Madam Speaker, I am very pleased to speak on Bill C-222, a very important bill brought forward by the member for Beauport—Montmorency—Côte-de-Beaupré—Île-d'Orléans.
As a number of other members have mentioned, a concept of this bill has been before the House many times before. In my previous life I was a self-employed chartered accountant. I had many mechanics, both employed and self-employed, as my clients, so I am very familiar with their concern regarding this issue.
I believe a number of interveners have possibly misunderstood the concept. The first issue is self-employment as opposed to employment. In fact the previous speaker gave many examples of people who were able to deduct tools, et cetera, by virtue of the fact that they were deemed to be self-employed. He was also confused about incorporated and unincorporated businesses. Unincorporated self-employed people are allowed to deduct expenses laid out to earn income.
There is a significant difference in the income tax system between people who are employed as opposed to people who are self-employed. We can have a long debate about that in and of itself, but generally speaking it is considered that people who are self-employed have likely more substantial risk in earning an income than do people who receive a weekly paycheque. Some people dispute that in this day and age when people are getting laid off of their jobs and so forth, but that is some of the foundation that underlies why this situation has occurred.
The issue of fairness was mentioned. A number of interveners said that it was only being fair to do this. I understand that plight and the costs involved in acquiring and even maintaining a tool inventory. However many people who are employed have similar costs related to being employed. Even we have a dress code in the House of Commons. I incur costs for suits and other things related to maintaining my job as a condition of employment, but these costs are not tax deductible.
I have two young sons who are engaged in the high tech sector. While it is not a specific condition of their employment, they feel it is part of their jobs to have computers in their homes. They use those computers as an extension of their work, but they are not allowed to deduct those computers for tax purposes.
The fact of the matter is that if we are going to start talking about fairness, we are going to have to talk about a lot of other people. I am sure people in our audience today or sitting at home watching this debate who are employed can think of things that they incur as well to earn employment income.
Uniforms is another issue that has been around for years. People may be required to wear uniforms such as a waitress or whatever the case may be. They are required to buy the uniform from their employers, but are not allowed to deduct them for tax purposes. That is another idiosyncrasy of the income tax system.
I am sure all of us can think of reasons why we should have a tax deduction. The real issue is why should this group of people be treated somewhat differently than all other people who are employed.
To go over the bill itself, the bill proposes to change the Income Tax Act to help mechanics to pay the costs of providing their own tools when this is a condition of their employment. I think that is very important.
We should also ask ourselves a fundamental question. Why is it a condition of employment for mechanics to buy their own tools? There are a lot of reasons for that but it has developed differently from other industries.
Changes would allow mechanics to deduct the cost of buying, renting, insuring or maintaining their tools. Income deductions would be available for tools costing less than $250 and this could be adjusted in accordance with inflation. That is what the bill says. For bigger amounts it would be subject to capital cost allowance and allowed to be deducted over a period of time.
The Government of Canada understands the difficult issue this bill is trying to address. We appreciate that employed mechanics face work related costs that are sometimes significant. This is particularly true, and it has been brought out in the debate today, of young people who have just become mechanics and have to buy that first investment. It is well known that if people enter a career path as a mechanic, they will have to buy their first set of tools. It does not alleviate the fact that it is very expensive and could be cost prohibitive to people becoming mechanics.
There is some merit that the bill is trying to achieve. However the bill overlooks some very important administrative issues, issues that would need to be considered if the bill went forward.
For instance, the bill talks about the word mechanic. Many people have used the words auto mechanic but it does not say that in the bill. Canada's national occupation code lists many kinds of mechanics. There are automotive mechanics, but there are also auto body mechanics, heavy duty mechanics, small engine mechanics, aircraft mechanics and many varieties of industrial mechanics. That has not been defined in the bill. People have used the analogy automotive mechanics but the bill says mechanics of all kinds.
Many other people would call themselves mechanics as defined under Statistics Canada even though they may not fit in any of those particular categories. In reality the bill has brought forward a great deal of confusion.
Another important administrative issue is how the deduction will work under the bill. I am puzzled by the use of the thresholds. The bill talks about those amounts in excess of $200, I believe, which is different from the current capital cost allowance provisions which is $250. In other words, it would appear that the bill anticipates some other form of capital cost allowance regime. This is a mystery to me.
What is even stranger is the bill talks about the proportionality of tools in excess of $250. I have a hard time reading and understanding it myself. I am assuming if a particular tool was $1,000, the first $250 would be deducted as a regular expense and the $750 would somehow be added to a person's capital cost allowance schedule as a depreciation.
There is no system of the Income Tax Act that treats capital acquisitions in that manner. It does not take part of a car and write it off while the other part is depreciated over a long period of time. It does not take part of a tractor, write it off and depreciate the balance over a long period of time.
The bill is inconsistent and does not fit in with the current income tax regime. Therefore, it is not a simple bill. It is a very complex bill that deals with a whole different method of depreciation and providing for capital cost allowances.
One of the problems is the matter of control. We recognize that in some areas there are already mechanisms which apply to employees who have to pay out of their own pocket for work supplies. The cost of chainsaws is allowed to be written off by loggers because it is recognized that they depreciate quicker than other forms of equipment.
We have to sit back from this issue and think about it for a minute. We talk about fairness but there are other employed people who are treated similarly to mechanics. This is not to say that mechanics are not deserving of some kind of treatment, but if we open up that Pandora's box we will have to open it up for a lot of other people, especially some of the people who are listening to us today.
My preference is that at this time the bill not go forward until it is studied further.