Mr. Speaker, I am pleased to be speaking at third reading on Bill C-48. It is largely a housekeeping bill that implements technical matters that have been introduced previously. Most of the measures that are contained in this bill were recommended by the Auditor General.
The Liberal Party supports Bill C-48 and we would like to see it passed quickly. The overarching theme of the bill is the need for clarity and certainty in the administration of Canadian law. That is certainly something that the Liberals support and we see it as an important function of the government in its service to Canadians.
I would like to spend a bit of time speaking about how this bill and taxes, since the bill is about tax changes, are serving Canadians' needs. I would like to make some comments from my perspective, not only as the member of Parliament for Vancouver Quadra, but also as a former businesswoman from a business that became international in its scope.
As a business person for 25 years, my understanding of one of the key imperatives of service is to continually improve the quality of service to those we wish to serve. In business shorthand, we could say that people are looking for faster, cheaper and better service. Who would not want that? Who would not want the goods and services that are provided to them to be provided more quickly, in a less costly manner and at a higher standard of quality?
Faster, cheaper and better are what people expect. Are we getting that from the Conservative government with respect to taxes and tax changes? Certainly, this bill is not an example of faster service. In fact, this is the third time that some elements of this technical tax bill have been introduced since 2001. It has taken far too long to bring this bill to the House. Some of these tax measures have languished in draft form for nearly a decade. For example, the provisions in part 3 of this bill, which deal primarily with reorganizations of and distributions from foreign affiliates, were first released on February 27, 2004 and we are now in May 2013.
What happens when tax measures take such a long time? Many of these measures were introduced by the Conservative government a number of years ago. These measures were introduced with a great deal of fanfare and then never actually brought into force because of delays. It does bring the question: Why wait so many years and then lump everything together in this 955-page bill, rather than give the kind of certainty that citizens of this country deserve and expect?
In fact, in meeting with the small business community as the critic for small business, I have heard feedback about the kinds of frustrations and costs that are incurred through not having had this bill earlier. There is a great deal of confusion when the government announces a certain tax change but does not actually take the steps to put forward the bill to make those changes law. The kinds of costs that small businesses will incur in having accounting and professional and legal consultations to help them understand the implications of these measures that have not actually been made into law are preventable. The bill could prevent confusion and expense for the business community. It has actually been a form of red tape on our small businesses that it has taken so long for the bill to be put forward.
Now that the bill has been put forward, I want to comment on the government's ability to apply its laws regarding taxes and to serve the needs of Canadians and small businesses with respect to the vast complexity of the tax regime in our country.
The Conservative government tends to put forward literally dozens of boutique tax measures that are not supported as part of a clear, simple and effective tax system but more as tax measures that are clearly designed to attract votes from one segment of the population or another. As a result, we have a much more complex tax system than we had before.
Does the Canada Revenue Agency have the resources to assist people in finding their way back to the quality improvement mantra of having faster, cheaper and better service? Is the government providing that to Canadians who are struggling with tax complexities? My answer would be no.
The overarching theme of the debate on Bill C-48 is the need for clarity and certainty in the administration of Canadian tax laws. However, the government's ability to respond to this major need is threatened by the Conservatives' cuts to the Canada Revenue Agency.
The Conservatives targeted the CRA in budget 2012 by reducing the agency's funding by $253 million per year. In addition, budget 2013 provides for further cuts to the agency, amounting to $61 million per year. The cumulative cuts to the CRA therefore total $314 million annually.
Even before the cuts were implemented, the CRA had trouble issuing advance tax rulings in a timely manner. The government's goal is to inform taxpayers of advance tax rulings within 60 days. This may be an acceptable timeframe, but the agency now needs 106 days, on average, to provide such rulings to taxpayers.
We are seeing that the cuts to the Canada Revenue Agency are making its service far slower and certainly not faster, as we would expect in the business community. The business community expects an organization to continue to improve its service, so its service could be faster, cheaper and better. If the government had been providing service in private enterprise, it would have failed and gone out of business long ago because of these unfortunate reversals in the speed and effectiveness of service. We have now gone from 60 days to 106 days for serving customers' information needs with respect to changes in tax laws.
I had meetings with former Yukon member of Parliament Larry Bagnell, who has been advocating for many years for services to citizens in Yukon. The one and only CRA office for Yukon used to be in Whitehorse, but that has been closed, so people living in Yukon no longer have a single agent to talk to in person when filing or asking questions about their taxes. How frustrating for people. That certainly is not better service; it is in fact far worse service.
People can go online to try to connect with this huge agency and get service, but many people in Yukon do not have access to the equipment or the high broadband Internet to do that. Many would have to drive for many hours to get to a place where they could engage the CRA to help serve their information needs.
I appreciate the work that our former colleague and MP, Larry Bagnell, has done on behalf of constituents in the Yukon. Even now that he is no longer a member of Parliament, he has become a voice for their needs.
I am not sure where the current member for Yukon stands with respect to the closure of the CRA office in Whitehorse. I will not comment further on that. However, this does have huge implications for people, especially for low-income, less educated people living in remote communities and for seniors, all of whom used to use this business office on a regular basis.
We have a pattern here of service not being faster but slower, and it certainly is not better. Is it cheaper?
Taxes are important as part of a sustainable society. Canadians by and large accept that taxes are positive because they help to purchase public goods that we need for our society, whether those goods are environmental safeguards, programs that create equality of opportunity for Canadians, or tax regimes that reduce income inequality. “Taxes” is not a four-letter word to most Canadians.
However, what Canadians expect and deserve is honesty from their government about their tax regime. They expect competence, transparency and honesty, but since 2010 there have been new, hidden tax increases that exceed the new reductions each and every year.
That is not what the current government has been promoting in terms of its image to Canadians. The Conservatives have not been honest and forthcoming and transparent about the fact that they have been increasing taxes on Canadians each and every year since 2010, and these are not minor tax increases. In fact, if I go back to an analysis of these tax increases, we would see that in budget 2010 there was a set of tax increases. There was a set of tax decreases, of course, but the net impact would be to increase taxes by $729 million over five years from the measures announced in budget 2010. That is almost $1 billion in tax increases.
Did the Prime Minister go forward and say this is how they are going to pay for goods and services, by increasing our taxes? I did not hear that from the Prime Minister, nor did I hear that in the budget speech from the Minister of Finance.
As well, there are impacts on small businesses in each and every one of these years in terms of increased taxes, meaning less money in the pockets of the men and women in small business who are the engines of job creation in our economy.
Let us look at budget 2011. In budget 2011, again there are hits on small business. In fact, the individual pension plan program is seeing, over five years, $75 million in reduced funds in the pockets of people who are utilizing that tax-planning tool. However, the key here is that the bottom line in budget 2011 is $2.168 billion in net tax increases over five years. It is over $2 billion.
What about budget 2012? Here we saw a huge undermining of the well-being of the small-business community in terms of extra taxes on employees' profit-sharing plans and over $1 billion less in support for the research and investment tax credit, the SR and ED tax credit regime in this country. That is more than $1 billion taken out of the support that the government was providing for good public policy reasons.
Why should government support scientific research and development? It is because scientific research and development provides, by and large, a public good. People in small business cannot afford to invest in research that soon becomes available to all of their competitors without having some support through this tax credit. That is how it is for the public good. The government supports something that becomes a benefit for all of society, and that is much of what happens with small business research and development.
However, that tax credit was reduced by over $1 billion for a net increase in taxes, as announced in the budget, of $3.547 billion. It is over $3 billion more out of the pockets of Canadians and small businesses, thanks to budget 2012.
In budget 2013, once again we have tax increases that exceed the tax reductions, this time to the tune of $3.3 billion. This is a big-tax government.
The challenge Canadians have in even understanding what the government is doing is that there is no transparency and no honesty here. There are hidden tax increases that now have a cumulative impact of almost $10 billion over the period covered by these announcements. It is cumulatively $10 billion dollars out of the pockets of Canadians and small businesses.
Who knew that? This is something the government has kept hidden. Is that cheaper service? No, government is actually costing taxpayers almost $10 billion more cumulatively, without actually revealing that it is doing that.
Why has the Conservative government felt a need to increase taxes with these incremental net increases of $10 billion, as I have laid out and as expressed in budgets 2010 to 2013? Could it be that since the Conservatives took office, annual federal spending under the Conservative government has risen to $280 billion, which is an increase of more than 30%? That is certainly not providing faster, cheaper and better service. It is very much more expensive service.
This is a government that inherited a $13 billion budget surplus in early 2006, but within a matter of a few years we were running deficits, and the government continues to run an annual deficit this year of $26 billion. There may be a change when the budget is balanced, but it may take a long time.
These tax increases hurt middle-class Canadians and small businesses. We have spoken at large and at length about the impact of the increase in tariffs on Canadians, which is driving them across the border to get goods cheaper. We have talked about how tax increases are hurting our tourism industry, an industry that used to be rated seventh among countries for international visits but that has dropped to 18th in international visits. This is hurting our tourism industry. We now have a $14 billion tourism deficit.
There are many comments I could make about how these hidden tax increases have hurt our economy and our small businesses, but I will give one last indication of the impact this government has had on small business.
In the last five years of the previous Liberal government, small and medium-sized businesses created over 460,000 jobs, but in the first five years under the Conservatives, the overall net number of jobs created by small and medium enterprises was negative. The number actually fell by 10,000 jobs.
Therefore, we do not have faster, we do not have cheaper, and we certainly do not have better service from the Conservative government. In fact, the spending choices the government is making with these tax increases are not supported by Canadians. Economic action plan advertising alone has cost $113 million, and I know that Canadians would rather that money were used for student summer jobs. Every second these ads for the economic action plan air during Hockey Night in Canada is another second that another young Canadian does not get the support that he or she previously enjoyed to have a summer job. Every second we are losing a job for youth.
I am happy to answer questions on how I see the government's spending choices as being part of this failure to provide faster, cheaper and better service to those the government was elected to serve, the Canadian people.