Alex Shepherd

[Income Tax Act, May 11th, 2001]

Madam Speaker, I am very pleased to speak on Bill C-222, a very important bill brought forward by the member for Beauport—Montmorency—Côte-de-Beaupré—Île-d'Orléans.

As a number of other members have mentioned, a concept of this bill has been before the House many times before. In my previous life I was a self-employed chartered accountant. I had many mechanics, both employed and self-employed, as my clients, so I am very familiar with their concern regarding this issue.

I believe a number of interveners have possibly misunderstood the concept. The first issue is self-employment as opposed to employment. In fact the previous speaker gave many examples of people who were able to deduct tools, et cetera, by virtue of the fact that they were deemed to be self-employed. He was also confused about incorporated and unincorporated businesses. Unincorporated self-employed people are allowed to deduct expenses laid out to earn income.

There is a significant difference in the income tax system between people who are employed as opposed to people who are self-employed. We can have a long debate about that in and of itself, but generally speaking it is considered that people who are self-employed have likely more substantial risk in earning an income than do people who receive a weekly paycheque. Some people dispute that in this day and age when people are getting laid off of their jobs and so forth, but that is some of the foundation that underlies why this situation has occurred.

The issue of fairness was mentioned. A number of interveners said that it was only being fair to do this. I understand that plight and the costs involved in acquiring and even maintaining a tool inventory. However many people who are employed have similar costs related to being employed. Even we have a dress code in the House of Commons. I incur costs for suits and other things related to maintaining my job as a condition of employment, but these costs are not tax deductible.

I have two young sons who are engaged in the high tech sector. While it is not a specific condition of their employment, they feel it is part of their jobs to have computers in their homes. They use those computers as an extension of their work, but they are not allowed to deduct those computers for tax purposes.

The fact of the matter is that if we are going to start talking about fairness, we are going to have to talk about a lot of other people. I am sure people in our audience today or sitting at home watching this debate who are employed can think of things that they incur as well to earn employment income.

Uniforms is another issue that has been around for years. People may be required to wear uniforms such as a waitress or whatever the case may be. They are required to buy the uniform from their employers, but are not allowed to deduct them for tax purposes. That is another idiosyncrasy of the income tax system.

I am sure all of us can think of reasons why we should have a tax deduction. The real issue is why should this group of people be treated somewhat differently than all other people who are employed.

To go over the bill itself, the bill proposes to change the Income Tax Act to help mechanics to pay the costs of providing their own tools when this is a condition of their employment. I think that is very important.

We should also ask ourselves a fundamental question. Why is it a condition of employment for mechanics to buy their own tools? There are a lot of reasons for that but it has developed differently from other industries.

Changes would allow mechanics to deduct the cost of buying, renting, insuring or maintaining their tools. Income deductions would be available for tools costing less than $250 and this could be adjusted in accordance with inflation. That is what the bill says. For bigger amounts it would be subject to capital cost allowance and allowed to be deducted over a period of time.

The Government of Canada understands the difficult issue this bill is trying to address. We appreciate that employed mechanics face work related costs that are sometimes significant. This is particularly true, and it has been brought out in the debate today, of young people who have just become mechanics and have to buy that first investment. It is well known that if people enter a career path as a mechanic, they will have to buy their first set of tools. It does not alleviate the fact that it is very expensive and could be cost prohibitive to people becoming mechanics.

There is some merit that the bill is trying to achieve. However the bill overlooks some very important administrative issues, issues that would need to be considered if the bill went forward.

For instance, the bill talks about the word mechanic. Many people have used the words auto mechanic but it does not say that in the bill. Canada's national occupation code lists many kinds of mechanics. There are automotive mechanics, but there are also auto body mechanics, heavy duty mechanics, small engine mechanics, aircraft mechanics and many varieties of industrial mechanics. That has not been defined in the bill. People have used the analogy automotive mechanics but the bill says mechanics of all kinds.

Many other people would call themselves mechanics as defined under Statistics Canada even though they may not fit in any of those particular categories. In reality the bill has brought forward a great deal of confusion.

Another important administrative issue is how the deduction will work under the bill. I am puzzled by the use of the thresholds. The bill talks about those amounts in excess of $200, I believe, which is different from the current capital cost allowance provisions which is $250. In other words, it would appear that the bill anticipates some other form of capital cost allowance regime. This is a mystery to me.

What is even stranger is the bill talks about the proportionality of tools in excess of $250. I have a hard time reading and understanding it myself. I am assuming if a particular tool was $1,000, the first $250 would be deducted as a regular expense and the $750 would somehow be added to a person's capital cost allowance schedule as a depreciation.

There is no system of the Income Tax Act that treats capital acquisitions in that manner. It does not take part of a car and write it off while the other part is depreciated over a long period of time. It does not take part of a tractor, write it off and depreciate the balance over a long period of time.

The bill is inconsistent and does not fit in with the current income tax regime. Therefore, it is not a simple bill. It is a very complex bill that deals with a whole different method of depreciation and providing for capital cost allowances.

One of the problems is the matter of control. We recognize that in some areas there are already mechanisms which apply to employees who have to pay out of their own pocket for work supplies. The cost of chainsaws is allowed to be written off by loggers because it is recognized that they depreciate quicker than other forms of equipment.

We have to sit back from this issue and think about it for a minute. We talk about fairness but there are other employed people who are treated similarly to mechanics. This is not to say that mechanics are not deserving of some kind of treatment, but if we open up that Pandora's box we will have to open it up for a lot of other people, especially some of the people who are listening to us today.

My preference is that at this time the bill not go forward until it is studied further.

[International Boundary Waters Treaty Act, May 3rd, 2001]

Mr. Speaker, I listened very intently to the member for Esquimalt—Juan de Fuca. He said we had an obligation to enter into trade in the area of freshwater. He talked about people who are unable to get the water they need.

The people who are looking to buy our water are in fact not the people who cannot afford it. The people who want to buy it are our cousins south of the border. The hon. member also said we had poisoned the water in the St. Lawrence River and that we had whales that were proof of this.

I am trying to reconcile those two points of view. Do we have the right to sell something we have proven ourselves incompetent to look after? At the same time can we talk about selling it to other people who, due to their own incompetence, have ruined their own water supplies?

[Income Tax Act, May 2nd, 2001]

Madam Speaker, I thank the member for Cumberland—Colchester for his intervention in this area. I can understand to some extent his frustration.

The Public Service of Canada is indeed one of our greatest assets and the government strives very hard to ensure that the public service in reflects the diversity of the country. I can assure the member that there are employees across the country who are resident in his province, in my province, in British Columbia and in the Northwest Territories. The reality is the public service does reflect residency across the country.

He talked very specifically about the mobility provisions. I believe the President of the Treasury Board answered his question to some extent when he first raised it back on February 15.

However the other issue that is important is the cost to the public service in providing employment applications across the country. It is the policy of the public service to only impose this restriction on certain types of job classifications. I know for a fact that today we are trying to acquire a new auditor general and that is a skill set that goes across the country and is irrelevant as to residency. It is based to some extent on the skill set.

The thought process that is in the Public Service Employment Act is basically to provide, for the Public Service Commission to restrict the hiring practices for one main reason. That is to restrict the number of applicants. Clearly, if the jobs were advertised across the country in certain designated fields, the feeling is that there would be a significant number of applicants and that the public service would have to process those applications. That would be a significant cost to the government. In other words, it is conceptually possible that they would have 30,000 or 40,000 applications for one job and the cost of processing and responding to those applications would be substantial.

I will quickly mention the charter provisions. The Public Service Employment Act has borne the scrutiny of the justice department. It conforms with our charter requirements.

I thank the member for his intervention on this and I look forward to his ideas on how we could change this in the future.

[Modernization Of The Standing Orders Of The House Of Commons, May 1st, 2001]

Mr. Chairman, I thank the member for his comments. I must admit that I have not put my mind to doing that. My experience has been that members of parliament work very hard when they are here and look forward to their time back in their constituencies. There are obviously some problems, but his opinion has merit and is probably worthy of some investigation.

With regard to the member's first comment that all the people interested in these areas are already gainfully employed, I do not know if that is quite true. If this thing could take on a life of its own, I suspect that once people got the impression they could have some impact on the way governments spend in the future it would possibly be more popular than the other two committees he talked about.

Another function of creating this committee and its interface with some of the other ideas about societal indicators and horizontal issues as opposed to vertical issues is basically to raise awareness. What would come with that pilot project would be some kind of education process for members of parliament. Treasury board officials or others would explain the process and how they could impact it. It would be a very powerful tool. People would warm up to the idea once they understood that they had an impact.

I have seen the reverse scenario. People came to this place in 1993 and were all keen about these things. Now that keenness has declined and people are not interested and have drifted away to other things. This would be a great forum to attract members who are keen and idealistic about changing things.

[Modernization Of The Standing Orders Of The House Of Commons, May 1st, 2001]

Mr. Chairman, the hon. member misunderstood what I said. I used the words estimates committee. I see the functioning of the estimates committee as having less to do with estimates and more to do with what are called plans and priorities.

What happens is that every department, in addition to giving their estimates, gives their plans and priorities for the next two years. In other words, I am not talking about something that is written in cement. I agree with the member in the sense that once we are into the estimate process, we are pretty much into cement. We ask people why they did what they did, as opposed to why would they do what they are planning on doing.

Possibly the name of the committee is wrong. Maybe we should call it the plans and priorities committee. However the object of the exercise has two functions: to deal with plans and priorities and with performance reports.

The plans and priorities would be an interface for members of parliament to get involved with the process that has not happened yet. In other words, the budget has not happened. It will, two years from now. The budget has not been presented, but the internal mechanism of departments is now planning on how they would spend money two years from now. It is the interface for parliamentarians to be able to catch up with a forward looking concept.

The second part of it is to make departments accountable for their plans. Right now, if we read their plans and priorities, there are great latitudes and platitudes. Some of them are good and some of them are not so good, but the reality is that they are not much good to members of parliament because they do not tell them specifically how or where they would spend the money and so forth.

The same fault exists with the performance report. This is all new. This is new in terms of parliament. It is six or seven years old, but the reality is that the performance report today, if we read it, gives all the departments an A. They never make a mistake. It makes no mention of some of the worst scenarios of which all members would be aware.

The object of the exercise of an estimates committee would be to try to link the plans and priorities with the performance report. We would agree as a committee on the plans and priorities or disagree with them. We would report to parliament. We may think the spending plans could involve the spending of money in better ways if the objectives were based on societal indicators. That is the concept and therefore when the performance report comes in we expect there to be failures.

When we are involved in this process there are risks and with risks there are failures. We are big enough to realize that. We talk about letting government departments manage. We should let them manage. If we let them manage, they will make a mistake somewhere along the line and that is fine. We understand that, but it should show up in the performance report.

[Modernization Of The Standing Orders Of The House Of Commons, May 1st, 2001]

Madam Chairman, I am very pleased to be sharing my time with the government House leader. I also want to congratulate him on his initiative to allow members not only the time in the House of Commons but in this format. I find it very friendly and congenial to possibly reforming the rules of the House.

I am interested in pursuing an issue which is dear to my heart and I guess is an issue that has been around since parliament started. That is the whole concept of the estimates process. In a lot of fundamental ways parliament was formulated as a watchdog to focus on the whole area of government spending.

Historically an estimates process was developed. If one studies the history of parliamentary democracy, most parliaments spent most of their time reviewing the estimates of departments, asking questions about why they were spending money certain ways and tried to ensure that governments spent taxpayer money effectively and efficiently.

I want to elaborate on the estimates for those people at home who may not understand the process. Estimates come from the budgetary process. The budget is presented, then individual departments prepare estimates. In other words, they are estimating the costs of running their programs for the forthcoming year.

Since 1993 we have improvised two other fundamental reports that come with the estimates. One is called plans and priorities, which is basically a document that looks forward two years to what individual departments will do. It is not so much trained on dollars and cents. It is more about their ideas and so forth and where they are going in the future. I suppose one could actually look at the budgetary process which talks about two year rolling budgets, which also fits into this analysis to some extent.

The other report that was added was the performance report. The concept was that the performance report would be the report card. In other words, it listed a department's plans and priorities and what it said it would do. The performance report obviously comes after the fact and tries to measure what a department's plans and priorities were and how well it measured up. That was an add on to the accountability function.

Having been in the House for seven and a half years and watching this process unfold, I think it is fair to say the estimates procedures and the review of the estimates has declined in importance for a number of reasons, not the least of which is that it is a deciphered process. The estimates show up in various committees, whether it is health, transport and so forth. They are dealt with in very short order and a very short period of time is spent on them. A lot of members do not have the resources or the wherewithal to get involved in the estimates process.

This is very much a problem for us as members of parliament and how we represent our constituents. It really gets back to the fundamental duties of members of parliament and what they are sent here for in the first place.

Basically, the whole issue of estimates and improving how we handle estimates has been around a number of times. I go back to Senator John Stewart who back on December 5, 1995 tabled an all-party Senate report. It recommended that we establish an independent committee to deal solely with estimates, plans and priorities and the performance of reporting.

Since then we have had two other committees of the House with members from across party lines. The member for St. Albert chaired one of these committees along with our member from Ottawa West—Nepean. Once again, back in 1998 the committee recommended the importance of establishing a separate estimates committee. There was another election but it was reported to the House.

Subsequent to that on May 4, 1998 another House committee, this time chaired by the member for Mississauga South, came back with the same recommendations. These were not government committees. They were committees of the whole and creatures of parliament. They have recommended this over and over again. Looking back at this there was all-party support in pursuing this matter.

Why is it important that we develop this in one committee? Some people will say what is wrong with the process now, that we look at estimates and so forth? I was in a discussion the other day, not only members of parliament but also the bureaucracy. The suggestion came up that it would be very interesting to ask members of parliament, who just received the estimates recently, if they actually opened up the binders. I think if we polled members of parliament and they were honest about it, we would find that it would not be a great number.

We should be ashamed of ourselves because of that. However there is something wrong fundamentally within the system that has created that lack of interest in that whole process.

In addition there is a number of other things going on in this country and in the world. We are changing technologically. We are talking about government online and people are able to interface with a government using the Internet. Often people now think in terms of horizontal issues. I heard that mentioned earlier today. We have to find a way to deal with horizontal issues imprinted on a system which is now working in silence, a vertical process.

We talk sometimes at length about societal indicators. We as members of parliament should be thinking about what it is that our constituents and people across the country expect of government. There are things called societal indicators. They want employment, a good quality of life, quality of air, et cetera. There are a number of societal indicators.

It seems that we need a committee to develop a filtration system picking out maybe 16 societal indicators, and treasury board has 16. We could all sit down and argue about what we thought were societal indicators. Once we agreed on the societal indicators, these documents could then possibly be reviewed by an estimates committee and members of parliament could look at the whole process somewhat through that litmus.

Another thing that would be very useful for members of parliament would be the plans and priorities procedure. They could interface with the bureaucracy before a plan and priority was established by a department.

There are limitations as to what members of parliament can do obviously. We still have the concept of responsible government and ministerial responsibility.

It would be a great place for members of parliament to have a significant impact, not necessarily on changing the overall view and direction of the government's policy but rather to look for things that perhaps are inappropriate.

If the object of the exercise is to improve culture in our country, is the expenditure better on CBC television or on CBC radio? These are some fundamental things with which we could deal. In other words, we could deal with the internal shifting of money within the estimate process and the plans of priority process.

More important, the system we have today is not working well, even with the plans, priorities and performance reporting. Most members of parliament who were not involved in that process would say that it was not working very well. If I were to pick up a performance report on any government department today I would not find one negative comment. It would be like having a report card with all A's. Most people would agree that if we really want performance reporting we should really have some failures.

It is up to members of parliament to refine the process and create a filtration system that each department could go through. We could create a litmus test for situations dealing with budgetary things. Sometimes we are over budget and sometimes we are under budget. This triggers questions and accountability arguments from members of parliament.

We need to talk about the accountability of government and our ability as members of parliament to impact on the accountability of government. By having an estimates committee we could develop an expertise.

The counter argument is: What is wrong with the process? One committee of parliament, which is the government operations committee, deals with about half the government estimates. I sit on that committee and the operations committee is a hybrid. It is not even an independent committee. It has been coupled up with transport issues and the whole thing is getting lost in the process. My experience on the committee is that people come for two or three hours to talk about the estimates, spend billions of taxpayers dollars and then shuffle out the back door. We then get back onto a legislative agenda. That is kind of the norm of what we are doing.

With a little bit of direction, perhaps Treasury Board people and others could come to that committee. We could develop a significant expertise on how to analyze estimates, how to report on them and how to change them to have some impact on that process of government. Our constituents elected us to do that. They elected us to come here and ask about the accountability process.

I know a lot of members of parliament who came here in 1993 studied estimates. I know I did. I went through page after page. Members who have been here longer do not pay any attention to them at all because they feel they do not have any impact on the system. Some members do not have the expertise to understand them, but even if they have raised questions the money has already been spent.

I keep talking about the estimates committee, which is inappropriate in some ways because the estimates are historical documents. When we talk about estimates we are really talking about something that has already been processed. The likelihood of changing the estimates is not of much value but the plans and priorities certainly are. If we could link the plans and priorities process to the performance reporting process it could have an impact on future estimate processes and a significant impact on how governments spend or do not spend and how we could save the taxpayers money in some of these areas.

The issue is not new. There has been a lot of resistance to moving in this direction. Some common law countries already have all kinds of estimates committees. Some have an estimates committee just for transport. New Zealand has a number of estimates committees. These committees study and improve the estimates process on a department by department basis and have developed an expertise in those things.

The people of this country deserve a better accountability framework for government. We need to take this a lot more seriously than we have in the past.

If we had all party support on establishing a pilot project to start an estimates committee, we could deal with one or two departments to see how it would work. Perhaps we could develop a degree of expertise to impact on the system and to talk about the societal indicators that people are interested in impacting on the government system.

We have to change government to some extent. The whole idea of silos is very difficult. There are many bureaucrats and governments trying to talk about cross horizontal issues. The issues of disability affect many departments. It could affect transportation. It could affect health. It has all kinds of cross indicators. Sometimes the directions of one department are doing something in tandem with another department when they are working at cross purposes.

An estimates committee could define those problems and eliminate them. It could have the power of bringing departmental officials forward to ensure that we alleviate some of those problems.

I will leave the House with the concept that something as unique as an estimates committee would be useful. Some people would ask why we cannot use the public accounts committee. The public accounts committee is entirely a different animal because it is examining things that have already happened and things that have been reported by the auditor general. The estimates committee is a forward looking committee that would examine how it could change government financing and how governments spend.

On that note, it would be my suggestion that we try to look at some of the recommendations made by parties of the House in the past and to create a pilot project in the fall involving an estimates committee. We could see if we could work on this with a degree of co-operation from all parties. The object of the exercise would be to spend taxpayer money wisely.

[Telecommunications, April 6th, 2001]

Mr. Speaker, I thank the member for Hull—Aylmer for his question. Government services to every citizen in Canada, whether they live in Toronto or Iqaluit, has been the goal of the government. A recent study ranked Canada as number one of all industrialized countries in connecting its citizens online.

I am proud to announce that in addition to the $160 million we have already put into this initiative, we have now put another $120 million into our budget for the 2001-02 fiscal year.

Empowering Canadians and giving them access to government information will ensure that Canadians and their parliamentarians will be more effective in addressing the needs of—

[Budget Implementation Act, 1997, April 2nd, 2001]

Mr. Speaker, I listened to the member for St. Albert intently. Does he mean to suggest or tell the general public that somehow this board will not be audited? He is leaving in everybody's mind that somehow it will not be audited. I think what he is trying to say is that he wants the auditor general to audit the fund as opposed to an outside party.

People have been concerned about their investment funds for a long time and think that the Canadian pension plan has not been an appropriate vehicle to see their moneys grow. The government put this legislation in place to segregate this.

There may well be a good number of people who can see why maybe they do not want politicians involved in the decision making that affects their retirement pension because they have had such a bad track record. Is the member suggesting that the members of parliament should have some kind of judgmental authority over people's investment funds?

[Infrastructure, March 16th, 2001]

Mr. Speaker, I thank the member for her question. I guess she has not been paying attention to the fact that our infrastructure spending program encompasses $600 million for new roads.

This has been implemented through negotiation with our provincial partners. We look favourably toward the input of the people of Manitoba from her riding as well as those from other ridings across the country. The program has been very successfully received by municipalities and we look forward to implementing it.

[Financial Management, February 26th, 2001]

Mr. Speaker, the President of the Treasury Board recently announced improved internal evaluation procedures throughout government. This will strengthen the fiduciary capacity of our government.

We know that Canadians work hard for their money. That is why the government is committed to making sure that expenditures within government are undertaken efficiently and wisely. These reports will be made available to the public, which will allow the public to judge and show that the government is transparent in the way that it spends money.