on this.

I have sent a letter to him asking if he would consider putting this into the budget. It is a very small dollar amount. Actually there are 12 teams. That is 10% of the teams in the country. The government went retroactively on them and the amount is still less than $100,000. It is not a big amount of money. We are looking for the finance minister, who is from Saskatchewan, to step forward and defend his province for a change. We think that perhaps he has been Ottawashed a little bit too much. He is only too willing to represent Ottawa's interests to Saskatchewan. We would like to see him represent Saskatchewan's interests in this part of the world as well.

The bill is not at odds with anything that is happening right now. In fact, an athlete assistance program has been set up for Olympic athletes which is very similar to this. They are provided a tax-free stipend from the government. They do not pay tax on that money. We do not think that this would be outside what is happening with them.

We want to highlight some of the reasons we think this is important legislation. First, it is focused on non-profit organizations and amateur athletes. That is a good place to put the focus. The organizations the teams are running that have been audited are non-profit organizations. They are not doing this to make money. Many of them exist in very small communities, communities of 5,000 and less. People in the communities get out, fund raise, buy things, help out and contribute to different things just to keep the teams going. It is important that those organizations be recognized.

These young people are definitely amateur athletes. We cannot call them professional in any sense of the word. What is the point of trying to tax kids on $50 or $70 a month? How much does it cost to try to get that money out of them? It is just ridiculous.

These players clearly are not employees. They are spending far more money than they are making out of this program of being in the hockey arena. Some receive only a small monthly allowance, as I mentioned, and the billet money.

I actually talked to one of the billets today. She asked me, “Do you have any idea how much these kids eat? There is no way I am making money on this. I could have 10 of them and I would still be losing money because of the amount they eat”.

As I mentioned before, we think this is unfair. The government targeted one area of the country. We realized that it was going to spread out from there. Some of the other leagues have said to me that it does not affect them. They do not think it affects them, but in reality it will. If the government is going to go after those monthly stipends, it could easily go after equipment expenses and all kinds of other things that virtually every team has.

We believe in tax relief. This is a step in the right direction. It is a small amount.

The bill is retroactive to 2000. It would take care of some of the problems that have arisen in the past and which need to be dealt with.

In conclusion, the bill offers protection for non-profit organizations, clubs and associations. That is a good thing. It offers protection for players, young men who are playing because they love hockey. This is not the level of hockey where they expect to become professional athletes. It offers protection for billets.

As the bill goes forward, we would like the members of Parliament of the other parties to support it. I would ask for their support.

TaxationStatements By Members

November 24th, 2004 / 2:10 p.m.
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Conservative

Bradley Trost Conservative Saskatoon—Humboldt, SK

Mr. Speaker, while all Canadians are already experiencing a winter without NHL hockey, the finance minister is doing his best to end junior hockey in Saskatchewan.

The Saskatchewan Jr. Hockey League is the only junior hockey league in Canada where the players, through their sponsors, are taxed on the room and board per diem that they receive.

For two years the Minister of Finance has done absolutely nothing to help teams in his home province. It is a disgrace that he has done nothing to help the SJHL. It includes teams like the Humboldt Broncos, a team in my constituency which is the heart of the town of Humboldt, a team which demonstrates the best of Canada and a team which is stuck with a $10,000 discriminatory tax bill.

Fortunately, the member for Cypress Hills—Grasslands has presented Bill C-285 to protect the SJHL.

While the Minister of Finance has done nothing to help protect Saskatchewan hockey, all other Saskatchewan MPs do support the bill and will support Saskatchewan hockey.