Herb Dhaliwal

[Privilege, June 13th, 1994]

Mr. Speaker, I rise on a question of personal privilege.

On June 2 and June 3 when I was not present in the House, the member for Simcoe Centre made some serious allegations, allegations which I think damage my credibility and thus impede my ability to function as a member of the House. The member opposite has brought into question my compliance with the conflict of interest code.

I would like to set the record straight. I am disappointed that the member for Simcoe Centre made no effort to contact me or the assistant deputy registrar general in advance to ask for clarification. If he had taken the time to do some research he would have found that he was incorrect in his allegations.

Within 30 days of my election as a member of Parliament, I spoke to and clarified with the assistant deputy registrar general what my requirements were to comply fully with the federal conflict of interest code. I then proceeded to meet these requirements by formally resigning as director and officer from the management of Dynamic on December 1, 1993.

I would like to point out for the record that I was not technically required to resign from Dynamic until April 5, 1994, 120 days after my appointment as parliamentary secretary. I did so because of my desire to act responsibly as a member of the House.

I received a letter from Mr. Howard Wilson dated March 31 of this year in which he stated that he was satisfied that I had met all the requirements of the federal conflict of interest code. From this letter I quote: "I am pleased to approve the arrangements you have made to comply with the requirements of the conflict of interest code". With the unanimous consent of the House I would like to table this letter.

[Transportation Subsidies, June 7th, 1994]

Mr. Speaker, on the question of privilege, the hon. member for Simcoe has talked to me and I will defer until Monday on this question.

[The Late Tom Goode, June 6th, 1994]

Mr. Speaker, I rise today to pay tribute to the late Tom Goode.

Tom Goode served this House, the constituents of Burnaby, Richmond and Delta, as a fine member of Parliament. He served with dedication, energy and enthusiasm between 1968 and 1972.

Tom was a people's person. He continued to serve and work in his community even after his term as an MP. Between 1974 and 1979 Tom Goode was mayor of Delta.

People who knew him will remember Tom as a warm and hard-working man who had the ability to put the people around him at ease by making them feel comfortable. He had a sense of humour and enjoyed life. Tom Goode liked to keep himself busy. He was a man of many interests and talents.

In addition to being an active member of his community, Tom was involved with the business life of Delta and the lower mainland through the construction industry. He built buildings as he helped to build the community where he lived to which he gave so much of himself.

Tom's good nature, warmth and kindness will be greatly missed.

[Witness Protection Act, May 26th, 1994]

Mr. Speaker, I thank the member for his question. I know how crucial this issue is for British Columbia and how important it is to the hon. member.

Let me begin by saying that we are very concerned with the position of the U.S. government. Its position on fishing arrangements is completely unreasonable. It wants more Canadian fish but wants us to take less of its fish. It wants Canada to help conserve its fish stocks but is not prepared to help us to conserve ours. It wants increased access to Canadian salmon when its stocks are low but denies Canadians the same treatment.

Its position on the equity principle is also completely unreasonable. According to the Pacific salmon treaty the principle of equity means that each country is entitled to fisheries benefits which are equivalent to its own production of salmon.

This fair balancing has never been implemented by the U.S. The current imbalance against Canada has almost doubled in the last four years and we are now in a deficit position of approximately $65 million a year. Instead of recognizing this imbalance the U.S. position is that for this year it wants to increase the deficit to $100 million.

Canada's position is clear. We are doing everything possible to ensure that we negotiate terms with the U.S. which are fair and responsible for both countries.

The Prime Minister has raised this matter with President Clinton who has agreed to become involved. The Canadian negotiator recently met with the state governors who have agreed to pursue the matter further with the U.S. administration.

The Minister of Fisheries and Oceans is currently in Washington, D.C., meeting with U.S. congressmen and senior officials. The province of British Columbia has agreed to assist in putting the Canadian case before U.S. opinion makers.

Barring these extensive measures, Canada's position is equally clear. We are not prepared to allow the U.S. to continue to reap the rewards while Canada bears the burdens. For too many years Canada has put off until the next year taking a firm line with American negotiators.

I want to make it perfectly clear that this year that will not be the case.

[Community Violence, April 27th, 1994]

Mr. Speaker, I rise today to bring to the attention of the House an issue which has brought tremendous sorrow and shock to members of my constituency.

Last Saturday a deplorable tragedy occurred in Vancouver south. Mr. Glen Olsen, an innocent bystander, was shot and killed while walking his dog down a street in my riding.

It is with profound sympathy that I pass my condolences on to Mr. Olsen's family and friends. I want them to know that the horror of this event has not gone unnoticed.

I have spoken to the Vancouver police department and I have full confidence that it is doing everything possible to bring those responsible to justice.

As the federal representative for my community I would like it to know that I will do everything in my power to ensure that these types of incidents do not occur in our communities. I will continue to fight for stricter gun control and stronger crime prevention measures so that tragedies like this do not occur in the future.

For the sake of the victims I implore all members of this House to support initiatives which will make our streets and our communities safer places.

[Department Of National Revenue Act, April 20th, 1994]

Mr. Speaker, I rise today to begin third reading of Bill C-2. This is an act to amend the Department of National Revenue.

While the amendments are administrative in nature they go to the heart of one of the fundamental concerns of the government and the country. That concept is to reshape the instruments of government and to provide both better service and better value to the taxpayer.

Bill C-2 does that in terms of the services provided by the department most involved with the concerns of the taxpayers, the Department of National Revenue.

Since 1926 the Minister of National Revenue has had responsibility for two separate functions: customs and excise on the one hand and taxation on the other. Over this time these two components of the department have operated as virtually autonomous organizations. Yet the daily reality with which taxpayers live has never been so easily compartmentalized. Increasingly through technology, trade and travel Canadians find their lives becoming more complex, more frustrating to manage and more difficult to understand in terms of the burdens government places on them.

All of us see this daily in terms of the complaints received from our constituents of overlap and duplication, of paper burden and red tape. The distinction between taxation on the one side and customs and excise on the other has become more and more an artificial distinction.

Increasingly the distinction denies rather than reflects the way Canadians live their lives. The distinction renders Canadians' lives more complicated than they need be. Reversing that trend must be and is our first priority.

However, increasingly this artificial separation also impedes rather than improves administration, making it more difficult to redeploy resources and to employ new technologies as tools to improve services on the one side and compliance on the other.

It is long past time that we brought the department in its structure and operation into line with the reality with which ordinary Canadians live. It is time we free the quality people who work within Revenue Canada to do a better job. It is time we eliminate overlap and duplication within the department for the sake of the department's clients and the Canadian taxpayer. It is time that we do this in law.

We have already demonstrated what consolidation can achieve within the existing legislative framework. The savings have been substantial. We have also demonstrated that we are at the limits of what we can do within that framework. We require Bill C-2 to remove those limits, to create new possibilities for improvements, to continue our momentum toward the goals of better service and better value and to free the department to work to its full potential. By doing that we can better align what we do with what Canadians want.

During the minister's appearance before the Standing Committee on Finance on February 15 members asked him for specific information on the benefits inherent in the administrative consolidation of Revenue Canada and he has responded to them.

I would like to share with all members of the House some of the benefits administrative consolidation will bring to Canadians and governments in terms of efficiency, productivity, effectiveness in generating revenue, and finally lightening the burden of the Canadian taxpayer.

First, let me speak to efficiency and productivity. Revenue Canada has a solid record of providing Canadians with good value for money. It administers more than 185 acts, regulations, incentives, credits, surtaxes and international tax treaties, and does so with its eye on the bottom line. Through ongoing improvements to its operations and efficiency gains realized through technological advancements, the department has achieved productivity gains equal to adding more than 2,000 full time staff in the last ten years.

These savings have permitted the department to carry out its legislative mandate while also investing in better service, enhanced enforcement and staff training and development.

At the same time, Revenue Canada has made a significant contribution to deficit reduction through both enhanced revenue collection and reduced spending. This will continue in the future.

Bill C-2 will allow the department to go even further in streamlining administration and generating savings for reinvestment. Already the consolidation of corporate activities and administration, which we have been able to pursue within the existing legislative framework, has saved $30 million.

Some $13 million of this saving has been reinvested in critical customs programs that are essential in protecting Canadian law and sovereignty at the border.

These include $2.3 million for the primary automated lookout system. This system provides a primary inspection line officer with access to data base of local and national information to determine the admissibility of travellers and their goods. The cost includes the acquisition of a licence plate reader system to streamline and speed the examination of travellers.

Also included is $1.2 million for the personal alarm security system. Seventy-four isolated border posts will be connected to ultra high frequency radio communications networks to enable customs inspectors to summon help in case they face threats to their health or safety.

Also included is $1.1 million for X-ray equipment. Four X-ray vans will be purchased to enhance examination and enforcement capabilities in Halifax, Toronto, Montreal and the Pacific region for providing a less intrusive and more time saving examination technique.

Also included is $1 million for the integrated customs enforcement system. This project will integrate and replace a number of customs systems to reduce overlap and improve enforcement. The integrated customs enforcement system is a comprehensive information repository and analytical tool that ensures front line customs personnel have the most reliable information to more effectively manage risk at the border.

Also included is $3.5 million for the new business relationship. Significant funds have been allocated to re-engineer processes such as electronic data interchange and to develop profile based release, accounting, self-assessment and audit processes. The benefits translate into real savings for business.

Also included is $1.3 million for the Peace Arch crossing entry. This initiative, which has been successfully piloted in Douglas, B.C., enables frequent pre-approved travellers to use an express lane at border crossing points. Duties and taxes are billed electronically to the travellers credit card based on personalized declaration forms. Additional funds will expand the service to other locations.

Also included is $2.6 million for specialized customs enforcement tools and systems.

Funds have been allocated to purchase a number of devices such as contraband detection kits to detect commonly smuggled goods and to improve compliance.

The full consolidation of Revenue Canada which Bill C-2 enables will permit even further savings. We anticipate that consolidation could generate a further savings of $30 million for the year 1995-96.

Let me turn to the second area, our enhanced revenue generating capability. As the Minister of Finance declared in his budget speech on February 22, our government is committed to take decisive action on tax compliance and to strengthen enforcement.

Through administrative consolidation Revenue Canada will have a stronger combined enforcement capacity and thus be able to follow through on this commitment. Our experience has shown that non-compliance in one area such as under reporting income tax is often matched in other areas such as under reporting on GST.

As a single unified department we will improve our penetration into the underground economy and thus increase the fairness of our tax system. It will do this by allowing us to build bridges between our tax system, trade system and border operations to improve the effectiveness of them all.

We want to apply the benefits of such collective efforts to target those who do not comply with the law and to level the playing field for those who do. Efforts to date in co-ordinating the administration of the two existing departments have enhanced revenue generation by enabling increased co-ordination and enhanced sharing of data bases as shown by the following illustrative examples.

First, we have established a pilot in 15 district offices to identify areas of major non-compliance through joint GST and tax audit activities. As at December 31, 1993, $8.4 million in additional federal tax has been assessed and 4,343 non-filers and non-registrants have been identified.

Second, in November we enhanced our effort to identify GST non-filers. It utilizes a combination of overtime, casual staff and facilities from both taxation and excise. Results to date include $417 million having been identified as additional accounts receivable, of which $220 million has already been collected.

Third, we have undertaken the cross-referencing of excise, GST and taxation data base to identify non-filers and non-registrants. The estimated recovery for 1993-94 is $240 million.

As members will see, the return in terms of revenue far outweigh the cost. This will be enhanced by departmental consolidation. The best examples of this is the initiative to offset GST credit payments against income tax liabilities and family court orders.

For 1992-93, $59 million was offset from GST credit payments. Results for the first three quarters of 1993-94 show that $56 million has already been offset. In similar fashion we have made efforts to use better co-ordination to provide more convenient and fair services in particular areas. As well, we expect enhanced revenues from our recent efforts to clamp down on smuggling.

The recent announcements concerning 42 additional customs officers in the Windsor area and 350 customs personnel for the government action plan on smuggling are examples of the government's commitment to improve border protection.

Finally, let me turn to our efforts to reduce the burden on Canadians of compliance with tax laws.

By eliminating the unnecessary barriers between the different components of Revenue Canada, Bill C-2 will have a positive impact on those who must deal with Revenue Canada whether small and large businesses, professionals, importers or the taxpaying public.

The following are but a few examples of the opportunity presented by administrative consolidation to reduce burden and increase service: an integrated collection program so that clients and their representatives need deal with only one Revenue Canada official; the provision of a convenient, one stop shopping service whereby clients can obtain information, acquire forms and make payments at any of about 130 customs, excise and taxation offices across the country; a single business registration number to replace the various identification numbers that business is currently required to use in its dealings with Revenue Canada.

The plan is to develop one single and common registration process, a single registration form, an integrated approach to payments, inquiries and account maintenance as regard corporate tax, source deductions, GST and customs; a simplified combined business return enabling small business with gross sales of less than $500,000 to file a net payment in a single annual return; simultaneous GST, income tax and source deduction audits when necessary and where possible.

Revenue Canada has been entrusted with a significant mandate that involves the lives and the livelihood of Canadians. This is indeed a challenging mandate affected by national and international elements. This consolidation will give Revenue Canada an unprecedented opportunity to enhance its ability to respond to these challenges without imposing any further burden on taxpayers.

As I said at the outset, this legislation provides concrete evidence of our commitment to reshape government to the needs of Canadians. The unanimous report of members of the Standing Committee on Finance is testament to the recognition of this imperative.

I now seek the support of all members in the passage of Bill C-2.

[Excise Tax Act, April 20th, 1994]

Mr. Speaker, I would like to take this opportunity to thank hon. members of the Reform Party and the Bloc Quebecois for supporting the bill.

I think the bill is an important bill because often we have had in the House both the Reform and the Bloc talking about duplication in government, talking about paper burden on small businesses and the administrative difficulty of managing the GST.

I think the government recognizes some of those concerns and this bill shows that we want to ensure that the government is aware of the concerns of small business in terms of the difficulties of the GST.

As someone who has been a small businessman, I think that doing things as simply as possible, as the hon. member said very well, we can help small businesses to be more competitive. We can help to ensure it is efficient and productive.

I want to thank the members for that and for the excellent comments that were made by the hon. member on how we as a government can work toward improving the environment for small business so it can be more productive, efficient, create more jobs and get this economy moving.

[Excise Tax Act, April 20th, 1994]

Mr. Speaker, there is an amendment to clause 1 that I would like to put forward.

I move:

That clause 1 of Bill C-13 be amended by striking out line 11 on page 1 and substituting the following:

"come into force on December 17, 1990 and any regulations made for the purposes of the definition estimated federal sales tax in subsection 121(1) of the Excise Tax Act as enacted by subsection (1) may have effect from that date".

[Excise Tax Act, April 20th, 1994]

Mr. Speaker, I welcome this opportunity today to reaffirm the government's commitment to a fair and simpler sales tax system.

Our goal is to make it fair for consumers and business, especially small business, and to have a tax structure that promotes federal-provincial co-operation and harmonization.

The House of Commons Standing Committee on Finance has already begun to explore alternatives to the current GST. The committee is focusing on the objectives of administrative ease for registrants, enhanced competitiveness for Canadian business and fairness for all taxpayers. It will also be mindful of the transitional impact on taxpayers of any proposed changes.

In addition the committee will have to be sensitive to the impact on revenue, for we need a sales tax system that can be relied upon as a stable source of revenue for the government.

The committee is consulting with Canadians. By June 1 it will report back to the House on ways in which we might achieve these goals.

The committee's report will help to set the agenda for consultations with provincial governments. We will invite the provinces to work with us to achieve a greater sales tax co-ordination. The lack of co-ordination in the tax system, particularly in the area of sales tax, increases the complexity for businesses and creates many extra costs for governments, both federal and provincial.

Through this process of consultation we will do our best to ensure that improvements to the tax system rest on a broad public and intergovernmental consensus. It will take time to build this consensus. It will take time to reform the sales tax system, to do it once and to do it properly.

It is therefore necessary for this government to take steps to make the GST easier to comply with in the interim. Bill C-13 proposes amendments that will accomplish this.

In several areas the GST legislation needs to be brought into line with what is practical on an administrative level both for the government and the GST registrants. The bill contains measures that have been developed and refined in consultation with representatives from the business community and other sectors affected by the changes. These measures will make the GST easier for businesses and other entities to comply with in their day to day operations.

Even though the GST will be replaced during the government's mandate, we will do what we can in the meantime to make the existing rules easier to understand for businesses, taxpayers and their professional advisers. The bill contains provisions that will ease the administrative burden on seasonal and part time businesses.

Bill C-13 is beneficial for charities as well. In fact it will allow some of the smaller charities to be excluded from the GST rules altogether. For charities that do remain in the system there are measures that would make the rules easier to follow.

This bill will also clarify and broaden the scope of the special treatment in the agricultural sector and certain exempt sectors.

I would now like to take a few minutes to tell my hon. friends about some of the specific measures in Bill C-13. I would like to begin with the changes we are proposing for the business community, especially small businesses, for it is in this sector that the need for change is particularly critical.

The bill contains provisions related to a simplified method for registrants to claim input tax credits, that is to recover the GST they pay on their business expenses.

This simplified method will be available to businesses with annual taxable sales of $500,000 or less. It will eliminate the need for them to identify the amount of tax payable on each and every purchase they make. Effectively this special approach will allow them to calculate input tax credits by using the same information they need for income tax purposes.

Other amendments in this bill will ensure that seasonal and part time businesses will no longer have to file GST returns during the off season.

Taken together, these small business measures will make the current sales tax system easier to comply with for many registrants in Canada.

There are other sectors of society that have special needs and practices to which the tax system must adapt. Bill C-13 contains provisions that respond to the concerns of the health, charitable and non-profit sectors.

For example, the legislation will guarantee the tax free status of adapting privately owned vehicles to the needs of the individuals who use wheelchairs. Another measure will broaden the GST exemption for homemaker services that are rendered to people who require special assistance due to age, infirmity or disability.

The bill will help charities by entitling them to rebates or input tax credits on allowances and reimbursements they pay to volunteers who have incurred expenses on the charity's behalf. It will also make it easier for them to calculate input tax credits on their meals and entertainment expenses. Another amendment will make it simpler for charities to determine whether or not they are required to register for GST purposes.

In the agricultural sector Bill C-13 guarantees the tax free treatment of rabbits produced for food.

For suppliers of exempt services particularly in the financial sector, the bill clarifies the extent to which they may claim input tax credits in respect of expenses they incur in support of both their exempt and taxable activities.

The measures contained in Bill C-13 will lessen the administrative burden of the GST. They will resolve some of its technical shortcomings until we, together with our provincial counterparts, have an opportunity to forge a solid consensus for a fundamental reform of the sales tax system.

I therefore urge the hon. members to give their full support to the bill.

[Fisheries, March 23rd, 1994]

Mr. Speaker, I would like to inform the House the five vessels in question have been formally advised that their activities are not sanctioned by this government and that their existing licences to fish inside the Canadian zone are in jeopardy.

They have also been informed that Canadian tuna and swordfish industry representatives have been advised that the catches of bluefin tuna and swordfish by these Canadian flag vessels will be counted against Canadian quotas.

We are doing everything possible to control these vessels and hope to put an end to it.