An Act to amend the Income Tax Act (sports and recreation programs)

This bill was last introduced in the 39th Parliament, 1st Session, which ended in October 2007.

Sponsor

Brian Fitzpatrick  Conservative

Introduced as a private member’s bill.

Status

This bill has received Royal Assent and is now law.

Summary

This is from the published bill. The Library of Parliament often publishes better independent summaries.

This enactment amends the Income Tax Act to exclude certain allowances in respect of board and lodging from the computation of a taxpayer’s income from an office or employment if those allowances are paid to the taxpayer by a registered charity or a non-profit organization in connection with its operation of a sports team or recreation program for persons under 21 years of age of which the taxpayer is a registered member or participant.

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.

Votes

Feb. 28, 2007 Failed That Bill C-294, in Clause 1, be amended by replacing lines 10 to 15 on page 1 with the following: “(A) the taxpayer is, in that month, a registered participant with, or member of, (I) a sports team or recreation program of the employer in respect of which membership or participation is restricted to persons under 21 years of age, or (II) a sports team or recreation program of a college or university,”
June 7, 2006 Passed That the Bill be now read a second time and referred to the Standing Committee on Finance.

FinanceCommittees of the HouseRoutine Proceedings

October 18th, 2006 / 3:25 p.m.
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Conservative

Jay Hill Conservative Prince George—Peace River, BC

Mr. Speaker, I have a couple of motions to deal with today. I would like to indicate at the outset that discussions have taken place between all the parties.

The first motion is concerning the recorded division scheduled to take place later today on the motion to concur in the third report of the Standing Committee on Finance, requesting an extension of time to consider Bill C-294. I believe you would find unanimous consent for the following motion. I move:

That the recorded division scheduled to take place later today on the motion to concur in the third report of the Standing Committee on Finance, be deemed concurred in.

FinanceCommittees of the HouseRoutine Proceedings

October 16th, 2006 / 4:45 p.m.
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Conservative

The Acting Speaker Conservative Andrew Scheer

Before moving on to the next speaker, I note that earlier today the third report of the Standing Committee on Finance, requesting an extension of 30 days to consider Bill C-294, was tabled. Pursuant to Standing Order 97.1(3)(a), a motion to concur in the report is deemed moved, the question deemed put and a recorded division deemed demanded and deferred until Wednesday, October 18, immediately before the time provided for private members' business.

Official LanguagesCommittees of the HouseRoutine Proceedings

October 16th, 2006 / 3:20 p.m.
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Conservative

Brian Pallister Conservative Portage—Lisgar, MB

Mr. Speaker, I have the honour to present, in both official languages, the third report of the Standing Committee on Finance.

This is requesting an extension of 30 sitting days from the hard-working committee to consider Bill C-294, An Act to amend the Income Tax Act (sports and recreation programs).

Income Tax ActPrivate Members' Business

June 7th, 2006 / 5:30 p.m.
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Conservative

The Acting Speaker Conservative Andrew Scheer

It being 5:30 p.m., the House will now proceed to the taking of the deferred recorded division on the motion at second reading stage of Bill C-294 under private members' business.

Call in the members.

The House resumed from June 1 consideration of the motion that Bill C-294, An Act to amend the Income Tax Act (sports and recreation programs), be read the second time and referred to committee.

Income Tax ActPrivate Members' Business

June 1st, 2006 / 5:35 p.m.
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Conservative

Brian Fitzpatrick Conservative Prince Albert, SK

moved that Bill C-294, An Act to amend the Income Tax Act (sports and recreation programs), be read the second time and referred to a committee.

Mr. Speaker, I want to point out that my colleague, the member for Saskatoon—Humboldt, will be making a friendly amendment, which I have no objection to when he speaks later on today.

I will start with a rhetorical question to get everybody's attention in the House. What if the Canada Revenue Agency decided tomorrow that the housing allowance, which members of Parliament receive while in Ottawa, would now be considered a taxable benefit and it would have to be brought into our income tax returns? We would be looking at full taxation on that. How many members in the House would applaud that move?

This is precisely what happened a number of years ago with amateur junior hockey in Saskatchewan. The tax department told tier two junior teams, struggling to keep their heads above water and keep their teams alive in their communities, that the room and board being provided to the players was a taxable benefit and that it was subject to Canada pension and income tax deductions. These are 17, 18 and 19 year old kids who generally attend school and board hundreds of miles away from these communities.

This brought a real hardship to the teams. Some of them were looking at $20,000 to $25,000 assessments on their operations and they were already in debt. They were selling lottery, raffle tickets, et cetera, to keep their teams alive and then along came the ruling by the Canada Revenue Agency.

The amendment to the Income Tax Act would have the effect of providing a small exemption to amateur athletic teams of $300 per month per player for the duration of the season. That would be exempt from the reaches of the income tax department. It would extend to all amateur sports teams in which the membership would be 21 years or under. It also would be limited to teams that were non-profit, community-based organizations trying to operate a junior team, or a midget triple A team, or a skate team, or gymnastics team or whatever it may be.

There are restrictions on the amendment to avoid abuses by people who are not legitimately amateur and who try to find loopholes to get around this. I think it is well crafted to ensure that it meets the test of helping amateur athletic development in all provinces of Canada.

I will give a bit of history on this matter. About four or five years ago, the tax department descended upon the 11 teams of the Saskatchewan junior hockey league, audited their books and came to the determination that they should have been reporting the room and board being provided to the players on the teams as a taxable benefit.

It is like a person who has a garden in the backyard and grows potatoes, carrots, peas. The tax department tells the person that is a taxable benefit, saying that normally people buy potatoes and carrots at the grocery store with after tax money and this person is getting the vegetables without having to pay for them.

The rationale was very questionable. The rationale was that this was an employer-employee relationship. This is not an employer and employee relationship. That is a questionable determination. In the fall, 70 or 80 kids will show up in these communities to compete to be on these teams. What are they trying to do? They are trying to enhance their skills as hockey players. It is like a school for hockey players.

Parents entrust their kids to those teams, to put them in good homes, to attend school and to develop their hockey skills. For a lot of parents, the end game of going to tier two hockey is to obtain an athletic scholarship to the United States.

Every year in Saskatchewan two or three players on a team receive a full four-year scholarship to major American universities to pursue their hockey careers and also to receive an education. This ruling quite seriously casts some doubt over their continued eligibility on this matter.

However, 80 players show up in the fall and they compete to get on these teams. Twenty to twenty-four players make the team. The other ones take the bus ride home. There is no payment to these players. There is no employer-employee relationship. The parents basically entrust their kids to the guardianship of these junior hockey teams. They attend high school or if they are over the age of 18, they attend a community college. They are expected to behave themselves and conduct themselves in a responsible manner in those communities.

That was the criteria for imposing this case. I know a junior team is taking on the Canada Revenue Agency and fighting it in court on such an issue. This is not the same as the softwood lumber dispute where millions of dollars are spent fighting something big for many years, hoping to get somewhere. Junior hockey teams do not have that kind of money. These teams are selling raffle tickets to pay the room and board for players. They do not have the money to spend on lawyers to go to court to fight our tax department.

This is some of the background of the bill. It is more than just the Saskatchewan tier two junior hockey league. This year the Prince Albert Mintos won the AAA midget Canadian hockey championship. It is the third time in the last fives that Saskatchewan has won the premier Canadian championship for the best midget hockey players in the country. Tisdale, a town of 3,700 people, won it in 2002. Since 1978, Saskatchewan has won the AAA midget championship something like 35% of the time. This is from a province with less than a million people.

There is definitely a culture of hockey history in Saskatchewan. We should be encouraging this part of our heritage. Saskatchewan is the home of Gordie Howe and Johnny Bower. A whole list of players have come through the Saskatchewan junior hockey league. We should encourage our young people to be involved in this type of program. Our tax department should not be there with assessments that almost have the effect, in some cases, of virtually putting these teams out of existence.

This is a major cultural event in the community. I come from Nipawin, Saskatchewan, which has a population of 5,000 people. When winter sets in, it is long. Hockey brings the community together.

If I go down to that hockey rink, professional people, business people, retired people, first nations people, people from all income perspectives in that community all come together. They are united in that community for one thing, and that is to cheer on their team and hope that it will advance through the hockey process. This happens in 11 communities throughout Saskatchewan. It has been going on for well over 60 years. It has been going on as long as Gordie Howe laced up his first set of skates in Saskatchewan.

Dave King is a product of that league. He has received the Order of Canada. He coached our Canadian team at the Olympics many times. He has coached in the NHL. I talked with Dave King and he could not believe the tax department would do something like this. He thought it was outrageous.

At that time, five NHL coaches had cut their teeth in the Saskatchewan junior hockey league. I believe four players on the team won the Olympic gold medal. They came from that league. They had developed their skills and worked their way through that league. Our policies should encourage the sport of hockey.

Too many Canadians sit at home watching TV, especially our young people. Young Canadians have a problem with obesity and diabetes and all kinds of problems. Why in the world does the government not encourage our young people to be active and to get involved in different activities, whether it is hockey, gymnastics or any other sport? The whole point of the amendment is to give these teams a bit of a break and some leeway.

There are 130 tier two junior hockey teams across the country. It is not just something for Saskatchewan. It would benefit other teams as well. Ontario has a whole pile of Junior B teams, maybe more of them than tier two teams. This would benefit them. The AAA midget teams would benefit as well. I am not an expert on other sports programs throughout the country, but if the tax department wanted to take its policy approach and extend it to gymnastic clubs, swim clubs, or junior football clubs, which have players under 21 years old, it would have a negative effect.

I want to also bring home a point with respect to the $300 amount. Some people would say that the income tax on $300 would not be a lot, but that is not the issue. The issue is the Canada pension assessment, which is very high when one is either at the beginning or the end of the income scale. It is basically 10%. The assessment for EI benefits, especially under the Liberal administration, was more a tax grab than an insurance premium. If we do the math involving a team with 25 players at $300 a player, it adds up. If we could pass the amendment, it would eliminate this hardship. I estimate that we are talking $5,000 or $6,000 a year.

A large group of volunteers selling tickets to raise funds for a community project would probably make $5,000 at the end of the day. What in the world would be the sense of selling raffle tickets so $5,000 could be paid to the Canada Revenue Agency? It does not make any sense. I have real doubts the amount collected, whether under EI or Canada pension, would ever amount to any tangible benefit to the player anyway. It is not enough to qualify for anything.

Some of my Liberal colleagues have mentioned disability benefits for players who might get injured. This is not enough to get them into any real meaningful disability benefit. Those members do not understand how our junior hockey leagues operate. They have disability insurance plans in place so if a player is injured, those plans provide them with much better benefits than they could ever get under the Canada pension plan. This shows a profound ignorance on the part of some members to even raise this issue. This argument could be used for school basketball teams or football teams as well. There are no Canada pension benefits for them.

A lot of my Liberal friends like to talk about our culture. I cannot think of anything that is more a part of our culture than hockey. We can go to just about any country and ask people, especially Europeans, what really sticks out about Canadian culture. They will tell us it is our hockey. Canada is the hockey centre of the world. It is our culture and it is very much a part of rural Canada.

This thing was an anti-rural Canada decision too. Our rural communities were the ones that were really hit by this. Larger cities like Toronto do not have a room and board issue. The kids live within close distance of the rinks. Nipawin, Saskatchewan is three hours away from Saskatoon and an hour and a half from Prince Albert. It is a long way away from other communities. Players travel long distances and are put in good homes.

I encourage everyone in the House of Commons to stand up for our culture, for our hockey and rural way of doing things. I urge them to tell people that the government is here to help them, not always to get in their way and make life difficult for them.

Income Tax ActRoutine Proceedings

May 17th, 2006 / 3:25 p.m.
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Conservative

Brian Fitzpatrick Conservative Prince Albert, SK

moved for leave to introduce Bill C-294, An Act to amend the Income Tax Act (sports and recreation programs).

Mr. Speaker, I am pleased to rise on behalf of the constituents of Prince Albert to introduce this bill entitled “An Act to amend the Income Tax Act (sports and recreation programs)”.

With this legislation an allowance given to young amateur athletes of up to $350 per month by non-profit sports organizations for board and lodging will be exempt from taxation. The bill would allow non-profit amateur junior teams to once again operate without the fear of being taxed out of business. The bill would also protect the amateur status of athletes wishing to pursue athletic scholarships elsewhere.

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