Thank you, Mr. Chairman. We certainly welcome the opportunity to present our views and recommendations.
As mentioned, I am the president of the Canadian Construction Association, which is the national voice of the non-residential construction industry. We represent some 20,000 firms from coast to coast to coast in Canada, who build everything except single-family dwellings.
Mr. Chairman, you have our written submission of last August, which outlines the specific measures we are recommending in response to the then committee's questions relative to the appropriate criteria to be used in considering changes to taxes, fees, and other charges.
Given the time constraints, I do not propose to mention all the specific recommendations in that submission, but I would like to draw the committee's attention to three main areas where we believe further action is required.
The first one is with respect to infrastructure and investment. A lot has been said in recent weeks about the size of our public infrastructure deficit, particularly in the municipal area. There's no doubt that to address this and other critical areas of Canada's strategic infrastructure that are very important to our nation's future economic and social well-being, it is going to take a concerted effort at all levels of government.
We were pleased with the efforts of the current federal government, building upon the initiative shown by the previous Liberal government, when it agreed to make available a portion of the federal excise tax on gasoline for municipal infrastructure reinvestment purposes. For the first time in Canada, we had the makings of a certain and long-term federal commitment to infrastructure. That program, however, currently runs to 2013-14 only. It needs to be made permanent.
We also acknowledge the establishment of the new Building Canada Fund that was announced in the last federal budget. We would encourage the federal government to conclude the necessary agreements with provincial and territorial governments as soon as possible, and in doing so to show some flexibility and understanding for the varying priorities and needs in the different provincial and territorial jurisdictions.
With respect to the EI fund, the EI rate-setting mechanism is still very broken and needs to be fixed. Despite the introduction of the new EI rate-setting mechanism that was supposed to ensure that EI rates would be set on a break-even basis, the EI fund continues to generate billions of dollars in annual surpluses, which are then diverted to the general revenue fund because of the inability of the chief actuary and the EI Commission to take into account the actual performance of that fund when they set future rates. EI continues to pick the pockets of Canadian employers and workers in order to feather the federal fiscal nest. If more aggressive rate reductions are not in the cards, look at some of the other specific recommendations, including the introduction of a yearly basic exemption similar to the Canada Pension Plan, that previous versions of this committee have in fact recommended. The throne speech did make a commitment to review the governance and management of the EI fund. Now is an opportune time for this committee to make substantive recommendations and get the EI fund back where it's supposed to be.
The third and last area I want to talk briefly about is the taxation of employer-provided vehicles. Many employees in the construction industry are required, as a condition of their employment, to take employer-provided vehicles--primarily pickups and vans--home at night for security reasons and are expressly forbidden to use these vehicles for personal or family purposes. These vehicles are usually filled with specialized equipment used in the employee's work. These individuals will then proceed directly to a construction work site, which is often further than the employer's principal place of business. Gone are the days when employees first report to the employer's principal place of business to pick up a company vehicle. Gone are the days when employers kept their company trucks and vans in a common yard at their company's offices. In fact, many of these employees never do “go to the office”. These company vehicles, in a sense, become their mobile office.
There have been a number of recent decisions by the Tax Court of Canada that refute the government's position that there is a taxable personal benefit in such circumstances, but since these decisions have been rendered under the court's informal procedures, they are not binding upon the crown. The tax treatment of employer-provided vehicles in these circumstances needs to be reformed to reflect modern-day business practices and realities, and to recognize the total absence of a personal taxable benefit in such circumstances as described.
There is a current review by the CRA on streamlining administrative practices with respect to the treatment of taxable employee benefits. Again, now is the opportune time to make a change in the act, if necessary, to reflect current business practices.
Thank you very much.