Mr. Speaker, I am pleased to take part in the debate this afternoon and to remind viewers that we are dealing with Bill C-43, which is an attempt by the government to repeal the Department of National Revenue Act to convert Revenue Canada from a fully accountable government department to an autonomous arm's length business oriented agency with broad management authority over national revenue.
We in this caucus will oppose the bill on principle. We are aware that some 40,000 employees in Revenue Canada now make up about 20% of the federal public service. The move would involve the transfer of more than $2 billion in annual parliamentary estimates.
The government is glorifying the role of private sector appointees and seems to think that the public sector can only run on private sector principles. What is at stake here is a move toward an independent agency without the support of major provinces. Nor does it seem to have the support of the majority of workers.
There are at least three provinces firmly opposed. Two other provinces have not endorsed the concept. I think it is fair to say that all provinces generally see the agency as an intrusion into provincial jurisdiction. Not only the provinces and the workers but Canadian businesses have major reservations about the proposed agency.
The public policy forum study commissioned by Revenue Canada found that among the businesses surveyed some 68% believed a single tax collection agency would either increase their compliance cost or have absolutely no impact whatsoever.
The commissioner of customs and revenue instead of a deputy minister would become the chief executive officer of the agency responsible for its day to day operations. According to the proposed bill, the governor in council would appoint the chair of the board, the commissioner and the deputy commissioner for a term of five years. The agency will still be subject to the access to information and privacy acts.
The government is claiming that the agency will provide better, more cost effective service to the public, to business, to the provinces and territories by bringing about tax harmonization with the provinces and therefore huge tax savings resulting from the elimination of such things as duplication and overlaps in tax administration among various levels of government.
A second point it advocates is that it promotes a stronger partnership with the provinces and territories which, the government believes, may then hire directly this new agency for the delivery of programs according to service levels and performance targets specified in the contract.
As an aside, I suggest that the government should consider how the Atlantic provinces of Nova Scotia, New Brunswick and Newfoundland have fared under the ill fated and loathed HST to see whether they think it is something that should be transposed on the rest of Canada.
Another point the government argues is that it creates a leaner and more efficient delivery of tax services to be achieved through the agency's enhanced operational flexibility and autonomy inspired by the business culture.
The government believes the agency will combine the best of both worlds. It will make the organization more accountable to its clients and partners and set high private sector standards while ensuring that the current powers of the Minister of National Revenue and accountability to parliament will be protected.
We oppose the bill, as I indicated, on a number of different grounds. First we oppose it for some philosophical reasons. I have talked about the 40,000 employees, the $2 billion transfer and annual parliamentary estimates that would be at stake. The government glorifies the role of private sector appointees and seems to think the public sector can only run on private sector principles. The government would certainly take credit for slashing expenditures by $2.2 billion.
It is frankly appalling that the control of tax collection, which is a historical prerogative of the state, is about to be abandoned, if the government has its way, almost by stealth to the private sector.
There is a whole history of economists over the last 200 or 300 years who may have been absolutely firm in terms of free enterprise and the like. They firmly believed, nevertheless, that the collection and control of taxes was a prerogative solely of the state, so important that it should remain completely in the hands of the state.
We can think in our own time that even such advocates of free enterprise and the market as the former prime minister of Great Britain, Margaret Thatcher, and the recently deposed chancellor of Germany, Helmut Kohl, never went so far in their drive to privatize as to contract out, in effect, the collection of taxes.
Second, we oppose it for political reasons. We believe the government in its move toward an independent agency is doing so without the support of the provinces. The major stakeholders simply are not buying. They have run this one up the flag pole but few, if any, are saluting.
I have mentioned that the provinces are opposed, specifically Ontario, Quebec and Prince Edward Island. B.C. and Saskatchewan refuse to endorse the concept. Alberta supported the concept probably for ideological reasons but pointed out that members needed to be reminded that Alberta does not have a sales tax and administers its own program. There is fading possibility that it might sign over any day soon the administration of its provincial income tax to this federal agency. I have also mentioned the reservation of Canadian businesses and the study that public policy forum conducted with those businesses.
We think for ethical reasons we should look at what happened in the United States, specifically with the Internal Revenue Service. In the evolvement and development of the IRS there are dangers for us in an non-controlled agency.
The IRS is a government department and not a fully independent agency. It has extensive powers and operates under stringent private sector performance standards similar to those that would be entrusted to the agency by Bill C-43.
Historically the powers conferred to the IRS resulted from pressures from the Federal Bureau of Investigation on Congress for the creation of an independent agency to fight corruption and organized crime back in the Al Capone days of the twenties and thirties. These powers were then used to arrest some of the most dangerous leaders at that time, including Mr. Capone.
On one hand the Liberal government affirms that the controls of the agency will be the same as the controls over any other government department. On the other hand, it would then turn around and stress the need for independence. If the controls of the agency will be the same as the controls over Revenue Canada or any other government department why bother? Why transform a government department into an agency which is not independent?
The agency will have more power because it will be more at arm's length from parliament. Using corporate performance standards will undoubtedly lead the agency to set up a system of tax assessment quotas, performance and pay bonuses. These standards have precisely led the aforementioned IRS to abuse its power over taxpayers and at times use harsh and excessive collection methods. The likely misuse of new powers and standards would therefore turn the agency into a taxpayer predator.
According to the auditor general, the Liberal government lost a potential $2.5 billion and $3 billion in revenues since 1995 simply because it refused to pay adequate salaries to attract highly trained professionals required to perform complex audits. These auditors are necessary to ensure compliance by foreign multinational corporations operating in this country.
I think the problem the auditor general has been flagging is that Revenue Canada acknowledges that it has been unable to hire staff up to the limits authorized by parliament simply because qualified auditors working in the private sector are not interested in taking a 50% pay cut for Revenue Canada.
I think those are the types of things this government should clean up and hire the number of auditors necessary to do the proper job rather than contracting out this agency.