Mr. Speaker, in speaking to Bill C-43 one of the things that I have a deep concern about is the present power of Revenue Canada. I do not see anything in the bill that would do anything to restrain the power of Revenue Canada.
I would like to refer to tax cases where in my judgment Revenue Canada has been excessive and has been punitive toward people in my constituency. In January of this year I asked for a meeting with the revenue minister. It took until April 30 to arrange that meeting with him unfortunately. What is even more unfortunate is that since April 30 I have not been directly contacted by the minister on this issue.
I find it very difficult as a member of parliament to truly represent the people of Kootenay—Columbia. I should be able to have access to the revenue minister, particularly on important issues for my constituents. I have a meeting and he does not respond to me.
What is this case? In my constituency there are many people who have ranches, farms and rural property. On those ranches, farms and rural properties there are trees which in many cases can be selectively harvested. In 1993, 1994, 1995 and through to 1996 there was a demand for timber, softwood lumber. Manufacturers have been looking for a source of timber. They have come to these ranchers, farmers and rural property owners and have made deals with them.
These people all independent of each other went to their professional accountants, whether they be CAs, CGAs, CPAs or whatever the professional designation. Their accountants either checked directly with Revenue Canada or went on the standing practice of Revenue Canada that these logs, because they do not form part of the normal income of the ranches, farms or rural property, would be treated as capital gains. After they had received the revenue from the softwood lumber manufacturers, these people went to their accountants, received professional advice, and paid their taxes.
What appears to have happened is that the tax department in Kelowna looked at these returns and said that there were enough of these things happening, that this was something new and it was going to reassess on the basis of those trees and the income from those trees as being part of those people's ordinary income. It is not part of their ordinary income. In fact, this is just found income on the part of my constituents.
My point is that tax practices cannot be changed retroactively. If Revenue Canada in 1996 when it woke up to the amount of money that in its judgment was being left on the table, had sent a bulletin to all of the accountants and affected people not only in my constituency but indeed throughout the interior of the province of British Columbia that this was going to be the practice from now on on their future income, I could accept that within reason.
The difficulty is that all of these people, and I have at least a dozen cases in my office and more are coming in every day, at least a dozen of my constituents in good faith went to a professional accountant, received advice and paid their taxes. When Revenue Canada realized that this was something new that was happening within my constituency and within the interior of the province of British Columbia, it decided retroactively that it was going to go after these people.
What is involved here? In some instances my constituents are retired people. This was a portion of money. To quantify this, their income could have ranged anywhere from $10,000 to $400,000 from the sale of these logs from their property. In many cases these are retired people who then took that income, paid their taxes and then made other investment decisions. In fact, in the case of a couple of my constituents, they actually gave their money away to their families. In other words, the money is gone.
Now all of a sudden Revenue Canada, with a retroactive tax grab, is coming around and saying “Oh well, now we will just bill you another $8,000, $9,000, $50,000, $80,000 in taxes because we have decided that we are going to change our way of assessing”.
The real injustice is that these people cannot even deduct their farming expenses, if they have expenses, against this income, because it is not a standard form of their income. Yet Revenue Canada is calling it a form of their income.
What has happened? One of my constituents took it to a tax court for review and he won hands down. There was absolutely no question about it. Revenue Canada has in turn taken it one ratchet up with the tax money from our pockets and these people's pockets. It is going after these people in tax court. In the very vague possibility that this higher court rules in favour of Revenue Canada, Revenue Canada will reap the benefit of all of the interest or penalty accrued on the money it says these people owe.
My specific concern is that I do not see anything in this legislation that gives me any feeling of comfort that we are going to end up with a fairer jurisdiction. I realize that to a certain extent the United States IRS has been mythologized. The problem is the agency has the probability of becoming a fierce tiger, as fierce a tiger as the United States Internal Revenue Service which is one of the most feared bureaucracies in the country south of the 49th parallel.
This legislation is seriously flawed if it does not stop Revenue Canada from retroactively grabbing money out of the hands of people like my constituents, honest, law-abiding, taxpaying Canadian citizens who pay what is rightfully and justly owed to Revenue Canada. It is my responsibility to speak on behalf of my constituents. I do so. The people in the constituency of Kootenay—Columbia have to know that as their member of parliament I am going to continue to push this issue as hard as I possibly can.
I have one little story which has been bubbling along for a short period of time, perhaps a year to 18 months. In that period of time I or my office assistant have asked some of these taxpayers if they would permit us to publicize this matter so that we could expose what Revenue Canada and the revenue minister are doing. They were scared. They were afraid that if they permitted this matter to publicized, that if their names became part of this whole process, Revenue Canada would come down on them on other issues in future years. That is shameful.
We understand the necessity of collecting revenue. We understand the necessity of collecting taxes. When the people of Canada are scared of Revenue Canada and the potential for the auditors to come down on them, I say shame on Revenue Canada, shame on this minister, shame on this government for not doing what is right. Give a proper balance to the rights of Canadian taxpayers. Change this legislation so it does that and then perhaps we can support the legislation.