Earlier this week, I was in my car listening to the radio and an ad came on referencing the $1,350 tax credit available to Canadians against the cost of anything related to “home improvement.” The Home Renovation Tax Credit is a key part of our economic stimulus plan to get Canadians spending in industries hurt during the downturn.
A few minutes later, I had one of those “a-ha” moments. Why not give taxpayers (both individual and corporate) a break against the cost of travel? This may seem a bit selfish coming from the guy who is a part owner of a travel agency group, but seriously, what would help kick-start the economy like people getting out flying, driving, eating in restaurants and staying in hotels?
According to the Canadian Tourism Commission, Canadians alone spend more than $50 billion travelling within Canada. In 2006, Travel made up 3.9% of total government revenue and 2.0% of total GDP.
Besides, travelling is much more fun than plastering dry wall or digging holes to add the extension on your deck. We keep hearing that the solution to the economy is stronger consumer confidence. I think more people out and about, exploring and meeting people face-to-face will go much further to restoring confidence than home renovations.
I am proposing an ongoing annual tax credit of 50 percent of reasonable travel expenses to a maximum $1,000 per adult and $500 per child. Therefore a family of four (two adults and two children) who spend $3,000 would be able to claim $1,500 as a credit on their next tax return. Corporations are a little more complicated but to keep it relatively simple how about a credit of 10 percent of their total travel spend?
Would a tax credit entice you to hit the road?