EVIDENCE

Standing Committee on Finance NUMBER 066 1st SESSION 44th PARLIAMENT Wednesday, November 2, 2022 Le mercredi 2 novembre 2022 Standing Committee on Finance CANADA [Recorded by Electronic Apparatus] EVIDENCE November 2, 2022 Committee NUMBER 066 NUMBER 066 NUMÉRO 066 66 02 11 2022 2022/11/02 16:30:00 House Of Commons Comité permanent des finances Standing Committee on Finance FINA Chair Mr. Peter Fonseca 1 44

(1630) [ English ]

The Chair (Mr. Peter Fonseca (Mississauga East—Cooksville, Lib.)) :

I will call this meeting to order. Welcome to meeting number 66 of the House of Commons Standing Committee on Finance. Pursuant to the order of reference adopted on Wednesday, June 8, 2022,the committee is meeting to discuss Bill C-241 ,

an act to amend the Income Tax Act related to the deduction of travel expenses for tradespersons. Today's meeting is taking place in a hybrid format pursuant to the House Order of June 23, 2022. Members are attending in person in the room, and remotely using the Zoom application. I'd like to make a few comments for the benefit of witnesses and members. Please wait until I recognize you by name before speaking. For those participating by video conference, click on the microphone icon to activate your mike. Please mute yourself when you are not speaking. As for

interpretation, for those on Zoom, you have the choice at the bottom of your screen of floor, English or French. For those in the room, you can use the earpiece and select the desired channel. This is a reminder that all comments should be addressed through the chair. For members in the room, if you wish to speak, please raise your hand. For members on Zoom, please use the “raise hand” function. The clerk and I will manage the speaking order as best we can. We appreciate your patience and understanding in this regard. Members, just before we move on to our witnesses, I have a quick note. We will be setting aside 10 minutes at the end of the meeting to discuss our

schedule when we come back from our constituency week. Now we will introduce our witness. We welcome the MP for Essex, Mr. Chris Lewis. He is the sponsor and author of this piece of legislation. The floor is yours, MP Lewis, for your opening remarks.

Mr. Chris Lewis (Essex, CPC) :

Thank you so much, Mr. Chair. Thank you to each committee member. It's certainly an exciting day. We've been waiting for this for an awfully long time. Thank you for being all ears at least for the first five minutes. Let me tell you what a strange feeling it is to be on this side of the desk and not on that side of the desk. Again, I'm extremely excited for the study of Bill C-241 . I love to call it the fair travelling tradesperson's bill. What's neat and unique about this is that I don't know anyone around this table who doesn't have trades shortages, labour shortages, in their ridings.

We've been hearing it for a number of years now. Quite frankly, it's only getting worse. It brings me great pride to say that I have met with numerous trades folks, from the carpenters to the sheet metal workers, from masons, crane operators and electricians to water, plumbing and gas fitters. You name it, and I've probably met with them. I have yet to find one union and/or non-unionized group that doesn't completely endorse this private member's bill.

To really simplify it, if I'm a businessman today and I leave Windsor and fly to Calgary, I can write off my airplane flight, I can write off my hotel, and I can write off my meals. There's no cap on how many times I can fly to Calgary to get business done every year. Unfortunately, for our union and non-union skilled trades folks, the ones who are expected to travel across Canada to build our roads, to build our bridges, to ensure their electrical grid is solid and to work in our mines for our critical minerals, they can't do that today. This bill is the fairest way that we can get them to get moving.

If we look across Canada, yes, there's a major labour shortage, but we also have folks such as the incredible folks who are down at the Gordie Howe international bridge, which will be the largest and the busiest international bridge in North America when it's completed. Of those folks, 54% are not local to the area. They've come in from out of town. In 2024 or 2025, depending on when the bridge is completed, they're going to need a home. I'm quite certain that there are many projects from coast to coast to coast for which these incredibly skilled trades workers could fill those voids and could fill those gaps.

It's time to give the skilled trades workers, the skilled trades force, all of the tools—pardon the pun—they need to travel across the country and build our country and our infrastructure. I guess it's as simple as this. I don't know of anyone around this table—committee members, we as members of Parliament—who can't write off their own expenses. If it's good enough for the folks who are around this table, then certainly it's good enough for our trades folks. With that, Mr. Chair, I only used three and a half minutes because I truthfully want to dive into the questions. It's a very simple bill.

I'm looking forward to entertaining questions. Thank you.

(1635) The Chair :

Thank you, MP Lewis, and I'm sure the members have many questions for you. You know how this works, but I'll just run through it. In the first round, each party will have up to six minutes to ask questions. We are starting with the Conservatives, and I have MP Morantz up for six minutes.

Mr. Marty Morantz (Charleswood—St. James—Assiniboia—Headingley, CPC) :

Thank you very much, Mr. Chair. Chris, thank you very much for bringing forward this important bill. You've identified a very serious problem, which is that, if you own your own business, you can write off your expenses, but if you're a salaried construction worker, you don't have that same right. It struck me, when I was thinking about your bill, that right now in this place—in Parliament—the Conservatives are really the only party that is standing up for workers. We're standing up for workers against the paycheque taxes this government wants to levy upon them.

We're standing up for workers against the tripling of the carbon tax. We're standing up for workers through Ms. Gladu 's bill protecting pensions and severance, and we're standing up for workers by fighting the inflation that was caused and exacerbated by the overspending of this government. Now we have your bill, which is truly standing up for workers and saying that enough is enough and that we need to level the playing field. I want to applaud you for bringing forward this bill. I think it's a very important one.

You mentioned in your comments that this bill will help mitigate the effects of the labour shortage. I'm wondering if you could expand on that prospect as well.

Mr. Chris Lewis :

Through you, Mr. Chair, to the committee member, thank you very much for the question. In Ontario alone by 2025, we will need 350,000 more skilled trades folks. That's just Ontario. You know, when I spoke with IBEW, a gentleman from Manitoba gave me some really good insight. He said the majority of all major projects in Manitoba are done by folks who have travelled to Manitoba. This is going to do a couple of things. It's going to incentivize people—these same folks who are paying exorbitant amounts of money for fuel, hotel rooms, flights and food—to actually want to travel for work.

What I also believe it will do is catch the attention of the young men and women getting into the field and give them a reason to be excited to get into this field, so that when they're coming out of high school, they go find a skilled trade. If we make it affordable for them, we won't have all of the shortages going forward. There are multiple factors, but there are a lot of opportunities there.

Mr. Marty Morantz :

Thank you. Again, I applaud you for bringing this forward. In terms of the affordability, I'm trying to put myself in the shoes of that person. They live 120 kilometres or more from where their job is going to be. What impact do you think a law like this would have in making that person—while they might not have taken that job before, now all of a sudden that this law is in place—think that while it's bad enough paying two dollars a litre, at least if they can write it off, they're saving part of that money? It's bad enough having to pay for the hotel and travelling so far. Do you think it's going to incentivize more people to seriously consider taking that job,

whereas before this law they wouldn't have done it?

(1640) Mr. Chris Lewis :

I absolutely do. Thank you for the question. I truly believe it will. It's ironic that just about two hours ago I got another email from a gentleman out in B.C. He said he has never ever missed a spousal payment in his life—apparently he's been paying spousal payments for quite some time—and he doesn't want to miss one for the first time but he's a travelling skilled tradesperson and it's costing him an additional $1,200 per week out of pocket to travel right now. He said he really hopes my private member's bill goes through.

That was just two hours ago, and we hear so much more testimony about these types of discussions and stories. It's going to make life just so much more affordable. People want to go to work. People are excited to go to work. They just can't afford it.

Mr. Marty Morantz :

I am very excited about the prospect of this bill coming forward. I think this is something—is it not?—that companies can now say to their workers is an added incentive to get people to come work for them. They can say they have lots of contracts but that a lot of them are outside of the 120-kilometre radius of where their office is. Now, if they come to work for that company, they will be able to take advantage of this new ability to write off their expenses. It's just another way of encouraging people entering the labour force.

Mr. Chris Lewis :

It certainly is, and I would suggest that if we look at our union halls and our skilled trades halls, a lot of times per diems are actually not written into these contracts they're bidding on. They need a reason to be excited and to get out and get working.

Mr. Marty Morantz :

Thank you, Mr. Chair. Those are my questions.

The Chair :

Thank you, MP Morantz. Now we'll move to the Liberals with MP Dzerowicz for six minutes. Go ahead, please.

Ms. Julie Dzerowicz (Davenport, Lib.) :

Thank you so much, Mr. Chair. I want to say a huge thanks to MP Chris Lewis for bringing this private member's bill before us. It is with great happiness that I hear opposition members talk about standing up for workers. This is the party that previously brought in Bill C‑377 and Bill C‑525 , which we had to repeal and which were definitely anti-labour legislation. I would also hope there will maybe be some influence from our federal colleagues on their provincial Ontario colleagues in terms of standing up for education workers whose rights are now being taken away pre-emptively using the notwithstanding clause.

In any case, I'm going to focus on this piece of legislation before us. Mr. Lewis, I've had the true pleasure of being on this committee for a few years, and we've had a number of trades workers come before us and say that it is super important for them to be able to have a certain amount of money to cover their costs in terms of going through the different jurisdictions. They've asked for this for a number of years.

Just over the last year, in our Budget Implementation Act , we implemented the labour mobility deduction, which provides $4,000 per year in tax recognition for eligible tax and temporary relocation expenses, because that has been requested by tradespeople. I'll tell you, we had Sean Strickland from Canada's Building Trades Unions. He applauds the Government of Canada for its support of skilled trades workers in budget 2022, which implemented this labour mobility deduction.

He said the labour mobility tax deduction for tradespeople is something for which we have advocated for over two decades, and it will support working Canadians and families to travel to where the work is, helping to address labour availability across the country. We also heard from the president of the Canada Labour Congress, Bea Bruske, who stated that Bill C‑19 's labour mobility deduction was a welcomed step that would benefit workers. You mentioned in your opening remarks that there is a labour shortage, which all of us are painfully aware of.

I want to ask you a specific question and I want to give you a little bit of a scenario, because right now the way the bill is written, as you've proposed, it doesn't require those claiming it to be working in Canada. For example, even with a 120-kilometre distance requirement, you could have an individual who lives in Oakville take up daily work across the border in Buffalo. In your very own riding of Essex, a skilled tradesperson living in Kingsville could travel to a work site in the west end of Ann Arbor, Michigan, and the Canadian taxpayer would be footing the bill if your legislation passed.

Under your bill, it would be a better deal for someone to work in Ann Arbor or Flint, Michigan, than in Windsor. I'm concerned, and I know many others are concerned that this may further incentivize workers living close to the border to take work in the U.S. at a time when we're facing serious labour shortages here in Canada. Can you maybe address this? I know that you've also talked about a worker deficit in the House. Have you received any assurance that this won't further exacerbate the issue by incentivizing those skilled workers who live close to the border to work outside the country?

(1645) Mr. Chris Lewis :

Thank you very much for the question. It's a very fair question. I think it's a great question. I did work in Michigan for quite a number of years. Under this bill, this is a tax deduction, so if they're working in Ann Arbor, for example, then they're going to be paying their taxes to the United States of America, which means this bill won't work. There is no jurisdiction once they leave Canada, so there is really no opportunity for them to write it off, to deduct it from their taxes, because they're going to have to pay all their taxes in the U.S. and then it's going to come back and Canada is going to take its chunk. It's a very fair question, but I don't see how it's going to apply.

Ms. Julie Dzerowicz :

The main point there is that it might provide some incentives for people to work in the U.S. versus working here, and it doesn't help to address that labour shortage, but I appreciate your response. My next question is this: The bill as it currently stands doesn't set a minimum period of relocation, nor does it lay out clear eligible expenses. I'll give you another scenario. This sounds slightly ridiculous but it could happen. If someone were to take a 50-minute job 120 kilometres away from their ordinary place of residence, they'd be able to claim the cost of the gas it took to drive them there.

They could claim meals. They could claim a hotel if they chose to stay the night, as well as whatever other expenses they believed were required for the job. Now I personally don't think any tradesperson would do that on average, but it could happen given the way your current legislation is written. Is there anything in the legislation that might prevent such a scenario?

Mr. Chris Lewis :

I just want to be very clear so I can give you the most honest answer. What were the last two lines, please, that you were asking about? What could somebody potentially do...?

Ms. Julie Dzerowicz :

The way your legislation is written right now, if someone took a 50-minute job 121 kilometres away from their residence, they could claim not only the cost of the gas it took them to get there but also a meal, a hotel and any other expenses they believe are required for the job. Basically what I'm asking is whether there is anything in this legislation that would prevent this scenario from happening.

Mr. Chris Lewis :

They'd be crazy to take a 50-minute job 120 kilometres away. It's going to cost them that in fuel to get to their job. I don't want to speculate as to what a skilled trade worker may or may not do, but I'd be very astounded if that were indeed the case. At the end of the day, this piece of legislation would be designed for folks who are travelling and staying out of town.

Ms. Julie Dzerowicz :

I think the point is that—

The Chair :

Thank you, Ms. Dzerowicz.

Ms. Julie Dzerowicz :

—some guardrails might need to be put in place to ensure those things don't happen.

The Chair :

Thank you. That's your time.

Ms. Julie Dzerowicz :

Thank you so much, Mr. Chair.

The Chair :

Now we're moving to the Bloc, and MP Ste-Marie for six minutes. Go ahead, please.

[ Translation ]

Mr. Gabriel Ste-Marie (Joliette, BQ) :

Thank you, Mr. Chair. Mr. Lewis, thank you for being here. Thank you for introducing this important bill. I remember the two hours of debate about it in the House. I sincerely appreciate the commitment of members of Parliament who, like you, bring forward legislation to improve the situation of workers. The bill is now before the committee. If it is passed and implemented, it could change people's lives. So my hat is off to you. My first question is a general one. Your bill would allow certain tax deductions.

What would your bill change, compared to the claims that construction workers can make under the current laws? There is also the budget implementation bill, which puts some measures in place. How does your bill differ from these measures? Also, how does what you are proposing compare to the measures in place in the United States? If you have that information, it would allow us to make a further comparison. This is a very broad question. You can answer the parts that you find most interesting. Take as much time as you need.

(1650) [ English ]

Mr. Chris Lewis :

Thank you for the question, sir. I'll address what I think is your first question, which is how the existing bill, which was introduced last fall by the government, with the $4,000 tax credit.... That's a tax credit; this would be a tax deduction. I also spoke to Mr. Strickland, from the CBTU, Canada's Building Trades Unions, and, yes, indeed, that was a great first step. The problem is that where we'll max that out is at about $2,230. That will not get people two months. What I want to make sure happens is that people go to work. They can go to work for a year.

They're not capped as to how many times they want to go to work. The more they're out working, the better off our infrastructure and our jobs will move along and, quite frankly, the more money they're going to be paying back to the government in taxes.

I will tell you, sir, that in March 2021, CBTU, Canada's Building Trades Unions, commissioned a financial projection that estimates that a Canada-wide implementation of a skilled trades workforce mobility tax deduction would save the federal government an estimated $347 million annually through increased tax revenues and reduced reliance on EI and other government programs. I hope that begins to help.

[ Translation ]

Mr. Gabriel Ste-Marie :

What you say is very interesting. Are you able to make a comparison with what exists in the U.S.? Have similar measures been put in place in the United States, either at the federal level or in some of the U.S. states? Have you studied this? If so, do these kinds of measures have the same kind of positive impact as those cited in the organization document you just mentioned? In short, have any comparisons been made, to see what the positive impact of your bill might be?

[ English ]

Mr. Chris Lewis :

Thank you for the question. I have not personally looked into it. I'm very focused on our Canadian skilled trade workers, on our Canadian skilled workforce and on getting projects done in Canada, so I have not looked into that. We could always look into it and come back to you, sir, but I have not looked into that.

[ Translation ]

Mr. Gabriel Ste-Marie :

All right. Thank you very much. Your bill focuses on employees in the construction sector. Could it be expanded to include workers in sectors other than construction?

[ English ]

Mr. Chris Lewis :

Thank you. Absolutely. It's been an almost two and a half year journey of meeting with so many folks. I've had so many other people say, “What about me? Can you include me? By the way, what about tools?”, and they add and add and add. What I really believe in my heart to be true is that they need instant relief to get them moving, to get them working. I didn't want to throw so many things into the bill that nothing would pass. I was trying to keep this as simple as possible, so we could have consensus around the table and get them moving. Certainly, this could be added onto in the future. Thank you.

[ Translation ]

Mr. Gabriel Ste-Marie :

Thank you. That's very interesting, again. Of course, I don't believe that a person would travel 121 kilometres to do a job that takes 15 minutes. It's implausible, unless the hourly rate is very high. Still, it's a question that was worth asking, in my opinion, because we have to make sure that such a measure will not be abused. As I understand it, a person who travels at least 120 kilometres for work can claim a deduction for travel expenses. If the person travels twice that distance, say 240 kilometres, there will be more travel expenses for which they can claim a deduction.

In your view, would it have been appropriate to provide for greater deductions, generally, based on distance, or is it your view that 120 kilometres will be sufficient to qualify? The greater the distance to work, the greater the travel costs, so it's all there. Should this have been modulated for a distance greater than 120 kilometres?

(1655) [ English ]

The Chair :

You have time for a short answer.

Mr. Chris Lewis :

I'll go very quickly. To answer your question, sir, I use the 120. I live in a very rural area. Windsor-Essex is very rural. We have access to Highway 401. We can get up and down the 401 in about an hour and a half and that's 120 kilometres. As an example, Mr. Green , who came up and spoke to me afterwards, mentioned that he lives in Hamilton and going 80 kilometres takes him an hour and a half. I don't know that we need to make it any further, because if you're an hour and a half from home, that means you'd be travelling three hours a day, so you're probably going to stay out of town. Thank you.

[ Translation ]

The Chair :

Thank you, Mr. Ste-Marie. [ English ] Now we are going to the NDP. MP Masse is with us via video conference. MP Masse, go ahead.

Mr. Brian Masse (Windsor West, NDP) :

Thank you, Mr. Chair. Thank you, Mr. Lewis, for being here and for your bill. We're in the same area. We're on a peninsula, but we also have 40,000 vehicles per day that cross over into Michigan, Ohio and all the way to Florida and Mexico. I want to allow you to tell us a little about the cyclical issues we face with skilled trades workers.

Often with the auto industry and others we have really good workers who are really good, trained professionals, but at times when the retooling of those plants takes place or we have a loss of industry, we want to make sure those individuals can keep their skills and talents in Canada. This bill is a really important piece of that. I'd like you to focus on that element, because during those times we wouldn't lose workers to other countries. We would keep them in Canada if they could actually stay here, but their families and their incentives are challenged with the potential for work overseas.

Mr. Chris Lewis :

Mr. Masse, thank you very much for those remarks. I appreciate them. You know as well as I do that in our area—you're right that we're kind of on a peninsula—we have an amazing workforce, as we do across Canada, but we also see, as you mentioned, that it's cyclical. That's what's happened in the past to the auto industry, which is not just about building a car; it's about all the components that go into it. It's about building the infrastructure, such as the hydro that feeds these plants, for which we need the folks there. When that industry dries up, these folks need a place to go. They need a home.

When we have people screaming in St. John's, Newfoundland, or in B.C., saying they need skilled trades, let's give these people an opportunity to get across Canada. To your point with regard to families, it's not fun having to travel for work. I understand that. I respect that. I personally did it for a lot of years, but it's certainly not fun not getting a paycheque when you have so much to offer Canada. I think we need to celebrate our skilled trades on many fronts, and we have to give them the flexibility to get across this amazing country to build all the infrastructure we will need going forward.

Mr. Brian Masse :

That's actually preferable to importing other trades or having certification that is uncertain. We have these workers and there's a small return for them through your bill. We have all of that capital invested in training them and going through requirements to make sure they have the proper skills. They're actually going to be qualified, versus what foreign labour, which we might actually have to import, would be. I really appreciate this bill, because it actually is a push back against taking a shortcut instead of having this be an incentive.

The fact of the matter is that the incentive goes back to the families. When you actually have a partner who's travelling or working abroad, they have extra costs. These are single-parent homes for that moment. This is what we've grown up with and been a part of in our area. I want you to highlight that, because I think that's really important. Your bill isn't about the individual trying to claim something; it's really about the family.

Mr. Chris Lewis :

You're absolutely right, Mr. Masse. I have so many testimonials here. I won't dive into them, but one that comes to mind is from a gentleman from Windsor specifically. He has worked with IBEW. He wrote me an email. He had to drive up to the Timmins area from Windsor, which is not a short drive. He basically said that, if the wear and tear on his vehicle isn't enough, what about the wear and tear on his family when he's away and the stress of knowing that he has all of these additional costs while he's away? You're right, Mr. Masse.

It always comes back down to compassion, understanding what the problems are and keeping our labour industry mobile. It's also about giving major kudos to those folks who are willing to do the travelling and make sacrifices with respect to their families, and about giving them the support they need. I do appreciate your bringing that up, sir.

(1700) Mr. Brian Masse :

I know the kilometre element has been raised. Are you open to amendments on that? For every piece of legislation we deal with, we always have scammers, fraudsters and so forth. I can tell you this much. The skilled tradespeople I know in my community, who work in the plants and other areas—especially during times when we've had slowdowns—are not really looking to defraud the government. I'm less worried about that. You're open to the consideration of amendments. Again, in my experience, these are not the people who are defrauding Canada.

These scenarios that are being presented are very weak compared with the value that we would get for the families that would actually benefit from this type of change.

Mr. Chris Lewis :

Thank you, sir. Yes, I'm absolutely open to amendments. What I would really hate to see happen here is this bill getting stalled or crumpled up and thrown in the garbage over a matter of 20 kilometres, for example. Absolutely, I want to hear from the committee. I would love to hear other ideas. If it's on a few kilometres here and there, which, at the end of the day, is not a lot of money, then it won't be stalled by me. I really want to see this go forward for our skilled trades, our country and our infrastructure.

Mr. Brian Masse :

I appreciate that and the interventions. Thank you, Mr. Chair, for the time you've given me today. Thanks, Mr. Lewis, for presenting the bill. I know it means a lot for a lot of people in my region and across this country. Those people need to be working in Canada and not somewhere else.

The Chair :

Thank you, MP Masse. Members, with this we're now moving to our second round. In this round, we're starting with the Conservatives. I have MP Chambers for five minutes. Go ahead, please.

Mr. Adam Chambers (Simcoe North, CPC) :

Thank you very much, Mr. Chair. Mr. Lewis, congratulations on getting your bill to this stage. It's no small feat. We talk about supporting workers. We have a lot of federal problems on our hands. I wonder why we keep importing provincial politics every time I turn around in this place. We also have to remember that this is being lectured on by a government that introduced back-to-work legislation for Canada Post workers. They must have a short memory. I get that it's politics, so that's okay.

With respect to people potentially defrauding the government, we do have an organization called the CRA, which is supposed to enforce the tax code. They have lots of auditors, and in fact they're hiring thousands of people every year. I mean, presumably there would be a check in the system if someone was found to have expenses that seemed not to be proportionate to the income declared or there were some challenges. They would be free to be audited as would anybody else. Is that right?

Mr. Chris Lewis :

Thank you for the question. I believe you're absolutely right. I would be surprised if they weren't audited. I don't know of anybody, in any sector, whom CRA doesn't audit. I'm certainly quite convinced that they would, but perhaps I'll just take it one step further. For many of these jobs.... For example, sir, when I met with IBEW in Windsor, they told me that it would not be uncommon on a Friday to get a phone call from a business in Hamilton or Toronto or somewhere else asking for 100 people. That's 100 people in one fell swoop. Why do I bring that up? We're not talking about one-offs here.

We're talking about 10, 20, 30, 50 or 100 people at a time. I'm pretty sure that if somebody is getting away with something through CRA, the other 99 are not going to be very happy about it. I have a hard time believing there's going to be fraud to any extent, and I know that the goodness this will do, sir, the benefit of this, far exceeds any potential fraud.

Mr. Adam Chambers :

Let's just talk about the existing tax preferences in the system. If a company pays for travel expenses, that company gets to deduct the travel expenses from the company's profit, against the company's net income. Is that right? That's the current system. What you're seeking to do, or at least what the bill seeks do, is to provide exactly the same tax preference to a different taxpayer, the same benefit that a large corporation or a large company that has resources also gets. Is that about right?

(1705) Mr. Chris Lewis :

You're absolutely bang on, exactly. That's why I like to call it the fairness bill. At the end of the day, the company is going to get the writeoff anyway, but there are many companies that actually don't pay for these deductions. They don't pay for these mobility deductions, these travel expenses, so they are paid for out of pocket. That's why we have so many workers sitting at home saying, “It's just too expensive to jump on a jet and go to work. I would just rather stay at home and collect a paycheque from the government.” To your point, that's it absolutely, sir.

Mr. Adam Chambers :

I also appreciate that you're open to amendments. I think that's important to help private member's legislation get through the House. You've also received legal advice that this bill is different from what the government has also proposed. Is that correct?

Mr. Chris Lewis :

That's correct, yes. This bill, in the past, has actually gotten very close to being introduced. I believe in the past it was 80 kilometres, but this has gotten clearance through the Clerk's desk and through the Speaker's office that it is different enough that it could go forward. I'm happy that, at least in discussions, we're getting very close here. It's been a number of years since this has gotten this far, as far as I understand, so I'm excited for the opportunity to see it through to the finish line.

Mr. Adam Chambers :

Thank you very much. Congratulations. Thank you, Mr. Chair.

Mr. Chris Lewis :

Thank you.

The Chair :

Thank you, Mr. Chambers. Now we go to the Liberals and MP Baker for five minutes. Go ahead, please.

Mr. Yvan Baker (Etobicoke Centre, Lib.) :

Thanks very much, Chair. Thank you, Mr. Lewis, for being here with us and for bringing this bill forward. Speaking for me, and I think for the government, frankly, I think we've demonstrated that we're very supportive of tax deductions for workers. I say that not just in conceptual terms but in tangible terms, through Bill C-19 , which was passed by the House and which offers tax deductions for travel, relocation expenses and the like. I think that gives you a sense of where I'm at and where a lot of the members on this side are at in terms of making sure we're supporting workers through tax deductions.

Something like a labour mobility deduction is so supported by members on different sides of the aisle because we understand there's a need to train and retain skilled tradespeople. You spoke to that a little bit in your responses to Mr. Morantz. The deduction that you're proposing in this bill or the deduction that's in Bill C-19 , the Budget Implementation Act, helps to incentivize people to get into and stay in the field. Another important part of these jobs and the attractiveness of them is the fact that they offer good wages and real protections.

A big part of that is workers' rights, which are protected in our Charter of Rights. If there weren't those protections in the Charter of Rights, it's hard for me to imagine that many of the workers we're talking about here today—whom Bill C-19 helps and whom your bill seeks to help—would have the wages and the protections they have today. You've spoken here in the committee about how you want to encourage people to join the trades and how that's part of the intent of the bill.

On that point, I want to ask this: Don't you think there's a chilling effect on Canadians who might think about getting into the trades when they see the provincial government, in this case the Premier of Ontario, using the notwithstanding clause to pre-emptively suspend workers' fundamental rights, which are so essential to achieving the wages and protections that we all believe in?

Mr. Chris Lewis :

Thank you, Mr. Baker, for your question and for your opening remarks. I look forward to getting the support of our Liberal colleagues as well. Going forward to your question, I was elected to represent Essex in the federal capacity, and I really don't have any comments with regard to the province because I'm not part of Premier Ford's team. I don't sit at their table. I don't know what discussions they've had. Therefore, I'm quite frankly not going to comment on that. I really appreciate the fact, sir, that you were listening so keenly to my opening remarks.

What I will comment on is how important it is to get our youth, the future generations, the proper training. We need to get them exposed to skilled trades at a very early age because—you're correct, sir— they do provide excellent wages. Almost right out of college they have a full-time job. That's the way we need to incentivize this, and that's another reason I'm so proud to bring it forward.

(1710) Mr. Yvan Baker :

I guess I can't help but say, look, we've heard members of the Conservative side and their opening remarks here at the outset about how they want to support workers—you spoke about how you want to support workers—but, again, those wages and those protections in large part, in my view, come from protections in the charter. I don't think it's okay for us to remain silent. Mr. Lewis, respectfully, I know we want to talk about your bill, but I've heard all the members in this committee, all the MPs, speak on provincial matters all the time and express positions on provincial matters.

I don't think we should allow the fact that we're federal MPs to prevent us from speaking out on what we believe is right. I guess what I'm saying is that we hear MPs on the Conservative side saying they support workers, but when the notwithstanding clause is being used by the Premier of Ontario to suspend the rights that fundamentally protect the wages and the quality of work of workers, they're silent on it. I guess I'm asking how you would square the assertions of your Conservative colleagues that they support workers when they're not wanting to speak out for their fundamental rights.

The Chair :

Could we have a very short answer, please?

Mr. Chris Lewis :

Thank you, Mr. Baker, again for your question. Here's how I support workers and here's how Conservatives and, I'm quite sure, many people around this table support workers: We bring solutions to the table as opposed to digging up problems. Our solution is to bring creative ideas to the table to get people working. Thank you, Chair.

The Chair :

Thank you, MP Baker. Now we're moving to the Bloc and we have MP Ste-Marie for two and a half minutes. Go ahead, please.

[ Translation ]

Mr. Gabriel Ste-Marie :

Thank you, Mr. Chair. I'm going to build on the last exchange. Mr. Lewis, I enjoyed hearing you say that if you had wanted to get involved in provincial politics, you would have run in the provincial election. As for me, I was not elected to evaluate the quality of snow removal in the streets of the city of Joliette, in my riding, nor to evaluate how health services should be delivered or how nurses should organize themselves. On the other hand, I was elected to ensure that Ottawa contributes to the funding, as this is a federal responsibility.

Since I have been elected and have been in Parliament, there have been two occasions when the federal government has used special legislation against Canada Post workers. Each time, I was on their side and I denounced the federal government's lack of respect for basic labour laws. This is where it played out. Let me return to your important bill and my question. There are people who live in rural or remote areas who are showing some fear about your bill.

They think that if there are deductions for workers who come from far away to work, maybe the construction people from their part of the country won't be hired before the others. So they are afraid that there will be competition and that, consequently, there will be less work on construction sites for workers from the regions. Do you think this is a valid fear? What do you have to say to these people to reassure them?

[ English ]

Mr. Chris Lewis :

Thank you very much for the question. I would suggest first and foremost that, no, it's not well founded. The only reason I say that so strongly, sir, is that we have such a labour shortage in this country from coast to coast to coast, this will only benefit this area. Second, I would say competition is a good thing. It's very healthy for democracy. It keeps people honest. It keeps companies honest. It allows the tax dollar to be stretched just a touch further. I think it's a great opportunity and I would not be concerned about the folks in the rural areas. If anything, if their work dries up, sir, it will give them an opportunity to go to another place as well.

The Chair :

Thank you, Monsieur Ste-Marie. Now we go to MP Blaikie for the NDP for two and a half minutes.

(1715) Mr. Daniel Blaikie (Elmwood—Transcona, NDP) :

Thank you very much, Mr. Chair. Thank you, Mr. Lewis, for being here today and for taking on this work that has been advocated for by others. I'm going to give a shout-out to my former colleague Scott Duvall, who presented a similar bill a couple of Parliaments before this one, and of course to my colleague Matthew Green from the NDP, who also presented a very similar bill. I will note my own work around this table when Bill C-19 was here in order to ensure there was fair tax treatment, as Mr.

Chambers was saying, equal to or certainly like the kind of treatment that businesses get for writing down certain kinds of expenses. There is a long track record of supporting this kind of work, and I thank you for your contribution to it. On the question we've been discussing when it comes to collective bargaining rights, I do think it is disgraceful to see the notwithstanding clause abused in this way. I share Monsieur Ste-Marie's incredulity at seeing Liberals and Conservatives argue over this point, because I've watched Liberals legislate people back to work.

I think the use of the notwithstanding clause is a relevant federal issue, because this is a precedent. The notwithstanding clause can be used by the federal government as much as it can by provincial governments. If we care about workers' rights to bargain collectively in Canada, it matters when a provincial government does this. It sets a precedent that can be used by other provinces and by the federal government. This is something a province is doing that will have consequences in not only its own jurisdiction.

This is something that a province is doing that will have repercussions for workers across the country if either another provincial government or the federal government decides to pull this kind of stunt one day. Therefore, I do think we should be properly concerned with this issue around this table. I don't think we can just write it off as a provincial issue. The notwithstanding clause is not simply a provincial issue. It's an issue of our constitution, which applies right across the country and to all levels of government. Now you know what I think about that.

As an IBEW member and construction electrician in Manitoba, I just want to circle back to Manitoba, which you mentioned in your opening remarks. I recall that before 2016 we had a lot of local employment. In fact, our hall was trying to get more and more people to travel to Manitoba because we had a provincial government that was investing in infrastructure. That meant not only that people were getting paid to be on publicly funded infrastructure projects in Manitoba but also that we had very high private sector confidence and very high levels of private sector investment. The government changed in 2016.

We saw the public financing of infrastructure projects go away. Then we started seeing a lot less private sector investment in places like downtown Winnipeg. Then we saw high levels of local unemployment, persistent unemployment, even as the government was quite happy to invite non-union contractors from outside the province to come do work in Manitoba. We also have to think about the role governments play in funding good public works with good requirements around good pay and good benefits when we talk about whether people are going to have to travel for work and whether they have good work available to them.

Thank you, Mr. Chair. I'm sorry I ran out of time, and we don't have time for a response.

The Chair :

Thank you, MP Blaikie.

Mr. Chris Lewis :

Thank you very much, Mr. Blaikie.

The Chair :

We enjoyed your comments. Now we are moving to the Conservatives for five minutes and we have MP Roberts with us. Welcome.

Mrs. Anna Roberts (King—Vaughan, CPC) :

Thank you for having me. I am so excited, Mr. Lewis, that you're bringing this bill up. I'll tell you what my issues are. I have a lot of issues with long-term care. As you know, we are struggling in many provinces, especially in my backyard, with accommodations for seniors. A lot of my families want to keep their parents with them. When one spouse passes away, the children will take on the responsibility of taking care of the other parent. I have a particular issue that just came up today, as a matter of fact.

I did not know I was going to be on this committee, so it's a perfect question for me to ask because I'm so excited about this bill. I'm going to go back to talk to you about the shortage, the fact that we do not have enough labour to help create these accommodations. Someone whose father passed away about eight months ago contacted my office today. Her mother is still okay but needs minimal help, but not to the point where they have to put her into long-term care. She wants to adapt her home to accommodate her mother so that she can do for her mother what her mother did for her growing up. Here's the catch.

She priced out what it would cost to put in an in-law suite and she was able to shop around. The wait time is 18 months. I said, “Wow, that's a long time for them to even get started and then you're looking at probably another three, four or maybe even more months to complete it. Why is that?” It's because there's a shortage. There are not enough people to complete the work.

This bill would not only encourage young people and all people, women included, to get involved in the trades, but it would also help with the situation we currently have with infrastructure, not just in my backyard but, I think, right across this country. Would you agree?

(1720) Mr. Chris Lewis :

Yes. Thank you. I would absolutely agree. The reason I can say that with so much confidence is that I just had the basement of my house done so my children could continue to live with me and expand because they can't afford a house. Do I ever know about how difficult it is to get skilled trades. Although they did a fantastic job, it's awfully difficult to get drywallers, electricians and carpenters, and the list goes on. I very much respect and appreciate your story, but I would suggest that it is certainly not just in the King—Vaughan area. I would suggest that it is across Canada.

Mrs. Anna Roberts :

It is. I'm probably older than most of you people here. I can remember how in high school they used to have a program that would introduce the trades to individuals to get them encouraged, because—let's be honest—not everybody can be a doctor or a lawyer or whatever. That's something that would encourage people and maybe give insight into it. Would you say that, if we could educate people and attract them to the trades by telling them, “Hey, you're not going to be out of pocket. If you do take a job that's 120 kilometres away, we will accommodate your expenses because we need you,” that would assist with getting more individuals into the trades?

Mr. Chris Lewis :

Absolutely that would assist more. We have to create a space, a place for folks to see themselves going forward. When I say folks, I'm talking about young men and women. When I was at the Gordie Howe bridge, I was very excited to see how many young women were working in the trades. That excited the heck out of me, so here's a golden opportunity for us to create a space for them to be in. They want to be there. They're excited to be there. They want to make good money, but they need the support going forward. Absolutely it will help that.

Mrs. Anna Roberts :

I'm excited about this bill and I'm also excited about the fact that you're open to amendments, because I think it will benefit not only the province of Ontario but everyone across Canada. I also think it would encourage and give an opportunity for everyone to get involved in the trades. Doing something like this so people aren't going to be out of pocket, I really believe, will help our infrastructure, especially in my community where I have a lot of seniors. The last two or two and a half years have been very difficult for them and they don't want to go live in a home.

I'm involved in long-term care homes because I volunteer there. I'm not saying that they're bad, but these seniors want to stay with their families. I really think this bill will encourage people to work and will allow the opportunity for the infrastructure to be created so that people can take care of their parents. I applaud you for it and I look forward to getting it done. Thank you.

Mr. Chris Lewis :

Thank you so much.

Mrs. Anna Roberts :

Thank you, Mr. Chair.

The Chair :

Thank you, MP Roberts. We're going to the Liberals. MP Chatel, you will be the last questioner for MP Lewis for this panel.

[ Translation ]

Mrs. Sophie Chatel (Pontiac, Lib.) :

Thank you, Mr. Chair. [ English ] To start with, any provincial government can invoke this clause. They can decide not to respect the fundamental rights of workers under the Charter of Rights. This is the Charter of Rights for Canada. Of course it is an issue for all of us. It's very important that we all stand together to protect workers' rights. I hope our Conservative colleagues will join their voices with ours. [ Translation ] My riding...

[ English ]

Mr. Brian Masse :

I have a point of order, Mr. Chair. I'm just looking for relevance. I hope we get the same thing from the Liberal side. They actually put workers back to work, like at the Port of Montreal.

(1725) The Chair :

That's debate, MP Masse. We will provide.... MP Chatel.

Mr. Brian Masse :

The port of Montreal was actually legislated back to work.

Ms. Julie Dzerowicz :

That's debate.

The Chair :

MP Masse, MP Chatel has the floor.

Mrs. Sophie Chatel :

I'm sorry, but you had the floor and I respected you, Monsieur Masse. Now I would like to be respected too. Thank you. [ Translation ] My riding, like yours, Mr. Lewis, is rural. So it is very important to me that we invest in our tradespeople. In that regard, I fully support you. It's so important to address the labour shortages in the construction trades. That is why I supported the labour mobility deduction, which is capped at $4,000. However, the deduction you propose would be unlimited. It could be up to $100,000 or whatever.

As a tax practitioner who advocates prudent management of government spending, I believe that taxation must have safeguards and that it is crucial to protect its integrity. I congratulate you anyway, because I fully share these values of protecting the rights of workers and allowing them to deduct these expenses from their salaries. However, as we say back home, the road to hell is paved with good intentions. As a tax professional, I have concerns. You said earlier that Canadians who go to work in the United States only pay taxes in the United States.

Excuse me, I'm going to put my tax hat on again to tell you that's not true.

Article XV of the Convention between Canada and the United States of America allows Canadians to work in the United States and pay their taxes in Canada in certain circumstances. In fact, your bill would allow Canadian workers to go to work on American job sites. This would mean that we would lose tradespeople for our own work sites here in Canada. Unfortunately, I find this to be a flaw in your bill that should be corrected. I am also concerned that there would be an unlimited deduction in addition to the $4,000 deduction, which would allow workers to double dip. This is another flaw in your bill.

You have to choose one of the two deductions; you can't choose both. Actually, there's even a triple deduction. I know the Conservatives like triples. Indeed, the employer could reimburse the employee and deduct that expense from their own profits, which would be a third deduction. You offset the allowance, but not the expense reimbursement. This triple deduction is another flaw in your bill, which is absolutely well-intentioned, I repeat. I would support it if it were fiscally prudent, but it threatens the very integrity of our tax system by allowing very significant loopholes.

Do you have any comments on these three loopholes that concern me, as a tax professional, as well as the potential exodus of workers to U.S. construction sites?

[ English ]

Mr. Chris Lewis :

Of course.

The Chair :

Could we have a short answer?

Mr. Chris Lewis :

I get a very short answer and that's good, because I was going to dive right into the weeds on the tax side of things too.

Voices: Oh, oh!

Mr. Chris Lewis: I'll answer your question. With regard to losing folks to the United States, I don't know, but I will tell you one thing. When I went to the States to work, every three years I had to get an L-1A visa. You can't go across the border and go to work just because you are a skilled trades folk. I think that is a non-starter of a concern. It's just not going to happen. You're going to get thrown in jail over there. The second thing I would say is that we cannot live and make all decisions in fear of what might go on next. I drive a pickup truck.

It doesn't mean that I couldn't speed or it doesn't mean that I couldn't drink. It doesn't mean any of these terrible things that I could do. No, I put my seat belt on, I drive the speed limit, I get to work and I come home. Just because there's an opportunity doesn't mean that people are going to do it. Thank you, Chair.

(1730) The Chair :

Thank you, MP Chatel. We want to thank you, MP Lewis, for coming to the finance committee and for bringing your bill to us, Bill C-241 . Thank you for your testimony and for your answers to the many questions here today. Thank you very much. Members, we're going to suspend now before we move into panel two.

(1730) (1730) The Chair :

I call this meeting back to order. I will just check with the clerks to confirm that all witnesses have been tested for today's meeting and that they have passed the test. Have they?

The Clerk of the Committee (Ms. Carine Grand-Jean) :

Yes.

The Chair :

Thank you, Carine and Alexandre. With us today are witnesses from the Department of Finance. We have Lindsay Gwyer, who is director general, tax legislation division, tax policy branch. Also with us are Mark Maxson, who is the director of employment and education, personal income tax division, tax policy branch; and Pierre Leblanc, who is the director general, personal income tax division, tax policy branch. Do the witnesses have opening remarks? Yes, okay. We will start with Ms. Gwyer. Go ahead with your opening remarks.

Mr. Pierre Leblanc (Director General, Personal Income Tax Division, Tax Policy Branch, Department of Finance) :

Actually, Mr. Chair, I'll give the opening remarks if that's okay with you.

The Chair :

I'm sorry, Mr. Leblanc. Yes, for sure, definitely. I apologize. I just wasn't sure who would be making the opening remarks.

(1735) Mr. Pierre Leblanc :

Thank you, Mr. Chair. Thank you to all members of the committee for inviting us to be with you today on this very important topic. It was really interesting to hear the debate and the discussion over the last hour. I think it underscores the importance of this policy issue, certainly, in the current labour market context and the value of the member's contribution in bringing this bill forward. Maybe I can just start by reiterating what the current law of the land is.

The current tax system has a labour mobility deduction for tradespeople. [ Translation ] In Budget 2022, the government proposed a labour mobility deduction for tradespeople, similar in form and intent to the measure that Bill C‑241 seeks to introduce. On June 23, 2022, Parliament passed Bill C‑19 , which included amendments to the Income Tax Act to create tradespeople's mobility deductions, as proposed in Budget 2022. [ English ] Again, it's part of the current tax system.

In fact, the Canada Revenue Agency is currently finalizing forms and administrative procedures, including guidance, to allow taxpayers to claim the labour mobility deduction for the 2022 tax year this coming spring. This is the time of year when the CRA is getting everything together so we can be ready for filing season. Compared with the deduction that would be enacted by the bill you are considering today, Bill C-241 , the labour mobility deduction that is already in law provides greater clarity on the

definitions of some concepts and includes safeguards that contain its scope and cost. For example, Bill C-241 doesn't define travelling expenses or construction activity and uses the term “tax credit”, which is not a defined term in law. The bill also requires no minimum period of relocation, places no limit on the number of trips or the amount of expenses that could be deducted in the year and makes no allowance for trips that might span multiple tax years. [ Translation ] If Bill C‑241 were enacted, taxpayers would be using two substantially similar deductions that serve the same purpose.

This would likely cause administrative difficulties for the Canada Revenue Agency and create confusion for tax filers, especially since the 2022 tax filing season will soon begin. Once again, thank you. We will be happy to answer any questions that members may have on this or other elements of Bill C‑241 .

[ English ]

The Chair :

Thank you, Mr. Leblanc, for those opening remarks and to all the witnesses for being with us here today. As you may have heard in our first panel—and it will be the same in our second panel—each of the parties has up to six minutes to ask questions to the witnesses. We're starting with the Conservatives. I have MP Morantz for six minutes. Go ahead, please.

Mr. Marty Morantz :

I have just one quick question. I don't see in Bill C-241 where it says that it's a tax credit. In fact, it adds proposed paragraph (q.1) to subsection 8(1), which specifically says that the deduction is permissible as long as the claimant does not claim those expenses as an income deduction or a tax credit for the year under any other provision of the act. I just want to see if you want to clarify that remark, because this is not a tax credit. This would be a tax deduction under this act.

Mr. Pierre Leblanc :

Thank you for the question. I'll turn it over to one of my colleagues, but I also want to emphasize that what we have in the tax system currently is a deduction. It's not a credit, if we are reflecting back on the last hour. Just as Bill C-241 is proposing a deduction—

(1740) Mr. Marty Morantz :

But to clarify, this—

Mr. Pierre Leblanc :

—what was legislated in Bill C-19 is a credit. On your question, let me turn to one of my colleagues.

Ms. Lindsay Gwyer (Director General, Legislation, Tax Legislation Division, Tax Policy Branch, Department of Finance) :

Both the existing labour mobility deduction that was implemented through the Budget Implementation Act and this deduction in Bill C-241 are deductions, so they're both amounts that an employee deducts from income and not tax credits.

Mr. Marty Morantz :

Thank you. I just wanted to clarify the statement that it was a tax credit. That was in fact incorrect with respect to Bill C-241 . I'm sharing my time with Mr. Lawrence. Thank you.

The Chair :

MP Lawrence, go ahead.

Mr. Philip Lawrence (Northumberland—Peterborough South, CPC) :

Thank you very much. I appreciate everyone's being here today. I failed to hear in your testimony any significant or substantial reason that would stop this legislation from helping workers. You brought up a couple of administrative challenges, but I didn't see anything that would absolutely stop this legislation from helping skilled trades workers, who desperately need this help.

Mr. Pierre Leblanc :

Thank you for the question. I think there are differences between the bills, and I think you've been talking about some of them over the last hour. In what is currently law, there is a $4,000 limit, which was considered reasonable by the government, versus there being no limit proposed. We think the safeguards that are in current law will allow for a more solid measure. The other thing I'd reiterate is that if Bill C-241 passes, you will then have two deductions in law. That will raise issues.

Mr. Philip Lawrence :

Thank you. You still didn't point to any significant issues. The double relief can certain be taken care of. That's not a really relevant issue and certainly can be resolved easily by the government. We would certainly support the government's passing of such legislation to resolve that quickly. With respect to that, can you tell me the difference between $3,999 and $4,001? What makes it so that the $4,001 shouldn't be deductible, but $3,999...? What is the possible relevance of this? I'll let you answer.

Mr. Mark Maxson (Director, Employment and Education, Personal Income Tax Division, Tax Policy Branch, Department of Finance) :

Thank you for the question. Certainly there is not a substantive difference between the $4,000 and the next dollar. It is common in tax law for different provisions to contain maximum amounts. It's a typical practice when it comes to tax measures. It's not universal. As Pierre mentioned, this particular amount is something that was deemed reasonable not just by Parliament, I guess, in passing Bill C-19 , but it was the amount that was put forward by the CBTU in terms of their financial projections as a typical amount. We think it's a reasonable amount to cover most circumstances.

Mr. Philip Lawrence :

Thank you. We believe that for a hard-working tradesperson it should be limited at $4,000. What about for a multi-million dollar business owner or billionaire? What's their limit?

Ms. Lindsay Gwyer :

I guess you're talking about situations where someone is carrying on a business. In those situations, it's a question of what's reasonable in the circumstances.

Mr. Philip Lawrence :

Just to be clear—let's not try to play games—there is no limit. Is that correct?

Ms. Lindsay Gwyer :

There's no dollar limit in general for business expenses. It depends on what's appropriate.

Mr. Philip Lawrence :

If a hard-working skilled tradesperson is going from coast to coast and building infrastructure, helping businesses get started or, as we heard, helping to construct housing or long-term care facilities, they'll be capped out at $4,000 because it's an arbitrary number.

Whereas if that's a business, and they're trying to deduct those same expenses for a worker who worked for them, they would not be capped. Why are we giving millionaires and billionaires a pass when we're hammering skilled trades workers?

(1745) Ms. Lindsay Gwyer :

The tax system is set up in such a way that people are limited in what deductions they can make with respect to employment income in general. Most expenses related to employment income are not deductible unless they're specifically enumerated exceptions in the Income Tax Act,

whereas business is more of a bigger picture of what expenses are relevant to computing the profit of a business, and that builds off accounting principles. It's really a difference in the way the system is set up. Deductions like this one, the deduction that was in Bill C-19 , are really exceptions to the general rule that employees are not able to claim deductions against their employment income.

Mr. Mark Maxson :

Just to build on Lindsay's comment—

The Chair :

I'm sorry. That's the time. We're well over time. Thank you, Mr. Lawrence. We now are moving to the Liberals. I have MP MacDonald for six minutes, please.

Mr. Heath MacDonald (Malpeque, Lib.) :

Thank you, Chair. This is a very interesting discussion and an interesting bill to hear about. Coming from a small island, I know that travel for work is really important. I think it's important for all parties, as it was put in the BIA , which is extremely important. I was very glad to see that. I want to continue on somewhat with what Mr. Lawrence said with regard to the larger corporations or the employers. Maybe I'll go to Mr. Leblanc. In your opening remarks, you spoke about the differences between Bill C-241 and the existing labour mobility deduction that was implemented through Bill C-19 .

One area that I'm particularly concerned about is the lack of protections that would prevent possible double-dipping by those corporations, by receiving compensation through an employer and via the tax credit. I guess my concern—in line with Mr. Lawrence's on the opposite side—in particular is that employers may choose to cut back on their compensation pre-emptively on the assumption that workers will access this benefit as well. Am I understanding the legislation correctly? If so, could you elaborate?

Mr. Mark Maxson :

Maybe I can take this question. As my colleague was indicating, there is a general rule in the tax system in Canada that limits deductions for employees to a greater extent than for self-employed workers. Part of the rationale behind that is that there is an expectation that employers are generally going to provide employees the tools necessary to do their jobs and are going to take on some of those costs on behalf of their employees in many cases.

Certainly in this context, we've understood from stakeholders that these are often workers who are not employed by a specific employer, but who are rather perhaps moving from a region where they normally work with one or more employers and then taking on a job with a new employer in a different region. In that circumstance, that new employer may not necessarily be providing reimbursements of travel expenses. They may or may not, depending on what they feel they need to do in order to attract the workforce necessary.

The bill doesn't specifically place any constraints on whether employers do or do not provide that assistance, but both Bill C-241 and the deductions that are currently in law do prevent someone from receiving an allowance for travel and also claiming the deduction. The existing deduction passed through Bill C-19 also includes a restriction that there can't be any reimbursement that is, in law, different from an allowance. Bill C-241 doesn't include that language, but it would be a question of

interpretation for Canada Revenue Agency to work through what would happen in that type of situation.

Mr. Heath MacDonald :

Thank you. As policy-makers we try to have every safeguard possible for the individuals we're talking about, and those are the construction workers. At the end of the day, we talk about our labour market, and we even talked a little bit about education, the lack thereof in K to 12 and the trades' being incorporated into the education system. Your answer obviously puts a flag up to ask how we can eliminate those possibilities, and there are many other cases with this bill.

I think it's great that we brought this forth and we're moving in this direction, but no cap on the amount of expenses is a very interesting thing. If you travel on Prince Edward Island, the 120 kilometres pretty nearly takes you from one end of the island to the other. Are there any additional safeguards with Bill C-19 's labour mobility deduction that aren't included in Bill C-241 , and could you elaborate on those? Could you give us a list of those items that you're aware of that could present challenges?

(1750) Mr. Mark Maxson :

Sure. Thank you for the question. As you mentioned, there is a $4,000 cap in the existing deduction. There is also a restriction that effectively says you can't deduct more than half of the income you earned from the job. The idea there is essentially that we recognize that people travel for a variety of reasons all the time, and I think we would all think it reasonable that people who are choosing to incur expenses to earn income aren't going to travel just to earn income if they're going to spend more on the travel and the expenses to get there.

This provides a simple catch to make sure that the income this person would earn from the travel would actually be significant relative to the expenses they incurred. There's also a restriction in the existing deduction that limits it to a minimum travel of 36 hours, which speaks to what we heard from stakeholders in terms of being able to move for temporary jobs and projects away from where they normally live as opposed to just ordinary commuting.

All employees may have commuting expenses and some people may live far from where they work, but those aren't typically deductable by most taxpayers and that's not really the gap that this provision was meant to address. Finally, I would flag that there's a provision that says the deduction is available for travel to a work site in a city where the individual isn't normally working. Again, this was getting at the sense that this is about travelling away for temporary jobs, and it's not about commuting to your day-to-day job that you normally work at.

That latter provision was modelled after an existing rule in the tax recognition for the U.S.

The Chair :

Thank you, Mr. Maxson and MP MacDonald. Now to the Bloc, MP Ste-Marie, please, for six minutes.

[ Translation ]

Mr. Gabriel Ste-Marie :

Thank you, Mr. Chair. Mr. Leblanc, Mr. Maxson and Ms. Gwyer, thank you for being here to answer our questions. Mr. Leblanc, thank you for your

preamble, first of all. I thank all three of you for all the information that you have subsequently provided to the committee. The purpose of a committee's work is to improve bills, to make sure they meet their objective and to amend them as necessary to make them the best they can be in the end. So I was a little surprised when you said at the beginning of your presentation, Mr. Leblanc, that the bill referred to several terms that were not defined. Obviously, in our role as legislators, we work with a team of legal experts.

So if these terms are not already defined in the Income Tax Act, for example, it would be preferable that they be defined in the bill. If senior officials feel that there are problems with the

definitions, it would be important for your team to provide the committee with the technical details in writing, such as the terms that would benefit from being defined and the

definitions that could be proposed. In this way, we could propose amendments as needed to improve and clarify the bill. I also have a message for the government party. It is important in the culture of committee work to take bills from members of the opposition parties seriously. I think it is best to assume that if the bill goes to committee, it can just as easily be sent back to the House afterwards. If the government party finds that a bill has problems in its technical aspect or its applicability, it is in committee that negotiations should take place with a view to amending and improving it.

This is why work on bills is done in different stages in the House of Commons. It would be nice if Mr. Leblanc could clarify in writing to this committee what major problems the Department of Finance sees with the technical aspects and applicability of this bill, as well as provide

definitions that could be added. Then, between meetings, all parties could consult on whether or not Mr. Lewis and colleagues think it is worthwhile to adopt such clarifying amendments. That would make for a better bill and quicker passage. Also, Mr. Leblanc and other colleagues have raised the issue of double deductions. Of course, when Mr. Lewis introduced his bill in the House, the budget implementation legislation had not yet been introduced. Obviously, work could have been done in parallel. It is a collateral effect if you end up with two competing pieces of legislation where the deductions can add up.

I am sure that is not the purpose of this bill, given that it was tabled in the House before the budget implementation legislation was introduced. In that regard, it would help us if Mr. Leblanc and his team could formulate an amendment for us that we could introduce to ensure that, if Bill C‑241 comes into force, there will be no possible double-dipping, given the measure contained in the budget implementation legislation. I know that I have made many comments and that my statement also contained many requests, but I now have a technical question, which is not easy to answer.

I imagine that this is not the first time in the House of Commons that two similar bills have been passed in a reasonably short time that open the door to a double deduction, when that was not the intention in the first place. To your knowledge, has this ever happened in the past? If so, what solutions have been provided by the House or its committees to remedy it?

(1755) Mr. Pierre Leblanc :

No such case comes to mind at present. I don't know if my colleagues are aware of any such situation that has occurred in the past, but I can let them answer.

[ English ]

Ms. Lindsay Gwyer :

I can't, offhand, think of a specific example. It might be important to clarify that. Both of the deductions provide that expenses that are deducted under one cannot be deducted under the other, so the same expense couldn't be deducted twice under the two different deductions. The concern is more that there are two different deductions in the Income Tax Act that have very similar purposes and apply in many of the same situations and very similar situations. From an administrative perspective and from a public confusion perspective, that's the concern.

[ Translation ]

Mr. Gabriel Ste-Marie :

Thank you for the response. So, I think the committee will have to clarify these kinds of things. Is my time up, Mr. Chair?

[ English ]

The Chair :

You have 30 seconds.

[ Translation ]

Mr. Gabriel Ste-Marie :

In that case, I'll stop now and pick this up in the next round. Thanks again to the witnesses.

The Chair :

All right. Thank you, Mr. Ste-Marie. [ English ] We're moving to your partner next to you, NDP member MP Blaikie.

Mr. Daniel Blaikie :

Thank you very much, Mr. Chair. I don't think there's a lot to say that hasn't already been said, but I do think that one of our tasks here is to try to appreciate the differences between what was passed in Bill C-19 and what's proposed in Bill C-241 . Thank you to our committee analysts, who prepared a pretty decent table that lays them side by side. I want to walk through that table while we have the government's own tax experts here so they can give us a sense of what these differences in the table will mean practically for folks who are filling out a tax return.

In terms of characteristics to compare between the two acts, first in the table are conditions related to the taxpayer. In the Bill C-19 version, you have to be an eligible tradesperson—earn employment income as a tradesperson or apprentice in the construction activities referred to—and then there's a regulation that defines that. In Bill C-241 , you have to be employed as a qualified tradesperson or an indentured apprentice for construction activities at a job site. Is there any real practical difference in those two

definitions that the committee should be aware of?

(1800) Mr. Mark Maxson :

I guess I can give a first answer, but others may wish to jump in. In terms of practical differences, it's challenging to lay out the concrete implications. One of the difficulties in terms of lacking some

definitions is that essentially it means that the Canada Revenue Agency will be required to put forward

interpretation and guidance as to what the different terms mean, and that's not something that we can do ourselves. As an example, Bill C-19 defines “construction activities” and Bill C-241 does not, so in the case of Bill C-241, the CRA would have to put forward guidance in terms of exactly what that means. Whether it ends up being different in certain cases is hard for us to say, and that would be true of certain other undefined terms as well. That's a potential confusion for the taxpayer question—

Mr. Daniel Blaikie :

It is possible that the CRA could adopt the same regulation as is identified in Bill C-19 as a way of interpreting what's in Bill C-241 . In terms of minimum required distance, I think that one's pretty straightforward. There is a slight difference in the distance, but we're talking about a 30-kilometre difference. Another main characteristic is the distance calculation method. In the table, it says that, under the existing law, it's calculated on the one hand between the ordinary residence and each temporary work location or, on the other hand, between each temporary lodging and each temporary work location,

whereas in Bill C-241 it's calculated between the ordinary place of residence and the job site. Are there any practical implications for those differences?

Mr. Mark Maxson :

This is again a place where the CRA would have to ultimately interpret the language, but one possible implication is that the language under the existing deduction is explicitly intended to say that you moved closer to the work site. You found temporary lodging that was closer to the work site than your home was. In Bill C-241 , if the work site is at least 120 km away from where you live, travel to and from the work site is deductible.

It's unclear to me whether this means that, if you have lodging near the work site, you can deduct your commuting expenses back and forth from your temporary lodging to that work site. That might be 15 kilometres, because that work site is 120 km away from your home. I don't know if that's the intention or not, but that would be one possible difference. The existing deduction is only for travel between your home and the work site.

Mr. Daniel Blaikie :

In the case of what's on the books currently, if I were living in Winnipeg but working on a job in Brandon and commuting every day, then I could deduct my gas, for instance, but if I rented a place in Brandon in order to be able to go to that job and not commute all the time.... Let's say that I drove out there Sunday night and then drove home Friday evening. Then I wouldn't be able to claim my gas from the place that I rented in Brandon to go to the job site every day. I would be able to claim only the initial travel from Winnipeg to Brandon, and then from Brandon back to Winnipeg. Am I understanding that properly?

Mr. Mark Maxson :

Yes. You wouldn't necessarily if it was every day, but the distance from Winnipeg to Brandon to that lodging would be sort of a one-time amount that would be deductible. Once you were in Brandon, your travel between your lodging and the work site would be just ordinary commuting, like that of any other taxpayer, and that would not be deductible.

Mr. Daniel Blaikie :

Is Bill C-241 any different in that respect or would it likely operate in the same way?

Mr. Mark Maxson :

That's unclear to me. It says travel to and from the job site provided that the job site is 120 kilometres away from home. It would be a question of

interpretation, perhaps, as to whether that's to and from the job site only from home or whether that could be to and from the job site from the temporary lodging. It's unclear to me.

Mr. Daniel Blaikie :

Would that be something the CRA could provide guidance on?

Mr. Mark Maxson :

One way or the other, they would probably have to provide guidance, yes.

Mr. Daniel Blaikie :

There are a few more items in the table. I know I'm running up against time, so if I'm out of time, Mr. Chair, that's fine. Perhaps we can continue in my next time, but I find the more detailed

section helpful in terms of understanding what the differences are and how they would be mediated.

(1805) The Chair :

I think that's very good, MP Blaikie, and that was helpful from the witnesses, our officials. Members, we are moving now into the second round, but it's going to be as we had before, a curtailed second round. It's going to be about three minutes per party. Each party will have three-plus minutes. We're starting with the Conservatives. I have the sponsor of the bill, MP Lewis, for three plus minutes.

Mr. Chris Lewis :

Thank you, Mr. Chair. Thank you to the witnesses here. I appreciate it. I have just a few questions. In my testimony, I mentioned that CBTU did a study—commissioned a financial projection—which estimates that Canada-wide implementation of a skilled trades workforce mobility tax deduction would save the federal government an estimated $347 million annually. Subsequently, Bill C-222 was introduced—or perhaps it wasn't even introduced. This is Mr. Green 's bill.

The Parliamentary Budget Officer issued a legislative costing note on Bill C-222, which is very similar to Bill C-241 , on April 5, 2022, estimating the cost of this measure. In 2022-23 it's $117 million, and its five-year cost is $522 million. Does it not make sense to keep the money in the pockets of the skilled trades workers if the government's going to rake in $347 million and it's only going to cost them $117 million a year? Mr. Maxson.

Mr. Mark Maxson :

The particular financial projection of the CBTU assumed that, for the purpose of a costing, about 10% of construction workers would relocate each year. Their estimate of savings from reduced draw on EI was based on the same population of people who, based on their estimates, were already moving, so it was somewhat unclear to me whether they were basing that estimate of savings on an actual change in behaviour, since these were the people they assumed were already moving. There was some question in my mind.

Mr. Chris Lewis :

Very well. Thank you. Just to your point to Mr. Blaikie, it is spelled out that it's 120 kilometres from home, so that's not a round trip of 60 kilometres each way. It's 120 kilometres from your place of residence. That's just for clarification. I have one last question. I know it's somewhat facetious, and I'm not trying to be funny, but does it not make sense that if we're going to put a cap on how much they can deduct a year and then they can't go to work, they're probably going to end up on EI if they run out of work?

Would it not be cheaper to keep the money in their pockets, and therefore make them pay more taxes at the end of the year by giving them the flexibility to get across Canada to build our bridges and keep them off EI?

Mr. Pierre Leblanc :

The question there would be whether the removal of the limit would result in that much of an increase in economic activity. I think we could say that often the government is clear that putting this forward and putting this into law, if it's passed by Parliament, will have a positive economic impact, which would somewhat reduce the cost of the measure, but we don't think it's very common that measures more than pay for themselves.

The Chair :

Thank you, MP Lewis. Now we go to the Liberals and MP Dzerowicz for three minutes plus.

Ms. Julie Dzerowicz :

Thank you so much, Mr. Chair. I want to thank the officials for being with us today. Thank you for your great work on this. I mentioned in my first hour the risk that this bill doesn't require those who are claiming this to be working in Canada. We've been talking about labour shortages. My concern is that, with the way the bill is written right now, I could be an individual who lives in Oakville, say, but actually works on the other side of the border. We might be losing people if we don't address the labour shortage issue.

They could work in the U.S., but under this bill, their expenses could be paid for by Canadians. Am I right in this? Is that actually a possibility given the way the bill is written right now?

(1810) Ms. Lindsay Gwyer :

You're right. There is nothing in the bill that requires the work location to be in Canada, so yes, it's possible that the deduction could be claimed in respect of someone who is commuting to the U.S. for work. In those circumstances, it would really depend on all the facts as to whether that person would be subject or not to Canadian tax on that income. The deduction is not limited to just income from that particular employment. It's a general deduction from income, so yes, it's conceivable that someone could be working in the U.S., potentially paying U.S. tax, depending on the facts on that income, and claiming a deduction in Canada.

Ms. Julie Dzerowicz :

Okay. Thank you. In the other question I asked—and I didn't mean to be silly—I said that the way the bill is currently written someone could take a 50-minute job that's 121 kilometres away and be able to claim the cost of the gas, meals, hotels and any other expenses that they believed were required for the job.

As legislators and as people who are policy-makers, I think it's our job to make sure that we have airtight legislation that's going to ensure it does what we want it to do, as opposed to someone saying, “Well, the law allows me to do this, so if the law allows me to do it, I'm just going to do it.” I could see situations where someone has a cottage two hours or 121 kilometres away that's under construction and says, “I'm a plumber, so I'm going to go over there and just look at it.” Their neighbour happens to tell them that they need their pipes checked, so for 50 minutes they do a job over there and then they head back home.

The way the legislation is proposed right now, I would probably say, “The law allows me to do this, so if the law allows me to do this, I might as well claim my gas and claim the meal I had while I was there, and I had to stay overnight because by the time I thought about going back it was fairly late, so there might be some other expenses.” Am I right to believe that the way the law is written it would actually allow me to be able to do that under the scenario I just gave you?

The Chair :

Could we have a very short answer, please?

Ms. Julie Dzerowicz :

I'm at two minutes and 15 seconds.

The Chair :

Yes, but we're only going for three minutes. You had three minutes and 15 seconds.

Ms. Julie Dzerowicz :

I'm sorry. Go ahead, Ms. Gwyer, or whoever wants to answer.

Ms. Lindsay Gwyer :

Sure. I can answer and Mark can chime in if there's anything else. Yes, I think the main requirement in the deduction is that the person is travelling 120 kilometres away from their home, unlike the deduction that's in law right now where there are safeguards to limit the circumstances in which the deduction can be claimed beyond that requirement to travel 120 kilometres for the work.

The Chair :

Thank you—

Ms. Julie Dzerowicz :

Mr. Chair, I apologize. I was over my time. I'm one minute late. I'm so sorry about that.

The Chair :

Thank you. We're going to MP Ste-Marie, please.

[ Translation ]

Mr. Gabriel Ste-Marie :

Thank you, Mr. Chair. I will begin by reiterating my full confidence in the way you are managing this committee. In the first hour of debate, our esteemed colleague Sophie Chatel raised a number of concerns about this bill. As I said earlier, our goal here, all of us together, is to improve the bill and to make sure that it fulfils its objectives. I wanted to check with you to see if you had any comments on that. Among the points raised, our colleague said that if Bill C‑241 were to be passed, there would be a double deduction, given that Bill C‑19 has already been passed.

We know this and we need to find a solution to this problem. She also said that a worker could claim expenses for travel to the United States if they go there to work. I would like to hear your comments on this. If we wanted to limit this type of expense in the event that a person went to work abroad, how could we proceed? Again, if you don't have an answer immediately, you can provide one in writing to the committee. Also, the Income Tax Act states that if a supervisor gives an allowance for a worker's travel, they cannot claim those travel expenses.

However, what if it is not an allowance, but some other form of expense payment? Do you think this could open the door to some abuse? If so, how could the bill be improved to avoid such abuses?

(1815) [ English ]

Ms. Lindsay Gwyer :

I'll start with the point on double deductions. Both deductions would, as I mentioned earlier, apply in very similar circumstances. There are restrictions on both with respect to what can be deducted and with respect to what has been deducted under other provisions of the Income Tax Act, so the same expense would not be able to be deducted under both of the deductions. In terms of being able to go and travel abroad, as I mentioned there's no restriction in Bill C-241 as to where the workplace needs to be located. Bill C-19 , the existing law, does require that the work location be in Canada.

That's there to address the issue of someone going to work in another country and claiming the deduction. Then on the last point, the existing law sets out specifically what travel expenses would be acceptable: the travel expenses relating to one round trip, so costs of a flight or of gas or of whatever means by which the commuting is done; the cost of meals incurred on that round trip; and then, potentially, temporary lodging if the person maintains their existing lodging in their ordinary place of residence. Those are the ways those concerns are addressed through the deduction that was passed in Bill C-19 .

[ Translation ]

Mr. Gabriel Ste-Marie :

Thank you very much.

[ English ]

The Chair :

Thank you, MP Ste-Marie. Now for our final questioner, we're back to NDP MP Daniel Blaikie.

Mr. Daniel Blaikie :

Thank you very much. I just want to continue on down the table here. When we talk about the distance calculation under the two laws, there are some additional conditions for what's currently in the statute, including relocation to a temporary work location, being away from your ordinary residence for at least 36 hours and residence at a temporary lodging. Again, I'm thinking about somebody who's working on a project in Portage la Prairie, say, who is commuting daily out of Winnipeg. They're travelling over 120 or even over 150 kilometres from their home in order to do to a job.

The Roquette pea plant was a big job in the Portage la Prairie area for a while. I know a number of guys who were working on that job for a couple of years. Under Bill C-241 , they would have been allowed to deduct those expenses to travel to that site, but under the current statute they would not because they would not be away from their home for 36 hours and they're not residing in temporary lodging? Is that a fair characterization of the difference between the two proposals?

Mr. Mark Maxson :

That's right. The existing deduction does not allow daily commuting expenses on the basis that those are considered a personal expense for all employees regardless of their industry.

Mr. Daniel Blaikie :

Another characteristic in the table here is the nature of the eligible expenses. Under the current provision, eligible temporary relocation expenses include—I think these were mentioned—transportation expenses of one round trip, meals during the round trip and temporary lodging, and under Bill C-241 it is expenses incurred for travelling to and from the job site. Again, what would be the practical difference? Is it that under Bill C-241 you could have a job that's relatively far from home but still within commuting range and you could deduct some of those expenses?

Mr. Mark Maxson :

That's one difference. There's a question in my mind. It would again be up to CRA to interpret what travel expenses to and from the work site means. It's not entirely clear to me whether that would include lodging if they did choose to stay overnight. That would be something CRA would have to provide guidance on, I think.

Mr. Daniel Blaikie :

Okay. If I was self-employed, it was my own business and I was travelling to a job in Portage, would I be able to claim gas, mileage and meals even if I'm returning to my principal residence at the end of the day?

Mr. Mark Maxson :

If it was daily commuting, it would not be deductible. If it was just a one-off job you were doing for the day.... Maybe Lindsay can jump in. She's more familiar with the business side—

Mr. Daniel Blaikie :

If it's my company, and I'm hired to do a job out in Portage la Prairie, and the job is going to last for two months, say, is there a threshold in the current income tax law at which point that becomes a regular commute as opposed to a temporary job? Every job in construction is temporary. You're always working yourself out of a job. There is no permanent construction job. That's a maintenance job. As long as you're doing construction, it's a temporary job.

(1820) Ms. Lindsay Gwyer :

The general rule is that, if it's a personal expense, it's not deductible, even if you're carrying on a business. That's interpreted to mean that, if you're commuting to and from work, then any of those expenses are not deductible. If you're working at different places every couple of months, I don't know exactly where the CRA draws that line, but the general rule is that travel between work and home is not deductible for business purposes as well as employment purposes.

The Chair :

Thank you, MP Blaikie.

Mr. Daniel Blaikie :

Thank you, Mr. Chair.

The Chair :

I want to thank the witnesses—

Mr. Philip Lawrence :

Mr. Chair, I have a point of order before you excuse the witnesses. You put in committee business at the end without giving us notice. I believe you need unanimous consent to do that. I think these witnesses are doing a fantastic job, so I would like the remainder—

The Chair :

It is not necessary, MP Lawrence. To the witnesses, thank you for your testimony and thank you for the many technical questions you answered today. I think members asked about

definitions. If you could bring that and some of the other information members require back to our committee, that would be terrific. We will now allow our witnesses to exit. Again, we thank them very much. Members, we are going to have a quick discussion—I see that MP Beech's hand is up—but I first want to inform you that we have worked with the Governor of the Bank of Canada on scheduling. I'm happy to let everybody know that the governor will be available to come before us on November 23 for a meeting here. As I said, we will now carve out a little bit of time here for future business. MP Beech, your hand is hand up.

Mr. Terry Beech (Burnaby North—Seymour, Lib.) :

Thank you, Mr. Chair. I have a motion that I gave to the clerk, who should feel free to distribute it. I have also provided this motion to all parties. We've had discussions over the last 24 hours. I'll read it now—

Mr. Philip Lawrence :

Mr. Chair, I don't believe we had two days' notice, as required, so that's out of order.

Mr. Terry Beech: I think we're in committee business.

The Chair :

MP Lawrence, you are right about the two days, but we are in committee business and we can discuss committee business. MP Beech can—

Mr. Philip Lawrence :

I'm sorry. On a point of order, Mr. Chair, at any point the Liberal chair can call committee business and put in any motion he wants. That doesn't sound correct. I don't think that's consistent with Bosc and Gagnon.

The Chair :

MP Lawrence, it can be any chair, and any member may bring forward any motion and any business that they would like. At this time, MP Beech has the floor.

Mr. Terry Beech :

Thank you, Mr. Chair. I'll read that motion, as follows:

That the Chair

schedule meetings to initiate a pre-study on the Act to implement certain provisions of the fall Economic Statement and that the first meeting take place on Monday, November 14, 2022, should legislation be presented in the House by that time and, that the Deputy Prime Minister and Minister of Finance be invited to appear with her officials on the bill; and that all evidence gathered as part of the pre-study be considered as evidence in the committee's full study of the bill.

Mr. Chair, this motion is very similar to what we did with the budget. It's just to make sure we can get to the important business of the fall economic statement when it lands. There have been discussions. I think we're all aware of where those discussions are. I think we can all agree that very shortly we're going to see where this is heading. If it's getting to a point where the Conservatives have to hold the floor, I'm more than willing to suspend in committee business and try to resolve this amicably over the next couple of days. With that, I'll cede the floor.

The Chair :

Thank you, MP Beech. I have MP Lawrence and then MP Morantz.

Mr. Philip Lawrence :

Thank you. I would thank the member for his good-faith discussions with me off committee time here, but I think we do need additional time. I would agree with the member's offer to suspend and come back on Monday, when we can further discuss this motion.

(1825) The Chair :

Thank you, MP Lawrence. MP Morantz.

Mr. Marty Morantz :

I'll cede my time.

The Chair :

Okay. We're trying to get some clarification on whether—

Mr. Terry Beech :

I'm happy to clarify, Mr. Chair.

The Chair :

—to suspend and then you can have your discussions.

Mr. Terry Beech :

Where this currently stands, just to open the kimono to everybody who might be watching this, is that there's some procedural stuff that's involved, and some of my members might even be confused. Thank you for your advice too, Daniel. Basically what is happening is that there is a disagreement. I put this motion on the floor. Certainly the government wants to proceed with the FES. Because, I believe, we have the support of a majority of members around around the table, the only way the Conservatives would be able to stop us from moving forward using this method would be to filibuster at this committee.

I am trying to respect everyone's time and all members of Parliament so that we don't have to go through that show. We can simply suspend with things the way they are, with the Conservatives holding the floor, and we can go have some chats.

The Chair :

Is everyone in agreement?

Mr. Terry Beech :

It's probably a unanimous consent thing, I would imagine.

The Chair :

I've heard the members loud and clear. We will suspend. [ The meeting was suspended at 6:27 p.m., Wednesday, November 2 ] [ The meeting resumed at 3:32 p.m., Monday, November 14 ]

(30330) The Chair :

I call this meeting to order. This is the continuation of meeting number 66 of the House of Commons Standing Committee on Finance. The committee is meeting today to discuss future business. Today's meeting is taking place in a hybrid format, pursuant to the House order of June 23, 2022. Members are attending in person in the room and remotely using the Zoom application. I'd like to make a few comments for the benefit of the witnesses and members. Please wait until I recognize you by name before speaking. For those participating by video conference, click on the microphone icon to activate your mike and please mute yourself when you're not speaking. For

interpretation for those on Zoom, you have the choice at the bottom of your screen of either the floor, English or French. For those in the room, you can use the earpiece and select the desired channel. I'll remind you that all comments should be addressed through the chair. For members in the room, if you wish to speak, please raise your hand. For members on Zoom, please use the “raise hand” function. The clerk and I will manage the speaking order as best as we can. We appreciate your patience and understanding in this regard. When we suspended, Parliamentary Secretary Beech had the floor and his hand is now raised. Mr. Beech.

Mr. Terry Beech :

Thank you, Mr. Chair. Hello, members. It's great to see everyone. I thought it would be good for us to recap where we currently are, given where we left off in our last session. We were disagreeing on the path forward for future business of the committee. The Conservatives had advised us that they were willing to filibuster to prevent the study of the fall economic statement. We decided to suspend so that further conversations could take place over the constituency week.

I'm not going to get into the details of those conversations out of respect for the confidence of all of my fellow professionals around this table, but I do think it would be valuable and probably productive if I could highlight where I think we fell short on our side. I don't actually think we're that far apart. The biggest thing for us is not receiving certainty in being able to study the fall economic statement in a timely manner to make sure that its measures can be implemented to benefit Canadians.

Those are measures like permanently eliminating interest on student loans and implementing the recovery dividend. Other measures are in there; I'm not going to go through all of them, but generically they are about growing the economy, making life more affordable and trying to keep our country on a viable and responsible fiscal track. If we can find a way to close this gap—I think there is still a way—we can meet the needs of all negotiating partners at the table.

I am somewhat saddened that we weren't able to do it over the constituency week, but maybe I can put on my “Adam Chambers socks” and find a path here in the room. I would reiterate to my friends across the way that I have a track record, whether it be with the member for Carleton , the member for Abbotsford , the member from Central Okanagan—Similkameen—Nicola —I hope I got that right; apologies to Mr. Albas if I got that wrong—and of course the member for Calgary Forest Lawn. I think we can still find a path and I am confident that we can find it today.

It might not be the exact way that negotiating members would be happy with, but if we zoom out and think about the working of this committee between now and Christmas, I think there's still an opportunity for a merry Christmas for everyone. That is my hope for what we can accomplish today. Thank you, Mr. Chair.

(30335) The Chair :

Thank you, Parliamentary Secretary Beech. I did start a list here. We have MP Baker up next. Then it is MP Dzerowicz, MP Lawrence and then MP Morantz after that. MP Baker.

Mr. Yvan Baker :

Thank you, Mr. Chair. It's good to see members after the constituency week. I hope everyone had a good constituency week in their ridings. I think this is a really important issue that we're debating right now. I think, as we're all aware, there are a number of important components in this bill with a number of important deliverables for folks. I think it's important that they be delivered to folks in a timely way. I'm thinking of things like the permanent elimination of student loans.

I'm thinking about a range of home affordability measures—for example, the creation of a new tax-free first home savings account, a doubling of the first-time home buyers' tax credit, and ensuring that property flippers pay their fair share. These are the kinds of things I hear about all the time, especially the property-flipping, from folks in my community. Another piece that I think is important is enhancing the Canada workers benefit to ensure that payments are delivered quarterly for low and medium-income Canadians.

I think there are a lot of people around this table who are really concerned about the inflation that Canadians are struggling with and the cost of living, especially for the low and medium-income Canadians. This is an example of something that I think is really important. I think that, in light of what's happening with the rising cost of living that people are facing and in light of the measures that are in this bill and the impact these could have on folks, we have to take it upon ourselves to study this legislation in an expeditious manner. I think that's what our constituents would expect of us.

It was my hope that we would adopt the motion at our last meeting so that we could hear today from officials on Bill C-32 . Unfortunately, we're not able to do that. To be frank, given that we haven't gotten to that place yet, I'm just concerned about our ability to study this in a timely manner. Ultimately, if we don't do that, then we're not going to get the supports to the people who need them in the time frame in which they need them.

I'm, therefore, proposing the following amendment: that after the words “be invited to appear with her officials on the bill”, we delete the word “and” and add the following after the words “in the committee's full study of the bill”. It would read:

and, should the bill be referred to the committee by Thursday, November 24, 2022: a. Clause-by-clause study of the bill commence no later than Wednesday, November 30, 2022; b. Amendments to the bill be submitted by 5:00 PM EST Thursday, November 24, 2022; c. and that the committee immediately proceeds to this study and hear from officials from the Department of Finance.

I'm happy to circulate the language to members of the committee, but in the end, the purpose of this proposed amendment, really, is to ensure that we study this bill in an expeditious manner and deliver the help to folks who need it in an expeditious manner and on the timelines they would expect us to.

(30340) The Chair :

Thank you, MP Baker. The clerk will distribute that amendment.

Mr. Terry Beech :

Mr. Chair, I view that as a friendly amendment.

The Chair :

Okay. As a friendly amendment.... I have MP Lawrence, MP Morantz and MP Blaikie.

Mr. Philip Lawrence :

Thank you, Mr. Chair, and to members of the committee. I think a little bit of process needs to be understood here. As the normal operation of the way that Parliament works, first of all, bills are debated in the House of Commons. We don't even know exactly what the bill will be before us or the form it will take. It can be amended in the House of Commons. Presupposing a prestudy beforehand I think is premature at best, and reckless is perhaps is a better word for that. I think it's very much the position of our party that we want to have a full understanding of the legislation before we consider studying it.

As I said, the form of it could dramatically change. We're in a minority Parliament. Certainly, large amendments could be made. Studying it now just doesn't make any sense. I also think it's important that we look at the context this bill is being dropped into. We're at a seven-year record of disappointing economic results after disappointing economic results. In fact, I would dare say that the fiscal update could really be called the failure update.

Considering this is a document created by a Liberal government, in that document it says that we are going to have high interest rates, we're going to have continued high inflation, and it even projects potentially a recession coming forward. In the downside analysis it has two negative quarters, which is the technical definition of a recession. When we look at that and we look at the track record, quite frankly, of this government of not being transparent and not being open with Canada, I don't think it necessitates a filibuster but rather a discussion of the issues given the lack of transparency.

If we go through the failures of this government to be transparent, whether we start with the Aga Khan, when the Prime MInister took an illegal vacation.... He was actually found guilty by the Ethics Commissioner of illegally accepting a vacation. Then we continue on to this story of lack of transparency in a government that was supposed to be open to a fault. We go on and we look at the SNC-Lavalin affair, where we saw an Attorney General, a Minister of Justice, who by her own words felt pressure to interfere in an investigation.

These are sacrosanct principles that this government is continuing to just wave over and push over. You'll have to forgive me, members, Mr. Chair, if I'm going to insist on transparency and accountability. We are His Majesty's loyal opposition. Our job is not to be an audience, not to simply clap and applaud failure after failure after failure, but it is to be in opposition and we're going to insist on the principles of democracy being upheld. There's no doubt that some members on the other side, some of the Liberal members, will object to the fact that they are being held to account.

It doesn't feel good, especially when you look at their tremendous record of failure. Then we move from the SNC-Lavalin to the WE Charity scandal. This was incredible. During a time when our country was facing a crisis the government was looking to give nearly a billion dollars to an organization that had given members of the Prime Minister's family hundreds of thousands of dollars.

Once again, I'm sure that this government would have loved to have just passed that legislation through and for the opposition just to be an audience and we would have just all looked the other way on this organization with its troubled history and its funding of the Trudeau family. They would have loved for us just to not do what we're supposed to do and not do our proper due diligence as members of Parliament, which of course, includes doing the appropriate studies at the appropriate times. A prestudy is by no means the regular way this House operates.

I, myself, have a private member's bill that just completed the second voting. We'll have our second hour of debate. We'll have our vote on Wednesday. But I don't get to have that debated at the foreign affairs committee until it's been dutifully passed, which is the way this is meant to operate.

(30345) As I said, there can be amendments in the House, and that debate can also inform the committee as it goes forward, so simply looking the other way is not how Conservatives want to operate. We want to properly investigate and have a proper debate. Let's look at the track record. Quite frankly, this Liberal government has not earned our trust. They continue to let Canadians down, whether we look at SNC-Lavalin, the WE scandal or the Aga Khan, and now we understand that the Prime Minister had a $6,000 hotel room—a $6,000 hotel room—at a time when Canadians are struggling just to get by.

Quite frankly, when we look at what's in a lot of this fall economic update, this isn't what the folks in my riding are asking for: the single moms who are having struggles just to get by, or the farmers who perhaps are facing restrictions on key ingredients of what they need to make their farms work, whether it be fertilizer.... On what they are looking for when they come to me, they don't talk to me about a 2% tax on share buybacks. That's not what they come to me to talk about. Even students, who I'm sure would.... Interest on student loans is an issue, but that's not what they're coming to talk to me about.

What they're coming to talk to me about is that unlike every other generation that preceded them, they can't afford a house. There are so many folks living in their basements, there are students going to food banks and there are larger economic issues. The reality is that unless we get the inflation beast under control, whatever good this government may attempt to do will simply be eroded or eliminated by inflation. Let's look at the impact inflation is having on Canadians, on middle-income Canadians.

This government came to office pledging to do everything they could do for the middle class and those attempting to join the middle class, and all that the middle class has seen over these past seven years is their economic ability, their economic strength, eroded, corroded, reduced and even eliminated. For the average Canadian, when we look at an inflation rate, whether it be 6%, 7% or 8%, that's eroding their purchasing power. If you're earning $60,000 a year, you are losing thousands of dollars at 8%, thousands of dollars for buying what you need.

That's on top of the fact that taxes already take more from a Canadian than food, shelter and transportation combined. The NDP love to talk about greed, but they fail to mention government greed, and the government actually has seen higher revenues during this inflation period. They've seen bigger increases in revenue than Loblaws or any oil company. It is government greed, but we don't hear about that. Even with these massive amounts of inflation taxes that are coming in to fill the coffers, this government wants more. They need more. Government greed is insatiable.

In this fall economic statement, they're actually going to increase spending by $6 billion—$6 billion in just this year—and on top of that, depending on how you calculate it, over the next five years there may be an addition $23 billion to $53 billion. The formula that's brought us high inflation, high interest rates and low economic growth is tax-and-spend government. What does this fall economic statement propose? It's more tax-and-spend government.

The definition of insanity is doing the same thing over and over again and expecting different results, yet that is a path that this government has chosen to continue on. Given the fact that we are now in the seventh year of economic failure, on the litany-of-failure statement that came out this fall, yes, perhaps we do want to pause and actually study it, do our jobs and go by the appropriate process, which is to have it debated in the House. Hopefully, we also want to have a debate that is both engaging while civil, that calls out different provisions that perhaps can improve this document.

(30350) I myself was in the House on the initial introduction and heard many interesting comments. Even though the NDP have sworn their allegiance, of course, if you listen to their speeches, you would never know that. There were some quite brutal critiques of the fall economic statement by the NDP, despite the fact that they are going to vote for it. I think they know, as we certainly recognize, that people are suffering. It's a real affordability crisis.

When I go to my local grocery store or I stop at a local cattle auction or I go down the street to the local Tim Hortons, or even just listening to the radio as I drive in to Ottawa, I do not hear people clamouring for the capitalization of our corporations that will come from a 2% tax on share buybacks. I do hear people struggling to pay for their Disney+ subscriptions. However, the deputy leader says they should simply cancel that. The deputy leader must not have been around children and seen the benefit of a Disney+ video and the challenges of parents going through COVID-19 and beyond.

When we look at the fall economic statement, we have that.... We just don't have many measures that will impact Canadians going forward in addressing the affordability crisis. A couple of things that would be extremely helpful would be a reduction, a pause, or even elimination of the carbon tax. The carbon tax, of course, raises the cost of everything. This is by design. This is why the Liberals can't back off from this ledge that they're on. It's their sort of principle policy, what they have accomplished in seven years. It's that, and maybe the legalization of pot.

Those are the two things that they can point to. The fact is, the carbon tax is having a dramatic point. We all agr