Mr. Speaker, the Auditor General reports that corporations owe $2.9 billion in unpaid taxes to Revenue Canada for 1993.
He also states: "Clearly, reducing deficits through more effective tax collection is preferable to raising taxes. Taxes receivable are an important national asset and leaving them uncollected has a serious impact on the deficit".
The burden on the deficit of unpaid taxes and tax expenditures is overly represented by corporations and large businesses. I raise concern to the fact that $2.9 billion in unpaid tax is owing to this government. The federal government has a responsibility to ensure that money is paid back to the treasury it is due. Corporations owe 32 per cent of the unpaid taxes. Another 12 per cent of unpaid taxes are from employers, that is business, who have not paid their payroll taxes. According to the Auditor General, the vast majority of accounts in arrears are less than one year old.
The federal government must work toward recovering these delinquent accounts. This is only the first step. The government has a responsibility to close the present tax breaks and the tax
loopholes provided to corporations and higher income Canadians. Why is it that a Canadian with an income of $286,000 can reduce their tax rate to less than 10 per cent, while middle and lower income Canadians experience tax rates of close to one-third of their income? The tax system gives corporations and the wealthy big tax breaks and some are still not paying what they owe. This must be corrected.
The government must stand up to tax cheats and close tax loopholes. It must also undertake tax reform during their budget deliberations, not just cut social programs.
Our economy has just been through some difficult times but not all corporations were in financial trouble. Many have turned healthy profits but do not pay their fair share of taxes.
In his reply the Minister of National Revenue stated that companies and individuals are "having a tough time after the recession". This sympathy was not extended to unemployed Canadians who saw their unemployment insurance benefits slashed. Unemployed Canadians were also victims of the recession, yet they did not seem to have the government's sympathy.
The government needs to place a tax on profits so that profitable corporations pay their fair share of taxes at a time when they are able to pay. The Auditor General identifies $37 billion in tax expenditures, of which only $15 billion is RRSP related. The majority of Canadians with RRSPs are average Canadians who are preparing for their retirements and are, in effect, deferring income that will be taxable in the future. The rest of the tax expenditures are corporate write-offs.
Why is the government not looking at ways to increase its revenue by eliminating some of the corporate tax expenditures and putting a cap on RRSP contributions from higher incomes?
The tax system is in desperate need of reform. Corporations are not paying their fair share of taxes. The Liberal government has made it clear that cutting the deficit is a priority, yet it has not taken a serious look at increasing revenue from profitable corporations.
The government has instead chosen to cut back on social programs. It is raising university students' tuitions, cutting money to seniors and cutting UI payments before it even considers making profitable corporations and the wealthy pay their fair share of taxes.
The government also continues to give away money to profitable corporations. As a former businessman I respect the company wanting to make a profit, but why are corporations such as Royal Oak Mines, Rolls-Royce Canada and Bombardier also receiving millions of dollars in grants? The Chamber of Commerce receives $2.1 million.
I am asking the government to get serious with the deficit by collecting the money owed by corporations and to reform the tax system to make it fair.