Mr. Speaker, I welcome this opportunity today to reaffirm the government's commitment to a fair and simpler sales tax system.
Our goal is to make it fair for consumers and business, especially small business, and to have a tax structure that promotes federal-provincial co-operation and harmonization.
The House of Commons Standing Committee on Finance has already begun to explore alternatives to the current GST. The committee is focusing on the objectives of administrative ease for registrants, enhanced competitiveness for Canadian business and fairness for all taxpayers. It will also be mindful of the transitional impact on taxpayers of any proposed changes.
In addition the committee will have to be sensitive to the impact on revenue, for we need a sales tax system that can be relied upon as a stable source of revenue for the government.
The committee is consulting with Canadians. By June 1 it will report back to the House on ways in which we might achieve these goals.
The committee's report will help to set the agenda for consultations with provincial governments. We will invite the provinces to work with us to achieve a greater sales tax co-ordination. The lack of co-ordination in the tax system, particularly in the area of sales tax, increases the complexity for businesses and creates many extra costs for governments, both federal and provincial.
Through this process of consultation we will do our best to ensure that improvements to the tax system rest on a broad public and intergovernmental consensus. It will take time to build this consensus. It will take time to reform the sales tax system, to do it once and to do it properly.
It is therefore necessary for this government to take steps to make the GST easier to comply with in the interim. Bill C-13 proposes amendments that will accomplish this.
In several areas the GST legislation needs to be brought into line with what is practical on an administrative level both for the government and the GST registrants. The bill contains measures that have been developed and refined in consultation with representatives from the business community and other sectors affected by the changes. These measures will make the GST easier for businesses and other entities to comply with in their day to day operations.
Even though the GST will be replaced during the government's mandate, we will do what we can in the meantime to make the existing rules easier to understand for businesses, taxpayers and their professional advisers. The bill contains provisions that will ease the administrative burden on seasonal and part time businesses.
Bill C-13 is beneficial for charities as well. In fact it will allow some of the smaller charities to be excluded from the GST rules altogether. For charities that do remain in the system there are measures that would make the rules easier to follow.
This bill will also clarify and broaden the scope of the special treatment in the agricultural sector and certain exempt sectors.
I would now like to take a few minutes to tell my hon. friends about some of the specific measures in Bill C-13. I would like to begin with the changes we are proposing for the business community, especially small businesses, for it is in this sector that the need for change is particularly critical.
The bill contains provisions related to a simplified method for registrants to claim input tax credits, that is to recover the GST they pay on their business expenses.
This simplified method will be available to businesses with annual taxable sales of $500,000 or less. It will eliminate the need for them to identify the amount of tax payable on each and every purchase they make. Effectively this special approach will allow them to calculate input tax credits by using the same information they need for income tax purposes.
Other amendments in this bill will ensure that seasonal and part time businesses will no longer have to file GST returns during the off season.
Taken together, these small business measures will make the current sales tax system easier to comply with for many registrants in Canada.
There are other sectors of society that have special needs and practices to which the tax system must adapt. Bill C-13 contains provisions that respond to the concerns of the health, charitable and non-profit sectors.
For example, the legislation will guarantee the tax free status of adapting privately owned vehicles to the needs of the individuals who use wheelchairs. Another measure will broaden the GST exemption for homemaker services that are rendered to people who require special assistance due to age, infirmity or disability.
The bill will help charities by entitling them to rebates or input tax credits on allowances and reimbursements they pay to volunteers who have incurred expenses on the charity's behalf. It will also make it easier for them to calculate input tax credits on their meals and entertainment expenses. Another amendment will make it simpler for charities to determine whether or not they are required to register for GST purposes.
In the agricultural sector Bill C-13 guarantees the tax free treatment of rabbits produced for food.
For suppliers of exempt services particularly in the financial sector, the bill clarifies the extent to which they may claim input tax credits in respect of expenses they incur in support of both their exempt and taxable activities.
The measures contained in Bill C-13 will lessen the administrative burden of the GST. They will resolve some of its technical shortcomings until we, together with our provincial counterparts, have an opportunity to forge a solid consensus for a fundamental reform of the sales tax system.
I therefore urge the hon. members to give their full support to the bill.