Finance Committee on Nov. 2nd, 2022

[Mark Maxson]

This is again a place where the CRA would have to ultimately interpret the language, but one possible implication is that the language under the existing deduction is explicitly intended to say that you moved closer to the work site. You found temporary lodging that was closer to the work site than your home was. In Bill C-241, if the work site is at least 120 km away from where you live, travel to and from the work site is deductible.

It's unclear to me whether this means that, if you have lodging near the work site, you can deduct your commuting expenses back and forth from your temporary lodging to that work site. That might be 15 kilometres, because that work site is 120 km away from your home. I don't know if that's the intention or not, but that would be one possible difference. The existing deduction is only for travel between your home and the work site.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

In the case of what's on the books currently, if I were living in Winnipeg but working on a job in Brandon and commuting every day, then I could deduct my gas, for instance, but if I rented a place in Brandon in order to be able to go to that job and not commute all the time.... Let's say that I drove out there Sunday night and then drove home Friday evening. Then I wouldn't be able to claim my gas from the place that I rented in Brandon to go to the job site every day. I would be able to claim only the initial travel from Winnipeg to Brandon, and then from Brandon back to Winnipeg.

Am I understanding that properly?

[Mark Maxson]

Yes. You wouldn't necessarily if it was every day, but the distance from Winnipeg to Brandon to that lodging would be sort of a one-time amount that would be deductible. Once you were in Brandon, your travel between your lodging and the work site would be just ordinary commuting, like that of any other taxpayer, and that would not be deductible.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Is Bill C-241 any different in that respect or would it likely operate in the same way?

[Mark Maxson]

That's unclear to me.

It says travel to and from the job site provided that the job site is 120 kilometres away from home. It would be a question of interpretation, perhaps, as to whether that's to and from the job site only from home or whether that could be to and from the job site from the temporary lodging. It's unclear to me.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Would that be something the CRA could provide guidance on?

[Mark Maxson]

One way or the other, they would probably have to provide guidance, yes.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

There are a few more items in the table. I know I'm running up against time, so if I'm out of time, Mr. Chair, that's fine. Perhaps we can continue in my next time, but I find the more detailed section helpful in terms of understanding what the differences are and how they would be mediated.

[The Chair, Liberal, Peter Fonseca]

I think that's very good, MP Blaikie, and that was helpful from the witnesses, our officials.

Members, we are moving now into the second round, but it's going to be as we had before, a curtailed second round. It's going to be about three minutes per party. Each party will have three-plus minutes. We're starting with the Conservatives.

I have the sponsor of the bill, MP Lewis, for three plus minutes.

[Chris Lewis, Conservative, Essex, ON]

Thank you, Mr. Chair.

Thank you to the witnesses here. I appreciate it. I have just a few questions.

In my testimony, I mentioned that CBTU did a study—commissioned a financial projection—which estimates that Canada-wide implementation of a skilled trades workforce mobility tax deduction would save the federal government an estimated $347 million annually.

Subsequently, Bill C-222 was introduced—or perhaps it wasn't even introduced. This is Mr. Green's bill. The Parliamentary Budget Officer issued a legislative costing note on Bill C-222, which is very similar to Bill C-241, on April 5, 2022, estimating the cost of this measure. In 2022-23 it's $117 million, and its five-year cost is $522 million.

Does it not make sense to keep the money in the pockets of the skilled trades workers if the government's going to rake in $347 million and it's only going to cost them $117 million a year?

Mr. Maxson.

[Mark Maxson]

The particular financial projection of the CBTU assumed that, for the purpose of a costing, about 10% of construction workers would relocate each year. Their estimate of savings from reduced draw on EI was based on the same population of people who, based on their estimates, were already moving, so it was somewhat unclear to me whether they were basing that estimate of savings on an actual change in behaviour, since these were the people they assumed were already moving. There was some question in my mind.

[Chris Lewis, Conservative, Essex, ON]

Very well. Thank you.

Just to your point to Mr. Blaikie, it is spelled out that it's 120 kilometres from home, so that's not a round trip of 60 kilometres each way. It's 120 kilometres from your place of residence. That's just for clarification.

I have one last question. I know it's somewhat facetious, and I'm not trying to be funny, but does it not make sense that if we're going to put a cap on how much they can deduct a year and then they can't go to work, they're probably going to end up on EI if they run out of work? Would it not be cheaper to keep the money in their pockets, and therefore make them pay more taxes at the end of the year by giving them the flexibility to get across Canada to build our bridges and keep them off EI?

[Pierre Leblanc]

The question there would be whether the removal of the limit would result in that much of an increase in economic activity. I think we could say that often the government is clear that putting this forward and putting this into law, if it's passed by Parliament, will have a positive economic impact, which would somewhat reduce the cost of the measure, but we don't think it's very common that measures more than pay for themselves.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Lewis.

Now we go to the Liberals and MP Dzerowicz for three minutes plus.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you so much, Mr. Chair.

I want to thank the officials for being with us today. Thank you for your great work on this.

I mentioned in my first hour the risk that this bill doesn't require those who are claiming this to be working in Canada. We've been talking about labour shortages. My concern is that, with the way the bill is written right now, I could be an individual who lives in Oakville, say, but actually works on the other side of the border. We might be losing people if we don't address the labour shortage issue.

They could work in the U.S., but under this bill, their expenses could be paid for by Canadians. Am I right in this? Is that actually a possibility given the way the bill is written right now?

[Lindsay Gwyer]

You're right. There is nothing in the bill that requires the work location to be in Canada, so yes, it's possible that the deduction could be claimed in respect of someone who is commuting to the U.S. for work.

In those circumstances, it would really depend on all the facts as to whether that person would be subject or not to Canadian tax on that income. The deduction is not limited to just income from that particular employment. It's a general deduction from income, so yes, it's conceivable that someone could be working in the U.S., potentially paying U.S. tax, depending on the facts on that income, and claiming a deduction in Canada.

[Julie Dzerowicz, Liberal, Davenport, ON]

Okay. Thank you.

In the other question I asked—and I didn't mean to be silly—I said that the way the bill is currently written someone could take a 50-minute job that's 121 kilometres away and be able to claim the cost of the gas, meals, hotels and any other expenses that they believed were required for the job.

As legislators and as people who are policy-makers, I think it's our job to make sure that we have airtight legislation that's going to ensure it does what we want it to do, as opposed to someone saying, “Well, the law allows me to do this, so if the law allows me to do it, I'm just going to do it.”

I could see situations where someone has a cottage two hours or 121 kilometres away that's under construction and says, “I'm a plumber, so I'm going to go over there and just look at it.” Their neighbour happens to tell them that they need their pipes checked, so for 50 minutes they do a job over there and then they head back home.

The way the legislation is proposed right now, I would probably say, “The law allows me to do this, so if the law allows me to do this, I might as well claim my gas and claim the meal I had while I was there, and I had to stay overnight because by the time I thought about going back it was fairly late, so there might be some other expenses.” Am I right to believe that the way the law is written it would actually allow me to be able to do that under the scenario I just gave you?

[The Chair, Liberal, Peter Fonseca]

Could we have a very short answer, please?

[Julie Dzerowicz, Liberal, Davenport, ON]

I'm at two minutes and 15 seconds.

[The Chair, Liberal, Peter Fonseca]

Yes, but we're only going for three minutes. You had three minutes and 15 seconds.

[Julie Dzerowicz, Liberal, Davenport, ON]

I'm sorry.

Go ahead, Ms. Gwyer, or whoever wants to answer.

[Lindsay Gwyer]

Sure. I can answer and Mark can chime in if there's anything else.

Yes, I think the main requirement in the deduction is that the person is travelling 120 kilometres away from their home, unlike the deduction that's in law right now where there are safeguards to limit the circumstances in which the deduction can be claimed beyond that requirement to travel 120 kilometres for the work.

[The Chair, Liberal, Peter Fonseca]

Thank you—

[Julie Dzerowicz, Liberal, Davenport, ON]

Mr. Chair, I apologize. I was over my time. I'm one minute late. I'm so sorry about that.

[The Chair, Liberal, Peter Fonseca]

Thank you.

We're going to MP Ste-Marie, please.