50-50 Tax breaks for volunteer firefighters - less than meets the eye

Stephen Harper arrived at the fire station in Victoriaville, Que., in a shiny, red fire truck. The kind of photo-opportunity designed to re-enforce a promise from the budget that was never passed.

If re-elected, Harper said, his government would follow through on its proposal to provide a tax break to volunteer fire fighters that could put about an extra $450 in their pockets.

Speaking without notes and against a backdrop of firefighters lined up in front of the truck, Harper promised to increase the number of volunteer firefighters in the country. No, he wouldn't do this by making personal appeals for volunteers to sign up. Instead, he's counting on the proposed tax break, which the Canadian Association of Fire Chiefs argues would help replenish the diminishing ranks of volunteer fire fighters, a number that stands at about 85,000.

In a response to CBC News, an official from the Finance Department wrote in an email that: "Based on representations made by members of the Canadian Association of Fire Chiefs, it is estimated that up to 75 per cent of all volunteer firefighters perform at least 200 hours of volunteer firefighting services annually."

That proportion, however, is questionable.

As it turns out, a company by the name of Abacus Data Inc. surveyed members of the Canadian Association of Fire Chiefs, an organization that represents a third of the approximately 3,500 fire departments in Canada.

The fire chiefs, who responded to the survey, identified 23,000 volunteers who, in their view, would be eligible for such a credit. Of that number, 45 per cent said they worked 200 hours and 19 per cent said between 150 and 200 hours.

In arriving at the percentage of those who might benefit from a tax credit, the association combined the 45 and the 19 percent to suggest that 64 percent of all volunteers would be eligible and that that proportion would probably increase in subsequent years.

So, Finance puts the eligibility percentage at 75; the association at 64. When CBC News asked the department for a briefing on its numbers, a spokesperson advised us to speak with the fire chiefs association.

But whatever the percentage being put forward, there are two factors that could diminish the figure even more. Martin Bell, the national president of the Canadian Volunteer Fire Services Association, says that many of his members are low income, meaning that they wouldn't earn enough to be eligible for the full tax credit.

Bell also pointed out that it could be a few years before volunteers got into the habit of collecting the kind of information they would need, such as the paperwork required to prove the number of hours worked to qualify.

The proposed tax credit is worth a maximum $450, assuming a firefighter is in a high enough tax bracket to claim the full 15 per cent of the $3,000 allowable deduction.

In some areas, however, volunteer firefighters receive an honorarium for their contributions and those volunteers will have to figure out if the new credit is worth more than the existing tax exemption for honoraria.

Still, Bell insists that this measure, which he calls "a token gesture," is welcome and something that he's been fighting for several years to obtain.

In fact, the measure should also be very familiar to bureaucrats in the finance department, given that it has been kicking around since the mid-1990s.

"I was the assistant deputy minister of tax policy in 1996 and that was on the table at that time," recalls Don Drummond, now the senior vice-president and chief economist for the TD Bank Financial Group. "And it's taken another 15 years before it actually came to the surface."

Perhaps that's because for very little money - about $35 million over three years - the Conservatives can hope to win votes in communities such as Victoriaville, rural areas where volunteer fire fighters enjoy widespread support and admiration.

"It's great politics," says Ian Lee, a professor at Carleton University's Sprott School of Business. "And it doesn't kill your budget.

"The amounts are very, very small and you've cemented your relationship and connection with people in rural communities. I think that it would be dangerous for any political party to say no because what they would really be saying is 'you people aren't important.'"

Perhaps that is why the measure has enjoyed such broad political support. The Liberals, for instance, have just put forward their own version of a firefighter tax credit.

Theirs is even a little richer as it is the refundable version, meaning volunteers can receive the full $450 refund, regardless of their income.

David McKie can be reached at david_mckie@cbc.ca.