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

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

Mr. Speaker, I thank the member for his question, but I will not comment on who is or is not present in the House, since we are not allowed to do so.

However, I will respond to his very important question about corporate taxes. Our corporate taxes are among the lowest in the world, and businesses are sitting on hundreds of millions of dollars.

The NDP's position has always been very clear. We believe in encouraging businesses to create jobs. Even though we may give them hundreds of millions of dollars in tax credits, these businesses sometimes do not create a single job. For example, a business in Ontario moved to another country after receiving millions of dollars and completely abandoned the jobs created in Canada.

When we give corporate tax credits, especially to multinational corporations, we should demand that they create jobs. If they do not create jobs, they should not be entitled to this money.

I think that is a rule of thumb for the government: businesses that receive tax credits from this government must create jobs, or else they are not entitled to that money.

[Terence Young, Conservative, Oakville, ON]

Mr. Speaker, I am pleased to rise today to speak to our government's low-tax plan for jobs and growth and how this important tax legislation, Bill C-48, the technical tax amendments act, 2012, would fit into that plan.

Through Canada's economic action plan, our Conservative government is continuing to create jobs and grow our economy. We are doing this while keeping taxes low and sticking with our prudent and responsible plan to return to balanced budgets in 2015.

I would like to remind all members of the House that our fiscal responsibility and aggressive debt reduction has placed Canada in an enviable fiscal position. While other countries continue to struggle with debt that has spiralled out of control, Canada is in the best fiscal position in the G7. In fact, Canada's net debt to GDP ratio is the lowest level among G7 countries by far.

While the NDP and Liberals want to engage in reckless spending, our Conservative government is on track to return to balanced budgets in 2015. Our plan to get back to balanced budgets is working. In the past two years we have already cut the deficit by more than half. Economic action plan 2013 builds on these efforts to reduce government spending by announcing an additional $1.7 billion in ongoing savings. Overall, measures taken by our government since budget 2010 will result in total ongoing savings of roughly $14 billion.

Unlike the NDP and Liberals, our Conservative government will not raise taxes on Canadian families and businesses to balance the budget.

Today we have legislation before us that, while technical, will help our government achieve this objective and help make the tax system more predictable. The bill would amend the Income Tax Act, the Excise Tax Act and related legislation to close tax loopholes and create a stronger and fairer tax system for all Canadians.

The bill contains proposals that have been previously released for public consultation on numerous occasions for many years. In fact, many of the proposals in the bill reflect the feedback that government received from Canadians and aim to ensure that everyone pays their fair share of tax and is treated equitably under our tax laws. Simply put, when everyone pays their fair share, tax rates can be kept low, something that benefits all Canadians.

I would like to take a moment and speak to some of the very important measures in the bill and their purpose. Although the legislation is quite technical in nature, I will be brief in my overview of the bill.

I will commence with part 1 of the act, which would modify the provisions of the Income Tax Act dealing with the taxation of non-residence trusts. These changes reflect the proposals initially publicly announced back in the winter of 2010, as well as from the feedback received from public consultations held the following summer.

Part 2 and 3 deal directly with the taxation of Canadian multinational corporations with foreign affiliates, implementing changes, some of which date all the way back to 2004, that will make Canada's tax system more fair and equitable, not to mention easier to administer.

As is the case with the majority of measures contained in the bill, these changes are again the result of extensive public consultations.

Part 4 of the bill deals with the concept of bijuralism. More specifically, it contains amendments that would ensure that the bill will function effectively in both the common law and the civil law. This means that amendments dealing with certain private law concepts, such as right and interest, real and personal property, life estate and remainder interest, tangible and intangible property and joint and severable liability, will accurately capture both common and civil law in both official languages.

Part 5 of the bill focuses on fairness for taxpayers by setting out a number of measures to close tax loopholes, ensuring that all Canadians pay their fair share. Specifically, the bill would close tax loopholes related to specific leasing property, ensure that conversion of specified investment flow-through trusts and partnerships into corporations are subject to the same rules as transactions between corporations, prevent schemes designed to shelter tax by artificially increasing foreign tax credits and, finally, implement a regime for information reporting of tax avoidance transactions. Taken together, these measures would help crack down on tax avoidance and ensure that everyone paid their fair share.

These measures, taken in conjunction with our government's recent action to curb tax avoidance in economic action plan 2013, affirm our continued commitment to making the tax system more fair and equitable for all Canadians, a subject that I will expand on in a moment.

At the same time, part 5 also includes a number of important but technical changes that are designed to ensure that the income tax system functions in accordance with its underlying policy intent. Many of these changes are relieving in nature and would address issues identified by taxpayers in the course of working through the application of the income tax rules to their own situations.

Part 5 would also implements an income tax amendment relating to the enactment of the Fairness for the Self-Employed Act. This would extend the personal income tax credit in respect of employment insurance premiums to apply also to such premiums paid by self-employed individuals.

Part 6 of the bill would implement technical improvements to the GST-HST, including relieving the GST-HST on the administrative service of collecting and distributing the levy on blank tape imposed under the Copyright Act.

Part 7 provides for administrative changes to the Federal-Provincial Fiscal Arrangements Act.

Finally, part 8 contains some housekeeping amendments to ensure coordination between provisions of the Income Tax Act, the Jobs and Growth Act, 2012 and the Pooled Registered Pension Plans Act.

All of these parts have been examined in great detail at the finance committee, where they received the support of all parties.

In my time remaining, I will just highlight that the underlying goal of all the measures in this legislation is to simplify the tax system, make it easier to comply with and administer and to create more fairness for all Canadian taxpayers.

The overwhelming majority of hard-working Canadians and business owners pay their taxes. They do so willingly and honestly. Others, shamefully, try to skip out on their taxes and avoid their fair share and, eventually, suffer embarrassing and costly legal ramifications when they are caught.

However, honest Canadians expect their government to manage their tax dollars with respect and that they be asked to pay their fair share and not a penny more. Our government fully understands that sustaining a voluntary tax system rests on the foundation of tax fairness. It is a simple concept and one that we on this side of the House grasp and support.

The fact is that we cannot expect taxpayers to continue to pay their share if they see that others are not. Tax fairness is a basic principle that our government is committed to upholding and we make no apologies for doing so. We are proud of our record and we are building upon it. In fact, that is precisely what this technical tax amendments act, 2012, would do.

Indeed, several witnesses who appeared at the finance committee as part of its study earlier this year noted how today's legislation would improve tax fairness for all taxpayers. For example, Mr. Greg Boehmer of Ernst & Young remarked, “It's very clear that this legislation is aimed at fairness”. Mr. Lorne Shillinger of KPMG echoed this sentiment in regard to Bill C-48, saying, “It's preserving the integrity of the tax system and it's time to get this bill passed”.

Ensuring everyone pays their fair share means tax rates can remain low and our government can ensure that Canada's fiscal house stays in order. Balancing the budget and reducing debt means that tax dollars that would have otherwise been absorbed by interest costs are freed up. These dollars can then be reinvested in the things that matter most to Canadians, like lower taxes. This is what Canadians expect and deserve.

As I mentioned earlier, our government is committed to improving the integrity and fairness of Canada's tax system by closing loopholes that allow few businesses and individuals to avoid paying their fair share of tax. Consistent with global efforts to close tax loopholes in their respective tax systems, measures introduced by this government will protect hard-working families that play by the rules, reaffirming the government's ongoing commitment to tax fairness.

Indeed, since 2006, and including the measures announced in economic action plan 2013, our government has introduced over 75 measures to improve the integrity of the tax system.

If I might take a moment, I would like to highlight some of the many measures in economic action plan 2013 that will work to close these tax loopholes, address aggressive tax planning, clarify tax rules and combat international tax evasion.

First and foremost, economic action plan 2013 announced the stop international tax evasion program. This new program would allow the Canada Revenue Agency, CRA, to pay individuals with knowledge of major international tax non-compliance a percentage of the tax collected as a result of information provided.

Other measures would include requiring Canadian taxpayers with foreign income or properties to report more information and extending the amount of time CRA had to reassess those who had not properly reported this income, as well as streamlining the process for the CRA to obtain information concerning unnamed persons from third parties, such as banks, and requiring certain financial intermediaries, including banks, to report their clients' international electronic funds transfers of $10,000 or more to CRA.

Our Conservative government's record on strengthening tax fairness is clear. I am sure all members agree on closing loopholes. Permitting a select few businesses and individuals to skip out on paying their fair share of tax is simply unacceptable. Most Canadians would be shocked and disappointed if any elected member would tolerate tax evasion. For this reason alone, I hope I could count on the support of the members opposite in passing this very important legislation.

That is not all. In addition to ensuring the integrity of our tax system, our government continues to work hard to ensure that the tax system remains competitive so we can continue to attract new business investment into the Canadian economy. Canadian tax reductions that play a particularly important role in supporting economic growth are those that enable businesses to invest more of their revenues back into their operations. Indeed, our government has reduced the small business tax rate to 11% and lowered the federal business income tax rate to 15%.

Over all, since 2006, our low-tax plan has resulted in $28,600 in savings for a typical small business, or almost 35%. Savings like this allow small businesses to make investments in their local communities, be it through new machinery, new equipment, a new location or, even better, hiring more people.

Not only that, it is this productivity growth that allows businesses to allow more workers and offer higher wages to Canadians in order to expand production and become more successful. In fact, the Canadian Manufacturers & Exporters agrees with this assessment. It said:

Reducing business taxes creates jobs, boosts investment, makes Canada more competitive and puts more money in the pockets of the Canadians...business tax cuts are critical drivers of the Canadian economy...

Moreover, since July 2009, over 900,000 net new jobs have been created, the strongest job creation record in the G7. What better indication than this to show that our low-tax plan is working?

Clearly, our government is committed to lower taxes for all Canadians. These are just some of the examples of our government's commitment to keeping taxes low for Canadians. Indeed, since 2006, we have cut taxes over 150 times, reducing the overall tax burden to its lowest level in 50 years. We cut taxes in every way government collects them, from personal taxes, consumption taxes, business taxes, excise taxes and much more. In fact, our strong record of tax relief has meant savings for a typical family of four of over $3,200 in 2013. Furthermore, we have removed over one million low-income Canadians from the tax rolls altogether.

Unfortunately, the NDP and Liberals continue to vote against these tax savings measures that help Canadian families and Canadian businesses. The tax legislation before us today would help to further our government's objective of keeping taxes low and the tax system predictable.

One wonders if the NDP and Liberals would support a piece of legislation that supports that plan. As I hear hon. members speaking today, it sounds as though the official opposition is going to, for which I thank them. I hope they will support it and not fight closing tax loopholes that only benefit a select few.

Why would anyone oppose ensuring that everyone pays their fair share of tax? I hope that all the members opposite will see the merits of this legislation and show their support for it by giving it swift passage.

[Jasbir Sandhu, NDP, Surrey North, BC]

Mr. Speaker, I have been a small business person myself. As a business person, some certainty is required.

The Conservatives have waited nine years to bring this bill forward to bring certainty to businesses and individuals and Canadians. What have the Conservatives been doing over the last seven years that prevented them from bringing this legislation forward? They certainly have not been fixing the Senate; we know that from the scandals in the other House.

The member talks about the government lowering the tax rate over the last six years. The tax rate for corporations, their friends, has been lowered. There is no denying that. However, if we look at the other side, the government has had the largest deficit in the history of this country during the last couple of years. Not only that, the debt has grown by billions of dollars.

My question is for the member. The Conservatives have lowered taxes, but who is going to pay the debt they have created? Who is going to pay the deficit the government has created?

[Terence Young, Conservative, Oakville, ON]

Mr. Speaker, I do not know if the member was listening to my remarks, but we have made 150 changes in recent years for tax fairness in budgets, et cetera, and there has been some great work done on regulations by the scrutiny of regulations committee, but some of these proposals have been around for a long time, so I would like to make a proposal to the member today.

I will go to my House leader, and perhaps he will go to his House leader, and ask that in every Parliament, perhaps every quarter of the year or every six months, we bring in a technical tax amendment bill. I am sure the members on this side of House will agree to sit until midnight in a periodic fashion to get that done.

We have been sitting until midnight the last couple of weeks and we are prepared to do it the next couple of weeks to get bills through this House. That is important to us.

The deficit has been cut in half, and the deficit will disappear by 2015. That deficit was created purposely, as the member may remember. I do not know if the member was in the House in 2008, but we faced a worldwide crisis, the worldwide recession, which was the worst recession since the 1930s.

That deficit was created purposely to fight that recession. It worked, with 900,000 net new jobs created, 90% of them full time. Now it is time to balance the budget again and get back to paying down the debt as the government did in 2006 and 2007, when it paid down $30 billion of debt.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, I thought it was an interesting proposal when the member suggested that he go to his House leader and that member could go to his House leader and maybe they would come to some sort of an agreement.

It would wonderful if the Leader of the Government in the House of Commons felt it was somewhat important to negotiate in good faith. I suspect that if he made that leap of faith, we would probably see bills being debated and passed in a more orderly fashion. Time allocation would not be necessary.

I want to pose a question. The Liberal Party supports the bill and has indicated its support for the bill for some of the very reasons the member talks about, issues such as tax evasion and tax avoidance. I suspect more than 98% of members of Parliament would be voting in favour of the legislation, because we see the merits of it.

Where I take a little exception is when the member, in his presentation on the bill, talked as if the Conservatives were not increasing taxes. In reality, in the last number of budgets there have been net tax increases to Canadians of tens of millions of dollars. A good example is the most recent one in regard to the number of tariffs. A tax is a tax.

Would the member not agree that an increase in a tariff is in fact a tax increase to our middle class and to all Canadians?

[Terence Young, Conservative, Oakville, ON]

Mr. Speaker, the member's point is well taken. When we change bills and bring forward sections in the budget for tax fairness, there will be situations in which some people will pay more taxes. Those would perhaps occur when a business operator had created a corporation or by aggressive tax planning was not paying as much as a competitor in a similar business was, simply by changing the paperwork and how they file their taxes.

That is what this bill is designed to address. It is designed to address people who are not paying their fair share. Yes, there would be new revenues from this bill, although that is not the purpose of the bill—the purpose of the bill is tax fairness—but there would be new revenues.

The amendments proposed in the bill have been discussed over years of repeated consultations. The bill has been before Parliament since last November, so any member who wanted to examine it or examine the issues has had many months to do so. The opposition members have had over 200 days to examine and debate this bill.

We have had days of debate at the finance committee. On the government side we can all sub into committees, and any member can attend any committee at any time. If members have specific concerns, they can sit in on the finance committee and examine the bills closely. That is what committees are for. They do a clause-by-clause examination of the bills.

Canadian taxpayers have been waiting for these technical amendments. They are overdue, and we should pass this bill quickly.

[John Carmichael, Conservative, Don Valley West, ON]

Mr. Speaker, I want to thank my colleague for his speech in the House this morning talking about tax fairness. It is a very important issue right now. It is particularly important that we as a government recognize that tax evasion and tax cheats have to be clamped down on, and as a former businessperson, I also recognize that tax loopholes have to be closed.

I agree with my colleague as he discusses tax fairness. I wonder if he could address the balance between tax fairness and tax reductions and the benefit that these bring to the economy of Canada.

[Terence Young, Conservative, Oakville, ON]

Mr. Speaker, regarding tax reductions, we do have 900,000 net new jobs in Canada since the summer of 2009, when we were starting to come out of that terrible recession, but we have a lot more than that. Businesses are actually holding on to a lot of capital right now; they are ready to explode in investment.

However, we have a slowdown in our largest trading partner, which is the United States of America. Americans buy basically 70% of everything we produce in Canada. To deal with that slowdown, we are proposing free trade agreements. We are pursuing free trade with 50 countries, and the deal that is closest to fruition is the European free trade deal, which would mean about 80,000 jobs in Canada. Where would those jobs come from? It would mean Canadian businesses investing to expand into foreign markets, so it would mean about 80,000 jobs and about $1,000 of net income to the average family in Canada from free trade. That is just one free trade deal, and there are many more.

We are well positioned for growth, and if the American economy continues to grow as it has been, our growth is going to accelerate as well. The tax picture has created an environment where we are ready for growth, and an explosion of growth is due.

[Don Davies, NDP, Vancouver Kingsway, BC]

Mr. Speaker, people on different sides of the House can have philosophical differences on what the best policies are to stimulate the economy, but I want to look at some numbers.

The Conservatives' philosophy starting in 2006 was to cut taxes, particularly on corporations. Their theory was that these tax cuts would stimulate growth, but in those six years under the Conservative watch, the debt of Canada has gone from $480 billion to $605 billion. That is $125 billion of additional debt added to Canada, a 25% increase in debt.

In terms of corporate taxes, the idea was that if they cut taxes to corporations, it would leave more money in the hands of corporations and the corporations would then invest it. The outgoing Bank of Canada governor, Mark Carney, has recently stated that there is $500 billion of dead corporate money sitting on the sidelines that has not been invested in Canada because those tax cuts were broad-based and they were not tied to creating jobs in this country.

Finally, I want to talk about unemployment, which is higher today. If we talk to people in communities across this country, they will tell us that there are more temporary jobs and more part-time jobs, but there are not the kinds of good-quality career jobs that used to typify jobs created in the 1970s, 1980s or 1990s.

Based on the numbers for the debt and the deficit, which is the highest deficit in Canadian history and is run by the current government, does my hon. friend consider those to be signs of the economic success of the Conservatives' philosophy?

[Terence Young, Conservative, Oakville, ON]

Mr. Speaker, I mentioned the $500 billion that businesses are sitting on. We cannot legislate businesses to start spending money. We have to create a climate in which they want to spend money, and that is exactly what we have done. As we pursue free trade agreements and open markets across the world, these businesses are going to start investing more and more.

However, creating 900,000 new jobs is not something to play down. These are 900,000 people who went home to their families and said, “I got the job”. Jobs relieve financial pressures in those homes and people are then able to pay their mortgages. Some of these people also start businesses.

We are poised for tremendous growth in Canada. We have had growth and we will have more growth, but the reality is that we are dependent on trade. We are a trading nation and we always have been. The economy of our largest customer is in trouble; it is starting to come back, but the best way to avoid being in that position in the future is to pursue free trade with many other countries, such as those on the Pacific Rim, which is what we are doing. I believe our future is very bright.

With regard to Canada's debt, if the member looks forward in the financial documents in the budget, he would see that the debt will start to go down in a few years, which is exactly what we were doing from—

[The Acting Speaker, Barry Devolin]

Order. The hon. member's time has expired.

The hon. member for Marc-Aurèle-Fortin.

[Alain Giguère, NDP, Marc-Aurèle-Fortin, QC]

Mr. Speaker, I will be sharing my time with the hon. member for Québec.

Unfortunately, Bill C-48 is a story of failure. It is the story of our tax laws that have never been updated. This bill is currently over 1,000 pages long, which is a significant number. Although the previous member's speech was excellent, if I were to ask him to quickly summarize the content of these 1,000 pages, he would be hard pressed to do so. It would not be easy. I will not ask him to do so, but I tip my hat to anyone in the House who can tell me that he has a perfect understanding of Bill C-48, the bill on which we are going to vote. Understanding a 1,000-page legal document about taxes is quite a feat.

There is a backlog of 400 technical amendments. Bill C-48 will address 200 of them. The other 200 will not be resolved, mainly because they are outdated and no longer necessary. The law is so old that the regulations are no longer relevant. In 2006, we wanted to close a tax loophole affecting airlines. The airlines took advantage of that loophole and are now increasingly making use of tax havens. What was proposed in 2005 and 2006 has therefore lost its relevance because the law is too old. For five or six years, there was a tax loophole that was not closed. That is unfortunate.

This situation dates back to 2001. I understand that our Liberal colleagues are not always present, but I hope that they will wake up. They were in power in 2001. The boom in tax loopholes occurred under the Liberal government. It was actually quite embarrassing. With regard to shipping companies, the finance minister at the time had the House pass a bill that allowed him to avoid paying taxes. His shipping company no longer had to pay very much in taxes to Canada.

[An hon. member]

That was when the Liberals were in office.

[Alain Giguère, NDP, Marc-Aurèle-Fortin, QC]

Yes. The Liberals were in office.

The Conservatives have not done much better. They were in power in 2007. They have had six years to introduce a bill to make technical amendments to the tax law. For a government that claims to be tough on crime, that is pretty bad from the perspective of regulation-making, red tape and bureaucracy. What is more, it is never-ending.

We will support this bill because we no longer have any choice. We have to do so. We also believe that the government should amend the tax law every year in order to update it so that everyone can understand it.

This is a complex 1,000-page bill that tries to reduce a backlog of 400 technical amendments. This means that as soon as a problem comes up, the accounting bills start piling up. An accountant does not come cheap.

It can also be expensive for a company that is teetering on the brink and wondering whether or not this law applies to it. In theory, ignorance of the law is no excuse; however, the law is unintelligible to the average person, and unfortunately, Canadian tax laws are no exception.

In 1917, Canada's first tax law, the Income Tax Act, was 50 pages in length. Those 50 pages covered everything.

Now, there are tens of thousands of pages of jurisprudence and as many doctrines. We can get a sense of our tax situation. It is clear why many business owners are telling us that their businesses are overburdened with accounting bills.

Taking over 10 years to make formal changes to the law opens the door to risky operations and aggressive tax planning. It opens the door to tax risk. A company may be able to pay a tax expert $500 an hour to solve tax problems, but the average person cannot. That is a problem.

The more complex tax laws are, the more they benefit the rich. People who do not have the means to hire a tax expert do not have the means to open a foreign bank account, build a family trust or incorporate in order to evade taxes. That is a problem.

We are talking about tax fairness. Obviously, this is still not the case. Unfortunately, I think we will have to wait until 2015 for a change like this.

However, I need to hammer home three main points and mention that the NDP by no means disagrees with this bill. In spite of everything, we feel that we need to fight tax avoidance and tax evasion, while preserving the integrity of our tax system. In short, our tax system needs to fulfill its main function, which is to enable the Canadian government to have the revenue it needs to cover its expenses.

At close to 1,000 pages, this document is a perfect example of an omnibus bill. If the government had done an act-by-act study, for example, of the GST act, the Income Tax Act and the legislation on certain trusts, it could have reduced the number of pages and members could have had a clearer idea of what is involved.

However, with this 1,000-page document, as I have said, I challenge any Conservative member to rise and say that he or she will vote entirely in favour of this bill because he or she understands it completely, has read it in full and knows it inside and out.

As we can see, a great many volunteers from the Conservative Party are rising and saying enthusiastically that they understand the bill. Actually, that number is a big, fat zero.

The business community is being penalized with similar changes. Our economy is also being penalized. Not only does this let people avoid paying tax, meaning that those who do pay have to pay even more, but those who pay more tax have to pay for an accountant and a tax lawyer on top of that. What joy, what luck. To think that this government claims to be effective.

There are some important parts to this bill. Part 1 covers non-resident trusts. That is very important because it is a significant tax loophole. Parts 2 and 3 deal with the taxation of foreign corporations. Globalization has enabled companies to transfer their profits to tax havens. We need to put an end to that practice. Part 4 is essential. Canada has common law, but Quebec has the civil code. This type of bijuralism requires us to correct the situation.

Clearly, this bill had to be drafted and, to be effective, this exercise should be carried out every year. An NDP government will commit to that.

I will yield the floor to my hon. colleague after questions.

[Andrew Cash, NDP, Davenport, ON]

Mr. Speaker, I thank my hon. colleague for his speech in which he framed some of these issues around justice and fairness in the tax system and then extrapolated beyond that to discuss a more fair and balanced Canada.

Today is World Hunger Day. Scanning some of the media attention, I note that in Ontario, post-secondary schools, universities and colleges have food banks on campus. This, to me, is an indictment of whatever the government has to say about its economic progress.

I wonder if my hon. colleague would comment on that in the context of the debate today.