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.