Mr. Chairman, members of the committee, thank you for the opportunity to take part in the pre-budget consultations leading up to budget 2012.
My name is Denis St-Pierre. I am a certified general accountant, and Chair of the Tax and Fiscal Policy Advisory Group of the Certified General Accountants Association of Canada, CGA-Canada. I am from New Brunswick and my work focuses on estate planning and tax strategies for the business sector.
We are pleased to appear again before the committee. I would like to begin by presenting our one and only recommendation for the next federal budget.
CGA Canada has one recommendation to put forward for the next federal budget: that the Government of Canada take immediate steps to simplify Canada's tax legislation and tax regime.
Although the federal government has been working to bring tax rates down in recent years, Canada's income tax system has continued to grow in volume and complexity. I have copies of the act, if you want to have proof of that, in both French and English.
Businesses and individuals are subjected to hundreds of various taxes from all levels of government, taxes that are unnecessarily complicated, difficult to understand, and even duplicative or contradictory from one jurisdiction to another, often making compliance cumbersome and labour intensive.
At the same time, more targeted tax relief measures have been introduced by the government. That may be of assistance to some, but it complicates Canada's elaborate tax regime even further. I'm talking about the bus passes, about the little credits that have been introduced.
Faced with a tight fiscal situation and the requisite to control public expenditures, the federal government will need to look for efficiencies and revenue-neutral or low-cost initiatives as it manages the economy. Taking concrete steps to address tax measures or policies that unnecessarily add complexity to the tax system is an obvious solution. In its submission to the finance committee, CGA-Canada proposed a number of steps the Government of Canada should take.
I would like to briefly reiterate these proposals: tackle the backlog of unlegislated tax proposals by introducing a technical tax bill this fall; implement a sunset provision for unlegislated tax proposals to bring greater clarity and certainty to tax legislation; avoid introducing any further targeted tax relief measures and examine the effectiveness of existing targeted tax relief measures; keep tax rates low to facilitate compliance and reduce the possibility of aggressive tax planning and more complicated legislative measures to close loopholes.
To collect taxes, strengthen enforcement efforts on existing tax rules instead of adding new rules and regulations; increase parliamentary scrutiny over federal tax expenditures to ensure they meet certain established principles such as simplicity, fairness, and efficiency; and seek advice from subject-matter experts by appointing a panel of independent experts to review Canada's tax system while ensuring that the House of Commons Standing Committee on Finance is involved in the process.
Now is the time to modernize Canada's tax regime. The benefits are crystal clear. A simple tax system increases transparency and reduces uncertainty and the likelihood of aggressive tax planning. It means higher compliance rates, lower compliance costs for taxpayers, less paperwork for business, and lower administrative costs for the government. It means a stronger system with a more secure tax base and predictable revenue. In fact, a simple transparent and fair tax system with a low internationally competitive tax rate encourages investment and job growth, both of which are integral to the well-being and sustained revival of the Canadian economy. Some of Canada's trading partners, like Australia, the United Kingdom, and the United States, are realizing that inefficient tax systems reduce their competitiveness and they're now taking steps to strengthen and streamline their tax regimes.
To help build a strong, competitive 21st century economy, we believe the federal government should set a clear course to streamline and modernize Canada's tax regime.
Mr. Chairman, thank you for your time. I would be pleased to respond to any comments or questions from the committee on CGA Canada's behalf concerning tax simplification. Thank you.