Mr. Speaker, I rise today to support Bill C-2 at third reading. I addressed the bill previously and have spoken favourably about it.
According to the Department of National Revenue, the approval of Bill C-2 will "enable it to be more responsive to changing needs, to streamline operations, to reduce the administrative burden on taxpayers, to reduce costs and duplication and to improve the quality of its services and programs". That is a pretty tall order and we hope it can be pulled off.
The Reform Party position on an objective like this is very much supportive. The steps taken by the Liberal government in an attempt to streamline departmental activities is a worthwhile effort. Combining immigration and citizenship, customs, excise and taxation and eliminating altogether the Department of Public Security will help reduce duplication and overlap.
I hope the current treatment of the overseas tax credit is not an example of this new and improved department's modus operandi in the future. The overseas tax credit is predicated on the assumption that people who work outside the country for extended periods ought not to pay full taxes since they do not consume their full share of government services.
This virtually eliminates tax on 80 per cent of total income for workers logging at least six months of the year abroad. I want to go into this to show members an example of what this super efficiency ought not to do.
By regulation, the tax credit cannot be claimed by employees of foreign parent companies but for years Revenue Canada permitted such workers to claim it anyway. They were taxed at the same level as employees of domestic firms working abroad.
Last fall, however, during a routine audit of the Calgary arm of Texas based Nabors Drilling, tax assessors said they would disallow the overseas tax credit not only for 1994, which seems legitimate, but retroactively for 1993, 1992 and 1991. The decision would nail up to 600 workers with additional tax bills of up to $48,000 each. Nabors' lawyers are currently disputing Revenue Canada's attempt to disallow the tax credit for the earlier two years, and so they should.
How can the Minister of National Revenue and the Department of National Revenue change the rules four years, three years after the fact? Once the department has set a precedent-it always deals on precedent-it should stick to it or change the law and give people warning so that they know what to expect.
If U.S. parent companies move their overseas operations centres back to the United States, that will kill office jobs in Canada and deprive Revenue Canada of far more money than allowing the overseas tax credit. It is not efficient. It is not effective. It does not serve the purpose for what this amalgamation is supposed to do. It gives the impression that we are creating a tax collection police force that is going to squeeze every penny, every dollar it can out of honest working Canadian companies and individuals. The Minister of National Revenue refused to be interviewed on this subject, so I plan to bring this up during question period in the very near future.
We need increased financial reviews and reforms for all government departments to ensure that taxpayers' money is being spent efficiently and effectively. The reduction of costs associated with departmental consolidation and the removal of a few individuals at the executive level are just the tip of the iceberg when one considers the amount of government waste that has existed over the years.
The ivory towers of the Conservative years have to come to an end and I hope the government is serious in its attempt to do so. The new super deputy minister of National Revenue Taxation, Customs and Excise through this amalgamation told us in the Standing Committee on Finance that he will save money. But I have a concern. He also told us that the department employs 44,000 people at a cost of $2.2 billion. When asked what the short term savings of this bill are, meaning within the next 12 months, his answer after much fumbling was $36 million.
He then pointed out in another part of the bill that through amalgamation and the changes that had to take place due to the smuggling problem that existed three or four months ago, the department would be spending more money on customs officials, et cetera, and there would be $50 million of new spending. The net saving is not a saving. It is a $16 million increase to the already high $2.2 billion cost of running the department. Let us hope that is not something of which he is proud.
Thirty-six million dollars is a lot of money and a savings of that amount is very much appreciated. It would do well in a lot of our pocketbooks and the pocketbooks of the taxpayers. It is very important that those people should have that money back.
If that is all the deputy minister is promising to save out of $2.2 billion, at the end of the current fiscal year I would hope the Minister of National Revenue would look for a replacement. There has to be a better objective than that. If that is all he can save he is unfit for the job.
Our party would encourage the minister and the government to initiate a line by line, item by item review of all departments to find out where the money is going. If we took the time to find the savings in the estimates, through the estimates of every committee and if the backbenchers of the government were allowed to point out where those savings are and if the cabinet had the courage and the confidence in its backbenchers to listen to their input, it would find a lot of further savings. If all the millions of dollars that the Prime Minister is talking about in savings and cuts are added together, it will come to the billions that the finance minister is talking about in cuts and savings. Therefore the two stories would go together and we could restore some confidence in the economy and in the government itself. It would then be speaking from the same song book whether it is old or new.
We have some concerns about Bill C-2. Although we support it, it is feared that the combination of Revenue Canada Taxation and Customs Canada is designed to place more of an emphasis on revenue collection, controlling the underground economy and smuggling rather than designed to save overhead and this ivory tower bureaucratic structure we talked about earlier.
Customs officials must not be hindered in any way by legislation from performing the important duty of protecting Canadians from illegal drugs, weapons and criminal elements by reducing their ranks. By making administrative cuts at the top, the minister must not reduce the number of customs
personnel in the field which would hinder their ability to function effectively.
Other concerns have also been raised by the customs union, several municipalities and the media-I am sure the media is doing it on behalf of the Canadian public-with the consolidation of the two departments, customs officers' resources to effectively defend the border will be strained. The customs union is under the impression that increased emphasis on these activities will lead to a reduction in resources for other activities such as controlling illegal immigrants, firearms, pornography and stopping child abduction.
The Minister of National Revenue has said-