Finance Committee on June 9th, 2008

[Yves Gingras]

I would very much like to help you, but I am not comfortable confirming that position because it is not consistent with our understanding of the bill to date. With the help of our lawyers, we will be able to verify that quickly and provide you with that information.

[Jean-Yves Laforest, Bloc, Saint-Maurice—Champlain, QC]

Whatever the case may be, I want to insist on the fact that the bill states the act is being amended “by adding”. It is therefore an addition.

That is all, Mr. Chair. Thank you.

[The Chair, Conservative, Rob Merrifield]

Thank you very much.

We'll now move on to Mr. Dykstra.

[Rick Dykstra, Conservative, St. Catharines, ON]

It's interesting. This point is moving along to the question I had when I read the briefing notes that were prepared for us by June and Alexandra. I'd like to know if I'm going down the right road here with this concern:

In order to claim the deduction, Bill C-219 would require the taxpayer to provide a certificate, issued by the appropriate municipality or other authority, certifying that the hours of volunteer emergency service were performed. Volunteer emergency service would include time spent in training and in carrying out any related duties requested by the authority issuing the certificate. Furthermore, a taxpayer could not claim the proposed deduction in a taxation year in which the taxpayer had already deducted, under section 81(4) of the Income Tax Act, an amount related to payments received from an employer for the performance of volunteer emergency services.

Was that relating at all to the so-called double-dipping you're thinking of?

[Yves Gingras]

Yes, that is exactly the point on which we base our interpretation. If a benefit has already been granted through an exemption, an individual cannot obtain a deduction.

[Rick Dykstra, Conservative, St. Catharines, ON]

Okay. Thank you. I hope that's clear, because that obviously gets into a whole different realm of questioning.

As a former city councillor, I listened to this with a great deal of interest, because one of the dilemmas that we faced in the city of St. Catharines a number of years ago was that we had a full-time fire department and we also had a volunteer fire department. And one of the issues that the full-time department had with the volunteer department was with respect to training, with respect to the ability to perform their duties, all of the types of things that the full-time employees went to school for or trained for or were educated to or obviously had on-hand and on-site training. And there has always been this argument, or at least the presentation, certainly by some, that the act of volunteering in this circumstance was simply that; it wasn't at all to try to take the place or remove the abilities of full-time workers to do their jobs.

What happened in our municipality is that we ended up moving to a full-time system. We didn't have volunteers any more. And there were two reasons for that. The first was the constant pressure on the volunteers to prove that they were performing at the same level as the full-time firefighters were, even though they were on a volunteer basis.

The second was a more interesting proposal, and that was that certainly the full-time firefighters believed that it would serve them better to have more employees, a larger group to be able to perform their duties better. And the City of St. Catharines made the determination that they would invest into that area and ended up hiring all full-time employees versus any volunteers whatsoever.

And despite how I certainly appreciate the bill and what it stands for in terms of recognition, it seems to perhaps allow for a future where municipalities will end up doing a very similar thing that the City of St. Catharines did, and that is to not have volunteers, to move towards a full-time service. Because once you break the ice and start to pay or at least start to offer a credit, you go down a road where municipalities may not be able to stop themselves from being able to do this.

I don't know if any of you have any comments on that.

[Michael Buda]

Sure, I might.

I think it's important to remember that with a $1,000 or $2,000 tax refund at a marginal tax rate, whatever it is, you're looking at $800, $900 money back in your pocket. I'm not sure that's comparable to the income of a full-time firefighter.

[Rick Dykstra, Conservative, St. Catharines, ON]

Michael, I appreciate that. My comments have nothing to do with how little or how much the amount may be. It's the principle and the universality of making that offer, and that you now go down a road that leads to your accepting it. Therefore, the only thing you can do on a yearly basis is either increase it or make them full time.

[Michael Buda]

You're right; it could be a slippery slope. I think in the end, though, that decision is always going to be within the accountability of that municipal government, because they're the ones who are going to have to pay for it. St. Catharines made that decision, and council would have been held accountable by voters.

Our perspective, our position, is that these kinds of decisions should be within the accountability of municipal governments. Our feeling is that because of the relatively modest financial gain as compared to full-time salaries, the risk of going down that slippery slope is probably fairly minimal.

[Rick Dykstra, Conservative, St. Catharines, ON]

One of issues that's been brought out is whether this is or perhaps should be based on the fact that some of the provinces have actually gone down this road, and whether it should be dealt with at the provincial level versus the federal level. I just wanted to get a quick comment on why it should be here rather than at the provincial level.

[Michael Buda]

I'm happy to comment on that as well. You're right: firefighting and fire protection have been a municipal responsibility. Actually, one of the reasons municipal governments were first incorporated was, of course, to provide fire protection; therefore, it's definitely within provincial jurisdiction.

One important argument for there being a federal interest in this is that although, clearly, especially with composite forces and larger municipalities, it's not just a rural, remote, and small community issue, largely it is. I think this kind of measure should be seen within the federal government's strategy to ensure the sustainability of rural Canada, which of course has tremendous national benefits in terms of access to resources, employment, and that kind of thing. Taken within the lens of rural economic development and sustainability, I think there is a very strong argument to be made.

The other thing, of course, is the protection that is offered through that volunteer firefighting service. If there weren't volunteers available, it probably would not be provided. Obviously it does provide a significant impact to the economy at large because of the prevention of loss from fire that it offers.

[The Chair, Conservative, Rob Merrifield]

Go ahead, Mr. Dunderdale.

[Malcolm Dunderdale]

I don't want to take away from my fellow volunteers here, but in our particular case we are strictly a federal volunteer organization. We don't report to municipalities or other organizations.

One of the things that concerns me about moving from volunteerism into fully paid in our organization is we cover Labrador, the Arctic, both territories--the north, period. If you wanted to take away from volunteerism and put it into paid positions, it would cost you billions. At this particular point in time, don't get me wrong--we don't have all our bases covered--but for the most part we are in a lot of northern parts of our country that paid employees are not. Basically it stems from people who live in either northern Arctic communities or coastal communities on both our Atlantic and Pacific coasts and our Great Lakes.

Don't get me wrong; I'm not taking away, but it doesn't apply in our particular case.

[Conrad Sauvé]

I think our comments were just enlarging the perspective in terms of preparation to face disasters. Following the ice storm, setting up 300 shelters from one day to the next in Canada was not something we envisaged. More and more preparation in the role of citizens in those situations is key. Right now there's also a huge pressure at the level of training of volunteers in terms of capacity for man-made disasters or pandemic preparation. That is the reason to enlarge that side, in recognition of that.

[The Chair, Conservative, Rob Merrifield]

Thank you.

Go ahead, Mr. Wallace.

[Mike Wallace, Conservative, Burlington, ON]

Thank you, Mr. Chair.

I have a number of questions.

I just want to be clear. Based on my reading of this, this is a straight tax deduction. It is not a tax credit. Am I correct on that, or is it a credit?

[Yves Gingras]

It is a deduction that would be applied to an individual's income. It would reduce the amounts at the marginal tax rate that the individual would face. That would be the difference from a credit set, let's say, at 15%. If you have a credit at 15%, it reduces the amount you owe, as opposed to a deduction that reduces at the margin.

Every individual would have a different benefit here. It depends on your marginal tax rate. It's not based on a given percentage, as credits usually are.

[Mike Wallace, Conservative, Burlington, ON]

Credits are on a percentage basis--

[Yves Gingras]

Yes.

[Mike Wallace, Conservative, Burlington, ON]

--so if you were a volunteer making a lot of money, it would affect you differently than if you weren't, because of the marginal rate you'd end up paying. Is that correct?

[Yves Gingras]

Yes.

[Mike Wallace, Conservative, Burlington, ON]

If this were to go forward, does the department have a preference?

[Yves Gingras]

As officials, we don't have preferences.

[Mike Wallace, Conservative, Burlington, ON]

You don't make that kind of comment. Okay.

[Yves Gingras]

No.