Finance Committee on Nov. 27th, 2007
Evidence of meeting #6 for Finance in the 39th Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was tax.
A recording is available from Parliament.
On the agenda
MPs speaking
Also speaking
- Pierre Le François General Director, Association nationale des éditeurs de livres
- Claire Morris President and Chief Executive Officer, Association of Universities and Colleges of Canada
- Darryl Smith President, Canadian Dental Association
- Bob Harvey Member, Tax and Fiscal Policy Committee, Certified General Accountants Association of Canada
- David Bradley Chief Executive Officer, Canadian Trucking Alliance
- Pierre Sadik Senior Policy Advisor, Sustainability Specialist, David Suzuki Foundation
- Nathalie Bourque Vice-President, Global Communications, CAE Inc., SR & ED Tax Credit Coalition
- Peter Look Vice-President, Tax, Nortel, SR & ED Tax Credit Coalition
- Carole Presseault Vice-President, Government and Regulatory Affairs, Certified General Accountants Association of Canada
- Susan Mullin Vice-President of Development, Association of Fundraising Professionals
- Margaret Lefebvre Executive Director, Canadian Association of Income Funds
- Chris Tabor Manager, Queen's University Bookstore, Canadian Booksellers Association
- Michael Atkinson President, Canadian Construction Association
- Gerry Barr President and Chief Executive Officer, Canadian Council for International Cooperation
- Amanda Aziz National Chairperson, Canadian Federation of Students
- Mark Yakabuski President and Chief Executive Officer, Insurance Bureau of Canada
4:50 p.m.
Member, Tax and Fiscal Policy Committee, Certified General Accountants Association of Canada
What we want is for an expert panel to review all of these issues.
I will admit that our tax and fiscal policy committee discussed the issues of a drop in GST versus a drop in income taxes and we couldn't reach a consensus. I think that probably reflects the country as a whole.
We're suggesting an expert panel on taxation, simply because we need the input from all sectors of our economy to consider these issues and to see which is most beneficial.
4:50 p.m.
Liberal
Garth Turner Halton, ON
The government has rejigged the tax code in its budgets of 2006 and 2007. It has brought in additional tax credits. Some experts believe it has complicated the tax code, actually made compliance more difficult, because of the use of small tax credits. Do you have an opinion on that?
4:50 p.m.
Member, Tax and Fiscal Policy Committee, Certified General Accountants Association of Canada
I certainly do. And I'm glad I'm sitting next to Dr. Smith in case my dentures fall out during my answer here.
There's no doubt that these various different adjustments and tax credits and rate differentials, depending on the date of purchase of certain assets, all of these things designed at one point in time perhaps to encourage a certain sector of the economy or to close a loophole, have added tremendous complexity to the act.
It's a very frustrating thing for us to not know if there is some obscure provision that was introduced to one of the 5,000 pages of tax legislation that we have to deal with, that may put the particular transaction we're dealing with offside, even though it's a simple one. It's very, very hard to know whether that's going to happen.
4:50 p.m.
Liberal
4:50 p.m.
Member, Tax and Fiscal Policy Committee, Certified General Accountants Association of Canada
Absolutely.
4:50 p.m.
Liberal
4:50 p.m.
Member, Tax and Fiscal Policy Committee, Certified General Accountants Association of Canada
That is not a good thing from our perspective, nor from the perspective of the average taxpayer across this country.
4:50 p.m.
Liberal
Garth Turner Halton, ON
What are some of the implications of that? Is this hurting productivity or competitiveness? Are there economic consequences?
4:55 p.m.
Member, Tax and Fiscal Policy Committee, Certified General Accountants Association of Canada
There are certainly economic consequences. Whenever you have a very complicated income tax system, first of all, you encourage non-compliance, and that could be intentional non-compliance, which of course is the underground economy. We're likely losing millions and millions of dollars a year in tax revenues because of that underground economy, partially because the system is so complicated.
In addition, there is a huge frustration for taxpayers who are hit with reassessments from unintentional non-compliance, and that also occurs frequently. So there is definitely a cost to our economy.
4:55 p.m.
Liberal
Garth Turner Halton, ON
Thank you very much.
So increasing non-compliance costing millions of dollars is frustrating taxpayers--
4:55 p.m.
Conservative
4:55 p.m.
Liberal
4:55 p.m.
Conservative
The Chair Rob Merrifield
No, your time is gone. Thank you very much.
Mr. Wallace, you have five minutes.
November 27th, 2007 / 4:55 p.m.
Conservative
Mike Wallace Burlington, ON
Thank you, Mr. Chairman.
I'll be brief. I have a question for Dr. Smith on the dental piece. Some of your colleagues came to see me yesterday to talk about the opportunity for a deferral--I don't like the wording of it--the PWIF, but a deferral program. There was a little bit of confusion.
Does your organization expect that the individual paying into it would never pay tax on that money, or would it be like a regular RRSP where, once you take it out, then you pay tax on it, assuming you're in a lower tax bracket?
4:55 p.m.
President, Canadian Dental Association
There are basically two formats you could use. One is, of course, the format of the registered education savings plan; in this case, taxable dollars go into the plan and then come out to your children later on at a reduced rate. The other one, the RRSP, is an up-front saving versus down the road when you have reduced income. There are several formats it could be placed into. It would involve structuring one that recognized government's responsibility in long-term planning as well.