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

Bank Service Charges
Oral Question Period

2:55 p.m.

Willowdale
Ontario

Liberal

Jim Peterson Secretary of State (International Financial Institutions)

Mr. Speaker, I would like to compliment Option Consommateurs for the good work it has done on behalf of low income Canadians with respect to banking services.

The member is quite right. We have two major concerns in this area. One is access for the 650,000 Canadians who do not have bank accounts and who cannot get out of poverty unless they have access to basic bank accounts. The other concern is the service fees that would be charged for a basic bank account. These matters have been looked at by the MacKay task force and the House of Commons is looking at them. They are very serious concerns for us. I thank the member for the question.

Transportation
Oral Question Period

3 p.m.

Progressive Conservative

Bill Casey Cumberland—Colchester, NS

Mr. Speaker, my question is for the Minister of Transport.

Nova Scotia started charging a fee to drive on the Trans-Canada Highway and the federal government did nothing. Now New Brunswick is planning to charge a fee to drive on the Trans-Canada Highway, creating a huge trade barrier and projecting a profit of $321 billion. First Nova Scotia and then New Brunswick. The next logical thought is that it will start in Quebec as well.

Will the minister use his constitutional authority to intervene on this huge interprovincial trade barrier and stop the madness of interprovincial trade barriers by the provinces?

Transportation
Oral Question Period

3 p.m.

Don Valley East
Ontario

Liberal

David Collenette Minister of Transport

Mr. Speaker, the government has used its constitutional authority on putting forward an agreement on internal trade. None of what has occurred on the east coast contravenes the transportation provisions of that agreement.

If one of those provinces feels aggrieved, it has the right to resort to conciliation and then a panel to resolve it. We prefer to use the agreement we have put together to resolve these issues in an amicable way.

Presence In Gallery
Oral Question Period

3 p.m.

The Speaker

I draw the attention of hon. members to the presence in the gallery of His Excellency, the Right Honourable Cavaye Yeguie Djibril, President of the National Assembly of Cameroon, and a delegation of members.

Presence In Gallery
Oral Question Period

3 p.m.

Some hon. members

Hear, hear.

The House resumed consideration of the motion that Bill C-43, an act to establish the Canada Customs and Revenue Agency and to amend and repeal other acts as a consequence, be read the second time and referred to a committee; and of the amendment.

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October 27th, 1998 / 3 p.m.

The Speaker

The member for Markham had the floor and I said before question period that he would be able to resume. He has three minutes left if he wishes to use them in debate.

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3 p.m.

Progressive Conservative

Jim Jones Markham, ON

Mr. Speaker, currently the provinces have not demonstrated a significant interest in having Ottawa collect or have more authority over taxes beyond what Revenue Canada does currently.

Ontario is looking to attain greater authority over its tax levers. It cannot simply be said to the provinces that someone will have more authority over their spending without providing them with more direct authority over tax policies.

Some of the provinces feel this agency may ultimately lead to less. If the provinces are not interested, obviously the agency will not save money or lead to greater efficiencies.

While we are on the subject of privatization, I draw to the minister's attention Bill C-54 which essentially deals with electronic privacy. This bill was tabled by the Minister of Industry for a very important reason. Canadians by and large do not have a sufficient degree of trust in the level of privacy accorded by the Internet. Without privacy legislation which Canadians are willing to buy into, electronic commerce would be a whole bunch of wishful thinking.

The same thing applies here. The combination of privatization, taxation and privacy is a very interesting dynamic, one which leads to great anxiety for Canadians. The question that needs to be answered is if most Canadians are unwilling to give personal information over the Internet, why should we suppose that they are prepared to have a large, faceless private agency with access to their most sensitive, personal information? Quite frankly Canadians are not interested in such a situation occurring. We can offload a lot of things but we cannot really offload leadership. That is what the government has tried to do.

Other than the issue of privacy Canadians also have traditionally expressed their frustration with the complexity of our income tax regime. There quite simply can be no justification for the fact that Canadians need to hire accountants to fill out their personal income tax forms. The notion that somehow a privacy agency will succeed in simplifying this process in a way that our present system cannot is completely without merit.

If we create incentives with all our public agencies or departments that recognize and award excellence as opposed to encouraging mediocrity we introduce market incentives without the existing agencies. We can achieve economies without necessarily creating new agencies.

In conclusion, the bill will not lead us toward a simpler tax system. It will not help us develop a fairer tax system. It will not achieve the goals of a flatter tax system. It is bureaucracy for the sake of bureaucracy, and that is the kind of legislation whose day has passed us by.

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3:05 p.m.

Bloc

Michel Guimond Beauport—Montmorency—Orléans, QC

Mr. Speaker, I am delighted to rise on this bill to create the Canada customs and revenue agency.

We have here yet another example of the style of management the Liberals adopted in 1993 after their return to power following the nine year reign of the Progressive Conservative Party under Brian Mulroney, Companion of the Order of Canada.

I will use this speech on the bill to illustrate how federal public servants, in the matter before us, may be vulnerable in the face of the policies developed by a government, namely those of privatizing and almost entirely eliminating the public service.

I would also like to make the following analogy, for our viewers, with the threat posed by the election in Quebec of a Liberal government under Jean Charest. We all know that the Quebec Liberal Party clearly indicated its intention, if the Liberals were to form the government in Quebec, to privatize on a large scale.

At the moment, what we fear federally could well happen provincially, if we were unfortunate enough to have Jean Charest's Quebec Liberals win the upcoming elections in Quebec.

On Thursday, June 4, 1998, one week before the long summer break, the Minister of Revenue tabled Bill C-43 to establish the Canada customs and revenue agency. It dates from the February 1996 throne speech, as the government announced its intention to set up a national revenue collection body.

This agency will, from the outset, be the transformation of the current Department of Revenue into a semi autonomous government agency.

It will have a mandate to negotiate with interested provinces and municipalities to collect all taxes in Canada. Ministerial accountability and parliamentary control would remain intact. The Minister of Revenue says he will remain fully responsible for administering the laws on taxes, customs duties and trade.

If that is the case, we might well ask why they are going to such lengths to transform a full department with one-fifth of all public service employees into an agency. What is the point of this agency? With the minister saying that few things will change, why set up such an agency, as I said a moment ago?

The answer is to be found in the remarks by the President of the Treasury Board, the member for Hull—Aylmer. I suspect there are a number of employees of Revenue Canada among his constituents who are watching us on television. I would hope that, in the next election, these people who live in the riding of the President of the Treasury Board will remember that this government and this minister have no interest in them as public servants. They are being left to the mercy of privatization and to be part of a semi-autonomous agency.

The minister is boasting here in this House almost of having the vote of the federal public servants. I hope that, for once, they will really make it clear to the member for Hull—Aylmer, the President of the Treasury Board, what they think of this agency.

The answer lies in the comments of the President of the Treasury Board, who says that the creation of the Canada Customs and Revenue Agency is an essential part of the government's commitment to modernize the federal public service. In the government's opinion, therefore, modernizing the federal public service is sort of like privatizing it; it means removing public servants from the effect of umbrella legislation such as the Public Service Employment Act.

This agency will employ about 40,000 public servants, some 20% of the entire public service, who will now be at the mercy of its board of management.

In a ten-minute speech, it is difficult to cover all the bases. I would like to take the opportunity to congratulate my colleagues on this side of the House, who worked very hard studying this bill, including the hon. member for Terrebonne—Blainville.

I would like to list the main reasons for rejecting this agency. First, we will have a mega tax collection agency that will enable the federal government to extend its influence to our communities. Moreover, with this agency, accountability to the public and to Parliament will be weakened. We also feel that the agency could be prejudicial to the privacy of Quebeckers and Canadians. This agency is a classic example of the building of an empire by Ottawa's senior bureaucrats locked up in their ivory tower.

The Bloc Quebecois thinks the primary reason for creating this agency is to conclude new tax agreements with the provinces, something which, incidentally, has not materialized. We also think that small and large businesses are not impressed with the new agency.

I see that the hon. member for Mercier, who is our industry critic and who pays very close attention to the concerns of small businesses, agrees with what I just said.

As we know, the business community was supposed to be the first to benefit from the agency. However, reaction to the new agency was mixed, to say the least. Organizations representing small businesses, including the Canadian Federation of Independent Business, were particularly suspicious of the enormous powers that would be concentrated in the hands of the agency.

A full 40% of the businesses that participated in a Public Policy Forum study commissioned by Revenue Canada see no point in having this agency. We are not talking about 2% or 3%, but about 40%. Forty percent of the businesses polled feel that the agency would increase or maintain the costs of their relationship with the department.

That is why we in the Bloc Quebecois are of the opinion that this agency will bring about new hidden taxes. Its supposed purpose is savings, but we believe it will bring new costs.

In fact, the agency is already wasting money even if it does not yet exist. We know that, even before gaining parliamentary approval, it is already costing the taxpayers money. Hundreds of departmental employees have already been relieved of their usual duties and assigned to design teams or other exercises serving the ambitions of senior bureaucrats.

Any public servant listening to us knows what we mean by senior bureaucrats in the federal public service. We do not need to spell it out. They know, for they live with it every day.

This costly diversion has also prevented the department from concentrating on its usual tasks.

One final point we would draw to the attention of this House is that this agency will be more bureaucratic than Revenue Canada.

I had the opportunity to meet in my riding an employee of Revenue Canada working in the Quebec City region, who made me very aware of the nasty effects and aspects of this agency. To protect him under the provisions of the Public Service Employment Act, I will not name him, but he and his colleagues know who they are.

The employees of Revenue Canada are concerned and anxious. They tell us that the declared intention is to create a headless bureaucratic monster that can go where it will and do what it wants. I am not sure this agency will look after the public interest.

In conclusion, Quebec does not support the desire of the federal government to centralize all activities related to the collection of federal revenues in a countrywide agency. We in Quebec already have our own department of revenue—

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3:15 p.m.

The Speaker

I am sorry to interrupt you, but I thought you were concluding. In any case, your time is up. Perhaps you could come back for the next round.

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3:15 p.m.

Liberal

Lynn Myers Waterloo—Wellington, ON

Mr. Speaker, I am pleased to rise in the House today to debate this very important issue. I do so on behalf of the residents of Waterloo—Wellington.

I want to begin by pointing out an important element of the proposal for the Canada customs and revenue agency and that is that it is a framework for the participation of the provinces and the territories. By setting the right conditions for greater co-ordination of federal and provincial tax administration, the agency can and will serve both the national as well as the provincial interests.

The success of the Canada customs and revenue agency does not require the participation of every province and territory. In fact participation in the agency is fully voluntary. The agency is intended to provide a framework and a platform to work for the benefit of all the provinces, not to take over any provincial powers. The creation of a new agency will reduce overlap and duplication between federal and provincial revenue administration.

As you know, Mr. Speaker, there is only one taxpayer. Why not then a single administration to collect taxes? This approach will allow governments to reduce their administrative costs and at the same time provide savings in compliance costs to taxpayers. Only where provinces and territories agree that a sound business case can be made for a specific service to be supplied by the agencies will these arrangements in fact be made.

The province of Quebec has been consulted along with all other provinces since the beginning of this process. Quebec has told us that although it does not want the new agency to administer any of its programs, it is willing to stay informed about its progress.

The agency legislation in fact simply represents a framework for closer collaboration. There is no obligation on the part of Quebec or any other province to have the agency administer more programs on its behalf if it is a matter completely for each to decide on its own.

Even if Quebec chooses not to participate, Canadian businesses will still benefit by saving between $116 million and $193 million annually in compliance costs. In addition, governments would save between $37 million and $62 million in administrative costs. Any new programs that the agency will administer will be based on a business case analysis. This will apply to Quebec as it will to all other provinces.

At the present time Revenue Canada collects personal income taxes for nine provinces and corporate income taxes for seven. Revenue Canada administers provincial social benefit programs for British Columbia, Alberta, New Brunswick, Saskatchewan, the Northwest Territories and Nova Scotia. Revenue Canada also collects provincial sales tax, and alcohol and tobacco taxes at the border for a number of provinces. It also administers the national child benefit. There is ample precedent for this co-ordination and consolidation of services.

The proposed agency by its very structure should expand even further the level of co-operation and at the same time increase the provincial voice in tax administration.

Provinces and territories will be able to supply lists of nominees from the private sector for 11 of the 15 directors on the board of management which will direct the business planning of the agency. These directors will not, I repeat not, be on the board to represent the specific interests of their province, but rather to bring a provincial and regional sensitivity to the management of the board and the agency.

The powers of the agency will be broad enough to allow it to enter into service agreements with individual provinces, for example for the collection of a non-harmonized provincial tax. Until now Revenue Canada could only administer provincial taxes if they were harmonized with federal taxes, limiting the number of programs that could be administered by Revenue Canada. Under Bill C-43 the agency will be empowered to administer non-harmonized taxes such as the provincial sales tax which is not harmonized. There are still economies of scale under a single administration even if a tax is not harmonized.

The agency will enter into an agreement with a province to administer a tax, but all of these agreements will have to follow guidelines which will be established by federal and provincial finance ministers. These guidelines will ensure that any taxes collected by the agency on behalf of the provinces and the territories will first of all, be legally valid; second, not jeopardize the system of self-assessment; third, not involve double taxation; fourth, ensure fairness; and finally, be undertaken under mutually acceptable contractual arrangements.

The last criterion demonstrates an important aspect of these agreements. They are service contracts with the agency providing a service to a province or territory according to specific terms and conditions of a contract between the two parties. This means that the province or territory will retain full authority over the tax and will be accountable to the taxpayers for it.

The agency will have to strengthen its accountability to the provinces for the administration of programs on their behalf so that they in turn can be accountable to their own taxpayers. Once a year the commissioner of the agency will have to report to provincial and territorial ministers on the programs and services managed on their behalf and offer to meet with them also on an annual basis to obtain their feedback on the agency's performance on their programs and their services. This strengthening of the accountability and performance bonds between the agency and the provinces and the territories will ensure that programs and services remain innovative, responsive to clients and cost effective.

I also want to point out that a study of the Public Policy Forum estimates that Revenue Canada could administer current provincial taxes for about $97 million to $162 million less than is currently spent, an overall reduction of 6% of the current costs if all provinces participate. The agency is currently undertaking joint studies with some provinces to examine specific possibilities.

Savings to individuals, businesses and governments increase as more provinces and territories participate. So it is in the best interests of all Canadians to have as much provincial and territorial participation as possible.

Bill C-43 will make the Canada customs and revenue agency a reality. The agency will be structured and positioned to earn the support of the provinces and the territories.

I want to point out that all provinces and territories as well as the federal government have worked hard to put their financial houses in order. The Canada customs and revenue agency is an opportunity to reduce costly overlap and duplication between the orders of government even further. That is important to note and certainly something all Canadians want.

I urge this House to pass Bill C-43 as quickly as possible so that Canadians in all provinces can realize the tangible benefits of better and more cost effective tax, customs and trade administration services in Canada. I believe that is what Canadians want and I sincerely believe that is what Canadians deserve.

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3:25 p.m.

NDP

Bill Blaikie Winnipeg—Transcona, MB

Madam Speaker, I regret very much that I have the opportunity to debate Bill C-43 this afternoon because I do not think this bill is necessary at all. This is a good example of unnecessary meddling. It is ideological child's play, or incompetent bungling, or a hidden agenda. I am not sure what to call it when it comes to this government and Bill C-43.

I certainly have never had constituents, other than people who felt they had been done some particular injustice, cry for the quasi privatization of Revenue Canada. I do not think the government is responding to any real need, except perhaps a need to cook the books with respect to how many employees there are in the federal public service.

Revenue Canada's 40,000 employees make up about 20% of the federal public service. This particular bill would also involve the transfer of more than $2 billion in annual parliamentary estimates.

It seems to me that what the government is up to here is it is creating the impression that it is somehow downsizing the public service. Then two or three years from now, whenever this becomes a reality, the government can say that it eliminated 20,000 employees from the public service payroll and that it should be lauded or should get some right wing award or medal for how many public servants it eliminated. It seems to me that is part of what is going on and I want to say how strongly I object to it.

I happen to have the taxation data centre for western Canada in my riding. Many hundreds of Canadians work there, many full time as well as part time early in the spring when people's tax returns are due.

I was recently there to participate with many of the workers, hundreds of them again, when they were demonstrating in favour of pay equity, when they were showing their anger at this government for not respecting the judgment of the tribunal. This government is now adding insult to injury. Not only is it saying to these people that it will not respect the tribunal's judgment on pay equity, but it is also going to change the nature of the government department they work for in such a way as to make them much more vulnerable than they are now.

I would say with confidence that I speak on behalf of hundreds of my constituents and those who live in surrounding constituencies who work at the taxation data centre when I register my opposition to Bill C-43 and the intention of the government to establish the Canada customs and revenue agency.

I said earlier that I thought this was completely unnecessary. One of the arguments for that is that there is certainly not the kind of support we would want from the provinces if we were going to create such an agency.

The government is moving toward this independent agency without the support of four major provinces and, as I have already said, it does not have the support of the majority of its workers. The major stakeholders are not buying it. Certainly the citizens of this country have not indicated any great desire for this to happen.

Ontario, Quebec and Prince Edward Island are firmly opposed. B.C. and Saskatchewan have not endorsed the concept. All provinces generally see the agency as an intrusion into provincial jurisdiction.

Canadian businesses have major reservations about the proposed agency. There is certainly a concern that a lot of people have, whether they be in business or ordinary citizens or whomever, that we might see down the line this new Canada customs and revenue agency becoming out of control, becoming something like the IRS in the United States which has a history of working according to quotas, of intimidating and harassing taxpayers in order to get a certain return on its investment one might say. We do not want to have this kind of system in our country.

There has been no demonstrable need or desire for changing Revenue Canada in this drastic way. The jobs of tens of thousands of civil servants are being put in jeopardy here. It seems this is one more instance of an ideological fetish or fixation on the part of this government for forms of privatization and quasi-privatization that it would do well to give up on.

We have seen the downside of privatization in a number of other instances. We saw it just last week when CN was laying off 3,000 people simply to please its shareholders, not because there was any particular need to lay off these people, not because there was not work for them to do.

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3:30 p.m.

An hon. member

Lay off Tellier.

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3:30 p.m.

NDP

Bill Blaikie Winnipeg—Transcona, MB

There is an idea. However, when Paul Tellier leaves the CNR with all his stock options and everything else he takes with him, chances are the next CEO of CN headquartered in Montreal will be American. Mark my words. It will be an American imported from some American railway and we will have the absolutely shameful spectacle of Canadian National, headquartered in Montreal, being operated and directed by an American. This is not many years away. All this is because of this Liberal government which did and is doing things that not even those who we knew to be ideological, those who we knew to be right wing, the Conservatives, did in this respect.

This is the betrayal that we have seen since 1993. At least many of things the Conservatives did they said they were going to do. They were at least up front about their philosophy and about where they stood with regard to crown corporations and the role of government. They were not deceitful like the Liberal Party was in its campaign of 1993 in particular. By 1997 people had reason to at least know where it was at but for a variety of reasons it is still the government.

However, the Liberals have not learned a lesson and we see here before us Bill C-43 where they are proceeding with another form of privatization. I just wanted to register my strong objection and the objection of my party, which was registered before by the hon. member for Regina—Qu'Appelle and many other members, to this particular measure and our contention that it will prove to be a mistake and one that many Canadians, particularly those who now work for Revenue Canada, will pay dearly for.

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3:35 p.m.

Liberal

Bryon Wilfert Oak Ridges, ON

Madam Speaker, we have heard a lot of fearmongering on the other side with regard to the establishment of this agency. I would like to point out the many reasons for moving to a departmental agency status, none more important than the demands of clients for better, streamlined and more responsive tax, customs and trade administration services, and more of them.

In the time of economic expansion the demand for tax, customs and trade services also increases. A million new jobs in Canada since 1993 means many more tax filers both individual and corporate. Resources at Revenue Canada have remained relatively stable during the period of economic expansion and steep increases in business volumes.

Much of the new demand has been accompanied by internal operating efficiencies. There is little room left for more efficiency gains at Revenue Canada under the present structure. Hence the need for a new framework.

The agency model proposed, Canada customs and revenue agency, is unique. It combines the strengths of both public and private sectors while remaining fully accountable to parliament and to the Canadian public.

In developing the Canada customs and revenue agency, the department has been sensitive to the concern of the concentration of too much power in one place. Tax, customs and trade administration affect the lives and livelihoods of Canadians. They want to be sure they are dealt with fairly and that their rights are protected. The intention is not to create a new agency with unlimited power and unlimited scope.

In the design of the new agency, the essential checks and balances that govern the activities and ensure the accountability of Revenue Canada have been maintained. For example, the enforcement powers of the new agency will be the same as those currently provided to Revenue Canada through legislation like the Income Tax Act or the Customs Act. If there is a problem or a complaint the minister will still be fully accountable to parliament and to the public for the administration and enforcement of specific legislation. The minister will also have the authority, as in the case now, to answer questions in the House and ensure the agency is acting properly in its dealings with the Canadian public.

The confidentiality of a taxpayer's personal information will be protected under the agency as it is currently with Revenue Canada. The authorities governing confidentiality are clearly set out in legislation. They will not be changed by this bill.

Bill C-43 will permit the agency to offer new and better services to the provinces and territories. For example, at the present time Revenue Canada can only collect provincial taxes that are harmonized with federal taxes. The new agency will be able to collect non-harmonized taxes, expanding the potential for single window tax collection with considerable savings for businesses and individual Canadians.

Greater co-ordination between the federal and provincial and territorial governments will simplify tax administration for Canadians and reduce costs and overlap and duplication between governments. This is what Canadians expect and this is what we are going to deliver.

A major change that will allow the new agency to adopt a more client oriented approach would be increased operational flexibility in the management of internal resources. The new legislation will allow the proposed agency to tailor its human resources and administrative functions to meet the needs of its clients as well as those of its employees. All this means better service to provinces and territories, to businesses and to individual Canadians.

Doing something better is not an expansion of power but an extension of service; service to Canadians, service to businesses and service to the provinces and territories.

Better service means savings in time and money, savings in compliance costs for businesses, savings in administration costs for governments.

The intention of Bill C-43 is not to create an agency with extraordinary powers but rather to establish a framework with all the checks and balances for a superior agency.