Debates of Feb. 3rd, 2005

Supply

[Dave Batters, Conservative, Palliser, SK]

Mr. Speaker, the producers in Palliser and the people in Saskatchewan certainly appreciated the minister coming to Saskatchewan and making that announcement in September. Yes, the prices seem to be stabilizing and improving, as it looks like our border will open. We pray that it is going to happen on March 7.

I do hasten to point out to the minister that eligibility for disaster relief in terms of the BSE crisis was conditional on participation in CAIS. So our producers were asked to pony up the dough in order to get disaster relief, which I am sure the minister will recognize does not happen in terms of individuals who are so unfortunate as to suffer a flood, for instance. We do not ask people who suffer a flood to pony up dough for flood relief. Why do we ask this of our producers? They have made some good points, but that is absolutely bizarre.

Before coming to the House today, I spoke to a gentleman who does not know how he is going to afford seed or buy fertilizer and spray. For the first time we are seeing people financing parts through Farm Credit Corporation. This producer says that for the first time we are financing parts.

The Minister of Agriculture needs to do the right thing. Help our producers out. Cancel or waive the deposit. It is the right thing to do. Our producers would commend the minister for it. It is high time that he took a stand here and did the right thing.

[Myron Thompson, Conservative, Wild Rose, AB]

Mr. Speaker, I thank the hon. member from Saskatchewan for his words as I come from a riding that probably has as many ranches and farms as any riding in the country. The picture that the hon. member painted was practically the same as one I could paint in Wild Rose except that we did not have a frost. What we had were droughts and grasshoppers and a couple of really terrible seasons just before the BSE crisis.

Other than that, putting everything in a collective basket, he might as well have described my riding. I know that this is true in many more ridings across the country. We are just repeating over and over what is happening, what is real and what the facts are.

The member is right. The deposit is something that has become impossible to face. People do not have it. They cannot pay the power bill. They cannot buy an extra tank of gas.

Does the member agree that the government is not listening right down to the grassroots problem? We are not interested in programs that take hours and hours of education in order to figure out how to fill out a form when there is no guarantee we are going to get anything from it and we have no money to put into it.

Can the government not see the picture? Is that the problem as the member sees it?

[Dave Batters, Conservative, Palliser, SK]

Mr. Speaker, my colleague from Wild Rose and I share the same deep concerns. We hear the same stories from our constituents. People out there are desperate. People do not have any working capital that they can invest in their operations. Not only can they not buy new equipment or upgrade it, as the letter I read today indicates, people are wondering how they are going to put a crop in the ground and buy the chemicals and the fertilizer necessary to somehow pull themselves out of this mess.

We are just asking that the government do the right thing and help give producers a hand out of this terrible struggle that they find themselves in. We could not have picked a worse average than the past five years to come up with this average that the CAIS program deals with.

We have been subjected to some really tough times in rural Canada and on the farm. People need a hand. It is time to do the right thing.

[Ted Menzies, Conservative, Macleod, AB]

Mr. Speaker, it is an honour to stand in the House today to address this issue and to support the motion to drop the deposit for the CAIS program.

The reason I find this such a fascinating topic of discussion is because it is my life. I farmed for 30 years before I came to this House. I can sense the frustration that farmers are going through.

We need to remember that it is not only the farmers. It is the ranchers. It is the agricultural industry. It is the supply industries that provide all the input to those producers who are maybe not feeling the pinch yet, but who certainly will very soon if we do not address what we need to recognize as very dire circumstances.

My riding of Macleod is very representative of the broad scope of agriculture in this country. We have some of the largest cow-calf ranches in my riding of Macleod. Certainly they have felt the impact of BSE. We certainly hope to hear encouraging words today from Mr. Johanns who is the new agriculture secretary in Washington. Let us hope that continues and that we actually do see that border open on March 7.

The grains and oilseeds industry is very large in my riding and that was my background. I was a grains and oilseeds producer for 30 years. I sensed the problems even back then.

We are always accused of bouncing from pillar to post and from crisis to crisis in agriculture. That is probably because we have not addressed the long term issue of how we deal with this. I got very involved earlier on in trying to make a difference, trying to influence policies that could improve the situation for not only primary agriculture, but value added agriculture.

I fought long and hard through many debates at committee tables. I have had the privilege of actually sitting on both sides of committee tables now. I have the honour of knowing what questions to ask because I have had them asked of me. I was very much involved, and I am almost scared to admit this, in the formation of the CAIS program, but I must admit that I was dragged along kicking and screaming.

What we are talking about here today are the exact issues that I and my colleagues that sat on the national safety nets advisory committee warned the government about. We said that it should not require a deposit because it would not work.

We had a NISA program that was working but the former minister of agriculture decided that there was too much money in that account. That was always brought back and thrown in our faces when we said that there was an issue with agriculture. That money was capital tied up.

What do we have today in this program if we do not have capital tied up? We have over $600 million in deposits. That is the working capital of farmers. That is money they cannot use to buy inputs for this spring and money they cannot use to make their payments. It is critical that we change that.

By the time the end of March comes around it looks like we will be at $1 billion. Is that good use of farmers' money to be tied up in a bank account somewhere else when they have to go back and borrow more money, that is if they can, to be able to put a new crop in for this year?

There are some tremendous flaws, which is why I am speaking out loud and clear that we need to remove this deposit part of the CAIS program.

The other part of our motion that I have not heard as much talk about today is following through on the commitments the government made to agriculture, one being the commitment to defend agriculture at the WTO.

The government has not done much of a job in promoting the trade on which this country is so dependent. We need to have a stronger position. We need to work harder at the WTO to be able to open markets in other parts of the world, to remove the export subsidies that the Europeans seem to love so much and the domestic support on which American producers are dependent.

The U.S. farm bill that we are still dealing with is having an impact on the barley producers in my riding. Barley that is landing in southern Alberta right now is well below the cost of production for my producers. Uncle Sam is adding 70¢ a bushel to each farmer's bushel of barley coming in to Canada with no tariffs on it, competing against our products.

We need the government to stand up and say that is wrong. We have heard government members say a lot of things about Americans that have not helped, and that is part of the issue. We do not have the respect that Americans should provide to us to try to get rid of those barriers and those subsidies which they provide to their producers.

In 2003 we had thousands of tonnes of subsidized corn coming into this country competing with our products. These are the types of things that the government could make a difference.

I work very hard within the WTO trying to make some of these changes, both as a private producer and as member of producer organizations. I often felt like we were not getting the kind of support that we needed from our government.

This is the way we can fix some of these problems but working through the WTO is long term. Something we can do for producers right now is to get rid of this onerous deposit that is certainly hurting us.

The European common agriculture policy is still allowing the Europeans to subsidize their exports. The American farm bill and the U.S. common ag policy has cost Canadian grains and oilseed producers $1.3 billion a year. That has been going on far too long. We have not seen enough hard work to try and get rid of that.

Let me talk quickly about my farm. We heard talk about whether CAIS is working. We have heard many arguments from the other side of the House saying that it has worked. I spend a lot of money on an accountant to look after the books for my farm. I have a very good accountant and I keep very tight books. From all of the indications, we assumed that I would be getting a sizeable CAIS payment. I received the initial advance on that and then when I finally read all the rules and the actual accounting was done, I found that my farm had to pay back money to CAIS. That is how the CAIS program is working.

I urge those on the other side of the House to support the motion.

[The Deputy Speaker]

It being 5:15 p.m., pursuant to order made earlier today, all questions necessary to dispose of the opposition motion are deemed put and a recorded division deemed requested and deferred until Tuesday, February 8, at 5:30 p.m.

[Larry Bagnell, Liberal, Yukon, YT]

Mr. Speaker, I rise on a point of order. I wonder if we could see the clock as being 5:30 p.m. so we could start private members' business.

[The Deputy Speaker]

Is that agreed?

[Some hon. members]

Agreed.

[The Deputy Speaker]

It being 5:30 p.m. the House will now proceed to the consideration of private members' business as listed on today's Order Paper.

Income Tax Act

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

moved that Bill C-285, an act to amend the Income Tax Act (exclusion of income received by an athlete from a non-profit club, society or association), be read the second time and referred to a committee.

Mr. Speaker, I am glad to be able to bring the bill to the House today. The bill has actually been a collaborative process and it has come from a number of MPs in Saskatchewan. I want to recognize some of them. My colleague from Battlefords—Lloydminster is seconding the bill today. He has been involved with this right from the beginning. The MP for Prince Albert has been involved with this, as has the MP for Saskatoon—Humboldt. Actually Mr. Roy Bailey, before he retired, was instrumental in bringing forth this issue.

I think it is going to be an interesting discussion today. This whole bill actually rises out of an ethic that this Liberal government has, which is basically that it has never seen a dollar that it did not want to tax. What has happened here is that it has gone out of control and we are trying to remedy a situation that has taken place.

For several years we know the government has been hiring more auditors. We have often heard the government brag that for every dollar it spends on auditors it can gain $7 back. Clearly, that is what it is trying to do here. As it has hired those auditors it has stretched its reach further and further into the Income Tax Act trying to grab more money, and that is certainly what has taken place in this situation.

I would like to give the House a little history behind the bill. It involves amateur athletes, particularly tier two junior hockey league players. From 1969 until 2002 there was no problem. There was not an issue or anything that would have come up from this issue. However, in June 2002, Revenue Canada walked into Saskatchewan and decided that it was going to audit all the SJHL teams, the tier two junior hockey teams, in Saskatchewan.

There is a difference between tier one junior A hockey teams, which would be teams like the WHL, the OHA, the Quebec major junior hockey league, and the second level of hockey leagues, the tier two junior teams.

The tier one teams have always been considered to be employees of the team. They pay EI and CPP. The tier two teams have always been considered to be amateur athletes.

One of the first problems that arose from this is that Revenue Canada only walked into Saskatchewan, nowhere else, and targeted the 12 teams in Saskatchewan. What it did was tell the players that it thought the players were receiving income and so it was going to tax them on that income.

The reality is that on some of the teams the kids receive from $50 to $200 as a monthly allowance. They also receive about $300 that goes to billets. Anyone who has ever fed young people knows that $300 does not go very far in feeding a teenager. The billets are not even getting the money to cover the cost of what they are spending on the players. The players are not getting enough money to cover the cost of the expenses that they have had through their hockey career as well.

By October 2003, the teams had been audited and Revenue Canada tried to say that the players were employees of those teams. Because of that, it assessed the teams and players for EI and CPP. What is frustrating about that is that of the 12 teams that were assessed in Saskatchewan, the average taxes that Revenue Canada wanted to put on them were $8,000 to $10,000 each.

I just want to read from an article in the Melfort Journal at the time that talked a bit about the situation. It reads:

Our Saskatchewan junior hockey league and 10 of its 12 teams are locked in a legal battle with Canada Customs and Revenue over payments to their players and billet families. Auditors from the government agency are going through the books of SJHL teams and assessing penalties of between $10,000 and $15,000 per team.

The chairman of the SJHL's Board of Governors said:

It is very scary to each and every team. There are teams that have told us they can't handle it (financially). If you haven't got the money to pay it you get locked up.

One team in the SJHL, the Melfort Mustangs, said that they were subjected to an audit on November 12. The team president said that the auditors arrived at the team's office mid-morning and by mid-afternoon the Mustangs were informed they owed $13,000. That is a pretty efficient use of auditors, going in that quickly and attacking the teams.

He went on to say, “surprise doesn't even begin to describe what the organization was feeling”. He went on to say:

It was something completely unexpected. If you expect it you can plan for it, budget for it. We were unable to plan for it so this becomes an out of budget expenditure. If the ruling goes ahead we will have to figure out how to pay for it.

Of course it caused some excitement and consternation in Saskatchewan when Revenue Canada declared that these employees were subject to taxation and, actually, people stepped in. Dave King, who was the coach of the Columbus Blue Jackets at the time, stepped in and talked about the fact that these were non-profit teams and that there was no reason that the government should be going after them and after their players.

One of the good things that happened was that members of Parliament got involved and I mentioned some of their ridings earlier. They stepped forward, got involved and raised a real stink over the fact that the government had targeted only one province. Saskatchewan was the only place where it was taking place. We assume that the government was going to begin there, establish its grounds for taxing and then spread out across the country. That seems to be what it is doing now. Also, the players were clearly amateurs. We believed that the government was way out of line by trying to tax these young players.

The Canada Revenue Agency because of the pressure from the MPs stopped the audits. We thought common sense would prevail but it did not because it took the SJHL to court. They are still in court fighting over about $100,000 worth of tax money. It is very frustrating to the league. In fact one of their officials told me, “It seems like they are just trying to grind us down”. The league is running up legal bills that it says it cannot pay. The government has all the money it needs to continue pushing the league. It is getting to the point where the league cannot fight it any longer.

The present situation is that the government is still pressuring the SJHL. It has not backed off on this at all. Worse than that, it seems that the government intends to continue to press this issue and spread it out across Canada.

The revenue minister actually sent out a notice on Tuesday, January 18 to all MPs and senators; everyone in the House would have received it. When I read it I got very alarmed very quickly because it is a re-release of the government's 2003 position. It talks about the fact that the government considers these young men to be employees of the team. It gives a number of criteria of why it thinks that in the case of hockey players the CRA has found that employer-employee relationships exist.

I just want to talk for a minute about the four criteria the CRA uses, the four criteria that must be met to form an employer-employee relationship. First, there needs to be control from one of the parties. Second, there needs to be an ownership of tools. If it was not so ridiculous it would be funny because the team, I guess, owns the hockey sticks or whatever. Third, there needs to be a chance of profit or risk of loss, and the employee cannot suffer that risk of loss. Fourth, there needs to be an integration between the commercial activities of the worker and the person who is paying the bills.

I started thinking about that and it would fit a whole number of things. I was thinking about private schools that take kids on school trips. If the kids are receiving any kind of indemnity for doing that or any kind of help, it could get so ridiculous as to try to tax even that kind of thing.

There is a lot more that I would like to say, but we do not have a lot of time today. I want to talk about the fact that we need a balance. We believe that balance is in this piece of legislation. The bill is very short; it has only one paragraph. It is an amendment to the Income Tax Act. The bill simply says that we would like to exclude income for the year, not exceeding $8,000, received by an athlete from a non-profit club, society or association that is operated exclusively for the purpose of improving athletic performances and promoting amateur athletics. It is very straightforward. It gives amateur athletes a chance to get up to $700 a month from a non-profit association or club. That would be excluded from the athlete's income.

We find this to be very important for a number of reasons. We have really looked to the government to provide a balance and it has not happened. Most disappointing, and I think some of my colleagues from Saskatchewan would agree, is that the finance minister has been of absolutely no use to us at all. We heard earlier today that he does not seem to want to provide Saskatchewan with any kind of an equal deal on equalization. For some reason his home province is not important to him. This issue is something that costs hardly anything, yet he does not seem to be willing to move in any direction on this.

I have sent a letter to him asking if he would consider putting this into the budget. It is a very small dollar amount. Actually there are 12 teams. That is 10% of the teams in the country. The government went retroactively on them and the amount is still less than $100,000. It is not a big amount of money. We are looking for the finance minister, who is from Saskatchewan, to step forward and defend his province for a change. We think that perhaps he has been Ottawashed a little bit too much. He is only too willing to represent Ottawa's interests to Saskatchewan. We would like to see him represent Saskatchewan's interests in this part of the world as well.

The bill is not at odds with anything that is happening right now. In fact, an athlete assistance program has been set up for Olympic athletes which is very similar to this. They are provided a tax-free stipend from the government. They do not pay tax on that money. We do not think that this would be outside what is happening with them.

We want to highlight some of the reasons we think this is important legislation. First, it is focused on non-profit organizations and amateur athletes. That is a good place to put the focus. The organizations the teams are running that have been audited are non-profit organizations. They are not doing this to make money. Many of them exist in very small communities, communities of 5,000 and less. People in the communities get out, fund raise, buy things, help out and contribute to different things just to keep the teams going. It is important that those organizations be recognized.

These young people are definitely amateur athletes. We cannot call them professional in any sense of the word. What is the point of trying to tax kids on $50 or $70 a month? How much does it cost to try to get that money out of them? It is just ridiculous.

These players clearly are not employees. They are spending far more money than they are making out of this program of being in the hockey arena. Some receive only a small monthly allowance, as I mentioned, and the billet money.

I actually talked to one of the billets today. She asked me, “Do you have any idea how much these kids eat? There is no way I am making money on this. I could have 10 of them and I would still be losing money because of the amount they eat”.

As I mentioned before, we think this is unfair. The government targeted one area of the country. We realized that it was going to spread out from there. Some of the other leagues have said to me that it does not affect them. They do not think it affects them, but in reality it will. If the government is going to go after those monthly stipends, it could easily go after equipment expenses and all kinds of other things that virtually every team has.

We believe in tax relief. This is a step in the right direction. It is a small amount.

The bill is retroactive to 2000. It would take care of some of the problems that have arisen in the past and which need to be dealt with.

In conclusion, the bill offers protection for non-profit organizations, clubs and associations. That is a good thing. It offers protection for players, young men who are playing because they love hockey. This is not the level of hockey where they expect to become professional athletes. It offers protection for billets.

As the bill goes forward, we would like the members of Parliament of the other parties to support it. I would ask for their support.

[John McKay, Liberal, Parliamentary Secretary to the Minister of Finance]

Mr. Speaker, I laud the hon. member's efforts in trying to put the bill together. I appreciate the matter he is trying to remedy and I appreciate even more the politics of the matter.

My first question has to do with the term “athlete”. Why is it that he did not define athlete in the bill? It appears to be a serious error and might well lead to some abuses. That is what we have to worry about on this side of the House. For example, trainers and coaches of young athletes presumably would qualify, as would men and women who teach or supervise skating, swimming or gymnastics. I am not quite sure why that is not in the bill.

Second, is his exemption on top of the base exemption of $8,000? I am assuming that it is. As we know every tax filer has an $8,000 personal exemption. I am assuming that the athlete that the member is intending to benefit would actually have $16,000 worth of income before it would be taxed.

Third, assuming the member could arrive at a definition of an athlete, why does he preference an athlete over another person, such as a dancer or people who are not athletes, or other forms of income, such as people who earn their living in fishing, farming, or things of that nature? Why is there a specific and unique exemption for an athlete as opposed to an artist for instance?

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

Mr. Speaker, I did not get all of the member's questions down, but I will try to answer them as best I can.

I found it interesting that the hon. member acknowledged that the Liberals have to worry about abuse on their side of the House. I guess we had not approached the bill from that perspective.

One of the reasons we have dealt with this in terms of athletes is that is who is being affected by this. In a Leader Post article a couple of weeks ago a government spokesman said that the Canada Revenue Agency does not go looking for people who are breaking the rules, but as information is brought to its attention, the CRA needs to investigate it. The article went on to say that the revenue minister said that the tax agency only pursues teams about which it receives complaints.

We are trying to deal with a situation where the government has come in with a heavy hand and has decided it is going to hold this big stick over these young people.

If the member wants to make amendments to expand the bill to include dancers and people in some of the other areas that would be considered to be amateur, that would probably be okay with us.

[Marc Lemay, Bloc, Abitibi—Témiscamingue, QC]

Mr. Speaker, I am pleased to take part in this debate. I will come back to the parliamentary secretary's question. First, I have a question for the hon. member who introduced this extremely interesting bill.

Since I have been involved in sports for over 30 years, I find this bill extremely interesting. I have the following question for the member. Members have the impression that this bill was introduced for a category of athletes that fits the profile of hockey players. I wonder if this is not also intended for athletes at all levels.

The word “amateur” needs to be dropped, since the government stopped using it in 1991. I have a question. All athletes, be they at the elite or the developmental level, have a coach. Whether the sport is gymnastics, swimming, cycling or downhill skiing, athletes have a coach who is often underpaid.

As the parliamentary secretary mentioned, I want the member to confirm that this bill does address athletes and coaches at all levels, be it elite or developmental. I also want him to confirm that this amount will be added to the $8,000 exemption that everyone, athlete or not, is allowed.

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

Mr. Speaker, I mentioned in my speech that there is a program already in place for the Olympic athletes. They receive tax-free stipends, so there is a similar type of thing going on for them.

I want to point out that the bill talks about all athletes but the focus is on a different place, which is non-profit clubs, associations or societies. We are talking about amateur athletes who are receiving funding from amateur organizations. Both of those things need to be kept in perspective.

I will not say that I know all of the implications of this as far as the taxes go, but it is my understanding that with the basic personal exemption, people pay EI and CPP on it. The issue here has been more on the EI and CPP payments and the government demanding that these young athletes be considered to be employees than it has been on the fact that they might be making the first $8,000 and then trying to add another $8,000 on top of that. These are 17 to 21 year old athletes who are involved in the present situation, so that really does not affect them for the most part.

[Russ Powers, Liberal, Ancaster—Dundas—Flamborough—Westdale, ON]

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.

[Marc Lemay, Bloc, Abitibi—Témiscamingue, QC]

Mr. Speaker, since we are resuming the debate, are we not allowed to ask the hon. member a question?

[The Speaker]

Questions may only be asked to the member who introduced the bill. Now, there will only be 10-minute speeches.

The hon. member for Abitibi—Témiscamingue has 10 minutes.

[Marc Lemay, Bloc, Abitibi—Témiscamingue, QC]

Mr. Speaker, the Bloc Québécois will vote in favour of this motion. We will explain why to the hon. members from the governing party.

For 30 years I have been involved in sports locally and internationally. I have a few words for the hon. members from the governing party. I want to know how much money Olympic athletes receive to be able to train year round. After deductions, they can barely make ends meet.

The purpose of this bill is not to increase the amount of money that goes to elite athletes such as Despaties, Heymans or others who are currently sponsored, who receive money from sponsors and file annual income tax returns. I am talking about the up and coming athletes, those who are at the developmental level. My focus is on them this evening. That is why we will support this bill.

It is the parents who pay for these athletes, who get up every morning at 6 a.m. to train. These athletes do not get a break on the weekend either. Sometimes a foundation might be set up to help them improve and get a little further, foundations such as the Gold Medal Club in Montreal, the athlete's fund in Abitibi-Témiscamingue and others. However, these athletes should be able to get a tax break for the money they receive from these foundations. It is totally unfair and unacceptable for this not to be the case.

The tax break would be $8,000 in addition to the $8,000 that every citizen in Canada is entitled to claim. That way, our athletes, whether at the elite or the developmental stage, especially those who show great promise, can have $16,000 of income that is not taxable. That is the very minimum.

I will read the bill as presented:

income for the year, not exceeding $8,000, received by an athlete—

If the hon. member agrees and if Parliament allows, I would add the word coach because they have coaches.

—received by an athlete from a non-profit club, society or association—

The athletes do not get help from major companies. It is the little regions and the little villages that end up creating a foundation when a local athlete is suddenly thrust into the spotlight, so that they can help him get to the Olympics, the Commonwealth Games, the Pan-Am Games or even a world championship. When such a foundation is created, the athlete ought to be able to deduct what he received from it on his income tax return. Otherwise, this is totally unfair.

The government tells us that it has programs available to help our athletes. It does in fact have programs to help those at the elite level. But those at the developmental level receive a mere $900 a month for accommodation, living expenses . We know that athletes need to travel to meets. I know of some badminton players who will be in the Ottawa region this weekend and will have travelled from as far away as Abitibi, the North, or Yellowknife. These competitors have had to pay their own way and they do not get any money back.

We accept the solution the hon. member has come up with. I think that Canadians would agree to giving our athletes a tax break on the first $8,000 of their income.

I think that is a bare minimum when we look at how much it costs for housing, food, clothing, sports gear and tuition fees. We will define the term athlete. Sport Canada already has one and we will apply the same one. They are just trying to create a problem where there is no need of one.

With respect, we are going to support the hon. member's proposal, and we hope that this bill can get passed as quickly as possible. We must not forget that we have the Vancouver-Whistler Olympics coming up in 2010. Our athletes are in full preparation mode already and we know they are going to be there. They must be helped and this is one way of helping them.

[Peter Stoffer, NDP, Sackville—Eastern Shore, NS]

Mr. Speaker, I want to thank the hon. member for Cypress Hills—Grasslands for bringing this bill forward in order for us to have a proper debate on something that we do not debate often in this House, which is what to do with physical activity and sports in this country.

I absolutely believe in what the hon. member is trying to do. The member believes that we can enhance sports activities and encourage further sports activities through the taxation system.

As the member knows and as the House knows, I have a private member's bill myself on a similar issue, Bill C-252, which I hope to be able to debate one day in the House. My bill would offer a tax deduction to any citizen in the country who participates in a physical activity, be it in a dance club or a gym, be it hockey, soccer or baseball, whatever physical activity it is.

For argument's sake, I will use the example of a soccer registration fee of $100 a year. That $100 should be tax deductible. This is similar to the limit we have for charitable donations. For example, if a person gives the Red Cross $100, the Red Cross provides a tax receipt for a certain amount. At the end of the year we are able to file that with our income tax. I believe that the same principle should apply to the registration for sporting fees as well.

We in this House all know that all members of Parliament have been hit up many, many times by various groups and organizations in order to support individuals going somewhere in an individual sport or a team sport.

At this time, I want to convey on behalf of the House our sincere condolences to the hockey team from Windsor that had the unfortunate accident and suffered the loss of life of four great residents and some injuries. We extend our condolences to their families and their friends and to the teams as well.

We in the NDP will be supporting the initiative of Bill C-285. We do know, as was pointed out by one of the Liberal members, that there are a couple of preambles that need to be expanded upon. This is why it is so important to bring this bill to a committee. Then the committee itself can look at the concerns that have been addressed. It can look at furtherance in terms of expansion in allowing the committee, in an all party sense, to really seriously look at the bill.

If we really sit down and think about it, the Olympics of 2010 will be here in Vancouver and Whistler. Everyone is talking about how if we put in x number of dollars we will be able to have more athletes standing on the podium. The reality is that this is very important for the Olympic athletes and for those training for that high level, but what about the athletes and the sports enthusiasts who will never achieve that level? What about the athletes that play sport for the pure love of the sport, be it team sports or individual sports? We need to support those organizations that in turn support those athletes.

The definition of an athlete is a bit of a misnomer. That is something we can work out. We notice that every single time an initiative comes from the opposition through the tax system in order to assist our citizens, the Liberals generally oppose it. They absolutely oppose it. Yet when it comes to tax incentives for the oil and gas industry, let us say, to make it more competitive, to bring in more investment or to have more economic activity in the country, there is no problem. Right away those incentives are put through.

If we look at physical activity, not economic activity but physical activity, we should be trying to get our citizenry more active physically in order to prevent the obesity that is increasing in our country at a rapid rate, to prevent the health issues that occur with it, and to prevent justice issues and social issues because of that. I believe that every kid in this country has a right to play. I believe that every community should have facilities for its citizens to participate in, regardless of the age of the individuals and regardless of the activity they wish to participate in, be it curling, lawn bowling, be it whatever. If we can get Canadian citizens more active and more cohesive as a society in terms of team and individual sports that would be a very good thing for this country.

There is no question about it: as Canadians we are generally out of shape. There is no question about that. In fact, I would question if the average grade 12 student could run a mile around a track. I question whether a person of that age could do it.

This particular type of initiative is something that we need to expand upon, not only in the committee but in the general discussion of this country.

The hon. member who introduced the bill may or may not realize this, but the fact is that federal government investment in sport in this country is one-tenth of 1% of total GDP. That is one-tenth of 1% of the total GDP for the federal investment into sport in this country.

The hon. member and his party know what that means. Volunteers and sporting groups of all kinds are picking up that slack by doing bottle drives, by standing in front of the grocery stores with their cans and their bottles asking for donations, by holding bake sales, and name it, they do it. These are the activities that Canadians have from coast to coast to coast. They will support their individual athletes and their team sports because it is the Canadian thing to do.

There is nothing better than watching teams from across the country competing in sports, not only at the adult level but at the children's level as well. I have coached soccer for over 30 years in British Columbia, Yukon and in Nova Scotia. Being with those kids has been a tremendous experience. I play organized sports as well, but I do know that there are many people who cannot participate in a sport, not because of physical infirmities but because of financial reasons.

Various organizations, as we know, are “volunteered out”. Our volunteers are getting burnt out. They are getting to the point where, after raising funds and money time after time, they are looking for assistance and leadership from the government, not just at the federal level but at the provincial and municipal levels as well.

One thing I have been advocating for quite some time is to have the provincial governments use the lottery funds for their initial purpose: sports, culture and recreation. We know that the initial lottery of Montreal in 1976 was for sports, culture and recreation. That is what the 1976 lotto was all about. In the mid-1980s the responsibility was transferred to the provinces and territories and now most of the provinces put that revenue into general revenues, whereas in our own province of Nova Scotia less than 2% of those total revenues actually goes to sports, culture or recreation. That has to change.

The federal government cannot just do it on its own, but it can show leadership in an initiative by the bill that was brought forward by the hon. member. It can also encourage dialogue with the provinces, the territories and the municipal governments to see what can be done not only to advocate changes within the tax system to assist our athletes and their organizations, but also in the development of fields, arenas and sporting events. We owe this to our future.

I know that my hon. colleague from Cape Breton who has just come into the House has been a long-time advocate of sports and especially the great sport of hockey. I will say that his reputation as a coach far exceeds his reputation as a member of Parliament, but that is just my own political view. The reality is that he knows, on the Liberal side, the value of sport. He has his own children involved in sports, as I do my own.

It is very clear that we thank the hon. member for bringing the initiative forward. We would hope that in turn when our bill comes up that party would support our initiative as well. The member is absolutely correct when he says that we can increase physical and sporting activity in this country through the taxation system.

If there are any concerns within this bill that the Liberals would like to discuss, we believe that instead of voting it down they should be supporting it and working with us in bringing this bill to committee so that we can enhance its opportunities and intentions for the good of all Canadians. Once again I thank the House for this opportunity and I thank the hon. member for bringing forward this important initiative. He has the NDP's total support for this initiative.

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

Mr. Speaker, it is a pleasure to stand today and support my colleague from Saskatchewan in this initiative.

The Liberals try to hide behind expressions like “this is not worded right” and “this could be done differently” and “how about these folks”. We agree. We are not master writers of legislation. That is what committees do. The one thing we know for sure is that the Liberal government and the bureaucrats at Revenue Canada got this wrong. We may not have it right but they got it wrong. They are continuing to reinforce that point in lawsuits and so on in trying to collect these fees from amateur sports groups.

Nothing gives one a stronger foundation in life than team sports. It has been said by every member who has spoken to this issue that team sports are a boon to Canadian society. We have let a lot of that slip. We have to reinvigorate it. Yet Revenue Canada is chasing down kids and the amateur sports teams. Amateur sports teams are the community backbone in a lot of cases and the CRA is chasing them down and fining them, and then taking them to court to try and collect.

It is only in Saskatchewan. No other province has been assessed $100,000. That is the amount I am talking about for 12 teams in Saskatchewan. I am sure the federal government has spent more money than that on lawyers in trying to collect this money.

This is not about fairness or initiative or anything. Those guys just do not get it that every once in a while they have to admit that they made a mistake and back up.

We saw that in spades with the little town of Wilkie in my riding. Revenue Canada assessed it retroactively for not charging amateur sports clubs and figure skating groups the GST on ice rent. Revenue Canada said that if Wilkie and the recreation community leased the ice to each individual hockey player, and these kids are amateurs, and each individual figure skater, there would be no GST charged. However if the ice was leased to a group, GST had to be charged. That is the opposite to buying doughnuts. We pay GST if we buy one doughnut, but we do not when we buy six. Revenue Canada got it backwards.

The crazy part of this whole thing was that the community of Wilkie paid the bill. It sent in $7,000. It did not know it could fight this charge.

I happened to be at a function in Wilkie and somebody mentioned that this had happened and thought it was ridiculous. I said, “You bet your sweet bippy it is”. I got on the phone to Revenue Canada the next day and spoke to the person in charge of this audit. I asked, “Who sent you out to do this audit? Where did this direction come from? I want to talk to that person, and when I am in government I want to fire that person”.

I was sent up the food chain and I found the person who had sent the auditor out. I asked her to send me the paragraphs in the tax code that authorized that. She said she was not sure she could get her hands on them. I told her she had better because I wanted to see them. A little over a day later I received them by fax. Right in the tax code it said there was an exemption if it was for amateur sports and figure skating. Exemption means it is not collected and it is not charged. Revenue Canada was going against what is in the code.

I phoned her back and said that the code indicated an exemption. It did not say to go for the jugular. I told her the code was being read wrong or maybe it had been translated wrong or something. We fought back and forth but lo and behold a week later the money was sent back to Wilkie with an “Oh, sorry”.

How many other communities have been nailed and do not realize that this is ridiculous? The community of Wilkie thinks I am a hero now which is great. Revenue Canada has a tainted name out there to begin with and it keeps compounding it with these stupid initiatives, going after amateur hockey players.

I have two teams in my riding and this is killing them. They raise their money with bottle drives and bake sales and whatever else the parents can put together. A lot of these kids are away from home and need to be billeted. As was said before, it costs money to feed these kids. I raised a young hockey player and he could eat his weight on a weekly basis. The $300 or whatever one gets does not even come close to that amount.

In its exuberance Revenue Canada has said that is income and somebody has to pay EI and CPP on it. What a ridiculous supposition. None of these kids can afford that type of thing. None of their parents can afford that type of thing. None of the teams can afford it. However, Revenue Canada is sending lawyers after these folks, but only in Saskatchewan.

That cost the Liberals in the last election. We are down to one Liberal minister in Saskatchewan. What has that Liberal minister, who is now the finance minister, done about this? ET call home. We have not heard from him. We have written him letters saying that he is the lead minister, that he is now the guy with the purse strings and that he should fix it. He has not even begun to address it. He is ignoring it.

The devil is in the details in situations like this. These are the types of things that rev people up. It is not the billion dollar boondoggle at HRDC or approaching $2 billion for the gun registry, which make some people mad. This makes everybody mad. They are picking on our kids. That is not even fair.

The Hon. Eleanor Caplan, who was the minister at that time, responded to Mr. Roy Bailey. I would be wrong if I did not say what a great job Roy did on this. He put his heart and soul in it. He deserves the respect of every hockey player across Canada, not just the kids in Saskatchewan. In a response to Roy, the Hon. Eleanor Caplan said, “The Revenue Agency is to administer the Income Tax Act in Canada fairly so that it applies equally to all Canadians”.

The last time I checked, all Canadians do not live in Saskatchewan. We are kind of scattered out across this hunk of ground. It did not apply to anybody else other than Saskatchewan, so there goes the fairness thing out the window. There is a fairness initiative in Revenue Canada that should apply, but it does not because those guys do not want to look at it.

Even Don Cherry became involved in this. When he heard about it, like Don does, he gave the most scathing attack on Revenue Canada. It probably has him pinned to the wall somewhere, but Don does not back down, and thank God for that. This is ridiculous.

Whether we have the wording in the bill right, who the hell cares? The whole point is that this has to see the light of day. The finance minister from Saskatchewan is running and hiding. He will not bring it forward. The government will not bring it forward. Revenue Canada will not apologize. Somebody has to push back. That is what we are doing here tonight. We are giving them a shove.

One of the Liberal members said that this was totally unfair to other Canadians. Other Canadians have not found themselves in the crosshairs of Revenue Canada. It will happen. These revenue guys are cash hungry. They have to pay for all the money that oozes out under sponsorship scandals and goes back to the Liberal Party. They have to find it somewhere, and that is what they are doing.

The Liberals wasted $150 million in the sponsorship fiasco. Here they are clawing back $100,000, chump change. It will cost them probably three or four times that to collect it. Shame on them. Stand up and vote for this bill when it comes before us. If they have any kind of backbone, that is what it will take.

There is a glaring problem. They cannot run, they cannot hide. They have to fix it. It will not take a lot to do it. Reword it, rewrite it, I do not care, but get off of these young kids. By doing nothing, they are part of the problem.

Mr. Bailey asked question after question and made statements on it. I have copies of them here. A point Roy made one day was that the Minister of Revenue kept saying that they were looking at it and that they were going to check it out. That was maybe what led to it taking almost two years to get this on the floor, other than private members' bills which are hit and miss at best. We kept thinking this was such a glaring error that nobody could walk away and not fix this, but she did.

The next person who looked after Revenue Canada did. We called them all. Nobody responded. We finally contacted the member for Wascana, the finance minister, who has the purse strings--

[An hon. member]

The last member from Saskatchewan.

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

Yes, the last standing Liberal member from Saskatchewan. He still has done nothing. He will not even return calls. He is affecting the future of these kids and the future of the small town that they play hockey in.

Roy kept up that battle. He just did yeoman's work on it. She kept going on about having to be fair, having to apply the rules and it had to be Canada-wide. None of those criteria were met. It has become ludicrous and laughable that these people perpetuate this thing.

The Liberals talk about the lack of funding, that we do not have good teams going to the Olympics, that we need better teams going to the junior hockey tournaments and this type of thing. It takes money. They are going to ramp that up. They want the good news story. They get the headlines out there saying, “Look at what we are doing for our Olympic teams”. The flip side of that same coin is, look at what they have done to other teams, but only in Saskatchewan. They have to fix it. It is discrimination against Saskatchewan alone. We did not vote right, according to them, so they pick on our hockey kids. It will not fly. It did not work in the last election and it will not work in the next one.

The minister at that time, Eleanor Caplan, kept saying that these kids needed access to social programs. They did not care about the social programs. They only wanted to play hockey. The members on the Liberal side have a choice: they can lead, follow or get out of the way.

[John Maloney, Liberal, Welland, ON]

Mr. Speaker, I am very happy to rise to speak to Bill C-285. I would agree that the member opposite who sponsored the bill, his heart is in the right place, but it is time he also put his head where his heart is.

I am quite frankly surprised that the Conservative Party is so strongly in favour of the bill. This is a party that is opposed to grants because they are bad. It is opposed to subsidies because they are bad too. It is opposed to any government intervention because that is awful. However, this has curb appeal. It is glitzy. It appeals to the heartstrings and frankly that is so superficial. We should look a little deeper into this legislation.

I would like to provide some input regarding the bill which, if enacted, would give athletes and exemption of up to $8,000 of the income they receive from non-profit organizations operating exclusively for the purpose of promoting amateur athletes. We have heard about youth, but as I look in the bill, I see nothing about youth. It is athletics and amateur athletics of any age. It could be an octogenarian and also qualify for this. Let us look at it in all honesty.

As my colleagues opposite have already made the case for not supporting the bill, I will speak to a few issues which I believe merit further attention.

First, they suggest that the bill would support our amateur athletes by exempting up to $8,000 of their income received from non-profit organizations from tax. That is leaving more money in their pockets. Let me note that our tax system already provides a basic personal tax credit of approximately $8,000 to all taxpayers. Therefore, the extent that an athlete has revenue of less than $8,000, he or she will pay no tax.

Take the example perhaps of a junior hockey team as has been referenced opposite. A living allowance of $4,000 given to a player would not be taxable because it would be below the basic personal threshold of $8,000. In this regard the bill is unnecessary because the tax system already provides a mechanism to ensure that a basic amount of income is not taxable. However, the effect of the bill is to provide an exemption to Canadians who, in addition to earning another source of income, also receive income from a non-profit organization. If that is true, let me submit that it would run counter to basic tax policy to enact the bill.

On what basis can we justify exempting $16,000 of an athlete's income from tax when other low income taxpayers receive only an $8,000 basic personal exemption? As is shown from this example, the bill does not stand the test of scrutiny.

Second, it is my understanding that the bill is intended to aid amateur athletes who are struggling financially by exempting part of their income from tax. The manner in which the bill is drafted leaves me to wonder who it is really supposed to help as there are no limits as to who can take advantage of this exemption. In other words, and it was alluded to earlier, the exemption would apply to an athlete whether he or she earns $10,000 or $100,000 of income. It goes without saying that to allow the exemption to apply to someone earning $100,000 would be just totally unjustifiable.

Has the member costed out what the financial impact would be on government revenues and where the additional revenue would come from to pay for our health care expenditures, our child care expenditures, perhaps our seniors' pensions and our military? Frankly, it would be difficult to speculate because there are so many Canadians participating in so many types of sporting activities. We all wish to encourage sporting activities, but this initiative I submit is not well thought out.

Lastly, I agree with my colleague when he mentioned that providing a tax exemption is not the best way to support amateur sports in Canada. The practice of a sport is primarily an individual and perhaps a family decision. To the extent that the government should involve itself, it should not be through the tax system.

In short, the bill fails as a good alternative for supporting struggling amateur athletes and amateur sports in general.

That is dealing with the bill as it reads, but let me speak just on the general principle.

The Minister of Finance will not be supporting this private member's bill that introduces tax measures outside the budget process. Tax decisions should be made in the budget not as one-off initiatives, as in this case, pre-empting consideration of all priorities outlined in the Speech from the Throne. This is a fundamental principle from which we should not waver.

The current minority situation raises significant concerns with regard to private members' tax measures and their pressures on the fiscal framework. At present, there are currently 13 private members' tax measures before the House which total a very conservative estimate of $2.5 billion per year worth of tax reductions. That is a lot of money.

If we take $2.5 billion out of our general revenues, where will we make up the deficit to pay for much needed programs such as our health care, our pensions, our seniors pensions, child care, the military, all these items which members opposite think are so important, and they certainly are.

The majority of these initiatives are well-intentioned targeted tax reductions, such as making the cost of tools for employment tax deductible, creating a deduction for volunteer emergency service, creating a deduction for adoption expenses, which I would personally support. We also have the current one, better tax treatment for our athletes in amateur sport. Again, we all agree with that principle, but not to do it through the tax system.

Which of these does not have merit in some aspect? Which one would we pick in priority if that were possible? These private members' bills, while in some instances have merit on their own, present a very serious challenge because of their cumulative impact, $2.5 billion. Where does one draw the line? I respectfully suggest the line must be drawn on Bill C-285. As we have heard, the bill has serious flaws as drafted.

For all the foregoing reasons, the bill should not receive the support of the House. I encourage all members of the House to get over the emotional aspects of the bill. Let common sense and reason prevail. That is a comment we have often heard from members opposite. We were elected to do that. Vote no to Bill C-285. It is common sense.

[The Deputy Speaker]

The time provided for the consideration of private members' business has now expired and the order is dropped to the bottom of the order of precedence on the order paper.

A motion to adjourn the House under Standing Order 38 deemed to have been moved.

[Jim Prentice, Conservative, Calgary North Centre, AB]

Mr. Speaker, on November 30, 2004, during question period, I rose in this honourable House and asked the Minister of Indian Affairs and Northern Development a question in relation to the Mackenzie Valley pipeline and, in particular, the regulatory confusion surrounding the pipeline and which currently imperils it and which imperils not only the pipeline but the prospect of economic progress for the aboriginal Canadians who are affected by that pipeline and which indeed threatens the resolution of environmental issues concerning the pipeline as well.

The minister's response at that time was that he was working together with the President of the Treasury Board on the smart regulations report that the government had received and that he was attempting, with the President of the Treasury Board, to define a regulatory regime in the north for the Mackenzie Valley gas pipeline.

More than two months have passed since that time and virtually no progress has been made. I am again asking the minister to tell the House and Canadians what he has done to advance one of Canada's most important energy projects.

The project is immense, by any standard. The required capital investment for the pipeline and the associated infrastructure will be over $7.5 billion. The project will result in an enormous increase to the overall Canadian gross domestic product of more than $57 billion. The total direct and indirect employment resulting from this project has been estimated at 157,000 person years. Yet, today the project is mired in morass, in a regulatory miasma created by this government.

Just recently, in the past week or so, the joint review panel provided the proponents of the Mackenzie Valley gas pipeline with its second round of information requests, in effect, following up on the massive submission that was filed as required. Those information requests are over 600 in number and follow on the first information requests, which were of a similar size and scale.

Clearly, the result is that valuable time has been lost. Originally, the in-service date for the pipeline was 2009 and the economics of the pipeline were predicated upon that. That date has now slipped to 2010 or even 2011.

Surely the government understands that whether this important Canadian pipeline gets built at all depends upon the resolution of the environmental issues, the regulatory issues and the aboriginal issues which are now swirling around this pipeline. Only the Government of Canada can resolve these issues.

The authority for the statement I have made is not myself but rather the government's own external advisory committee, the smart regulation report, which describes the northern regulatory framework as the “...complex and unpredictable cobweb of regulations involving multiple federal government departments, and territorial and Aboriginal authorities.

Could the minister assure Canadians that the government will take the necessary steps to ensure that the Mackenzie Valley project maintains its competitive advantage over the American pipeline? Will he assure Canadians that the Deh Cho settlement negotiations will be resolved? The government has been very quiet on that front. I would ask the member to please advise the House on what is happening. Could he also tell the House when the regulatory confusion will be resolved and will he report to us on the status of the access and benefit agreements which the proponents have been endeavouring to negotiate?