Finance Committee on March 5th, 2013

[The Chair, Conservative, James Rajotte]

Mr. McCallum, which part of Bill C-48 does this refer to?

[Voices]

Oh, oh!

[John McCallum, Liberal, Markham—Unionville, ON]

It's a slightly different, but related, topic.

[Ted Menzies, Conservative, Macleod, AB]

This will save him having to ask it in question period later on.

Thank you, and it is déjà vu all over again, because here we have a few questions that are perhaps not on topic. But I don't comment on speculation in the media. As stellar as the reporting is in the media, I do not comment on it.

[John McCallum, Liberal, Markham—Unionville, ON]

Then I'll move on to something more pertinent to this bill.

[The Chair, Conservative, James Rajotte]

Thank you.

[John McCallum, Liberal, Markham—Unionville, ON]

My point is, I don't think minority government is an excuse for the delay in the introduction of this bill. Twice in Parliament there was unanimous agreement to proceed with the predecessor bills. Therefore, one cannot say that it's because of a minority government that there was a delay. I believe that all parties are supporting this version of the bill. So if all MPs, whether it's a minority or a majority government, were in favour, then that's not an excuse for such a long delay and all the costs that this delay implies.

My question is, why has the government not treated this as a priority? Why has it taken seven years to get to it?

[Ted Menzies, Conservative, Macleod, AB]

Some of this dates back to the previous Liberal government that didn't quite get their legislation through either. I'm not suggesting that minority parliaments were the only reason, but it does take time to get this on the agenda. There's been a lot of legislation put forward. There's been extensive discussion on a number of budgets. I shouldn't have to remind this committee that we went through a recession in which that became the priority—dealing with how to help people find jobs, how to stabilize the economy, help the economy grow. We were focused on that. We remain focused on that.

Officials reminded us of the comfort letters, and the fact that individuals were assured of what the government's intention was. It's a matter of legislating these. We're moving forward with it now, and we encourage the House to move forward with it as quickly as possible so we can get these implemented in this spring session. I would think that would be quite doable.

[John McCallum, Liberal, Markham—Unionville, ON]

What you're saying is it's not possible to walk and chew gum at the same time. I don't know why a recession stops you from passing this highly technical bill.

But moving on, in terms of the time it takes for tax rulings, the 2009 report of the Auditor General suggested a 60-day target, then it was 101 days, and according to the latest departmental performance report, the latest figure is 106 days. So we're moving in the wrong direction.

I'm wondering if you have any plans to change that direction and get to the 60-day target.

[Ted Menzies, Conservative, Macleod, AB]

Certainly, we'd like to reduce that whenever possible, but there are lots of extenuating circumstances. These individuals sitting with me today are the ones who have been working with the accounting firms, with the individuals who have been sharing their concerns, and we move forward as quickly as we can.

[The Chair, Conservative, James Rajotte]

You have one minute.

[John McCallum, Liberal, Markham—Unionville, ON]

That doesn't really tell us that it's going to go from 106 to 60. It sounds as if it might go from 106 to 120. Maybe they don't have enough resources, I would say.

I have one last question. The suggestion has been made that rather than do such a bill as this every seven years, it should be done every year so that one could have a housecleaning process that would eliminate these long delays.

Would you support the idea of an annual technical bill to keep things tidier than they currently are?

[Ted Menzies, Conservative, Macleod, AB]

Certainly, we want to keep it more regular and more timely. I don't know if putting specific numbers on it would be helpful. There may not be enough for a stand-alone piece of legislation each time. But regular and timely working through this process is a very worthwhile goal.

[John McCallum, Liberal, Markham—Unionville, ON]

Thank you, Mr. Chair.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. McCallum

We will go to Mr. Jean, please.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

Thank you, Mr. Chair, and thank you, Minister and witnesses, for attending today.

It sounds as if the Liberal Party is going to support this technical tax bill. Certainly, it seems to me, based on their comments, that they are encouraging us to move forward with it very aggressively, and I'm glad to hear that.

I'm curious, in particular in relation to the Auditor General's comments. Some of the comments made by that office were in relation to the higher costs to comply, as it was, less efficiency in business transactions, and there were other comments.

Could you give us your synopsis of an indication, from what's taking place today, of how we are complying with what the Auditor General has recommended?

[Ted Menzies, Conservative, Macleod, AB]

Thank you.

Mr. Cook referred to the integration and more consistent processes for recording, tracking, and prioritizing all of the technical issues. As we all know, these are very technical issues.

I refer back to a comment I made to Mr. Hoback. The more complex this gets, the more costly it is to your constituents and mine. I think the Auditor General recognized that this backlog was creating an additional cost for individuals and for the accounting firms as well. Consolidating the Department of Finance's systems and the technical uses that are documented, the cataloguing of these changes—those are all improvements the Auditor General recommended. The officials can help me out here, but my understanding is that those have been put in place to help move the process along. I would suggest we'll be perhaps better prepared as this bill works its way through, and we have new tax changes coming in the future.

I'll pass it over to Mr. Cook.

[Ted Cook]

If I can perhaps make a couple of comments in that respect, in terms of ease of compliance and certainty for taxpayers, a lot of what the bill does will ease compliance for taxpayers with respect to tax changes that have been outstanding and have been administered by the CRA for a number of years.

As I think was mentioned to the committee before, even though there has been draft legislation, a taxpayer may not have been able to use those changes for financial statement purposes. A taxpayer may be choosing whether or not to take a particular position for tax purposes and then be required to take another position for financial statement purposes. It wasn't integrated.

With the tabling of this bill, for accounting purposes this counts as substantially enacted, so taxpayers can now rely on one set of tax rules for financial statement and tax purposes. And going forward, if smaller packages of draft legislation are released, presumably it will be easier for taxpayers to digest and work with those changes—and presumably smaller bills in the future.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

So it takes care of the grey areas of the tax department code.

My understanding is that as a result of this uncertainty in the tax code, often corporations will take a more aggressive position with their tax filings because of the uncertainty in the code itself.

[Ted Cook]

That certainly has been a concern. The longer it takes, the greater a concern it becomes. Taxpayers are encouraged to file based on proposed legislation. CRA generally administers based on proposed legislation. But taxpayers do have the right to file based on the existing law and not rely on the draft legislation, with the result that potentially you could take an aggressive position in the hope that it—

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

It changes.

[Ted Cook]

—won't get through.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

Yes. I only have a couple of minutes, but I notice that there are some groups that have come out very positively in relation to these changes by the government.

Can you give us an idea, Mr. Minister, of some of the more positive groups, such as the CGA, etc.?

[The Chair, Conservative, James Rajotte]

Just a brief response, Minister.

[Ted Menzies, Conservative, Macleod, AB]

Certainly, the Certified General Accountants have been very supportive of this, and the charitable sector as well, and you've heard much from them.

The fact is that in this technical tax bill we're clarifying what has been a long-standing practice. Everybody has been assuming in the charitable sector that you can actually split receipts for charitable donations. That has not been legislated until it has been put in this. The charitable sector is very supportive of that. And the self-employed as well; I think it was mentioned earlier that they can actually deduct—a large segment of our economy right now is the self-employed. They could not actually fully deduct the benefits from their EI contributions. Those are just some of the groups that have been waiting for this to happen.