Mr. Speaker, I am pleased to rise this morning to address Bill C-43. At the end of my speech, we will introduce an amendment to this legislation.
The Bloc Quebecois and myself are totally opposed to this bill. As you may remember, the government first announced the creation of the Canada Customs and Revenue Agency in the Speech from the Throne delivered in 1996.
At the time, the government had defined a number of objectives for the agency. First, to provide programs and services in a more efficient and cost-effective manner, through greater autonomy and flexibility. Second, to improve services and reduce administration and enforcement costs by working with the provinces to eliminate duplication and overlap. Third, to strengthen the effectiveness of the Canadian federation and to contribute to national unity by making the agency responsible for providing federal, provincial and even municipal services to Canadians.
Before explaining why we are totally opposed to this bill, let us take a look at each of these objectives.
Let me begin with the third one. That objective mysteriously disappeared when the second progress report was tabled, and it is obvious that the agency as proposed will not contribute to the effectiveness of the Canadian federation and to Canadian unity.
The second objective is doomed from the start, since none of the provinces has agreed to enter into any agreement with the federal government so far. The provinces are very unenthusiastic about the establishment of such an agency. Quebec, for one, is formally opposed. While not being totally against the idea of the single level of taxation referred to by my hon. colleague, the minister, Quebec feels that tax administration should be a provincial responsibility.
Ontario's opposition is even stronger than that of Quebec. In fact, the Minister of Revenue of Ontario recently stated he was considering the possibility of taking over personal income tax services. As we know, in Ontario, personal income taxes are currently collected by the federal government. The minister now wants to look after it at the provincial level.
The maritimes are very unenthusiastic because the program to harmonize the sales tax is not producing the expected results, in spite of the fact that this new approach to tax collection has cost Canadian taxpayers over $2 billion.
Also opposed are all western provinces, except Manitoba, whose premier suggested it might be worth looking into. The premier of Manitoba may be looking for a job opportunity after he leaves politics. After all, the position of agency commissioner is an attractive one with an attractive salary. The commissioner would be appointed for a term of five years, which is renewable, so that he could hold office for several years, making very good money.
In the face of this opposition, Revenue Canada's spokesperson, Michel Cléroux, explained that the provinces had not said no. That is not a very good explanation.
Returning to the first objective, which was to provide more efficient programs and services at a lesser cost. First, I do not believe the agency will produce the promised savings. Right from the start, those promoting it accepted that the greatest savings would come from harmonizing taxation. I would remind you, however, that, as we all know, extension of the harmonized sales tax flew like a lead balloon.
Another thing, the proposed agency will not require the provinces to pay for collection and processing of their taxes if the provincial programme is fully harmonized with a federal taxation program. This so-called free service represents an increase in agency costs, not a decrease.
The agency's status will also enable its executives to pay themselves salaries comparable to those of business leaders in the private sector. Will the agency commissioner, who will have responsibility for hundreds of thousands of people, and billions of dollars, demand to earn the same amount as the President of the Royal Bank? Will his annual salary be up in the millions? Those are questions that need to be asked.
Regardless of the position one adopts on this, one cannot avoid acknowledging that this is a new expenditure coming at a time when the morale of public servants who are not in executive positions is suffering seriously after a six-year freeze. It must not be lost sight of that, since April 1, the present government has awarded its executives raises of up to 19%.
The agency has already cost the taxpayer a fair bit. Thousands of departmental employees have been involved in design teams and other internal exercises aimed at turning the dream of senior management into reality. A good part of the focus of Revenue Canada has been turned away from more important and more pressing matters which the minister ought to have been looking at.
I will give you an example. You will recall a CBC program, which reported that, according to Department of National Revenue documents, over 500 of the 1,500 auditor positions in the Toronto region were vacant. This situation would mean a shortfall for the federal treasury in this region of over $500 million in 1997.
If we apply this to the rest of Canada, we estimate the loss would be over $2 billion, due to the lack of Revenue Canada auditors.
There is another point I wish to make: the agency would be less effective as a solution than the status quo. The myth surrounding the agency is that it could provide tax services more cheaply and more effectively. However, the structure proposed for the new agency adds another level of bureaucracy in the form of an appointed board of management, which would have nothing more than a supervisory role. Nevertheless, time, money and staff must be provided for the board and its staff. This would mean another level of bureaucracy.
At the same time, the Canada Customs and Revenue Agency would report to Treasury Board on administrative matters, such as its activity and human resources plans.
Another point I wish to address is that this agency would seriously weaken the Department of National Revenue. By removing the agency from the direct supervision of the minister's office, the bill would seriously weaken the Department of National Revenue's bureaucracy. The minister would receive a corporate business plan from the agency in which he would have a very small hand, or none at all, making it practically a fait accompli. The minister would be told what to do.
Fourth, the agency would upset the balance between tax policy and tax collection. There is, at the present time, a healthy balance between the structure and tax policy, which should be left up to the department and the Minister of Finance, and enforcement of this policy, which is the responsibility of the Minister of Revenue and his department, the Department of National Revenue.
The agency's status would upset this balance. The agency's bureaucrats would inevitably launch into a turf war with their Department of Finance counterparts. This would be a costly and unproductive exercise that would serve the interests of no one but the mandarins.
Fifth, the agency would open the door to bureaucratic patronage and the abuse of power. In practice, the agency would have carte blanche with respect to contracts, and with respect to the management of property, materiel and information, as well as technology. With limited outside oversight, the risk of favouritism and abuse of power by bureaucrats is very, very high.
Sixth, the agency would pose a threat to taxpayers' privacy. My colleague, the hon. member for Sherbrooke, mentioned this yesterday in a question having to do with the report tabled by the auditor general. If the agency were actually to achieve its objectives, personal information would be concentrated in a large organization not overseen directly by Parliament.
Moreover, internal departmental documents indicate that creation of a “big brother” raises reservations among some of those involved with privacy issues. We share those concerns.
What do the experts and the business sector think of this agency? Nothing good. In his report of December 1997, the auditor general voiced concerns about the responsibility of the proposed agency by asking “What assurance will the people of Canada and parliamentarians have that the public interest is protected?”. I share Mr. Desautels' concerns.
As well, a Public Policy Forum, or PPF, study commissioned by Revenue Canada reported that Canadian business had serious reservations about the creation of this agency.
The PPF report referred to the agency's objective of rationalizing and simplifying tax collection. However, 40% of the businesses the foundation surveyed saw no advantage to a new national collection agency and over 68% felt that such an agency would add to their compliance costs, or have no effect whatsoever.
As we have seen, then, the promise of a single tax collection agency did nothing to bring about the harmonization of taxes in all provinces. If this harmonization did take place in the three Atlantic provinces, that is because they were paid $2 billion while Revenue Canada was a department, and not an agency.
A serious question arises: how many billions will the provinces have to be paid to gain their participation in this project?
Continuing with outside commentaries, I quote a Canadian Press article by Bruce Cheadle, which appeared in the Halifax Chronicle-Herald on February 9, 1998, stating that some observers see the agency as a pretext for getting rid of employees or increasing executives' salaries, or both.
Professor Vern Krishna, head of the CGA Tax Research Centre at the University of Ottawa, is quoted as having said: “—what are the advantages? Mainly, a little less direct control by government, and in particular a little more leeway with employee salaries—This is not as fabulous a concept as they would have the public believe”.
An associate with the Montreal firm of Raymond, Chabot, Martin, Paré & Associates—or RCMP, as it is known in Quebec—said that the “creation of the customs and revenue agency would, in every respect, amount to an abdication of political power”. That comment was made in the March 1998 issue of CA Magazine. It was not made three years ago, but in March of this year.
One has to wonder. Why has the government developed this bad and even compulsive habit of creating agencies? This is, as the spokesperson for RCMP pointed out, an abdication of political power. We have a number of examples of that pattern. The new Canadian wheat agency just started its operations and people are already bickering. Nothing works.
And let us not forget Nav Canada, which cost millions of dollars. Remember what happened. Nav Canada said that all its employees would keep their jobs for at least two years. Now, 30% of the employees who were guaranteed a job for two years will actually lose their job after just 18 months. Will these job cuts jeopardize the safety of airline personnel? That is one concern we have regarding Nav Canada. Is this yet another meaningless commitment made by the government?
Another example that really fires me up is ADM, the Agence des aéroports de Montréal. Remember the mess in which the agency found itself in February 1997, when it decided to transfer international flights from Mirabel to Dorval. That decision was made unilaterally by dictators, without any regard for what people thought. A year and a half later, it is still a mess and nothing works.
Bloc Quebecois members put questions to the Minister of Transport regarding ADM, but he told us he could not do anything, that the agency had total control.
Since when do these agencies have the authority to spend taxpayers' money without having to answer to anyone? It is highly improper.
In conclusion, I think that the government finds the present human resources system to be in need of improvement. Rather than make changes to Revenue Canada's present system, it prefers to create a completely new external body.
In the face of this admission, we can also conclude that the government feels that federal employees are being paid at rates well below those of the private sector. Rather than raising the pay scale for all present positions, the government prefers to create a structure within which it will be easy to pay salaries that will attract and keep excellent employees.
The following question then arises: Can two people performing the same duties, or doing the same type of job, one employed by the agency and the other employed by a department, be paid at different rates? That is what I am asking.
In closing, I would like to move an amendment to the motion for seconding reading of the bill.
That the motion be amended by deleting all the words after the word ”That” and substituting the following:
”Bill C-43, An Act to establish the Canada Customs and Revenue Agency and to amend and repeal other Acts as a consequence be not now read a second time but that the Order be discharged, the Bill withdrawn and the subject-matter thereof referred to the Standing Committee on Finance.”