I don't know that we're going to start numbering, but it is a rare event to have three Edwards sitting at the end of the table. Edward Short is with me, as well as Ted—or Edward—Cook and Shawn Porter. I will be leaning heavily on them, because as you all know this is very technical. We understand it on the surface. We understand the reasons for doing it, but these individuals will be able to explain how we are actually doing this and the depths of it.
Mr. Chairman, if I can, I first want to thank all of the members of the finance committee for undertaking this important consideration of Bill C-48, the Technical Tax Amendments Act.
I will start with relatively short remarks, as I would like to leave as much time as I can for questions from the members of the committee to me and my departmental officials here today.
Prior to beginning those remarks, I would like to pause for a moment to express my gratitude and thanks, as well as those of Minister Flaherty, to both the chair and all the members of the finance committee for their hard work in recent months. To begin with, I'd like to recognize the committee for completing its annual pre-budget consultation hearings and for tabling such a comprehensive report this last December.
In addition to the consultations conducted by me and the Minister of Finance, this committee's proceedings and report are key components of how we all ensure that Canadians from all across this country have the opportunity to provide their input into the federal budget. As in previous years, the recommendations from the finance committee's report will help guide us in the development of that budget.
On another note, I want to applaud the committee for tabling its report this past February on potential opportunities for our government to help boost charitable giving in Canada. As we review this comprehensive study of ways to support Canada's charitable sector, I congratulate the committee for undertaking this landmark study and for consulting so thoroughly with charities from coast to coast to coast.
Now I'll move on to the matter at hand, this Technical Tax Amendments Act. As the name suggests, this legislation is fundamentally very technical. Nevertheless, it has important implications for taxpayers, both individuals and businesses.
Indeed, today's legislation actually represents over a decade's worth of miscellaneous tax amendments that have long been backlogged and that are important to Canada's taxation system. It's a backlog that has festered and grown, as Parliament has not passed technical tax legislation for over a decade, despite previous attempts in recent parliaments, including those by our government.
The backlog has grown to such an extent that numerous groups have urged Parliament to act. In fact, the Auditor General of Canada, after careful examination, recommended in a recent report that this situation needed to be addressed. I will quote from her report from 2009:
Taxpayers' ability to comply with tax legislation depends on their understanding of how the rules apply to their own circumstances.... Uncertainty about how the law should be applied can also add to the time taken [as well as the] costs incurred by tax audits and tax administration.
Our government wholeheartedly agrees with that statement, and that's why we've been working extensively over the past few years to clear this decades-long backlog. During that time, we've held numerous public consultations on these amendments, allowing Canadians to provide feedback before the formal introduction, to allow any issues or concerns to be dealt with in advance.
With that far-reaching consultation process now complete and the legislation introduced, we move to the next stage in this long journey, and that is the examination and the study by Parliament.
I truly believe that all parliamentarians recognize the need to work together in a cooperative manner to conduct the detailed yet timely study that this legislation deserves.
The Certified General Accountants Association of Canada is a strong and vocal proponent of addressing this technical tax backlog, as members of this committee will recall from their numerous appearances before you. Let me quote from them regarding today's legislation:
By tabling this legislation, the government is taking concrete action to deal with the backlog of unlegislated tax proposals.... The new bill will provide more certainty to Canadian taxpayers and lessen the burden of compliance.... With unlegislated tax measures, taxpayers and professional accountants must maintain their records and forms—sometimes for years.... This uncertainty and unpredictability places an enormous compliance burden on taxpayers, businesses, professionals and their clients.
With that background in mind, let me highlight certain aspects of the legislation, specifically those related to closing tax loopholes, something that may be of interest to the committee given your current study on tax evasion and tax havens.
Although some members on one side of this table might not agree with our government's low tax agenda, I think we would all agree on the need for tax fairness. That being said, everyone should pay their fair share of taxes, and the principle of tax fairness is important for a whole host of reasons, none more so than that it allows taxes to remain low across the board and not merely for a select few who abuse the system at the expense of hardworking, honest Canadians who do play by the rules.
Indeed, since taking office in 2006, our government has introduced over 50 measures to improve the integrity of the tax system by closing tax loopholes worth about $2.4 billion annually. In keeping with that principle and with our record, the technical tax amendments act of 2012 proposes to strengthen Canada's tax system by closing a number of tax loopholes and improving fairness for all Canadian taxpayers.
For instance, in order to help protect the integrity of the income tax system, this legislation contains various measures to address aggressive tax planning. A number of these rules are intended to frustrate those who would use aggressive tax avoidance transactions, including, for example, the rules concerning foreign tax credit generators, refinements to the application of the specified leasing property rules, rules to curtail loss trading on the conversion of income trusts to corporations, and rules intended to strengthen the integrity of the non-resident trust provisions. Today's legislation also contains measures to implement a more rigorous information reporting regime for certain transactions associated with schemes that are intended to avoid taxes.
This tougher reporting regime will help the Canada Revenue Agency get early disclosure and detailed information on transactions that present a high risk of abuse to the income tax system and assist the agency in challenging them if they are in fact found to be abusive.
As I said at the outset, I will make these remarks short, so I will stop there and open the floor in the time remaining for questions of the committee that either myself or these officials who are here to help me will be happy to answer.
In closing, let me sum up in a few short phrases why passage of this lengthy bill is important. It provides certainty for taxpayers, it makes compliance easier, and it improves tax fairness for all Canadians.
We welcome your questions.
Thank you, Mr. Chair.