Finance Committee on June 9th, 2008

[Malcolm Dunderdale]

Those are paid volunteers that I'm talking about.

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

How does he get that?

[Malcolm Dunderdale]

He's paid, so he receives a T4. He obviously gets--

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

But there's no corresponding deduction against that $1,000. Let's say he receives $1,000 in pay; he wouldn't get a deduction off that $1,000, would he?

[Malcolm Dunderdale]

Yes, in actual fact they do. That's why we find there's an inequity. That was my reason for it.

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

Mr. Buda, you say you don't want to burden the municipalities. First of all, do any of the big cities have any volunteer firemen or volunteer emergency workers?

[Michael Buda]

It's virtually all municipalities of 100,000 or less. Those between 10,000 and 50,000 have a large degree of blended services. As I said in my presentation, Ottawa is an example of a larger city with a contingent of volunteer firefighters. Halifax Regional Municipality is another.

It's only those large amalgamated communities that encompass large areas of rural regions. Generally this is a small and medium-sized community issue.

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

When we did look at this bill, we didn't have a problem with administration or an administrative burden with all the paperwork surrounding how people could obtain this deduction. Do you have any suggestions of how we could reduce that?

[Michael Buda]

For sure.

I should actually mention—and again, I mentioned it in my presentation—that the Canadian Association of Fire Chiefs made a very good submission in 2007, I believe, and Brian can correct me on that, I'm sure. They spoke specifically to that.

In fact, volunteer fire departments already have very, very extensive record keeping because of legal liability issues, and human resource issues as well, because of workers' compensation claims, for instance. Unfortunately, firefighters get hurt fairly frequently, and even if they are volunteers, they are covered by the WCB or WSIB, whatever province they are in.

In terms of streamlining it, this is really an implementation issue rather than a policy or legislative issue, but I think the key would be to ensure that the record keeping is able to draw on existing data already collected for things like workers' compensation, and the data required by legal reporting requirements.

My understanding from consultations with the CAFC is that the data are already there. We just need to make sure the record keeping or the reporting is done in a way that we're drawing on existing data. It really does sound like the data are already there.

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

Can I ask the question of Mr. Gingras?

Monsieur Gingras, do you have a comment on that, in terms of the administrative burden? What would it take to make you guys happy?

[Yves Gingras, Chief, Employment and Education, Personal Income Tax Division, Tax Policy Branch, Department of Finance]

My name is Yves Gingras and I am from the Personal Income Tax Section of the Department of Finance.

Currently in effect is an exemption on amounts that have been paid. It is incumbent upon cities and organizations to decide on the remittance of these amounts. Expenses of up to $1,000 are exempted. No T4s are issued. That is the beauty of the current measure. If an amount has been paid out, there's no document to prepare. That is the nature of an exclusion. If this were a deduction, there would have to be recognition of a monetary amount. A T4 would be submitted to the Canada Revenue Agency and only then would the amounts be deducted. This is the rationale of the obligation to produce documents, based on which we can administer this measure and prevent cases of abuse.

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

For these deductions, could you not issue slips similar to those used for RRSPs or charity donations? Why issue a receipt of income and deduct this amount?

[The Chair, Conservative, Rob Merrifield]

The time has gone, so make a very, very quick answer.

[Yves Gingras]

The bill as it stands...

As worded, this is about a deduction, so this would have to be declared first and it would call for a T4 slip. That's how we understand the bill. Then there would be a deduction that would apply against all income, because this is a deduction that will go against the individual's income. This is the natural way or how it is done usually.

[The Chair, Conservative, Rob Merrifield]

Okay. Thank you very much.

Monsieur Crête.

[Paul Crête, Bloc, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Thank you, Mr. Chair.

Last fall, I wrote to the Minister of Finance to propose that a measure equivalent to this bill be included in the budget. He replied in the negative. Allow me to read a part of his written reply:

An additional incentive to be added to the tax exemption of $1,000 raises problems in terms of fairness. In fact, it would be difficult to justify a supplementary tax incentive to emergency service volunteers when there are so many volunteers who provide precious services to Canadians, and who do not draw any benefits under the Income Tax Act.

I would like to know your thoughts on this remark.

[Conrad Sauvé]

I think that ties into what I was saying. We, at the Canadian Red Cross, draw a distinction between volunteers who are on call 24 hours a day, who are trained and prepared to respond in an emergency situation, and all other volunteers. We are already taking this into account in our management, from the very point that they are recruited. Volunteering regularly in an institution is not the same thing as being available 24 hours a day and being ready to act at any given moment.

[Paul Crête, Bloc, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

In light of that, you do not believe that it is difficult to justify such a credit, as the minister seems to believe.

[Conrad Sauvé]

In our case, no.

[Paul Crête, Bloc, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Do any of the other witnesses have comments to make on that?

[Ruth MacKenzie]

I would certainly say there is a strong rationale for this tax credit, given the level of training, the on-call aspect of these volunteers, and the inherent risk they put themselves under in the execution of their volunteer duties, which certainly distinguish them from volunteers who coach sports or participate in election campaigns. All of those elements, and others, build enough of a case that they are a unique cohort within the framework of how volunteers engage in this country.

[Paul Crête, Bloc, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Does someone wish to reply?

[Malcolm Dunderdale]

I want to be fair about this and say to you that it's not necessarily that just because my organization has 5,000 volunteer members, you're going to get 5,000 people applying for a $1,000 or $2,000 tax deduction. That's not fair.

We have a search-and-rescue management system that keeps an eye on each individual member, and if he or she puts in 100 hours, we know about it, and they become, of course, eligible. If they put in 200 hours, then they become eligible.

Maybe I shouldn't be saying this right now, but at this particular point in time I would, at a guess, say that we're looking at about 600 of our 5,000 members who would qualify for the $1,000 deduction. And again, in all honesty and fairness, we're looking at about 400 who would benefit from the $2,000 deduction. So I want you to know that in the grand scheme of things, you shouldn't look at the whole picture in our case, because some of our members don't put in 200 hours a year.

Thank you.

[Paul Crête, Bloc, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

You are no doubt aware that a lot of goodwill went into the drafting of this bill. We are in favour of recognizing this type of contribution. I recognize that certain arguments are well-founded. In fact, if we give tax deductions to those who have box tickets to a hockey game, why not grant similar deductions to those who carry out recognized volunteer work? That would be much better.

If you had been the Minister of Finance last fall, and were seeking to solve this issue, would you have included such a measure in a bill like this one, or proceeded differently? I'm not in any way challenging your support of this bill. This is not a trick question. I simply want to make sure that given the general state of the economy, you would have opted for making amendments to the Income Tax Act to cover all possible situations. Would you have proposed a bill such as this one, would you have made additions to legislation, or would you have proceeded in an entirely different way?

[Conrad Sauvé]

We had called for broadening of the exemption to include work-related preparedness, response in an emergency situation, and recovery. In fact, we often focus solely on that aspect.