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.