Mr. Speaker, the motion before us today proposes that the Income Tax Act be amended to provide all emergency service volunteers with a tax credit in the amount of $500 per year.
I thank the member for Kings—Hants for highlighting the very valuable role played by emergency services volunteers in Canadian communities. As I am certain we are all aware, many Canadians provide emergency services such as firefighting and first aid on a volunteer basis, especially in small and rural communities. These volunteers give freely of their time and expertise to their communities, often at considerable risk to themselves. They are to be commended for their dedication and effort.
The government has long recognized that small communities are often unable to maintain full-time emergency personnel, and depend on the essential services provided by these devoted volunteers.
In order to encourage the commitment of these individuals, the Income Tax Act has, for many years, allowed an exemption on the nominal amounts received from a municipality or another public authority by volunteer firefighters in the course of their duties.
This provision recognizes these volunteers often receive small amounts to help defray the expenses they incur in carrying out their duties and that taxing these amounts would be inappropriate. To offer additional support the 1998 budget increased this annual exemption from $500 to $1,000 and extended it to other emergency service volunteers, including volunteer ambulance technicians, search and rescue volunteers and others who in their capacity as volunteers are called upon to assist in emergencies or disasters.
The motion we are discussing today proposes to go beyond this existing provision. I would note that historically tax assistance for volunteers has been restricted to amounts received by eligible volunteers from public authorities. This motion in contrast would extend a tax credit to all emergency service volunteers whether or not they received any amount in the course of their volunteer duties. The intent behind this proposal is admirable in that it seeks to provide tax recognition to those emergency service volunteers who do not receive any allowance or honorarium.
But I think that passing such a tax credit would raise important questions in the context of tax policy and administration. I will, if I may, develop these points.
At the outset I would note that by implementing this proposal we would in effect be providing emergency volunteers with a fixed tax credit without regard to expenses incurred or time spent. Under such a system the dedicated year round volunteer would be receiving the same tax assistance as an individual who is called upon only once or twice during the course of the year. This would be difficult to justify especially as a dedicated volunteer is likely to incur much larger expenses than a one time volunteer.
Moreover it would be very difficult to explain why such a generous provision was limited to emergency service volunteers only. Other volunteers such as hospital workers and coaches for sports teams who contribute to their communities in different ways would be very likely to ask why this credit was not extended to them given that it appears to reward volunteer activity in itself and is unrelated either to effort or expense. I am not sure that I would able to offer a convincing answer to this question.
While extending the credit to all volunteers would resolve this issue, it would also be extremely costly for the government. It would be important to keep in mind that volunteer service is performed at an individual's discretion and without expectation of personal financial benefit. To provide a general tax credit for volunteers would be to ignore this very crucial point.
Furthermore, even if this tax credit were limited strictly to emergency service volunteers, it would be very difficult to ensure that it was claimed only by actual volunteers. This is because tax assistance would no longer be limited to the amounts paid by the municipality for which the taxpayer does the volunteer work.
As a result, there would be fewer incentives for public authorities to ensure that the credit was being claimed only by actual volunteers. To prevent abuse a compliance mechanism would have to be developed possibly involving a separate form or annual certification. This would place a significant administrative burden on municipalities, volunteers and the Canada Customs and Revenue Agency, especially considering the large volume of claims that would likely be made.
The current treatment avoids this problem to a large extent because tax assistance is restricted to amounts actually paid up to $1,000. Clearly, municipalities have much better control over these amounts and who receives them.
In this context, the present $1,000 exemption for emergency service volunteers is the most balanced solution, because it provides tax assistance to these important volunteers in a straightforward and transparent manner.
In closing, I would like to thank again the member for Kings—Hants for bringing this issue to our attention. However I feel that the motion as it stands before us today would reduce equity in the tax system rather than enhance it and would be very complex for volunteers and municipalities to comply with. For these reasons I feel that the motion should not be supported by the House.
