The House resumed from November 6, 2012, consideration of the motion that Bill , be read the second time and referred to a committee.
Mr. Speaker, I am pleased to speak about my private member's bill, which I call “Discover Your Canada”.
This bill seeks to amend the Income Tax Act in order to make travel within Canada more affordable for Canadians by providing income tax deductions on the expense of purchasing tickets for taxpayers and their children, for non-business travel by airplane, train or bus, if travel covers at least three different provinces.
During the many speeches we will be hearing on this bill, some members of Parliament will erroneously discuss the potential high cost of the bill. However, this bill is intended to be about unifying Canadians and not about finances. As an accountant and former chairman of the finance committee, I am usually the first person to want to ensure that the numbers add up. I have written Bill in order that the federal treasury would not be impacted and that this bill would be revenue neutral, while perhaps even being an economic generator.
Therefore, the primary focus of this bill would not be financial. As is evident in the name “discover your Canada act”, I want more Canadians to have the option to travel across this country, something that is usually only an option for the more affluent. I want as many Canadians as possible to be able to visit other parts of their great country, and not as a layover to a foreign destination, not as a two-hour drive up to the cabin, and not as a business trip, where all they will see is an airport or perhaps a conference room. We want Canadians to see a part of Canada that is as distant and as different from their own little corner of this great land as possible.
I first got this idea years ago while I was in Vancouver chairing the finance committee during its pre-budget consultations. Anyone who has been to Vancouver can tell us that there are some impressive sights to behold. As a visitor walking the streets after a long day of witnesses telling us how the government should spend its money, I looked up and was astounded by what I saw. I thought that if more Quebeckers would see what I am seeing right now, none of them would want to separate. It was every bit as beautiful as my hometown of Montreal, but it was also very different. The vastness of the Pacific Ocean was different from the charm of the St. Lawrence River. The grandeur of the Rocky Mountains was different from the soothing humility of Mount Royal. The modern architecture was different from the classic beauty of Old Montreal. Pictures can never do justice to Canadian scenery, and one can never truly appreciate and feel like it is part of his or her natural heritage until he or she can see it and touch it in person.
In the past, even prior to being a member of Parliament, and afterwards of course, I have been to places in Canada as far east as Newfoundland, as far west as British Columbia and as far north as Yukon and the Northwest Territories. I have found in each place a newer and deeper appreciation for Canada. I am certain that all Canadians would have a better sense of their own national identity if they just had a chance to see parts of this country that are out of reach for some of them now. This is why I have chosen to refer Bill to the heritage committee instead of the finance committee. The discovery of Canada act would not be about dollars and cents; it would be about allowing Canadians to take ownership of their national heritage by providing them with a bit of assistance and incentive to see their own country.
Having said all this, it would be unlike me not to discuss costs at least a little bit. The deductions I propose in the Discover Your Canada Act are not extravagant. The deductions are also capped, and conditions to ensure that the deductions are not abused are written into Bill .
As a result, the upper threshold of deductions will not be reached by most eligible travellers, as was confirmed by a Parliamentary Budget Office study I requested for this bill soon after it was introduced.
According to newspaper articles, the government says that this bill will cost money. However, even if the government is able to justify its estimate of the cost of this bill, nothing can compare to the $5.2 billion that Canadians spent in the United States in 2012.
During the second quarter of 2012, during trips to the United States, Canadians spent $3.4 million, the most money in 20 years. In June, they spent a record $1.9 million. This increased spending is a result of the increase in duty free allowances, which went from $50 to $200 for a stay longer than 24 hours, and from $400 to $800 for a stay of 48 hours. We are talking about travel abroad.
According to the government, this will result in the loss of hundreds of millions of dollars in 2013-14. This is another gift for the American industry.
It is easy to add tax deductions. Administering them will cost the Canada Revenue Agency nothing extra. The Parliamentary Budget Office said so as well.
The last thing I want is for this bill to create more red tape.
When a new income deduction is proposed, there is always a measurable cost, but it is not so easy to calculate the economic spinoffs.
The Parliamentary Budget Office acknowledges that Bill will generate economic and financial spinoffs, but it cannot calculate those with certainty.
Generally speaking, I can say with confidence that increased travel within Canada is bound to generate positive economic and financial spinoffs.
Increased revenues from provincial and federal sales taxes are one such fiscal benefit.
I know that when I travel, I need to stay somewhere, I need to eat, and I want to take in some local attractions. I like to enjoy a night out on the town, and I enjoy bringing souvenirs back to family and friends. All this costs money and all this will contribute to government revenues in the form of federal and provincial sales tax.
Increased economic activity from more Canadians travelling domestically will also benefit the tourism industry in Canada in addition to industries that see spinoff benefits from increased tourism.
According to Industry Canada, almost 600,000 jobs in Canada are directly generated by tourism in every province and region of the country.
If that is not specific enough, I encourage each member in this chamber to visit the Tourism Industry Association of Canada website, where a breakdown of tourism jobs per riding is available.
I took examples from the ridings with the largest cities in the country. Tourism represents 4,905 jobs in Elmwood—Transcona, 5,460 jobs in Dartmouth—Cole Harbour, 9,445 jobs in Vancouver South, 10,080 jobs in Calgary Centre, 11,150 jobs in Trinity—Spadina, and 11,170 jobs in Laurier—Saint-Marie in downtown Montreal. These are just a few examples. There is a list of all the ridings across Canada.
These are real jobs for real people in each and every one of our communities. We need to be cognizant of what stimulating this industry can mean to local economies and the national economy as a whole. The possible benefits are too big to ignore in my opinion.
I could go on, but as I stated earlier, the bill is not about dollars and cents.
Since I introduced the bill back in November, what has struck me most of all is how much Canadians have rallied around this idea. According to a Harris/Decima study released on November 7, 2012, total support for the discover your Canada act stood at 70%, and it enjoyed strong support throughout the country.
For example, the Atlantic region registered 78% approval, Quebec registered 68% approval, Ontario registered 69% approval, Saskatchewan and Manitoba registered 66% approval, Alberta registered 76% approval and British Columbia registered 74% approval.
The same study showed that 39% of Canadians would be more likely to consider travelling within Canada if the discover your Canada act were to become law, while only 5% would be less likely to consider travelling within Canada if the discover your Canada act were to become law, for a net gain of over 34%.
The same study also notes that the bill has the potential to address Canada's growing international travel deficit, which grew by $91 million in the second quarter of 2012 alone.
Beyond the numbers, I have been humbled by messages of support I have received from Canadians from all over the country who want to see the bill pass. One lady from Alberta wrote to tell me that “Despite not being one of your constituents, I am writing to tell you that I support your recent private member's bill, the discover your Canada act. I live in Alberta. However, I have strong ties to Quebec through my maternal grandparents. In such a vast country as Canada, I would welcome this initiative in assisting my travel within our own borders. Canada has so much to offer”.
I cannot go on all day quoting letters and emails, but this is just one of several letters of support I received. They all have the same theme: a desire for us as Canadians and as parliamentarians to implement this idea.
It is not because they want to save money or because they are looking for a handout, but simply because they love their country and like the idea of more Canadians visiting more places within Canada to strengthen their bonds to this country and to each other, especially when we have a travel deficit in this country.
It has long been said that Canada has too much geography and not enough history. In 2017, Canada will have precisely 150 years of history behind it. Our nation's history is no longer in question, but our geography remains both a source of pride and a challenge to our nation's cohesiveness. Facts are facts: there is no inexpensive way for people to traverse such a massive country as Canada. As parliamentarians, we should recognize this reality and react accordingly.
I have chosen 2017 for the coming into force of the bill, because I believe that for Canada's 150th birthday, we should give Canadians the greatest gift we could possibly give them: we should give them Canada.
The government will be investing all kinds of money in celebrating Canada's 150th anniversary, so I am asking the government to think about offering Canadians a choice of where they choose to spend their money and not have the government decide for them.
We do not know how much money the government will put towards the anniversary, but this investment is minimal. There will events across Canada, as I just stated. We should have Canadians plan today where they want to travel to get to know Canada much better so that they will not be watching the events on a TV screen because they cannot afford the trip. They will be able to watch and participate in these events, up close and in person.
We should remove some of the financial barriers that stop them from exploring this great land and tell them to go out and discover your Canada, because one thing I have learned is that financial incentives are one way to get people to change their behaviour.
Thank you for your time, Mr. Speaker. I am open to questions.
Mr. Speaker, I am pleased to have the opportunity to speak to Bill brought forward by the Liberal member for .
I know that the member for is a proud Canadian, and I commend his efforts to give Canadians the opportunity to get to know their country better.
This bill is really just a novelty, a gimmicky distraction costing taxpayers over $200 million a year, without really encouraging tourism within Canada. While the member says his intent is to promote tourism, not only is his ill-considered proposal unfair, but there is absolutely no evidence it would have any effect whatsoever.
In fact, the Tourism Industry Association of Canada has already dismissed this Liberal idea as completely out of touch with the challenges faced by the Canadian tourism sector, saying, “we don’t think this is a particularly useful mechanism because Canada’s challenge is not a lack of domestic travel”. Indeed, our challenge is finding ways to compete in the international travel market.
In contrast, our government promotes travel in Canada by funding cost-effective programs and events proving that, unlike the Liberals, the Conservative government supports the tourism sector, while safeguarding taxpayer dollars.
Let me start by briefly highlighting our government's role in supporting the tourism industry in Canada.
Canada's strong economic performance during the global recession has been the envy of the world. While these initiatives may not have always been the most talked about, Canada's economic action plan provided funding to several organizations to stimulate the growth of tourism during the global economic downturn and it helped promote our country as a destination for Canadians and visitors alike.
During this time, economic action plan funding was provided to things like the National Trails Coalition, Parks Canada and its National Historic Sites, the Canadian Tourism Commission for greater domestic and international marketing and a grand total of 79 festivals and events through the marquee tourism events program. Our economic action plan also increased tourism-related infrastructure through investments in everything from local parks to convention centres.
Furthermore, our government already supports programs to discover Canada, programs geared to encourage Canadians to explore what is happening culturally outside their own backyards.
In particular, the Department of Canadian Heritage invests over $105 million every year to provide almost 100,000 youth with opportunities to learn about their country and connect with one another through its youth programs. I should add that these programs can benefit all Canadians, regardless of what region they live in, a point I will return to later in my speech.
In addition, the government supports programs to foster Canadian identity for people of all ages such as celebrate Canada, which encourages Canadians to come together in their communities to discover and appreciate the wealth and diversity of Canadian society and understand the significance of the rich heritage Canadians all share. These types of measures and programs achieve two important results: they boost our economy and they promote tourism in Canada.
Beyond what our government already does to boost tourism in Canada, the bill before us today is fundamentally flawed. Providing an income tax deduction for travel expenses of up to $2,000 for individuals and each of their dependants under the age of 16 raises concerns about fairness.
Let me explain.
Under the proposal, only travel within Canada that crosses three provincial boundaries is eligible. Here is the first problem with that. This requirement may disproportionately benefit some regions and favour particular travel routes. Given the shorter distances between provinces in Atlantic Canada, less travel would be required to meet the eligibility criteria.
Furthermore, the three provincial boundaries rule would unquestionably favour particular routes. For example, travelling from Halifax to Toronto by train or bus would cross three provincial boundaries and qualify for tax relief, whereas air travel, assuming the flight uses U.S. airspace, might not qualify.
The list of inequities continues. The value of the deduction would depend on the mode of travel: 100% for travel by bus; 75% for travel by train; and 40% for travel by airplane. From the onset, this makes no sense.
It bears repeating that the breakdown of how the deduction would be calculated makes no sense. Why should someone travelling by bus get a higher deduction than someone travelling by train or plane? Why does it exclude travelling by car or even by boat? There is no question this bizarre distinction is completely unfair.
Not only that, but Bill would provide more tax relief to higher-income individuals who tend to travel more and spend more on travel than lower-income families. Not only would higher-income individuals generally claim more, but the tax relief stemming from the proposed deduction would also be higher for individuals who were in higher personal income tax brackets, which vary from 15% to 29% federally.
Our government has been very clear. We believe in tax fairness for all Canadians. This discrimination alone is reason enough to vote against the bill, but there are many other reasons to vote against this bill.
On this side of the House, that is the government side, we believe a law that is meant to encourage interprovincial travel should, at the very least, encourage Canadians to travel. With respect to Bill , there is no evidence that the proposal would encourage individuals to travel more often, over $200 million a year with no result. Not only that, but individuals who plan to travel anyway would gain significant benefits from the deduction. It would represent a windfall, again an unfair tax advantage without actually increasing tourism within Canada.
Furthermore, the proposal only recognizes the cost of tickets for traveling by bus, train or air, not other major travel expenses, such as lodging or car rentals, that may continue to be an obstacle for people to travel.
Finally, as I have already mentioned, the cost of the proposal would be significant. Preliminary estimates suggest that based on existing travel patterns and expenditures, the passage of Bill would cost about $215 million a year.
In a time of a certain fiscal restraint that we have now, it is not the time for a novelty Liberal subsidy, or as National Post columnist Kelly McParland put it, “silly ways to spend even more borrowed money trying to manipulate Canadian behaviour, just like the old days”.
Our government has been working diligently to keep taxes low and the economy strong in the face of turbulent economic challenges from across the world. Our economic action plan has delivered results for Canadian families. We will stay the course.
I would ask every member of the House to vote against the bill. It is plainly not in the best interests of Canadians.
Mr. Speaker, I am happy to have been recognized to speak to this subject.
The bill before us has the best of intentions, but the result is questionable and rather inconsistent. Unfortunately, the NDP will not be able to support this bill. I will take the time to summarize the bill so that those at home will understand what we are talking about.
This bill provides that taxpayers may deduct, from their taxable income in a given year, the cost of purchasing tickets for the taxpayer or a child or children of the taxpayer for non-business travel that involves crossing at least three different provincial boundaries. The bill is designed to encourage Canadian taxpayers to travel within the country in order to increase domestic tourism by providing a maximum deduction of $2,000 a year from taxable income.
It is complex and yet it is not. Basically, people need to travel a lot and need to cross three borders. If they can prove that they were not travelling on business, they can get a non-refundable deduction of up to $2,000.
The NDP has found six major flaws in this bill.
This bill is fiscally irresponsible. It would allow for up to $1 billion in tax deductions, but this measure would directly cost $110 million. A little earlier, I heard my hon. colleague say that if people travel, they will spend more money, but that principle does not apply here, especially in light of the current situation with the tourism industry.
Tourism within Canada is being squeezed dry. Domestic travel accounts for a majority of the travel in the country and this proportion continues to increase. There is no reason to believe that creating more travel in an industry that has already been squeezed dry would suddenly create enough economic activity to compensate for the $110 million.
The Canadian Tourism Commission is asking for about $110 million to create a real international marketing program. The tourism industry is always lamenting the fact that we do not have enough foreign tourism. Canada's tourism industry is already struggling to stay afloat with domestic travel.
There will surely be cases of fraud. How can someone prove that they travelled for work but stayed a few days at the destination to visit the beach or do some shopping? How do they sort that out come tax time? It does not appear as though that aspect of this bill was thought through.
Consider the increased amount of paperwork if, for example, the government has to contact a taxpayer or a business if there is any doubt that travel or an application for a tax refund was associated with business travel instead of leisure travel. How would we manage that? The bill does not address that problem.
The other important point is that this is a regressive policy. Only families that are well off can spend thousands of dollars on transportation costs. The study we received showed that 70% of the tax benefits associated with this bill will go to families that earn a minimum of $50,000. We want to share Canada and get Canadians to travel. However, we must help the lower-income families who will never be able to see Vancouver, not the well-off families who could afford a trip to Vancouver regardless.
This bill does nothing to address the fact that it is not easy to travel within Canada. One of the major problems with the tourism industry is that transportation services are irregular and inadequate. For example, train service out east between Montreal and the Maritimes was recently reduced by 50%. Providing a credit on a service that is no longer available is like the chicken and the egg. This bill has it backwards. First we must ensure that our infrastructure can provide adequate service.
Another point concerns the harmful effects of greenhouse gases. For the same reason that those who are well off will be more likely to be able to cross three borders—since that is what the bill requires—they will also be more likely to travel by plane to claim this tax credit. Once again, this bill favours the mode of transportation that causes the most pollution. It does not address this problem.
We can imagine another ridiculous scenario that the bill does not cover. Imagine that a family crosses three borders. Family members leave Quebec, go to New Brunswick and want to go to Prince Edward Island. One of the children tells his father that he wants to go to PEI by ferry. However, the tax credit does not apply to ferries. The father will have to apologize to his child and tell him that they will not be able to go to PEI because the method of transportation for getting there is not covered by the tax deductions for non-business, family travel. This bill has all sorts of problems like this one.
The asymmetry of the provinces, which is specific to Canada, is another factor that is completely unfair to the western provinces. I can cross three provinces and get a tax credit by going to spend a weekend with my family in the Maritimes, since I live in eastern Quebec. It would be impossible for someone who lives in British Columbia to even think about getting a tax credit for making a short weekend trip by train when he has two or three days off. It is not fair to the western provinces. The bill does not address this problem. The bill does not address the tourism industry's main problem.
The tourism industry is calling for more international tourism. Domestic tourism is being squeezed dry. Canadians are doing all they can right now. There is a lack of marketing to ensure that domestic tourism stays the same and even continues to grow and to convince hundreds of thousands of new international travellers to come to Canada.
With the emergence of BRIC, more and more people are travelling. They have money and we are not reaching out to claim our portion of it. That is the real problem. If this bill is passed, $110 million will be invested, but it will not be invested in solving the tourism industry's real problem.
We would like to ensure that agreements with the provinces and municipalities result in affordable infrastructure, so that low-income families can afford train tickets and go on a trip. That is our goal. We would also like to see the tourism industry finally gain increased revenues from international tourism.
None of these solutions and priorities are part of the bill. We cannot support a bill so badly put together. It is not right to introduce a bill and expect a committee to fix it.
What about families who travel by car? What about families who travel in two provinces by train, then take a ferry to a third province? Do they suddenly stop being eligible for the tax credit? What if a man goes on a business trip with his family tagging along, and they vacation together for seven or eight days? Should they report that they were travelling for business or for pleasure?
Such a convoluted and unmanageable solution is not acceptable. Some people think that if a bill is flawed, it can just be sent to committee to be fixed up.
However, when a bill creates more problems than it solves, there is no way we can support it at second reading and send it to committee.
Sadly, that is the position New Democrats find themselves in today. The bill was poorly conceived and poorly drafted. It would be costly and difficult to implement, and it would not solve the problems facing Canada's tourism industry.
Mr. Speaker, it is with pleasure that I rise today to speak to Bill , the discover your Canada act. I want to thank my colleague from for introducing this legislation and for giving the House an opportunity to discuss the importance of our tourism sector and to address Canada's travel deficit.
The goal of the bill is to make it easier for Canadians to travel within their own country. It would amend the Income Tax Act and create a tax credit of up to $2,000 for Canadian taxpayers who cross at least three provincial or territorial borders on personal travel. This credit would help reduce the cost of holiday transportation by covering eligible travel expenses. Taxpayers would be able to claim the amount not only for their own expenses but also for their children. This would provide much needed support for Canada's tourism sector.
According to the Tourism Industry Association of Canada, this sector represents more of Canada's GDP than the agriculture, forestry and fisheries combined. It generates $78.8 billion of economic activity annually. It is responsible for more than $15.9 billion of export revenue despite this growing travel deficit. It generates $10 billion in federal government revenue and fosters over 600,000 jobs across the country.
Tourism plays an important role in the economy in my riding in Nova Scotia. People come to Kings—Hants from all over the country and all over the world to marvel at the world's highest tides, to come to the beautiful Annapolis Valley, to come to Windsor, the birthplace of hockey, and also to enjoy our growing food and wine industries.
Many of us in the House represent Canadians who make a living in the tourism sector. We know how vital this sector is to the Canadian economy. We also know how worried participants in this sector are about the future of this industry and the growing travel deficit.
There is a gap between how much money Canadian tourists are spending abroad and how much money international tourists are spending here in Canada. This gap is growing, and the government used budget 2012 not to address it but to slash support for tourism in Canada. By cutting the Canadian Tourism Commission's budget by $14.2 million each and every year, the government is cutting the commission's ability to promote Canada abroad and to attract international tourists to Canada.
David Goldstein, president of the Tourism Industry Association of Canada said:
|| The travel deficit has widened dramatically since 2002.... We used to be the seventh in the world in 2007 when it came to international arrivals. We are now the 18th. We used to have 20 million international visitors in 2002 and now have 16 million....
|| The fact that we are now contributing almost a third to Canada’s trade deficit is somewhat shocking....
Last December Mr. Goldstein told The Globe and Mail the Conservative cuts are hurting the sector.
While other countries are making tourism a priority and investing in marketing to attract international visitors, Canada lags behind. Australia, for instance, outspends Canada by three to one in terms of tourism marketing dollars, yet according to the Canadian Tourism Commission every dollar invested in direct advertising is actually earned back 37 times over.
The Canadian Chamber of Commerce has also asked the government to make tourism a priority. In a recent report on tackling the top 10 barriers to competitiveness, the chamber identified uncompetitive travel and tourism strategies as one of the most serious barriers to success in the Canadian economy. That report cited that tourism is a major industry in every reach of the country, but it is struggling.
Instead of damaging the sector's ability to market itself abroad, the government should recognize the risks assoc