Madam Speaker, one of the most important features of the bill to establish the Canada customs and revenue agency is without a doubt the increased participation of the provinces and territories. The framework for their participation is an important part of the proposal to create the agency.
Revenue Canada is already providing them with a number of services and has taken steps to further increase co-ordination of fiscal administration. By creating appropriate conditions for improved co-ordination, the agency will be able to serve national and provincial interests.
In addition, the new agency will make it possible to reduce duplication and overlap in the administration of federal and provincial revenue. There is only one taxpayer. Why, therefore, is there not just one tax collection agency?
This approach will enable government to reduce its administrative costs and lower enforcement costs.
We feel it is important to mention that the new agency will not be taking over provincial or territorial powers. No action will be taken until the provinces and territories agree that it is cost-effective for the agency to provide a particular service.
We also wish to point out that this fundamental attitude is not new in Canada. Right now, Revenue Canada collects individual income taxes for nine provinces and corporate taxes for seven.
Revenue Canada administers social benefit programs for British Columbia, Alberta, New Brunswick, Saskatchewan, the Northwest Territories and Nova Scotia. It also collects sales taxes and taxes on alcohol and tobacco products for many provinces at border points. Revenue Canada also administers the national child benefit.
There is therefore no lack of precedents for this co-ordination and pooling of services. The proposed agency's structure could lead to even greater co-operation and, at the same time, increased provincial participation in fiscal administration.
For their part, the provinces and territories will be able to submit lists of candidates from the private sector for 11 of the 15 director positions on the board of management, which will be responsible for planning the agency's activities. These directors will not represent the interests of their own province; they will instead help the agency take into account the special characteristics of provinces and regions in its management activities.
The agency will have fairly broad powers to enable it to conclude agreements on the provision of services with each province, such as on the collection of an unharmonized provincial tax.
To date, Revenue Canada has administered only those provincial taxes that were harmonized with federal taxes. Thus the number of programs Revenue Canada could administer was limited. Under Bill C-43, the agency will have the power to administer taxes that are not harmonized, such as a provincial sales tax that is not harmonized. There are, nevertheless, economies of scale to be achieved with a single administration, even with an unharmonized tax.
The agency will conclude an agreement with a province to administer a tax, but all agreements reached will be governed by the guidelines established by the ministers of finance of the federal and provincial governments.
These guidelines will ensure that all taxes collected by the agency for the provinces and territories will first be legally valid, will not interfere with the self-assessment system, will not result in double taxation, will be fair and, finally, will be collected in the context of contractual agreements acceptable to all parties.
This last criterion reflects an important aspect of these agreements. They are service contracts. The agency will provide a service to a province or a territory according to the specific terms of a contract between the two parties.
This means that the province or territory will continue to enjoy full powers to apply the tax and will be accountable to its taxpayers in this regard. The agency will have to consolidate its obligation to report to the provinces with respect to the administration of programs on their behalf, so that they in turn may provide an accounting to their own taxpayers.
Once a year, the agency commissioner will have to report to the provincial and territorial ministers on the programs and services administered on their behalf. In addition, he will offer to meet the ministers annually as well in order to obtain their feedback on the agency's performance with respect to their programs and services.
This reinforcement of the obligation of accountability and of performance guarantees between the agency and the provinces and territories will make it possible to ensure that programs and services remain innovative, client-focused and, above all, cost-effective.
A study by the Public Policy Forum estimates that Revenue Canada could administer current provincial taxes at a saving of between $97 and $162 million over what it costs today. This represents an overall drop of 6% over today's costs, if all provinces participate.
Initially, a good number of the provinces adopted a wait-and-see attitude. They wanted to see the agency fully operational before giving unconditional support. This attitude changed as the information about the agency became clearer and the consultation process advanced. In fact, the attitude of several of the provinces was very positive and they are now prepared to give serious consideration to handing some of their activities over to the agency.
At the present time, we are undertaking joint studies with certain provinces in order to examine specific possibilities. The more provinces and territories participate, the more savings there will be for individuals, businesses and governments. It is, therefore, in the interest of all Canadians to have as much provincial and territorial participation as possible.
The position of New Brunswick Minister of Finance Edmond Blanchard is a typical example of this. In a recent Canadian Press article dated March 20, 1998, he expressed his agreement for the agency to handle more of New Brunswick's taxation operations. According to Mr. Blanchard, “If efficiency can be enhanced, I am prepared to look at the options”.
Bill C-43 will put the Canada customs and revenue agency into concrete form. This agency will be structured and positioned in such a way as to obtain the support of the provinces and territories. All provinces and territories, as well as the federal government, have worked hard to put their finances in order. The Canada customs and revenue agency now represents an opportunity to reduce costly duplication and overlap between the various levels of government still further.
When we speak of provincial participation in this new agency, there is one particular question that crops up once again: How can a true national agency be set up without the participation of Quebec?
The success of the Canada Customs and Revenue Agency is not dependent on the participation of all provinces and territories. In fact, participation in the agency's activities is optional. The purpose of the agency is to provide a platform that would help the provinces. The agency will not appropriate provincial powers.
We have consulted Quebec, and the other provinces, since the beginning of the process. Quebec told us that, while it does not want the new agency to administer its programs, it wants to be kept informed of the agency's progress.
The legislation establishing the agency proposes a framework based on closer co-operation. The provinces, including Quebec, do not have to give to the agency the responsibility of administering a larger number of programs on their behalf. That decision is made by each individual province.
It should be noted that Quebec's participation would increase the benefits of having a single tax agency. However, even if Quebec does not participate, Canadian businesses will benefit from annual savings of $116 million to $193 million. Moreover, annual savings of between $37 million and $62 million will be achieved in terms of the administrative costs for all governments.
Any new program administered by the agency will have been subjected to a cost-benefit analysis. This will apply to Quebec, as well as to other provinces.
I should point out that even if Quebec decides not to have the agency administer one of its programs, it could still be represented on the board of management.
In conclusion, there are many issues on which the parties and regions may disagree. However, if we want all Canadians to achieve substantial savings, regardless of their province or origin, all of us in this House must remember that we represent one person, the taxpayer, and that we must do our utmost to make that person save money. I do hope that all members will support this initiative.