Mr. Speaker, I am pleased to speak on the motion brought forward by the right hon. member for Kings—Hants which proposes to introduce a tax credit for individuals engaged as emergency service volunteers in the amount of $500 a year.
I have attentively listened to the debate. I listened particularly to what the right hon. member for Kings—Hants, the hon. member for Sackville—Musquodoboit Valley—Eastern Shore and the member from Thunder Bay had to say about the value of the contribution made by firefighters in our communities.
As one of the members pointed out, those of us who live in urban communities do not have the same problems as those who live in rural communities. Speaking as someone from an urban community, the House might forgive me however if I speak to this issue as a taxpayer and as someone who has to look at the fairness and equity of the system of taxes which govern all of us. Taxes are not designed to apply to individual specific cases as much as they are designed, as the hon. member knows perhaps better than most, to the country as a whole. We must make sure that the system is equitable for all if it is going to be respected and accepted by all.
The idea that the tax system should in some way promote volunteer activities or other activities of a selfless nature is hardly a new one in our tax system. In fact the government understands the importance of supporting individuals who have contributed to their communities and has taken steps to help through the tax system.
As we know, the Income Tax Act, as the parliamentary secretary pointed out, already provides for volunteer firefighters to earn an annual amount tax free. That provision was substantially strenghtened in the 1998 budget, when the amount was increased from $500 to $1,000 a year, and the provision was extended to other emergency service volunteers, whose contributions are no less important.
The government has also improved other tax provisions, such as tax credits for charitable donations, in order to facilitate things for individual taxpayers who want to make donations to their communities. For example, charitable donations of up to 75% of a taxpayer's annual net income now qualify for a credit for charitable donations, compared with 20% in 1995. The ceiling does not apply to certain donations or certain cultural property, or to donations of ecologically sensitive lands made after 1994. Our government has already seen how important the issue was and has improved the tax system to deal with it accordingly.
In addition, the government's 1997 budget moved to ensure that individuals who donate certain marketable securities need only include one-half of the usual proportion of the resulting capital gains in their income. Following the reduction in the general capital gains inclusion rate from three-quarters to two-thirds in the 2000 budget, this inclusion rate now stands at only one-third.
Why do I refer to these? These are important initiatives which relate to this debate. They demonstrate the government's commitment to supporting volunteers, generous givers and non-profit organizations.
The motion before us proposes to go beyond these existing measures by extending a tax credit to all emergency service volunteers. This would presume to include those volunteers benefiting from the existing tax-free amount, as well as those emergency service volunteers who currently receive no amounts whatsoever.
While the proposal I described would certainly provide greater assistance to emergency service volunteers than is currently the case, it raises a very thorny issue, not the least of which is the cost to the public accounts referred to by the parliamentary secretary and by my colleague who spoke before me in the House.
Therefore it falls upon us as responsible members of the House, as has been pointed out, to consider that dimension. We cannot just rush in and say, as one of the members reasonably said, “Yes, we must find a solution to this issue”. Yes, we must find a solution but we must find a solution that is balanced within the tax framework that applies to all citizens and all members of the country. That is what we are called upon to do in the House, not adopt ad hoc solutions to questions which are going to bring inequity and problems to the tax administration and the way it is going to apply that.
That is why I would contrast the proposition with the other charitable donation situation because this proposal goes significantly beyond the scope of the current tax proposition. It contemplates providing a tax credit to all individuals engaged in a particular volunteer activity without regard to time spent or expenses actually incurred.
The charitable donations credit, which provides tax assistance in proportion to the amount donated by taxpayers, is a totally different matter. Similarly the tax-free amount for emergency service volunteers is restricted to these amounts received by eligible volunteers from a public authority, typically to compensate them for the expenses they incur in fulfilling their duties.
It is also interesting to note that the proposed tax credit would apply in equal measure to an individual who volunteered all year round and an individual who volunteered perhaps just once or twice during the year.
While this would be difficult to justify, it would be even more difficult to explain why the tax system should provide assistance to an individual who provided volunteer emergency services on a single occasion and not to a dedicated year round volunteer who performed other services.
I would go back to my urban roots, if I may say, for the example of reading to sick children in hospital, helping the blind, or providing other services which many people in other communities do on a regular basis without a necessity to be compensated but with a sense of the community devotion which we heard properly extolling the firefighters who are the subject matter of this motion. The unfortunate distinction that I referred to could well result if the motion were carried by the House.
I know the parliamentary secretary is extremely sensitive to matters of achieving balance in the tax act. I am sure he is as concerned as I am about favouring a particular group of volunteers over another, whether or not they incur actual expenses, extraordinary expenses, or even participate in specific emergency situations. Surely it would be difficult to justify providing a tax credit to one group of volunteers, while denying tax assistance to all other volunteers.