Mr. Speaker, the number of private members' bills that are coming forward are very creative, imaginative and are keeping the Department of Finance, the Minister of Finance and his parliamentary secretary very busy.
I hope I am not the bad cop today.
I have some sympathy for the member's bill. Before I was elected in 1996, I worked for 20 years in the forestry sector. The workers in this sector are very professional. They are people with whom I have done a lot of work.
As I understand it, the intention of this private member's bill is to amend the Income Tax Act to permit, in certain circumstances, forestry workers to deduct for tax purposes motor vehicle expenses related to travel between their residences and places of work. Deductible costs would include not only the day to day out of pocket expenses required to operate the vehicle, such as gasoline, repairs and maintenance costs, insurance and licence fees, but also capital cost allowances. That is the depreciation on the original cost of the vehicle and interest costs associated with any loan taken out to acquire the vehicle.
This bill raises a number of issues that need to be examined carefully. In examining these issues, a number of policy principles must be considered.
One of the most important tax policy considerations is that of fairness. That is that the tax change be fair, not only to the taxpayers directly affected by the change, but also to all other Canadians.
A second important tax policy consideration is that of simplicity. Can taxpayers understand and comply with the tax change and can the proposed tax change be readily administered and enforced by the Canada Customs and Revenue Agency? Another consideration is how the proposed tax change impacts on the fiscal resources of the government.
This bill proposes to permit forestry workers to deduct employment income motor vehicle expenses related to travel between their residence and their place of work. Permitting such a deduction would represent a major departure from a well-established tax policy which has been in place for many years. The cost of driving to and from one's place of employment is considered to be personal driving. As such, costs associated with personal driving are considered to be personal and therefore not deductible.
Before I was first elected in 1996, I spent a number of years in the forestry sector. Even with that predisposition I cannot think of any rationale that would justify providing this benefit to forestry workers but not to workers in other sectors. I agree that forestry workers often have to work far from their home in relatively remote locations whether it is doing silviculture work, tree planting, thinning or spacing or whatever the case may be. However, forestry workers are not unique in this regard. Most employees have to commute to work and incur costs in doing so. Some employees may have to travel relatively long distances, like forestry workers, to remote work locations. However, it would be difficult to justify providing a tax deduction solely for forestry workers, as this private member's bill proposes, at the exclusion of other individuals.
In fact, the issue that this bill raises relates to the much broader issue of the deductibility of employment related expenditures more generally.
Most workers incur costs connected, in one way or another, to their employment. In addition to the cost of commuting to and from their work location, in the past, taxpayers and their representatives have sought tax relief for work related expenditures such as personal computers; professional journals; skills upgrading; business and construction safety clothing; and home office expenses.
Providing tax relief to employees in all of these situations would be a major shift in policy and would result in a significant fiscal cost.
As I mentioned, a second issue that must be carefully considered in examining this bill is that of simplicity. Can taxpayers understand and comply with the tax change and can the proposed tax change be readily administered and enforced by the Canada Customs and Revenue Agency?
We already have extensive provisions that permit the deduction of automobile expenses from business and employment income in certain circumstances and within certain limits. These rather extensive provisions are intended to ensure that all taxpayers are treated in a fair and consistent manner. However, taxpayers often express concern about the complexity of these provisions. This bill would only increase the number and length of the provisions devoted to automobiles by providing a unique tax benefit to forestry workers that other employees are not entitled to. By confining this benefit to forestry workers, the bill requires the crafting of a definition of forestry workers eligible for this tax benefit. However, developing an appropriate definition broad enough to include a variety of work situations yet narrow enough to focus the benefit to those taxpayers for which it is intended would be extremely difficult and could lead to increased uncertainty for taxpayers and increased administrative and enforcement concerns for the Canada Customs and Revenue Agency.
I agree that there is a need to reduce the tax burden of Canadians. However, providing focused tax relief to employees in specific sectors is not the way to go. Rather, as outlined by the government in its last three budgets, it is better to provide broad-based tax relief to all Canadians.
In the 2000 budget alone, the government proposed that federal personal income taxes be reduced by an average of at least 15% over the next five years. The proposed budget measures will ultimately benefit each and every Canadian taxpayer by retroactively restoring full indexation of the personal income tax system effective January 1, 2000.
In addition, the budget proposes to: first, reduce the middle income tax rate to 23% from 26%; second, increase the amount of income that Canadians can earn tax free to $8,000; three, raise the income amounts where middle and upper tax rates begin to apply to at least $35,000 and $70,000 respectively; and finally, eliminate the 5% deficit reduction surtax for people with incomes up to $85,000 effective July 2000 and completely phase it out over the following five years.
The budget also provided further support to Canadian families by the expansion of the Canada child tax benefit by $2.5 billion a year to more than $9 billion annually.
The personal income tax cuts proposed are even larger when combined with actions taken in the budgets of 1997, 1998 and 1999. The combined effect is that federal personal income taxes will be cut by an average of 22% over all, 26% for low and middle income Canadians and 30% for families with children by the year 2004-05.
It is important to note that the personal tax cuts outlined in the 2000 budget reflect the least, not the most, that the government will do and we will accelerate those tax measures, I am quite confident, in budget 2001.
I could not agree more that the forestry sector plays an important role in the Canadian economy. I have met and worked with many of these professionals. This sector contributes significantly to our gross domestic product and the large volume of exports contribute significantly to our balance of trade.
This industry provides work to many hard working Canadians. However, for the reasons I mentioned, I hope the members here would support the position I outlined. To create this provision for forestry workers alone, to restrict it and not allow it for other workers in other sectors and to create a precedent with respect to the deductibility of travel expenses from home to the workplace would create an unnecessary and costly precedent. I urge members to vote against the bill.