House of Commons Hansard #21 of the 37th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was c-11.



11 a.m.

Saint-Léonard—Saint-Michel Québec


Alfonso Gagliano LiberalMinister of Public Works and Government Services

Mr. Speaker, I was absent from the House last Friday due to a death in my family.

However, during Friday's sitting, I was the victim of false and vicious attacks by certain members of the opposition. My privileges as a member were breached, and, today, I would like to set the facts straight clearly here in the House.

These members based their remarks on an article in Montreal's La Presse , which was full of errors and insinuations. Paying no attention to the categorical denial I had issued Friday morning, certain opposition members not only repeated the falsehoods in the article, but went even further. Let us review the facts.

Last May, a woman of Italian origin, unknown both to me and to my staff, contacted my riding office with an enquiry about her immigration file.

This action surprised no one, since I am the only Italian speaking MP in Montreal, hundreds of people in greater Montreal automatically contact my riding office concerning their immigration files or other matters of concern to them.

The Government of Quebec had approved the woman's investor immigrant application, and she wanted to know the status of the federal portion of her file.

My assistant therefore followed the usual procedure and sent a fax to client services at Citizenship and Immigration Canada.

I would point out that the fax was not sent to a specific person, but to a service of the department.

The message's single paragraph read “Simply to find out the status of the residence file”. How much more clearly could a person indicate that this document was merely a simple request for information without any form of support or reference?

The memo continues with the following three questions “have the audits come in?”—and I stress the question mark—, “And what about the medical results?”—again with a question mark. The third question was “Do you think the visas will be issued shortly?” Here, again, there is a question mark.

That memo does not exert any kind of pressure whatsoever and there is not the least bit of involvement in the decision. That document was signed by my riding assistant.

The note is clear and to the point. It is similar in every respect to the more than 40,000 such notes sent each year to Citizenship and Immigration Canada by the members of this House. In fact, I intend, with leave from the House, to table a copy of that note at the end of my speech.

One wonders what motivates journalists, who obviously had a copy of that note, but chose to write that I had personally sent a letter, which was not the case, and insinuate, in a very underhanded way, that I exerted pressure in that case.

The issue will be settled at another level, since I asked my lawyers to order La Presse and the journalists involved to withdraw these comments as soon as possible.

It is not the first time that I have been the target of such underhanded attacks. Each time, an investigation was held and I was cleared of all allegations.

In our work as members of parliament we cannot check in advance the background of all those who call on our staff to follow up on a federal issue. This means that we are all vulnerable. This is why my staff follows very strict procedures to serve the public diligently and effectively, without engaging in favouritism or discrimination.

Still, given the behaviour of some opposition members and journalists, it is easy to say, as a well known radio commentator pointed out this morning, “If my name were Lapierre or Arcand, this sort of thing would not happen”.

Obviously, I have no intention of leaving my ministerial responsibilities, because, with regard to this issue, my staff simply did its work and I am completely blameless.

In fact, I hope that opposition colleagues will withdraw their allegations and apologize.


11:05 a.m.

Canadian Alliance

Monte Solberg Canadian Alliance Medicine Hat, AB

Mr. Speaker, I rise on a point of order. The hon. member has offered to table a document. I wonder if he would also be willing to table all other documents relating to this matter.


11:05 a.m.


Alfonso Gagliano Liberal Saint-Léonard—Saint-Michel, QC

Mr. Speaker, this is the only document I have and, as I said, I am ready to table it.


11:05 a.m.

The Speaker

The document has been tabled. The minister has given his statement as a question of privilege and has raised a grievance. I believe the matter has now been dealt with. The Chair will leave it at that.

It being 11.10 a.m. the House will now proceed to the consideration of private members' business as listed on today's order paper.

Income Tax ActPrivate Members' Business

11:05 a.m.

Canadian Alliance

Leon Benoit Canadian Alliance Lakeland, AB

moved that Bill C-244, an act to amend the Income Tax Act (deduction of mechanics' tool expenses) be read the second time and referred to a committee.

Mr. Speaker, I am truly delighted to be able to rise to debate this bill once again. I first introduced it in the House in 1997, four years ago. It has been debated on at least five days since then and I have spoken on it myself four or five times.

In spite of that we have had no action from the government, but I am quite confident that we will have after today's debate. I believe it will go to committee at some time in the near future and some action will be taken. However, it will certainly require the continued efforts of mechanics, technicians and others across the country to ensure that this happens. It is not something we can take for granted.

Since I introduced my bill four years ago and in fact in the two months immediately following that, I received over 7,000 letters from technicians and from people who owned businesses that did mechanical repairs on vehicles and so on, from right across the country, from British Columbia to Newfoundland. The support for that bill was widespread indeed. Since the member from the Bloc introduced the same bill just before the last election, we have received over 70,000 postcards from right across the country. The support for the bill is undeniable. I will talk about that later.

The issue of the bill is that technicians and mechanics who, as a condition of employment, are required to purchase tools and to maintain a line of tools are not allowed to deduct for tax purposes the cost of these tools. That is the issue.

It seems completely inconsistent when we have other groups of people such as artists and others who are allowed to deduct from their incomes the cost of the equipment they purchase to carry out their occupations. It is also inconsistent when we see that business people are allowed to claim these expenses as the cost of doing business, whether they run the corner garage, a large machinery dealership or a farm implement dealership. They are of course allowed to claim all the costs of doing business and that includes the cost of tools.

I guess the problem arises from the disappearance of tools. As a farmer, I have done a lot of mechanical work and I have seen a lot of tools disappear. That was okay until my kids were old enough so that I could kind of point the finger of blame at them; every time a tool disappeared I could say my kids walked away with it, that it was not my own carelessness. The problem is that with the kinds of conditions we work in, tools do disappear, and if the tools are owned by the business owner, they probably disappear a little more often, because someone is not quite careful enough to collect them after finishing a motor job or something else.

In some cases no doubt they are stolen, but in most cases it is just a matter of carelessness. Sometimes they are left on a vehicle and when it is taken out for a test drive or when farm equipment is taken out to be tested or used again, the tools are gone. It adds up to thousands of dollars. It is a serious cost.

For that reason, we have seen right across the country a common requirement of employment that mechanics purchase their own tools. That is a condition of employment, so there is the problem. Business people do what makes sense, because they know that technicians and mechanics will be a little more vigilant when they are dealing with their own tools and when they have to purchase out of their own pockets any tools lost. Yet in spite of that, technicians and mechanics are just not allowed to claim the cost for tax purposes.

That is the issue here and it is a serious one. Because of this there is a shortage of mechanics and technicians right across the country right now, with no indication that the shortage will be reduced in any way. It is a serious problem.

What I want to do with the rest of my presentation today is to demonstrate that there is broad support for this change and to explain how it is an issue of tax fairness and how the finance committee of the House, on different occasions, has indicated that this is a change which should be made because it is an issue of tax fairness.

I then want to close by talking a bit about the process to date with the bill in the House, to explain to Canadians and to technicians that it has been a long process, too long, I would argue.

I want to carry on by talking about the support. I have already referred to over 7,000 letters that I personally received from technicians on this issue, and the 70,000 postcards. I know that every member of parliament in the House has received letters and phone calls from technicians about this piece of legislation. I doubt that there is one who has not.

When the bill was introduced by the member for Beauport—Montmorency—Côte-de-Beaupré—Île-d'Orléans and made votable in the last parliament, it was widely supported by members of every political party in the House, including the governing party. There is support for the piece of legislation in every way imaginable. There is no need to belabour the point.

The bill is about tax fairness. It is about giving mechanics what is already available to certain other groups in society and what is already available to the business people who hire mechanics, if they choose to purchase tools for their use. Clearly it is a matter of fairness.

I would like to quote from the December 1997 House of Commons finance committee prebudget report which stated:

The Committee believes that all Canadian employees should be allowed to deduct from their income the cost of large mandatory employment expenses. Special provisions in the Income Tax Act already apply to artists, chainsaw operators and musicians. To deny this tax treatment to apprentices and technicians in the automotive industry is not only unfair, it also imposes an impediment to employment, especially for the young who might choose to work as apprentices. Revising the tax treatment of such expenses would remove the impediment that exists under the present tax rules.

The finance committee was very clear, and it was repeated later by the finance committee. The finance committee is controlled by a majority of members from the governing side. They recognize that this change should happen. I do not understand where the resistance is coming from.

It is funny that the government only seems to act on a situation of tax fairness when it means more revenue and when it means that it can raise the taxes of a particular group in society. In this case we are talking about lowering the tax load of technicians and mechanics. Under those circumstances the government really does not seem that keen to act at all. Sad as it is, that is the situation.

I normally would quote from some of the people who have written to me on this issue, but I want to leave some time to explain what has happened with this piece of legislation in the House to date. It is worth pointing out.

I first brought the bill forward in 1997. A couple of weeks ago I found out that in 1992 a Liberal member when in opposition brought forth a similar bill except that it had no specifics attached to it. It was a general statement indicating that mechanics or technicians should be allowed to deduct the cost of purchasing tools. It had been put before the House in 1992. I introduced it and debated it in the House in 1997. I debated it when the Bloc MP had his name drawn and his bill was chosen. Only the dollar value was changed somewhat in his piece of legislation.

He indicated that tools which cost $225 or less should be fully written off in the particular year for tax purposes and tools above $225 should be claimed through capital cost allowance. The figures were changed slightly, but that bill was debated a couple of months before the last election and passed by the House. This shows there is support for the legislation in the House. I do not think we should have to argue the point anymore.

Here we are again with the bill before the House. This time it is Bill C-244. The figures I have used in the bill are the same ones I used when I first introduced and debated the bill in 1997. Tools under $200 could be fully claimed in that year and tools valued at $200 or more could be claimed through capital cost allowance. Insurance and so on could be claimed as business expenses. That is completely consistent with what happens with farmers and other small businesses. My bill is completely consistent with the Income Tax Act.

I have chosen this bill on two occasions when my name has been drawn. I do not understand why it has not been made votable. Yet when the Bloc member introduced substantially the same bill, in fact it was identical except the number was slightly changed, it was made votable on two occasions. I cannot understand that.

Now is the time to deal with the piece of legislation. I know my time is up, but I should like to close my presentation by asking for unanimous consent of the House to refer the bill to the finance committee.

Then we could deal with the issue in committee. It would not be held up any longer. Finally we could end the government's balking on the issue. We could have it put before the committee to amend it or draft its own legislation so that it could be carried forward on behalf of technicians and mechanics across the country, and indeed on behalf of all of us who depend upon them to keep us going, whether it is by air, by car or by rail.

We should act on it quickly so that they will be treated fairly under the tax laws. I ask for unanimous consent for Bill C-244 to be referred to committee so that there will be no more hesitation on this issue.

Income Tax ActPrivate Members' Business

11:20 a.m.

The Acting Speaker (Mr. Bélair)

Is there unanimous consent to send the bill directly to the finance committee?

Income Tax ActPrivate Members' Business

11:20 a.m.

Some hon. members


Income Tax ActPrivate Members' Business

11:20 a.m.

Some hon. members


Income Tax ActPrivate Members' Business

11:20 a.m.


Roy Cullen Liberal Etobicoke North, ON

Mr. Speaker, I congratulate the member for Lakeland for his tenacity on this bill. Of course another bill, which is almost exactly the same, has been deemed votable and will be coming to the committee.

This private member's bill proposes changes to the Income Tax Act to help mechanics defray the cost of providing their own tools when it is a condition of employment. The changes would allow mechanics to deduct the cost of buying, renting, insuring or maintaining their tools.

An income tax deduction would be available for tools costing less than $200. This amount may be adjusted according to inflation. For larger amounts, the tool costs would be subject to capital cost allowances and these allowances would be set by regulation.

Canadian employers normally provide workers with the tools and other resources they need to do their jobs. Even so, all Canadian workers bear some job related costs. Whether these are the costs of getting to and from work, the costs of uniforms or other work clothes, the costs of eating away from home, or the costs of keeping up with trade journals. These costs are something that all Canadians incur when they take a job.

These normal work related expenditures are recognized in the tax system through the basic personal amount. The government increased this amount substantially since the elimination of the deficit.

I am pleased to remind members that the 1998 and 1999 budgets increased the basic personal amount by $675. Budget 2000 went even further with measures to ensure that the tax free amount would be more than $1,500 higher in 2004 than in 1997. More tax free income helps low income workers offset normal employment expenses.

The bill before the House aims to recognize that employed mechanics face exceptional work related costs. The Government of Canada understands that the costs can sometimes be a significant burden, particularly at the start of a career.

Last summer, for example, a Nova Scotia newspaper reported the case of a young apprentice mechanic. He was earning $18,000 a year working in a garage service station. He had invested some $10,000 in his tools. On top of that he said he had to pay insurance costs, another $100 per $1,000 of tools. For him that was another $1,000 per year. I think all members would appreciate that is a large amount for one making only $18,000 a year.

I expect this young man also had other bills to pay like groceries, heat, rent, et cetera. Clearly the costs that this young man incurred were worth it to him. The tools he purchased will serve him for years to come.

Surely these costs were a big financial burden as well. Upfront costs should not be a barrier to an individual's ability to enter an occupation which at least in the longer term could provide a living income.

In short, the government understands the difficult issue that this bill is trying to address. We can support the principle that underlies. it, but I must nevertheless point out that this specific bill in many ways does not adequately address the issue.

Allow me to explain. The bill would allow mechanics to deduct even small expenditures related to their tools. As I said earlier, most Canadian workers have specific job related costs that they need to cover out of pocket. What about carpenters, for example, or computer operators?

I remind members that the tax system provides some recognition with to the basic personal amount. Instead of just covering the exceptional tool expenses that a mechanic might incur, the bill would give mechanics preferential tax treatment on normal work related expenditures. It would simply be unfair to other tax paying Canadian workers. If tax relief is provided for specific groups, it should be limited to extraordinarily high expenditures.

The bill also opens the door to other inequities. For example, it does not adequately ensure that tax relief is provided only for items genuinely required as a condition of employment. Employers should have to certify that the expenditures are a condition of employment. Further, the principle of fairness would dictate that the tax benefit should be adjusted when tools purchased for work are subsequently used for other purposes or when tools are sold, for example. There is no provision in the private member's bill to ensure that this takes place.

Finally, I would briefly note that this bill creates unnecessary administrative complexities. Instead of using the existing regime for capital expenditures, the current capital cost allowance regime, this bill would set up a parallel system for employed mechanics. This is not warranted since the existing capital cost allowances would achieve essentially the same results as the private member's bill.

The very substantial employment expenses incurred by some employed mechanics are certainly a concern. There is merit in the idea behind the private member's bill. The lack of tax recognition for exceptionally high work related expenses should not be a barrier that prevents people from participating in the economy.

I trust as well members agree that the bill would create inequities and unfairness in the tax system. That is why much more work and thinking is needed to develop a workable solution to this important matter.

As the government examines the issue it intends to work with representatives of the automotive industry, particularly with respect to the challenges faced by apprentices, to find a way to address the shortcomings in the private member's bill.

Income Tax ActPrivate Members' Business

11:25 a.m.


Michel Bellehumeur Bloc Berthier—Montcalm, QC

Mr. Speaker, I am happy to speak to Bill C-244 introduced by the Canadian Alliance member for Lakeland, particularly in view of the fact that a member of the Bloc examined this issue for a long time and had previously introduced almost exactly the same bill.

We will have another opportunity in this 37th parliament to consider the Bloc Quebecois bill introduced by the member for Beauport—Montmorency—Côte-de-Beaupré, since his bill deals with the same subject, except that the Canadian Alliance deduction is set at $200 compared to $250 for the Bloc. But the real difference is the fact that the bill introduced by the Bloc Quebecois member for Beauport—Montmorency—Côte-de-Beaupré—Île-d'Orléans will be votable.

The House will be allowed to vote on this tax deduction which is a rather important issue for the low and medium wage workers. These people are not rolling in money.

Actually, I might even look a bit surprised after what I have just heard from the government, since as a result of the work of the Bloc member for Beauport—Montmorency—Côte-de-Beaupré—Île-d'Orléans, members have already voted on a similar bill to grant a $250 tax deduction when buying tools, insurance or anything else pertaining to this kind of work.

Except maybe for a few members on the front benches, the Liberals had for the most part voted in favour of the bill. If I remember well, I think the House voted for the bill 180 to 11.

Income Tax ActPrivate Members' Business

11:30 a.m.

An hon. member

Even some ministers voted for it.

Income Tax ActPrivate Members' Business

11:30 a.m.


Michel Bellehumeur Bloc Berthier—Montcalm, QC

As one of my colleagues points out, some of the Liberal ministers even voted for that bill.

I call on the member to read the notes again and look at what the government has done, since that is very important for those workers. He said that this would create inequities. For my part, I say that the system as it exists now is already creating inequities for them. We should check again.

I call on the member to look at what has been done, not only during the 36th parliament but also during the 35th, the 34th and the 33rd parliaments. Liberal members, who at that time were sitting in the opposition, brought in a bill almost identical to the one we are discussing today and to the one we will be discussing another day, the bill presented by the Bloc Quebecois.

It is a bill that is approved unanimously in the various parties, since the Liberals had introduced a similar bill when they were sitting in the opposition. The Canadian Alliance is introducing a similar bill, the NDP has already introduced one and so has the Progressive Conservative Party. I find it strange that as soon as a party moves across to the other side, it forgets legislation it had introduced previously.

In all honesty, I call on the member to reread the speeches the Liberals made on this issue. He will see that there are indeed inequities for these workers and that we have to deal with these inequities, something that ultimately could be done quite easily.

We do not need a royal commission to study whether mechanics should be allowed a $250 credit. We do not need to study the issue for years, for that has already been done. This issue has been on the table for at least 15 years in the House of Commons, but a party, once it is in office, never thinks about these workers who are doing an extremely important job in a society such as ours, a consumer society.

Who in the House does not have a vehicle? Who in this House does not use a vehicle for work? It is very important to have good mechanics. It is extremely important to have mechanics who are at the cutting edge of the whole mechanics industry. Today, auto parts are quite different from what they were 20 years ago. Tools bought by mechanics are not screwdrivers from the dollar store. They are very expensive equipment.

I am convinced that, during the last election campaign, the government member listened carefully to all these technicians who told him that these tools are now costing a fortune. Yes, these people have a passion for mechanics. Yes, they do this job because they love it and because it is gratifying in many cases.

We must also think about the next generation. When a young person gets out of school and has to buy $5,000, $10,000 or $15,000 worth of tools—it could be as much as $20,000 to $25,000, depending on the specialty—because he needs these tools to get a job, he should at least be allowed to deduct a certain amount.

What I have heard this morning from the government members is that they do not understand or do not want to understand.

I understand. At one time, the Liberals were ready to help big sports clubs, and sports millionaires. For these people, they could afford millions. Luckily enough, the opposition could stop them and bring them back to their senses, but they were quite ready to help the sports millionaires.

When it comes to mechanics and ordinary workers, it is another story. These people who earn their living honestly are not millionaires. Their working conditions are sometimes quite difficult. I would not like to be a mechanic right now, making oil changes and repairing cars that have been riding on our roads in Quebec and Canada. In the summertime, their working environment can be very hot. Everybody knows the working conditions of mechanics. These workers are very useful to the economy in Quebec and Canada. The government should be a little more sensitive to their needs, and more consistent in its approach.

Earlier, the hon. member said that this would create a degree of unfairness in the system. But the system is already unfair. How can you explain that to mechanics? During the last campaign, I had to discuss this issue with them. How can you explain to them that they cannot have a deduction, when their boss, who demands that they have their own tools to work, can claim depreciation for his own tools, just because he has a company. It is hard to explain.

Income Tax ActPrivate Members' Business

11:35 a.m.

An hon. member

Oh, oh.

Income Tax ActPrivate Members' Business

11:35 a.m.


Michel Bellehumeur Bloc Berthier—Montcalm, QC

The hon. member does not like to hear the truth. It is always unpleasant to hear things you do not want to hear.

How do you explain that a mechanic cannot deduct the cost of his tools while a forest worker can deduct the cost of his chainsaws? Forest workers can claim deductions for their tools.

Musicians can also deduct the cost of some of their instruments. I am not saying they should not do so, it is normal for them to do so because they use their instruments to earn their living just like a mechanic uses his tools to make a living. Without tools, he cannot work. If he does not work, he does not earn any money; if he does not work, he does not pay any taxes.

How do you explain the situation to mechanics? I tried during the last election campaign, but I could not do it. I only promised them that, at the very first opportunity, the member for Beauport—Montmorency—Côte-de-Beaupré—Îles-d'Orléans would reintroduce a bill so that finally the government and the House of Commons would be able to vote on these very important tax deductions.

Fortunately for us, the highly competent member of the Bloc Quebecois promptly introduced this bill. He argued his case and the House will vote on the bill. Until then, I hope government members will listen to our concerns, show some compassion and vote in favour of this bill, as a vast majority of members did in the 36th parliament, so that mechanics in Quebec and in Canada will be able to deduct the cost of part of the insurance coverage and the tools they need to practice their trade.

Income Tax ActPrivate Members' Business

11:35 a.m.


Pat Martin NDP Winnipeg Centre, MB

Mr. Speaker, I too begin by thanking the member for Lakeland for allowing us the opportunity to debate this important issue once again.

As previous speakers have pointed out, it is an issue of great interest right across the country, and certainly in the House, proven by the fact that every political party currently sitting in the House has introduced this issue. Even the Liberal Party, when it was in opposition, saw fit to try to get some relief for ordinary working people when it came to the high cost of tools needed to do their jobs and earn their livings.

I differ with the hon. parliamentary secretary. This is an issue of tax fairness. This would not exacerbate any unfairness in the tax system. It would give some relief and recognition. Working people also deserve the ability to ply their trade and not be hampered by the unbelievably high cost of a working person's tools.

The bill specifically cites mechanics. There is good reason for this because there are probably the most glaring examples of difficulties in this area. An apprentice mechanic has to put together a tool kit costing anywhere from $10,000 to $20,000 worth of expensive tools. A mechanic's job gets more complex and technical with diagnostic equipment. It is no longer tuning up an old six cylinder in-line six with a simple set of tools. It is very complex and very technical. We do not recognize that.

The real frustration for me is the government's unwillingness to recognize working people in this way. This fuels the whole blue collar stigma that blue collar work and trades are not valued by the government. Therefore, it is even more difficult to attract and retain young people in the industry. There is evidence of that.

I am a journeyman carpenter and the average age of a carpenter today is 49 years old. We cannot attract young people to the trade. In part it is because of this overwhelming feeling that their jobs are not valuable. Only the high-tech jobs appear sexy. People feel they should be going into the B.A. program even if their skill set would point them in the direction of being a skilled trades person.

The root of the problem of who gets to deduct their expenses can be found in the definition of the independent contractor. What is a truly independent contractor as opposed to an employee? If a mechanic hangs out his or her shingle as an independent entrepreneur, the person can deduct everything from the space rented, to the tools purchased, to the depreciation on those tools and even the truck he or she drives. All those things are tax write-offs because he or she is now a small business person.

The industry has taken advantage of this. Mechanics are different from the average hourly paid employee in most shops. They are actually paid by piece work. They are not paid by the hour anymore, they are paid per job. If it takes 2.1 hours of labour to do a head job on a Honda Civic, that is what they get paid whether they take three hours or one and a half hours to do it. In that sense they differ from the traditional relationship of employer and employee. They are independent to some degree. This is not recognized in the tax system which is one of the basic problems. Other workers in the country also suffer from the same ambiguity in the definition of what an independent contractor is.

I remind the House of the plight of the rural route mail couriers who find themselves in the same situation. They are actually wholly dependent on one source for their income but they are not categorized as employees. As such, the rural route mail couriers get it from both ends. These individuals are dependent, not independent, but they do not get any of the advantages of being employees.

This basic tax unfairness helps to fuel the whole skill shortage problem faced in all of the skill trades. This is because we do not recognize how very difficult it is for apprentice mechanics to rack up what is really a small business loan, up to $20,000, just so they can start plying their trade.

We might say that most trades people make more money than the average industrial worker and that higher wage offsets the additional costs they must go through to be able to practise their trade. That really is not true. If a survey was done on what a mechanic makes, the amount would be anywhere from $15.00 to $21.00 per hour. There are people working in pulp mills with none of the risk factor or the additional costs of buying their own tools who make more than that. The compensation package is not offsetting the additional expenses they have in setting up shop.

One of the most galling things in hearing the Liberal government refusing to entertain this very modest tax relief idea is that it just spent $100 billion in tax relief in its last announcement. The government plans to give tax relief right across the country in the figure of $100 billion, some of which is to corporations. The corporate tax rate will go down from 17% to 16%, which is a huge benefit to the corporate sector. Capital gains taxes will be reduced for high income earners. Do not tell me there are some high income earners here who applaud that. There are a lot of mechanics who do not find any comfort in that whatsoever.

Do not tell me that the bureaucrats who put together the tax relief package were not aware that this was a pressing national issue. They were reminded every year in the House of Commons by every political party that this was pressing.

The member for Lakeland pointed out that he had some 70,000 pieces of correspondence, not just from employees but from employers in the industry, who are very concerned that their inability to attract young people into the industry is affected by the lack of recognition that skilled trade gets from this government.

Hearing the Liberal Party talk about apprenticeship in the Speech from the Throne and then failing to recognize one of the most pressing problems that apprentices face today by failing to introduce any tax relief for working people when it had the opportunity to do so, tells me that it is really just lip service. The Liberals are not really seized of the issue of those blue collar trades, the apprenticeship industries. They are more concerned with the high tech field or providing tax relief to corporations so that something will trickle down to ordinary working people.

This is an issue which has been raised to virtually every member of parliament in the House. I doubt there is a person here that has not had some communication from a mechanic, a carpenter or an industrial electrician who has to shell out a great deal of money just to ply their trade, so they can get up in the morning, go to work and do what they are trained to do. They do not get any of the recognition that even a small businessman or an entrepreneur might get if they went into business on their own.

There is another issue of tax fairness or tax unfairness that working people face. As a journeyman carpenter, many times I had to cross the country looking for work. I had to go where the work was. I had to throw my tools into the back of my pickup and then drive from B.C. to Thunder Bay to look for a job. None of that can be written off. If I was going to a job and was actually hired at the other end with the proof that I had a job, I could write off my moving expenses. If I showed enough initiative to look for work and kept travelling until I found a job, none of that can be written off. This is another example of how we are overlooking a whole sector of the population who make their living by their skills, who have to go where the work is and who are not being recognized by the government.

The final piece of evidence that I would offer to show that the government does not really care about apprenticeship, the skilled trades or even the industries that employ skilled trades people, is the EI treatment of apprentices. When I went to trade school, after I had left my job to go to the community college component of my schooling, EI kicked in immediately. There was no interruption. I have income maintenance to survive that six week period.

That was one of the changes made in 1996. Now when apprentices leave their job to go to a community college they have a two week waiting period as if they were unemployed. They not unemployed. They are just doing the learning component of their apprenticeship. The government has been reminded of that oversight time and time again. Now it has put forward amendments to the EI bill and it has chosen not to address the issue that faces apprentices, the one single issue that has been brought to its attention by the building trades council.

My compliments to the member from Lakeland for letting us have the opportunity to debate this again. It is a shame the Liberal government does not see fit to meet the needs of industry by addressing this pressing concern.

Income Tax ActPrivate Members' Business

11:45 a.m.

Progressive Conservative

John Herron Progressive Conservative Fundy Royal, NB

Mr. Speaker, I am standing in today on behalf of our finance critic, the hon. member from Kings—Hants, who has spoken on previous occasions in the House in support of this particular initiative.

I compliment the member for Lakeland for bringing this issue forth and joining almost a chorus of parliamentarians who have been in support of this particular initiative.

Upon the first look at a deduction of this sort, there is something that I and I know the Progressive Conservative Party categorically believes in, and that is that the our tax code is far too complicated on a broad based perspective.

Having said that, I am very reticent to say that we will have the broad based tax relief that this country requires in order to maintain our capacity to be competitive. I do not think we will see that from this government in the near future, in any way, shape or form. The minimum that we owe the mechanics and the people in this particular sector is to accept the recommendations that were brought forth by the member for Lakeland and by other members of parliament in the House.

There are at least 115,000 mechanics working and paying taxes in Canada, mechanics who make a very significant contribution to our economy but who have to make a very significant initial cost to enter this particular trade. I know a lot of Canadians would be alarmed or shocked to know that in order to even gain entry into this particular field a Canadian has to spend from $15,000 to as much as $40,000 in order to acquire the necessary tools to participate in these particular trades.

The member from the New Democrats who spoke just a few moments ago pointed out that we have a massive demographic shift taking place in a lot of the trades, whether it is in carpentry, mechanics, welding or other trades. They are not attracting the numbers of young people that they should. One of the reasons right now is that the startup costs are quite prohibitive for them to be able to make this particular investment.

On behalf of the Progressive Conservative Party of Canada, I would support the initiative from the member for Lakeland. This initiative was brought forth by the finance committee, not just once in 1996 but on a second occasion in 1997. Although an argument can be made that this does complicate the tax code, it would also bring forth meaningful tax relief to individuals who are in those particular trades, which is a necessary component of our labour sector.

We support this initiative as we would all broad based tax relief. The Government of Canada still does not understand that currently we have the second highest personal income taxes among all G7 nations as a percentage of our economy. It should recognize the fact that our trading partners are making massive leaps. It should be providing Canadians with the broad based tax relief that we need to maintain our position in the world. It believes that its initiatives with respect to tax reductions that were made in the mini budget this past September were initiatives that addressed this concern.

While the rest of the countries in the OECD are taking massive steps in terms of tax reduction, the Government of Canada, the Liberal Party of Canada, is taking baby steps. The result is that Canada is falling farther behind and losing its place as a competitive nation.

We need to ensure that we provide the broad based tax relief that we categorically need. We know that the Government of Canada is not providing that particular tool to our economy as it should be doing. We know we are probably heading into an economic slowdown of some nature, the magnitude of which is still to be determined.

I also take this opportunity to challenge the government. If we are on the eve of any form a slowdown, we need to send the right signal to the investment community that Canada is a place in which to grow, to profit and to invest. I also want say to the Minister of Finance that not only should he be supporting the member for Lakeland's position on this particular initiative but it is almost unprecedented for the Government of Canada not to be tabling a true budget on schedule as it is supposed to do.

Income Tax ActPrivate Members' Business

11:50 a.m.

Canadian Alliance

Ken Epp Canadian Alliance Elk Island, AB

Mr. Speaker, I am pleased to support this private member's bill. It is an issue that has come up in my riding over and over again. There are a number of people in my riding who actually work in machine shops, car dealerships and other places where this issue of deductibility of the cost of their tools is a very real item.

It has been mentioned here today that this issue has been before the House on a number of occasions. I will not digress long, but I will take the risk for 30 seconds or so to say that this is an issue that underlines the ineffectiveness of parliament.

This is an issue that has come up over and over again in the seven years that I have been here and it has been spoken in favour of by members from all parties. Even the Liberals spoke in favour of the bill when they were in opposition. The issue deals with basic fairness to a sector of Canadians who right now are being unfairly treated by the Income Tax Act. However, for some reason when the people on this side get to the other side, as happened in 1993, I do not know what happens. Is there a machine half way across the aisle that performs a frontal lobotomy on these people so that when they get over there they can no longer think for themselves nor speak for themselves?

I do not want to offend them so I will not go that way. I just want to appeal to them. We are backbench members and this is private members' business. The issue will be up before the House again and again until it is finally corrected. Perhaps these members now on the other side could be in the forefront of leadership, on behalf of mechanics in Canada who are being unfairly treated, and perhaps vote in favour of the bill when it comes to a vote.

My hon. colleague from Lakeland brought the issue before the House shortly after the 1993 election. At that time I remember speaking to people in my riding. A number of my constituents work at Petersen Pontiac Buick, a major dealership in Sherwood Park. I do not think they are related to the hon. member opposite who perks up at the sound of his name. It is certainly a good dealership. The mechanics who work at Petersen Pontiac are required to have their own tools.

At issue here is that it is just good business sense for each mechanic to have his or her own tools because when one owns one's own tools one pays closer attention to one's security.

I have done my own mechanical work for many years. On Saturday I always like to get underneath my car and get my hands dirty changing the oil and doing some other work. It has happened to me, as meticulous as I am, that I have occasionally lost one of the tools I was working with and I had to replace it. I am not a professional mechanic so I go out with after tax dollars and replace it. However, the mechanic who is making his living with these tools has no choice as to whether or not to replace it. He or she must buy a replacement with after tax dollars.

There is another important issue here. We have to recognize the importance to our country of this sector. We are so dependent upon mechanical devices, such as automobiles, buses and trucks, for our transportation, not only for getting ourselves from place to place but also for the goods and services that we produce in Canada. If it were not for mechanics and a very healthy number of people in that trade we would be in trouble. We need to have an adequate supply of personnel. Frankly, I believe they are being discouraged from entering this profession because of the immense high cost involved.

When most mechanics graduate from their training at the apprentice level, and even as they are being trained, they have to acquire these tools and pay for them with after tax dollars, which is grossly unfair. Every other profession is permitted to deduct the cost of their equipment from the bottom line. A mechanic working as an employee is not permitted to do that.

The parliamentary secretary has said that the government is concerned about this because it will open up the floodgates and make the tax code very complicated. Well it is complicated already.

I do not think this little amendment will make anyone unhappy but it will make a lot of mechanics very happy. Members on the other side claim this is a matter of fairness and that therefore they will deny it to mechanics because they are denying it to other groups. We all know there are some groups that have these deductibilities. For example, musicians and artists make their living from their trades. They use tools. In a way we could call a violin a tool of the trade. That is deductible and it should be.

I do not understand by what reasoning one can then conclude that a mechanic who is required to have tools should spend his after tax dollars.

I will give a math lesson. We have a tendency when we talk about taxation to talk about the percentage rates. It is well known that in most provinces the marginal tax rate is around 50% if we add federal and provincial taxes together. Since that is taxable, and with the present tax agreements between the provinces and the federal government, any tax incurred federally is automatically also a provincial tax.

From the consumer's point of view and from the mechanic's point of view they now have a bill to pay which, if they earn some money to buy a product, they will spend 50% of what they earn on taxes. I will give a numeric example of what that means. Let us say the individual needs to buy $1,000 worth of tools. The person must earn $2,000 in order to pay for them because after the marginal tax rate of 50% he or she is left with $1,000.

Our mistake is that we measure that as a percentage of the money earned. When we pay the GST it is a percentage of the product we are buying. If we look at this as a percentage of the product the mechanic is buying, it is a taxation rate of 100%. To buy $1,000 worth of tools the mechanic had to pay $1,000 worth of taxes, which is a 100% tax rate. It is very discriminatory. I urge all members to vote in favour of this motion when it comes again to the House.

Income Tax ActPrivate Members' Business


The Acting Speaker (Mr. Bélair)

Pursuant to Standing Order 95(2) the mover of the motion, the hon. member for Lakeland, has five minutes to reply.

Income Tax ActPrivate Members' Business


Canadian Alliance

Leon Benoit Canadian Alliance Lakeland, AB

Mr. Speaker, I would like to start by thanking not only my colleagues in the Canadian Alliance but also the members of all other political parties for giving resounding support for the legislation, with the exception of the governing party.

I listened to the parliamentary secretary, puppet to the finance minister. It is interesting that almost all members of the governing party voted in favour of the legislation just before the election. There were 11 ministers, if I am not mistaken, who voted against it. Some ministers supported the bill before the election. Of course now it is a different ball game.

That is how the governing party views democracy. It is wrong and improper. It is undemocratic and unacceptable.

The parliamentary secretary to the finance minister stood up today and gave a speech, probably prepared by the finance minister—and a sad speech it was—arguing against the bill on the grounds that a personal exemption was already in place to cover those things. He said that the bill would create inequity in the Income Tax Act. He also said that it would allow mechanics to deduct even small costs. He went on to say that tools may be used for non-work purposes. In other words, he was saying that mechanics would cheat and claim tools that were being used for personal use.

I will respond to some of the things the parliamentary secretary has stated. Regarding his statement on personal exemptions, a personal exemption is not there to cover things like this. Employees who do not have to buy anything as a condition of employment, which is most employees, get the personal exemption. Every employee gets the personal exemption. It is a nonsensical argument, and I cannot believe that the parliamentary secretary came up with it.

The Canadian Alliance has been campaigning on increasing personal exemptions some $3,000 more than the government and $4,000 more in the case of spousal exemption. The government has been very weak on that, but it has nothing to do with the issue. It is an important issue, something the Canadian Alliance feels is important, to increase personal exemptions, but the government is not doing that at any meaningful rate. It has nothing at all to do with the issue, so I cannot understand the parliamentary secretary.

He went on to say that the bill would create inequity. I would like the parliamentary secretary to think about that comment. When mechanics or technicians choose to work on their own they can claim all the costs. They can claim the cost of the tools they buy and any other costs related to the business. However, if they work as an employee, maybe in the same shop, even if it is a condition of employment that they purchase their own tools they are not allowed to deduct the cost. How is the bill leading to more inequity? It is leading to equity and fairness under the tax act. That was another absolutely ill conceived answer.

The parliamentary secretary argued against allowing mechanics to deduct small costs. What is wrong with that? Mechanics use a lot of things that as individual items do not cost a lot, but they add up to thousands and thousands of dollars. That is exactly what the bill is intended to deal with. What is wrong with that?

He went on to say that tools may be used for non-work issues. That is the case in every area of the tax act. If someone is prone to cheating, and I guess the parliamentary secretary believes that perhaps all taxpayers are cheats and we should watch against that, of course they could be used for personal use. However, most technicians are honest, hard working people and they should be respected for that. It is disgusting for the parliamentary secretary to indicate otherwise. I think that is completely unacceptable.

What will happen with the bill in the House? Before the election almost all government members, along with all members of the opposition, voted in favour of the same bill. However now the parliamentary secretary is saying something entirely different.

I wonder if backbench members of the governing party will vote against the bill this time, now that the election is over. I really wonder. I cannot believe they would do that, but they did vote against their red book promise, a promise taken from the red book and put forward as a motion from the official opposition. They voted against that, so who knows what they will do? They may well vote against the bill. That would be very unfortunate.

What about tax fairness for technicians and mechanics who as a condition of employment must buy their own tools? They have to pay for $15,000 to $70,000 worth of tools with before tax dollars. It is unfair. This is an issue of fairness. Let the government bring the issue forward as soon as possible.

I ask now for unanimous consent of the House to make the bill votable.

Income Tax ActPrivate Members' Business

12:05 p.m.

The Speaker

Is there unanimous consent that the bill be votable?

Income Tax ActPrivate Members' Business

12:05 p.m.

Some hon. members


Income Tax ActPrivate Members' Business

12:05 p.m.

Some hon. members


Income Tax ActPrivate Members' Business

12:05 p.m.

The Speaker

The time provided for the consideration of private members' business has now expired. As the motion has not been designated as a votable item, the order is dropped from the order paper.

Standing OrdersGovernment Orders

February 26th, 2001 / 12:10 p.m.

Glengarry—Prescott—Russell Ontario


Don Boudria LiberalLeader of the Government in the House of Commons


That section (5) of Standing Order 76 and section (5) of Standing Order 76.1 be amended by adding at the conclusion of the notes thereto the following:

For greater clarity, the Speaker will not select for debate a motion or series of motions of a repetitive, frivolous or vexatious nature or of a nature that would serve merely to prolong unnecessarily proceedings at the report stage and, in exercising this power of selection, the Speaker shall be guided by the practice followed in the House of Commons of the United Kingdom.

Mr. Speaker, I am pleased to have the opportunity to speak to the motion before us.

The purpose of this motion is straightforward. It is to reconfirm the authority of the Speaker to select motions for debate and, of course, for voting, at the report stage in the manner that was intended when our present legislative procedures were adopted some 32 years ago.

In my discussions with other House leaders, we have canvassed a wide variety of options that might be followed in the interest of making the report stage a more effective part of the legislative process. These included possible changes to the committee stage and to the time allocation rules, as well as changes to report stage rules.

But it became clear to me that such an approach more properly should be considered in the context of House of Commons modernization and that, today, we should simply confine ourselves to restating, as it were, the authority which the Speaker has always possessed or exercised in the 32 years we have had this procedure.

This left us today with a single issue, but a very confined one, that had become a problem for the House in recent years and I was convinced by some of my honourable friends opposite that I should confine my initiative to addressing that single point, which is what I am going to do.

In recent years successive Speakers have felt progressively less and less justified in exercising their authority, with the consequence that the report stage has been rendered vulnerable to unsatisfactory and, shall I say, clearly unintended uses.

In December, 1999, the House was obliged to spend 42 consecutive hours voting on 469 report stage motions, most of which were concocted for the sole purpose of delaying the House. Changing commas to semicolons, and attempting to obstruct the parliamentary process has nothing at all to do with democracy. That is not democracy; it is the opposite. And all members know it.

Standing OrdersGovernment Orders

12:10 p.m.


Michel Bellehumeur Bloc Berthier—Montcalm, QC

That is what democracy is.