Moved second reading of Bill C-241, An Act to amend the Income Tax Act (deduction of travel expenses for tradespersons).

She said: Honourable senators, I rise today as the sponsor in the Senate of Bill C-241, An Act to amend the Income Tax Act (deduction of travel expenses for tradespersons) — it’s the “fair travelling tradesperson’s bill,” as MP Chris Lewis said when he proudly introduced the bill in the House of Commons.

I would like to begin by acknowledging my colleague in the other place, Member of Parliament Chris Lewis, for his tireless work on this bill and his advocacy on behalf of Canadian tradespersons. I would also like to thank all of the MPs from all parties in the House of Commons who supported this legislation at third reading and sent it over to this chamber, including unanimous support from the Conservatives, as well as the New Democratic Party, the Bloc Québécois and the Green Party.

Colleagues, Bill C-241 is an act to amend the Income Tax Act to allow tradespersons and indentured apprentices to deduct from their income amounts expended for travelling where they were employed in a construction activity at a job site that is located at least 120 kilometres away from their ordinary place of residence.

This bill will amend section 8(1) of the Income Tax Act by adding the following to include the tradesperson’s travel expenses:

(q.1) where the taxpayer was employed as a duly qualified tradesperson or an indentured apprentice in a construction activity at a job site that was located at least 120 km away from their ordinary place of residence, amounts expended by the taxpayer in the year for travelling to and from the job site, if the taxpayer

(i) was required under the contract of employment to pay those expenses,

(ii) did not receive an allowance in respect of those expenses that is not included in computing the taxpayer’s income for the year, and

(iii) does not claim those expenses as an income deduction or a tax credit for the year under any other provision of this Act . . . .

Colleagues, this is a simple bill, yet it is very important. Tradespersons play a vital role in our communities. They are hard-working individuals whose skills are essential in providing access to basic needs, like clean water, electricity, safe homes and buildings, safe infrastructure and clean energy. Their day-to-day work life is comprised of long hours, travel and tight deadlines. They frequently miss valuable time with their families. The work they do and the importance of skilled trades are immeasurable. We cannot take for granted the essential services that they provide for all of us.

By the very nature of their work, every construction job is temporary. When one job is done, they must move to the next job site. These job sites are often many miles away from the tradesperson’s home, and sometimes located in another province.

If you are a businessperson, these travel costs have been deductible for a very long time if you incurred those expenses to earn business or professional income. But for tradespersons, this has not been the case.

In March 2021, NDP member of Parliament Scott Duvall attempted to change this inequality when he introduced Bill C-275 as a private member’s bill. Later, in December 2021, MP Matthew Green reintroduced the same bill once again. However, neither of those bills made it to second reading because of the nature of private members’ business in the other place.

During that same period, Canada’s Building Trades Unions, known as CBTU, was actively pressing the federal government to recognize these costs as legitimate, tax-deductible expenses for tradespersons. In their pre-budget submission, their first recommendation to the government was as follows:

That the Government permit a skilled trades workforce mobility tax deduction to allow skilled trades workers to deduct work-related travel costs when these costs are not covered by their employer.

They went on to explain in more detail:

The Income Tax Act is currently an inequitable tax policy in its treatment of construction workers related to the deductibility of work-related expenses. Salespeople, professionals and Canadians in other industries can receive a tax deduction for the cost of their travel, meals, and accommodations. The same option is unfairly denied to skilled trades workers who work on jobsites that are in different regions or provinces from their primary residence. The Government has a responsibility to ensure a system of tax fairness is in place for all Canadians and to support skilled trades workers who build our infrastructure and communities.

Skilled trades workers have always had to travel for work — that’s why we’re called journeypersons. But infrastructure investments and growth across the country is oftentimes uneven, with some areas experiencing higher levels of construction activity resulting in labour shortages, while others will see high unemployment levels. To build a strong economic recovery, the Government should address the long-standing issue of labour mobility in the skilled trades by allowing skilled trades workers to deduct from their income the cost to travel and go to work.

It was shortly after this that the legislation before us today was introduced in the House of Commons. On February 8, 2022, MP Chris Lewis tabled Bill C-241 to, once again, secure a deduction of travel expenses for tradespersons. In response to the mounting pressure, the Liberal government seemed to recognize that there was validity to this request, and included a new measure in Budget 2022 called the Labour Mobility Deduction, or LMD, for Tradespeople. As explained by the Canada Revenue Agency:

The LMD provides an eligible tradesperson with a deduction for certain transportation, meals and temporary lodging costs incurred for travelling significant distances to earn income at a temporary work location from temporary employment in construction activities during the 2022 and subsequent taxation years.

This was significant, colleagues, because it was a step forward and showed that there is no disagreement in principle over the need for such a deduction.

There was, however, one significant problem: The government limited the deduction to a maximum of $4,000. And according to a representative from Canada’s Building Trades Unions, or CBTU, some tradespersons would max out that deduction in only about two months.

So although the Labour Mobility Deduction was a step in the right direction, it did not go far enough. Bill C-241 will correct this by not imposing an arbitrary cap on travel expense deductions. I would note, colleagues, that this does not mean there are no guardrails around the deduction to prevent it from being abused. There are.

The parameters of what constitutes an allowable travel expense are already well defined by the Canada Revenue Agency, or CRA. In addition, Bill C-241 notes that a taxpayer does not qualify for the deduction if they received an allowance for these expenses from their employer or received an income tax deduction or tax credit under any other provision in the Income Tax Act for the same expenses.

The deduction is meant to capture those who currently have no way to deduct legitimate expenses from their taxable income. And if more clarification is needed on the application of the deduction, the CRA can and will issue additional guidance to provide the needed clarity, as it currently does frequently on other tax measures.

Colleagues, in his second-reading speech, MP Lewis stated that:

By 2025, Ontario alone will need an additional 350,000 tradespeople to fill the current need. As is often the case, tradespersons can be expected to travel long distances from one job to the next, far from home. With inflation at a 30‑year high and during the ongoing cost-of-living crisis, this bill is a common-sense proposal for hard-working Canadians.

When it comes down to it, this legislation is basic fairness for tradespeople.

Tradespersons are fathers, mothers, grandparents, sisters and brothers — hard-working Canadians who are part of the backbone of our Canadian economy. Skilled trade workers are vital to Canada. Each is a master of their craft, and their knowledge and abilities are essential to communities and to our country. We must support them to allow the industry to grow and to provide support for resources for training to allow for the success of future generations of tradespersons.

Canada’s Building Trades Unions are the national voice of over half a million Canadian construction workers, members of 14 international unions who work in more than 60 different trades and occupations. They advocate on behalf of our hard-working tradespersons across Canada.

The CBTU commissioned an independent financial projection which estimates that a Canada-wide implementation of a skilled trades workforce mobility tax deduction could save the federal government an estimated $347 million annually through increased tax revenues and reduced reliance on Employment Insurance and other government programs. This is a substantial impact.

As noted by the CBTU:

Other jurisdictions, such as the United States, already permit a tax deduction like this to those working in the skilled trades. The US Revenue Code allows workers to deduct meals, travel, and accommodation expenses for temporary work away from home. Implementing a similar measure will help put Canadians to work, address labour shortages and reduce reliance on government programs like Employment Insurance, ultimately saving the government hundreds of millions of dollars.

Honourable senators, today I ask for your support for our Canadian tradespersons by sending Bill C-241 to committee for further study. Thank you.

Senator Martin, will you take a question?

Yes.

Thank you for the question. I don’t have the cost of what it would be to remove the cap, but that $4,000 is very limiting in that for some it would only be covering the cost for two months.

In terms of other provinces, I don’t have that information either, but the union that represents all of these half a million workers has done their research, and given this is such an important industry and we want to encourage more young people to go into the trades, this is one measure. It would only be fair because business people already have this opportunity, whereas they do not.

Your Honour and honourable senators, I rise today in support of the bill now before us, Bill C-241, An Act to amend the Income Tax Act (deduction of travel expenses for tradespersons).

I’d like all of us to pay particular attention to this bill, which aims to give tradespeople, whose skills are so badly needed, the opportunity of deducting expenses when they work more than 120 kilometres from their home.

This isn’t a new topic in the political arena. It has been the subject of various pieces of legislation since 2006 that have never been passed by Parliament.

Bill C-241 fits on a single page. The few lines that make it up didn’t generate much discussion when it was studied in committee in the other place. It took just 17 minutes for it to be sent back to the House of Commons for passage.

What is surprising is that all members from each of the opposition parties voted in favour of this pro-tradespeople bill, but all the Liberal members voted against it. Fortunately for tradespeople, this is a minority government.

I’m now hoping that everyone in this chamber, which some describe as non-partisan, will pass it quickly.

We can’t lose sight of the fact that electricians, plumbers, welders, tinsmiths and many other construction workers are working in trades that are essential in our society.

While this class of workers has been ignored or even devalued for too long, it now includes people who earn very respectable wages, taxpayers who pay their fair share of taxes.

We’re currently facing a labour shortage, and it’s not uncommon these days for tradespeople to take jobs on construction sites that aren’t necessarily in their home community. As a result, they have to temporarily incur travel and living expenses in order to earn their wages.

Bill C-241 that is before us today seeks to enhance the mobility of construction workers and make it easier for business owners to hire workers.

What’s more, I believe that a bill like Bill C-241 will likely help different trades to convince young and not-so-young people to work in construction.

Construction workers are badly needed.

Our economy has always been based on construction. However, work sites aren’t always located in communities that have the workers needed to do the job. What’s more, the working conditions offered by business owners don’t always cover tradespersons’ travel costs.

Bill C-241 seeks to set guidelines that will encourage construction workers to travel in order to make it easier to complete certain projects.

This is also a good way to address the current labour shortage.

I now want to talk a bit more about why I think the Liberal MPs are refusing to vote in favour of this bill that is good for middle-class workers.

They must have had to tow a party line because the current government believes it has done its part by bringing in a $4,000 tax deduction for the mobility of tradespeople. In contrast to this deduction, Bill C-241 doesn’t set a ceiling and will allow tradespeople to choose the tax regime that is most favourable to them and their family.

I want to emphasize the family aspect here.

Even though we already have compensation programs for workers who have to move to be within 40 kilometres of their work site, it’s important to remember that a family today is often made up of two people who earn a salary and children who are rooted in their community.

Moving can sometimes mean a job loss for the spouse, in addition to having to work to recreate a family and school setting for the children. These tough choices aren’t just limited to construction workers.

As a police officer with the Sûreté du Québec, I personally refused to enter competitions for a promotion because I knew that this could lead to a move and that my wife would lose her job.

Bill C-241 seeks to allow tradespeople who agree to temporarily move to earn a living to deduct employment expenses when those aren’t paid by the employer.

The current mobility tax deduction of $4,000 is insufficient and, in my view, too restrictive.

However, the Liberal members in the other place haven’t understood this. Instead, they’ve decided, in a partisan manner, to turn their backs on construction tradespeople.

The right to claim travel expenses as tax deductions mustn’t be reserved for the elite.

I will close by reminding you that the members of this chamber and those in the other place have travel allowances and per diems because they’re called upon to travel temporarily outside their place of residence.

This situation is indisputable.

Furthermore, our tax system allows any businessperson or professional in Canada to travel by plane, train or automobile, to stay at hotels and to claim meal expenses when these expenses are work-related.

They can do so as often as they like during a fiscal year and that is indisputable.

If it is acceptable in the two situations I just talked about, ask yourselves why construction workers, who must travel in their own vehicle and with their own tools, wouldn’t have the right to claim such expenses when they have to travel more than 120  kilometres from their home to earn a living.

When people travel to earn a living, it makes no difference to me if they’re travelling with a toolbox or a computer.

I therefore hope that you will feel as I do about tradespeople and vote in favour of Bill C-241 to grant them the right to tax deductions in cases that require extensive travel.

I believe that the mobility of this workforce is essential for construction, which is a major economic sector. Thank you.