Roy Cullen

[Tax On Tools, February 28th, 2001]

Madam Speaker, I thank the member for Acadie—Bathurst for his initiative in bringing the motion before the House of Commons.

I also congratulate him on his good news.

Mechanics' tools and tools required for work seem to be a very topical debate right now. The motion proposes that the Excise Tax Act be amended to eliminate the application of the goods and services tax and the harmonized sales tax for employees in trades who are required as a condition of their employment to provide on the job tools.

Currently GST-HST relief is provided via a rebate mechanism for the GST-HST paid on those employee expenses that are deductible in computing an employee's income from employment for income tax purposes.

It is recognized that presently there are a number of private members' bills, as I mentioned before, Bill C-222, Bill C-244 and Bill C-225, before the House with respect to the income tax treatment of the tools of mechanics and others.

As the GST and the HST rules should be consistent with those for income tax purposes, it is prudent to await the outcome of the debates and the outcome of the discussions on these private members' bills. I am sure the hon. member would agree.

Nevertheless, it should be stated that any tax policy with respect to the matter of employee tools should be fair. In addition, any changes should also be relatively simple to administer and enforce for the Canada Customs and Revenue Agency, and easy to comply with for taxpayers. In this regard, any changes with respect to the tax treatment of employee provided tools should take into account a number of factors.

First, any measure in this regard should be targeted to extraordinary expenses. In other words, the cost of the tools in question should be beyond those that most employees must incur in the normal course of employment. The motion before the House today would provide GST and HST relief to all employees irrespective of the size of their expenditures instead of targeting relief to those who incur extraordinary expenses relative to their income.

For employees with tool expenses comparable to those incurred by other employees this would be unwarranted as tax relief for normal employment expenses is provided through the basic personal exemption amount. That is the case with apprentices. Perhaps a special case needs to be considered for those with low incomes and high tool costs.

Second, effective control mechanisms would have to be put in place. Under existing rules for income tax purposes the employer must certify certain expenses as eligible for deduction from employment income. This is important as many items provide a personal benefit even when they are required for work. One would need to ensure that any tax relief is provided only for items required as a condition of employment and not for those purchased for personal use.

This would be very difficult to do because many items could be purchased mostly for personal reasons even if they are used for work. For instance, the computers home based employees need to purchase are available outside working hours for personal use. In these circumstances providing full tax recognition and a GST-HST employee rebate would be unwarranted.

Finally, any new measures would have to both take into account the existing capital cost allowance provisions and appropriately deal with change of use and transfers to other arms length persons.

The provisions needed to address these issues would inevitably be very complex since they would need to account for the large variety of items for which tax relief may be claimed and the different work situations in which such items are used.

To understand this, let us consider the extensive provisions needed to ensure the equitable recognition of automotive expenses. Provisions governing the deductibility of employee equipment expenditures and corresponding GST-HST employee rebates would apply to hundreds of disparate items and numerous occupations.

As members can see, this is a complex issue with many aspects that need to be examined carefully. In particular, with respect to the GST-HST employee rebate, I hope the hon. members agree that it is essential to ensure that the GST-HST rules be consistent with those for income tax purposes.

As a result, I think members of the House would agree, given the number of other private members' bills dealing with the tools of mechanics and others, that it is prudent to wait for the outcome of the aforementioned private members' bills, for the deliberations of the House and for any government response that might deal with the issue of income tax deductions for employee tools.

[Income Tax Act, February 26th, 2001]

Mr. Speaker, I congratulate the member for Lakeland for his tenacity on this bill. Of course another bill, which is almost exactly the same, has been deemed votable and will be coming to the committee.

This private member's bill proposes changes to the Income Tax Act to help mechanics defray the cost of providing their own tools when it is a condition of employment. The changes would allow mechanics to deduct the cost of buying, renting, insuring or maintaining their tools.

An income tax deduction would be available for tools costing less than $200. This amount may be adjusted according to inflation. For larger amounts, the tool costs would be subject to capital cost allowances and these allowances would be set by regulation.

Canadian employers normally provide workers with the tools and other resources they need to do their jobs. Even so, all Canadian workers bear some job related costs. Whether these are the costs of getting to and from work, the costs of uniforms or other work clothes, the costs of eating away from home, or the costs of keeping up with trade journals. These costs are something that all Canadians incur when they take a job.

These normal work related expenditures are recognized in the tax system through the basic personal amount. The government increased this amount substantially since the elimination of the deficit.

I am pleased to remind members that the 1998 and 1999 budgets increased the basic personal amount by $675. Budget 2000 went even further with measures to ensure that the tax free amount would be more than $1,500 higher in 2004 than in 1997. More tax free income helps low income workers offset normal employment expenses.

The bill before the House aims to recognize that employed mechanics face exceptional work related costs. The Government of Canada understands that the costs can sometimes be a significant burden, particularly at the start of a career.

Last summer, for example, a Nova Scotia newspaper reported the case of a young apprentice mechanic. He was earning $18,000 a year working in a garage service station. He had invested some $10,000 in his tools. On top of that he said he had to pay insurance costs, another $100 per $1,000 of tools. For him that was another $1,000 per year. I think all members would appreciate that is a large amount for one making only $18,000 a year.

I expect this young man also had other bills to pay like groceries, heat, rent, et cetera. Clearly the costs that this young man incurred were worth it to him. The tools he purchased will serve him for years to come.

Surely these costs were a big financial burden as well. Upfront costs should not be a barrier to an individual's ability to enter an occupation which at least in the longer term could provide a living income.

In short, the government understands the difficult issue that this bill is trying to address. We can support the principle that underlies. it, but I must nevertheless point out that this specific bill in many ways does not adequately address the issue.

Allow me to explain. The bill would allow mechanics to deduct even small expenditures related to their tools. As I said earlier, most Canadian workers have specific job related costs that they need to cover out of pocket. What about carpenters, for example, or computer operators?

I remind members that the tax system provides some recognition with to the basic personal amount. Instead of just covering the exceptional tool expenses that a mechanic might incur, the bill would give mechanics preferential tax treatment on normal work related expenditures. It would simply be unfair to other tax paying Canadian workers. If tax relief is provided for specific groups, it should be limited to extraordinarily high expenditures.

The bill also opens the door to other inequities. For example, it does not adequately ensure that tax relief is provided only for items genuinely required as a condition of employment. Employers should have to certify that the expenditures are a condition of employment. Further, the principle of fairness would dictate that the tax benefit should be adjusted when tools purchased for work are subsequently used for other purposes or when tools are sold, for example. There is no provision in the private member's bill to ensure that this takes place.

Finally, I would briefly note that this bill creates unnecessary administrative complexities. Instead of using the existing regime for capital expenditures, the current capital cost allowance regime, this bill would set up a parallel system for employed mechanics. This is not warranted since the existing capital cost allowances would achieve essentially the same results as the private member's bill.

The very substantial employment expenses incurred by some employed mechanics are certainly a concern. There is merit in the idea behind the private member's bill. The lack of tax recognition for exceptionally high work related expenses should not be a barrier that prevents people from participating in the economy.

I trust as well members agree that the bill would create inequities and unfairness in the tax system. That is why much more work and thinking is needed to develop a workable solution to this important matter.

As the government examines the issue it intends to work with representatives of the automotive industry, particularly with respect to the challenges faced by apprentices, to find a way to address the shortcomings in the private member's bill.

[Speech From The Throne, February 9th, 2001]

Madam Speaker, I wonder if the people in St. Albert actually made a mistake and sent the wrong person to Ottawa. Perhaps they were as confused as the member for St. Albert is today.

The members opposite talked about the heating oil rebate program. We could have had people filling in forms. The members opposite love filling in forms. The people would have then had their cheques by next winter. That would have been a reasonable option according to the member.

The Alliance Party put a motion in the House just before the election calling for a reduction in the excise tax on gasoline. A comparable amount to the $1.3 billion would have been maybe a cent a litre. Of course that money would have gone to the oil companies. I assume then that when the member says there are people in need, he actually meant the oil companies because a litre of gas goes up and down a cent in one afternoon. We knew that a cent a litre would go straight to the oil companies and not to Canadians. That was the proposition the Alliance Party brought to the floor.

One of the members opposite also talked about the fact that half of the people who are getting the cheques do not need them. Eleven million Canadians are getting them, so a half of 11 million would be 5.5 million Canadians, low income Canadians who do not need heat or who do not have to pay for heat. In some other provinces they might have very generous landlords who do not pass on their costs

Could the member for St. Albert confirm to the House if he really feels the rebate should have gone to the oil companies in line with the Alliance's proposition before the election was called?

[Speech From The Throne, February 9th, 2001]

Madam Speaker, I rise on a point of order. I was away from the Chamber momentarily but I thought that when I left we were debating the Speech from the Throne. The debate I am hearing is on the auditor general's report. Is this relevant to the debate?

[Questions On The Order Paper, February 9th, 2001]

Mr. Speaker, I ask that the remaining questions be allowed to stand.

[Speech From The Throne, February 6th, 2001]

Mr. Speaker, I also congratulate the member for Hillsborough. I know he comes from a very distinguished career on Prince Edward Island, including being on the board of the CDIC, and many other areas.

I was curious about his comments with regard to the linkage between social and economic policy. He also cited a few examples. Could develop that theme a little further, particularly in the areas of early childhood development, health care, drug abuse and other aspects.

[Speech From The Throne, February 6th, 2001]

Mr. Speaker, I listened to the remarks of the member for Medicine Hat with interest. I have two questions for him.

First, he said that the Alliance Party has a different view from that of the government about the softwood lumber dispute. I am wondering what its position might be.

Five years ago the forest industry pleaded and begged the government for the quota system to manage trade so that they could get five years of trade peace. In hindsight perhaps it has not worked, but it was on the basis of the industry's recommendation that the government proceeded to manage trade. Now there is talk about free trade in lumber. What is the Alliance's position on softwood lumber?

Second, the member referred to the social dinner with the Tamil community in Toronto, a cultural dinner. I think it was $25 a head, hardly a big fundraiser. I was there with two ministers. He talks about the Tamil community and sponsoring tourist activities in Sri Lanka. What about other communities that are illegally sending money back to their home countries to help causes? Why is he singling out the Tamil community? Has he some information that the government does not have?

[Speech From The Throne, February 2nd, 2001]

Mr. Speaker, I would like to take this opportunity to thank the voters in Etobicoke North for supporting me again and giving me the opportunity to represent them in the House of Commons.

I am sure the member from Calgary Southeast has heard of the concept of the self-fulfilling prophecy. In spite of that, he and his colleagues stand in the House and pick out every tiny shred of negative comment that might have come from the United States or from selected economists. It is almost like they are wishing that the economy would go into a significant downturn. I think that is scandalous.

I would like to quote from an independent, reliable source, the International Monetary Fund. The report is dated January 26, 2001. Today is February 2, 2001. This report says many things, and paragraphs and sentences of it have been quoted. One thing it does say is:

The strong policy framework in place (in Canada) has positioned the real and financial economy to cope with any new major economic shock, including a slowdown in U.S. growth. The Canadian authorities are to be highly commended for their policy accomplishments.

The government had a mini budget in October and introduced the largest single tax cut in Canadian history. In fact, in the year 2001, at around $17 billion in tax savings, it is the largest single monetary tax cut in Canadian history and is coming right at a time when there is somewhat of a slowdown. However, most reasonable, educated economists are saying that even a slowdown in the United States will be a temporary slowdown and that the economy will start to pick up at the end of the year.

Notwithstanding that, the government has consistently built prudence into its economic forecasts and estimates. There is prudence in its budget planning. The finance minister said that this situation is being monitored and that he will take action if required.

I wish the hon. members would look at something more positive. Instead of being the doomsayers and feeding a self-fulfilling prophecy, why do they not talk about the realities in Canada instead of the myths?

[Bank Of Canada, February 1st, 2001]

Mr. Speaker, I rise today as Parliamentary Secretary to the Minister of Finance. Yesterday marked Gordon Thiessen's last day at the Bank of Canada after more than 30 years of service, including the last 7 as governor.

It was said, appropriately so, that Mr. Thiessen fulfilled his mandate with distinction and achieved extraordinary success. During the seven years he was in charge of Canada's monetary policy, our economy experienced one of its greatest periods of growth.

Mr. Thiessen's determination to make Canada a low inflation country was known worldwide and it largely contributed to the solid growth that we have been enjoying recently.

Mr. Thiessen is replaced today by another very distinguished Canadian, David Dodge, who has committed to continue to build upon the success of his predecessor.

I ask all members and all Canadians to join me in thanking Governor Thiessen for his years of service and in congratulating David Dodge on his new duties.

[Economic Policy, October 19th, 2000]

Mr. Speaker, I read an article this morning in the Globe and Mail , a newspaper that often is not too kind to the Liberal Party. The article was by Hugh Winsor. He talked about the Alliance tax plan. Here is what he had to say about the Alliance tax plan:

The Alliance plan is totally predicated on a presumption of tax greed: that everybody wants lower taxes, even if it means fewer services from the government. It is a plan clearly skewed toward higher incomes.

That really captures the essence of the Alliance's tax plan.

In the House this morning the member for Elk Island and others have talked about low income Canadians. I would like to acquaint Canadians and the House with the impact yesterday's economic statement will have on some Canadian taxpayers.

For example, a one earner family with two children with an income of $40,000 a year paid about $3,325 in federal tax last year. The Alliance has not said when its tax measures would come into play but as of January 1, 2001, and not some unknown timeframe out there in never-never land, the taxes for this family of four will fall by $1,100. That is a 32% saving in federal income taxes. That is not all. I have just begun. By the year 2004 their taxes will fall by 59%.

How about a single parent with one child earning $33,000. As of January 1, and not 2004 or 2005 or some other time in the distant future, but as of January 1 a single parent earning $33,000 will pay no net tax at all. Zero, zip; in English that is none.

Could the member tell us under his tax plan what programs his party will cut? It will have to cut $25 billion in programs.