THE STANDING SENATE COMMITTEE ON NATIONAL FINANCE
EVIDENCE
OTTAWA, Tuesday, October 24, 2023
The Standing Senate Committee on National Finance met with video conference this day at 9 a.m. [ET] to study Bill C-241, An Act to amend the Income Tax Act (deduction of travel expenses for tradespersons).
Senator Éric Forest (Deputy Chair) in the chair.
The Deputy Chair: I would like to welcome all of the senators, as well as the viewers across the country who are watching us on sencanada.ca. My name is Éric Forest, and I represent the senatorial division of the Gulf, in Quebec. I am the deputy chair of the Standing Senate Committee on National Finance.
I will now ask my fellow senators to introduce themselves, beginning with the senator to my left.
Senator Gignac: I am Clément Gignac, and I represent the senatorial division of Kennebec, in Quebec.
Senator Duncan: Good morning and welcome. Pat Duncan, senator from the Yukon.
[Translation]
Senator Loffreda: Good morning and welcome. I am Tony Loffreda, and I represent the senatorial division of Shawinegan, in Quebec.
[English]
Senator M. Deacon: Welcome. Good to see you again — some of you. Marty Deacon, senator from Ontario.
Senator Smith: Larry Smith, Quebec.
Senator Marshall: Elizabeth Marshall, Newfoundland and Labrador.
[Translation]
Senator Dagenais: I am Jean-Guy Dagenais, and I represent the senatorial division of Victoria, in Quebec.
The Deputy Chair: I would also like to acknowledge our clerk, Mireille Aubé, as well as our analysts, Shaowei Pu and André Léonard. The committee relies on their professional and capable support.
Honourable senators, today we are beginning our study of Bill C-241, An Act to amend the Income Tax Act (deduction of travel expenses for tradespersons), which was referred to the committee by the Senate of Canada on June 8, 2023.
We are pleased to have the Parliamentary Budget Officer, Yves Giroux, back with us. He is joined by Nora Nahornick, Senior Analyst. We also have two officials from the Department of Finance Canada, Pierre Leblanc, Director General, Personal Income Tax Division, and Mark Maxson, Senior Director, Employment and Education.
Welcome, and thank you for accepting the invitation to appear before the Standing Senate Committee on National Finance.
[English]
We will start with opening remarks from Mr. Giroux, followed by Mr. Leblanc.
[Translation]
Yves Giroux, Parliamentary Budget Officer, Office of the Parliamentary Budget Officer: Mr. Deputy Chair and honourable senators, thank you for inviting me today to participate in your study of Bill C-241. As the deputy chair mentioned, I am joined today by Senior Analyst Nora Nahornick, who prepared the cost estimates for this bill and its predecessors.
I’d like to start with some context.
In May 2022, we published a costing note on the labour mobility tax deduction measure proposed in Budget 2022 to introduce a tax deduction of up to $4,000 per year for travel and relocation expenses for eligible tradespersons and apprentices.
We estimated that the labour mobility tax deduction would cost $459 million over five years beginning in 2021-22, and $108 million per year beginning in 2023-24, with an annual growth rate of approximately 2%.
The labour mobility tax deduction was introduced in Bill C-19, known as Budget Implementation Bill, 2022, No. 1, which received Royal Assent on June 23, 2022. The measure has been in effect since 2022.
I will now switch languages.
[English]
In December 2022, we published a note on the cost assessment of Bill C-241. Bill C-241 proposes an amendment to the Income Tax Act. It aims to allow tradespersons and indentured apprentices to deduct expenses incurred when travelling to construction job sites. These sites must be at least 120 kilometres away from their ordinary place of residence instead of the 150 kilometres under the current Labour Mobility Deduction.
It’s worth noting that Bill C-241 proposes no limit on eligible travel expenses compared to the existing $4,000 limit under the Labour Mobility Deduction.
All things considered, Bill C-241 would be very similar to the existing deduction in section 8(1)(t) of the Income Tax Act.
When considered with the existing Labour Mobility Deduction, we estimated that it will cost $19 million more from 2022-23 to 2026-27 to remove the $4,000 cap, and bring the minimum distance to 120 kilometres instead of the current 150 kilometres.
In conclusion, I’d like to highlight potential issues associated with Bill C-241. It could cause confusion for taxpayers forced to choose between two nearly identical deductions that serve the same purpose.
Furthermore, the absence of a specified cap on annual deductions for travel expenses and the added complexity that could result in administrative complications for the Canada Revenue Agency, or CRA, also add to the issues with this bill. Different amendments to the Income Tax Act could achieve the same goal as Bill C-241 without these administrative issues.
That concludes my opening remarks. My colleague and I would be pleased to answer any questions the committee members might have.
[Translation]
Thank you.
The Deputy Chair: Thank you, Mr. Giroux. Over to you now, Mr. Leblanc.
[English]
Pierre Leblanc, Director General, Personal Income Tax Division, Department of Finance Canada: Thanks for the invitation to appear today. The bill before you today — Bill C-241 — would introduce a tax deduction to allow tradespeople and apprentices to deduct from income amounts spent for travel to and from a job site where they are employed in a construction activity. In 2022, Parliament passed Bill C-19, which included amendments to the Income Tax Act to enact the Labour Mobility Deduction for Tradespeople. That was initially proposed in Budget 2022. As a result, tradespeople have been able to deduct expenses associated with their relocations for work starting with the 2022 tax year, and will continue to be able to do so under current law.
[Translation]
Compared with the deduction that would be enacted by Bill C-241, the Labour Mobility Deduction for Tradespeople that is already in law provides greater clarity on the definitions of some concepts and includes safeguards that contain its scope.
For instance, Bill C-241 does not define the terms “travel expenses” or “construction activity.” If the bill is enacted, we expect that the Canada Revenue Agency, or CRA, would eventually provide guidance on how to interpret the relevant concepts. However, the CRA has to interpret the legislation as written, and its interpretation could be broader or narrower than was intended.
Bill C-241 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, does not require that the travel be away from the area where the taxpayer is ordinarily employed, and does not require that the individual have earned any amount of income from the job for which they travel.
[English]
One result of these differences is that taxpayers may be able to deduct expenses for daily travel between their usual place of residence and their usual place of work if the commute is sufficiently long. This could create an unfair situation relative to other employees, given that commuting is generally considered a personal expense that is not deductible for income tax purposes.
Another result is that tradespeople might be permitted to deduct their travel to and from a location that is at least 120 kilometres away from their ordinary residence, so long as one purpose of the travel is to perform a job — however small — in that location. The deduction that’s currently in law limits the deduction to 50% of the amount earned at the temporary work location.
[Translation]
To conclude, typical scenarios outlined by stakeholders for tradespeople travelling to take temporary jobs away from their usual place of employment are already receiving tax relief under current tax law. Bill C-241 would add a second deduction for that same purpose, but risks also providing tax relief in other scenarios that may be unintended.
[English]
The introduction of a second deduction for the same purpose would make the tax system complex, and we have heard several times at this committee that the complexity of the tax system is a concern for senators. This would likely result in administrative challenges for the Canada Revenue Agency and confusion for tax filers, particularly given that this bill would be retroactive to 2022, and the 2023 tax filing season is about to begin.
We will be happy to answer any questions that you may have on this bill or the issues therein. Thank you.
The Deputy Chair: Thank you very much for your statement.
[Translation]
We will now begin the question and answer portion. Senators, please note that you will have a maximum of seven minutes each for the first round and three minutes each for the second round, so please be direct when asking your questions.
Witnesses, please respond concisely. The clerk will inform me when the senator’s time is up.
[English]
Senator Marshall: Thank you to the witnesses for being here today. I will start with Mr. Giroux. I want to ask some questions about the estimated cost that’s in your briefing note.
For the Labour Mobility Deduction, the budget estimated quite a significant amount more than what you are estimating: $25 million in 2021-22; $110 million in 2022-23; and $110 million in 2023-24. But your numbers are noticeably smaller.
I know that you said in your costing note that it’s the uncertainty that relates to the assumptions. Can you bridge those two amounts? You must have assumed something else. You must have assumed that most people would deduct under the Labour Mobility Deduction as opposed to under Bill C-241. Could you explain that?
Nora Nahornick, Senior Analyst, Office of the Parliamentary Budget Officer: I’m happy to explain that.
The costing note that we published for Bill C-241 is the incremental cost that we had assumed when we heard that this would be an amendment rather than two separate costings. You need to consider the original cost of Bill C-19 to the budget labour deduction that was passed in addition to the $19 million that we had estimated.
Senator Marshall: You assumed the same number of people — because the bill is much more generous than what already exists. It seemed like it wasn’t a lot of money, especially since the data that we have shows that there is about 1 million trade workers, and 700,000 of those — which is 70% — have actually tapped into the Labour Mobility Deduction.
Do you feel that incremental cost is sufficient?
Mr. Giroux: Yes, we do because there are relatively few individuals who would benefit from the reduction in the distance. It is just moving from 150 kilometres to 120 kilometres, so there are not that many individuals in that 30-kilometre radius who currently are not eligible and would become eligible — and the limit is also another factor. It’s just amending these two factors that results in the cost.
Senator Marshall: I will ask you a question that I will also ask Mr. Leblanc. Since the bill is pretty general in nature, and doesn’t have the specifics that the Labour Mobility Deduction has, can regulations be enacted? I think either you or Mr. Leblanc said in your opening remarks that the Canada Revenue Agency would probably flesh out more details, but is it possible that regulations could also be enacted under that bill?
Mr. Giroux: I will defer to Mr. Leblanc, my colleague from Finance Canada. He probably knows more whether regulations would be able to fix this.
Senator Marshall: I have just one last question, then, Mr. Giroux. I know the estimate of $1 million relative to the overall budget for the government is not material, but you wouldn’t have included that item in your fiscal update — would you? There is nothing new in your fiscal update that you released a couple of weeks ago.
Mr. Giroux: No, that would not be in our fiscal update — not Bill C-241.
Senator Marshall: Thank you very much.
Mr. Leblanc, if this bill passes, how do you integrate the existing Labour Mobility Deduction with this new bill?
Mr. Leblanc: Thank you for the question.
Senator Marshall: I realize it’s not you; it’s the Canada Revenue Agency. How will it be integrated?
Mr. Leblanc: The Canada Revenue Agency would be charged with informing taxpayers that there are two similar deductions, and they can choose one of them to prevail. It’s hard to think of many instances that are similar in the Income Tax Act.
Senator Marshall: For the budget that was outlined in either 2021 or 2022, in regard to the estimated cost, do you have the actual numbers there? I would be interested because there was $25 million budgeted for 2021-22, and then $110 million for 2022-23 and for 2023-24. Do you have the actual expenditure numbers?
Mr. Leblanc: We are still working with that estimate, senator, because tax returns are still rolling in for the 2022 tax year, which was the first year that people could claim the Labour Mobility Deduction for Tradespeople. When you look at a tax year, it’s sometime into the year after, so it will be sometime into 2024 before we have full data — when we can look at actual claims versus estimated claims.
Senator Marshall: Are you over the $25 million? I can ask you that.
Mr. Leblanc: It’s too early to tell.
Senator Marshall: It’s too early to tell. So you can’t tell us whether it’s under or whether it’s over.
Mr. Leblanc: When there is comprehensive full data for the 2022 tax year, we will be able to report on that.
Senator Marshall: Those are my questions.
Mr. Leblanc: Mr. Chair, the senator posed a question related to regulations. I wanted to make sure to follow up on that.
There is no provision in the bill. There has to be a provision in the bill that gives the Governor-in-Council the ability to make regulations. For the situation that you would have here, the Canada Revenue Agency would have to step in and provide, in this case, pretty detailed guidance. It is really the Canada Revenue Agency, as the administrator, providing guidance.
Senator Marshall: Thank you.
[Translation]
Senator Gignac: Good morning to our witnesses.
My first question is for Mr. Leblanc.
Is there a risk, Mr. Leblanc, that the tax deduction proposed in the bill could be misused? Without clear parameters such as a maximum amount of expenses or a minimum length of time spent on the job site, what do you make of the measure? It is after all more generous than the other deduction. What are the risks of enacting this bill?
Mr. Leblanc: Thank you for your question, Senator Gignac.
As I said, I think there is some risk. That’s why, when the Labour Mobility Deduction for Tradespeople was introduced, we included safeguards such as clear definitions to limit its scope.
For example, the deduction will not be limited to half the amount earned by the taxpayer from the employment. There is no such requirement in the bill.
Do you have other examples, Mark?
[English]
Mark Maxson, Senior Director, Employment and Education, Department of Finance Canada: To expand on that, I wouldn’t describe it as a situation of abuse because, ultimately, what the legislation allows is what taxpayers can claim. The issue that we face in the case of a deduction for travel, for example, is that people travel for a variety of purposes, and the bill before us doesn’t specify that the travel is for the purpose of employment. It simply says that there was employment at that location. It doesn’t require, as Mr. Leblanc mentioned, that they earn any particular amount of money from that job.
One can imagine scenarios where someone’s travel entails multiple purposes, and that there was a job at that location, but the cost of travel is, perhaps, twice what they’re actually earning from the job. In that scenario, it is fairly easy for the Canada Revenue Agency to conclude that the job probably wasn’t the principal reason they travelled if the cost was more than they actually earned. That’s the logic behind our condition in the existing act that limits the deduction to half of the amount earned. In that scenario, it is plausible that the job was the main reason or purpose for the travel.
[Translation]
Senator Gignac: This bill is a clear example of a measure that will result in more red tape and make the Income Tax Act more difficult to administer. This measure is very similar to the one enacted in 2022, under the budget implementation bill. As far as you know, Mr. Giroux, or in your career, is this the first time a member of the other place has brought forward a private bill so similar to an existing measure? Is there an alternative? Is there an amendment worth proposing? In the Senate, we can make observations, or propose amendments to a budget implementation bill. This is already covered by the Income Tax Act.
Mr. Giroux: As far as I know, this is the first time there has been a private bill so similar to an existing measure without directly amending it. It’s not uncommon for private bills to need some refining, given how complex the tax system and Income Tax Act are. The bill seeks to eliminate the maximum deduction amount of $4,000 and to reduce the distance to the job site from 150 kilometres to 120 kilometres.
To do those things without running into the problems the finance officials and my office have raised, it makes more sense to amend paragraph 8(1)(t) in order to remove the $4,000 cap, and to amend paragraph 8(14)(c) in order to replace 150 kilometres with 120 kilometres. Those are the two simplest ways to achieve the purpose of the bill, while avoiding the administrative issues flagged by the finance officials.
Senator Gignac: Very well. Your opening remarks were quite clear, and we’ve heard that there is a way to achieve the intended purpose other than through this bill. That is what I take from your remarks. Ultimately, the taxpayer will get to choose between the two measures, and there is no deduction cap. That’s what I’ve understood. All right. Thank you.
[English]
Senator Smith: The Department of Finance Canada has raised concerns about the broad scope of the bill before us. For example, it does not limit the number of trips or jobs, and you mentioned earlier that the government’s claim of $4,000 a year maximum is reasonable. Can you give us some background on why the existing Labour Mobility Deduction is capped at $4,000? What factors determined this figure?
Mr. Maxson: Thank you for the question. It’s not unusual to include a cap on deductions, especially for expenses that could entail different purposes. One of the issues in this particular case is that there was no existing data on the population or the amounts claimed in these types of contexts.
The specific $4,000 figure was put forward by Canada’s Building Trades Unions as an amount that might be typical of annual claims in this context. We took that amount from their financial projections, and over time, as we develop data from claims, the government or Parliament has the ability to revisit that amount.
Senator Smith: What’s the likelihood that would happen?
Mr. Maxson: I can’t speak to that.
Senator Smith: It’s too early to tell.
Mr. Giroux, the existing mobility tax deduction is, in general, a lot more restrictive and conditional than the one proposed in Bill C-241. Do you have any concerns with the lack of parameters set out in Bill C-241?
Mr. Giroux: Yes, my colleagues from Finance Canada have indicated some of these concerns, and I think these are very reasonable concerns. Notably, there is no clear definition of travel expenses; there is no clear definition around the fact that expenditures have to be clearly incurred for the employment that’s mentioned in the bill; and the fact that there being no limit could lead to expenditures that could be more than the income earned for the purpose of this type of employment. The concerns that they have mentioned to me are all valid and legitimate concerns.
Senator Smith: What is your number one concern if you look at the two bills overall? You have mentioned a lot of factors, but what is your biggest concern?
Mr. Giroux: My number one concern is that it would insert two deductions that would serve almost identical purposes. It adds to the complexity of the Income Tax Act, and makes this more complex to administer — when the goal was quite clearly, in my opinion, to eliminate the $4,000 limit and reduce the minimum distance from 150 kilometres to 120 kilometres. It introduces another type of deduction instead of amending the parameters in the existing deduction.
Senator Smith: Would your first objective have been to not have the bill, and instead go to Finance Canada and ask them to make some changes so that you could live with one piece of legislation as opposed to having two?
Mr. Giroux: Assuming that would be in the spirit of the sponsor of the bill, yes, that would be my preferred approach.
Senator Smith: Thank you.
[Translation]
Senator Dagenais: My first question is for Mr. Leblanc. As I understand it, Mr. Leblanc, this measure will be difficult for the CRA to implement. I’m sure you would agree that, even with clearer parameters, it can be difficult to implement bills. Right now, we are experiencing a labour shortage. It’s not unusual for workers in some fields to have to travel a good way to a job site. Don’t you think the $4,000 cap is a barrier that will prevent some workers from taking those jobs?
[English]
Mr. Maxson: It is certainly possible that some workers will have travel or expenses over the year that will exceed $4,000. However, as I mentioned, we, unfortunately, do not have existing data that helps us to gauge that probability or risk. As we and the Canada Revenue Agency gain experience with claims under the existing deduction, again, it’s open to Parliament to revisit that amount.
[Translation]
Senator Dagenais: Have you ever compared these types of deductions for tradespeople with those available to lawyers and other such professionals? Lawyers, for instance, can bill for their mileage, accommodations and meals. A lawyer could easily be called upon to argue a case in a different legal district. They are allowed to claim these types of expenses from time to time.
How do you respond to that, Mr. Leblanc?
Mr. Leblanc: The challenge is that there are two groups. We are talking about employees, and, as mentioned, employees generally aren’t allowed to claim these types of expenses.
Yes, I do recognize that self-employed workers or people who own their own businesses have a greater ability to deduct income-related expenses.
Employees aren’t usually allowed to claim travel deductions. However, the government wants to encourage workers to travel in order to support the country’s needs in the construction sector, so it opted to include the tax measure in the 2022 budget and enact it under Bill C-19.
Senator Dagenais: In Quebec, a lot of people from Montreal have had to travel to job sites that were a good distance away, such as the hydroelectric dam on the Romaine River. They had to either fly in or use their vehicle to get there and live nearby.
A lot of workers have left Quebec to work in the oil and gas sector in Alberta.
When I worked for the Sûreté du Québec, I wouldn’t work in the community of Kuujjuarapik, because the isolation allowance wasn’t attractive.
I’m coming back to Mr. Giroux. Am I wrong to think that this bill might be acceptable had there not been the measure in Bill C-19?
Mr. Giroux: Had there been no such measure in Bill C-19, the measure in Bill C-241 would definitely be new. There would still be the issue of the definitions, as the finance officials pointed out. I’ll let you decide whether it would be acceptable or not, but, yes, our concerns would have been the same.
Senator Dagenais: Thank you, Mr. Giroux.
[English]
Senator Pate: Thank you to all of the witnesses for appearing.
My first question is for Finance Canada. One of the areas that I’m concerned about is the ways in which we keep trying to piecemeal address issues. This seems to be one of those measures, where Bill C-241 seems to be trying to support construction workers, or ostensibly address the housing crisis.
We seem to keep having these kinds of specialized tax deductions or tax credits added on, which provide small amounts to targeted groups, but aren’t necessarily being provided to those with the lowest incomes.
I’m curious as to how many of these kinds of measures have been introduced since 2015, if you have an idea of that. Do you have estimates regarding the annual costs of these measures? Finally, do you have any estimates regarding the costs of administering the current complex tax system versus what might be achieved if the planned Budget 2023 announcement of providing more automatic tax filings is introduced? These are three questions related to that theme.
Mr. Leblanc: Thank you for the questions, senator.
In regard to the first two questions — in terms of the measure — it all depends on what one would define as a targeted measure. That’s something we can take back and think about.
As you noted in your third question, in terms of the Budget 2023 announcement on automatic tax filing, it’s an important measure for the government. The idea is to do a better job of ensuring that vulnerable Canadians get the benefits to which they’re entitled. That being said, I would almost treat them as somewhat separate.
Here the government and Parliament have chosen to provide a special deduction in order to provide special recognition to this expense in the interests of encouraging a particular type of activity. You’re still going to have those types of measures. Government and Parliament will decide what type and how many, in addition to the efforts to expand the uptake of benefits to those who are eligible.
Senator Pate: Would you be able to provide the detailed amounts to the committee in writing?
Mr. Leblanc: We can see what we can provide.
Senator Pate: That would be great; thank you.
To the Parliamentary Budget Officer, thank you very much; it seems like we’re now seeing you almost every day.
Leaving aside broader measures, like the GST tax credit, for example, do you have any numbers regarding the amount of government revenue foregone each year as a result of the series of targeted, complex tax deductions and tax credits currently contained in the Income Tax Act?
I’m particularly concerned with how much we lose in tax revenue each year to support people who are not necessarily those with the lowest incomes and in the most need.
Mr. Giroux: We don’t have that information. However, the Department of Finance regularly publishes the tax expenditures report. If one looks at that comprehensive report, then one can make an assessment as to what constitutes a targeted tax measure as opposed to a measure of broad application.
They’re usually quite good at estimating the amount foregone in terms of revenues for each of these measures. Some are very small, so numbers cannot be estimated. For the majority of measures, there is an estimated amount related to each of them.
Senator Pate: That’s something where I can do my own addition next time around, and I will.
Mr. Giroux: The library can help you, or the very capable analysts of this committee, or ourselves.
Senator Pate: Thank you. You may have already answered some of this, but, in terms of the difference between these two benefits, have you been able to calculate what the cost to taxpayers would be regarding the difference between the government’s provision and Bill C-241, or is it too early to know?
Mr. Giroux: We have estimated that removing the limit of $4,000 and reducing the minimum distance from 150 kilometres to 120 kilometres would cost about $19 million over a four-year period. It’s not that much more expensive compared to current measures. It’s based on estimates that are using the available data.
There’s a level of uncertainty related to these estimates depending on behavioural impact, and whether employers would reduce the reimbursement of these measures, sending more of their employees to pay for their expenditures out of pocket as opposed to reimbursing them.
Senator Pate: Do you have any concern that, like the Canada Emergency Response Benefit, or CERB, issue, if there’s confusion — as both of your organizations have talked about — there may be issues around needing clawbacks, as well as a disproportionate impact on people after the fact?
Mr. Giroux: Potentially. The main concern that we have — and I think Finance Canada shares this — is having two deductions; that complicates tax filing for individuals who are not tax specialists, and who are trying to do their job. At tax filing time, they’ll probably have to talk to their tax preparers. They’ll have to decide which of these two deductions to go for. It’s an unnecessary complication for taxpayers.
Senator Pate: Thank you.
Senator Loffreda: Welcome to our witnesses, our panellists, our experts, this morning.
My question is for the Parliamentary Budget Officer, Mr. Giroux. In the sources of uncertainty, you mention and state — or Ms. Nahornick stated it — that the main source of uncertainty relates to the assumptions used to determine the number of eligible workers and their average eligible expenses.
My question is this: Is it because you feel that with this bill more people will join the building trades, it increases that uncertainty level? There are currently 1 million trade workers. Maybe it is a policy question, but, nonetheless, I’ll put it out there.
Based on your experiences, what other incentives could be implemented or would be required to increase trade workers, which we are in short supply of at this time in Canada.
Mr. Giroux: The main source of our uncertainty, as you mentioned, is based on the data that we use. We used employment data from Statistics Canada, and, by “main source of our uncertainty,” we mean that we have made some assumptions regarding how many workers would be eligible based on that data set. If we were to be wrong in these assumptions, the costs could be higher or lower, so that’s what we mean by that level of uncertainty.
When it comes to incentives for tradespersons, it’s difficult to make suggestions as to additional incentives. When there’s labour scarcity, the salaries and working conditions tend to improve, but, beyond that, it’s difficult to make additional assumptions. There are already a number of tax deductions and credits available for tradespersons. There’s one to improve or incent mobility, but it does not necessarily increase the number of apprenticeships, for example, or more deductions for those entering these trades — but they already exist. Maybe it’s an issue of making them bona fide, as well as advertising the benefits of tradespersons and going into these professions and these types of training. That’s probably as much as I can share, not being an expert myself.
Senator Loffreda: Thank you. It’s noted here that you used employment data from Statistics Canada, and projected forward the eligible subset of tradespersons and apprentices by considering the historical growth of employment in the construction industry and your projections of the labour force. What is that historical growth number? Today, we’re putting this bill in place to try to solve that problem of scarcity of tradespeople. Are we growing more quickly now than we have in the past, or has the number of 1 million trade workers been steady over the years? Was the fact that you don’t have a limit on travel expenses an issue in determining your costs for this bill?
Ms. Nahornick: In terms of how we ended up doing our projection, we have our internal economic model as part of our projection forward of the construction workers. We also considered other economic factors and did a regression analysis in order to determine what we anticipated the subset of construction workers and tradespersons to be. We used that for our basis of growth. I don’t have the number in front of me, so I can’t speak off the top of my head as to what that is exactly.
Senator Loffreda: Has there been an increase in the 1 million trade workers that we have today? Do we need more today? I’m looking for those projections. And why is there scarcity? Is it scarce resources? Do we have fewer tradespeople on the market now than we’ve historically had, or are projects increasing because of different issues, such as population growth due to immigration or what have you? I’d be interested in having some of those numbers in order to determine the efficiency of this incentive and further incentives.
Mr. Giroux: We used estimates from Canada’s Building Trades Unions, so we’ll go back and see if we have that type of information in our data sets.
Senator Loffreda: With respect to the no limits on travel expenses, has that been a hurdle in determining cost?
Mr. Giroux: Yes, and we find that it’s the determining factor in driving up the cost for Bill C-241.
Senator Loffreda: Thank you very much.
Senator M. Deacon: Thank you very much for being here. I’m going to piggyback a little bit on my colleague Senator Loffreda.
When I found that I had the opportunity to come today, the luck of the draw was that our Canadian Home Builders’ Association is here in town, so last night I had a chance to do a round table. I’ve tried to bring this bill to the practical — this is where I’m getting to — and I can say to my colleague that they are desperate across all areas and short-staffed across the country. Their priorities are trying to man their jobs and their sites from every angle: electrical, plumbing, building and fabrication. We had a great chat about that.
I talked about this bill, and, of course, the mileage piece and the $4,000 piece were well received, but for the whole idea of tax — two things that are similar — they were quite familiar with what I was talking about. This bill was probably introduced in very good faith — I don’t have any issue with that — but they said, “Please, do not make this more complicated because we don’t even have tax accountants available to help us because they’re so stretched.” So it goes on and on.
The supply chain of expertise in the Canadian trades unions is very depleted. I can’t debate the $1 million, but it was very passionately explained to me last night across five different union groups.
Where I’m getting to is this: We use an example of guys going from Waterloo, Ontario, to Beamsville, Ontario. It is 118 kilometres, but with traffic and routes altered, it’s actually 132 kilometres. They will probably be eligible, and they talked about this, making sure they’re recording and doing all the things that are due and just.
At the end of this, if we carry on, you must be anticipating more administrative support. There’s going to be a hiccup here if there are two very parallel, somewhat confusing, already daunting concepts in the tax world — for regular folks, this is not their lane. What is the anticipated cost for administrative support to try to make this work — the very best that it can — in its birth?
Mr. Leblanc: Thank you for relaying the discussion that you had at the round table. That’s very interesting. It’s hard to come up with a number — certainly on the spot — but to think of the types of costs that it might produce, it could be things like the pressures it might create, such as people calling the CRA. They’re already finding out about the one deduction, which was passed in Bill C-19 and became available last year. We can expect that workers and their unions are just learning about this. Some are probably calling in, and asking how this works and what is eligible. The CRA is fielding those calls, amongst all the other calls it’s fielding.
If you were to add a second deduction, you can imagine that people will be asking, “What is going on now? What can I do? What are the rules?” That’s probably a good example of how big that is. It’s hard to say, but qualitatively that would be the type of cost pressure that could result.
Senator M. Deacon: It’s also back to 2022?
Mr. Leblanc: That’s what the bill has right now.
Senator M. Deacon: That was one of the conversation pieces, saying this will be even more of a change and a driver of time. I won’t call it “retro” just yet, but it is retro.
Mr. Leblanc: It’s retro for 2022. We’re approaching the end of October. Right now, the CRA is finalizing the tax forms, and working with software providers to have everything ready for 2023. It would depend on how legislative processes work, but everything could be out there for 2023 — providing information on what is now current law for one deduction, and then something could change. It might not just be 2022 where there’s a retroactive or backward-looking element.
Senator M. Deacon: It would probably be the recommendation of the trade union groups, but what’s the origin of the 120 kilometres, which was agreed upon and recommended, that came from the bill — I’m curious how that number was determined, and if it came as a culmination from the trade union groups. I think it’s a fairly good incentive — from 150 kilometres to 120 kilometres — but I’m kind of wondering how they landed on that number.
Mr. Giroux: Personally, I don’t know. I know there was a bill tabled by an NDP member a few years ago that landed on 80 kilometres, so 120 kilometres is far enough from home that you can’t really consider it normal commuting. I don’t know if there’s any magic or anything specific about 120 kilometres.
Senator M. Deacon: Thank you.
Senator Duncan: Thank you very much for your appearance here today. I would argue that there is experience with travel deductions in the northern residents travel deduction. I have two points about that.
The amount that one is able to deduct is based on the cost of travel, so it’s a set airline ticket or a rebate of some kind. It’s designed to help people who have to travel south for medical purposes and other reasons — and the cost of the distance of this great country. The CRA has that experience, and, likewise, because of the Income Tax Act and the scarcity of resources to assist with it, there are many northern residents in the Yukon who were audited continually — every year — on the same issue.
My question really follows on Senator Deacon’s point. I can see in this bill — because of the complexity that you’ve noticed — a significant issue in terms of staffing and resources for the CRA. While I’m not denigrating in any way the intent and the need for the transfer of mobility, I’m concerned. Given the experience of the CRA with these sorts of deductions, and given the experience that I’m aware of, do you have the amount of resources it’s going to take to administer this?
Mr. Maxson: Unfortunately, I can’t give a specific number until it’s passed. At that point, maybe the CRA would examine it more closely. If they felt the need for additional resources to administer it, they would put forward a request for that funding. At this time, that kind of estimate hasn’t been done.
Qualitatively, I certainly agree that any time you’re introducing a new deduction that requires that the CRA validate claims, it is going to require some new resources on the validation and compliance side, and, as has been previously mentioned, resources on the public-facing side to help answer questions. As you are familiar with, northerners also reach out to the CRA quite often for assistance in navigating these rules, so I think that’s a reasonable assumption.
Senator Duncan: If I understand you correctly, what we get in terms of information is what it would cost the taxpayer, but we’re not given the information — and there’s no analysis — on what it’s going to cost in terms of staff resources.
Mr. Maxson: Not at this stage, there isn’t.
Senator Duncan: Was the northern residents travel deduction at all considered in Bill C-19 in the design of the other deduction?
Mr. Maxson: I don’t know that it was specifically considered, but the northern residents travel deduction isn’t the only provision where there is a recognition for travel. The medical expense tax credit, for example, has a travel provision that is specifically for medical travel outside of the North, and there are existing provisions for employees who need to travel as part of their job.
This one is a little bit different. What makes it different from the previously existing provisions for employee travel is that there is travel for people who work for a single employer continuously — and, as part of their job, they need to travel away from their normal workplace to visit a client, or something like that, and come back. What is different in this case is that they’re moving to a new job with a new employer that wasn’t really covered under the broader existing travel provisions.
The short answer is that we considered a range of experience that the department and the agency have with claims for travel, and tried to reflect that knowledge in designing the version that is in Bill C-19.
Senator Duncan: Thank you.
[Translation]
The Deputy Chair: We are now beginning the second round.
[English]
Senator Marshall: My question is for Mr. Leblanc. We’ve been talking a lot about the available data, or the data that’s not available — the limitation of data — and I think even the Parliamentary Budget Officer referenced the available data.
Why is there no data available to us on this? The first year was 2021-22. That was 19 months ago. I appreciate your comments that it’s not the final data, but why can’t we get interim data? It’s always an issue when I’m looking for information. To properly review this bill, I’d like to know what percentage of taxpayers claimed the maximum deduction under the Labour Mobility Deduction, and I would have liked the numbers for both 2021-22 and 2022-23. It’s very disappointing that we don’t have the data that we need to review this.
The $4,000 is not a lot of money. It’s minimal, given the costs. We talked about airfare, gas, hotels and food. In my province of Newfoundland and Labrador, people aren’t just going to places within the province; they’re going back and forth to Alberta all the time trying to make a living. They don’t have a permanent salary like we do. They’re just trying to make a living going from job to job. Why can’t we get the data that we need to properly review this bill, even if it’s interim data?
Mr. Leblanc: Thank you for the question, senator. As people who use tax data for many parts of our job in advising the Minister of Finance, we would love to get tax data sooner rather than later. The situation here is that the first year that people could claim is 2022. You would think that most people file their 2022 returns by April 30, 2023, but there’s a large group of people who don’t; people will still file in the summer of 2023 and in the fall of 2023.
Senator Marshall: But even the interim data, Mr. Leblanc. The problem is that we’re here trying to review a bill, and we’re talking about the $4,000 limit — which is something that almost everybody mentioned — and we can’t even get the data on where we’re at right now. I don’t know if the government has the data and doesn’t want to share it, or if they don’t have it — but they should have some interim data. It’s the federal government; we’re spending half a trillion dollars a year. I don’t know if you can add any more to that.
Mr. Leblanc: As soon as the data is available, we’re looking at early 2024 to see what we could share. But the way things work, that is the timeline we’re on.
Senator Marshall: No further questions.
[Translation]
Senator Gignac: This is for Mr. Leblanc. I’m trying to grasp the difference between the measure in this bill as it relates to travel expenses and the measure that was in Budget 2022, the Labour Mobility Deduction for Tradespeople.
If I understand correctly, the measure in the 2022 bill requires relocation, not just travel. There has to be a temporary relocation. Is that a requirement? However, this bill pertains only to travel expenses. The first bill sets out a requirement, under the current rules, but that’s not the case here. Do I have that right?
[English]
Mr. Maxson: Yes, you’re correct. The issue that was brought to us by stakeholders prior to Budget 2022 was that it was a common occurrence for this industry — for this group of workers — to have periods when there are not jobs available to them locally, and they need to take a job that’s somewhat far from their current residence or usual place of employment. This was put forward. Instead of going on Employment Insurance, they will take a job somewhere else, for example.
The scenario that the measure tried to address was the people who were travelling temporarily to a different location to work at a different job. It was not framed as being, “My commute is 130 kilometres, and I am going back and forth every day.” That was not something that was envisioned by Bill C-19.
That’s not something, frankly, that any employee would be allowed to deduct currently. The current bill in front of us would be, ultimately, for the CRA and the courts to interpret, but it is entirely possible that it would allow a deduction for daily commuting above 120 kilometres.
[Translation]
Senator Gignac: This would be a first, then. Isn’t there a fairness problem? This measure is for people in construction. My daughter-in-law is a teacher. She gets a call a day ahead to fill in for someone, so she ends up driving a good few kilometres a day. She’s hired on a temporary basis, so she has to travel dozens of kilometres to substitute for another teacher. In the regions, workers have to travel a lot. Does this create a precedent for a group of employees who get to claim travel expense deductions on their income tax returns, or does this already exist elsewhere for other groups?
Mr. Leblanc: Thank you for your question. I understand what you’re saying, but the Labour Mobility Deduction for Tradespeople in Bill C-19 is the result of a decision the government made to target the construction sector. The same is true of Bill C-241. The government has decided that, for the time being, those are the workers it wants to capture through this measure.
Senator Gignac: The precedent was established in Budget 2022, because the measure didn’t exist before that. The government established the precedent in its 2022 budget, if I understand correctly.
Mr. Leblanc: For temporary travel, yes.
Senator Gignac: Yes, since people have to travel. However, this bill goes further than the existing measure because a temporary relocation isn’t required. Am I mistaken? The measure in the 2022 budget bill had a relocation requirement, but this bill focuses instead on travel to and from the job site.
Mr. Leblanc: Under the current measure, the relocation period has to be at least 36 hours.
Senator Gignac: That is a requirement.
Mr. Leblanc: It can’t be daily. Commuting there and back doesn’t count.
Senator Gignac: Yes, but this is establishing a precedent. I’ll explain what I mean. My daughter-in-law the teacher comes home at the end of her workday, so she wouldn’t be eligible. This measure is creating a precedent because it doesn’t require the worker to sleep away from home. They can go to the job site and come back the same day. That’s the precedent I’m talking about. For a specific population of employees, the employer didn’t reimburse them for travel between their home and their place of work, in other words going to work in the morning and coming home at night. Now, though, there is no requirement to sleep away from home, so they can claim the travel expense deduction. That’s a precedent. Am I wrong?
Mr. Leblanc: No, that’s a fair statement.
Senator Gignac: This is creating a precedent, then.
[English]
Senator Smith: My question is to both groups, if you wouldn’t mind. The existing deduction is conditional on the temporary work location — the temporary lodging — being in Canada. There is no condition like this in Bill C-241.
Do you have any concerns about Canadian tradespeople using this deduction and trying to work across the border, especially in places where you have close proximity and long-term relationships? New Brunswick is an example. There is a lot of movement back and forth between New Brunswick and the U.S. Is there any concern that you would have? Would it qualify as a concern, or has it never happened?
Maybe both of you can comment on that, starting with Mr. Maxson and then Mr. Giroux.
Mr. Maxson: Thank you for the question. One thing I can say is that, as you may have noted, the existing deduction is not allowed for a job site that is outside of Canada, and Bill C-241 does not place that restriction.
Certainly, irrespective of these deductions, tradespeople can already choose, if they live near the border, to take jobs in the United States. That’s certainly their choice; they can do that.
All I can say is that on the margin under the existing law, there is tax recognition for those who choose to work in Canada for these temporary jobs, and not for those who choose to work in the United States. Under Bill C-241, that difference would not be the case. They would still be able to potentially get this deduction for the job in the United States.
Senator Smith: I am worried about manipulation — that’s all.
Mr. Giroux: The concern that you mentioned is something that I had not thought about, but if the purpose of having a travel deduction for tradespersons is to increase the supply or mobility in Canada, yet we allow a deduction for those in Canada who go work in the U.S., that totally defeats the purpose of increasing the supply of tradespersons. It’s one good example as to why I think amending the current provisions that were implemented through Bill C-19, as opposed to this bill, would be a better approach to removing the limit of $4,000 and reducing the distance — rather than proceeding with Bill C-241. It’s one more concern that can be raised with Bill C-241.
Senator Smith: Thank you.
[Translation]
Senator Dagenais: Mr. Leblanc, you said that this type of deduction isn’t usually available to employees. To my knowledge, employees can submit claims for incurred expenses to their employer, who tallies them up and deducts them from their annual income, which allows them to pay less tax on their profits. A junior lawyer or accountant at a big firm has an advantage over a tradesperson who is permanently or temporarily employed at a job site that is far from home.
Other than the worker’s social standing, what’s the difference?
[English]
Mr. Maxson: You’re quite right; there is a high-level framework when we’re talking about these types of expenses, and when we’re talking about employees in a typical scenario. The government’s view or expectation is that employers should be providing their employees with the tools they need, and if they need to travel for the job, then, generally, we anticipate that the employer will either reimburse that or provide some sort of allowance or pay it outright. The deduction for those expenses, as ordinary business expenses, would be deducted by the employer. But we recognize that in a number of scenarios, it may not be practical or possible for the employer — or perhaps they simply don’t — to pay for these expenses. That was part of the underlying rationale for the measure introduced in Bill C-19, which was that, in this particular case, we’re typically not talking about someone who is travelling at their employer’s behest to another location and coming back.
They’re not on the job with their ordinary employer — rather, they’re travelling in order to get a job temporarily with a new, different employer. That new, different employer at the distant location may or may not be providing any sort of relocation allowance. Maybe most of their employees are local, and there is simply a subset who are coming from further away. That employer, perhaps, doesn’t want to provide relocation allowances to some employees — but not to the local ones — so they don’t provide any assistance in that regard.
Recognizing that in this scenario, for particular business reasons, these employees are not getting that assistance from their employer, this special provision was put in place to try to help those employees who have to pay for the travel out of pocket.
[Translation]
Senator Dagenais: I want to follow up on what Senator Gignac said. Sometimes bills create classes of employees. Senator Gignac said that his daughter-in-law has to travel for her job as a substitute teacher when she works at other school boards, which is very common today. Those workers can’t claim any deductions for their travel, even though they may have to travel to a fairly remote region because there aren’t enough teachers.
Don’t you think that, at some point, it’s necessary to bring the bills in line with today’s job realities, especially since there is such a major labour shortage? Shouldn’t the government bring forward better bills to make it easier for workers to move around?
[English]
Mr. Maxson: Certainly, that is something that the government can look at. There is always a variety of scenarios. It is a matter of trying to target the scenarios where there is the most need.
Certainly, the trades is an industry — a sector — that brought forward the concern that this type of situation was very common. That’s not something we have heard from other sectors or industries to date. Obviously, the Department of Finance is always trying to examine the tax system to keep it fair and efficient. That’s something the government could consider in other contexts in the future.
[Translation]
Senator Dagenais: Thank you.
[English]
Senator Loffreda: My question is around eligible deductible expenses. We do have a lack of tradespeople, as we mentioned. It is leading to greater relocation.
Assuming a taxpayer moves to a job site — relocates temporarily — and the project they are working on exceeds one year, then the expenses in year one, due to the relocation, exceed his income for year one. What happens to these additional expenses? Are they lost?
I’m asking the question because usually deductions are limited by your income generated for tax purposes. Is there a provision that would allow these expenses to be carried forward?
Mr. Maxson: Thank you. As you mentioned, typically these deductions are limited by your income. Under the current deduction in law, it’s limited to 50% of the earnings at that temporary location. Any excess can be carried forward to the next year.
For example, if you took a temporary relocation that started in December, and the only expense you have incurred, as of the end of the year, is your flight out — and you have not had time to earn much — the bill that is currently in law, in fact, allows you to take the earnings in January and apply those to your claim in the previous year, or to potentially carry forward the expenses, if necessary, to the next year. It provides that flexibility.
There is another provision currently in law called the moving expense deduction which is intended for more permanent moves. If we’re talking about a scenario that lasts a full year — this becomes a question of fact for the CRA — it is possible that could qualify as a move under the moving expense deduction.
That one has a similar rule that the amount deducted can’t exceed the total earnings at that new location. Again, there is a carry-forward provision. The bill before us today does not actually provide any rule that says your expenses can’t be more than your earnings. The entire amount of the expenses could simply be deducted in the current year, regardless of how much you earn from the job. It would offset other income. It would create a loss effectively.
Senator Loffreda: Create a loss and offset the other income if there is other income.
Mr. Maxson: Other income from other sources.
Senator Loffreda: If there is no other income, then it can be carried forward to a subsequent year?
Mr. Maxson: I’m not sure that it could. I would have to confirm that in a general case.
Senator Loffreda: It would be lost. Maybe you can answer that.
But we do have, as we mentioned, 1 million trade workers and half a million Canadian workers who belong to 14 international unions, if I look at the note we read this morning.
What is the feedback from the stakeholders? Have they been consulted? What are the echoes you have heard? Are they content with the current bill? Does it satisfy their needs? What is your information regarding the issues that we mentioned, as well as the obstacles that we and the Parliamentary Budget Officer mentioned from the get-go this morning?
Mr. Leblanc: Thank you for the questions.
If you think of the unions, like Canada’s Building Trades Unions, they wouldn’t be talking to us about this current bill. We can’t speak to those conversations that they have had with the sponsor.
We do know that they were pleased with the measure passed by Parliament last year, and that’s currently in law: the Labour Mobility Deduction for Tradespeople. The feedback from the union was certainly positive.
In fact, we and the people at the CRA worked with that union after the measure was passed by Parliament to try to determine how best to get information about the new measure, and how to disseminate that information to workers who are eligible for the measure. We can’t speak to their views on this bill before you.
What we can say is the reaction was positive to what you passed in Bill C-19.
Senator Loffreda: The precedent legislation.
Mr. Leblanc: Yes.
Senator Pate: For the Parliamentary Budget Officer, thank you for your suggestion. We have already sent the request off, as you suggested, to the Library of Parliament.
When you carried out your costing, how many tradespersons and apprentices did you assume would benefit from the measures? This is a question for you, Ms. Nahornick.
Ms. Nahornick: We ended up assuming that approximately 10% of individuals would benefit from these bills. That ended up being our assumption.
Senator Pate: Were you able to tell from what income bracket they would be?
Ms. Nahornick: No. We had limited data. In doing this costing, we had to make a number of assumptions because there is no data about individuals who would necessarily benefit when we originally came out with this costing.
Senator Pate: I suspect that I know the answer, but were you able to assess whether that would lift anybody above the poverty line who currently would be below it?
Ms. Nahornick: That is not something we ended up looking into for this costing at this time.
Senator Pate: Would it be possible to get that information, or would that be speculative?
Ms. Nahornick: When more information is released in the 2022 tax year on individuals who benefited, we could reanalyze and relook at this analysis, and make assumptions based on that and consider it.
Senator Pate: Thank you. Do you know — if this bill is implemented — on average, how much each beneficiary would receive?
Ms. Nahornick: We looked at an average. We wouldn’t know, obviously, on an individual case. We ended up assuming that in the first year, it was about $4,000.
One of the biggest uncertainties that we did mention is eligible costs at the end of the day. We looked at historical data, and we did not assume behavioural impacts for this. So if individuals are more likely to start taking on more job opportunities as a result of the unlimited measure, then that would change the estimate. But, at the time, we didn’t have information, so we took historical assumptions.
Senator Pate: Thank you very much.
[Translation]
The Deputy Chair: I have two questions. The first is about the $4,000 cap. You set the cap after consulting with union officials who represent the workers in these trades. Is that right?
[English]
Mr. Maxson: That’s right. It is an amount that was put forward as typical of these types of expenses in a year — in their own financial projections.
[Translation]
The Deputy Chair: Thank you. Supposing Parliament passes this bill with an amendment to cap the deduction amount at $4,000, we would have two similar pieces of legislation on our hands. In your experience, what happens when two bills prescribe measures that ultimately say and do the same thing?
Mr. Leblanc: Thank you for the question. As already mentioned, this is a rather unique situation. We don’t find many cases like this. It would really be up to the Canada Revenue Agency to determine how to administer these measures and how to inform these workers that there are two possible deductions. It would be quite a different situation.
Mr. Giroux: We could also have a scenario where the administrative issue is unnecessarily complex, and a scenario where people file modified tax returns. If they comply with Bill C-19 and find that it would have been more advantageous for them to go with the new deduction, there will probably be an increased number of amended tax returns in subsequent years, so there will be higher administration costs.
The Deputy Chair: Thank you.
[English]
Senator Marshall: Mr. Leblanc, the $4,000 limit is not much because the taxpayer won’t get the $4,000. It depends on what quintile they are in and how much tax they are paying.
How many years ago was that $4,000 limit established?
Mr. Leblanc: It was established in 2022, so it was when the government proposed the measure in the budget of last year.
Senator Marshall: It was 2022 — so that was last year.
Have there been discussions about increasing that limit?
Mr. Leblanc: No, it is pretty recent, but I think, as was said earlier, once we start to get actual data, and once we see not only how many claims there are but also the amount that’s claimed, you can see how many people are hitting the maximum amount, and that’s something that governments can reflect on.
Senator Marshall: The Parliamentary Budget Officer can give us a better estimate. Thank you.
My next question is this: Why did the department decide to go with a tax deduction as opposed to a tax credit? Was there ever any consideration for a non-refundable tax credit?
These are workers that, generally speaking, I wouldn’t consider to be high-income workers, and I see them on the plane going from Newfoundland to Calgary all the time, so a tax credit would be of more benefit to them. I am thinking about the benefit to the taxpayer. Has there been any consideration about that, and why did the government decide to go with a tax deduction as opposed to a non-refundable tax credit?
Mr. Leblanc: Generally, if they are in the first bracket, you can expect it to be, in most cases, of equal value because the large majority of our non-refundable credits are 15%, which is the lowest tax rate. Then, if they are in a higher bracket, the benefit would be greater from a deduction than from a credit.
Another way to think about it, senator, is that, basically, it’s about measuring income. It’s about measuring net income.
Senator Marshall: My question was this: Did the department sit down and say, “Do we go with a tax deduction, or do we go with a non-refundable tax credit?” I’m thinking about the benefit now to the taxpayer as opposed to the government’s revenue.
Mr. Leblanc: We do consider those cases. Basically, no one is worse off with a deduction than with a credit, and some people are better off with a deduction than with a credit.
Senator Marshall: I would argue that. I think I would go with the non-refundable tax credit, but we won’t get into taxation. I just wanted to make the point that the $4,000 limit — even though you are saying it was last year — is really not that high when you consider it. I think about my fellow Newfoundlanders and Labradorians travelling back and forth to Calgary, Alberta, and when you think about the cost of airfare, hotels and meals, $4,000 adds up pretty quickly. This is why I was asking the question about the tax credit as opposed to the tax deduction.
Thank you for your answer.
[Translation]
The Deputy Chair: Following up on Senator Marshall’s very pertinent question, do we have any statistics? This would be a rather special case; we’re talking about someone from the Gaspé or Newfoundland and Labrador going to work at their own expense, as these would be non-reimbursed expenses. I imagine it must be fairly rare for someone to go to work at their own expense in Calgary or Winnipeg, whatever the case may be. Do we have any statistics? When we say that the union suggested a cap of $4,000, that must take into account the distance and costs incurred that are not reimbursed by the employer?
[English]
Mr. Maxson: No, unfortunately, we don’t have much data on these types of expenses.
One thing that I would like to clarify is that the amount of $4,000 was put forward as an amount that was typical of these types of expenses. I wouldn’t want to put words in their mouth in terms of suggesting a cap, but that was just an amount that they put forward as typical. I can’t really speak to how they arrived at that number.
[Translation]
The Deputy Chair: Thank you. We have now gone through the questions we wanted to ask the witnesses. Thank you for appearing before us today. Your testimony helps us, on behalf of all Canadians, to focus on four key principles: transparency, accountability, reliability and predictability. That’s what Senator Mockler, our chair, often says.
I would like to remind senators that our next meeting will be tomorrow, Wednesday, October 25, 2023, at 6:45 p.m., to resume our study of the 2023-24 Main Estimates.
I’d like to thank this committee’s support team, those in the room as much as those working behind the scenes whom we don’t see.
[English]
Thank you for all your work, which contributes enormously to the success of our work as senators.
(The committee adjourned.)