House of Commons Hansard #143 of the 36th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was agency.

Topics

Division No. 247
Government Orders

1:25 p.m.

NDP

Lorne Nystrom Qu'Appelle, SK

Mr. Speaker, I would be curious if the last member could extemporaneously tell us what he said. That would be very useful.

Today the Bloc moved an amendment to delay for six months the creation of this great big new taxation agency which was created by the Liberal government. I have three or four concerns about it which is why I support the amendment before the House today.

The Liberal government is setting up a taxation agency to collect GST, income taxes and corporate taxes. The provinces can buy in. They can collect the provincial sales tax, the liquor tax, eventually municipal taxes and so on. It is a radical departure from the existing practice of the Department of National Revenue collecting taxes in this country.

I have three or four concerns about that. My first concern is that this is supposed to be a federal-provincial agency. A good friend of mine, a minister from Edmonton, is in the House today. He is concerned about federal-provincial relations. I wonder if he could tell the House today which provinces have bought into the idea of a new taxation agency. My impression is that the answer would be none. Not a single province has bought into this agency—

Division No. 247
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1:25 p.m.

An hon. member

Nova Scotia.

Division No. 247
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1:25 p.m.

NDP

Lorne Nystrom Qu'Appelle, SK

If Nova Scotia has bought into it I would like to see a letter tabled in the House which says that Nova Scotia will take part in this agency. When the minister was defending the agency on October 1 not one province had bought into the idea to be part of this agency to collect taxes.

We are heading into a Quebec election—

Division No. 247
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1:25 p.m.

An hon. member

So what?

Division No. 247
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1:25 p.m.

NDP

Lorne Nystrom Qu'Appelle, SK

—and we are hearing a lot about federal-provincial co-operation.

A Liberal across the way says “So what?” It is no wonder the Prime Minister is stumbling around making all kinds of mistakes. He is aiding Mr. Bouchard with some of his comments.

I believe very strongly in co-operative federalism, the kind of co-operative federalism that was preached in this House by people like Robert Stanfield, Lester Pearson and Tommy Douglas many years ago. That is what I believe in, but this government is bringing in an agency without the support of any of the provinces.

Division No. 247
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1:25 p.m.

An hon. member

Medicare.

Division No. 247
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1:25 p.m.

NDP

Lorne Nystrom Qu'Appelle, SK

I am glad that medicare was referred to. It was started by a CCF government in Saskatchewan in 1961. It was a popular idea that spread across this country. It came into being federally after the royal commission headed by Mr. Chief Justice Hall. There was a national consensus that we should have a national medical care program. Medicare was supported by an overwhelming majority of Canadian people and an overwhelming majority of the provinces before it actually was passed by the House of Commons.

This case is the opposite of the medicare example. No province has bought into the idea of a tax collection agency like the new agency the government wants to set up.

Another point is the idea of the quasi-privatization of the largest part of the federal government in this country. Forty thousand people work for Revenue Canada and the Liberal government wants to take this department out of the public service. Some 20% of the workforce of the Government of Canada will be, in effect, privatized.

There is no need to talk about the new right in this country. The alternative is right there. The united right in this country is the Liberal Party.

It is the Liberal Party that has downsized government to a smaller scale than we have seen since the late 1940s after the second world war. That is the legacy of the Liberal government. There is the privatization of CNR and what the Liberals have done to the employment insurance fund. We can go on and on and on in terms of downsizing government in this country. That is what the Liberal government across the way has done.

Division No. 247
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1:30 p.m.

An hon. member

Tell us what the NDP has done in Saskatchewan, Ontario and B.C.

Division No. 247
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1:30 p.m.

NDP

Lorne Nystrom Qu'Appelle, SK

Mr. Speaker, I do not know if I am allowed to answer questions but I was asked what the NDP government has done in Saskatchewan.

I have here in my pocket the results of a byelection in Saskatchewan last night. It shows that the NDP government is in touch with the people of Saskatchewan. A Liberal MLA named Bucky Belanger resigned from the Liberal Party about two months ago. Mr. Belanger resigned his seat from the Saskatchewan legislature and sought the NDP nomination. A byelection was held last night. The result of the byelection was that Bucky Belanger got 2,145 votes; the Liberal Party received 95 votes.

Division No. 247
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1:30 p.m.

The Acting Speaker (Mr. McClelland)

This might be an appropriate time to interject and inform the hon. member for Regina—Qu'Appelle and the House that the Table does its work. On October 1, 1998 the hon. member for Regina—Qu'Appelle actually did speak on the amendment. I am afraid we have to retract everything the member already said. I am sorry but the member's time for debate at this time is over.

Division No. 247
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1:30 p.m.

Bloc

Pierrette Venne Saint-Bruno—Saint-Hubert, QC

Mr. Speaker, Hallowe'en is being celebrated on the weekend, and the government will again try to scare people with its Bill C-43. No doubt Quebeckers will be shaking at the prospect of the Department of National Revenue transforming itself into a semi autonomous government agency.

Why will they be shaking? The President of the Treasury Board gave us part of the answer in the House. “No one likes paying taxes”, he said. Obviously, no one likes paying taxes when they get nothing for their money. Obviously no one likes paying taxes when we are deprived of the health care services our taxes are supposed to pay for. Obviously no one wants to pay taxes, when assistance to fishers, farmers and the unemployed is being cut.

This is why people are afraid. They know that the government does not provide the services they are entitled to through their taxes. They are afraid because the money they are paying in taxes will now be collected by another monster, the Canada customs and revenue agency.

The Bloc Quebecois totally disagrees with the bill. One of the most important prerogatives of modern government is the power to tax. Thanks to this power, Canada collects money from taxpayers that they worked hard to earn. It is unthinkable that this power will be put in the hands of a semi autonomous agency that is not under the direct control of the government.

The minister has said there will be less overlap between the federal and provincial governments with the bill. That is not reassuring; it causes concern. The fact there is no more encroachment is because the government will not be collecting income tax anymore, the agency will.

On the other hand, it is common knowledge that we are in favour of an end to overlap. The Bloc has long wanted an end to such overlap between the federal and the provincial governments. The solution is simple: combine all tax collection activities within Revenue Quebec.

Bill C-43 means savings, we are told. We have our doubts. The government is going to create a quasi-autonomous agency that will be entrusted with billions of dollars, and the agency's managers will not be subject to any pay controls. In today's economy, with the directors of banks and financial concerns often voting themselves outlandish salaries, we wonder about the size of the salary bill taxpayers will have to foot for the agency's managers.

The very status of the agency will allow senior managers to pay themselves salaries comparable to those of CEOs in the private sector. Will the agency's commissioner, who will have hundreds of thousands of people reporting to him and a budget in the billions, demand a salary on a par with that of the chairman of the Royal Bank? Will the agency's commissioner have millions of dollars in annual income? These are some of the questions we have.

Will these managers be more motivated as employees of the new agency than they are right now? We read in Le Devoir this morning that Pierre Sigouin, assistant director of the Customs and Excise information division, claims to have lost all motivation over the last four years.

Mr. Sigouin took paid sick leave to co-ordinate the election campaign of Pierre Bourque, the mayor of Montreal, who is running for re-election. Apparently, it is unmotivating to work for this government. Is this the reason the government has decided to create independent agencies such as the Canada customs and revenue agency?

It is obvious what the government is up to. It will at last be able to shift the blame for tax collection problems. Those who had too much tax deducted will be told it is not the department's problem and referred to the agency.

It is all very fine and well for the minister to say he will retain some control over the agency. The bill contains provisions that make the agency relatively autonomous. It will therefore be possible for the minister to authorize the commissioner or any person employed or engaged by the agency to exercise or perform on his behalf any of his powers, duties or functions under any act of parliament, with the exception of making regulations.

The Canada customs and revenue agency will be run by a super-bureaucrat who will not be accountable to parliament. While accountability is essential to our democracy, this principle is increasingly left out of the current political scene by this government.

The bill will make it impossible to criticize the administration of an organization performing a function that the very existence of the state depends on. This is especially worrisome since it follows a trend of political patronage.

Under clauses 15, 22 and 25 of the bill, there will be a board of directors of 12 members appointed for three years on the recommendation of the provinces, but holding office only on a part time basis. Three other directors, that is the chair of the board, the commissioner and the deputy commissioner, will be appointed by the governor in council for a term of five years.

Once again, we will be witness to the political appointments made by a government that sacrifices competence to give jobs to political friends.

It is to be feared that the decisions made by politically appointed senior officials with a free hand for action would be prejudicial to taxpayers.

Members will recall that less than three years ago, the auditor general revealed a scandal that we in the Bloc Quebecois had condemned in the 1993 election campaign: the family trust scandal.

The auditor general had revealed that, at around midnight on December 23, 1991, some senior officials of Revenue Canada, Finance and Justice decided, without even asking their ministers, to transfer two family trusts worth $2 billion to the United States without collecting a single cent in Canadian tax.

If the mandarins of Revenue, Finance and Justice could do so under the present circumstances, imagine what things will be like when there is this customs and revenue agency they are trying to set up, which will be quasi-independent and not answerable to Parliament.

How many similar cases will be swept under the rug, without Parliament even knowing about them, cases of scandalous decisions by senior mandarins who will now be in control of tax collection as well as of all the confidential data banks on Quebeckers and Canadians? It makes no sense whatsoever to delegate so much to a new class of super-bureaucrats.

It goes without saying too that creation of this agency will considerably weaken the Department of Revenue. Once the agency is created, the Minister will have an overall business plan submitted to him, one to which he will have made little, if any, contribution. He will be confronted more or less with a fait accompli. They will be dictating to the minister what he has to do.

The bill will set up an agency that will be virtually independent of the government and will centralize the power to collect taxes. The government is on the wrong track here. The provinces are calling for more control over the administrative powers that affect them, and the government is pulling the rug out from under them and rejecting their demands.

This bill augurs nothing good for the taxpayers of Quebec and of Canada, and the Bloc Quebecois will be voting against this Halloween horror of a bill.

Division No. 247
Government Orders

1:40 p.m.

Liberal

Alex Shepherd Durham, ON

Mr. Speaker, it gives me great pleasure to enter this debate on Bill C-43, the Canada customs and revenue agency. This is all about getting government right. We cannot continue to live with significant inefficiencies within our administrative structure. This is a continuation of our government's desire to reinvent government and get government onto a course of efficiencies.

When I talk about efficiencies, members will be interested to know that in the last budgetary estimates Revenue Canada's administration cost to run the department was $2.2 billion. It collected a sum total of about $153 billion. That means a ratio of 1.43%, that is to say, it costs us about 1.5% for every $1 that is being collected by Revenue Canada which is good in itself.

Some people note that Revenue Canada is probably one of the most efficient arms of government today. In my earlier life I was involved with Revenue Canada on a more direct basis in representing my clients. Generally speaking the people at Revenue Canada carry out their jobs in a professional and diligent way with fairness and equity. Some people watching today might think that Revenue Canada is just a little bit too efficient in how much taxes it collects. However, the reality is that it undertakes its functions quite effectively.

In Canada today we have developed a multiplicity of taxes and tax regimes. It is small business week. Maybe we should be paying attention to some of the concerns of small and medium size businesses in this country. One of them is the pure complexity of complying with our taxation system.

Both the federal and provincial governments collect excise taxes, transportation taxes, tourist taxes and corporate taxes. Both the federal and provincial governments have their own little tax regimes collecting corporate taxes from small and medium size incorporated businesses. We also collect the employment insurance and the Canada pension plan. At the same time, the provinces are also involved in making separate collections for workers compensation.

The most insidious is the incidence of duplicity of sales taxes, the GST and provincial sales taxes. This duplication is very expensive for our citizens and small businesses. The problem with the provincial sales tax is that it also cascades into the actual exports in the selling prices of commodities. As Canada is an exporting country it causes great inefficiencies as well. It makes us less competitive as a nation.

It is for some of these reasons that the government has put forward the concept of this agency. We talk a lot in this House about the underground economy. Generally speaking we assume that people are simply cheating, but the reality is that a good number of people find it very difficult to comply with the level of complexity of the forms and requirements for different types of taxes.

Quite frankly, people cannot afford the compliance. I can remember a small business operator saying that he needed to spend one day a week just to comply with the taxation system. It is very important that we develop an agency that will be efficient and smoothly run to try to reduce this complexity and make the whole concept of tax collection more efficient. I have been surprised to find out that Revenue Canada for instance does not do e-commerce. We can pay our bills over the Internet, to Bell Canada and even to our local municipal tax authorities, but we cannot do it with Revenue Canada. I suggest that one of the reasons is it needs a certain inertia. It needs to spend more time developing electronic commerce to make this a more efficient agency. This is done for corporate structures but not on an individual basis. We have to catch up with the times. When I hear the Bloc, the NDP and others saying leave it the way it is, these people are just standing in the path of progress.

I would like to get back to an issue which is dear to my heart, the harmonization of sales taxes. We have tried politically to deal with this issue in the maritime provinces and some of those provinces have signed on to harmonized sales tax.

The member for Regina—Qu'Appelle was actually challenging us as to what province would ever sign on to this. I am surprised by that comment. The reality is we are leaders, that we are leading in this area of efficiency. We should be complimenting the government on its leadership role rather than saying if nobody else is ponying up to the cause, it must be a bad thing.

In spite of what the member for Regina—Qu'Appelle said, I can remember when medicare was first brought on and I think only one or two provinces initially signed on to that agenda. Of course all the provinces today are part of the medicare system. So it is not a reason to stand in the way of an agency that will be competitive within our economy.

The lack of harmonization of the sales taxes is probably one of the single largest inefficiencies in tax collection. Canada has to be the only country in the western world that actually has one federal sales tax and nine provincial sales taxes. It does not take much thought process to realize how inefficient that really is.

If the agency were in place pure rationality between provinces and the federal government would try to find some way to solve that problem. We as politicians quite frankly have not been able to do that. I think that is possibly a failure of this place compared to what an agency could possibly do. That does not mean those decisions are outside the political agenda. They are not.

In answer to a question the other day the minister of revenue suggested Nova Scotia had already signed on to a service contract. Three ministers along with our minister had signed on. So we can see how this is starting to evolve. Once this agency is in place we are going to find many more ways to make the whole concept of tax collection more efficient and more relevant to the 21st century.

Ontario, for instance, my province, insists on collecting its own provincial sales tax regardless of the fact that the provincial sales tax becomes a cost of production to our manufacturers. In my area General Motors has to actually pay provincial sales tax on input components. When it buys stationery or other things for its operation, it pays provincial sales tax. Eighty per cent of its production goes across the border into the United States. It goes across the border embedded with provincial sales tax as opposed to the GST, which has a methodology of removing that tax when it finally goes outside of our borders.

As a consequence Ontario's provincial sales tax is a very inefficient, outmoded tax that is not serving the people of Ontario well, because 40% of our exports are coming from the province of Ontario.

We have to find better ways of doing business and I believe this is part of that solution, to create this agency which will be more efficient, will allow a broader base concentration of critical mass, will allow for possibly more spending in the area of technological efficiency and will allow people to interface with the government more efficiently and more effectively.

In the act there are provisions where the provinces will be able to be consulted in the area of appointing directorships and so forth.

We can certainly see the window of opportunity to make a more efficient agency, allowing the provincial and federal authorities to work together to make this an efficient tax regime, an efficient, modern tax collection system.

I am supportive of this legislation and I hope the rest of the House will support it as well.

Division No. 247
Government Orders

1:50 p.m.

Progressive Conservative

Jim Jones Markham, ON

Mr. Speaker, I rise to address Bill C-43, an act to establish the Canada customs and revenue agency and to amend and repeal other acts as a consequence.

A brand new revenue agency, that is what Canadians have been clamouring for. I dare say it was one of the most mentioned issues for all candidates as we went door to door during last year's federal election campaign.

The minister probably still recalls that many people told him what they want is tax reform but not lower taxes, not a simpler system. No, what they want is a new agency, one with wider powers, a new agency with less accountability to parliament, a new agency that runs outside the government with access to their most personal information.

I think the minister is confused. This is the Hallowe'en season and while he is very effectively scaring the Canadian public with this bill the time for pranks is still April 1. All levity aside, I do not want to ensure that the Liberal Party is fully aware of the fact that this bill in no way addresses tax reform. In the interest of accuracy I am sure it would not want to see some overzealous campaigner insert Bill C-43 in the 2001 red book as an example of the Liberal's commitment to reform.

This whole bill is predicated on the level of trust between the provinces and the Liberal government, a level of trust that simply does not exist.

Just to be certain I will spell out why this situation exists. It concerns unilateral cuts to transfer payments, outrageous levels of unemployment insurance, overtaxation and ridiculous postering statements by the Prime Minister and the Minister of Health against the most respected premiers in Canada, including the premier of my province, Mike Harris. These are just some of the reasons why there is no level of trust at the first ministers level.

My hon. colleague from Kings—Hants has outlined the many shortcomings of this bill. However, we do not have to have a Ph.D. in economics to understand why this national agency is destined to fail.

The government offloads responsibility to the provinces by making draconian cuts to health care, for instance $7 billion in the last term. The minister has said there is only one taxpayer. The provinces and municipalities have been faced with an ever increasing tax burden as a result of the government's failure to lead and to take responsibility for national matters, including such issues as health care funding.

The minister speaks of the provinces having greater opportunities to effect control and have control over the levers of this important agency than they now have with Revenue Canada. I suggest the provinces' lack of approval and their concern with this new agency is an indication that they do not believe in this. The provinces will not have greater powers and authority with this new agency.

I ask the Liberal government to take a short walk back to a time when it still pretended that keeping red book commitments was important. After the Prime Minister's ridiculous claim during the 1993 election that he would get rid of the GST, there was an attempt to create a renamed and more pervasive tax known as the BST, the blended sales tax. This little attempt at massaging the red book promises was only adopted in three provinces, Nova Scotia, Newfoundland and New Brunswick.

Coincidentally there are only three provinces in Canada with Liberal governments. I am sure many will be shocked to learn that these governments exist in the same three provinces, proving that the tentacles of this government run very long and that the tendency of elected Liberals to imitate the nodding heads drinking birds is not limited to our federal parliament.

Unless Prime Minister Bo Peep intends to elect a few more Liberal sheep in provincial legislatures across the land, he may as well stick a fork in Bill C-43. As I do not see anybody rising on a point of order to withdraw this bill, allow me to provide the minister with a course of action that would give him a fighting chance at actually implementing this new agency with a certain degree of success.

The first course of action would be put an end to the war against the public service in this country. We are all friends in the House and I understand that the public service was probably a bit too trusting when it took the Liberal Party at its word on pay equity. However, this government made a commitment and those people are filled with righteous anger. Therefore I suggest the minister rethink the likelihood that these public servants are going to be very interested in assisting in the privatization of their jobs.

Why should they be helpful? Bill C-43 is going to result in new people being paid higher salaries to do the exact same jobs which are being done now. Of course Canadians will be thrilled to learn that along with this new agency comes a whole new level of bureaucracy.

We see current employees who will lose existing rights, including job security and the right to bargain on staffing matters. Keep in mind that there will only be a two year job guarantee and we are effectively dealing with about 25% of the public service. We have to take a look at whether this agency would not be more flexible than Revenue Canada but less flexible in working with other government departments, including the finance department, and the provinces.

At various times of the year Revenue Canada has between 40,000 and 46,000 employees. Revenue Canada has many responsibilities, primarily the collecting of federal taxes and various fees, harmonized sales taxes in three provinces, personal income taxes on behalf of nine provinces and corporate taxes on behalf of seven provinces. The new agency is to assume all these responsibilities. The new agency is supposed to be as efficient as the department was without any increased cost to the taxpayer.

I suggest that unless the provinces buy in and support this direction and this new agency, any claims by the government that this agency will lead to greater efficiencies and save the taxpayer money are suspicious at best. The only efficiencies that can be achieved will be those realized through a slower transfer rate of funds to provinces. As a former town councillor I can assure this House that in turn the municipalities will see foot dragging when it comes to receiving funds.

In essence this government is trying to implement a law that will cause greater discourse between voters and all levels of government. The government is saying we could save between $97 million and $162 million per year if all the provinces participated. That is a very big if. At this juncture currently the provinces have not demonstrated a significance interest in having Ottawa collect and have more authority in effect over taxes beyond what Revenue Canada does currently.

Division No. 247
Government Orders

1:55 p.m.

The Speaker

You still have three minutes in your excellent discourse. I know you will want to seek the floor right after question period. As it is almost 2 p.m., I thought we would proceed to Statements by Members.

Agriculture
Statements By Members

October 27th, 1998 / 1:55 p.m.

Reform

Jim Pankiw Saskatoon—Humboldt, SK

Mr. Speaker, for months now this Liberal government and the agriculture minister in particular have been ignoring the farm income crisis on the prairies.

The average drop in farm income over each of the last two years was 50% and programs such as crop insurance and NISA will not provide sufficient help. In fact, NISA will not even cover the cost of fertilizer and fuel next spring for many farmers who are struggling to avoid bankruptcy.

If the Liberals had listened to Reform in 1993 the government could have been investing in a farm safety net to protect farmers who are getting hammered by European Union subsidies and unfair trade practices by the U.S. So far there has been no response from the agriculture minister to Reform's proposals.

Farmers across the west are demanding action but sadly they realize it will not be coming any time soon from this do nothing Liberal government.