Mr. Speaker, I am sorry I missed that when I prepared my speech. I will go on with my quote:
While I recognize that your party, the Bloc Quebecois, has specific aspirations, your comments mirrored the concerns of many citizens in Canada.
[Translation]
And further:
Reform of the tax system should be a primary responsibility of a future oriented government. Instead, our present leaders seem to have their feet bonded firmly in the concrete of outdated, cumbersome legislation. Your speech informed taxpayers such as myself that Ernst and Yonge, a management firm most noted for their legitimization of patronage appointments, have been appointed to the tax commission studying the taxation law for large corporations. Using our tax money to pay Ernst and Yonge for these services is similar to appointing a fox to plan a security fence for a flock of chickens. Of course, the ordinary citizens of Canada have had our feathers plucked so often by our elected officials that we should not be surprised when the last vestiges of equal opportunity are removed.
There is a lot of work to do. As I told you, this lady took the time to write, to tell me that she thought this committee was a farce, that there was no real political will to reform the fiscal system. This lady also called for serious consideration of our tax system. There is a lot of work to do in the area of fiscal reform.
Just in the area of tax expenditures, that is to say the area of exemptions, tax credits and so on given to companies, it is estimated that some of them-and there are scores the impact of which is not known-are costing Quebec and Canadian taxpayers, year after year, around $10 billion.
Those are the known measures, because of course there are others that have not been evaluated for want of a review by a serious and transparent committee, one that really wants to make the process work. Ten billion dollars a year. These taxes that go unpaid or these credits that are allowed look like indirect subsidies, since, when the taxes are not collected, it as if the government were investing in these businesses, or were giving subsidies to these businesses.
It is all the taxpayers of Quebec and Canada who pay for those $10 billion a year. When you pay such large amounts you hope to get something for your money, but this is not necessarily the case. When we look at each of the tax expenditures, each of the exemptions, it is not true that we get something for our money.
Take for example the partial inclusion of capital gains. Under that measure only three-quarters of corporate capital gains are taxed. So, any company buying shares and reselling them at a higher price makes a capital gain equal to the difference between the buying price and the selling price. Only three quarters of the profit between the buying price and the selling price is taxed. Why do we not apply a normal tax rate? Why not tax 100 per cent of these capital gains? Much has been made about this everywhere in the country, and even the fiscal experts say that this should not be the case, that we should tax, as in the case of all the taxpayers' revenues, 100 per cent of the capital gains. Any investor or company buying and reselling shares already makes a gain, a profit on this sale. On top of that, we give them even more. We say: "Only three quarters of this amount will be taxed". Why not 100 per cent?
Do you know how much this measure is costing? It is costing $400 million each year to the taxpayers of Quebec and Canada. The same thing applies to the investment tax credit and the scientific research and experimental development tax credit. Essentially, this is a very good measure. It is excellent. We have to promote research and development in Quebec as in Canada. We should have done this ten years ago. We should have had these credits and grants for research and development to increase the competitiveness of companies.
Yet, once again, there are serious deficiencies in the rules which govern this research and development tax credit. They are so permissive, as far as the equipment and the research projects themselves are concerned, that there are definite abuses. I remind the House that, last year, the Bloc Quebecois condemned the use of the research and development tax credit by major Canadian banks and that, had it not been for our condemnation, banks would have continued to claim this tax credit to develop their automated teller machine systems and their internal software. Major Canadian banks have already taken advantage of an amount of $300 million in investment tax credits to develop their equipment and their internal software.
I could go on at great length, but you are indicating to me that I have about three minutes left. I could go on at great length, because there are dozens of exemptions such as these that would deserve to be examined seriously, in a transparent way, that would deserve to be explained to the people and also to be judged by them through the work of an open and transparent parliamentary committee, not a committee such as the one that the finance minister has set up, which is partisan, which is likely to skew the assessment of exemptions and of the tax system in general, and which will not
meet the objectives that we would hope it would meet, that is a real tax reform benefiting the taxpayers of Quebec and Canada generally.
I want to make an appeal, but just before I do, I would add that committee members will not propose to eliminate benefits related to tax conventions signed with countries that are considered as tax havens, since they themselves take advantage of them. So, what do we expect from this committee?
In conclusion, I would like to appeal to the Minister of Finance on behalf of all Quebecers and Canadians. If he really wants to get the government's fiscal house in order, if he really wants fair taxation in Canada, if he really wants not only to make people feel that everything is fine, but also to make some improvements to the tax system, I urge him to set up a real parliamentary committee supported by experts to conduct a serious, extensive, in-depth review that will produce results in the end. Once we have such an assurance, you can be sure that the official opposition, and especially myself, will work on this reform in a serious and constructive manner, with all the co-operation the Minister of Finance could hope for.
In the meantime, allow me to table the following motion:
That this House deplores the fact that the technical committee set up by the Minister of Finance to analyze business taxation is comprised of members who are both judge and judged with regard to business tax reform; and that, this being so, the Minister of Finance should set up a joint committee of experts and parliamentarians to examine business taxation in an impartial manner according to an open and transparent process.
I table this motion on behalf of the official opposition.