Debates of April 30th, 1996

Canadian Human Rights Act

[Chuck Strahl, Reform, Fraser Valley East, BC]

Mr. Speaker, I already mentioned at two or three places in my speech because I wanted to be very clear, that I do not believe that Canadians, certainly not myself and certainly not our party, will accept discrimination against people who have a job, wherever that job might be. They could be sales clerks or whoever.

We say that the hiring and firing of people should be based on merit. If they can do the job, then that should be the criteria. We have said that consistently. Any statements to the contrary are simply untrue.

When it is a statement of intent for what we would like to see for Canada, on everything from immigration to hiring practices to policies of the federal government Reformers believe that it should be racially neutral, colour blind and gender blind. It should assume that all people are equal before the law.

When they are not treated equally then they should have the opportunity, and they do, to take the matter to a court and say: "I have been discriminated against based on my gender, my colour-", or whatever, and, "They would not rent me an apartment because I am black".

When that happens, I say throw the book at them. They cannot be discriminated against. That is something that we have been consistent about.

One has to use these words carefully because maybe they have been overused. How many of us, I would think probably on both sides of the House, have used the words of Martin Luther King, Jr. who said: "I dream of a day when the sons of former slaves and the sons of former slave owners can sit down together at the table. I dream of a day when my son will be judged, not on the colour of his skin but on the content of his character".

Let us move away from the idea of grouping people, selecting them out and categorizing them, putting them in slots, in pigeon holes and designing programs based on something that cannot be changed. If we were to treat one another equally, we would be far ahead of what we have here before us today. I urge all members to think in terms of the equality of all Canadians, not in terms of dividing up people in groups.

[The Acting Speaker (Mr. Kilger)]

It being 5.30 p.m., the House will now proceed to the consideration of Private Members' Business as listed on today's Order Paper.

Taxpayers Bill Of Rights

[Alex Shepherd, Liberal, Durham, ON]

moved that Bill C-215, an act to appoint a taxation ombudsman and to amend the Income Tax Act to establish certain rights of taxpayers, be read a second time and referred to a committee.

Mr. Speaker, it is a great pleasure today to finally have a private member's bill brought before the House. I regret it is not a votable bill but that is the way of this place.

This bill originally was part of a larger package of the general concept of tax reform. Another private member's bill which is also in the hopper talks about changing the accountability of government legislation and how we cost government programs coming before the House. Another portion of the bill was to deal with the capacity of individuals in this country to sustain tax increases, in other words, to put an upper limit on the amount of tax to be extracted from people.

I do not think I have to tell the House that Canada has one of the highest taxation administrations in the world. I think it is second only to France in the western world. This is causing a great strain on our economy. It is causing a significant reduction in disposable income and the ability of people to purchase and create a robust economy.

My background is in accounting. I am a chartered accountant and practised in the taxation area for 25 years. I advised clients and dealt with their tax matters with Revenue Canada. My father and many of his associates also worked for Revenue Canada and were tax auditors. I have an understanding of how the taxation system works and how the administration of Revenue Canada operates.

The Canadian Taxpayers Federation, which represents taxpayers throughout Canada, has said that it would be well served to have this kind of legislation outlining the basic rights of taxpayers. There is a wide base of support for this kind of legislation.

We were debating in the House today a Canadian human rights amendment which is to prevent discrimination against certain groups in our society. It is surprising that we have not taken the time to consider a significant minority group in this country, the taxpayers. There are over 13 million taxpayers in Canada. Surprisingly they have very few fundamental rights. In its guide, Revenue Canada has about 240 words on the rights that taxpayers have. They are mainly platitudes and there is not a lot about how one gets restitution if the system does not work.

The people at Revenue Canada are basically fair minded. As a general principle I have found them to be concerned about the issues of Canadian dignity and so forth. Having said that, the reality is our tax collection system has been pushed to where it is trying to extract the maximum amount of money it can within its constitutional parameters. From time to time people in the department cross the line. In their desire to extract money from people they infringe on the individual rights of people.

I call it Caesar. As a matter of fact those people watching out there are going to see the hand of Caesar in the House today. We can actually see the hand of Caesar represented in some hon. members who are going to speak against it. I respect the rights of my colleagues but it is surprising that a number of people will defend that Revenue Canada considers some of the concerns of private individuals.

The United States already has a taxpayers bill of rights. Senator Pryor brought forward legislation in 1988. It has now been amended a second time in the United States.

The United Kingdom has a taxpayers ombudsman as does New Zealand and many Scandinavian countries. You can see this is not a novel concept. In fact it has been accepted in most other tax jurisdictions except Canada. Do we need this kind of legislation? Do we need to protect taxpayers? I will give some examples of what I am talking about.

In my riding there is a woman named Cheryl Sassville who is a single mom. She was dinged for not paying tax on her child support payments, a common problem with many single mothers. She came to an arrangement with Revenue Canada that she would pay it off over a prescribed period of time. This lasted about two or three years. She went through one collection officer and everything was great. She went through another collection officer and that was fine. She was paying as agreed.

Then she got a collection officer who said that it was not fine. He was trying to make waves for himself in Revenue Canada. This sometimes happens. Her whole life was in balance and what Revenue Canada did was it seized her bank account and got $94. This woman had a heart attack over it and she lost two weeks of work. It cost her $700 and Revenue Canada never said it was sorry. It did not even give her the $94 back.

Another incident which occurred recently is the change to the Canada-U.S. tax treaty. What has happened there is we have taxed seniors in this country, people who are receiving social security payments on American income. That might seem novel and not a big problem, but there are 81,000 seniors in Canada who have been affected by that legislation. Many of these people are low income seniors.

There is the example of Elen Mowat, a woman who was earning $14,000 in total retirement income. About $10,000 is social security she gets from the United States. She was hit for 25 per cent in tax, $2,500 from somebody who is only making $14,000 a year. What did Revenue Canada tell her to do? It told her to go and lobby Washington. Her own government told her to go and lobby Washington.

A letter just came in today from a Mrs. Leona Jeremy of Middleton, Nova Scotia. Because our government does not take into account the fact that this tax occurred, her guaranteed income supplement is reduced.

These people are living below the poverty line. Do we need somebody to take care of this problem? Can these people afford tax lawyers and accountants to appeal their cases? No they cannot and that is why I am here today.

Another incident concerns medical exemptions. In 1991 Revenue Canada decided it wanted to change how it was going to calculate the medical exemptions. The only problem is it was not widely distributed in the population. People continued claiming under the old system. In 1994 it decided to get tough with these people.

Mr. Roberts in my riding had no idea that the legislation had changed. Revenue Canada turned around and simply reassessed him for $1,000 and told him to pay right now. Mr. Roberts earns less than $12,000 a year. He cannot afford to pay the money. There does not seem to be anyone who wants to listen to his problems.

The Financial Post has done lots of polls on people's attitudes toward the taxation system. Poll after poll has said that people want to be part of the process. They want to have something to say and they want protection from some of these problems.

These are some of the features of my legislation. I talk about legislated standards for audit completion. What do I mean by that? It means if an audit is started on a small or medium size business it has to be finished some day. I have seen it happen time and time again where an audit is started and goes on and on for years, sometimes two years. It ties up the whole business operation. People's lives are put in limbo while they are going through the audit process.

My legislation also says it is up to that taxpayer who has made a mistake that they can avoid the six month period. The reality is it is up to Revenue Canada to execute its mandate within a reasonable time frame and to give proper notice prior to seizures.

I have seen time and time again that small and medium sized businesses have had their bank accounts seized. It could be an error. They are not even given notice. The money is just taken out of their bank accounts and then Revenue Canada says it made a mistake. It can affect their credit ratings. I am suggesting that the legislative powers of Revenue Canada need to be used moderately.

Another aspect of my bill would give people an understanding of the Income Tax Act. We are constantly changing the taxation system somewhat randomly. My legislation says that no change in any one year should affect more than 1 per cent of the taxpayers and no cumulative changes should affect more than 3 per cent and that major tax changes which affect the lifestyle of people will only occur every 10 years.

If this legislation were in place, people would have a greater understanding of the taxation system. They would learn to understand it and possibly even learn to respect it.

The other thing is to prevent arbitrary cancellation of payment agreements. I was just talking about people over 60 being forced from their homes. How could anybody in the House argue against that? If people over 60 years of age for whatever reason, possibly the death of a spouse, trigger the tax liability, Revenue Canada can force them to sell their house. I am suggesting that the house be mortgaged and wait until the demise of the sole spouse, but do not force people from their homes. This is only reasonable in our society.

Finally, I come to the issue of an ombudsman, to which some other speakers will probably object because the hand of Caesar does not want to be questioned.

Revenue Canada has 38,500 employees which is equal to 60 per cent of the entire armed forces of the country, and a budget of over $2 billion. Within that framework 10 or 20 employees could be found to create an office of an ombudsman to protect 13 million people from the random and arbitrary nature which sometimes occurs at Revenue Canada. Some will say it is impossible, that it cannot be done. However, Revenue Canada is hiring all kinds of people to deal with the enforcement of the GST. Money can be found to do that but we cannot find money to protect the people of Canada.

The House and the committee just went through the whole process of looking at the concept of an ombudsman for our financial institutions. Why? We thought that people were being taken advantage of by their financial institutions, by banks. The banks have set up their own ombudsman. As a government we forced them to have a national ombudsman to protect the rights of people. Why is it that we are not prepared to protect the same rights of people within our own government structure yet we will force the banks in the private sector to carry on with that legislative agenda?

I talked earlier about the United Kingdom model. When we talked with the banks about the provision of an ombudsman, I had an opportunity to talk to the ombudsman from the United Kingdom. He told me the system worked very well.

Some of my colleagues would suggest if we have an ombudsman everyone will appeal their case and the whole system will fall apart. There could be a screening device and we could monitor for clearly spurious cases where people were simply trying to delay paying taxes.

The ombudsman system in the United Kingdom is a bit odd because it actually thinks that members of Parliament have some power. Complaints are put through members of Parliament who in turn make decisions as to whether or not there is a valid complaint. I am not suggesting that for us. I am just illustrating how other jurisdictions such as the United Kingdom and New Zealand have dealt with the problem.

What we are asking for is a very simple and efficient dispute settlement mechanism. Some of my colleagues will suggest that Revenue Canada can do it all by itself. I would like to suggest that it has not done it by itself. As a matter of fact, a recent Supreme Court of Canada decision recognized that Revenue Canada had changed its attitude in an audit situation. It was forcing people to pay money which they did not owe. The court actually made a decision to tell these people to sit down and talk calmly to each other. Imagine that. I think that clearly indicates a need. The Supreme Court of Canada is telling us there is a need for some form of ombudsman.

We have developed a litigation system in Canada. The way individuals solve their taxation problems is to get a lawyer. The people I just talked about cannot afford a lawyer. They cannot afford to go to Washington to protest. They cannot afford the $1,000 that Revenue Canada is randomly extracting from them. There is no place for them to go.

Some people would say they should go through the political system, that they should go through the minister. Revenue Canada does not want that kind of intervention. It does not want to be monitored. It wants to have a free rein and not to be held in check.

I feel we have to temper the hand of Caesar. It has happened in all civilizations. It is interesting to note a book on the history of taxation of the world. This book is about people who have dealt with this in earlier days. This is from the theodecian code of laws under Constantine. It states: "If any person shall complain in court that payment has been unduly exacted of him, or that he has sustained any arrogance, and if he should be able to prove this fact, a severe sentence shall be pronounced against such tax collector". We do not have that legislation today. The Romans addressed the problem and understood that people were to be treated with dignity and respect.

I am not suggesting that the system is out of order and that it runs rampant over the rights of people as a general course of action. However, I have witnessed situations where it has. My legislation would address that. It would give people the ability to go to an ombudsman to get restitution, such as Mrs. Sassville. That poor woman never got her $700 back. She is entitled to her $700. I remember that woman coming into my office in December. She said: "I cannot buy groceries for my kids. I cannot buy a Christmas turkey". I had to send her to the food bank. That woman's dignity was broken and she is owed an apology. That apology never came, even though I asked for one.

This legislation would add a certain degree of dignity and respect to the system. People would have more respect for the system in the way it dealt with them. Through that process they would understand and believe that the system was fair and they would be happier about paying their taxes.

This is only one part of a long process which I have in line. It is very hard to introduce major legislation to change the income tax system through private members' bills, but I will continue on that course.

[René Laurin, Bloc, Joliette, QC]

Mr. Speaker, the bill before us today reflects the best intentions in the world to protect taxpayers.

Low income taxpayers, who, we are told, often feel singled out by mean taxation officials, might be looking forward to this bill, Bill C-215, with great hope and confidence.

In my opinion, however, Bill C-215, which was introduced by my colleague, the hon. member for Durham, opens the door to too much abuse. This bill calls for two types of measures, both aimed at reducing Revenue Canada's powers and reinforcing taxpayers' rights against taxation authorities.

Of course, one might think that Revenue Canada already has far too much power, that its powers must be reduced, while vulnerable taxpayers need more protection. In principle, this is true. In practice, however, there are ways to protect taxpayers better without leaving the door open to even greater inequities.

As it stands, this bill could lead to some inequities. It would be dangerous to aggravate tax inequities because those who would benefit the most still pay taxes. The worst off are not low income taxpayers who can barely pay their taxes, but those who enjoy good incomes, who already pay a lot of taxes, who would have more opportunities to avoid paying taxes, to circumvent their obligation to pay taxes.

We in Canada have a voluntary taxation system, in that taxpayers voluntarily agree to report their income at the end of every year and to send Revenue Canada their fair and equitable share of taxes. Taxpayers must calculate how much they owe by gathering the

information required in accordance with the law, report all their income, and send the government their share of taxes on this income. Unfortunately, the bill before us would not allow us to adhere to this great principle of fairness for all taxpayers.

I am referring to clauses 2 to 7. These clauses call for the establishment of a taxation ombudsman. This ombudsman would be appointed by the cabinet for a term of seven years and might be appointed for another seven-year term. If we had to appoint an ombudsman for all the departments now in Ottawa, we would be faced with an army of public servants and perhaps even greater injustice than we are already experiencing.

In my opinion, there are other measures that would cost less. The taxation ombudsman suggested here would soon, in my opinion, be swamped with work and complaints, because who would not be tempted, faced with a ruling from the department of revenue, to turn to an ombudsman? There would be no end of claims, complaints lodged with the ombudsman, who, in turn, would have to hire another army of public servants to look into each of the complaints, many of which involve small amounts.

Current procedures allow taxpayers a means of defence. First, there is the initial notice of appeal. If the reassessment, as it is called, is not satisfactory, the taxpayer may appeal to the Tax Court of Canada, which itself suggests two mechanisms for handling complaints: one of a general nature for cases involving large amounts of money, and an informal mechanism for complaints of $12,000 or less. And it costs taxpayers nothing to defend themselves before this court. They can represent themselves, without having to pay a lawyer to do so.

What is needed, in order to meet the hon. member's objectives, is for the public servants now handling our tax problems to take a more humane approach. Most of them are excellent people, who want to perform their duty, to assume their responsibilities. And at a time when jobs are scarce, in their day to day duties these public servants want to acquit themselves properly of their duties.

So, when the Minister of Revenue tells them: "Dear employees, this year your task is to get as much money as possible back from the taxpayer", you can imagine that they do not want to lose their jobs. They take their jobs seriously and they harass and squeeze the taxpayer to get the last drop possible out of them. Then they report to their superiors: "Today, my esteemed superior, I have bagged five taxpayers. Two of them burst into tears, one felt he was having his throat cut, the other, I have his shirt here, and the last has vanished. So, dear boss, I did my best to bag them today. The state is the winner today, because I got many hundreds of dollars from the pockets of those poor taxpayers". But that is not, I think, the object of the exercise.

Sometimes I see taxpayers in my office. For example, I have a man who owed $800 in taxes. Being a small time taxpayer with a low salary, he reaches an agreement with a taxation employee to pay $50 a month until the taxes owing are all paid. Revenue Canada accepts the agreement.

A few months later, Revenue Canada learns that the indebted taxpayer has filed his income tax and is expecting $200 back. So the Department of Revenue goes into hunting mode and tries to stop the $200 refund in order to claim it for itself, on the pretext that the taxpayer owed money to the tax people, despite the agreement that had already been reached. We tend to feel there is abuse in cases such as this on the part of tax officials, and rightly so, no doubt.

What we need, instead of a bill that opens wide the doors to other abuses, is a minister who will direct his officials to use judgement and to treat each case of unpaid taxes a little more humanely, with a little more thought for the taxpayer. When a taxpayer has made an agreement with the department of revenue, the agreement is usually kept. If the department of revenue wants to make sure that more money is coming in, it should first go after those who have the means to avoid paying taxes, to have a host of experts to advise them on how to make use of tax shelters. These are the people they should go after.

I regret having to speak against this bill whose intention is nevertheless, I repeat, excellent and highly laudable. But to support it reminds me of when we were children playing cat and mouse. I do not know whether you remember the game. You stood in a circle, boys and girls together, and held hands. When the mouse was in the middle, you linked arms and bent over to keep the cat from getting in and jumping on the mouse.

Today, the bill lets the cat and the mouse out at the same time. So when the cat and the mouse are left to themselves, the department of revenue goes after the smallest, and you can be sure it catches its prey. What needs to be done is this: rather than pass legislation that will result in further abuse, we should make relations between taxation officials and the taxpayer more humanitarian so that they are more humane, more civilized and more at the level of the ordinary taxpayer.

[Jim Silye, Reform, Calgary Centre, AB]

Mr. Speaker, I would like to compliment the member for Durham for putting forward his private member's bill. Also I would like to compliment him on the style in which he delivered his ideas. The arguments and passion which he used were very persuasive. It is always nice to hear somebody speaking from the heart and with conviction rather than reading a canned speech from one of his staff members preaching the party line, which happens in all parties. Having worked with the hon. member in the Standing Committee on Finance, I believe he is

a Liberal who does care about the issues and who matches that caring with positive and concrete ideas.

He said some things today which I definitely support and agree with. He talked about the audit process which sometimes goes on forever. When auditors come into an office, they will there for one or two days or one or two weeks. If they are there for very long, they have to start justifying their time by squeezing out every dollar they can. Heaven forbid they audit one place for five days and leave saying that this company has a clean bill of health. Because there is a cost to the department, the auditor has to get a pound of flesh. The member's concept that those audits which go on endlessly and which become almost a persecution should have a beginning and an end is an excellent idea and one I support.

Another excellent idea is the example of proper notice. Revenue Canada should not be able to seize one's funds or garnishee one's accounts without giving notice. It is embarrassing. Most times there is not even the courtesy of a phone call. This is still another excellent suggestion to look into.

I really liked the analogy to banks. The hon. member indicated that the House has passed legislation to force financial institutions to have an ombudsman, yet the government does not want anyone to check into what it does.

The Prime Minister knows that integrity, honesty and respect for politicians are at an all-time low. He knew that when he sat on this side of the House. He promised to appoint an ethics commissioner to monitor any potential wrongdoing.

Now this member has made the suggestion that we should have an ombudsman who would look at and review what happens at Revenue Canada. In that way the taxpayers, the people who pay the bills, who sometimes make mistakes and sometimes do not, would have someone to go to and actually lodge a complaint about their concerns.

I know the member for Durham has had complaints and phone calls from his constituency and so have I from mine. I sit there and am helpless. I cannot do anything. I try to go through the minister to get an answer. A file is created and the best that I can do after a period of time, two or three or four months, is to get a response on why the decision or the actions of the department are consistent with the intentions and the objectives of the department and therefore there is not much one can do.

I really feel that some of the points made by the member are excellent. These examples are worth remembering because I feel that we do need to look at the Department of National Revenue and at taxation. We need to dispel that myth and make it more taxpayer friendly.

I have my way of doing it, which is a flat tax, but another way to make taxation and taxes taxpayer friendly is to reduce the friction between the taxpayer and the tax collector. Right now the only appeal and the only court of appeal that a taxpayer has is to hire a lawyer at a cost which most of the ones who are picked on cannot afford, to file an appeal and perhaps lose. It is a shame.

The examples that the member for Durham pointed out, of those people who need help, the seniors, the individuals with low income, cannot get help. They are the very people who need help.

I said earlier that this is a Liberal member who really cares. He has suggestions to show how he cares rather than the general rank and file of Liberals who say they care and just dish out the money. Even if it is people making $25,000 they get it, they do not care, they feel good, they have thrown out the money. This member wants the money to go to those people who need it and I compliment and applaud him for that effort.

Pushing taxpayer's rights is an excellent concept. Taxpayers need a taxpayers' protection act, anything along those lines are worthwhile pursuing. I like his idea, as well, of a six-month process from beginning to end or Revenue Canada loses its claim.

I have some concerns, however, and I would like to point those out. The member from the Bloc Quebecois has touched on some of them. The work overload for an ombudsman in this bill, as it stands, could be enormous. This person would have to hire a lot more people quickly because there is a backlog of high level appeals and complaints already at Revenue Canada. People have to wait.

Having another department will create work overload. That is a concern. It creates another level of bureaucracy. There is nothing in this bill that outlines how the member perceives the cost, the size of the department, how it would relate and put a number to it. This kind of activity, this recourse would probably cost the taxpayers x but the benefit to the taxpayers would be y .

Looking at clause 4(2), it is perhaps giving the ombudsman a little too much power. He can examine any person under oath. These are concerns I am pointing out. Perhaps after discussion or constructive discussion, these things can be improved upon.

Given the limited time for debate on this issue, the member has put two significant topics on the plate. It is much like the gun control bill. All Canadians are in favour of gun control but when it is lumped with firearms registration, it is an omnibus bill and two separate issues. We have gun control, the FAC. That has been in place along with firearms certificates. To introduce firearms registration was a a whole separate issue. It got into a whole big field.

That was a sizeable debate that took over a year. The justice minister got the legislation passed because of the issue.

Gun control and the criminal misuse of firearms was never an issue. Everybody, including the Reform Party, supported that part. It is an omnibus bill that has two elements. Each element is important. Each element deserves separate debate and separate consideration.

There is not time enough to cover everything when the two are lumped together. It is complicated to debate anything fully in an hour. I am glad the member had 20 minutes to explain the purpose and the objectives of his bill.

As the member from the official opposition said, he commends the purpose and objectives of the bill but he cannot support it because of a number of reasons. I have some concerns with it. I understand the intent of the member. I agree with his intent. I agree with his passion. I agree that there is a need to look at how Revenue Canada operates.

The officials in that department have been given too much power. Some of them have used the power, although not many. Very few do but all it takes is a few to wreck it. One rotten apple spoils the bunch.

It is important to look at this. I am definitely interested in taxpayers' protection acts, taxpayers' rights, taxpayers' issues. The member knows that. I would undertake, in whatever time is left in this Parliament, to work with the member to come up with a joint bill or motion.

In that way we could show this is a non-partisan issue. It is of benefit to all Canadians, all taxpayers. It would not be Liberal versus Reform but something that we could lobby at the committee that evaluates private members' bills. We should get it to be a votable motion and give it three hours.

Whether it is a motion or a bill, we should have something in place that is for the benefit of Canadians along the lines of what the member wants. In some areas, I agree with him wholeheartedly. All that is needed is to work out the details.

[The Acting Speaker (Mr. Kilger)]

Before resuming debate, I want to explain to hon. members my dilemma. There is only one hour to present this debate and there are indications of more members than I could hope to accommodate wanting to speak.

I am going to rely on my instincts and consider another issue of debate and that is people speaking for and speaking against. It is just my instinct. I do not know what you are going to say before you speak. I am going to turn to the Parliamentary Secretary to the Minister of National Revenue and then I am going to come back to the seconder of the motion to close the debate. If there is still time left, I will recognize other members.

[Sue Barnes, Liberal, Parliamentary Secretary to Minister of National Revenue]

Mr. Speaker, I rise to speak on Bill C-215 introduced by the hon. member for Durham.

This bill has many purposes, including the establishment of a taxation ombudsperson to protect taxpayers' rights, the repeal of the general anti-avoidance rules in the Income Tax Act, restrictions on the time allowed for Revenue Canada to complete its audits and limitations on the types of new taxation measures that could be introduced by the Minister of Finance.

I submit that Revenue Canada has a wide array of programs in place right now to protect the rights of Canadians. My remarks will address the issue of the taxation ombudsperson since this is of the greatest concern to me.

In order to assess the need for the new bureaucracy which this bill proposes I would like to review the mechanisms that we have currently in place. Revenue Canada has at least five major safety nets to ensure that its clients' rights are respected, to deal with complaints and to provide appropriate ways of resolution of problems.

These include the general inquiries program; the problem resolution program; the service enhancement program; fairness legislation; and the objection process. In addition to these programs taxpayers can appeal their tax assessments to the tax courts for a final decision on any issue.

The Department of National Revenue's commitments to its clients is articulated already in the declaration of taxpayers' rights which was published in 1985. The declaration gives taxpayers: the right to a fair hearing; courteous treatment; fair handling of any complaints; complete and accurate information about their rights and obligations under the Income Tax Act; an impartial application of the law; a presumption that the taxpayer is honest; service also in both official languages; and a very important thing, privacy and confidentiality.

The declaration of taxpayers' rights confirms that everyone is entitled to arrange their personal affairs or their corporate affairs to pay the least amount of tax that the law allows. Clients who dispute assessments are entitled to withhold payment of the amount in dispute until a court decides the issue in essence.

The problem resolution program started around 1986 and it handles problems which require special attention. The program budget is about $3.5 million annually. It employs 94 full time persons across Canada and it deals with cases which cannot be resolved through normal channels.

Program co-ordinators analyse, trace problems to their source and determine whether each case is isolated or if it is part of a larger trend that needs attention. Co-ordinators under the program are hand picked for personal suitability to be sensitive to clients'

concerns and they can cross functional and hierarchical lines within Revenue Canada to solve problems. They stay with the case until it is solved.

How does the problem resolution operate? Clients are encouraged to contact local client services staff if they have a tax related problem. Last year, this is an amazing figure to me, general inquiries answered over 24 million inquiries from business and individual clients. Two hundred and ninety-nine out of every 300 inquiries were answered to the satisfaction of the caller. For the one out of 300 callers who still needed help they were put in touch with a problem resolution co-ordinator and the co-ordinator acted as the caller's advocate within the department to ensure full, fair, quick, friendly resolution of a problem, mostly without the services of a lawyer.

Problems which have national implications are referred to Ottawa where the service enhancement committee develops and implements action plans to prevent the same or similar problems from happening again. We do not want irritants in the system.

How is this problem resolution promoted? It is found in the blue pages of the phone book. It is found on the reverse side of the notices of assessments. The problem resolution co-ordinators work with individual members of Parliament to resolve constituents' tax problems. Within the department the front line employees are encouraged to identify and solve clients' problems on the spot if possible and to refer problems that they cannot solve to the problem resolution program staff. There is regular analysis of client problems to provide information about problems in the system and the service irritants we know will affect client satisfaction. We think this is important. We are a service bureau as well as a revenue collection agency.

Revenue Canada has another fast track program, the service enhancement program. It is used where staff finds its ability to provide the best service possible is hindered by an internal process within Revenue Canada. This program places responsibility, authority and accountability for service at all levels of the organization and it provides the mechanism by which field personnel, senior management and the deputy minister level are kept informed about situations which could result in a loss of public confidence in the department.

How does it work? The mandate of the service enhancement program has been kept deliberately broad. It focuses on preventing conditions and problems and on improving the process within Revenue Canada, the largest government department.

The program provides frontline staff with a way to cut through red tape, to the person who can come up with a proposed action plan outside the normal administrative procedures. The program is designed to prevent issues from being side tracked or left unresolved. Each issue has an action plan to remedy the situation. Weekly reports are distributed to senior department officials as well as the deputy minister.

I will now discuss fairness legislation. In 1991 legislative amendments known as the fairness legislation were enacted to assist clients of Revenue Canada with problems which arise through no fault of their own, which does happen in our system. It allows for a common sense approach in dealing with those who, because of circumstances totally beyond their own control, are unable to meet the department's guidelines or comply with its rules.

The fairness legislation consists of the many provisions which make the tax system simpler, easier and fairer. Further legislative amendments were made in 1992 and 1993 with respect to customs and GST components of Revenue Canada besides the personal and corporate tax provisions. Further harmonization of fairness legislation is in process now for all business lines and business numbers.

Prior to fairness legislation, Revenue Canada was unable to grant refunds to individuals beyond the three-year normal reassessment period. Now Revenue Canada can make such refunds after verifying the claim.

Prior to the enactment of the fairness legislation, the department had little or no discretion to cancel or waive penalties and interest no matter what the client's circumstances or how the charges arose. The fairness legislation now enables the department to respond more flexibly to a client's circumstances where there is a reasonable cause to cancel or waive penalty and interest.

Generally, the department will consider waiving or cancelling penalty and interest when circumstances beyond a client's control prevent timely payment or other compliance. In addition the department may consider waiving or cancelling interest and penalty in circumstances where there is an inability to pay. The intent of providing such relief in such circumstances is to allow a means of easing the burden on clients who want to comply but who simply cannot do so, through no fault of their own.

We also have the objection process for clients who are not satisfied after discussions with officials in their tax services office. They would file a notice of objection with officials in a different branch of Revenue Canada which deals exclusively with objections and appeals. When this is done, an appeals officer would conduct an impartial review of the case in a friendly and hopefully very courteous manner, then contact the client to discuss the issue.

Except for large corporations, collection of the income taxes in dispute can be deferred until 90 days after the department mails its decision. The appeals process is involved when clients are still not

satisfied with the outcome of their problem. They can also file an appeal to the Tax Court of Canada. This tax court hears appeals under two distinct procedures, an informal and a more formalized one.

Under a new Revenue Canada commission which was announced by the Minister of Finance in this year's budget, taxation officials will have even more administrative and financial flexibility to deal with problems.

It is my view that the creation of another layer of bureaucracy such as an office of the tax ombudsperson with the costs, the complexity and the personnel would be a step backwards, not forward. It would diminish the incentive for the department to resolve problems in a timely, cost effective manner as is the case today.

Accordingly, I cannot support the hon. member's bill but I do understand the honest belief, the hopefulness and the direction he was attempting to put forward in this bill. I thank him for that energy and commitment.

[Dianne Brushett, Liberal, Cumberland—Colchester, NS]

Mr. Speaker, it is a pleasure to stand and support Bill C-215, an act to appoint a taxation ombudsman and to amend the Income Tax Act to establish certain rights of taxpayers. It is very appropriate to speak on this bill tonight as millions of taxpayers are working diligently to get their taxes in by midnight.

Our hon. colleague from Durham has spent a great deal of time and research on this matter in the interest of ordinary citizens, ordinary taxpayers across this country.

In the past two days we have debated victims rights, gay and lesbian rights, but tonight I want to speak for all people on the issue of taxpayer rights.

I get dozens of letters a week from my constituents who feel they have no rights when it comes to Revenue Canada. These constituents tell me they are helpless to protect their income and assets from Revenue Canada. They tell me they often feel intimidated by the bureaucracy and the collection tactics of Revenue Canada.

Between individual personal tax filers, corporations, importers and exporters, small and medium size business, Revenue Canada serves close to 140 million customers. In 1996-97 Revenue Canada will process 23.1 million income tax returns, 36.6 million child tax benefit payments and 32.4 million GST credit payments. Revenue Canada audited over 70,000 individuals and corporations during 1994-95. With such a tremendous mandate this department needs to be much more accountable to the Canadian taxpayers. Bill C-215 will ensure that accountability.

This bill will enact the taxpayers bill of rights. We presently have a declaration of taxpayers rights but it is one page and eight paragraphs of absolute vagueness. The taxpayers bill of rights in Bill C-215 is in part based on the American example of taxpayers rights from the United States senate in 1988.

The taxpayers bill of rights put forward by the member for Durham will allow Revenue Canada to enter into instalment agreements and restrict the department's right to cancel such agreements.

The bill will provide taxpayers the right of consistency. Major changes to a taxation system may only occur once in every 10 years. Any single change to the taxation system would not affect more than 1 per cent of taxpayers. Cumulative changes for a whole year would not affect more than 3 per cent of total taxpayers. Taxpayers will also have the right to be protected from retroactive legislation.

The taxpayers bill of rights will establish an ombudsman who will act as an intermediary between taxpayers and Revenue Canada in settling accounts and enforcement of the bill. As we heard earlier, perhaps this is a step that cannot be integrated into the bill of rights because of an additional layer of bureaucracy or extra costs.

However, I am the ombudsman for taxpayers in Cumberland-Colchester. I see so many people in my office regarding Revenue Canada issues. I intervene on their behalf, I write letters, I make telephone calls and I go to appeal courts. I am the ombudsman. Is that the role of a member of Parliament? Perhaps it is, but somehow I think there is a better way when we have a department that is as large as Revenue Canada. There should be more accountability in the tax system.

Where it is clear that enforcement of standing orders would result in bankruptcy, the ombudsman would be able to negotiate a settlement based on an assessment of the remaining assets to be paid on an instalment basis. The ombudsman again would be required to prepare an annual report and submit it to both the Senate and the House of Commons.

Many countries have such an ombudsman. The United Kingdom has had one since 1974. The system has been a great success in the U.K. Between 1974 and March 1987 the English commission received more than 30,000 properly referred complaints and the Welsh commission received over 2,500.

I believe this bill is good for the taxpayers of Canada or I would not be standing here speaking on it tonight. Taxpayers have the right to be treated with respect and to know their rights.

It is my hope that all hon. members will give this bill serious consideration and that their full support will come forward not tonight but at another time when we have the opportunity, as the hon. member for Calgary Centre has proposed, for parties through-

out the House to bring together collectively a private member's bill that can be votable and enacted as legislation.

It is imperative for the citizens of Canada. With the tax rate which we have in this country, the bureaucracy administering that tax rate should be held more accountable. We in this House must take swift action to ensure that we give Canadians a bill of rights which provides a sense of respect, fairness, appeal and the many mechanisms which the United States Senate has brought forward in its bill. I believe it could be somewhat reflected and copied in part.

[Roy Cullen, Liberal, Etobicoke North, ON]

Mr. Speaker, I will limit my remarks given the time available. I am very pleased to speak today on the hon. member's bill and his proposal to improve taxpayers rights. As much as I would like to support the bill, I find I am unable to because I do not believe it makes good public policy.

Who can argue with the broad principles that are articulated in the bill as they relate to taxpayers rights in their dealings with Revenue Canada? Like the hon. member who brought the bill forward, I too am a chartered accountant. I believe I understand some of the challenges and issues associated with tax law and tax administration. I suppose my experience working as a chartered accountant in Bermuda which is a known tax haven has perhaps influenced my view of the bill.

All taxpayers clearly have the right to be treated fairly and courteously when they interact with Revenue Canada, whether they are requesting information, arranging an audit, an interview or whatever. However, how many Canadians would support the creation of a new federal bureaucracy at a time of fiscal restraint, in particular when remedies are already available, as the hon. member for London West has described, through Canada's declaration of taxpayer rights and other mechanisms?

The department was one of the first organizations to inform taxpayers of their rights by preparing a declaration of taxpayer rights, which was published in 1985.

I will not go into the features of the declaration of taxpayer rights. However, it includes things such as the right to be presumed honest until proven otherwise, the right to appeal a decision, the right to privacy and confidentiality, and the right to an impartial review. There are softer provisions as well in the declaration of taxpayer rights, such as the right to courteous and considerate treatment, the right to be serviced in the official language of choice, the right to impartial application of the law and the right to complete and accurate information about the Income Tax Act.

These rights helped establish a balance between legality and practice. This is an important part of customer services as practiced by a number of private and public institutions.

Canada should be proud of the declaration of taxpayer rights. I am advised that since introducing the declaration in 1985 a number of other tax administrations have contacted Revenue Canada as they have developed their own declarations.

The creation of a taxation ombudsman would transfer the responsibility of taxpayer rights from the administration and its employees to an outside agent. What message would this send to all law-abiding taxpaying citizens? To those who are paying their fair share of taxes, would it be seen as further protection for those who evade tax and by doing so, place an unfair burden on those in our society who are paying their way?

While I recognize and respect the concerns of the hon. member for Durham, I believe that with Revenue Canada's declaration of taxpayer rights and the other quality service initiatives of the department we have achieved the appropriate balance between the rights of taxpayers and the rights of taxation administrators in Canada. For these reasons I will vote against Bill C-215.

[The Acting Speaker (Mr. Kilger)]

Earlier before we began the debate on this private member's bill, the mover of the motion, the hon. member for Durham, asked under right of reply if he could have two minutes. I want the House to understand that no one will speak after him. This will close the debate and he will not take any longer than two minutes under right of reply.

[Alex Shepherd, Liberal, Durham, ON]

Mr. Speaker, we have heard a wide range of thought processes here. I thank those people who entered into the debate. It is very useful. We should be doing more of that in this country.

This is something that affects almost everyone in the nation. We have over 13 million taxpayers. In some ways it is something that unites us, although it seems like a strange thing to say. A lot of people tonight are struggling with the concept of filing their tax returns. It is something that unites us in the sense that tax filing is consistent across the country.

We talked about all the reasons why we cannot have a taxpayers ombudsman. There are all kinds of reasons. I can show the House this very interesting book. It basically studies taxation and tax administration back through the time of Egypt and up to modern times. Every administration said the same thing, we cannot do this, we cannot tame the hand of Caesar.

The bottom line is that we can do that. It is very important that we do it if we want to command respect for Revenue Canada and for our tax collection agencies. This is a process that people feel comfortable with.

Today that process does not exist. With the great pronouncements of all the things we could have done to make the system better, why have we not done them? As I suggested, there is a tax case where the Supreme Court of Canada had to actually tell two parties to sit down and talk to each other. There is something wrong with the system.

Most people in Revenue Canada carry out their job with diligence and with respect. I have met many of these people throughout my career. I found them generally hard working, concerned about their job and concerned about presenting the department's attitudes fairly and honestly in the community. There are those odd people in the system. We are all human beings and we make mistakes. When one makes a mistake at that level people draw back and say it did not happen.

For those people who are filing their tax returns tonight, we need a process where they feel more comfortable with the system.

[The Acting Speaker (Mr. Kilger)]

I want to join in thanking all the members who participated. I would add to that also the member for Hastings-Frontenac-Lennox and Addington, who rose on several occasions trying to catch my eye and he did, but I thank him for his patience.

The time provided for the consideration of Private Members' Business has now expired and the order is dropped from the Order Paper.

It being 6.33 p.m., the House stands adjourned until tomorrow at 2 p.m., pursuant to Standing Order 24.

(The House adjourned at 6.33 p.m.)