Mr. Speaker, this bill is truly based on good intentions, to encourage tourism in Canada by Canadians. Of course, taxpayers are in favour of more tax credits, especially when this would enable them to reduce the cost of their family vacations by a considerable amount.
However, before saying that this deduction would be good for both families and businesses, we should look closely and weigh several factors, including the cost of the bill itself, and thus its consequences for the government's revenue, Canadians' expected participation rate, the real effects of such a deduction on Canada's tourism industry and the additional complexity of the tax system.
The cost of this bill was estimated by the former Parliamentary Budget Officer, Kevin Page. He responded to a request by the House of Commons Standing Committee on Finance for an estimate of the lost revenue to the government if such subsidies were granted. His conclusions were not really surprising.
Since no revenue source was proposed to counterbalance the expenditures related to this bill, Bill C-463 would result in reduced tax revenue.
Thus, according to the Parliamentary Budget Officer, the net impact of Bill C-463 on federal tax revenue would be between $90 million and $120 million in 2017, in constant 2013 dollars.
Yet the hon. member for Saint-Léonard—Saint-Michel claims confidently that the economic spinoffs from this bill would be sufficient to cover the cost of these deductions or, in the worst case, would be revenue-neutral for the government.
It is undeniable that such a bill would generate economic spinoffs. How big will they be? That is the question. If the hon. member has some calculations or more information on this, it could be interesting to hear about them, because even the Parliamentary Budget Officer was not able to establish an estimate.
We must determine how much use the taxpayers would make of this tax credit and what impact it would have on tourism. Will there really be new travel? Will people simply change their means of transportation or decide to go across one more provincial border in order to claim the tax credit? If they lengthen a planned trip in order to cross three provinces instead of two, only one part of the trip should be counted.
The Parliamentary Budget Officer added that he made his calculations based on the assumption that the proposed deductions would not cause carriers to increase prices, since if that were the case, a corresponding decline in induced demand could be expected.
It is a matter of aligning complex calculations with behavioural factors that are rather subjective. As it stands, we do not really have any credible figures, except those from the Parliamentary Budget Officer. Those are the figures we will use to make a decision.
It is not enough to simply bring in this measure. The public must know that it exists to be able to take advantage of it.
The costing of the bill is based on the assumption that all those who are eligible will use the tax credit. We know that is not true, but we have no choice but to take that into consideration. However, that assumption skews the figures in favour of the proposal.
On the one hand, travellers who do not use the tax credit will save the government money by not claiming the money they are owed. On the other hand, their travel cannot be included in the statistics used for costing Bill C-463, since they would have travelled anyway.
Something really bothers me about my colleague's logic. He claims that the bill is meant to encourage Canadians to explore, appreciate and discover their country, to meet other Canadians and experience culture. He said the following when he introduced the bill:
We should remove some of the financial barriers that stop them from exploring this great land and tell them to go out and discover your Canada...
With all due respect, I do not see how families with financial struggles would prioritize travel across the country. They may want to, but times are tough for many people.
My NDP colleague from Abitibi—Témiscamingue also questioned why the member chose the rule of crossing at least three different provincial boundaries, and she did so very eloquently. I agree that if we want Canadians to travel more within the country, they should be able to choose their destination. In her example, she explained that someone who crosses three provincial boundaries does not necessarily travel further than someone who goes from the far north of the Northwest Territories to southern Saskatchewan.
Acknowledging the limitations of his bill, the member said that the main reason for his bill was as follows:
Canadians have to start getting to know one another and discovering Canada. The only way to do that is to get them to travel as far as possible in the regions. When I talk about the regions, I am not talking about going from an urban area to a rural area. I am talking about travelling to eastern, western and central Canada. That is how people can get to know one another.
To be honest, I do not see the difference. In fact, from what I understand, Canadians will prove they want to visit Canada and get to know their fellow Canadians by travelling across three provinces. That is rather ridiculous. He spoke at length about Canadian tourists who buoy up American tourism, so he should be happy simply that someone decides to travel in Canada.
After looking at the tax credit requirements, it is clear to me that the three-province rule was put in place to try and restrict accessibility and eligibility in some way. According to statistics from the Parliamentary Budget Officer, 92% of trips within Canada are taken by plane, train or bus, and the vast majority of those, 88%, are not work-related and would therefore be eligible for the tax credit proposed in Bill C-463.
However, as far as the distance criterion is concerned, travellers cross at least three provinces in only 23% of travel by airplane within Canada. That being said, people who can afford to travel in three provinces are, for the most part, relatively well off. What is more, to benefit from this tax credit, a person would need a high enough income to pay taxes and for this non-refundable credit to make a difference in the taxable income. This is an important aspect of the bill that, I hope, in no way reflects what the member was getting at.
Travel, within the meaning of this bill, is considered a luxury for many Canadians. Many do not have the means to travel very far, or at least not far enough to benefit from the tax credit. According to the Parliamentary Budget Officer, a maximum of 10% of tax deductions for travel would come out of this bill, which is equivalent to roughly $110 million out of $1.1 billion.
Is it worth the trouble? There may be less expensive and more sustainable ways of encouraging tourism and helping people to travel. I am not sure this is the best way to go about it, especially at a time when we are trying to have the government simplify the tax system and reduce economic inequality. I think it would be hypocritical to encourage a new tax credit that goes against the primary goal of the tax system, which is to distribute wealth, and makes it less progressive.
The Parliamentary Budget Officer confirmed that when he said that “the benefits of tax measures proposed under Bill C-463 are anticipated to concentrate to higher income earners”. I am not necessarily talking about this credit in particular, but the direction of the tax policy in general. To be more progressive and more effective, the tax system has to remain as simple as possible.
To conclude, despite what the hon. member thinks, I believe that many trips that do not follow the three-province rule contribute just as much to helping people learn about socio-cultural differences. As a result, I do not see why they are completely disregarded. If the intent really is to have people travel and discover Canada, simply travelling from one province to another should be enough. Whether a person leaves from downtown Toronto or from Calgary to get to Chaleur Bay, the trip will be no less memorable.
With that thinking, the member is minimizing the unique character of each province and is reinforcing certain cultural stereotypes, like the idea that western Canada is all the same, regardless of the province, when that is not true. I truly hope that everyone has an opportunity to travel; not only is it pleasant, but it is also enriching. However, I am not sure that it should be a government priority, quite frankly. I think the $200 million or thereabouts could be better invested right now.
In short, I understand the member's intent, which is commendable. It is very important to encourage Canada's tourism industry. We support the intent of the bill. My riding in particular, Rimouski-Neigette—Témiscouata—Les Basques, depends largely on tourism, an important industry. However, the bill and its tax credit will do nothing to achieve the objectives or to help Canadians get to know each other better. This bill creates a tax credit that will benefit the wealthy more than everyone else.