Mr. Speaker, I am delighted to have the opportunity to make a few comments on Motion No. 382 as sponsored by the member for Mississauga
South. I congratulate my hon. colleague on this initiative first and foremost.
The issue that is the focus of this motion is of major importance to all Canadians right across the country. For many individuals and businesses the underground economy has become a convenient way to avoid paying taxes, not paying their fair share.
People who deal in the underground economy may feel their financial situation justifies their actions. It may be because it has been several years since their last pay raise. It may be because they feel the tax system is much too complex or unfair. It also may be basic greed. They see it as cheating the tax department, a victimless crime.
When these people take their financial transactions underground they are failing to make their contributions in support of Canada's social and economic programs. These people do not pay for the services they use. Instead, other Canadians are forced to pay more.
Each time someone participates in the underground economy, money to help pay for programs such as health care and education is lost. It is revenue that may never be recovered.
Whatever the reason, underground economic activity makes victims of all of us. The cost shows up in reduced essential services, higher taxes than would otherwise be the case, unfair competition and a reduced standard of living for the honest taxpayers. This is simply unfair and shortsighted.
The motion before the House suggests the government educate the public and encourage their participation in addressing the problem. I agree Canadians need to know the facts about the seriousness of the underground economy and what can be done to reduce it. I also agree governments cannot solve the problem alone. We must all do our part to fulfil these responsibilities.
The government has recognized that solutions to this problem and others now facing Canadians cannot be found in isolation. We must understand the problem and its consequences. It is for this very reason that in November of 1993 the Minister of National Revenue made education a fundamental element of his action plan to address the underground economy.
Officials of Revenue Canada have been actively consulting with individuals and associations right across Canada. These groups are taking the message of the risk of dealing in the underground economy back to their membership. Every citizen and every business has a role to play in eliminating the underground economy.
Individuals can start by refusing to deal with business and trades people who ask for cash payments. Businesses can do their part by turning down demands to work off the books.
To ensure everyone is aware the government is serious about prosecuting those who deliberately defraud the tax system, the Minister of National Revenue is publicizing convictions for tax evasion. The increased publicity has been a deterrent and has had an effect.
The number of voluntary disclosures received by the department where people come forward to voluntarily correct their tax affairs has doubled in the past year. In addition, the number of referrals received from people each year providing the department with leads on potential tax fraud has risen by some 19,000.
As members of the House are aware, Canada's tax system is based on taxpayers voluntarily filing and paying their taxes. A voluntary self-assessing system is the most effective way for a government to collect taxes owing.
A cornerstone of a sound tax system is the reality and perception that everyone pays his or her fair share. It does not ask for any more or any less, just everyone's fair share. The underground economy undermines the fairness of the tax system.
Regardless of its size there is no disputing the underground economy exists and that it exacts a toll on Canadian society from unfair competition for honest business to taxes higher than they would otherwise be for honest taxpayers, to business closures, to unemployment and to lost revenues which government uses to support Canada's social and economic agenda. It is a problem we cannot afford to ignore.
I am confident, however, that we are making progress in dealing with the underground economy and other forms of tax evasion. I applaud the hon. member for Mississauga South for his efforts to stimulate discussion on this issue. I certainly solicit the support of all members of the House to support the motion.