Mr. Chairman and distinguished members of the committee, thank you for giving CGA-Canada the opportunity to take part in the 2010 pre-budget consultations.
We are pleased to appear once more before the committee. The committee is gathering viewpoints on fiscal and program spending priorities in preparation for the upcoming federal budget.
In view of CGA-Canada's deep-rooted concern and interest in small and medium-sized enterprises, we propose one overarching recommendation: that the Government of Canada provide further and meaningful support to SMEs and entrepreneurs. How? By improving the taxation and regulatory environment for Canadian businesses. Given the role SMEs play in Canada's economy, the needs of SMEs should be at the top of the public policy agenda.
I would like to spend the next few minutes outlining strategies to unlock the potential of the SME sector. These strategies emanate from our recent forum on SME issues convened by CGA-Canada and CPA-Australia. These themes also reflect work that was just completed with CPA-Ireland on entrepreneurship.
First, appoint an independent panel of experts to review Canada's tax regime to ensure the system is simple, fair, and efficient. While personal and corporate income tax rates have come down over the years, Canada's tax system has kept on growing. It's unnecessarily complex, cumbersome, labour intensive, costly to administer, full of red tape, and difficult to understand. Being a tax partner in an accounting firm, I believe this is true. We've said it before and we believe now is the time: we must modernize Canada's tax regime.
Second, implement a sunset provision for unlegislated tax proposals. We need an effective process to address the backlog of technical changes to be made to the Income Tax Act. Frequently, too much time elapses between measures being announced and actually being implemented. In the interim, taxpayers, professional accountants, and even the CRA prepare for government policy, which involves maintaining records and forms--sometimes forms that don't even exist for several years--not knowing if the legislation will come forward at all. To correct this, CGA-Canada recommends a sunset provision for unlegislated proposals. In effect, if a tax policy change is announced and not incorporated into legislation within a reasonable amount of time, the measure would lapse. This is in place in Britain and it appears to be working.
Third, introduce a Canadian taxpayer fairness code. In budget 2010, the federal government spoke of the issue of strengthening taxpayer fairness. CGA-Canada supports a Canadian taxpayer fairness code, which includes the guaranteed right of a Canadian business to receive written tax rulings that would clearly define the CRA's expectations of SMEs. The CRA should consider making its policies available to the tax community online, for example. This would strengthen transparency and accountability and also facilitate compliance.
Fourth, take immediate and aggressive action to reduce the overall regulatory burden on SMEs. While there have been initiatives at the federal level, there is more work to do. For instance, the government needs to deliver on its 2010 budget commitment to establish a red tape reduction commission.
Canada's governments need to get much more serious to achieve meaningful results and reduce the overall regulatory burden on SMEs, which continues to cost businesses about $30 billion a year.
Last but not least, all governments must continue working towards revitalizing the Agreement on Internal Trade. Remove the barriers—once and for all—that limit Canada's interprovincial trade and labour mobility, and harm our international reputation as a place to do business.
Mr. Chairman, thank you for your time.
Madame Presseault and I will be pleased to respond to any questions or comments.