Thank you very much, Mr. Chairman. It's a real pleasure to be here. Thanks to you and the committee for allowing us to present today.
My name is Sean Strickland. I'm the executive director of Canada's Building Trades Unions, part of North America's Building Trades Unions.
We represent 14 international construction unions with a combined membership of over three million unionized construction workers, of whom 600,000 are in Canada.
The women and men of the building trades are employed constructing everything from small projects to large, multi-billion-dollar projects right across Canada. The construction and maintenance sector annually represents approximately 6% of Canada's GDP. Skilled trades workers are often employed later in the operation, renovation, maintenance, and repurposing of plants, factories and facilities. Our members and contractors build it and maintain it.
We recommend that budget 2022 consider the following.
One, maintain investments in infrastructure that provide good middle-class jobs, and remove the clutter that currently exists between federal, provincial and municipal governments to make sure the money for infrastructure projects flows more smoothly and quickly.
Two, apply community benefits agreements on federal infrastructure projects that provide opportunities to under-represented groups and apprentices. Community benefits agreements must be included in all federally procured construction contracts. We need to do better than provide aspirational goals for the industry in order for us to provide more opportunities for more people.
Three, ensure a just transition for energy workers along Canada’s path to net zero. We all know that there will be much job loss on the path to net zero, especially for Canada's energy workers. We need to make sure the right kinds of supports and training opportunities are available so workers can position themselves for the new energy supplies of the future.
More details of each of these will be contained in our formal submission.
There is, however, one simple, long-overdue, critically important issue that must be included in the 2022 budget: a skilled trades workforce mobility tax deduction.
This deduction will end the inequity in the Income Tax Act that currently treats skilled trades workers unfairly compared to salespeople and professionals in other industries, who can receive a tax deduction for their work-related travel costs. It will also encourage labour mobility for building trades members and all construction workers who, unlike workers in other occupations, are often required to travel for work. Also, it will potentially save the government an estimated $347 million a year based on independent analysis that has been shared with several members of this committee and the government.
The construction industry is cyclical; projects are developed, built and completed in different locations at different times, requiring a mobile skilled trades workforce to travel to where the work is. When expenses aren’t covered by an employer, workers often have to pay out of pocket for travel expenses, costs that can run into the thousands. When trying to support a family, the extra expenses make it too expensive to travel for work, thus creating a barrier to labour mobility and unbalanced labour markets; often in Canada we have a surplus of construction labour in some areas while at the same time shortages in others. Currently, the Income Tax Act treats skilled trades workers unfairly. Other professionals can receive a tax deduction for the cost of their travel, meals, and accommodations when not covered by an employer. The same option is denied to skilled trades workers.
For example, someone selling rebar or conduit for the construction of a new building can travel and deduct the cost of their travel, meals and accommodations from their income, while the same option is unjustly denied to skilled trades workers, who have to travel the same or a greater distance and incur similar costs to actually install the rebar and conduit. Clearly, this is unfair.
Workers in the skilled trades will always have to travel for work. That’s why our members are called journeypeople. The tax system shouldn’t punish construction workers for their profession. CBTU and our 600,000 working men and women are buoyed and appreciative of this issue being included in both the Liberal and Conservative Party platforms and by the ongoing support of the NDP on this issue over the years. We are very hopeful that the inclusion of a tax credit in the Deputy Prime Minister's and Minister of Labour’s recent mandate letters will finally get this done, with one small change: construction workers need a tax deduction, not a tax credit. Why? A maximum credit of $600 will not provide enough of an incentive for workers to be more mobile. Depending on your total income, a tax deduction could provide tax savings of up to $2,000 or more, which will make it more attractive for a worker to travel to work. A deduction, not a credit, will level the playing field between construction workers and other workers.
It would also save the government money. CBTU commissioned an independent study that estimated that a skilled trades workforce mobility tax deduction could reduce reliance on employment insurance and increase government revenue to the tune of $347 million annually.
This is a simple and long overdue change to the Income Tax Act. It is in the best interest of the government, this Parliament, and all parties to support the inclusion of a skilled trades workforce mobility tax deduction in the 2022 budget to redress a current inequity in the Income Tax Act, provide reasonable incentives to improve labour mobility, help rebalance construction labour markets, and remove barriers for construction workers to travel, get to work and continue to build Canada.
Thank you very much.