House of Commons Hansard #153 of the 41st Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was support.


And the bells having rung:

Corrections and Conditional Release ActPrivate Members' Business

6 p.m.


The Speaker Conservative Andrew Scheer

The question is on Motion No. 1.

A negative vote on Motion No. 1 necessitates the question being put on Motion No. 2.

(The House divided on Motion No. 1, which was agreed to on the following division:)

Vote #464

Corrections and Conditional Release ActPrivate Members' Business

6:10 p.m.


The Speaker Conservative Andrew Scheer

I declare Motion No. 1 carried.

Corrections and Conditional Release ActPrivate Members' Business

6:10 p.m.


Guy Lauzon Conservative Stormont—Dundas—South Glengarry, ON

moved that the bill be concurred in.

Corrections and Conditional Release ActPrivate Members' Business

6:10 p.m.


The Speaker Conservative Andrew Scheer

Is it the pleasure of the House to adopt the motion?

Corrections and Conditional Release ActPrivate Members' Business

6:10 p.m.

Some hon. members


Corrections and Conditional Release ActPrivate Members' Business

6:10 p.m.


The Speaker Conservative Andrew Scheer

I declare the motion carried.

(Motion agreed to)

The House resumed from September 20 consideration of the motion that Bill C-293, An Act to amend the Corrections and Conditional Release Act (vexatious complainants), be read the third time and passed.

Corrections and Conditional Release ActPrivate Members' Business

6:10 p.m.


The Speaker Conservative Andrew Scheer

The House will now proceed to the taking of the deferred recorded division on the motion at third reading of Bill C-293, under private members' business.

The question is on the motion.

(The House divided on the motion, which was agreed to on the following division:)

Vote #465

Corrections and Conditional Release ActPrivate Members' Business

6:20 p.m.


The Speaker Conservative Andrew Scheer

I declare the motion carried.

The House resumed from September 21 consideration of the motion.

Special Committee on Subsection 223(1) of the Criminal CodePrivate Members' Business

6:20 p.m.


The Speaker Conservative Andrew Scheer

The House will now proceed to the taking of the deferred recorded division on Motion M-312 under private members' business.

The question is on the motion.

(The House divided on the motion, which was negatived on the following division:)

Vote #466

Special Committee on Subsection 223(1) of the Criminal CodePrivate Members' Business

6:30 p.m.


The Speaker Conservative Andrew Scheer

I declare the motion defeated.

It being 6:34 p.m., the House will now proceed to the consideration of private members' business as listed on today's order paper.

Reflecting the Realities of Canadian Artists ActPrivate Members' Business

6:35 p.m.


Tyrone Benskin NDP Jeanne-Le Ber, QC

moved that Bill C-427, An Act to amend the Income Tax Act (income averaging for artists), be read the second time and referred to a committee.

Mr. Speaker, I would like to congratulate you on your new position. Having sought your counsel a number of times, I cannot think of anyone better to follow in the previous Deputy Speaker's footsteps.

I am more than pleased to stand in the House today as an artist and member of the House to speak to this bill. It is neither a new idea nor a particularly brilliant idea in and of itself, but it is an important idea.

Bill C-427, my private member's bill, is to introduce income tax averaging for artists. It is something that has been sought by the artistic community for over 15 years and is very important to the community.

I named the bill to recognize the value of artists and their realities because that is what the bill does. It takes into consideration the fluctuations and spikes in an artist's income at any given time and puts a value to that through the Income Tax Act.

I have divided Bill C-427 into two parts. The first part is the actual income tax averaging where an independent artist can take an income spike in any given year and average it over the previous two to five years.

This is important because the life of an artist is very unique. They trundle along at $20,000 to $40,000 a year for a period of time and then, through hard work and learning their craft, they may spike one year. In the case of actors, they may land a television series or a particularly plum role in a movie and their income can spike from $30,000 to $250,000. For the artist, it is a great thing and a recognition of their abilities, but tax-wise it creates a huge hit that they will have to carry for the next few years.

For example, when I was working on a series in South Africa, I was out of the country for approximately a year. When I came back, no one knew where I was. The series did not get picked up. I spent the following year rebuilding my career and not making as much as I was before the series.

The bill would make allowances for performers, visual artists or painters who spend years working on a sculpture or a series of paintings to sell in a given year. Hopefully the artists will be successful, but in some cases they go back down to zero because while they are working they are not generating income.

Bill C-427 would allow independent artists to average the proceeds from their work over the previous four years. Basically, they would be reassessed on their tax filings for the previous four years.

I need to point out that this bill is directed at what I call the journeymen artists. They are the artists who work every day hoping to make it big and sell well, which is the vast majority of artists in Canada. If they are blessed enough, they have that opportunity within a given year but it is not a consistent thing by any means. Bill C-427 is not aimed at the artists who have “hit it”, as one might say, such as those artists who have a series going on for a number of years or whose work is consistently auctioned off at high amounts. The bill is not aimed at those people but rather at everyday working artists.

The second part of my bill is a tax exemption on the first $10,000 of residual income. Residual income is any income that comes from royalties or residuals as in the film industry. Most people are familiar with the U.S. version of the residual system, which is that anytime a project plays or a show airs, the artists are paid for it. In Canada, it is a different system. In Canada, Canadian film and television actors are paid a percentage of their overall fee up front and the producers and/or distributors get to use that work for a period of two to four years before any back-end or residual payments are made. For the two to four year period nothing is coming in. After that, residuals start coming in.

I have received cheques for $1.45 that cost me more to process than the actual cheque itself. However, that can range from $2 to $200. The importance of this money is that it is essentially found money. It is money that one cannot budget for because one has no idea how a project is going to sell afterward. In many cases, this residual income, which comes in throughout the year, is the difference between making ends meet at the end of the year financially and not. I am looking for a $10,000 cap on money that comes in through that residual system to be tax free so it can be used by Canadian artists.

The economics of this are really quite simple. I had the bill costed. With both parts it is a total of approximately $25 million, and that is rounded up. However, it is not a $25 million loss to the coffers of government. It is $25 million that goes back into the pockets of working artists who can then reinvest in themselves as small businesses. Make no mistake about it, actors, performers and artists are small businesses. They can reinvest in the economy through consumerism. That money comes back to the coffers through sales tax or just through investments. It is not a $25 million loss that we are looking at.

One of the questions that came to me as I was discussing this with my colleagues was the aspect of fairness. There are other industries that are cyclical in nature, such as insurance brokers or real estate agents or farmers. The question is how do we do this for one sector of Canadians and not for the others. What I say is that labour in the world and in Canada has changed.

Once upon a time we could pocket everyone into a few different categories. They were labourers, management, professionals or something of this nature. Now things have become really specialized. Looking at the medical profession, we can no longer go to a GP. In fact, fewer people are going into general practice as doctors. They are specializing. We go to a heart specialist. We go to an ear, nose and throat person.

The labour landscape in North America or in the world, especially in Canada, is being specialized just as much. In the IT world, we have any number of different specialties that have their own unique problems. We need to begin to look at the labour market in that way.

For over 15 years now, artists have been looking for a recognition of that difference. The vast majority of independent artists do not have access to EI benefits or to pension plans. The cultural community had to create its own entities to take care of artists' futures. ACTRA has the Actra Fraternal Benefit Society, which is open to everyone in the industry. That way, artists can put money toward RRSPs through the benefit society. They can put money toward extended health care through the benefit society.

The issue of credibility at banks is something that artists have had to face for many years and still have to face. A colleague of mine had two series under his belt and wanted to buy a house. To get a mortgage he had to get his father to co-sign. That led to the founding of CASCU, the Creative Arts Savings and Credit Union, which was founded by ACTRA Toronto and is now available to the artistic community with a better understanding of the lifestyle of people in the arts.

These are things that the community has done for itself and it is incredibly important that we begin to recognize the value of artists to our economy: $85 billion from $8 billion being put in. That is a very high return. We would like to see fairness in recognizing those aspects, that lack of accessibility to programs that other people have access to, and balance that out. Within the tax system itself there are easements that are given to people for various reasons and all of those reasons are warranted, be it child tax credits or investment credits. There are a number of different things such as the volunteer firefighters tax credit, which is a worthy tax credit but it is not available to people who are not volunteer firefighters.

To the question of fairness, income tax averaging is a way of finding that balance for a unique sector of the Canadian landscape, the artists, and creating a world for them where they are seen as legitimate contributors to the Canadian economy, to the Canadian identity and to the business landscape. As I said, artists are not recognized as small businesses and we need to get past that sense of artists being long-haired hippies sitting under a tree writing songs and saying, “Yo, hey, this is great”. They are legitimate business people. They are legitimate contributors to the economy.

I will speak for every independent artist in this country when I say that all artists want to do is to be able to live a life from the fruits of their labour. They want to be able to raise a family. They want to be able to buy a car and put gas in it, although it is really expensive these days. They want to be able to buy a house, invest in their future. This income tax averaging act, in recognition of artists' realities, would be a step forward to help them do that.

On that note, I look forward to questions, comments and opinions.

Reflecting the Realities of Canadian Artists ActPrivate Members' Business

6:45 p.m.


Scott Simms Liberal Bonavista—Gander—Grand Falls—Windsor, NL

Mr. Speaker, I thought the mover of the bill did a great job, a very compassionate one. If he were not from the artistic community I would be really impressed, but I am simply just impressed. I have worked with him for quite some time now and it was a great speech. It is a worthy cause. I will not even call it a cause because it is not charity but something they would work for.

The bill is well thought-out and well reasoned, and we should all support it. I will certainly be voting for it for several reasons, but I would like to talk about income averaging. It is a concept that has been around for quite some time. Throughout the 1970s and early 1980s income averaging was available for all people. Is there a certain model or way that other nations do this that we should look to as a good model to use in this Canadian context?

Reflecting the Realities of Canadian Artists ActPrivate Members' Business

6:50 p.m.


Tyrone Benskin NDP Jeanne-Le Ber, QC

Mr. Speaker, that is a great question. The model that I used is based on the Australian model. There are a number of countries that have varying methods of income tax averaging. Some are income tax credits and others are through the model of reassessment of previous years.

I felt that this was the best model because I would not have to make any predictions about what am I going to earn next year or the year after, which could run into problems. Reassessing based on previous years is something that I felt was more acceptable to the community and something that was a little more predictable and workable in our Canadian context.

Reflecting the Realities of Canadian Artists ActPrivate Members' Business

6:50 p.m.


Bev Shipley Conservative Lambton—Kent—Middlesex, ON

Mr. Speaker, I am trying to get a handle on what Bill C-427 would actually cost Canadians. We did not talk about that, but that is where I come from in a lot of ways. To bring in this legislation there would be a cost to taxpayers across Canada. Could the hon. member give me an idea of what the cost of the program would be over the year? We have done an estimation that the minimum would be $25 million a year.

Has the member thought about where the money might come from, or what programs would be cut? Could he give us a hint as to how he would raise the money?

Reflecting the Realities of Canadian Artists ActPrivate Members' Business

6:50 p.m.


Tyrone Benskin NDP Jeanne-Le Ber, QC

Mr. Speaker, the hon. member is right. We had it costed by the finance department through the Parliamentary Budget Officer. The combined rounded up total was approximately $25 million.

Where would I find the money? Any budget that is put together by any government is based on a matter of choices. There is no concrete way that it needs to be done.

One has to consider the choices. For example, if we cut a thousand jobs, we may save money in one area, but we have to remember that there would be a thousand people who would have no income, and as such they would not be paying income tax. Those thousand people would not be purchasing because they would not have any buying power. No sales tax revenue would be generated. There would be nothing feeding the economy through consumerism. We may win a few dollars in one area and lose a few dollars in another. It is a matter of choices.

This would be a very modest cost. It would allow artists to become stronger participants in the economy and to reinvest in themselves as businesses and as families.

Reflecting the Realities of Canadian Artists ActPrivate Members' Business

6:50 p.m.

Oak Ridges—Markham Ontario


Paul Calandra ConservativeParliamentary Secretary to the Minister of Canadian Heritage

Mr. Speaker, at the outset, let me thank the hon. member for bringing this bill forward. I had the opportunity to work with him on the Canadian heritage committee for some time. I know he has moved on to other responsibilities with official languages, and I wish him well.

As Canadians we are very proud of our artists. Of course, this government is very proud of our artists. We are not talking just about people like Justin Bieber or Celine Dion, Canadian artists who are very well known internationally, but we are talking also about people in our local communities across the country.

In my riding there are two extraordinary singer-songwriters, one by the name of Quisha Wint and the other by the name of Dallas James. They are incredible singer-songwriters. Quisha, who has just released a spectacular album, is incredibly talented. Dallas James performed at my Christmas concert last year and really wowed the audience.

I think we would all agree that our artists and musicians across the country make us very proud. In many ways they are the custodians of Canada's identity abroad. They are the ones who help display everything that we as Canadians are proud of. At home we are extremely proud of the efforts they make on our behalf.

This government has been investing extraordinary amounts of money in the arts and culture since being elected. We understand how important the arts and culture sector is to our economy. That is why when we introduced our economic action plan, we did not just maintain funding for the arts, but we actually increased it. In the next phase of Canada's economic action plan, the government will continue to maintain these record levels of support. That is in contrast with what other jurisdictions around the world are doing with respect to arts and culture.

In the United States, for example, the National Endowment for the Arts runs on less money now than it did 20 years ago. Last year Arts Council England saw its funding cut by 30% and its operating costs cut in half. In Australia the budget for the Australia Council for the Arts is $163 million per year. In Canada this year the budget for the Canada Council for the Arts is $180 million.

In fact, since this government was elected, we decided to actually increase funding to the Canada Council for the Arts by 20%, which is the largest funding increase for the council in decades. We have kept that increase despite the fact that the world economy continues to be under some serious pressures. We made a commitment on this side of the House to bring our budget back into balance, to continue cutting taxes for Canadian families, to continue investing in job creation initiatives, but we have been able to maintain funding for the arts and culture, and we are extraordinarily proud of that.

Let us look at another example. Michigan recently passed a budget that reduced the state's arts budget by 80%.

We are not doing that. Through Canada's economic action plan, we have invested in theatres, festivals and museums. We have invested in the travelling exhibitions indemnification program. Our museums not only can bring in more important exhibits to our national museums, but the national museums can actually send more of their displays across Canada so that more Canadians can see the collections that we have and truly understand how important our national museums are to our country.

We have created two new national museums. The new Canadian Museum for Human Rights in Winnipeg is well under way. It is an absolutely spectacular museum. Over the summer I had the extraordinary fortune to visit Pier 21 in Halifax. It is a museum that means a lot to me as both my parents came into Canada through Pier 21. To have been able to go back there as the Parliamentary Secretary to the Minister of Canadian Heritage and see where my parents came into Canada many years ago was truly an honour. This, too, is a spectacular museum.

We should all be very proud of the work that our national museums do in helping maintain our Canadian history.

We have continued to support the arts and culture sector. People are noticing.

The Canadian Opera Company said that the Canadian government has steadfastly demonstrated its dedication to developing a country where creativity and innovation are supported and that it remains extremely grateful for the government's continued support. It talked about this in the context of Canada's economic action plan that was introduced by the Minister of Finance and passed by this House.

The Canadian Museums Association said that it was “very pleased with this budget” and that “museums are being identified as important generators of jobs and growth in Canadian society”.

We support and value the arts, not only because of what they bring to Canada culturally, but because of their importance to the Canadian economy. The hon. member for Jeanne-Le Ber mentioned the importance of the artistic community and the arts to Canada's economy. The arts represent some $46 billion in economic activity and about 635,000 Canadian jobs. To put that into context, that is twice the size of Canada's forestry industry. What we do for the arts is extraordinarily important to the Canadian economy.

In recent years, Canada has been the birthplace of some major global entertainment companies, such as Lionsgate Entertainment. There are other stunning Canadian success stories throughout the arts and culture sector.

Make no mistake that the arts are a massive economic generator in Canada. That sector is a source of jobs, investment, growth, and strong economic activity.

For all of those reasons, our Conservative government will continue to invest in arts and culture. We are going to continue to do that in programs that we think work for our artists, programs that work for our economy and help continue to generate economic activity.

The member talked about the fairness of this proposal. We have to look at what is being proposed in the context of other industries. I was glad that he brought that up.

Let us look at income averaging. As a former insurance broker, I am glad he brought up insurance brokers. There are great times and there are bad times. Income averaging for insurance brokers probably would have been a good thing for me in my career. It also would have been a good thing for farmers and car salesmen. There are many industries in this country that would benefit from income averaging. The dilemma is that this bill would decide who the winners and losers are, which industries are more important than others.

Our tax system has been, and should continue to be, based on fairness. One of the things that a government cannot and should not do is try to pick winners and losers in the tax system. We are not going to do that. We are going to continue to focus on creating jobs and opportunities. We will continue to introduce taxes for all Canadians, not just for one sector and not another.

Professor Kevin Milligan looked closely at the proposal and concluded the following:

[T]he NDP's tax policy proposals still need some more rehearsal time.... [I]ncome averaging is an extremely clumsy apparatus for supporting the arts -- to the extent it would even help at all. Let the debate on support for culture flourish, but let's keep income averaging out of it.

He mentioned that because, as was mentioned by one of the speakers, income averaging was tried in the 1970s and 1980s and it was abandoned as something that was not only unfair, but it was unworkable, hard to administer and actually did not achieve the results it sought to achieve. For those reasons, we have abandoned income averaging in the past.

Our government is going to continue to support arts and culture. That sector is extraordinarily important for economic activity. It is also a very important source of Canadian pride. When we see the success of our artists and our museums, we are very proud.

Again I thank the hon. member for bringing this forward and giving us an opportunity to discuss it further. I too look forward to some of the debate going forward.

Reflecting the Realities of Canadian Artists ActPrivate Members' Business

7:05 p.m.


Scott Brison Liberal Kings—Hants, NS

Mr. Speaker, I thank the hon. member for bringing forward this proposal. It is helpful for us to debate changes to the Canadian tax system because the reality is that we have not had a meaningful study or evaluation of our personal tax system in Canada since 1971 with the Carter commission. The reality is if we were to try to find one word that would sum up what has changed in Canada since 1971 in terms of the Canadian and global economies, that word would be “everything”. Therefore, we do need a meaningful study, review and reform of the Canadian personal tax system.

Unfortunately, we are having these kinds of one-off discussions around the tax system due to the lack of leadership on the government side to take this important issue seriously and have a meaningful debate and discussion about changes that would build a fairer tax system and, potentially, a more globally-competitive one at the same time.

The parliamentary secretary said that the tax system should be based on fairness. He also said that we should not be picking winners and losers. I cannot help but go back to those comments and reflect on recent Conservative government policy in some ways, because he is saying that the taxes should be based on fairness and that we should not be picking winners and losers.

Recent boutique tax credits introduced by the Conservative government, whether for volunteer firefighters or family caregivers or, going back a bit further, the disability tax credit, discriminate against the lowest income Canadians because they are non-refundable tax credits. As such they do not benefit low-income Canadians. That is not consistent with the idea of a tax system based on fairness. I also do not think it is consistent with the idea that we would not pick winners and losers. The reality is that the Conservatives are picking winners and losers and the losers are low-income Canadians, which is absolutely inconsistent with the principles the member just articulated.

If we simply made those tax credits refundable we would include low-income Canadians in the category of Canadians and Canadian families who would benefit from them. I would ask the parliamentary secretary and the government to reflect on that. If fairness is the principle, if not picking winners and lowers is the principle, then we ought to at least make those tax credits fully refundable to start.

Now I want to speak specifically to Bill C-427 and the idea of income averaging for artists, because it is important to realize that all of our cultural artists, such as musicians, painters, sculptors and authors, face huge challenges and tremendously cyclical income curves over the period of their careers. They will work for years and not make any money, and then one year will have a really good year and be in a top marginal tax bracket. That is why I think we should move this to committee and have it studied. It is important to realize that this is an important issue for our cultural community, that the current system, as it stands, is not fair and that changing it to reflect the incredible variance in incomes of cultural creators makes a lot of sense.

Where I would agree in some ways agree with the Conservative parliamentary secretary is that we ought to consider income averaging in other areas. However, his idea is that if we are not doing it for everyone right now then we cannot do it for anyone. I think that is wrong. Income averaging in the cultural community can actually create a model that can ultimately be applied more broadly.

I will give an example. A few years ago I met with a constituent who I think had a grade 7 education. He was a physical labourer who had been injured in the workforce. After that injury, he went to workers compensation in Nova Scotia to apply for compensation.

He fought for his compensation for four years and ultimately was compensated. I think at the time he got over $100,000, which at that time put him in the top marginal tax bracket. As such, he was taxed at the highest marginal tax rate, after having had basically no income for four or five years. In that case I would argue that having been deprived of his income or capacity to work for those years because of a workplace injury and then having received a lump sum cheque to compensate for that lost income, he ought to have been able to qualify for income averaging.

I am using that example not as a reason why we should oppose the bill but why we should both support the bill and consider income averaging more broadly. That is where I agree with the Parliamentary Secretary to the Minister of Heritage. There are other groups within society that could benefit from this.

That brings me back to the original point. Why are we not having a more thorough discussion on the need to reform our Canadian tax system and taking a look at issues of fairness? For example, yesterday in the House we debated the issue of income inequality and equality of opportunity. There are direct impediments in our tax system to equality and upward mobility. Moreover, there do exist areas where members of the Conservative Party, the New Democratic Party, the Liberal Party and the Bloc would agree. These are some areas where if common sense were applied to the Canadian tax system, it would yield a simpler system. We could actually have a simpler tax system.

I understand the argument that this bill would create a more complicated tax system, but it is difficult to understand the Conservatives' point that they are opposed to any complications in the Canadian tax system when they continually introduce boutique tax credits, which actually further complicate the Canadian tax system. I studied taxation in university, and I remember it was an open book exam. I remember the size of the textbook. The Canadian tax code was pretty voluminous way back then. I shudder at the thought of what the Conservatives have done to that puppy since 2006.

The reality is that income averaging for artists makes sense. That is why in 2008, in our Liberal platform, we actually called for this. We said:

Support for Canada's arts and culture must also extend to support for artists themselves. That is why a Liberal government will provide income averaging for artists drawing on the inspiration of Quebec's income-averaging provisions. This will ensure that the tax system will better reflect the peaks and valleys of the artistic work cycle. This is an important tool for helping this country's writers, artists and musicians continue to excel.

Of course, Quebec has led the way on this. I have been acquainted with and introduced to the Quebec culture by having married a Quebecker. Prior to that, as an anglophone born and raised in Nova Scotia, I was not aware of groups like Les Trois Accords, or films like C.R.A.Z.Y., or La Grande Séduction, or programs like Tout le monde en parle, as an example. What I am very much impressed with and what I think all Canadians can learn from is what Quebec has done to support, foster and strengthen culture. I say this because when two million Quebeckers watch Tout le monde en parle on a Sunday night, it is a lesson to the rest of us as to what happens when we actually get behind a cultural entity. The reality is that there is a network of stars that far too many anglophone Canadians have not had the opportunity to enjoy and be immersed in. Having married into a Quebec family, I have had that great luxury and privilege.

We can learn from what Quebec has done in this area. I thank my colleague from the province of Quebec for having brought this forward. He is someone with great experience in this area. I hope that the Conservatives actually demonstrate some flexibility in recognizing that we can learn from this and move forward. This can be a start toward a fairer tax system and perhaps income averaging that can apply outside of cultural areas in the future.

Reflecting the Realities of Canadian Artists ActPrivate Members' Business

7:15 p.m.


Kennedy Stewart NDP Burnaby—Douglas, BC

Mr. Speaker, I rise tonight to speak in support of Bill C-427.

Before I comment directly on the bill, I want to commend my colleague from Montreal for his work on this issue. He is a two term national vice-president of ACTRA, an accomplished actor, singer, songwriter, composer, director and writer. I really cannot think of a better person in the House to work on this issue.

I had a nice surprise yesterday that that really speaks to why I strongly support Bill C-427. Between the ages of 15 and 25 I played music professionally and often considered making music my career. Yesterday a former Raspberry Jam band mate, Randy Kee, posted some old VHS footage on YouTube, which brought back memories of the time when playing music was probably the most important thing in my life.

In addition to allowing me to take a trip down memory lane, the video made me think not only about the artists with whom I worked but also the artists I currently admire and those in my community who really work hard but sometimes struggle to get by. The bands I am thinking of are 3 Inches of Blood, Faira, Wintersleep, Japandroids, Hey Ocean, Mother Mother, and perhaps Maria in the Shower. They might be groups that members entertain themselves with during the evenings. These bands are important to our community. They speak to different parts of the community. The entertainment that I mentioned goes right across the spectrum and is important to support.

We need to support our artists not just in words but financially. We need to take as much pride in our artists as other countries, and we need to back up our words with legislation like Bill C-427.

At its core, Bill C-427 concerns income averaging for artists. It would allow artists to average income for the purpose of federal taxation over a period of two to five years, producing significant tax savings on a flexible scale. Importantly, the bill proposes to exempt from taxation the first $10,000 in income derived from royalties, residuals and other special payments.

My colleague has outlined this in much more detail but I just want to give three reasons why I think the bill needs to be passed.

The first concerns the direct benefit to artists, like those I just mentioned. The bill would create greater overall tax fairness for this specialized group of taxpayers who are significantly disadvantaged under the current federal tax code. This concrete support acknowledges financial difficulties faced by developing and emerging Canadian artists and would put measures in place to counter the lack of access to certain government programs such as EI and CPP.

If we are able to make the private member's bill law, it would really show that the Canadian government is putting its money where its mouth is.

The second reason the bill should be passed is really a symbolic one, that we need to recognize the integral role that artists play in our society and how they boost our cultural identity.

The third reason is economic. We can see the House of Commons starting to focus and really zero in completely on the economy as we face economic difficulties abroad and really struggle in dealing with these in Canada. In that regard, we have heard some figures from the other side of the House that really underestimate the contributions artists make to our Canadian economy.

According to the Conference Board of Canada, the overall economic footprint of Canada's cultural sector is around $85 billion a year. We heard a number quoted a few minutes ago of $40 billion, but the Conference Board of Canada, which is not an extremely left-leaning organization, has estimated it at $85 billion. When we look at the impact on the overall Canadian economy, it is about 7.4% of Canada's GDP. When we look at this in terms of other industries, it really has a fairly massive impact.

We always talk about our trade deficit and how we import more than we export, but what could be more exportable than cultural products. These days people upload things to iTunes and sell them wherever they like. It is a very transportable good, film or music and as we move more toward a knowledge economy, this is something we need to encourage. Our neighbours to the south have done this in tremendous ways and we need to catch up.

Despite the potential contribution as well as actual contribution of the $85 billion, Statistics Canada indicates the average annual income of an independent Canadian artist is only about $37,500. This is significantly less than tradespeople, contractors and virtually every other variety of independent employee in the Canadian economy.

I was a musician until I was about 25 and used to joke about sleeping on couches, or having lots of people living in a house or driving in stinky vans. I guess that is the fledgling part of the industry. It might be fun when people are 25, but it is not fun when they are 45. These types of measures would encourage more people to stay in the arts and make it more of a viable career, which would only be good for Canada.

In the past, the government has portrayed of life of artists as a series of galas or soirees, but for most Canadian artists it is survival on the very edge of the poverty line. The measures being proposed today would go some way to alleviate that.

The measures contained in the bill are affordable as well. The government would forgo less than $25 million in tax revenue per year, but the benefits would be enjoyed by over 55,000 Canadians. Therefore, it really is the best kind of measure, where we are not spending a large pile in comparison to the rest of the budget, but spreading it out over a large number of people and boosting them up a little, which makes a big difference. It seems to be a very effective measure.

These benefits lead me to think about countries that really care about their artistic talent and ways that smaller countries can punch way above their weight. The country I think of often is Ireland, which has a small population but a worldwide reputation for everything from poetry to songs. The Irish have forever had one of the most generous taxation schemes, which has paid off in spades. While this legislation is different than the Irish measures, it is the spirit that is important, recognizing the cultural and economic contributions of artists and how we can support that most effectively.

Numerous jurisdictions at home and abroad use income-averaging measures to recognize the special circumstances of certain groups of taxpayers in cyclical or seasonal industries whose livelihoods do not follow the steady, predictable formula of a salaried job. Income-averaging models specifically targeting artists exist in dozens of European Union economies, including France, Britain, Germany, the Netherlands and a number of our other key trading partners.

In Canada, as has been mentioned but is worth restating, income-averaging models have been employed at various times to support east coast fishers, investment in resource exploration projects and other high-risk fields of work. It is often associated with physical labour, but it is good to stretch the mind a little to think about how this could benefit those who are not engaged in that kind of work, although lifting band equipment can fall into that category maybe.

In 2004 the Government of Quebec enacted Canada's only permanent income-averaging system, once again leading the way in terms of supporting artists.

This is widely supported right across Canada. Not only do we have an excellent spokesperson presenting the bill this evening, but ACTRA and other organizations are enthusiastically supporting this concept. The House should support the bill and I was happy to speak to it this evening.

Reflecting the Realities of Canadian Artists ActPrivate Members' Business

7:25 p.m.

Peterborough Ontario


Dean Del Mastro ConservativeParliamentary Secretary to the Prime Minister and to the Minister of Intergovernmental Affairs

Mr. Speaker, I am pleased to join this evening's debate on this private member's bill that has been brought forward by the hon. member for Jeanne-Le Ber for consideration in the House this evening.

Prior to my current position as Parliamentary Secretary to the Prime Minister and to the Minister of Intergovernmental Affairs, I was very honoured to serve between 2008 and 2011 as the parliamentary secretary to the Minister of Canadian Heritage. In that capacity I had the opportunity to meet the hon. member prior to his election. We talked about a range of issues that artists encountered. He was a very good and strong spokesperson in his capacity. We did not always agree, as we do not always agree on everything today when it comes to policy. However, I know he is sincere in what he has put forward with respect to arts and culture in Canada, even if we may from time to time differ on exactly what the right course may be.

Admittedly, the member knows more about acting than I do. He has a number of significant credits to his past and perhaps in his future. However, when it comes to taxes, I may trump him a bit on that. My education at university was in that. I came from business before being elected here. I have spent quite a bit of time dealing with the finance side of things in business, at university and in this place, as I served on the Standing Committee on Finance for a number of years.

I note the member for Kings—Hants talked about having a study on taxes. We did have a study on taxes at the finance committee a few years ago and we focused on that as part of our prebudget consultations. We looked at methods of taxation, how to make the tax system more efficient, more effective and fairer because we all wanted to see fairness in the tax system.

The member mentioned a couple of things of which I have to take note. Specifically, he and his party have talked a number of times about refundable tax credits and transforming a whole range of current programs from their current system to refundable tax credits. There are numerous reasons why that is a bad idea, not the least of which is the enormous cost, of which the members have not proposed any means of paying for, which would ultimately lead to higher taxes for all Canadians if we were to do that. It would also threaten a number of the programs that people who do not qualify for non-refundable tax credits rely on, programs like the working income tax benefit program, child tax credits, GST and HST rebate cheques, housing support and OAS. So many programs that are funded out of general revenues by the government would be impacted by changing how these tax credits work, and the Liberal Party members have proposed no means of paying for these things.

While the members put it out as kind of a fuzzy, feel-good thing that they would like to give more free money to everybody, I think a lot of Canadians know there is no such thing as free money from government. It does not exist. In many cases it comes from one pocket and goes in the other, with the cost of government subtracted from it before it arrives in that pocket. Or it comes from a neighbour, parents or other family members or from businesses. Overall, it just becomes a weight on the national economy.

To speak to this bill directly, there are principles in the tax system that are very important. One of them is generally accepted accounting principles, or GAP, which I had an opportunity to speak to the member about a couple of days ago. One of the principles that the tax system is founded on is the matching principle, which basically states that income or expenses that are incurred in any given period are recognized in the period for which they are incurred. In other words, we do not take an expense from 2006 and put it against our income for 2012 and we do not take income from 2008 and put it into 2012. We match our income and our expenses to the period for which they apply and it is on that basis that our tax system is built. If we do not base it on generally accepted accounting principles and just cast them away, then our whole system of marginal tax rates, the progressive nature of our tax system and the very treasury itself and how much revenue it collects in any given year would be significantly impacted.

This is a costly bill. As I said when I spoke to the member, if we were to looking at doing this for artists, we would have to look at doing it for a number of professions, because I think an awful lot of folks in various occupations do have cyclical incomes.

My colleague, the Parliamentary Secretary to the Minister of Canadian Heritage, named a few industries. Certainly the one that came to mind immediately for me is realtors. I have talked to realtors about this. They would love to have the ability to move their income from good years to bad years and pay less tax. The problem with doing that is we would then have to put more weight on other Canadians whose income is not cyclical. We would have to charge them more taxes to supplement people whose incomes go up and down. That is not fair.

The government has done a number of things for lower income Canadians, including low income artists. We have removed almost a million low-income Canadians completely from the tax rolls. They pay no federal income taxes at all. That is a significant accomplishment.

We also reduced the GST from 7% to 6% to 5%, which is a tax that absolutely every Canadian pays, regardless of what income they do or do not have. That was one of the most advantageous taxes to reduce to help people who were on the lower end of the income scale. It was important. I believe even the NDP at one time supported reducing the GST and then voted against it when it came to the House of Commons, but I digress.

It is very important also to recognize that regardless of whether an individual is an artist, a realtor, an insurance broker or whatever in the Canadian economy, all Canadians contribute to our society. They contribute to our tax system. They contribute to making our country stronger. They all deserve a fair tax system based on a clear set of guiding principle. That is what has guided the tax system.

That is why essentially I would oppose the bill. I do not think the Minister of Canadian Heritage has taken a definitive position, but I would personally oppose it because I think it runs contrary to clear guiding principles on which our tax system is founded.

If want to take a broader look at this, if we want to start looking at income averaging and so forth, as the member for Kings—Hants said, it would be a very significant restructuring of the Canadian tax system because it is not based on that foundation. Indeed, marginal income tax rates, for example the non-refundable deduction, the top line deduction that every Canadian claims on their tax return, all of these things would have to be adjusted in order to allow for a new system in which Canadians, not just artists, could income average.

I mentioned that I served as the parliamentary secretary to the Minister of Canadian Heritage. One of the things we did during that period of time, and I am very proud of both the Prime Minister and the Minister of Canadian Heritage for their very clear direction, was to invest significantly in the arts.

We have a number of programs and range of means in which we do that. It has resulted in a much stronger Canadian arts industry. For example, Canada Cultural Spaces, the Canada Council for the Arts, there were significant increases to both of those funds. We have the Canada music fund, the Canadian film and video production tax credit, the Canada arts presentation fund and the Canada arts training fund. We introduced a new tax credit for kids in the arts to help their parents support them. All of these programs have come together and have built a very strong cultural sector. I can speak for my own community. The arts sector is so important in Peterborough. It contributes so much, and I think it will continue to do that.

I am proud this government has sought to support the arts in Canada and I congratulate the member for his contributions to the Canadian arts system.