Mr. Speaker, it is with pleasure that I rise today to speak on Bill C-222, which would actually address what is a significant inequity in our tax treatment, in this case, of mechanics in Canada.
There are 115,000 mechanics across the country, on average investing between $15,000 and $40,000 each in tools and equipment. The average wage for these mechanics is not as high as what I have heard some Liberal members opposite claim it to be. In fact, the average income is $29,000.
I heard one of those members opposite, and I believe it was the Parliamentary Secretary to the Minister of Finance, say that the average mechanic's wage is $60,000 or something to that effect. I do not know what kind of car he is driving, but I am driving a 10 year old Volvo station wagon and I cannot not afford to pay mechanics who cost that kind of money. Obviously the parliamentary secretary is investing an awful lot more in cars than some of the members here in the opposition.
The fact is that the average income is $29,000 and the investment just to get through the door to become a mechanic and have those tools required averages between $15,000 and $40,000. It is little wonder that we are faced with a critical shortfall of mechanics across the country. This is becoming a real issue. This is a real issue that is going to wreak havoc in the long term and affect every one of us in our own situations as we need the services of mechanics.
It is clear that this piece of legislation is fair. It makes a great deal of sense. It would extend the same treatment to mechanics that we see extended to professionals who, in many cases, have the ability under the tax code to write off professional expenses that are required for participation in their particular job or profession. It is very sensible.
In fact, the House of Commons finance committee in 1996 and 1997 made this recommendation to the Minister of Finance in its prebudget consultation report. It would go a long way toward improving the fairness of our tax treatment, in this case, of mechanics. If we improve the tax treatment or the fairness of our tax system for any segment or group of people within society, we all stand to benefit.
This proposal represents one idea, in this case from one member of parliament, on things we can do with our tax system to make it better, to make it fairer and to make it more effective in creating greater opportunities for Canadians.
I would like to take the opportunity to segue into a related topic, and that is a speech given by Jack Mintz, the president of the C.D. Howe Institute. In the past he chaired a report to the Minister of Finance on tax reform in Canada. Recently he gave a speech where he, not as a parliamentarian but as an individual with a great deal of depth on public policy issues in Canada, provided a four point plan on ways in which he sees Canada becoming a stronger, more prosperous country in the 21st century.
In the same way that the hon. member presented his piece of legislation, this private member's legislation, on a specific means by which to have a better, fairer tax system, I would like to present some other ideas, in this case from Jack Mintz, the president of the C.D. Howe Institute. What he describes is his four point plan.
That four point plan sounds like going to a mechanic or someone servicing a car, again in a related segue. The first point he makes is to reward success, not failure, to judge public programs based on what they accomplish. Successful ones are funded and continue to be funded. Failing programs are not funded. Clearly HRDC or some of the aid programs which have fallen under the purview of the minister of HRDC might find it difficult to achieve funding under this sort of scrutiny.
Public sector workers need to be paid and rewarded in monetary and in non-pecuniary ways according to their success in meeting objectives. This would include civil servants, teachers, professors, medical workers and anyone who is paid from public money. He suggests that we need competition in providing public services and that in fact there has to be a greater ability for market forces to pervade the delivery of public services.
He also suggests as the second point in his plan that of tackling the public debt in Canada. We have a huge debt in Canada that has built up over the years. The total government debt in Canada is $850 billion. Unfunded liabilities for public pensions and public health care, if we add those in, take us to about the $2 trillion mark for the total public debt in Canada. That does not include many of the other contingent liabilities. If the problem is left untouched, we will have to levy taxes equal to eight per cent of our GDP just to service these liabilities by 2015.
Mr. Mintz is suggesting that we take a very aggressive approach to our federal debt. To reduce tax burden in the future, he suggests that we tackle our federal debt and use the returns from tackling the federal debt and those returns coming from the reduced interest payments that we see as an expense every year, paid by the taxpayers of Canada.
If we were to take a more aggressive approach to public debt now, as a result we would engage in what would become a virtuous circle of using that reduced level of expense from paying the reduced level of interest on the principal of our debt to actually fund tax reduction, which would of course benefit Canadians and create greater levels of economic growth.
That would reduce the debt not just in real terms but also as a percentage of GDP, by reducing the debt of course in real terms but also by increasing the GDP through aggressive tax measures which would fuel greater levels of economic growth.
In Canada our governments command well over 40% of the economy. That is higher than Australia, Iceland, Ireland, Switzerland and others countries, which operate on a third or less of the national economies. The U.S. is at about 30%. Clearly we have to reduce the percentage of government participation overall as a per cent of our GDP.
We need to address Canada's dysfunctional tax system. We have a tax system that needs significant reform. The hon. member has presented in this case a specific initiative that would improve the fairness as it relates to mechanics. I would suggest that we need to move much further and actually provide a comprehensive, holistic approach to tax reform and in fact start using tax policy and tax reform measures as vehicles to create greater levels of economic growth and opportunity for Canadians.
Mr. Mintz is now president of the C.D. Howe Institute. In a previous incarnation, he was the author of the Mintz report, commissioned by the Minister of Finance but subsequently shelved by the Minister of Finance because it did not contain purely politically palatable recommendations. As he had the courage to address some of the long term competitiveness issues facing Canadians, he has a great deal to offer in this regard.
From a tax perspective he goes further to suggest we need to significantly reduce areas of taxation in Canada that are most out of line with those of our competitors. They include corporate and capital taxes which deny business the necessary capital to achieve greater levels of productivity and competitiveness in the hypercompetitive global economy.