As a result of dialogue, Finance Minister Flaherty announced on March 25 that the policy was not in fact not to impose new taxes on the financial sector, and the release was just badly worded.
So let's take a look at where you are now if you supply one of the services in this danger zone. The legislation proposed in this bill taxes your service. Notice 250 from the CRA taxes your service. That notice has two caveats on it: one, when it was released in February, which says, “Be warned, the legislation may not be enacted as described”; and a second one after Minister Flaherty's statement, saying that there is now a review conducted by the CRA. What are you supposed to do?
Persons making these supplies and their advisers simply do not know what to do. Clearly this is unacceptable and brings the tax into disrepute. The only honest and forthright way to deal with this is to remove this amendment from the bill. Then, following the process of consultation now under way, a new amendment should be developed to apply from a prospective date.
Time does not allow me to comment on the aspect of investment management services, but I did supply another article to the committee entitled “A New Lower Low”, which does give you more detail on that.
In conclusion, it is fair to say that the consensus among tax advisers and their clients is that the system of tax statute maintenance is broken. The amendments before you are a very good example of that.
Professional advisers are very concerned, corporate taxpayers within Canada are very concerned, and corporate taxpayers outside of Canada are becoming increasingly informed and dismayed. And that, ladies and gentlemen of this committee, should concern us all.
Thank you.