Mr. Speaker, it gives me great pleasure to enter this debate on Bill C-43, the Canada customs and revenue agency. This is all about getting government right. We cannot continue to live with significant inefficiencies within our administrative structure. This is a continuation of our government's desire to reinvent government and get government onto a course of efficiencies.
When I talk about efficiencies, members will be interested to know that in the last budgetary estimates Revenue Canada's administration cost to run the department was $2.2 billion. It collected a sum total of about $153 billion. That means a ratio of 1.43%, that is to say, it costs us about 1.5% for every $1 that is being collected by Revenue Canada which is good in itself.
Some people note that Revenue Canada is probably one of the most efficient arms of government today. In my earlier life I was involved with Revenue Canada on a more direct basis in representing my clients. Generally speaking the people at Revenue Canada carry out their jobs in a professional and diligent way with fairness and equity. Some people watching today might think that Revenue Canada is just a little bit too efficient in how much taxes it collects. However, the reality is that it undertakes its functions quite effectively.
In Canada today we have developed a multiplicity of taxes and tax regimes. It is small business week. Maybe we should be paying attention to some of the concerns of small and medium size businesses in this country. One of them is the pure complexity of complying with our taxation system.
Both the federal and provincial governments collect excise taxes, transportation taxes, tourist taxes and corporate taxes. Both the federal and provincial governments have their own little tax regimes collecting corporate taxes from small and medium size incorporated businesses. We also collect the employment insurance and the Canada pension plan. At the same time, the provinces are also involved in making separate collections for workers compensation.
The most insidious is the incidence of duplicity of sales taxes, the GST and provincial sales taxes. This duplication is very expensive for our citizens and small businesses. The problem with the provincial sales tax is that it also cascades into the actual exports in the selling prices of commodities. As Canada is an exporting country it causes great inefficiencies as well. It makes us less competitive as a nation.
It is for some of these reasons that the government has put forward the concept of this agency. We talk a lot in this House about the underground economy. Generally speaking we assume that people are simply cheating, but the reality is that a good number of people find it very difficult to comply with the level of complexity of the forms and requirements for different types of taxes.
Quite frankly, people cannot afford the compliance. I can remember a small business operator saying that he needed to spend one day a week just to comply with the taxation system. It is very important that we develop an agency that will be efficient and smoothly run to try to reduce this complexity and make the whole concept of tax collection more efficient. I have been surprised to find out that Revenue Canada for instance does not do e-commerce. We can pay our bills over the Internet, to Bell Canada and even to our local municipal tax authorities, but we cannot do it with Revenue Canada. I suggest that one of the reasons is it needs a certain inertia. It needs to spend more time developing electronic commerce to make this a more efficient agency. This is done for corporate structures but not on an individual basis. We have to catch up with the times. When I hear the Bloc, the NDP and others saying leave it the way it is, these people are just standing in the path of progress.
I would like to get back to an issue which is dear to my heart, the harmonization of sales taxes. We have tried politically to deal with this issue in the maritime provinces and some of those provinces have signed on to harmonized sales tax.
The member for Regina—Qu'Appelle was actually challenging us as to what province would ever sign on to this. I am surprised by that comment. The reality is we are leaders, that we are leading in this area of efficiency. We should be complimenting the government on its leadership role rather than saying if nobody else is ponying up to the cause, it must be a bad thing.
In spite of what the member for Regina—Qu'Appelle said, I can remember when medicare was first brought on and I think only one or two provinces initially signed on to that agenda. Of course all the provinces today are part of the medicare system. So it is not a reason to stand in the way of an agency that will be competitive within our economy.
The lack of harmonization of the sales taxes is probably one of the single largest inefficiencies in tax collection. Canada has to be the only country in the western world that actually has one federal sales tax and nine provincial sales taxes. It does not take much thought process to realize how inefficient that really is.
If the agency were in place pure rationality between provinces and the federal government would try to find some way to solve that problem. We as politicians quite frankly have not been able to do that. I think that is possibly a failure of this place compared to what an agency could possibly do. That does not mean those decisions are outside the political agenda. They are not.
In answer to a question the other day the minister of revenue suggested Nova Scotia had already signed on to a service contract. Three ministers along with our minister had signed on. So we can see how this is starting to evolve. Once this agency is in place we are going to find many more ways to make the whole concept of tax collection more efficient and more relevant to the 21st century.
Ontario, for instance, my province, insists on collecting its own provincial sales tax regardless of the fact that the provincial sales tax becomes a cost of production to our manufacturers. In my area General Motors has to actually pay provincial sales tax on input components. When it buys stationery or other things for its operation, it pays provincial sales tax. Eighty per cent of its production goes across the border into the United States. It goes across the border embedded with provincial sales tax as opposed to the GST, which has a methodology of removing that tax when it finally goes outside of our borders.
As a consequence Ontario's provincial sales tax is a very inefficient, outmoded tax that is not serving the people of Ontario well, because 40% of our exports are coming from the province of Ontario.
We have to find better ways of doing business and I believe this is part of that solution, to create this agency which will be more efficient, will allow a broader base concentration of critical mass, will allow for possibly more spending in the area of technological efficiency and will allow people to interface with the government more efficiently and more effectively.
In the act there are provisions where the provinces will be able to be consulted in the area of appointing directorships and so forth.
We can certainly see the window of opportunity to make a more efficient agency, allowing the provincial and federal authorities to work together to make this an efficient tax regime, an efficient, modern tax collection system.
I am supportive of this legislation and I hope the rest of the House will support it as well.