Mr. Speaker, first I wish to inform the hon. member for Chambly, who referred to mechanics as a less noble trade, that this trade is as noble as any other. In my opinion, it is a very important trade.
This private member's bill would amend the Income Tax Act to help mechanics pay for the cost of providing tools for their employment if they are required to do so under the terms of their employment.
This enactment would permit mechanics to deduct purchase, rental, insurance and maintenance costs of their of tools. Mechanics would benefit from a tax deduction applying on the cost of tools under $250. This amount could be adjusted for inflation. The cost of tools exceeding this amount would be subject to a kind of capital cost allowance, which would be set by special regulation.
The Government of Canada understands the situation that this bill aims to solve. We are aware that tool costs can be significant, particularly at the start of a career.
Because of that, I am happy to say that there is merit in the idea behind the private member's bill and I wish to congratulate the member for Beauport—Montmorency—Côte-de-Beaupré—Île-d'Orléans for his dedication and perseverance. However, I must also point out that this bill ignores some very important issues, such as the need to ensure that our fiscal system remains fair.
Financial aid to one particular group of employees can be justified only if those employees have to spend substantially more that others.
Mechanics do not form an homogenous group. There are many types of mechanics. Members need just think about the car maintenance technicians and all those specialists who repair brakes, transmissions, radiators and fuel injection systems; the members know what I am talking about. There are also the bus and truck mechanics and even the automotive body repairers.
However, it is at this point that I begin to have some doubts. What about the aviation mechanics or heavy machinery mechanics who repair the large vehicles used in forestry, mining and construction? Do they have to spend large sums for the purchase of their tools?
If we must give a tax break, it should be given to the appropriate persons, to those who must incur employment related expenses substantially higher than those of the others. The persons I have just mentioned are all mechanics. However, they do not all have the same expenses.
We are faced with a problem. If we grant a tax benefit to all mechanics, we will find out that some mechanics do not incur major expenses whereas some others do. For some of them, the expenses are comparable to those of carpenters or plumbers, for example. Why, then, should the member make a distinction that would amount to discrimination against other trades, and why should the same tax break not be granted to all? How could we explain to many other employees that this tax measure is for mechanics only, even if they incur similar costs in their job?
Why not extend this measure to all employees? We have to recognize that this would be very costly, potentially over $1 billion. It would limit the government's capacity to grant tax cuts to all taxpayers.
Besides, it would be difficult to ensure that the expenses are effectively incurred for employment purposes. Many items can be used for personal as well as professional purposes, like computers, software and cell phones. A tax deduction for employment expenses for all taxpayers does not seem to be advisable.
If we do have a tax break, we believe it should be only for taxpayers who incur exceptionally high employment related expenses, especially when compared to their income. Is this really the case for mechanics?
For example, let us take a mechanic who already has his tools. How much should he spend to maintain and upgrade these tools? A survey by the Canadian Automotive Repair and Service Council shows that the average expense is about $1,500 annually. Some spend more and some spend less. It is reasonable to think that many other employees have employment related costs similar to those of mechanics.
Now, is there any reason to believe that these expenses are a heavier burden for mechanics than for other workers? The members of the House know full well that mechanics are not rich. However, mechanics make a better living that other workers. Let us try to put them in the proper perspective.
In 1996, when the last census was taken, the average annual wage of an automotive service technician was approximately $38,000. The same year, the average wage of a university graduate was slighter higher than $42,000. Workers with no university diploma earned, on average, $26,000.
Therefore, the situation of mechanics is good compared to the national average. And their situation is also good compared to many other trades such as bricklaying and woodworking, where the average annual wage is approximately $34,000.
It would not appear that, as a whole, mechanics form a group that incurs employment related expenses that are substantially higher, in proportion to their income, than those incurred by other workers.
This brings me to another point. When we recently debated a similar bill, I was astonished to hear all members, except for one, talk about the effect that the cost of tools is having on all the mechanic apprentices entering into the trade.
For many years, the Automotive Industries Association of Canada has made a priority of the recognition for tax purposes of expenses incurred by mechanic apprentices. According to the association, the cost of tools represents a barrier to the recruitment of mechanic apprentices. I would like to take a few moments to address this position and, more particularly, the proportion of their income mechanic apprentices spend on tools.
I guess the first question is, how much does it cost for a starter toolbox and tools? Well, the CARS council says it can cost between $3,000 and $4,000. This is just the basic starter kit. The apprentice would add more tools as he or she progressed through the apprenticeship program.
During a typical four year apprenticeship, it would not be unheard of to spend $15,000 and sometimes more. And so let us compare that to what they earn. The average annual income is about $20,000.
It would certainly be a challenge for a mechanic apprentice to buy $3,000 worth of tools on an annual income of $20,000. In some cases the costs might even make someone think twice before going into this line of work, as industry representatives have said.
In conclusion, the bill before us today has some laudable goals, but it also has some significant shortcomings. It does not take into account the different circumstances of various kinds of mechanics.
At one level, we have apprentices who pay somewhere around $3,000 a year for tools, on an annual salary of $20,000. And we have mechanics spending around $1,500 a year on tools, but making a great deal more. The bill fails to distinguish between those who can reasonably afford to cover tool costs and those who might really need some help.
The tax relief proposed in this bill needs to be better targeted. I therefore urge members of this House not to support it.