Bill C-48 (Historical)

Technical Tax Amendments Act, 2012

An Act to amend the Income Tax Act, the Excise Tax Act, the Federal-Provincial Fiscal Arrangements Act, the First Nations Goods and Services Tax Act and related legislation

Part 1 of this enactment implements, in accordance with proposals announced in the March 4, 2010 Budget and released for comment on August 27, 2010, amendments to the provisions of the Income Tax Act governing the taxation of non-resident trusts and their beneficiaries and of Canadian taxpayers who hold interests in offshore investment fund property.
Parts 2 and 3 implement various technical amendments in respect of the Income Tax Act and the Income Tax Regulations relating to the taxation of Canadian multinational corporations with foreign affiliates. The amendments in Part 2 are based on draft proposals released on December 18, 2009. Among other things, Part 2 includes the amendments to the foreign affiliate surplus rules in the Income Tax Regulations that are consequential to the foreign affiliate changes to the Income Tax Act announced in the March 19, 2007 Budget. The amendments in Part 3 are based on draft proposals released on August 19, 2011. Among other things, Part 3 includes revisions to the measures proposed in a package of draft legislation released on February 27, 2004 dealing primarily with reorganizations of, and distributions from, foreign affiliates.
Part 4 deals with provisions of the Income Tax Act that are not amended in Parts 1, 2, 3 or 5 in which the following private law concepts are used: right and interest, real and personal property, life estate and remainder interest, tangible and intangible property and joint and several liability. It enacts amendments, released for comments on July 16, 2010, to ensure that those provisions are bijural, in other words, that they reflect both the common law and the civil law in both linguistic versions. Similar amendments are made in Parts 1, 2, 3 and 5 to ensure that any provision of the Act enacted or amended by those Parts are also bijural.
Part 5 implements a number of income tax measures proposed in the March 4, 2010 Budget and released for comment on May 7, 2010 and August 27, 2010. Most notably, it enacts amendments
(a) relating to specified leasing property;
(b) to provide that conversions of specified investment flow-through (SIFT) trusts and partnerships into corporations are subject to the same loss utilization restrictions as are transactions between corporations;
(c) to prevent foreign tax credit generators; and
(d) implementing a regime for information reporting of tax avoidance transactions.
Part 5 also implements certain income tax measures that were previously announced. Most notably, it enacts amendments announced
(a) on January 27, 2009, relating to the Apprenticeship Completion Grant;
(b) on May 3, 2010, to clarify that computers continue to be eligible for the Atlantic investment tax credit;
(c) on July 16, 2010, relating to technical changes to the Income Tax Act which include amendments relating to the income tax treatment of restrictive covenants;
(d) on August 27, 2010, relating to the introduction of the Fairness for the Self-Employed Act;
(e) on November 5, 2010 and October 31, 2011, relating to technical changes to the Income Tax Act;
(f) on December 16, 2010, relating to changes to the income tax rules concerning real estate investment trusts; and
(g) on March 16, 2011, relating to the deductibility of contingent amounts, withholding tax applicable to certain interest payments made to non-residents, and certain life insurance corporation reserves.
Finally, Part 5 implements certain further technical income tax measures. Most notably, it enacts amendments relating to
(a) labour-sponsored venture capital corporations;
(b) the allocation of income of airline corporations; and
(c) the tax treatment of shares owned by short-term residents.
Part 6 amends the Excise Tax Act to implement technical and housekeeping amendments that include relieving the goods and services tax and the harmonized sales tax on the administrative service of collecting and distributing the levy on blank media imposed under the Copyright Act announced on October 31, 2011.
Part 7 amends the Federal-Provincial Fiscal Arrangements Act to clarify, for greater certainty, the authority of the Minister of Finance and of the Minister of National Revenue to amend administration agreements if the change in question is explicitly contemplated by the language of the agreement and to confirm any amendments that may have been made to those agreements. Part 7 also amends the Federal-Provincial Fiscal Arrangements Act and the First Nations Goods and Services Tax Act to enable the First Nations goods and services tax, imposed under a tax administration agreement between the federal government and an Aboriginal government, to be administered through a provincial administration system, if the province also administers the federal goods and services tax.
Part 8 contains coordinating amendments in respect of those provisions of the Income Tax Act that are amended by this Act and also by the Jobs and Growth Act, 2012 or that need coordination with the Pooled Registered Pension Plans Act.

Technical Tax Amendments Act, 2012

[Joy Smith, Conservative, Kildonan—St. Paul, MB]

Mr. Speaker, the member opposite is obviously very concerned about his riding. Therefore, I would hope that he would give new hope to those young people who are looking for jobs and tell them that now, in spite of the economic climate globally, our country is the most sought after country in terms of economic climate in the world. There are 900,000 net new jobs that have been created.

I think it is a really good idea not to say to our youth that our country is no good and nothing is going right in our country when actually it is the envy of the world. Those 900,000 new jobs are very important for these young people and they can get out and get them.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, the Liberal Party is going to be supporting the passage of this bill, and we indicated that at second reading.

Average Canadians look at tax avoidance or tax evasion as a serious issue that needs to be addressed. The bill, in principle, by its passage would go a long way in dealing with that issue. Our constituents want to ensure that there is a sense of fairness to our taxation policy and it is one of the reasons that we feel it is important to pass the bill in a timely fashion.

My question to the member is regarding the frequency of having legislation of this nature come before the House. There is concern about the length of time since it was amended in the past. We would like to think that we would not see that kind of gap in the future. Does she have some thoughts about what would be an appropriate time for passage of future changes to legislation of this nature?

[Joy Smith, Conservative, Kildonan—St. Paul, MB]

Mr. Speaker, as the member knows, this started in 2001 when the tax fairness plan and loopholes were first looked at. As I said in my speech earlier, the fact of the matter is it has taken years to work with this. We were not actually in government in 2001. There was another government here. It takes a long time for governments to close all these loopholes that have been long-standing.

When we do a piece of legislation like this we want to do broad consultation. Broad consultation was done on this and there were things found that had to be addressed that no one had ever thought of. Therefore, with the finance committee and others culminating with this examination, this big bill has arrived now in Parliament, and it is very important that we get it passed very quickly.

[Marc-André Morin, NDP, Laurentides—Labelle, QC]

Mr. Speaker, I am sure that if anyone is watching, they are wondering why it has taken so long for this to happen. The fact that this bill is 1,000 pages long proves just how negligent this government is and how negligent previous governments were.

That brings me to two other questions. Who benefits from this being so complicated and that we need experts to figure it out? Who would benefit from it being simple and clear? Obviously, their negligence was not an accident.

This government, and perhaps the one before it, wanted this to remain complex and wanted to foster confusion for as long as possible, so that those who can afford to make use of tax experts would have an advantage.

What does my colleague think?

[Joy Smith, Conservative, Kildonan—St. Paul, MB]

Mr. Speaker, as the Certified General Accountants Association of Canada said, as they welcomed the passage of Bill C-48:

As the last technical income tax bill was passed by Parliament in 2001, a significant backlog has accumulated that must be addressed. The Government has consulted on the majority of these measures in recent years and now is the time for action.

The fact of the matter is that our government has consulted widely. It did start in 2001 before we were in government, but the ball was picked up because it had to be picked up. These tax loopholes had to be addressed.

As the member says, the bill is 1,000 pages long and it has now taken 200 days in this Parliament to pass it. When members opposite are talking about the speedy passage of this bill, one way that would be helpful is for all members opposite to support this bill and get it passed.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Mr. Speaker, I thank my colleague for her speech on Bill C-48 which, as she said, is quite long.

I would like to know if, as a parliamentarian, she thinks it is a good idea to have a bill that is about 1,000 pages. I would also like to know if she has read it. If she has, that means that when she votes on it, she will be voting with a full understanding of the situation, and she will know what she is voting on.

If she has actually read it and fully understands the content, I would like to know which measure in this bill she prefers.

[Joy Smith, Conservative, Kildonan—St. Paul, MB]

Mr. Speaker, to be perfectly honest, I will not begin to say that I have read the 1,000 pages thoroughly, but I can say that I have gone through it and studied the parts that are very relevant to me.

I know I have been kept abreast of the consultations that have been going on. I have also been kept abreast of the issues that have popped up when companies and individuals have not paid their fair share of Canadian taxes.

I also know how important this bill is. Simply because we are coming out of a recession is one very important aspect. Every single honest Canadian is paying taxes, as we all are in this Parliament. Everybody, whether they are very wealthy or very poor, must be honest Canadians as well, or honest people who pay Canadian taxes.

Having said this, it has been a long consultation, a long process. It has been 200 days in this Parliament. I think as parliamentarians we can sit back and say it is a big thick book and we cannot get into it until sometime next year, but Canada is waiting. Canadians are waiting for the results. Canadian taxpayers are waiting to ensure everybody is paying their fair share of taxes. We need to do that.

[Françoise Boivin, NDP, Gatineau, QC]

Mr. Speaker, if any of my law faculty colleagues from long ago are watching right now, they will probably be sniggering because they will remember that tax law was not my favourite field. I would add that it was not the favourite field of many law students.

However, it is probably the subject that affects people's everyday lives the most. People always talk about the long arm of the government and how it finds all kinds of ways, each more imaginative than the next, to reach in and take what we earn with the sweat of our brow. Sometimes it does that under what is called the Income Tax Act. At other times it does so by means of hidden taxes, which are highly valued by the Conservatives, with charges levied on all kinds of things.

We pay our share every day and our money flows in many ways into the government's coffers. Many people will obviously wonder why I am rising to discuss Bill C-48. I am doing so because it has an impact on everyone's life. It has an impact on the lives of the people in my riding, Gatineau. That is as true for small businesses as it is for big businesses, but it is also true for individuals. They pay every day through the GST, and barely a month ago they did through their income tax returns, so this is not the easiest subject.

Earlier I flipped through the act and thought back on marvellous memories of my time at the law faculty and on the Income Tax Act, just from looking at a few sections of the act. I wondered why legislators were incapable of coming up with anything simpler.

I was listening to the member on the other side of the House who spoke before me. Several questions were put to her, all asking the same thing: why are we making technical amendments in 2013 that should have been in place since 2001? Let us get something straight. This is technical, but Bill C-48 is already in force by means of comfort letters.

People must understand that, from the moment the mean taxman decides that something must be done, it is done, even if it is not yet included in the Income Tax Act, the Excise Tax Act, the Federal-Provincial Fiscal Arrangements Act, the First Nations Goods and Services Tax Act or related legislation. From the moment a comfort letter is signed, the government takes that money from our pockets. This will therefore make little change to people's lives, but it will be much easier to access because it will finally be in the act. Comfort letters are all well and good, and they say what they say, but they are not always clear.

For individuals, our tax system is based on voluntary assessment. In other words, we rely on average Canadians to file their tax return by April 30. If they are lucky, and Revenue Canada does not ask them to produce various documents, they can use the short form. In fact, it is not over yet. Even for people with some training in taxation, it is not very straightforward.

As the Auditor General said, this is not like other bills, where we have seen three versions die on the order paper as a result of an election or prorogation forced by the Conservative government, whose agenda disappeared as if by magic. In this case, the work just was not done. The work was also not done by the Liberals, since the previous legislation dates back to 2001. Auditors general have been calling on the legislators of the House for ages to do something about this more quickly.

In this way, the public could immediately see the changes to the legislation.

In my opinion, the Conservative response to this matter does not stand up. The legislation has not had previous incarnations, nor has it taken a great deal of time, nor is it the opposition’s fault. That is absolutely not the case.

It has taken them this long to produce Bill C-48 and finally listen to what the Auditor General was telling them. What she was telling them was rather serious and blunt. She noted that there were more than 400 technical amendments, and there are barely 200 in Bill C-48.

In her fall 2009 report she said:

No income tax technical bill has been passed since 2001. Although the government has said [as quick as the devil] that an annual technical bill of routine housekeeping amendments to the Act is desirable, this has not happened. As a result, the Department of Finance Canada has a backlog of at least 400 technical amendments that have not been enacted, including 250 “comfort letters” dating back to 1998, recommending changes that have not been legislated.

If proposed technical changes are not tabled regularly, the volume of amendments becomes difficult for taxpayers, tax practitioners, and parliamentarians to absorb when they are grouped into a large package.

This is true, whether you are a New Democrat, a Liberal, the sole member of the Green Party or one of the few from the Bloc Québécois. This is true for everyone, including the Conservatives.

In the 1991 Report of the Auditor General, chapter 2, the Auditor General expressed some concerns that income tax comfort letters were not announced publicly. We are talking about chapter 2 of the Auditor General's report from 1991. In response, the Department of Finance Canada stated that:

…the government intends to release a package of income tax technical amendments on an annual basis, so that taxpayers will not be subject to more lengthy waiting periods as in the past before amendments are released to the public.

Comfort letters have since been regularly released to the public. However, in the past 18 years, very few technical bills have been introduced and passed. Only four of the bills relating to income tax have been passed.

A few sentences in my colleague's speech caught my attention. I found them surprising because it seemed to me that I had heard them yesterday as well. It is important to understand that all these bills are subject to a time allocation motion, be it Bill C-48 today, Bill C-54 last night or Bill C-49, which is to come and will not be spared either.

Introducing a time allocation motion for Bill C-48 seems particularly outrageous, especially when the members opposite do it ad nauseam, parroting the lines written and produced for them by the office on the third floor.

They are trying to tell us that this has been before the House for 200 days, yet Bill C-54 was also in the House for 200 days, as was Bill C-48, and Bill C-49 probably will be, as well.

With its majority, the government can advance its agenda as it pleases. Perhaps we are moving at a snail's pace because the government does not really know where it is going. It improvises a little and all of a sudden it realizes that the session may end and that it will leave a lot of things unfinished. That is why it is speeding everything up.

I hear people say we are repeating ourselves, but that is not the case. The message the people of Gatineau want me to send the Conservative government, particularly on Bill C-48, is that they are fed up with provisions so inaccessible and incomprehensible to the average person that everyone would like us to change those aspects.

When I got to page 13 of the Income Tax Act, I had covered only three sections, and I was already getting fed up.

Yet I was a lawyer for 30 years. I studied tax law. I was elected as a member in 2004. I have analyzed many budgets, and I have seen the Income Tax Act in all its forms, as a member of both the government and the official opposition. I was not born yesterday, but this can be hard to grasp even for someone like me.

Small businesses also point out a problem I regularly hear about in my riding of Gatineau. For a small business required to complete all the forms, the disproportionate amount of red tape is good only for the numbers expert industry.

When members of the middle class or less privileged individuals want to do the right thing and pay their taxes, but do not really know how the system works, they have to go see an expert to be sure they make no mistakes. Few people like to make mistakes when it comes to taxes. However, some people manage to divert a large portion of what they owe in taxes even though they make millions of dollars. Authorities often go after lower-income individuals and treat them like criminals even though some people are forced to make arrangements with the Canada Revenue Agency, Revenu Québec or other organizations simply because everyday life is hard for them.

We get these kinds of messages in our ridings. True, we will vote for the bill, but the Conservatives tell us to shut our traps the moment we agree with them. We are no longer entitled to speak. I do not have the right to tell the House what the people of my riding would like to get from their politicians, and I was elected by 62% of the electorate, not 39% like the Conservative government. There are lessons to be learned from each of our ridings. That is what democracy means. It means electing 308 members of different political philosophies. Gatineau may not have the same problem as certain ridings in Alberta, British Columbia or the Atlantic provinces. That is what makes it possible for us to improve the situation together.

Voting in favour of a bill is not necessarily the same thing as giving the government carte blanche or saying that overall the bill is amazing. Sometimes, the government would do well to listen to us and follow the interpretation, which it does not often do. This is unfortunate, but there is a reason why it sticks to the script, like a racehorse running straight for the finish line. The Conservatives’ problem is that they often hit a wall because they fail to listen to what people were saying along the way. That is regrettable, but the message they are sending to all of our constituents is that their opinion does not matter in the least.

Yet if there is one issue that affects all Canadians, regardless of where they live, surely it is taxation. My grandmother always said that in certain areas of life, things should be the same for everyone. I am sure that she would qualify that statement, since some people are good at avoiding certain things. She used to say that some things were unavoidable, like death and taxes. She was right up to a point, although she would surely be turning in her grave at all of the tax avoidance measures that abound today.

While I am very pleased to see that Bill C-48 attempts to address certain problems, I am not fooled either. The Minister of Justice argues that by amending and toughening up certain laws, the problems of all crime victims will be resolved. That is not true. If the government fails to put more police officers on the highways and to increase funding for psychological support services, then it will not accomplish anything. The same holds true for tax avoidance.

If there are not enough agents to properly investigate cases of tax avoidance, or better still, of tax evasion, we will hit another wall.

Again, this is a problem that the Conservatives have. They have an extremely narrow vision of how to get from point A to point B. They are incapable of appreciating that in order to get to point B and the desired outcome, they might have to make a small detour. The Conservatives just do not do certain things, like admitting they were wrong or that they made a mistake. According to an old saying, a fault confessed is half redressed. They have a hard time with that and again, that is unfortunate.

Bill C-48 is a sound piece of legislation, but it does resolve everything. Had we not had to contend with this time allocation motion, we would have been able to hear a lot more from my colleagues, and maybe even from the Conservatives.

I listened to some of the speeches, and it was interesting to see what it is about this bill that makes some Conservatives react. Once they had dispensed with “we are the best, the nicest, the cleverest” or what have you, in the final 30 seconds, they tied it to what was happening in their riding. It was beneficial for all members of the House.

We can all learn from one another. I learn something from my colleagues who represent more rural regions. They in turn learn about what makes people in urban areas tick. Of course, there are different kinds of urban areas. There are large cities like Montreal, Toronto and Vancouver and cities like Gatineau, which is the fourth-largest municipality in Quebec. Gatineau’s problems are different because it is located right on the Ontario border. By talking to one another, it is possible to find real solutions.

When I served in Parliament from 2004 to 2006, I chaired the women’s caucus. Back then, my favourite expression was gender-based analysis, or GBA.

I would tell my male colleagues that GBA stood for gender-based analysis, not Game Boy Advance. When a bill was being drafted, we ensured that all of the facts were taken into account. We were not just concerned about women.

The best example I can give you is young people who drop out of school. If the facts show that young boys are the ones who drop out of school and a policy is needed to address that situation, then young boys will be the focus of that policy. That logic will dictate our actions.

We accomplish things by talking to one another, by discussing matters and especially by listening and by being willing to admit that sometimes ours is not the absolute truth. However, this government is absolutely incapable of understanding that someone other than the PMO may have some sound ideas or be right. Just imagine having to admit that the NDP had a sound idea. The government thinks the sky would fall and something terrible would happen if it admitted that. How utterly ridiculous and how out of touch with the public.

When I weigh everything, I tell myself that maybe this is what the Conservatives really want in the final analysis. All this really does is leave the public fed up, and what happens when people are fed up? The Conservatives are gambling on two possible outcomes: either that people will come out in force and vote them out of office, which I am hoping will be the case because people no longer want to have anything to do with them, or that people will stay home because they are sick and tired of the whole process. The Conservatives are gambling that the second scenario will play out.

I think people have to realize that while they may not be interested in politics, something like Bill C-48 affects their day-to-day lives, starting with taxation.

Just think about the tax people pay every day on all kinds of things. If they were to calculate how much tax they pay throughout the year, not just income tax, but tax on items purchased at the corner store, at the grocery store, at the drugstore or elsewhere, they would realize that the government is truly omnipresent and that perhaps they should pay attention to politics.

I will be voting in favour of the bill, but it is not an end in itself.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, a number of New Democrats referred to the time and said that 2001 was the last time that technical changes were made. One can imagine that changes are not made on an annual basis per se, but depend on the changes that are required.

My question is related to just that. How often does the member believe it is necessary to make changes? Would she not agree that bringing out a new piece of legislation would depend on the nature and the number of changes that are being requested?

For example, 2002 would not have been a good year to bring additional legislation forward, given that changes were made in 2001. Would the member suggest that we go on an annual basis with legislation?

[Françoise Boivin, NDP, Gatineau, QC]

Mr. Speaker, that is a very good question.

I think that the Auditor General has actually provided part of the answer. In my view, once there are comfort letters, a corresponding bill should be drafted to make adjustments immediately.

From 2001 to 2006, there was no temporary gap in tax rules because there were comfort letters. The Conservatives came to power afterwards.

The Auditor General told us to stop using comfort letters for the sake of those reading the legislation. Luckily, I was able to do my 20 minutes without reading part of the Income Tax Act. That would have been a real treat. Sections 1 to 5 alone take the reader through subparagraph after subparagraph. Do you think that the individuals concerned can make sense of this? No way. This is why the Auditor General wants us to put an end to comfort letters and amend legislation quickly.

[The Acting Speaker, Barry Devolin]

The time for government orders has expired. The hon. member for Gatineau will have eight minutes remaining in questions and comments when this matter returns before the House.

Statements by members, the hon. member for Edmonton Centre.

The House resumed consideration of the motion that Bill C-48, an act to amend the Income Tax Act, the Excise Tax Act, the Federal-Provincial Fiscal Arrangements Act, the First Nations Goods and Services Tax Act and related legislation, be read the third time and passed.

[Mike Wallace, Conservative, Burlington, ON]

Mr. Speaker, it is my pleasure to speak to Bill C-48 and participate in this debate.

While this legislation is indeed a technical bill, as its name suggests, it is nevertheless important. The bill before us today has been over a decade in the making and represents over 10 years of miscellaneous tax announcements.

While Canadians have been repeatedly and broadly consulted on these measures, because they have not yet been formally enacted by Parliament, the tax system has become overwhelmingly backlogged. Previous attempts to pass technical tax legislation by governments of all stripes have been unsuccessful for a variety of reasons. Not only have governments attempted to address this backlog, the Auditor General has identified it as a matter of significant concern as far back as 2009.

All members can agree the time has come to formally legislate these technical amendments into our tax system. We all know that a sound tax system is one of the cornerstones of a strong economy and a strong economy is a top priority for our Conservative government. Through Canada's economic action plan, we are helping to ensure that all entrepreneurs and businesses have the opportunity to succeed in the global economy and continue to create jobs. That means keeping taxes low and the tax system predictable, as we are doing through today's legislation.

It also means we should have a tax system that is simple and fair for all. Indeed, our government is firmly and strongly aware of the importance of tax fairness, truly a concept that all members should understand and support. It is a basic principle that our government is committed to upholding, something that everyone, especially members, needs to remember if they try to skip out on their own taxes.

I will address that and other important tax issues in my time today as I discuss Bill C-48 in great detail. As members know, this technical bill would amend the Income Tax Act, the Excise Tax Act and other related legislation to simplify the tax system and make it more predictable, while also closing tax loopholes and creating a stronger and fairer tax system for all Canadians.

I should note that this bill and its measures were previously released for a repeated public consultation before its introduction in late 2012. To highlight the importance of that consultation, especially with tax professionals, the Office of the Auditor General at a recent meeting of the finance committee stated:

It was certainly part of our recommendation that the draft legislation be released for comment so that practitioners could provide input. That's an important part of the process. This means that before it actually gets tabled in the House, it's had input and it's not going to be a surprise to the practitioners. If there are any glitches, they can be straightened out.

As members can see, the proposals in this bill reflect the feedback our government has received from all Canadians, especially those tax professionals. Indeed, Bill C-48 has received its due diligence and our Conservative government is ready to move forward with ensuring tax fairness for all Canadians.

I should note that even the all-party finance committee endorsed this bill, without amendment, after a very detailed study. Witness after witness spoke in favour of the bill. This is what some of those witnesses had to say.

I will first quote from Gabe Hayos, Vice-President of Taxation, Canadian Institute of Chartered Accountants, who stated:

We support Bill C-48. The CICA understands how important it is for taxpayers to have greater certainty and a clearer understanding of Canada's federal income tax system.... Bill C-48 helps improve clarity and certainty, and it mitigates the negative effects of uncertainty identified by the Auditor General.

Second, Larry Chapman, executive director and chief executive officer of the Canadian Tax Foundation said at committee:

Bill C-48, the Technical Tax Amendments Act, 2012...represents 10 years of repairs and maintenance in updating the Income Tax Act and the Excise Tax Act. Its passage is important to all Canadians. You heard that in the earlier presentation. I want to emphasize it again. Its passage is very important to all Canadians....Delays in the passage of tax legislation leave taxpayers and their advisers in a no man's land of uncertainty. My message for the Standing Committee on Finance is that you should encourage passage of this legislation...

Paul Hickey, a tax partner of KPMG, added in his testimony at committee:

[I] ask Parliament to act decisively and to pass Bill C-48 to essentially clean the slate of this old pending legislation and to finally bring the Income Tax Act up to date. Taxpayers could then move on and focus on running their business, and the CRA could carry on administering and collecting tax in a more stable system.

Finally, we heard from Carole Presseault, vice-president of government and regulatory affairs, Certified General Accountants Association of Canada, who said at committee:

—I wish to say that we support the tabling of the bill and that we encourage you to move swiftly to pass this important piece of legislation. The bill deals with a massive backlog of unlegislated tax measures. Its passage would, in our opinion, bring greater clarity to the tax system and strengthen the integrity of our laws.

That is just a very small sampling of the support that the committee heard for the bill.

Let me highlight a number of points in the bill. I will do my best to recap it succinctly and as briefly as possible, especially in light of its technical nature.

Part 1 of the bill proposes enhancements to the Income Tax Act to better target and simplify rules relating to the non-residents trust, taking into account comments received during public conversation.

Parts 2 and 3 relate to the taxation of Canadian multinational corporations in respect to their foreign affiliates, the result of which would be a more fair and equitable international tax system.

Part 4 deals with ensuring that the tax rules work well under both common and civil law, while part 5 would close tax loopholes and create greater fairness for taxpayers.

This part of the bill would implement a number of integrity tax measures that were first publicly released in 2010, on which we have consulted extensively since then.

These particular measures would close loopholes relating to specific leasing of properties and ensure that conversion of specific investments flow-through trusts and partnerships into corporations would be subject to rules similar to those governing transactions between corporations.

It would deal with schemes designed to artificially increase foreign tax credits in order to reduce taxes. In fact, it would prevent that from happening.

Finally, it would implement a regime for information reporting on tax avoidance and of transactions.

As an overall package of items, these key initiatives would help crack down on tax avoidance and ensure that every Canadian paid their fair share of tax.

At the same time, part 5 also includes a number of very technical changes essentially designed to ensure that the income tax system functions in accordance to policy that it is intended to operate under.

Most of these technical changes would address issues identified by everyday Canadian taxpayers working through the application of the income tax rules in their own personal or working studies.

Part 5 would also implement an income tax amendment relating to the enactment of the Fairness of Self-Employment Act. It would provide a tax credit in respect of employment insurance premiums paid by self-employed individuals, a change that this government has made.

Part 6 of the bill would implement the technical amendments to the GST and HST, including relieving the GST and HST on the administrative services of collecting and distributing the levy on blank media imposed under the Copyright Act, which we updated.

Part 7 would amend the Federal-Provincial Fiscal Arrangements Act and the First Nations Goods and Services Tax Act to provide for technical changes concerning tax administration agreements.

Finally, Part 8 consists of coordinating amendments that would ensure that the tax amendments in this legislation interact properly with other legislation.

While these measures may seem technical, they are crucial to the fair and efficient functioning of our tax system and they have been consulted on a repeated basis. Now is the time to pass the bill.

Tax professional Carole Presseault again, who was one of the many expert witnesses who appeared before finance committee to speak to the importance of the bill and its passage, said:

—this bill needs to get passed. My concern doesn't result in the study of this bill. This bill has been studied; it's been consulted. My colleagues here, the witnesses, have also expressed that it's been extensively studied. Stakeholders have had an opportunity over the last decade to comment on the various provisions of this bill, and, yes, please, what's required is for it to be passed expeditiously.

Tax fairness and a competitive tax system are important to this government. As taxpayers, we are all forced to give up a part of our hard-earned income to fund government programs like health care, policing and other services for Canadians. We do so willingly and honestly and under the understanding that everyone is paying their fair share. Canadians who play by the rules do not like tax cheats and neither does this Conservative government. That is exactly why today's legislation would help fight tax cheats.

To quote noted tax practitioner Greg Boehmer of Ernst & Young, who also appeared in front of finance committee:

It's very clear that this legislation is aimed at fairness, that it does close a number of loopholes, and that it does broaden the base in certain circumstances.

Additionally, as part of our government's broader efforts to keep taxes low for Canadian families and ensure integrity in our tax system, economic action plan 2013 included a number of measures to close tax loopholes, address aggressive tax planning, clarify tax rules and reduce international tax evasion and aggressive tax avoidance.

As everyone knows, our government is very committed to closing tax loopholes that allowed a select few businesses and individuals to avoid paying their fair share. Ensuring that everyone pays their fair share also helps to keep taxes low for Canadian families and businesses, thereby improving incentives to work, save and invest in Canada.

Since 2006, as has been said before, our Conservative government has introduced a whopping 75-plus measures to improve the integrity of the tax system. Bill C-48 would work in partnership with other governments, improving efforts to promote tax fairness, a fact which did not go unnoticed during finance committee's careful consideration of this legislation.

When it comes to our Conservative government's priorities, the witnesses were absolutely correct. However, in addition to ensuring its integrity and fairness, our government remains dedicated to ensuring the tax system remains competitive so we can attract vital new business investment to Canada and to grow the economy and create jobs.

Lower Canadian taxes are critical in supporting economic growth by enabling Canadian business to invest more of their revenues back into their operations and into their workers. These businesses invest in machinery, equipment, information technology and other physical capital that are components of an improving Canadian productivity.

Taken as a whole, there is no question that our government's actions have made a noticeable difference. Canada now has the lowest overall tax rate on a new business investment in the G7, a policy proven to increase productivity and to contribute to a higher standard of living for all of us.

In conclusion, our government strongly believes that Canadians deserve lower taxes, not just a select few. That is why, since coming into office in 2006, Canadians from every walk of life are benefiting from the tax relief introduced by our government, such as the lowering of the GST and the landmark TFSA.

I would like to add that I have a 22-year-old daughter who is just starting out in the world. One of her questions to me recently was whether she should invest in a TFSA and whether that would that help her in the long run.

Our message is getting out there. I did not give her that message. She came to me about it. There are opportunities and the need for Canadians to invest and save.

Also, one million low-income Canadians have been removed from our tax rolls. This is a fact.

Our strong record of tax relief is saving the typical Canadian family of four more than $3,200 each year.

Also, our government has shut down tax loopholes in the system in order to stop people avoiding to pay their fair share of tax. Ensuring tax fairness is just another way that our Conservative government will keep taxes low for Canadians and their families. I am proud that the bill before us today will help us go even further in meeting that objective.

I encourage all my colleagues to vote in favour of tax fairness and to support this important legislation here this evening.

[Dennis Bevington, NDP, Western Arctic, NT]

Mr. Speaker, my question is on tax fairness and equity in the system.

There is something missing in the bill, and would be some method of determining the inflation rate within the north for the northern residents tax deduction.

In 2007, after constant lobbying on my part and on the part of the Canadian Chamber of Commerce and the territorial governments, which were asking for a 50% increase in this northern residents tax deduction that had not been changed since 1989, the government gave us 10%.

Over the last six years, that 10% has been taken up by inflation. We are back to square one. We have not had the increases that would make the system fairer.

Why did the Conservative government not put something into this legislation that would identify an inflation increase to the northern residents tax deduction, something that is absolutely required in the north? We are losing workers. The cost of living has gone up so high in the north that people are not staying there anymore. They are flying in and out to their jobs. What has happened in northern Canada in terms of the cost of living is a disgrace.

Why did the Conservative government ignore the important requirements of tax equity and fairness for northern people?

[Mike Wallace, Conservative, Burlington, ON]

Mr. Speaker, I appreciate the passion the hon. member across has for his constituency. He is from the north. However, I do have to bring him back to the purpose of this bill we are debating this evening.

His question was with regard to a policy issue in the tax system. However, the bill we are dealing with today, Bill C-48, deals with legislation that has already been passed, that has had regulations and some changes to the Tax Act, or a number of other acts such as the Excise Tax Act. The purpose of the bill is to catch up on the tax changes that happened to the Tax Act. There is a legislative requirement that the House pass those minor changes to bring them into law.

The fact is that the CRA puts a note out with respect to the changes that are made. They go into effect virtually immediately and the industry, mostly the tax professionals, accepts those as being in place. However, this bill would actually put them into law.

It has been 10 years, and that is a long time. I do agree with the auditor's report that we need to be doing these minor catch-up tax amendments more often than every decade.

However, the question he asked has absolutely nothing to do with the bill.