Evidence of meeting #48 for Finance in the 39th Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was volunteers.
A recording is available from Parliament.
Liberal
Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC
Thank you, Mr. Chairman.
Monsieur Sauvé, perhaps you could repeat your amendment for the sake of some of the members who didn't hear it. What was your proposed amendment for clause 1 of the bill--proposed new paragraph 60(y)?
You can come back to it, if you like.
Conrad Sauvé, Secretary General and Chief Executive Officer, Canadian Red Cross
The wording for proposed paragraphs 60(y) and 60(z) is as follows:
(y) $1,000, if the taxpayer performed in the taxation year at least 100 hours but less than 200 hours of volunteer service as an ambulance technician, a firefighter or a person who assists in the search or rescue of individuals or in other emergency management (mitigation, preparedness, response and recovery) activities; and (z) $2,000, if the taxpayer performed in the taxation year 200 hours or more of volunteer service as an ambulance technician, a firefighter or a person who assists in the search or rescue of individuals or in other emergency management activities.
Liberal
Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC
It's just the last part that I need--after “individuals or in other....”
Conrad Sauvé, Secretary General and Chief Executive Officer, Canadian Red Cross
“...emergency management activities.”
Conrad Sauvé, Secretary General and Chief Executive Officer, Canadian Red Cross
I have a copy for you.
Conservative
Ted Menzies Conservative Macleod, AB
Thank you, Mr. Chair.
Thank you to our witnesses.
I want to share a little bit of personal experience, as did Mr. Wallace. I think we all, around this table, tend to be volunteers. I guess I have to raise the issue that this doesn't apply to everyone, so you start picking and choosing who is critical to making this country run, who is critical to protecting Canadians.
On my farm, for example, there was one year I attended, I think, six fires. I'm not a fireman; I'm not trained to be a fireman. But I have my own firefighting equipment. I got there before the fire trucks. That's part of being a neighbour.
I would average, with the different associations I belong to, somewhere between 80 and 100 days of volunteering in a year--not in life-threatening situations at all. But how do we pick who gets a tax credit for what they do? Then do we start putting a value on their contribution? Is it those who help disabled children? Is it those who help kids learn how to play hockey? There are some fundamental questions that, to me, just aren't answered here.
But I do want to get some questions answered on the cost of this. We're hearing some estimates of how many people this would or wouldn't impact.
Mr. Gingras, how closely has this been costed? Has the department looked at it? We're hearing $65 million as the estimate. Could it be higher? Could it be lower? Do we have a solid estimate of the number?
Chief, Employment and Education, Personal Income Tax Division, Tax Policy Branch, Department of Finance
Yes, we have determined the costs. Firstly, keep in mind that such estimates are uncertain given the data we receive from Statistics Canada. I do not have any administrative data on the number of people who volunteer their time to emergency services. We use figures that were collected during Statistics Canada surveys, and there are uncertainties. There's also ambiguity with respect to the activities that would be covered in this bill, as it is currently worded.
That being said, the cost of $65 million per year is our best estimate given the data available to us, and that also factors in a certain level of uncertainty, and hypotheses. According to Statistics Canada, approximately 400,000 individuals per year act as volunteers for emergency services. However, these individuals self-identify. For us, it is difficult to know what individuals consider emergency activities.
I must mention that there was an attempt to update this figure. We have been in contact with Statistics Canada, but there is great uncertainty as to the possibility of updating the figures we have used.
Conservative
Ted Menzies Conservative Macleod, AB
My understanding is there's a fairly substantial cost to the provinces, because we're de facto downloading some of this cost onto the provinces. The number I have heard is $35 million. Is that accurate?
Chief, Employment and Education, Personal Income Tax Division, Tax Policy Branch, Department of Finance
Yes. For all provinces with a tax collection agreement, this will alter the federal tax base. And for Quebec, assuming that Quebec would follow suit and adjust their own tax system—they would have a choice—the cost would be about $35 million per year.
Conservative
Ted Menzies Conservative Macleod, AB
So we're easily looking at $100 million per year. I would suggest that's probably low-balling it, considering the number of people who are looking at this as an option.
Chief, Employment and Education, Personal Income Tax Division, Tax Policy Branch, Department of Finance
This is the best estimate we have within the department, given the information we have.
Conservative
Ted Menzies Conservative Macleod, AB
And I see some of the provinces do have legislation in place for a refundable tax credit. Are we stepping on their toes then?
Chief, Employment and Education, Personal Income Tax Division, Tax Policy Branch, Department of Finance
That wouldn't be for me to judge. We have the Income Tax Act, within which such things could be done, but I understand there are two jurisdictions that have such things. I think they are Nova Scotia and Nunavut, which have recently introduced something that is quite similar to what is proposed.
Conservative
Ted Menzies Conservative Macleod, AB
Those are specific to firefighters. That's a narrower criterion. That's my understanding.
Chief, Employment and Education, Personal Income Tax Division, Tax Policy Branch, Department of Finance
I understand this is the case. So it's narrower than this one. In fact this one is not very well defined. It looks much broader than what they have.
Conservative
Ted Menzies Conservative Macleod, AB
We keep going back to the record keeping. Have you analyzed what you would need for records, and are those records available from municipalities? Is it a completely new tax form? Does it fit in a box on the present tax form?
Chief, Employment and Education, Personal Income Tax Division, Tax Policy Branch, Department of Finance
If there is payment involved, then a T4 is necessary, and then the deduction applies against that T4. If there is no amount involved, then the authorities would have to certify the hours, so a form would need to be designed. We would need to work with CRA to define what exactly this form should look like and the type of information that should be on it. You want to keep it simple, to the extent that you're not encouraging abuse, of course. It's a difficult balance, and it's something we would need to work on closely with CRA, which is responsible for administering these things.
Conservative
Bloc
Jean-Yves Laforest Bloc Saint-Maurice—Champlain, QC
Thank you, Mr. Chair.
Mr. Gingras, according to your interpretation of this bill, the first deductible $1,000 or $2,000 replaces what already exists, that is a lack of income. In fact, an employer does not provide any proof that the first $1,000 was actually earned. Yet, the bill clearly states that “section 60 of the Income Tax Act is amended by... adding the following...” A $1,000 exemption is added if a taxpayer has, during that fiscal year, worked between 100 and 200 hours, and a $2,000 exemption is added if a taxpayer has worked 200 hours.
The interpretation of the Library of Parliament is in keeping with the same logic: “Bill C-219 would amend the Income Tax Act providing for emergency service volunteers to deduct $1,000...” Therefore, according to the interpretation of the library, the volunteer who has donated hours of work has the right to deduct $1,000 if he or she has served 100 hours, or $2,000 if he or she has served 200 hours.
The interpretation of the Library of Parliament seems to contradict your interpretation somewhat. To my mind, the first $1,000 is not taxable since the employer does not pay it. A person who has worked 100 hours can deduct $1,000. The total deduction could actually go as high as $3,000.
Chief, Employment and Education, Personal Income Tax Division, Tax Policy Branch, Department of Finance
That is not our reading of the situation. With your permission, I will consult lawyers from our department and confirm to you at a future date the position of our department on that point. I don't want to confirm anything right now. I will need to consult people and provide an answer to you later.
Bloc
Jean-Yves Laforest Bloc Saint-Maurice—Champlain, QC
Very well. I was relying on the interpretation of the Library of Parliament. That was my understanding.
That was my only question, Mr. Chair.
