Tool Tax Time

Industry partners recently worked together to hold a media event and information session in Ottawa to promote the tool tax issue. On February 9th, industry and education representatives were invited to participate in the event and answer any questions posed by the media or members of parliament who were invited to the session.

Snap-On Tools provided an extensive display of the tools technicians use daily – with the price tags attached – to demonstrate to those attending how much technicians must spend in order to properly diagnose and repair today’s vehicles.

Automotive Industries Association (AIA) President, Ray Datt, and CARS President, Dan Bell, emphasized to those attending, how the issue is hurting the industry and is providing a barrier to those young people interested in choosing a career in the industry.

“Apprentices and technicians working in the automotive repair and service industry cannot deduct from their income tax the costs of tools that they must — as a condition of their employment — purchase, upgrade and maintain. Bluntly, we think this is unfair” stated Mr. Datt.

Mr. Datt emphasized that the tool tax situation is having an impact on the number of young people choosing a career in the industry. This is a concern as almost half of the current workforce is over 41 years of age and will be retiring in the next 5-10 years. The industry is deeply concerned that future workforce requirements will not be met.

“A starter set of tools costs $4,000 yet an apprentice makes less than $25,000…To make an analogy, it would be like asking a young executive assistant to purchase a computer, printer, software, chair and desk before offering that executive assistant a job”, added Datt.

Dan Bell added that the demand for automotive technicians will not only increase due to retirements but also to the fact that Canadians are, on average, keeping their vehicles longer. The increasing complexity of vehicles means that technicians will have to spend more on tools to keep up with the pace of technology.

“Today’s technicians must own a number of hand held scanning devices so they can diagnose problems on a vehicle. For example, a hand held scanner required to connect to a vehicle’s on-board diagnostic equipment costs about $3,300.”

Several members of the media as well as members of parliament took the opportunity to ask questions regarding the issue and get a better understanding of how much a technician spends on his or her tools throughout their career.

Ray Datt reiterated the need for bright young people to be encouraged to choose a career in the industry but that the tool tax issue would remain a barrier to their employment opportunities until it is dealt with by the federal government.

“Today’s technicians are highly trained computer literate professionals. The expenses related to being a technician are high, but with fair tax deduction, young Canadians can feel confident that they have entered an exciting and challenging career with a future.”