Canada’s Building Trades Unions (CBTU) is calling on the federal government to back and pass a private member’s bill that would allow tradespeople and indentured apprentices to deduct travel expenses from their income if they work on a job located at least 80 kilometres away from their ordinary place of residence.
The goal of the legislation, known as Bill C-275 An Act to Amend the Income Tax Act, is to make it easier for tradespeople to go to where there is work available without having to bear a financial burden to do so.
CBTU executive director Sean Strickland says a tax deduction has long been a priority for the building trades, but as result of the pandemic the idea is even more important as it would enable the trades to seek work in another region or province where they are needed, and also help to address labour supply shortages.
“Simply put,” he notes, “the nature of construction work requires members to go where the work is and the cost of travelling to the jobs, many times, comes out of a worker’s pocket. Unlike other professionals, a skilled trades worker can not deduct their out-of-pocket expenses for the temporary relocation.”
If travel, accommodation, food and other costs are not covered by an employer, and they are simply too much for a worker to shoulder, it becomes a barrier for tradespeople to relocate for work, says Strickland.
“We have pockets of high unemployment in certain regions and an abundance of work in others. We need to remove the cost barrier that makes it prohibitive for workers to travel for work to address labour shortages.”
Flexibility and mobility are common requirements of construction workers.
According to Strickland, passage of the provisions of the legislation would allow construction workers to travel to where the work is, increasing job opportunities for them and meeting labour market demands.
COVID-19 has increased the strain on the economy, including decreasing work opportunities for skilled trades workers in many areas, and government has a responsibility to ensure a system of tax fairness is in place for Canadians who belong to a mobile workforce and may work for more than one employer during a tax year, he says.
The legislation was introduced by NDP MPs Scott Duvall (Hamilton Mountain) and Alexandre Boulerice (Rosemont-La Petite-Patrie). It is proposed that the skilled trades workforce mobility tax deduction would be legislated into the Income Tax Act (Canada). To be eligible, employees must have been required under the contract of employment to pay expenses on their own and not be reimbursed by an employer.
The CBTU recognizes that Bill C-275 is unlikely to come to a vote in this session of Parliament and is therefore asking the federal government to take up the cause to get it passed.
“This has long been an unfair tax consequence for workers,” Strickland says. “There is an opportunity to fix it now to help in our economic recovery caused by the pandemic. It would address labour supply shortages and reduce dependency on things like the Temporary Foreign Worker program.”
Like all industries, construction continues to be impacted by COVID-19, with the current construction unemployment level sitting at 8.5 per cent. Some provinces have been particularly hard hit such as Newfoundland and Labrador with a 31.1 per cent unemployment rate in the construction industry.
“Getting Canadians back to work and strengthening the middle class is key as we face an uncertain and uneven economic recovery following COVID-19 – and implementing a Skilled Trades Mobility Tax Deduction would be a win for skilled trades workers,” says Strickland.
According to financial projections that were commissioned by the CBTU by accounting firm Hendry Warren, implementing Bill C-275 would save the government $2,532 per worker, or $347 million annually, through increased revenues from income tax and because there would be more people working which would reduce users on EI.
In Ontario alone, the government would save $130.4 million, while in Alberta the figure would be $54.2 million, and in B.C. it would be $56.1 million.
The calculation of the estimated federal savings took into account the amount of EI savings and increase in federal tax revenue as a result of increased employment.
The report indicated that, on average, it cost a construction worker more than $4,000 to temporarily relocate for work.
Duvall said in a statement he is hopeful the solution will be adopted by government.
“Achieving tax fairness to those working hard in the construction and building trades and improved labour mobility in the industry is long overdue. It’s time to get this done.”
Boulerice says it’s an inequity that has gone on for far too long and needs to be corrected now.
“It is unacceptable that these people be penalized by the nature of their work that forces them to move constantly. Our fiscal policy must take this particular situation into account and it is all the more urgent to do so in a context of economic and health crisis.”