Technical Tax Amendments Act, 2012

An Act to amend the Income Tax Act, the Excise Tax Act, the Federal-Provincial Fiscal Arrangements Act, the First Nations Goods and Services Tax Act and related legislation

This bill was last introduced in the 41st Parliament, 1st Session, which ended in September 2013.

Sponsor

Jim Flaherty  Conservative

Status

This bill has received Royal Assent and is now law.

Summary

This is from the published bill. The Library of Parliament often publishes better independent summaries.

Part 1 of this enactment implements, in accordance with proposals announced in the March 4, 2010 Budget and released for comment on August 27, 2010, amendments to the provisions of the Income Tax Act governing the taxation of non-resident trusts and their beneficiaries and of Canadian taxpayers who hold interests in offshore investment fund property.

Parts 2 and 3 implement various technical amendments in respect of the Income Tax Act and the Income Tax Regulations relating to the taxation of Canadian multinational corporations with foreign affiliates. The amendments in Part 2 are based on draft proposals released on December 18, 2009. Among other things, Part 2 includes the amendments to the foreign affiliate surplus rules in the Income Tax Regulations that are consequential to the foreign affiliate changes to the Income Tax Act announced in the March 19, 2007 Budget. The amendments in Part 3 are based on draft proposals released on August 19, 2011. Among other things, Part 3 includes revisions to the measures proposed in a package of draft legislation released on February 27, 2004 dealing primarily with reorganizations of, and distributions from, foreign affiliates.

Part 4 deals with provisions of the Income Tax Act that are not amended in Parts 1, 2, 3 or 5 in which the following private law concepts are used: right and interest, real and personal property, life estate and remainder interest, tangible and intangible property and joint and several liability. It enacts amendments, released for comments on July 16, 2010, to ensure that those provisions are bijural, in other words, that they reflect both the common law and the civil law in both linguistic versions. Similar amendments are made in Parts 1, 2, 3 and 5 to ensure that any provision of the Act enacted or amended by those Parts are also bijural.

Part 5 implements a number of income tax measures proposed in the March 4, 2010 Budget and released for comment on May 7, 2010 and August 27, 2010. Most notably, it enacts amendments

(a) relating to specified leasing property;

(b) to provide that conversions of specified investment flow-through (SIFT) trusts and partnerships into corporations are subject to the same loss utilization restrictions as are transactions between corporations;

(c) to prevent foreign tax credit generators; and

(d) implementing a regime for information reporting of tax avoidance transactions.

Part 5 also implements certain income tax measures that were previously announced. Most notably, it enacts amendments announced

(a) on January 27, 2009, relating to the Apprenticeship Completion Grant;

(b) on May 3, 2010, to clarify that computers continue to be eligible for the Atlantic investment tax credit;

(c) on July 16, 2010, relating to technical changes to the Income Tax Act which include amendments relating to the income tax treatment of restrictive covenants;

(d) on August 27, 2010, relating to the introduction of the Fairness for the Self-Employed Act;

(e) on November 5, 2010 and October 31, 2011, relating to technical changes to the Income Tax Act;

(f) on December 16, 2010, relating to changes to the income tax rules concerning real estate investment trusts; and

(g) on March 16, 2011, relating to the deductibility of contingent amounts, withholding tax applicable to certain interest payments made to non-residents, and certain life insurance corporation reserves.

Finally, Part 5 implements certain further technical income tax measures. Most notably, it enacts amendments relating to

(a) labour-sponsored venture capital corporations;

(b) the allocation of income of airline corporations; and

(c) the tax treatment of shares owned by short-term residents.

Part 6 amends the Excise Tax Act to implement technical and housekeeping amendments that include relieving the goods and services tax and the harmonized sales tax on the administrative service of collecting and distributing the levy on blank media imposed under the Copyright Act announced on October 31, 2011.

Part 7 amends the Federal-Provincial Fiscal Arrangements Act to clarify, for greater certainty, the authority of the Minister of Finance and of the Minister of National Revenue to amend administration agreements if the change in question is explicitly contemplated by the language of the agreement and to confirm any amendments that may have been made to those agreements. Part 7 also amends the Federal-Provincial Fiscal Arrangements Act and the First Nations Goods and Services Tax Act to enable the First Nations goods and services tax, imposed under a tax administration agreement between the federal government and an Aboriginal government, to be administered through a provincial administration system, if the province also administers the federal goods and services tax.

Part 8 contains coordinating amendments in respect of those provisions of the Income Tax Act that are amended by this Act and also by the Jobs and Growth Act, 2012 or that need coordination with the Pooled Registered Pension Plans Act.

Elsewhere

All sorts of information on this bill is available at LEGISinfo, provided by the Library of Parliament. You can also read the full text of the bill.

Votes

  • May 29, 2013 Passed That the Bill be now read a third time and do pass.
  • May 27, 2013 Passed That, in relation to Bill C-48, An Act to amend the Income Tax Act, the Excise Tax Act, the Federal-Provincial Fiscal Arrangements Act, the First Nations Goods and Services Tax Act and related legislation, not more than five further hours shall be allotted to the consideration of the third reading stage of the Bill; and That, at the expiry of the five hours provided for the consideration of the third reading stage of the said Bill, any proceedings before the House shall be interrupted, if required for the purpose of this Order, and, in turn, every question necessary for the disposal of the said stage of the Bill shall be put forthwith and successively, without further debate or amendment.
  • March 7, 2013 Passed That, in relation to Bill C-48, An Act to amend the Income Tax Act, the Excise Tax Act, the Federal-Provincial Fiscal Arrangements Act, the First Nations Goods and Services Tax Act and related legislation, not more than one further sitting day shall be allotted to the consideration at second reading stage of the Bill; and That, 15 minutes before the expiry of the time provided for Government Orders on the day allotted to the consideration at second reading stage of the said Bill, any proceedings before the House shall be interrupted, if required for the purpose of this Order, and, in turn, every question necessary for the disposal of the said stage of the Bill shall be put forthwith and successively, without further debate or amendment.

Technical Tax Amendments Act, 2012
Government Orders

May 28th, 2013 / 10:35 a.m.
See context

Liberal

Joyce Murray Vancouver Quadra, BC

Mr. Speaker, I am pleased to be speaking at third reading on Bill C-48. It is largely a housekeeping bill that implements technical matters that have been introduced previously. Most of the measures that are contained in this bill were recommended by the Auditor General.

The Liberal Party supports Bill C-48 and we would like to see it passed quickly. The overarching theme of the bill is the need for clarity and certainty in the administration of Canadian law. That is certainly something that the Liberals support and we see it as an important function of the government in its service to Canadians.

I would like to spend a bit of time speaking about how this bill and taxes, since the bill is about tax changes, are serving Canadians' needs. I would like to make some comments from my perspective, not only as the member of Parliament for Vancouver Quadra, but also as a former businesswoman from a business that became international in its scope.

As a business person for 25 years, my understanding of one of the key imperatives of service is to continually improve the quality of service to those we wish to serve. In business shorthand, we could say that people are looking for faster, cheaper and better service. Who would not want that? Who would not want the goods and services that are provided to them to be provided more quickly, in a less costly manner and at a higher standard of quality?

Faster, cheaper and better are what people expect. Are we getting that from the Conservative government with respect to taxes and tax changes? Certainly, this bill is not an example of faster service. In fact, this is the third time that some elements of this technical tax bill have been introduced since 2001. It has taken far too long to bring this bill to the House. Some of these tax measures have languished in draft form for nearly a decade. For example, the provisions in part 3 of this bill, which deal primarily with reorganizations of and distributions from foreign affiliates, were first released on February 27, 2004 and we are now in May 2013.

What happens when tax measures take such a long time? Many of these measures were introduced by the Conservative government a number of years ago. These measures were introduced with a great deal of fanfare and then never actually brought into force because of delays. It does bring the question: Why wait so many years and then lump everything together in this 955-page bill, rather than give the kind of certainty that citizens of this country deserve and expect?

In fact, in meeting with the small business community as the critic for small business, I have heard feedback about the kinds of frustrations and costs that are incurred through not having had this bill earlier. There is a great deal of confusion when the government announces a certain tax change but does not actually take the steps to put forward the bill to make those changes law. The kinds of costs that small businesses will incur in having accounting and professional and legal consultations to help them understand the implications of these measures that have not actually been made into law are preventable. The bill could prevent confusion and expense for the business community. It has actually been a form of red tape on our small businesses that it has taken so long for the bill to be put forward.

Now that the bill has been put forward, I want to comment on the government's ability to apply its laws regarding taxes and to serve the needs of Canadians and small businesses with respect to the vast complexity of the tax regime in our country.

The Conservative government tends to put forward literally dozens of boutique tax measures that are not supported as part of a clear, simple and effective tax system but more as tax measures that are clearly designed to attract votes from one segment of the population or another. As a result, we have a much more complex tax system than we had before.

Does the Canada Revenue Agency have the resources to assist people in finding their way back to the quality improvement mantra of having faster, cheaper and better service? Is the government providing that to Canadians who are struggling with tax complexities? My answer would be no.

The overarching theme of the debate on Bill C-48 is the need for clarity and certainty in the administration of Canadian tax laws. However, the government's ability to respond to this major need is threatened by the Conservatives' cuts to the Canada Revenue Agency.

The Conservatives targeted the CRA in budget 2012 by reducing the agency's funding by $253 million per year. In addition, budget 2013 provides for further cuts to the agency, amounting to $61 million per year. The cumulative cuts to the CRA therefore total $314 million annually.

Even before the cuts were implemented, the CRA had trouble issuing advance tax rulings in a timely manner. The government's goal is to inform taxpayers of advance tax rulings within 60 days. This may be an acceptable timeframe, but the agency now needs 106 days, on average, to provide such rulings to taxpayers.

We are seeing that the cuts to the Canada Revenue Agency are making its service far slower and certainly not faster, as we would expect in the business community. The business community expects an organization to continue to improve its service, so its service could be faster, cheaper and better. If the government had been providing service in private enterprise, it would have failed and gone out of business long ago because of these unfortunate reversals in the speed and effectiveness of service. We have now gone from 60 days to 106 days for serving customers' information needs with respect to changes in tax laws.

I had meetings with former Yukon member of Parliament Larry Bagnell, who has been advocating for many years for services to citizens in Yukon. The one and only CRA office for Yukon used to be in Whitehorse, but that has been closed, so people living in Yukon no longer have a single agent to talk to in person when filing or asking questions about their taxes. How frustrating for people. That certainly is not better service; it is in fact far worse service.

People can go online to try to connect with this huge agency and get service, but many people in Yukon do not have access to the equipment or the high broadband Internet to do that. Many would have to drive for many hours to get to a place where they could engage the CRA to help serve their information needs.

I appreciate the work that our former colleague and MP, Larry Bagnell, has done on behalf of constituents in the Yukon. Even now that he is no longer a member of Parliament, he has become a voice for their needs.

I am not sure where the current member for Yukon stands with respect to the closure of the CRA office in Whitehorse. I will not comment further on that. However, this does have huge implications for people, especially for low-income, less educated people living in remote communities and for seniors, all of whom used to use this business office on a regular basis.

We have a pattern here of service not being faster but slower, and it certainly is not better. Is it cheaper?

Taxes are important as part of a sustainable society. Canadians by and large accept that taxes are positive because they help to purchase public goods that we need for our society, whether those goods are environmental safeguards, programs that create equality of opportunity for Canadians, or tax regimes that reduce income inequality. “Taxes” is not a four-letter word to most Canadians.

However, what Canadians expect and deserve is honesty from their government about their tax regime. They expect competence, transparency and honesty, but since 2010 there have been new, hidden tax increases that exceed the new reductions each and every year.

That is not what the current government has been promoting in terms of its image to Canadians. The Conservatives have not been honest and forthcoming and transparent about the fact that they have been increasing taxes on Canadians each and every year since 2010, and these are not minor tax increases. In fact, if I go back to an analysis of these tax increases, we would see that in budget 2010 there was a set of tax increases. There was a set of tax decreases, of course, but the net impact would be to increase taxes by $729 million over five years from the measures announced in budget 2010. That is almost $1 billion in tax increases.

Did the Prime Minister go forward and say this is how they are going to pay for goods and services, by increasing our taxes? I did not hear that from the Prime Minister, nor did I hear that in the budget speech from the Minister of Finance.

As well, there are impacts on small businesses in each and every one of these years in terms of increased taxes, meaning less money in the pockets of the men and women in small business who are the engines of job creation in our economy.

Let us look at budget 2011. In budget 2011, again there are hits on small business. In fact, the individual pension plan program is seeing, over five years, $75 million in reduced funds in the pockets of people who are utilizing that tax-planning tool. However, the key here is that the bottom line in budget 2011 is $2.168 billion in net tax increases over five years. It is over $2 billion.

What about budget 2012? Here we saw a huge undermining of the well-being of the small-business community in terms of extra taxes on employees' profit-sharing plans and over $1 billion less in support for the research and investment tax credit, the SR and ED tax credit regime in this country. That is more than $1 billion taken out of the support that the government was providing for good public policy reasons.

Why should government support scientific research and development? It is because scientific research and development provides, by and large, a public good. People in small business cannot afford to invest in research that soon becomes available to all of their competitors without having some support through this tax credit. That is how it is for the public good. The government supports something that becomes a benefit for all of society, and that is much of what happens with small business research and development.

However, that tax credit was reduced by over $1 billion for a net increase in taxes, as announced in the budget, of $3.547 billion. It is over $3 billion more out of the pockets of Canadians and small businesses, thanks to budget 2012.

In budget 2013, once again we have tax increases that exceed the tax reductions, this time to the tune of $3.3 billion. This is a big-tax government.

The challenge Canadians have in even understanding what the government is doing is that there is no transparency and no honesty here. There are hidden tax increases that now have a cumulative impact of almost $10 billion over the period covered by these announcements. It is cumulatively $10 billion dollars out of the pockets of Canadians and small businesses.

Who knew that? This is something the government has kept hidden. Is that cheaper service? No, government is actually costing taxpayers almost $10 billion more cumulatively, without actually revealing that it is doing that.

Why has the Conservative government felt a need to increase taxes with these incremental net increases of $10 billion, as I have laid out and as expressed in budgets 2010 to 2013? Could it be that since the Conservatives took office, annual federal spending under the Conservative government has risen to $280 billion, which is an increase of more than 30%? That is certainly not providing faster, cheaper and better service. It is very much more expensive service.

This is a government that inherited a $13 billion budget surplus in early 2006, but within a matter of a few years we were running deficits, and the government continues to run an annual deficit this year of $26 billion. There may be a change when the budget is balanced, but it may take a long time.

These tax increases hurt middle-class Canadians and small businesses. We have spoken at large and at length about the impact of the increase in tariffs on Canadians, which is driving them across the border to get goods cheaper. We have talked about how tax increases are hurting our tourism industry, an industry that used to be rated seventh among countries for international visits but that has dropped to 18th in international visits. This is hurting our tourism industry. We now have a $14 billion tourism deficit.

There are many comments I could make about how these hidden tax increases have hurt our economy and our small businesses, but I will give one last indication of the impact this government has had on small business.

In the last five years of the previous Liberal government, small and medium-sized businesses created over 460,000 jobs, but in the first five years under the Conservatives, the overall net number of jobs created by small and medium enterprises was negative. The number actually fell by 10,000 jobs.

Therefore, we do not have faster, we do not have cheaper, and we certainly do not have better service from the Conservative government. In fact, the spending choices the government is making with these tax increases are not supported by Canadians. Economic action plan advertising alone has cost $113 million, and I know that Canadians would rather that money were used for student summer jobs. Every second these ads for the economic action plan air during Hockey Night in Canada is another second that another young Canadian does not get the support that he or she previously enjoyed to have a summer job. Every second we are losing a job for youth.

I am happy to answer questions on how I see the government's spending choices as being part of this failure to provide faster, cheaper and better service to those the government was elected to serve, the Canadian people.

Technical Tax Amendments Act, 2012
Government Orders

May 28th, 2013 / 10:55 a.m.
See context

NDP

Charlie Angus Timmins—James Bay, ON

Mr. Speaker, I rise on a point of order. I take my role in the House very seriously. Earlier today, in discussion of the concurrence motion, I attempted to make humorous comments about the very serious situation facing the Ford administration in Toronto. That is simply not acceptable.

I would like to retract those comments and apologize for making any unsubstantiated comments or potentially leaving a false impression regarding the very serious issues that are facing the City of Toronto and the Ford administration.

Technical Tax Amendments Act, 2012
Government Orders

May 28th, 2013 / 11 a.m.
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Liberal

Wayne Easter Malpeque, PE

Mr. Speaker, my question relates to the member's comments on how the government's tax regime is affecting tourism.

We have dropped from seventh or eighth place in the world as most visited by international visitors to 18th. We understand the cutbacks to the Canadian Tourism Commission have forced it to cut advertising for tourism in the United States, which is a major drawing market for us in Atlantic Canada. It will impact our tourism industry, our seasonal workers and our economy.

Could the member elaborate further on how some of those hidden taxes by the government have impacted tourism? I know airport fees is one. What others might the member elaborate on?

Technical Tax Amendments Act, 2012
Government Orders

May 28th, 2013 / 11 a.m.
See context

Liberal

Joyce Murray Vancouver Quadra, BC

Mr. Speaker, this is certainly an example of worse service by the government.

Tourism employees and owners across the country, including in my riding of Vancouver Quadra, are suffering from mismanagement by the government. As the member mentioned, there are high taxes on airports that are driving consumers to shop for flights in the United States, including from Vancouver Quadra. In Vancouver, Bellingham and Seattle are seen as frequent choices of where to fly from, rather than Vancouver airport.

This has cost the Canadian economy 8,900 local jobs, $500 million in wages, over $1 billion in GDP and more than $2 billion in economic output. That is just the high taxes on airports.

Surprisingly, we no longer provide a GST rebate to tourist visitors to Canada. Therefore, that makes us a higher-cost destination in another way. That is also deterring international visitors from coming to Canada.

Why is the Minister of State for Small Business and Tourism not defending this industry, which has been so mismanaged by the Conservative government?

Technical Tax Amendments Act, 2012
Government Orders

May 28th, 2013 / 11 a.m.
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Liberal

Kevin Lamoureux Winnipeg North, MB

Mr. Speaker, we recognize that one of the driving forces in job creation is small businesses. Small businesses have the greatest potential in the generation of jobs and new employment.

My question for my colleague is in regard to performance. We need to recognize that the Conservatives have failed in supporting small business, especially if we contrast that to the days of Paul Martin or Jean Chrétien when small business was a priority and its growth was encouraged, which led to the creation of tens of thousands of jobs.

Things have changed under the Conservative-Reform government. Could my colleague provide some comment on just how things have changed?

Technical Tax Amendments Act, 2012
Government Orders

May 28th, 2013 / 11 a.m.
See context

Liberal

Joyce Murray Vancouver Quadra, BC

Mr. Speaker, I appreciate the member's advocacy on behalf of small businesses in his community. Small businesses are a huge driver of the economy and the success of new Canadians who have come to Canada.

I want to go back to my comments about taxes and if taxes are competently applied to the public good. Canadians, by and large, support contributing their share. At the same time, there are occasions when taxes need to be reduced.

The small business tax rate, for example, under the Conservative government, has been reduced by only 1%, and a huge part of that 1% reduction is being clawed back through a small dividend tax credit change in the 2013 budget. Some $2.34 billion will come out of small business pockets due to this dividend tax credit change over the course of five years.

How does that help small business owners reinvest in their companies, grow their companies and bring them up to technological advances? They will have $2.34 billion less to do that. This is in the context of a decrease in the large corporate tax rate from 22% down to 15%, at the cost of $60 billion, yet small business owners saw only a 1% reduction, which was then pretty much clawed back.

Technical Tax Amendments Act, 2012
Government Orders

May 28th, 2013 / 11:05 a.m.
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NDP

Pierre-Luc Dusseault Sherbrooke, QC

Mr. Speaker, I would like to thank my hon. colleague for her contribution to this debate and ask her a very simple question.

As members of Parliament, should we not be focusing on promoting a more regular process for this kind of modernization of the income tax laws? Indeed, perhaps we should reduce the scope of such bills by making more regular updates. Instead of waiting 10 or 13 years to modernize our laws, should we have a more regular process to ensure that parliamentarians do not always have to consider 950-page bills, as we are doing today?

Technical Tax Amendments Act, 2012
Government Orders

May 28th, 2013 / 11:05 a.m.
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Liberal

Joyce Murray Vancouver Quadra, BC

Mr. Speaker, I would like to thank my hon. colleague for his question.

Clearly the current process is not working. I mentioned that in my comments.

It has taken over 10 years to make a few changes to the Income Tax Act. There is indeed a need for a formal process, but what is at stake here is the government's competence. Usually, governments are more competent than this Conservative government. It is normal procedure to introduce a bill like this more often, say every two or three years. Yet that has not happened for many years. This is not acceptable and has to improve.

Technical Tax Amendments Act, 2012
Government Orders

May 28th, 2013 / 11:05 a.m.
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Liberal

David McGuinty Ottawa South, ON

Mr. Speaker, I would like to pick up on a few comments my colleague has made about the question of choices a government makes.

In my riding of Ottawa South, there are 3,250 small businesses. They could have one, five or 50 employees, but they are the backbone of our local economy and the Canadian economy.

I want to ask the member about the choice the government is making about advertising. One of the things I hear from small business owners is how offended they are when they see hundreds of millions of dollars of advertising on TV about some kind of economic action plan, yet their small business taxes are increasing.

Could the member comment on that in terms juxtaposing the government's priorities, self-promotion versus helping to strengthen small businesses?

Technical Tax Amendments Act, 2012
Government Orders

May 28th, 2013 / 11:05 a.m.
See context

Liberal

Joyce Murray Vancouver Quadra, BC

Mr. Speaker, I concur 100% with my colleague's comment. Every day in my role as a small business advocate, I hear that these hundreds of millions of dollars of self-promotion are a grievous insult to the small business community. At the same time, we had the minister looking to put major new taxes and fees on small businesses in the historic Rideau Canal zone in the Ottawa area, which has since been reversed thanks to members such as that member, who spoke up on behalf of his constituents. That is just one example.

Another example of the government taking money out of the pockets of small businesses while spending it on self-promoting ads is the increase in tariffs. This is a government that has set a priority that apparently does not include small business, which is the heart of our economy and our communities. It is difficult to understand why it does not get it.

Technical Tax Amendments Act, 2012
Government Orders

May 28th, 2013 / 11:10 a.m.
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Conservative

Larry Miller Bruce—Grey—Owen Sound, ON

Mr. Speaker, I am very pleased to participate in this very important discussion today. I want to speak to the matter of taxes generally and why both tax legislation and a well-functioning tax system are so important to Canadians. Well-functioning is key, and I am very happy to hear my colleague across the way say a mere few minutes ago that it is not working the way it is, so I will appreciate her support of the bill when it comes to a vote.

All of this is underlined in today's legislation, the technical tax amendments act, 2012. As most Canadians appreciate, creating jobs and growing our economy is top priority for our government and the main objective of Canada's economic action plan. Since being elected in 2006, our government has been working on a number of important fronts to create optimal conditions for sustained growth. Indeed, we are making it easier for Canadian employers and entrepreneurs to successfully compete in the global economy and to make it more attractive for others to invest in this country.

The end goals here obviously are more jobs for Canadians and a healthy and thriving economy, and that “low tax in Canada” brand is getting noticed around the world. Indeed, here is what John Chambers, CEO of Cisco Systems, a major global technology company, recently had to say about Canada's economic leadership on an American television program entitled Charlie Rose:

The number one country in the world to do business is which one? It's Canada and that was a surprise to me when I first started seeing this occurring several years ago, but they have a government that partners with business to solve issues.... They are willing to work together to create an environment to say, “What does it take you to keep your jobs here or bring more jobs here?”

Key among those strategies that we are employing is our government's low-tax plan for jobs and growth that has made Canada a great place to invest. It began in 2007, when our Conservative government passed a bold tax reduction plan that started us down the road to branding Canada as a low-tax jurisdiction for business investment. At the same time, our government also encouraged the provinces and territories to collaborate in supporting investment, job creation and growth in all sectors of the Canadian economy by establishing low combined federal-provincial corporate income tax rates.

Today, we have made substantial progress toward that objective, which has lowered the federal business tax rate to 15%. Also, in 2012, the last of the provincial general capital taxes was eliminated. This follows the elimination in 2006 of the federal capital tax and the introduction in 2007 of a temporary financial incentive to encourage provinces to eliminate their general capital taxes.

There are other key measures that we have taken since 2006 to fuel job creation and spur our economic growth. They include implementing a temporary hiring credit for small business to encourage additional hiring by this vital sector; reducing the small business tax rate to 11% and increasing the amount of income eligible for this rate to $500,000; supporting manufacturers by introducing a temporary accelerated capital cost allowance rate for investment in manufacturing or processing machinery and equipment, and extending it; eliminating tariffs on imported machinery and equipment and manufacturing inputs, to make Canada a tariff-free zone for industrial manufacturers by 2015; improving the ability of Canadian businesses to attract foreign venture capital by narrowing the definition of taxable Canadian property, thereby eliminating the need for tax reporting under section 116 of the Income Tax Act for many investments; and much, much more.

The fact is that our government's low-tax plan is working, and the world is increasingly noticing, as the quote from John Chambers clearly indicated. As a result of these and other tax changes, Canada now has an overall tax rate on new business investment that is substantially lower than any other G7 country and below the average of the member countries in the Organisation for Economic Co-operation and Development. That is both an incredible achievement and a draw for investment. It has proven invaluable in helping Canada skirt the worst of the global recession.

Let me quote at length what the Canadian Manufacturers and Exporters had to say about Canada's low-tax advantage and our Conservative government's business tax cuts, and I am quoting directly:

If federal tax rates had not been reduced, Canada's unemployment rate would have exceeded nine per cent in 2009 during the recession. Today, our unemployment rate would be higher than that of the United States, with about 200,000 fewer Canadians working....

Investment meanwhile has also increased. Canada's business sector invested $25 billion more in capital assets last year than in 2007, and $50 billion more than at the depth of the recession in 2009. Investment in industrial machinery and equipment, which has been given an additional boost by the rapid depreciation that the federal government has made available to manufacturers, has risen 12 per cent since 2007, and has jumped by 37 per cent since the end of the economic downturn....

It's time we get the facts on the table. Business investment has been a key driver of economic and job growth over the past five years, and lower taxes have contributed significantly to that growth.

This is a significant advantage for Canada in the global economy and will be a key contributor to Canada's long-term economic prosperity, and we are not going to stop there.

Canada's economic action plan is continuing our efforts to preserve this country's advantage in the global economy, to strengthen the financial security of Canadian workers, seniors and families, and to provide the stability necessary to secure our recovery in an uncertain world. Canada weathered the global economic and financial crisis well compared to a lot of countries, particularly when we compare it to most other developed nations.

As the Toronto Sun noted in a March 2013 article:

Since the Tories took over, no other G-7 country has surpassed Canada in per capita job growth. Canada has added 1.5 million net jobs since 2006.

...Canada is in good shape compared to all the other industrialized countries of the West.

Nevertheless, Canada is not immune to the global challenges that emanate from beyond our borders, especially in Europe and the United States.

That is why I was extremely pleased to note that our government has stated clearly that this is not the time for dangerous new spending that would increase deficits or raise taxes, like those proposed by the NDP with its dangerous carbon tax proposal.

We have heard time and time again in uncertain global economic times such as these that the most important contribution the government can make to bolster confidence and growth is to maintain our sound fiscal position. That means maintaining our focus on fostering prosperity for Canadians and their families by growing the economy and helping to create high-quality jobs. In other words, we have to do everything we can to keep taxes low for Canadian families and businesses and also make the tax system predictable for taxpayers. That is exactly what we would do through today's legislation, the technical tax amendments act, 2012.

As members know, the Auditor General released her study in the fall of 2009 on the existing backlog of outstanding income tax legislation, a backlog that this legislation seeks to address. While outlining the delay in addressing the current backlog of outstanding income tax amendments, the Auditor General also made some important observations about the impact of not dealing with this issue in a timely manner, an impact with far-reaching implications.

Among the many negative effects for taxpayers caused by the uncertainty of the backlog of outstanding income tax amendments, the Auditor General's report identified higher costs of obtaining professional advice to comply with tax law; less efficiency in doing business transactions; inability of publicly traded corporations to use proposed tax changes in their financial reporting, as they have not been substantively enacted; and increased willingness to engage in aggressive tax planning.

Therefore, we will applaud this government for taking action to finally end this more than a decade-long backlog and the Office of the Auditor General for its report that really helped crystallize this issue for parliamentarians.

Furthermore, the Auditor General made a series of recommendations to help deal with this issue going forward, and as we stated at the outset, we agree with each of her recommendations.

For instance, the Auditor General recommended that the Department of Finance use an integrated and consistent process for recording, tracking and prioritizing all technical issues for possible legislative amendment. We agreed, and we moved to consolidate the system of the Department of Finance for ensuring that technical issues are documented and catalogued consistently, and that this system is maintained and kept up to date.

The Auditor General also recommended that the Department of Finance regularly develop and release draft technical amendments, including those that arise from comfort letters, so that taxpayers and tax practitioners know what changes will be made and can provide input. Again, we agreed, and we formally committed to bring technical amendment packages forward for consideration where appropriate, notwithstanding the fact that the prior technical amendments had not yet been adopted by Parliament.

In fact, this past December, the Department of Finance released a package of draft legislative proposals for public comment relating to a number of technical changes to the Income Tax Act and the income tax regulations.

Since there is only one level of taxpayer, we must work together to ensure Canada's taxpayers are treated with respect and taxes are kept low. An important way to keep taxes low is by returning to balanced budgets. We must recognize that balanced budgets are important for what they make possible and what they avoid.

Reducing debt frees up tax dollars that would otherwise be absorbed by interest costs. These dollars can then be reinvested in the things that matter most to Canadians, including lower taxes. Reducing debt keeps interest rates low, encouraging businesses to create jobs and invest in the future. It preserves the gains made in Canada's low-tax plan, fostering the long-term growth that will create more and better paying jobs for Canadians.

Canadian tax reductions that play an important role in supporting economic growth are those that enable businesses to invest more of their revenues in their operations. Such investments boost efficiency and productivity. It is this productivity growth that allows businesses to hire additional workers or offer higher wages in order to expand production and earn more profits.

Our government is committed to lower taxes for all Canadians. That is why we have introduced broad-based tax relief, with more than 150 tax reductions such as lowering the GST from 7% to 6% to 5% and introducing the landmark tax-free savings account.

Our strong record of tax relief is saving the typical Canadian family of four more than $3,200 each year. That is great news for Canada and great news for taxpayers. When we make these cuts, not every taxpayer benefits, but when we get an overall average savings of $3,200 per year, that means a lot to young families especially, and I have a lot of those in my riding, as many members do.

What is more—as is demonstrated in today's legislation, the technical tax amendments act, 2012—our government has been aggressive in closing tax loopholes used by a small group of taxpayers to avoid paying their fair share of taxes. I even hear there are some people in this House who have been using those loopholes. We will close them.

Ensuring tax fairness helps keep taxes low for all Canadians and their families, not only a select few. This is very important and reflects the feedback we have received from Canadians, who have consistently told us that they want a tax system that is both simpler to understand and comply with and ensures everyone pays their fair share of the national tax bill.

That is exactly what our government would deliver with this legislation. Put simply, this legislation would help ensure everyone is treated equitably under our tax laws.

Among the measures in the bill are enhancements to the Income Tax Act to better target and simplify rules relating to non-resident trusts. There are also modifications to rules to simplify and make more equitable the taxation of Canadian multinational corporations that have foreign affiliates.

In short, this legislation would close tax loopholes, crack down on tax avoidance and create greater fairness for all taxpayers.

I want to reiterate and stress in no uncertain terms tax fairness is a basic principle that our government is committed to upholding. We are proud to build upon it here today. I hope my friends across the way share our commitment. Who among us could oppose action to improve the integrity and fairness of the tax system? Who among us would oppose closing loopholes that allow a few businesses and individuals to avoid paying their fair share of tax? No one on this side of the House.

In all fairness, no one likes to pay taxes, but anyone who looks at it with a dose of reality at all realizes that without taxes we could not enjoy our standard of living, health care and all the things that sometimes we all take for granted.

Since 2006, our government has introduced more than 75 measures to close tax loopholes and ensure that taxes are fair for all. By ensuring this integrity, we help make our tax system even more attractive for new business investment, which is a key goal of our government. The fact is that we want to make sure the world knows that Canada is open for business and is the best place to invest.

In closing, tax reductions brought in by our government are allowing individuals and families to keep more of their hard-earned money and are improving incentives to work, to save and to invest, while also contributing to the government's long-term economic agenda. What is more, once the federal budget returns to balance, we have committed to building on our record with additional broad-based tax relief.

Ensuring tax fairness through today's legislation helps keep taxes low for all Canadians and their families. This will help keep our economy strong and lead to a better quality of life for every Canadian. I encourage all members to support the legislation before us today and to help create a better tax system and greater fairness for all Canadians.

Technical Tax Amendments Act, 2012
Government Orders

May 28th, 2013 / 11:25 a.m.
See context

NDP

Jasbir Sandhu Surrey North, BC

Mr. Speaker, my hon. colleague across the floor talked about creating jobs here in Canada. Jobs for whom? Are they jobs for temporary foreign workers? How many jobs were created for temporary foreign workers last year?

I know my colleague is not going to answer that, so I will answer that for him. There were 300,000 temporary workers allowed into country. We believe that, yes, we need skilled workers. We need highly skilled workers for jobs when we cannot find the workers here. However, last year, as we have seen through scandals throughout the last year, 300,000 temporary foreign workers were allowed into the country. My question for my hon. colleague is this: how is the government going to fix that broken immigration system that allows for unskilled workers to be imported into Canada?

Technical Tax Amendments Act, 2012
Government Orders

May 28th, 2013 / 11:25 a.m.
See context

Conservative

Larry Miller Bruce—Grey—Owen Sound, ON

Mr. Speaker, we all know that many members from across the way, and I am not sure if my colleague who just asked the question was one of them, did ask for favours under this program because it benefited jobs and businesses in their ridings. At the same time, we know that with every program, from time to time there are people who literally lie awake at night trying to figure out ways to abuse a program that is there for good reasons. The Minister of Human Resources and Skills Development and the Prime Minister have committed to fixing that program, and we will.

The member who asked the question may have come in halfway through my speech, but I did use a quote in my remarks from an organization that talked about the number of real jobs that we have created in our country. We will stand second to no one when it comes to job creation.

Technical Tax Amendments Act, 2012
Government Orders

May 28th, 2013 / 11:30 a.m.
See context

Liberal

Joyce Murray Vancouver Quadra, BC

Mr. Speaker, I listened to the member for Bruce—Grey—Owen Sound's remarks with interest. I know that he himself is a small business person and certainly has the interests of his businesses in his community at heart.

However, despite the PMO talking points behind his speech, the fact of the matter is that the Conservative government is doing a poor job. Growth has flatlined. We are lagging behind a number of our important competitors. Youth employment is stuck at high rates that are double that of other Canadians. The number of people out of work is still more than 200,000 persons higher than it was when the government first came in. Additionally, 25% of graduates are underemployed.

It is not working. I pointed out some of those of factors, as did the member for Ottawa South, who talked about taxes on businesses in his community.

My question is this: which economists would have advised the government that reducing the GST and then increasing EI payroll taxes by almost $10 billion, as well as adding other tax burdens around dividends and R and D credits to compensate for the GST reduction was the right trade-off for the economy? My understanding is that the GST was not supported by the economists, and these taxes on small businesses are definitely having a dampening impact on our economy, growth and jobs.

Technical Tax Amendments Act, 2012
Government Orders

May 28th, 2013 / 11:30 a.m.
See context

Conservative

Larry Miller Bruce—Grey—Owen Sound, ON

Mr. Speaker, I am glad that the member brings up the GST, because it was her former leader who declared back in 1993 that he was going to get rid of the GST, in order to get on the good side of the public, I guess we would say. Of course, we all waited for 10 long years, and that never happened. Almost immediately when this government came to power in 2006, we moved the GST from 7% to 6% and not too long after to 5%. I am glad to hear that she supports the direction in which we are going on that.

It has been over a decade since Parliament last passed a comprehensive package of technical income tax amendments. The member who just asked the question declared in her remarks half an hour or so ago that the system is not working. We all know that. The government knows that, and that is why we are all here today debating this bill. We will certainly appreciate her support on it at the end of the day.