Apprentice technicians to get tax write-off for tools

OTTAWA (June 19, 2001) — Apprentice technicians will soon be allowed to write off the cost of new tools.

Federal government officials have given assurances that tax laws will be amended in the next session of parliament to allow apprentices to deduct a portion of the cost of tooling up from their taxable income. No tax relief is currently planned for working technicians, however.

The promise made public earlier this month at the of the Automotive Industries Association of CanadaÕs annual convention.

“We have fought for this, and we have won!” an emotional Randy Moore, past chairman of the AIA, told convention delegates as he held up a letter outlining the proposed tax change.

Liberal MPs have since confirmed the governmentÕs intention.

The planned tax break is being cited as the government’s alternative to Bill C222, a private member’s bill which would have given a $250 tax break to the country’s 140,000 automotive technicians. The bill, by Bloc Quebecois member Michel Guimond, was an updated version of Bill C-205 which had been strongly supported in second reading last year but which died on the floor when the federal election was called.

A spokesman from GuimondÕs office said the failure of Bill C222 was “disappointing and a little bit of a surprise, considering the reception to the last bill.”

But Liberal MPs are now saying Bill C222 was flawed.

“Since the vote [on Bill C205] last fall, the government, and the Department of Finance in particular, has done a lot of work on this to come up with a solution thatÕs reasonable both for the industry and for taxpayers,” says Liberal Whip Marlene Catterall. “We couldn’t just pass a law that says automotive technicians get special treatment. We would have been challenged in court so fast.”

Catterall admits the Liberals’ plan is “not everything that everybody has asked for” but she says it takes care of one of the most serious problems facing the automotive industry: the difficulty of attracting new apprentices.

“The intention is to allow apprentices to deduct the cost of their tools over a certain percentage of their income, probably around 5%.”

She said recent research shows that apprentices in other industries spend 3 to 5% of their income on tools needed for their work. For automotive apprentices, it’s more likely to be 5% or more of their income.

Liberal MP Steven Mahoney, described the governmentÕs plan as “the better way to go on this one, because a private member’s bill requires all kinds of machinery to kick in at the government level.”

He said, “Paul Martin has promised us that he will deal with this issue directly in his next budget. You can rest assured that it will be tackled aggressively and directly so the problem will be solved.”