Thank you, Mr. Chair, and good afternoon committee members. Thank you for the opportunity to discuss Bill C-30.
As introduced, I'm Kim Moody. I'm a CPA and the CEO of Moodys Tax Law and Moodys Private Client in Calgary, Alberta, although I'm in snowy Edmonton today. I have a long history of serving the Canadian tax profession in a variety of leadership positions, including chair of the Canadian Tax Foundation, co-chair of the joint committee on taxation of the Canadian Bar Association and CPA Canada, and chair of the Society of Trust and Estate Practitioners, to name a few.
Given the limited time that we have this afternoon, I'm going to keep my opening remarks rather short and briefly comment on three matters: the size of the projected deficit; the length of the bill, which is 366 pages; and the amount of time it took to produce the federal budget.
Let's start with the projected size of the deficit.
While I'm not an economist, I feel compelled to comment on the size of the projected deficit as projected for the upcoming year. It will be an astounding $155 billion, after a record deficit of roughly $354 billion in the previous year. While proponents of modern monetary theory, MMT, may not have any concerns about such deficits, I think the more rational and reasonable person has issues with the size of the deficits and what the future implications of running such high deficits might be for our country. Count me and 74% of Canadians in the camp of those who are concerned, according to a recent poll conducted by Nanos for The Globe and Mail.
While some argue that current low interest rates make such deficits and lending possible, should inflation and interest rates increase, Canada can expect significant negative implications. In my view, control over the deficit, meaning reducing the size of the deficit, should be an immediate priority so as to reduce risk that future borrowing costs do not compromise essential government services.
Next, let me quickly comment on the length and content of the income tax measures contained in Bill C-30.
Some of the measures have been previously announced, such as the stock option measures, and are consolidated in this large bill. Some of the measures are welcome, such as the accelerated capital cost allowance deduction for certain depreciable capital property. Some of the measures are unwelcome, such as the amendments to the absolutely horrible Canadian journalism tax credit regime. Other measures are technical amendments, such as the amendments to enable the conversion of health and welfare trusts to the employee health and life trust regime. All told, there are 30 income tax measures in the bill, which is not an insignificant number of amendments, and they're all packed into a 366-page document.
With such a massive bill, I query whether any parliamentarian can realistically understand every proposed amendment and intelligently comment, and thus vote, on its contents. In my view, to intelligently understand a bill, such measures should be broken up into bite-sized pieces in order to accommodate proper understanding and passing of laws. Having said that, I do appreciate that the business of government needs to proceed for the benefit of Canadians.
This leads to my third and final comment. March 19, 2019, was the last time, prior to April 19, 2021, that the federal government released a budget. That's a record, as we all know, and our government used COVID as the excuse for not releasing a plan. As I've stated at this committee before, former parliamentary budget officer Kevin Page said in October 2020, budgets “are fiscal plans. And to say that, ‘because there’s too much uncertainty, we’re going to manage without a plan’, is kind of bizarre.... The reason we have plans is because there is uncertainty.”
I absolutely agree. In this day and age of uncertainty, prudent fiscal budgets and plans are needed. After reading the 700-plus pages in the 2021 budget, it's difficult to see a prudent plan other than massive spending. Canadians deserve more than just a massive spending budget. They expect timely and well-thought-out budgets accompanied by intelligent plans that encompass possible shock factors such as high interest rates and inflation increases.
Never again should Canadians need to wait two-plus years for a budget. In fact, it would be my recommendation to make the timely delivery of a budget a law. Fixed budget days should also be considered.
Finally, as many presenters have told you in the past, this country needs comprehensive tax review and reform. Your committee has recommended this very thing and so has the Senate finance committee. Perhaps there is something to all the smart people who have appeared before this committee. Rather than wading through a 366-page bill with 30 income tax amendments, Canadians expect and demand real and comprehensive change.
Forget the cries for patchwork quilt fixes like those contained in this bill. In my opinion, it is critical for our country's fiscal future to engage in comprehensive tax review and reform. The time could not be better.