Finance Committee on Nov. 2nd, 2022

[The Chair, Liberal, Peter Fonseca]

I will call this meeting to order. Welcome to meeting number 66 of the House of Commons Standing Committee on Finance.

Pursuant to the order of reference adopted on Wednesday, June 8, 2022,the committee is meeting to discuss Bill C-241, an act to amend the Income Tax Act related to the deduction of travel expenses for tradespersons. Today's meeting is taking place in a hybrid format pursuant to the House Order of June 23, 2022. Members are attending in person in the room, and remotely using the Zoom application.

I'd like to make a few comments for the benefit of witnesses and members.

Please wait until I recognize you by name before speaking. For those participating by video conference, click on the microphone icon to activate your mike. Please mute yourself when you are not speaking. As for interpretation, for those on Zoom, you have the choice at the bottom of your screen of floor, English or French. For those in the room, you can use the earpiece and select the desired channel.

This is a reminder that all comments should be addressed through the chair. For members in the room, if you wish to speak, please raise your hand. For members on Zoom, please use the “raise hand” function. The clerk and I will manage the speaking order as best we can. We appreciate your patience and understanding in this regard.

Members, just before we move on to our witnesses, I have a quick note. We will be setting aside 10 minutes at the end of the meeting to discuss our schedule when we come back from our constituency week.

Now we will introduce our witness. We welcome the MP for Essex, Mr. Chris Lewis. He is the sponsor and author of this piece of legislation.

The floor is yours, MP Lewis, for your opening remarks.

[Chris Lewis, Conservative, Essex, ON]

Thank you so much, Mr. Chair. Thank you to each committee member.

It's certainly an exciting day. We've been waiting for this for an awfully long time. Thank you for being all ears at least for the first five minutes. Let me tell you what a strange feeling it is to be on this side of the desk and not on that side of the desk.

Again, I'm extremely excited for the study of Bill C-241. I love to call it the fair travelling tradesperson's bill. What's neat and unique about this is that I don't know anyone around this table who doesn't have trades shortages, labour shortages, in their ridings. We've been hearing it for a number of years now. Quite frankly, it's only getting worse.

It brings me great pride to say that I have met with numerous trades folks, from the carpenters to the sheet metal workers, from masons, crane operators and electricians to water, plumbing and gas fitters. You name it, and I've probably met with them. I have yet to find one union and/or non-unionized group that doesn't completely endorse this private member's bill.

To really simplify it, if I'm a businessman today and I leave Windsor and fly to Calgary, I can write off my airplane flight, I can write off my hotel, and I can write off my meals. There's no cap on how many times I can fly to Calgary to get business done every year. Unfortunately, for our union and non-union skilled trades folks, the ones who are expected to travel across Canada to build our roads, to build our bridges, to ensure their electrical grid is solid and to work in our mines for our critical minerals, they can't do that today. This bill is the fairest way that we can get them to get moving.

If we look across Canada, yes, there's a major labour shortage, but we also have folks such as the incredible folks who are down at the Gordie Howe international bridge, which will be the largest and the busiest international bridge in North America when it's completed. Of those folks, 54% are not local to the area. They've come in from out of town. In 2024 or 2025, depending on when the bridge is completed, they're going to need a home. I'm quite certain that there are many projects from coast to coast to coast for which these incredibly skilled trades workers could fill those voids and could fill those gaps. It's time to give the skilled trades workers, the skilled trades force, all of the tools—pardon the pun—they need to travel across the country and build our country and our infrastructure.

I guess it's as simple as this. I don't know of anyone around this table—committee members, we as members of Parliament—who can't write off their own expenses. If it's good enough for the folks who are around this table, then certainly it's good enough for our trades folks.

With that, Mr. Chair, I only used three and a half minutes because I truthfully want to dive into the questions. It's a very simple bill. I'm looking forward to entertaining questions.

Thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Lewis, and I'm sure the members have many questions for you.

You know how this works, but I'll just run through it. In the first round, each party will have up to six minutes to ask questions. We are starting with the Conservatives, and I have MP Morantz up for six minutes.

[Marty Morantz, Conservative, Charleswood—St. James—Assiniboia—Headingley, MB]

Thank you very much, Mr. Chair.

Chris, thank you very much for bringing forward this important bill. You've identified a very serious problem, which is that, if you own your own business, you can write off your expenses, but if you're a salaried construction worker, you don't have that same right.

It struck me, when I was thinking about your bill, that right now in this place—in Parliament—the Conservatives are really the only party that is standing up for workers. We're standing up for workers against the paycheque taxes this government wants to levy upon them. We're standing up for workers against the tripling of the carbon tax. We're standing up for workers through Ms. Gladu's bill protecting pensions and severance, and we're standing up for workers by fighting the inflation that was caused and exacerbated by the overspending of this government.

Now we have your bill, which is truly standing up for workers and saying that enough is enough and that we need to level the playing field. I want to applaud you for bringing forward this bill. I think it's a very important one.

You mentioned in your comments that this bill will help mitigate the effects of the labour shortage. I'm wondering if you could expand on that prospect as well.

[Chris Lewis, Conservative, Essex, ON]

Through you, Mr. Chair, to the committee member, thank you very much for the question.

In Ontario alone by 2025, we will need 350,000 more skilled trades folks. That's just Ontario. You know, when I spoke with IBEW, a gentleman from Manitoba gave me some really good insight. He said the majority of all major projects in Manitoba are done by folks who have travelled to Manitoba.

This is going to do a couple of things. It's going to incentivize people—these same folks who are paying exorbitant amounts of money for fuel, hotel rooms, flights and food—to actually want to travel for work. What I also believe it will do is catch the attention of the young men and women getting into the field and give them a reason to be excited to get into this field, so that when they're coming out of high school, they go find a skilled trade. If we make it affordable for them, we won't have all of the shortages going forward.

There are multiple factors, but there are a lot of opportunities there.

[Marty Morantz, Conservative, Charleswood—St. James—Assiniboia—Headingley, MB]

Thank you. Again, I applaud you for bringing this forward.

In terms of the affordability, I'm trying to put myself in the shoes of that person. They live 120 kilometres or more from where their job is going to be.

What impact do you think a law like this would have in making that person—while they might not have taken that job before, now all of a sudden that this law is in place—think that while it's bad enough paying two dollars a litre, at least if they can write it off, they're saving part of that money? It's bad enough having to pay for the hotel and travelling so far. Do you think it's going to incentivize more people to seriously consider taking that job, whereas before this law they wouldn't have done it?

[Chris Lewis, Conservative, Essex, ON]

I absolutely do. Thank you for the question.

I truly believe it will. It's ironic that just about two hours ago I got another email from a gentleman out in B.C. He said he has never ever missed a spousal payment in his life—apparently he's been paying spousal payments for quite some time—and he doesn't want to miss one for the first time but he's a travelling skilled tradesperson and it's costing him an additional $1,200 per week out of pocket to travel right now. He said he really hopes my private member's bill goes through.

That was just two hours ago, and we hear so much more testimony about these types of discussions and stories. It's going to make life just so much more affordable. People want to go to work. People are excited to go to work. They just can't afford it.

[Marty Morantz, Conservative, Charleswood—St. James—Assiniboia—Headingley, MB]

I am very excited about the prospect of this bill coming forward.

I think this is something—is it not?—that companies can now say to their workers is an added incentive to get people to come work for them. They can say they have lots of contracts but that a lot of them are outside of the 120-kilometre radius of where their office is. Now, if they come to work for that company, they will be able to take advantage of this new ability to write off their expenses. It's just another way of encouraging people entering the labour force.

[Chris Lewis, Conservative, Essex, ON]

It certainly is, and I would suggest that if we look at our union halls and our skilled trades halls, a lot of times per diems are actually not written into these contracts they're bidding on. They need a reason to be excited and to get out and get working.

[Marty Morantz, Conservative, Charleswood—St. James—Assiniboia—Headingley, MB]

Thank you, Mr. Chair. Those are my questions.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Morantz.

Now we'll move to the Liberals with MP Dzerowicz for six minutes.

Go ahead, please.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you so much, Mr. Chair. I want to say a huge thanks to MP Chris Lewis for bringing this private member's bill before us. It is with great happiness that I hear opposition members talk about standing up for workers. This is the party that previously brought in Bill C‑377 and Bill C‑525, which we had to repeal and which were definitely anti-labour legislation. I would also hope there will maybe be some influence from our federal colleagues on their provincial Ontario colleagues in terms of standing up for education workers whose rights are now being taken away pre-emptively using the notwithstanding clause.

In any case, I'm going to focus on this piece of legislation before us.

Mr. Lewis, I've had the true pleasure of being on this committee for a few years, and we've had a number of trades workers come before us and say that it is super important for them to be able to have a certain amount of money to cover their costs in terms of going through the different jurisdictions. They've asked for this for a number of years.

Just over the last year, in our Budget Implementation Act, we implemented the labour mobility deduction, which provides $4,000 per year in tax recognition for eligible tax and temporary relocation expenses, because that has been requested by tradespeople. I'll tell you, we had Sean Strickland from Canada's Building Trades Unions. He applauds the Government of Canada for its support of skilled trades workers in budget 2022, which implemented this labour mobility deduction. He said the labour mobility tax deduction for tradespeople is something for which we have advocated for over two decades, and it will support working Canadians and families to travel to where the work is, helping to address labour availability across the country.

We also heard from the president of the Canada Labour Congress, Bea Bruske, who stated that Bill C‑19's labour mobility deduction was a welcomed step that would benefit workers.

You mentioned in your opening remarks that there is a labour shortage, which all of us are painfully aware of. I want to ask you a specific question and I want to give you a little bit of a scenario, because right now the way the bill is written, as you've proposed, it doesn't require those claiming it to be working in Canada.

For example, even with a 120-kilometre distance requirement, you could have an individual who lives in Oakville take up daily work across the border in Buffalo. In your very own riding of Essex, a skilled tradesperson living in Kingsville could travel to a work site in the west end of Ann Arbor, Michigan, and the Canadian taxpayer would be footing the bill if your legislation passed. Under your bill, it would be a better deal for someone to work in Ann Arbor or Flint, Michigan, than in Windsor.

I'm concerned, and I know many others are concerned that this may further incentivize workers living close to the border to take work in the U.S. at a time when we're facing serious labour shortages here in Canada. Can you maybe address this? I know that you've also talked about a worker deficit in the House. Have you received any assurance that this won't further exacerbate the issue by incentivizing those skilled workers who live close to the border to work outside the country?

[Chris Lewis, Conservative, Essex, ON]

Thank you very much for the question. It's a very fair question. I think it's a great question.

I did work in Michigan for quite a number of years. Under this bill, this is a tax deduction, so if they're working in Ann Arbor, for example, then they're going to be paying their taxes to the United States of America, which means this bill won't work. There is no jurisdiction once they leave Canada, so there is really no opportunity for them to write it off, to deduct it from their taxes, because they're going to have to pay all their taxes in the U.S. and then it's going to come back and Canada is going to take its chunk.

It's a very fair question, but I don't see how it's going to apply.

[Julie Dzerowicz, Liberal, Davenport, ON]

The main point there is that it might provide some incentives for people to work in the U.S. versus working here, and it doesn't help to address that labour shortage, but I appreciate your response.

My next question is this: The bill as it currently stands doesn't set a minimum period of relocation, nor does it lay out clear eligible expenses. I'll give you another scenario. This sounds slightly ridiculous but it could happen. If someone were to take a 50-minute job 120 kilometres away from their ordinary place of residence, they'd be able to claim the cost of the gas it took to drive them there. They could claim meals. They could claim a hotel if they chose to stay the night, as well as whatever other expenses they believed were required for the job. Now I personally don't think any tradesperson would do that on average, but it could happen given the way your current legislation is written.

Is there anything in the legislation that might prevent such a scenario?

[Chris Lewis, Conservative, Essex, ON]

I just want to be very clear so I can give you the most honest answer. What were the last two lines, please, that you were asking about? What could somebody potentially do...?

[Julie Dzerowicz, Liberal, Davenport, ON]

The way your legislation is written right now, if someone took a 50-minute job 121 kilometres away from their residence, they could claim not only the cost of the gas it took them to get there but also a meal, a hotel and any other expenses they believe are required for the job. Basically what I'm asking is whether there is anything in this legislation that would prevent this scenario from happening.

[Chris Lewis, Conservative, Essex, ON]

They'd be crazy to take a 50-minute job 120 kilometres away. It's going to cost them that in fuel to get to their job. I don't want to speculate as to what a skilled trade worker may or may not do, but I'd be very astounded if that were indeed the case.

At the end of the day, this piece of legislation would be designed for folks who are travelling and staying out of town.

[Julie Dzerowicz, Liberal, Davenport, ON]

I think the point is that—

[The Chair, Liberal, Peter Fonseca]

Thank you, Ms. Dzerowicz.

[Julie Dzerowicz, Liberal, Davenport, ON]

—some guardrails might need to be put in place to ensure those things don't happen.

[The Chair, Liberal, Peter Fonseca]

Thank you. That's your time.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you so much, Mr. Chair.

[The Chair, Liberal, Peter Fonseca]

Now we're moving to the Bloc, and MP Ste-Marie for six minutes.

Go ahead, please.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Thank you, Mr. Chair.

Mr. Lewis, thank you for being here.

Thank you for introducing this important bill. I remember the two hours of debate about it in the House. I sincerely appreciate the commitment of members of Parliament who, like you, bring forward legislation to improve the situation of workers. The bill is now before the committee. If it is passed and implemented, it could change people's lives. So my hat is off to you.

My first question is a general one.

Your bill would allow certain tax deductions. What would your bill change, compared to the claims that construction workers can make under the current laws?

There is also the budget implementation bill, which puts some measures in place. How does your bill differ from these measures?

Also, how does what you are proposing compare to the measures in place in the United States? If you have that information, it would allow us to make a further comparison.

This is a very broad question. You can answer the parts that you find most interesting. Take as much time as you need.

[Chris Lewis, Conservative, Essex, ON]

Thank you for the question, sir.

I'll address what I think is your first question, which is how the existing bill, which was introduced last fall by the government, with the $4,000 tax credit.... That's a tax credit; this would be a tax deduction. I also spoke to Mr. Strickland, from the CBTU, Canada's Building Trades Unions, and, yes, indeed, that was a great first step. The problem is that where we'll max that out is at about $2,230. That will not get people two months.

What I want to make sure happens is that people go to work. They can go to work for a year. They're not capped as to how many times they want to go to work. The more they're out working, the better off our infrastructure and our jobs will move along and, quite frankly, the more money they're going to be paying back to the government in taxes.

I will tell you, sir, that in March 2021, CBTU, Canada's Building Trades Unions, commissioned a financial projection that estimates that a Canada-wide implementation of a skilled trades workforce mobility tax deduction would save the federal government an estimated $347 million annually through increased tax revenues and reduced reliance on EI and other government programs.

I hope that begins to help.