Good morning to all of the members of the committee.
First of all, on behalf of the Coalition des travailleuses et des travailleurs autonomes du Québec, I want to thank the committee for having us. To my knowledge, this is the first time representatives from our organization have appeared before you. Generally speaking, we are very rarely consulted, even though many legislative provisions, in particular tax provisions, concern us, and even though associations representing management and labour are called upon for opinions.
I would first like to make a comment regarding the situation of self-employed workers. In Canada, self-employed workers represent a shade more than 10% of the workforce. The number of self-employed workers increases yearly, that is to say at least two and a half times more quickly than the number of salaried workers.
The distinction between a self-employed worker and a salaried one hinges on a single factor. The employee has an employer, which means the employee is subordinate. For his part, the self-employed worker is someone who has created his own business. He did not wait for a job to be offered to him. He took some financial risks and made commitments to those who provide him with work, who are for him not bosses, but clients. The relationship he has there is the relationship between an entrepreneur and a client.
For the Canadian economy, the surge in the number of self-employed workers is primarily due to the advent of new communication technologies, but also to the need Canadian businesses have to have access to specialized workers on an ad hoc or sporadic basis, and thus have a certain flexibility in the management of their human resource requirements.
The result of that is that being able to call on self-employed workers is very beneficial for the business, but this type of lifestyle is also advantageous for the self-employed worker. It is a lifestyle he or she has chosen. He has chosen to be an entrepreneur and we want him to be treated as such. That is why the Coalition des travailleuses et des travailleurs autonomes du Québec has always objected to any type of measure which would give certain self-employed workers benefits of the same type as the benefits salaried workers have, such as those conferred by their seniority, which would skew and alter the relationship self-employed workers have with their clients.
Regarding Bill C-48, I have heard the people who are before you today, but I would in any case have some comments to make. However, what I have to say is perhaps not as weighty.
The Quebec Parental Insurance Plan provides income support to Quebec workers following the birth or adoption of a child, both self-employed workers and salaried workers.
We commended this measure when it was put in place, because for a self-employed worker to be able to benefit from this type of additional income during a certain period of time allowed his or her business to survive. Premiums paid into this system by self-employed workers are 78% higher than those paid by salaried workers. You have the exact rates in the brief. Self-employed workers pay approximately 178% more in premiums than do employees. However, they do not pay them as employees, but as entrepreneurs. The amount is not divided up. It is the amount that they would have contributed had they been salaried workers, in addition to an additional premium because they are self-employed workers. The amount is taken as a whole and is presented as such in the accounting in government reports.
In clauses 196 and 253, Bill C-48 amends the Income Tax Act in a way that will create an artificial division of this amount. In fact, the yearly premium that would have been paid by a self-employed worker will be divided up. First they will assess what he could have deducted had he been a salaried worker. Afterwards, any surplus will be subject to a distinct tax treatment. For this part, the person will be considered an entrepreneur. He will be allowed to deduct that expense from his income, which is consistent with business income tax rules under the Canadian tax system.
The Coalition des travailleuses et des travailleurs autonomes du Québec is asking that this artificial division—which is totally fictitious and adds needless complexity to the task of the self-employed worker who is going to have more paperwork to do when filing his income tax return—be grouped in a single measure which would be, in this case, the new subsection 60(g) of the Income Tax Act. This allows for a simple deduction, just like for any other expenditure incurred in the course of operating the business using business income. We are asking that the self-employed worker be allowed to deduct all of the amounts he or she will have paid and not only the part that is considered surplus. We are also asking that the self-employed worker be taxed in a manner comparable to salaried workers, which has never been the case.
And so we believe that this amendment is consistent with one of the primary objectives of Bill C-48, which is to ensure a certain consistency and harmony in the Canadian tax system as it applies to these deductions. We also propose that the process whereby taxpayers prepare tax returns be simplified and that it not be needlessly complicated.
I thank the committee.