Madam Speaker, it is a pleasure to address the House this afternoon on the controversial topic of family trusts, and, more particularly, of the auditor general's report.
There is no getting around the fact that it was very ill-considered of the finance committee, which is obviously controlled by the Liberal majority, to have criticized the auditor general and his report, because the auditor general is an institution that must, at all times, be above criticism.
I appreciate the fact that the minister recognizes that the auditor general is doing a good job. Beyond the fact that I know that the minister is the soul of honesty, I must say that the scheming that has come to light in her department and that she says she is trying to rectify, is not going to encourage the public to have great confidence in the federal revenue department.
Beyond the technical considerations the minister laid out earlier, the fact still remains that the average citizen does not necessarily have great confidence in the federal tax system. If you met a businessman anywhere in this great land and you asked him whether he was treated fairly by the tax system, I am not sure you would find him very enthusiastic. On the contrary, he would point out a number of situations that he finds disgraceful, a number of measures that he finds unfair.
And even if we were to give him a technical explanation for certain situations, he would be no more convinced.
When average citizens, the men or women who work five days a week, who have families to raise, file their tax returns at year's end, do they think they are being asked to pay their fair share of taxes, or do they think they are being asked to pay more than the more fortunate members of society?
So you can understand that when the auditor general tells us that a rich family, with the help of what is known as a family trust and by means of tax provisions permitting money to be moved out of the country, has used these tax rules to shelter a sum of two billion dollars from taxes, average citizens do not understand. They do not understand why the act allows something like this to go on while they must pay every last cent of taxes they owe.
You will agree with me that they have reason to worry. The legislative tax measures that are in place and that are administered by Revenue Canada cannot be justified solely from a technical
point of view, but must also demonstrate respect for this country's citizens, whatever their income.
Basically, the problem is that people who have money are able to get the technical expertise they need to find legal ways to save on their income tax. Technically speaking there may be nothing wrong, but the fact remains there is something distinctly immoral about this.
The average person is not in a position to say, with a big smile, that everything is okay because it is legal, because all the rules and regulations have been observed and the experts said it was all right. How can you make it morally acceptable to someone who earns a modest weekly wage and pays provincial and federal income tax of up to 20, 25, 30, 35 or 40 per cent and more, that someone can take two billion dollars, transfer it to the United States and not pay a cent of income tax? That is hard to swallow.
For the benefit of the minister, I will tell you about a letter I received a few days ago. It was from a woman in Saint-Raymond, in the riding of Portneuf, a woman with a family, who last year had a job under a program managed by Human Resources Development, commonly referred to as DEPS and section 25s.
I hope the minister will listen for a few moments, because I think the situation will interest her and help her understand why some people feel the family trust issue is particular shocking.
This woman, who worked under a job readiness program of Human Resources Development for many months, hired a babysitter so her children would be looked after at home. Instead of paying this person under the table, thus making her work illegally, she paid her a reasonable amount so she agreed to give her name and this woman from Saint-Raymond could claim child care expenses as a tax deduction. In other words, she acted like a law abiding citizen so she could claim this deduction.
But there is a problem because the money to pay for her salary comes out of the Unemployment Insurance Fund. So she is not entitled to this deduction. So, imagine, this woman who spent more to avoid hiring someone illegally was denied the deduction to which all other workers who have a job are entitled.
There are numerous technical reasons, and the minister will agree, for which this woman is not entitled to that deduction but fundamentally, morally, and I hope the minister is listening carefully, that woman feels very angry and frustrated and is disappointed by a tax system she finds unfair.
That is what is outrageous. On one hand, the auditor general tells us that a wealthy family was able, through a family trust and with rules on taking money out of the country, to shelter $2 billion. This is three times the cost of the disaster in the Saguenay. That is a lot of money. Three times the cost of the disaster in the Saguenay: $2 billion.
On the other hand, this woman I just talked about is losing the equivalent of $1,000. I realize my time is running out but I believe I have demonstrated that what is outrageous is not that some things are legal but that the law has more consideration for the rich than for the poor.
I hope the minister will be able to address this situation as soon as possible.