Thank you, Madam Chair.
Members of the committee, thank you for the opportunity to participate in the pre-budget consultations leading up to Budget 2013.
I am Denis St-Pierre, CGA, Chair of CGA-Canada's Tax and Fiscal Policy Advisory Group. I am a private practitioner from New Brunswick and my work focuses on estate planning and tax strategies for small and medium-sized businesses.
When the finance committee invited Canadians to share their priorities for the 2013 federal budget, you posed five questions. We can summarize all of these questions with one answer again this year, which is tax simplification. We submit that many of Canada' s challenges can be addressed through tax reform. Now that tax rates have come down, we must ask ourselves: what kind of system do we want or, better yet, what kind of system does Canada need for the future?
Canada's tax system is unduly complex. Entrepreneurs will tell you that. My clients tell me that. There is a growing consensus that the complexity of Canada's tax system must be addressed if Canada is to remain competitive, able to attract business and investment, and create jobs and economic growth.
For example, the Canadian Chamber of Commerce identifies Canada' s complex tax system as one of the top 10 barriers to competitiveness. Tax simplification is the number one public policy priority for CGA-Canada. The federal government must take action to modernize Canada' s tax regime.
Canada needs a simple, fair, and efficient tax system to help build a strong, competitive 21st century economy. Done properly, as a revenue-neutral initiative coordinated by all levels of government—federal, provincial, and municipal—tax simplification could yield substantial benefits. A few of them are increased compliance rates, because when it is simple, it is easy to comply; lower compliance costs for taxpayers; less paperwork for businesses; lower administrative costs for government; and a more secure tax base with predictable revenue.
How? In last year's pre-budget report, this committee endorsed CGA-Canada's recommendation to establish an expert panel to review, modernize, and simplify the tax system, as was done in other countries. We thank committee members for their support, and we also want to reiterate that the creation of an expert panel still remains CGA-Canada's first recommendation. There is an important place for an expert panel to chart the course towards improving Canada's tax system, and there is an important role for the finance committee in framing the issues and defining the scope of study for the expert panel.
However, let's not wait for an expert panel to be appointed. There are still concrete measures that could be taken by this committee to simplify the tax system. There are two things for attention.
First, the government must introduce a technical tax amendments bill. The last time a technical tax bill was passed by Parliament was over 11 years ago. Literally hundreds of unlegislated tax amendments to the Income Tax Act—which I showed this committee last year by bringing the Income Tax Act, if you recall—have been proposed, but not yet enacted, which brings uncertainty and unpredictability to the process.
Second, we strongly feel that implementing a sunset provision would ensure that tax amendments are legislated, which ultimately will eliminate the ever-growing backlog of unlegislated tax measures once and for all. With this provision, if a tax policy change is announced and not incorporated into legislation within a reasonable amount of time, the measure would lapse. This would bring greater clarity and certainty to tax legislation, reduce the compliance and paperwork burden, and, perhaps most importantly, prevent any future legislative backlogs.
Those are a few simple but important steps that would go some distance in improving and strengthening Canada's tax system.
Canada needs a 21st century tax system that is simple, fair, efficient, and transparent with low, internationally competitive tax rates.
We would be remiss if we failed to mention that CGA-Canada will be convening a full-day national summit on tax simplification on Tuesday, December 4 in Ottawa. The summit will bring together stakeholders, public officials and thought leaders to strategize on the issue of tax simplification, and to establish priorities and next steps. We hope that committee members will attend the summit, and we look forward to sharing the summit outcomes with the committee.
Madam Chair, thank you for your time. I would be pleased to respond to any comments or questions from the committee on CGA-Canada's recommendations concerning tax simplification.
Thank you.