Debates of Oct. 1st, 1998

Canada Customs And Revenue Agency Act

[Sue Barnes, Liberal, London West, ON]

Madam Speaker, I am pleased to respond to the question of the hon. member opposite. It is a fair question.

It is very difficult to join something that has not yet been created. That is the bottom line. But the structure is there. I will give an example by quoting directly from a statement made by the minister of finance for New Brunswick, the hon. Mr. Blanchard: “Where there are efficiencies to be gained, I am open to alternatives. There may be areas that yes, some of our current taxes can be collected in an efficient way by this agency. I have not shut the door on any possibility”. He is one.

The situation is such that if we went across the country and looked at how collections are made and the current functions of Revenue Canada, some provinces were already up in the high 80% of collecting revenues. That is already status quo. We are doing some things, like the child tax benefit in British Columbia. There are many things Revenue Canada is currently doing under different agreements where the provinces do not have a direct input in the board situation that we are offering. This will provide for that input. When people have some input into board management, I am sure over time they will sign on.

[John Reynolds, Reform, West Vancouver—Sunshine Coast, BC]

Madam Speaker, I would like to follow up on my colleague's question in the same area. In her speech the member said that this is not about downsizing. We can all agree with that. There is nothing the past two governments have done in this country over the last 15 years that has been downsizing. Everything they have done has created more jobs for people in the bureaucracy so I am not too concerned about that area.

The member said that it is not harmonizing through the back door, that it is not being forced and that it is a choice. She quoted a minister from one of our smaller provinces who said that where efficiencies were to be gained they would look at it.

This government has been looking at it with the provinces for over 18 months. It does not have the definite agreement of Ontario, Quebec, British Columbia and Alberta, which is the overwhelming majority of this country. The government will not get those agreements even once the act is in place.

As my colleague said in his question, with the election coming up in Quebec, this is another little thing we can throw in the fire to show that this country is not working in the way the people and the provinces want it to work. They do not want a bigger federal government with bigger federal government agencies. The provinces want to run their own business. They do not want these kinds of agencies and they have told the government that.

The government has had a consultative process. The government says that it is listening. When the majority of provinces are saying they do not want this, why is the government proceeding with a bill that is going to change the face of this thing, probably create a lot more jobs in the federal bureaucracy, but not solve any problems for Canadians and the provinces? It will not give any more power to the provinces which is what the provinces want.

This is not consultation. This is big brother telling the rest of us what we should be doing in the provinces.

[Sue Barnes, Liberal, London West, ON]

Madam Speaker, I know the hon. member was sitting in his seat and listening attentively a couple of minutes ago when the minister emphasized that at the finance ministers meeting there was an agreement on the outline of those taxes that could be covered under this legislation.

I would ask to be shown anywhere where they emphatically say “We do not want to have discussion. We want this process to stop. We are not engaged”.

The reality is even though the Government of Quebec has a different system than the rest of Canada in its revenue collection, there is day to day co-operation. There is day to day co-operation, consultation and communication between the systems of tax and revenue collection. That is why we do work together and will continue to work together and seek more co-operation. We will not halt the potential for more co-operation because that would not be in the best interests of Canadians.

[René Canuel, Bloc, Matapédia—Matane, QC]

Madam Speaker, I would have three brief comments to make.

The bill says the headquarters of the agency must be in Ottawa, but, as we know, the financial community is concentrated in Toronto and Montreal, but not necessarily in Ottawa. So what is the advantage?

The agency will be responsible for contracting with the provinces or for implementing agreements between the federal government and the provinces. How many of these tax agreements does the government intend to ask the agency to look after? None, so what is the point?

The Minister of National Revenue will be responsible for the agency. But the minister may delegate his powers, except the power to make regulations. So a non-elected person who is not accountable to this House could be acting on his behalf. The minister would actually be going through this person. I would like the hon. member to comment on this.

[Sue Barnes, Liberal, London West, ON]

Madam Speaker, I want to thank the hon. member for his question. It is a good question.

I believe that the federal and provincial finance ministers have agreed to standards for administering provincial taxes. In other words if there is an agreement on standards, there could be an agreement in the different collections.

With regard to the point which is a political one I understand about the location of a head office per se, to my understanding the minister and the department location will not change. The minister works here in the capital of the country. I have every expectation that will remain. I certainly have not seen or heard anything different. I think the hon. member should be more concerned about the co-operation as opposed to the geographic location of this agency.

[Jason Kenney, Reform, Calgary Southeast, AB]

Madam Speaker, I appreciate the hon. member's comments and know that she as the parliamentary secretary spent a great deal of time on this bill and was very dedicated.

As the parliamentary secretary knows, while the vast majority of Revenue Canada agents are hardworking and treat taxpayers fairly, from time to time we see some really extraordinary abuses of their power, as I have outlined in various interventions today. What is in this bill that would strengthen accountability to preclude the possibility of these types of abuses of power and to treat taxpayers as innocent until they are proven guilty by the tax system?

[Sue Barnes, Liberal, London West, ON]

Mr. Speaker, I am delighted to answer the question.

At Revenue Canada we have what is called the fairness principle and as the hon. member knows there is a taxpayers' bill of rights in place. Those things would continue, but we need to have the culture of fairness understood by Canadians citizens. I believe our workers already understand the principle. They have the training in the principle and they work every day in this principle. It is a system of due process.

I know I do not have the time to go into the details, but I would like to direct the member to one of the speeches I gave specifically on this point which I think was at least 10 or 15 minutes in length. It was in the last session of parliament. It goes through the different processes available to the Canadian taxpayer. If the member approaches me I can get that to him at a later date.

[The Acting Speaker (Ms. Thibeault)]

It is my duty, pursuant to Standing Order 38, to inform the House that the question to be raised tonight at the time of adjournment is as follows: the hon. member for Kootenay—Columbia, APEC summit.

[Derrek Konrad, Reform, Prince Albert, SK]

Madam Speaker, I am glad to speak to Bill C-43, the Canada Customs and Revenue Agency Act, an act that affects all Canadians and is extremely important to the House as taxation is the primary reason for the existence of government.

I would like to change the direction of the debate a little to how the legislation itself will be considered. It is being debated in the lower House and will probably be passed by the Liberal majority. After it goes through second reading, it leaves the House and goes to the other place, a place of unbiased sober second thought which is not in any sense subject to partisan consideration. We do not really believe that. We know the only piece of equipment required over there is the rubber stamp that is issued without any delay when a senator is appointed and not elected to that place.

While it may seem an aside in the discussion of Bill C-43, I would like members of the House to consider that for the last two federal elections there has not been a single Progressive Conservative elected west of the Saskatchewan-Manitoba border. Yet the Prime Minister recently appointed a senator for Alberta who was not from the Reform Party, which has the bulk of support in Alberta, and not from the Liberal Party which has marginal support but from the PC Party which has no support.

Does anyone believe that a place of sober second thought will represent the so-called regions, the regions being the provinces? Several provinces have already indicated they do not support the legislation. How are their concerns to be heard in that place?

What do they have at the present time? They have members of parliament, the bulk of whom are Liberals, who will vote for the legislation, probably denying any proposed amendments set out by any of the opposition parties. They have premiers who have moral suasion but do not have legislative power.

Parliament needs a triple-E Senate that has the power which flows from elections, the people's choice, effected senators able to act independent of the Prime Minister and equal in that each province has its own senators who will represent the province's point of view in debates like this one and others. They will represent their provinces in parliament. They will not represent the governing party in the House of Commons. That is some of the background I wanted to set. As we consider this matter we know the provinces will not be heard in this place.

Turning to consideration of the actual bill, we understand that debate is important in that various perspectives on tax collection policy are at issue. The balance is between increased efficiency in the collection of taxes owed to the government and the potential for abuse by the government of the centralized tax collection power.

Few people would admit to being happy to pay taxes. The dissatisfaction with paying taxes is largely due to perceived government waste and the inefficiencies in the use of the tax dollars collected. In a civilized society no one would acknowledge that a world without taxes is possible since taxes are used to provide services of benefit to all as well as services that benefit those particularly in need.

Dissatisfaction with paying taxes should lead. though, to actions to lower tax levels and to make the government more accountable for the use of tax dollars. Dissatisfaction with paying taxes cannot justify the evasion of taxes properly owed. Dissatisfaction with paying taxes should also not lead to unreasonable delays in paying taxes properly owed.

The position of the official opposition on Bill C-43 is essentially that there should be greater safeguards for citizens with respect to the centralized tax collection power of government. It must acknowledge that concerns about the tax collection practices of government assumed public prominence in the early 1980s.

Some in the House will remember that the Conservatives then in opposition conducted public hearings into the fairness of tax collection policies. The parliamentarian conducting those hearings, Mr. Perrin Beatty, later became the Minister of National Revenue during the Conservatives' term of government.

At that time comparisons were made between tax collection policies in the United States and Canada. I believe it is fair to state that tax collection policies in the United States, notably through the actions of the IRS, have always been regarded as significantly more aggressive than they are in Canada, perhaps due to national differences in perspective as much as to the benevolence of government.

In the United States the government and its citizenry often assume adversarial roles whereas in Canada the consensus appears to be that citizens are less inclined to regard government as the enemy. We must be very cautious with respect to any criticism of initiatives to make tax collection more efficient. After all, it is well known that those least able to avoid paying taxes are the salaried employees throughout Canada. Those most able to avoid paying taxes are self-employed persons and businesses.

Everyone should pay taxes justly owed. The requirement for instalment tax payments on the part of business and the self-employed is to avoid unwelcome tax liabilities and collection difficulties.

There is a further difficulty that the government faces in collecting taxes and that is the elimination of its priority under the Bankruptcy Act.

For better or for worse it was determined that the government did not merit the status of preferred creditor under the Bankruptcy Act, meaning that for many people the easiest answer to tax collection problems is simply to go bankrupt. Given this trend some might argue that it is in the larger public interest that tax debts survive a bankruptcy, not unlike family support obligations.

Why this is important can be seen in the experiences of countries where there is widespread public contempt for tax collection, which is usually tied to great public lack of confidence in government. Our most recent example is that of Russia where the outgoing head of tax collection has predicted this week that his successor will soon fail, given that the government is bankrupt and likely to fall within weeks.

These types of attitudes cannot gain a strong foothold in Canada lest it be to widespread resistance to paying taxes justly owed. The appropriate response in a civilized society is political action to change dimensions of the tax system considered to be objectionable.

I might add again that political action should involve creating a House of Commons and a Senate that are workable. The proposals of my colleague from Calgary Southeast, who is also the official opposition critic for national revenue, appear to be aimed at balancing the need for the efficient collection of taxes justly owed with protections to curb the potential for abuse of the collection power.

This balancing of interests would occur through the legislative enactment of a taxpayers' bill of rights combined with the creation of an office for taxpayer protection. This office for taxpayer protection would involve an independent taxpayer advocate who would report to parliament in a similar fashion to that of the auditor general. We have recently seen why the need for independence in reporting is important in terms of the assertions now made by the recently dismissed chief actuary of Canada.

Some may ask why a taxpayer's bill of rights. We know that the tax department collection policies are generally asserted to be far more considerate of taxpayer concerns than in years previously. There is a similar bill of rights approach communicated by the tax department to taxpayers. However, with the centralized collection power of the new agency the position of the official opposition is that Canadians should never be subjected to the abuses of power and summary treatment that has made the internal revenue service the most feared institution in the United States.

What is a primary constraint on the abuse of a centralized tax collection power? As proposed by my colleague from Calgary Southeast, the office for taxpayer protection represented by a chief advocate would have the power to issue taxpayer protection orders to protect taxpayers from arbitrary treatment or treatment that could lead to undue financial hardship. The office of taxpayer protection would also have an ombudsman-like role with respect to assisting taxpayers in resolving disputes with the Canada customs and revenue agency.

To those who are concerned that this proposal would increase costs without any demonstrated benefit in terms of increased efficiencies in tax collection, I wish to point out that there is no intention to create another government bureaucracy in the office for taxpayer protection. Rather, this office would be funded primarily from an appropriation to general revenues from Revenue Canada's current budget.

In terms of the taxpayer rights that are being referenced in the proposed taxpayer's bill of rights some of the more important dimensions concern circumstances where a taxpayer acted in good faith and without the intention to evade taxes, which are more or less synonymous terms. Another circumstance is where a taxpayer relied upon incorrect advice provided by a Revenue Canada official or an official of the Canada customs and revenue agency. In these circumstances penalties and interest otherwise payable must be waived.

In addition, in cases where penalties and interest may cause severe financial hardship or in cases where reassessments can be proven to cause severe financial hardship, the Canada customs and revenue agency must make alternative payment arrangements. This could be by way of negotiated repayment schedules or in certain cases abatements of amounts owed.

Many will argue that current tax practice incorporates these elements in any event. So what is the problem? The fact that tax collection practices in Canada are not regarded with great disfavour does not minimize the potential for future abuse. By formalizing a good practice as a taxpayer right one is ensuring that a social good will be preserved, notwithstanding changes in governments or government debt positions.

One area involving a particular compassion relates to the effects of the seizure of assets on employees or family members not involved with a particular tax transgression. We know the actions of wrongdoers frequently have negative consequences far beyond their own persons. Families can be destroyed by wrongful acts over which they have little or no control. The sensitivity of the tax department in this area is a matter of discretion on the part of particular officials.

What is proposed under the taxpayer's bill of rights is that the office of taxpayer protection can advocate fairness in seizure practices, making a protection order, for example, in cases where undue hardship is caused to third parties. In a general sense the office of taxpayer protection acts as an intervener and moderator with respect to government seizure practices.

I emphasize that the official opposition's concerns primarily relate to the protection of individual taxpayer rights. No one, absolutely no one, can be seen to be an advocate of letting those who justly owe taxes to the government avoid their obligations to pay such tax.

[Jason Kenney, Reform, Calgary Southeast, AB]

Mr. Speaker, I congratulate the hon. member for Prince Albert on his remarks.

The hon. member spoke about the need for greater accountability. Has he, in his now 14 months as a member of this place, received any case files or complaints from constituents that would lead him to believe there is a need for greater accountability of Revenue Canada? Or, do his constituents believe that everything is just hunky-dory over there and that we can just plough along with the status quo with a mega-tax collection bureaucracy that has really no presumption of innocence for taxpayers and which tends to shoot first and then ask questions?

I just wanted to ask what his experience is as a member and the thoughts of his constituents with respect to the accountability of Revenue Canada and whether it does indeed overreach its very considerable police powers in occasionally harassing law-abiding and well intentioned taxpaying citizens.

[Derrek Konrad, Reform, Prince Albert, SK]

Mr. Speaker, I have had bad experiences. Some have had better experiences and some have not, which illustrates the need for taxpayer protection provision in the new act.

Because these responsibilities are going to be transferred to an arm's length agency, we are certain to see cases increasing where arbitrary decisions are going to happen. Rather than having some on and some off, we should have legislation in place that allows the individual taxpayer to know what his or her rights are and to know that there is an ombudsman like person there to interpret his rights and to make sure they are fairly and evenly applied across the board.

[Grant McNally, Reform, Dewdney—Alouette, BC]

Mr. Speaker, I was in the House earlier today and heard the Minister of National Revenue talk about Canadians gladly and voluntarily complying with the tax forms they have to fill out and the wise management of the taxes collected by the government.

I would like to quickly ask my colleague whether he would agree with the Minister of National Revenue that the government is currently managing the tax dollars taken from Canadians in a wise way? Would this lead us to believe that this super agency with extensive powers being contemplated would in any way be a wiser way to manage Canadian hard earned tax dollars that the government continues to take?

[Derrek Konrad, Reform, Prince Albert, SK]

Mr. Speaker, the Reform Party puts out a frequent publication called “The Waste Report” which talks about how our tax dollars are handled. I bring to the attention of every member of this House that it is available from our revenue critic. Members can supply them to all their constituencies. Liberal members are also welcome to have them.

The collection of tax dollars is one thing which really frustrates people when the get “The Waste Report” or reports from the Canadian Taxpayers' Federation outlining how their tax dollars are frequently abused.

[Roy H. Bailey, Reform, Souris—Moose Mountain, SK]

Mr. Speaker, I listened with interest all day to members talking on this bill. It was a little humourous to hear some members talking about how Canadians cheerfully pay their taxes.

I was thinking about my last trip home when somebody opened a letter from Revenue Canada at the post office. They owed something like an addition $600. I assure members they did not say “goody, I owe the government another $600”.

I want to address this point in particular to the member for Ottawa West who spoke earlier. She said we need better service. I believe she used the word service about eight times while she was speaking.

Service has a connotation of servant. The IRS in the United States had to look at its whole department and say it has to become more humane in dealing with people. If there is one lesson that human resources needs, even if this bill goes through, it is to treat the taxpayers of this country with a great deal more respect than it does at the present time.

It is a fallacy beyond comparison for members of the government to say they handle people and it is cheerfully done.

I have caseload after caseload of widows and elderly people who get letters that are a disgrace. I have yet to see a letter from Revenue Canada that offered an apology to any of my clients dealing with that department.

Would the member for Prince Albert not agree that they need to take a lesson in public relations?

[Derrek Konrad, Reform, Prince Albert, SK]

Mr. Speaker, I thank my hon. colleague. I do not think it is up to the government to be delivering lectures to its people on arrogance when we see the arrogance of the Liberal government at the top. It flows down. It does not come up. It comes down. Leadership starts at the top in that chair over there. We can see it in what I said earlier about the appointment of a Progressive Conservative from a province that does not know what a federal Progressive Conservative looks like. They have forgotten their faces and names.

We see a member in the other house who had nothing to do with the people of Alberta's selection. Talk about arrogance of servanthood. Servanthood is something that is demonstrated at the top. As it is practised by the leadership, it will be practised by those who see it practised.

[Gilles-A. Perron, Bloc, Saint-Eustache—Sainte-Thérèse, QC]

Mr. Speaker, I have a question for my Reform Party colleague.

Does he think that this agency would create another level of bureaucracy that the federal government would naturally be unable to control?

And, as a supplementary, would creating a board of management as described in the bill not create positions for friends of the party? I would like to hear my hon. colleague's comments on this.

[Derrek Konrad, Reform, Prince Albert, SK]

Mr. Speaker, I thank my hon. colleague for the question about democratic control.

Again, this is why we are suggesting that these amendments be made to the bill calling for a taxpayer protection agency, something we can work with that will ensure government has some control even in setting the terms of reference for how that person will work.

As to political friends, we all know the record of this government. One would not be surprised to see that most members of any boards or commissions would probably have Liberal connections.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, I am pleased to lend my support to Bill C-43, an act to establish the Canada customs and revenue agency and to amend and repeal other acts as a consequence.

I asked to speak on this because I want to talk a little about the finance and administration aspects of the proposal to create this agency.

The Canada customs and revenue agency, while acquiring many new powers and responsibilities in areas such as human resources management, will still be a department from a standpoint of financial management. That is a very important aspect. What is happening is that a government department is becoming a government agency. Yet the controls and the many other aspects of it are identical to what was in place as a department.

It will operate under the authority of the Financial Administration Act. It will be governed by the policies and procedures of the Treasury Board and the receiver general with respect to matters of financial management and the treatment of public money. The agency's financial statements will also be prepared in accordance with standard government accounting practices.

The budget of the Canada customs and revenue agency will still have to be approved by part of the government's overall expenditures management system. It will be subject to the normal Treasury Board approval process and will be subsequently approved by parliament. That is very important for Canadians to understand.

Parliament will continue to receive the same level of detail from this agency as it does from Revenue Canada and although the board of management of the agency will be responsible for determining terms and conditions of employment at the agency, the overall human resource cost will still have to remain within Treasury Board approved financial levels.

To repeat, although the human resources component will be centred within the agency, the same scrutiny and criteria will be applied.

The obvious question about the new agency is what about the new sources of revenue such as user fees? I think it is an area of concern to Canadians whenever they hear user fees.

The simple answer is there will be no change in the way user fees will be prescribed and administered. I think Canadians should be assured by the fact that there will be no new user fees as a result of this change, that the fundamental reasons for this change are directed at efficiency, productivity and cost effectiveness.

Overall, user fees that are charged now represent less than 1% of the department's overall budget and the new agency will continue to charge these user fees. It is not the intention of the agency to convert into one that is totally or even considerably reliant on this form of income.

The idea is not to take more money out of the pockets of Canadians but rather to return it to them in the form of lower costs for compliance and through other forms of savings. The agency will be funded in a way that Revenue Canada is funded today, namely by parliamentary appropriation.

One possible new source of income for the agency could be some form of financial arrangement with a province or territory to administer a particular program or to institute a new process or procedure.

This is where the composition and skill of the board of management which is proposed under the act will come into play in terms of negotiating appropriate financial arrangements for new programs and services.

Provinces and territories will obviously invest their money where they can achieve real savings from central administration of a program. Program results will have to be monitored, including, most important to Canadians, levels of service.

The new one time costs of moving the agency status will be included in the overall cost structure of the agency so that Canadians should be assured that there is no significant additional cost in establishing this agency and that it will be done within the overall cost structure being proposed for the agency.

Finally, it is anticipated that these costs will be minimal relative to the overall operating budget of the existing department and will be offset with planned savings of the new organization.

We are dealing with transferring a function from a department of government to an agency of government. We are dealing with the concepts of accessibility, responsiveness, reliability of service, efficiency and effectiveness.

The two main points are that this agency will more effectively co-ordinate federal and provincial revenue collection programs, reduce overlap and duplication and therefore reduce costs and reduce taxpayer costs of complying with the tax laws.

The second theme is that it will modernize its internal management to be more responsive to the needs and requirements of Canadians. This board of management will ensure a client oriented approach and still maintain accountability to parliament.

In brief, I believe this fairly and accurately reflects the intent and the effect of Bill C-43 with regard to this new agency. I hope all hon. members will support conceptually the principles being offered here.

I really would like to make some comments with regard to the previous speaker's statements about the Senate of Canada, certainly an area which has been under much scrutiny for many years. I would like to pose for him some facts I have thought about quite a bit, about what happens if we did move to an elected Senate.

I think it is interesting that although the Senate is an integral part of parliament, the concern about whether it is an elected body and whether it is able to discharge its responsibilities continues to come up. It is a subject of debate. I would pose this as a rhetorical question.

If there was an election, as there was previously in Alberta and which I understand cost the Alberta taxpayers $2 million, there would be a significant cost of conducting the election which would be borne ostensibly by the taxpayers through taxpayers dollars.

As all hon. members know, senators do not have constituency offices across the country. They do have offices here. If they were elected and had a constituency, would we have to provide constituency offices for them as well as the support staff and all the other costs associated with it?

Another question I have is how we would differentiate between the responsibilities of members of parliament and senators if they are elected from within the same geographic area. Since there are 301 members of parliament and just over 100 senators, it means a senator's geographic area or population coverage would be three times that of an MP. Would that mean that the senator would have to handle three times the workload that we handle right now? I am not sure whether it is really possible. Those are some of my thoughts.

I know it is an important aspect but I think at this point with regard to Bill C-43, the important thing is that we do have a parliamentary system and we do have a committee that is going to deal with this. All members will have an opportunity to debate again at report stage and third reading as well as to have input on other aspects through the committee process.

To dwell on the possibility that the Senate is somehow going to act in some particular way, this is our system of parliament. One way to deal with it is to complain about it. The other way is perhaps to do something about it.

I am going to end my comments because I have a feeling there may be a question.

[The Acting Speaker (Mr. McClelland)]

We will go now to questions and comments. Just before we do, I would like to take a moment to point out that we are talking about the Revenue Canada bill. Although there has been a fair amount of latitude in this debate, let us try to keep our comments about the Senate to an absolute minimum. We are talking about this bill. I appreciate the fact that it was not the member for Mississauga South that introduced it.

Without any further adieu we will go now to the member for Calgary Southeast and then to the Bloc.

[Jason Kenney, Reform, Calgary Southeast, AB]

Mr. Speaker, I will take your words of caution with respect to relevance advisedly as you did of course allow the hon. member to pose certain rhetorical questions.

I would simply say that the member suggests that rather than talking about parliamentary reform, one ought to do something about it. This is precisely what the people of Alberta are doing in the process of selecting their next senator. With respect to the cost objection that the member raises, yes democracy does cost something. I know the people of Alberta, 92% of them, are prepared to incur some small cost to be able to hold their representative accountable.

The reason they want their representatives accountable in the Senate and in this place is precisely because we have enormous powers, powers such as the power to tax which is really the power to destroy. Too often it is a power that is abused. Too often the tax collection agents at Revenue Canada treat taxpayers as though they are guilty until proven innocent.

Would the hon. member not support a statute which would more clearly define the rights under due process of taxpayers to be given the presumption of innocence in the collection and assessment process? Would the member not think it would be a worthwhile complement to this bill for such a taxpayer bill of rights to be passed, essentially to enshrine in law the current declaration of taxpayers' rights which is really a statement of good intentions? Does the member not think this would be a worthwhile proposition to support?

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, it is an interesting point. We do have laws in Canada, tax laws and other laws. What we expect of our various departments which are responsible for the administration and enforcement of those laws is that the laws are respected.

Most members know that when a case comes to our office, it is not people who have filed clean returns or who have done something in accordance with the tax provisions, it is usually people who have been assessed for legitimate reasons. I think the most important job we do is to ensure that they are put in the position that they should have been in, had all things been done the way they should be done.

Taxpayers have implicit broad rights by virtue of the fact that the laws are clearly articulated and that they are not there for interpretation at the whim of some Revenue Canada employee. Rather the laws are there and articulated in a way in which all Canadians know what their responsibilities are so that everyone pays their fair share, no more, no less.

[Bernard Bigras, Bloc, Rosemont, QC]

Mr. Speaker, I am surprised to hear government members describing Bill C-43 as a change of very little consequence overall. We are told that it merely involves transferring certain applications to collection and certain functions from a department to an agency, with no real impact on individual members of the public, on workers and public servants.

In late August, I was fortunate to be able to meet with tax collection employees in Shawinigan, Quebec, to talk about a completely different area in which the government has outdone itself with its incompetence, namely pay equity. The public servants described the position in which they found themselves. Some employees came to see me and reminded me of the upcoming Bill C-43 and how they were counting on the Bloc Quebecois to intervene.

I would like to know if the member opposite is aware that 20% of public servants will no longer be covered by the Public Service Employment Act, meaning that, in two years, the agency will have carte blanche to raise or lower salaries, to hire or fire employees.

I would like to know if this is not the real reason that the government created the agency. Does the government prefer strong-arm tactics that will ultimately crush employees' collective demands? That is my question.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, with regard to the pay equity component, that is not a fair reflection of the government position. In fact, the government not only has offered some moneys but also has already paid additional moneys into the pay equity settlement. The issue right now is the final amount and whether or not it is equitable relative to private sector settlements.

With regard to the human resources component of the new agency, I do not share the member's cynicism. This is a joint program between the federal government and the provinces. We are working together, co-operating and collaborating so that we can achieve a number of things, not only efficiency in the whole system but more importantly, to provide more cost effective service, at lower cost to Canadians with regard to Revenue Canada.

[Walt Lastewka, Liberal, Parliamentary Secretary to Minister of Industry]

Mr. Speaker, there are many reasons for moving to a departmental agency, none more important than the demands of our clients, the constituents of our country.

Streamlined and more responsive tax, customs and trade administration services will provide more effectiveness with this new agency. Few Canadians appreciate that in a time of economic expansion the demand for tax, customs and trade services also increases. A million new jobs in Canada since 1993 mean many more tax filers and hopefully more in the future. An 8.6% increase in real exports in 1997 coupled with a 13.4% increase in real imports means a substantial increase in the demand for trade administration and customs and border services.

Resources at Revenue Canada have remained relatively stable during this period of economic expansion and steep increases in business volumes. Much of the new demand has been accommodated by internal operating efficiencies. But as everybody knows, everything has a limit. Hence the new framework for this agency.

The agency model we are proposing for the Canada customs and revenue agency is unique since it combines the strengths of both the public and private sectors while remaining fully accountable to parliament and the Canadian people.

Bill C-43 will permit the agency to offer new and better services to the provinces and territories. For example, at the present time Revenue Canada can only collect provincial taxes that are harmonized with federal taxes. The new agency would be able to collect non-harmonized taxes. This would expand the potential for single window tax collection with considerable savings for businesses and individual Canadians. Greater co-ordination between the federal, provincial and territorial governments will simplify tax administration for Canadians and reduce the overlap and duplication.

To ensure the various needs of Canadians are given full consideration, a board of management of the agency will direct its management activities and oversee its business planning. The board will include 10 directors nominated by the provinces and one director nominated by the territories, all from the private sector.

Another major change that would allow the new agency to adopt a more client oriented approach is increased operational flexibility in the management of internal resources. The new legislation will allow the proposed agency to tailor its human resources and administrative functions to meet the changing needs of the client as well as those of its employees.

For example, under the current status as a department, Treasury Board negotiates collective agreements and determines classifications for personnel. The Public Service Commission is responsible for the staffing process. Under departmental agency status, the Canada customs and revenue agency will assume responsibility for these critical functions.

This change will offer the agency more flexibility in attracting certain in demand skills such as auditors and computer systems experts, training, retraining and keeping these experts. It will significantly reduce hiring times and allow the agency to match resources to work demands whether created by policy or by program changes, seasonal factors or general economic conditions. All of this means improved service to the provinces and territories, to businesses and to individual Canadians. An improved service means savings in time and money, savings in compliance costs for businesses and savings in administrative costs for the government itself.

In creating the Canada customs and revenue agency, we are encouraged by the experience of many other countries such as the United Kingdom, New Zealand and Australia. Organizations that have been given greater managerial autonomy and operational flexibility provide improved service to the public even while retaining accountability to the public and its elected representatives.

We live in a world that is competitive at many levels. We live in a world that is changing. Businesses and individuals need their governments to support their activities rather than to set up roadblocks. The Canada customs and revenue agency is an important step in the process of providing the best tax, customs and trade administration services in the world. This will mean more business and more benefits for all Canadians and looking to the future, to make it even better.

[Gilles-A. Perron, Bloc, Saint-Eustache—Sainte-Thérèse, QC]

This afternoon, we heard all the members opposite including the minister of revenue, who finally joined us. They said they consulted people across Canada and that everyone supported the new agency.

However, this same minister, who is sitting in front of me, called for a report by the Public Policy Forum. This report revealed that Canadian business has serious reservations about the creation of the agency.

In the same report, 68% of businesses felt that a single agency would increase their compliance costs and would have no impact.

I would like the last government spokesperson to comment on the report on this agency.