Thank you very much.
Good morning. My name is Gabe Hayos, vice-president of taxation for the Canadian Institute of Chartered Accountants. On behalf of Canada's 82,000 chartered accountants, thank you for the opportunity to appear before this committee. In my role as vice-president of taxation, I oversee the activities of CICA tax committees, including the CBA-CICA joint committee on taxation, which is a joint committee of chartered accountants and tax lawyers, the CICA tax policy committee, and the CICA commodity tax committee.
Prior to joining the CICA in 2011 as its first vice-president of tax, I was a partner with KPMG, with a primary focus on international tax and mergers and acquisitions. I'm also a past governor of the Canadian Tax Foundation.
I'd like to note at the outset that we appreciate the opportunity to work closely with Finance Canada with respect to current tax laws and regulations, as well as on future legislative initiatives. Indeed the CBA-CICA joint committee on taxation has commented over the years on most of the elements of Bill C-48, including the foreign affiliate rules, the non-resident trust rules, and the specified investment flow-through entity rule, just to name a few.
Bill C-48 marks the end of a very long road, one with many twists and turns over the years. The last technical bill on income tax received royal assent in 2001, as you've all heard. Mr. Chairman, I think it is fair to say that we greet the technical tax amendments act of 2012 with a sense of relief. 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.
Also, as you've heard many people refer to the Auditor General, we will as well. As former Auditor General Sheila Fraser observed in her 2009 report on income tax legislation:
For taxpayers, the negative effects of uncertainty may include
—higher costs of obtaining professional advice to comply with tax law;
—less efficiency in doing business transactions; ...
—greater cynicism about the fairness of the tax system; and
—increased willingness to use aggressive tax plans.
Bill C-48 helps improve clarity and certainty, and it mitigates the negative effects of uncertainty identified by the Auditor General.
It is a simple truth, however, that striving for clarity and certainty never ends. The CICA supports the policy of technical tax legislation being tabled for review and adoption by Parliament on a regular basis, so that we do not accumulate unpassed legislation for a number of years and thus exacerbate the problem of tax complexity and uncertainty.
In closing, as we think about the future, the CICA sees an ongoing need to address the issue of tax simplification. We suggest a two-part approach.
First, create an office of tax simplification, similar to the model that was adopted by the U.K. in 2010. This office would focus on simplifying particularly complex and vexing parts of our current system.
Second, establish an expert panel or even a royal commission on tax reform to conduct a full-scale examination of our tax system and recommend how we can ensure that tax laws are certain, predictable, and fair, so that taxpayers can order their affairs intelligently.
We believe these twin initiatives would send a strong signal of the government's commitment to clarity and certainty in our tax system and would be well received.
Thank you for your time. I would be pleased to respond to your questions.