Mr. Speaker, I welcome the opportunity to speak to the bill put forward by the hon. member for Cypress Hills—Grasslands.
The bill would exempt from tax, on an annual basis, up to $8,000 received by an athlete from a non-profit organization to the extent that the organization is operated exclusively for the purpose of promoting amateur athletics.
I understand why the hon. member has put the bill forward and I understand the specific issue he is trying to address. What I do not understand is how the hon. member could possibly think the bill would address his concern.
Although the proposition may sound attractive, it is the government's position that this is not the right way to enhance government support of athletics in Canada. For this reason and for other reasons on which I will elaborate further, the government does not support the bill. I also recommend that hon. members of the House not support the bill.
Granting an exemption under the tax system is not the right approach to enhance government support of athletics in Canada. It would be easy to say that leaving more money in the pockets of athletes will help them somehow. This can be said for any group of taxpayers. However, the question must be asked, is there a better way to achieve the same goal?
Promotion of athletics in Canada is not done best by helping those athletes who receive compensation, but by creating infrastructure and supporting the governmental and non-governmental organizations that support all our athletes.
The exemption in the bill would call into question the allocation of the tax burden and the justification for such allocation under the current tax system. The government uses the tax system to raise revenues and tax policy provides justification for distributing the tax burden among all taxpayers based on economic, social and political considerations or based on fairness or equity.
In this regard, it is the basic premise of our tax system that similarly situated taxpayers should be taxed similarly, regardless of their source of income. Thus, although the tax system categorizes income on the basis of its source, the income from the various sources are pulled together and a graduated tax rate is applied. For instance, an individual earning employment income is taxed at the same rate as someone earning income from an office or business.
The bill proposes to exempt part of an athlete's income from tax in order to show support for amateur athletics in Canada. It aims at differentiating income received by an athlete from a non-governmental organization from, say, income received by a waitress from her employer. Would it be fair to say to the waitress that her income is fully taxable and give an exemption to athletes? Is income not the same? Is income not income, no matter where it is coming from? To give athletes an exemption is not fair to other hardworking Canadians who, day in and day out, go to work and pay their fair share of taxes.
In addition, in our opinion the wording of the bill is flawed. The bill, as drafted, would open the door to abuse because it is easy to set up a non-profit organization and because anyone participating in sport or fitness activities could be considered an athlete. Any individual could argue that they qualify for this relief simply because of their physical condition or involvement in athletic activities. Indeed, the bill does not provide the basis for differentiating athletes from non-athletes.
Also, it would be easy for professional sports teams to set up non-professional, non-profit organizations in order to extend the exemption provided under the bill to professional athletes.
The proposed cap on the amount of eligible income would limit, but not eliminate, this potential problem. The ease by which the intent of the bill could be circumvented strongly undermines its validity. The bill proposed by the Conservative member would make exempt for tax purposes annually up to $8,000 received by an athlete from a non-profit organization operated exclusively for the purpose of improving athletic performances and promoting amateur athletics.
As I have explained, there is simply no basis for granting athletes this exemption. There is no reason to believe that this is the best way to help promote amateur sports in Canada. There is no answer to those other hardworking Canadians who must pay tax on all of their income. Finally, there is no justification to enact into law a bill that could be so easily abused. For those reasons the bill should not receive the support of the House.