Mr. Speaker, I would like to congratulate the minister on finally having his bill brought before us at third reading. Unfortunately, it came before us after time allocation was invoked at each stage of the bill.
The minister said that this bill respects the finest traditions of the parliamentary system. If that is the case, then why did he cut short democracy? Why did he cut short democratic deliberation when it came to this bill?
I can tell the House why. It is because for months he was not able to get any degree of precedence or priority for this bill from the government House leader or from those who manage the government's legislative agenda. Suddenly they were seized with an urgency to ram this bill through before the Christmas break and they invoked time allocation.
The government announced its intention to invoke time allocation on both report stage and third reading only two hours into the debate. I must say that while I commend the minister for the work that he, his officials and his parliamentary secretary have put into this bill, I think it is disappointing, to say the least, that the government has, in passing such a critically important piece of legislation, so carelessly and callously disregarded the best traditions of democratic deliberation in this place.
The minister spoke at some length about the degree of consultation which was exercised in the development of Bill C-43, an act to establish the Canada customs and revenue agency. I would concur with him that his officials did a fine job in consulting, particularly on the technical aspects of the bill, with traditional interest groups like some of those he mentioned which have a great deal of familiarity with the tax laws and their application.
I would also commend the minister and his officials for having taken to heart some of the constructive criticisms that were levelled at earlier versions of his bill.
However, I would point out to the minister that his consultations fell far short when it came to the kind of democratic, political and public consultations which ought to surround any important piece of legislation such as this.
It is fine and well to set up an advisory board of technical experts who are extremely familiar with the Byzantine 1,300 page tax code and its associated regulations, and to sit around and talk with Revenue Canada union officials and people in the department about the framing of legislation of this nature, but that merely leaves about 30 million Canadians out of the process of consultation. This is where we think the minister and the government have completely failed to consult deeply and broadly with respect to the implications of this bill.
I suspect that some day when this bill is proclaimed and this new Canada customs and revenue agency comes into effect, there will be a sudden flurry of news stories in the media regarding the creation of this new agency and the passage into history of Revenue Canada. Canadians will suddenly wake up startled, wondering what is going on. I submit that the vast majority of taxpaying Canadians have little or no idea that this rather dramatic proposal has been made and will probably be adopted by the House tonight.
I think that it would have behoved the minister and the government to have consulted far more broadly and deeply with grassroots Canadians. I think it would have behoved government members to have voted for a Reform motion at the finance committee which sought to extend hearings beyond the two or three days on which hearings were held, to extend hearings across the country, to allow Canadians in communities across our country, those who work in Revenue Canada, those who are ordinary taxpayers and those who have concerns about the administration of the tax laws, to appear before us to prolong the debate so that this rather dramatic change was not suddenly sprung upon them.
I am also disturbed that the government did not, with respect to consultation, take at all seriously some of the very thoughtful and substantive amendments put forward by the opposition. I will grant that my colleagues in the Bloc Quebecois put forward a number of dilatory amendments to essentially strike every clause of the bill. In a sense they were provoking the government into time allocation. However, I would submit that there were some very substantive and sensible amendments put forward at report stage by the official opposition.
The minister talked about common sense. Where was the common sense in the government voting against our Motion No. 7? Among other things, that motion would have inserted words like “the legislation should be enforced in a manner that respects the principles of fairness, impartiality and accountability”.
Why in the world did government members stand in this place last night to vote against ensuring that the legislation be enforced in a manner that respects fairness, impartiality and accountability? Are they against fairness, impartiality and accountability in this legislation?
It escapes me as to why the government voted against a motion to ensure that any new powers granted to the agency could only be granted by parliament and not simply by the cabinet through order in council. Why did the government vote against a motion to restrict this granting of further powers to this parliament and to remove the carte blanche power of the cabinet to grant such powers to the new agency?
These and other substantive motions which we put forward were voted down without apparently even a moment's consideration on the part of the government, which again causes me to question the sincerity of the minister's remarks with respect to consultation, listening to Canadians and following the debate.
Having said all of that about process—and I really do find it disappointing—let me say that there are certain redeeming aspects to this legislation. We in the official opposition have been quite consistent in pointing out that we feel there are certain incremental gains to be found in the kind of corporate culture of the new revenue agency which this bill envisions. We believe that it would be an improvement over the status quo for this new revenue agency to be released from the kind of burdensome, bureaucratic, inefficient, cookie-cutter style personnel and human resource policies enforced on it by the regulations of the Treasury Board and public service legislation. Creating greater flexibility in the revenue agency's management, hiring and personnel practices we think is a positive step forward.
However, the gains to be made in terms of flexibility of human resources management would allow the new agency among other things to pay some of its people on the basis of merit. It would allow the new agency to pay some of its senior highly skilled auditors competitive salaries vis-à-vis the private sector. All of these improvements could be achieved without Revenue Canada metamorphosing itself into an agency. It simply is not necessary.
Other opposition members and I have made the point again and again in the House and at committee that if the government simply wanted greater flexibility in hiring, firing and paying people, it could have done that without moving to an agency and without the bill that is before us today. The government did not need to create a new level of bureaucracy through the adoption of a commissioner and a patronage appointed board of directors. The government could have achieved the personnel efficiencies without potentially diminishing parliamentary accountability through the minister to parliament. It could have achieved these things simply by amending the statutes that govern personnel in the public sector.
That is not just my view. It is the view of the Canadian Tax Foundation which published an article suggesting that was a possibility. It is the view of the Library of Parliament, which produced an opinion for us that confirmed various amendments to existing statutes could have achieved the desired objective of greater flexibility in personnel management. I want to be absolutely clear for the record. That alleged rationale simply does not hold up.
Another rationale which the government presented for this legislation was that it would create greater efficiency through the removal of much of the current overlap and duplication between the provincial and federal governments in tax collection and administration. The bill would concurrently reduce compliance costs for businesses which today must fill out tax forms and in some provinces must comply with two separate tax bureaucracies. The government argues sensibly that compliance costs would be reduced under a single tax agency since the business taxpayer would only have to fill out one corporate tax form as opposed to two.
The government solicited an opinion from the Public Policy Forum which indicated there would be a potential savings to the economy of a couple of hundred million dollars through reductions in compliance costs if all 10 provinces were to participate in the agency proposal. That is the big caveat. The government has thrown around this argument about efficiency gains and reduced compliance costs and at the same time it has not told Canadians this requires the full, complete, unanimous participation of all 10 provinces.
It is absolutely evident to all with eyes to see that this agency does not have the support of all 10 provinces or even a majority of provinces or even a single province, at least as of this date. We know of only one province. The Government of Nova Scotia has indicated its willingness to participate in a very modest way with this new agency through the administration of its workers compensation system. The Government of Nova Scotia could very easily have contracted with Revenue Canada to assist it with its WCB system under the current departmental model of Revenue Canada. Bill C-43 is completely unnecessary to achieve the objectives of such provinces as Nova Scotia participating on the WCB front.
What do we see as we look across the country from Newfoundland and Labrador to British Columbia? After nearly two years of consultation and pressure and lobbying on the part of the Minister of National Revenue, at least nine provinces have indicated that they are not prepared to sign on to this new agency. The minister and government members will say that the provinces have not said that they are opposed to the idea.
Certainly the Government of Quebec has indicated that it has absolutely no interest whatsoever in any circumstances of ceding tax collection authority to this new federal agency.
The province of Ontario has indicated publicly and to me in writing through the Minister of Finance, Mr. Eves, that it has no particular interest at this point. The Government of Ontario has suggested that it is looking at greater flexibility, not greater federal control over its tax collection and tax policies through the possible opting out of the federal-provincial income tax collection agreements and the adoption of a tax on income process as opposed to the tax on tax which currently exists.
Similarly the province of Alberta and its provincial treasurer Mr. Day have indicated that they really have no interest in this, at least at this point. The province of Alberta is looking at some rather dramatic changes in tax policy which would perhaps preclude any efficiencies gained by participating with a single revenue agency such as the one proposed in this bill.
As we look across the country we see at least three provinces which seem to be out of the game and we see six or seven other provinces which are not really interested but have not yet closed the door. Why is the government proceeding with legislation which is predicated on the participation of the provinces whose basic rationale is co-operation between the provincial and federal governments, when the other partners, that is to say the 10 provinces, have not yet offered to participate and have not yet agreed to engage in this new agency? This is a legitimate question and one which the minister has not yet provided an adequate answer to.
With respect to flexibility of personnel management and human resources and with respect to efficiency through the reduction of overlap, duplication and compliance costs, we see that the government has not made its case.
Having said those things, I think the basic structure of the bill is not malignant. As I mentioned, there are incremental improvements in public sector administration which could be achieved through other statutes.
Let me add parenthetically that the changes to employment practices contemplated by this bill could very easily be and ought to be applied to every department of the government. The minister has made a compelling case that the current Treasury Board guidelines with respect to the employment of public servants are far too rigid and far too bureaucratic and do not create a culture of efficiency in the revenue department. If that is the case in the revenue department, as I believe it to be, then equally it is the case in other government departments.
I would ask the government why it is prepared to change the personnel regime with respect to Revenue Canada, the largest government department which employs approximately 40,000 to 45,000 individuals, but it is not prepared to apply the same principles of personnel management to every department of government. Why is the government not prepared to do what the Government of the United Kingdom has done with respect to its agencies? Why is the government not prepared to do what the Government of New Zealand has done with respect to the corporatization of the public sector there?
We could apply these same principles elsewhere without diminishing parliamentary accountability if this legislation is crafted properly. It makes very little sense for the government to be myopically focused on one department while leaving the rest of the public service in the current strictures of the Treasury Board rules.
Our principal concern on Bill C-43 is the potential for diminished parliamentary accountability, for accountability to Canadian taxpayers who after all are the people who really hold sovereignty in this country. These are the people who day after day put in an honest day's work and come home to find that up to half of their paycheque has been consumed by politicians and bureaucrats at all three levels of government. These are Canadians, the vast majority of whom are honest, law-abiding taxpayers who want to comply with the tax laws. They want to pay their fair share but they have felt increasingly over the past years that they are paying more than their fair share.
The average Canadian is working harder today than he or she ever has before in Canadian history. Statistics Canada tells us that the average Canadian family now works longer hours and more hours with more two income families than at any point previously in our history, yet they are coming home with less money in their pockets after tax. Why? Not because they are not working hard enough, not because people in the private sector economy are not taking enough risks, but it is because governments continue to consume a larger and larger percentage of the fruits of the labours of Canadian taxpayers.
Revenue Canada every business day collects roughly a billion dollars. That is a billion dollars sucked out, hoovered out of the pockets of Canadian taxpayers. I see even you are flabbergasted, Mr. Speaker. It is remarkable. We sit here in this place thinking that this is sort of commonplace; we authorize another spending bill, authorize another tax bill and sooner or later it all adds up.
That is not my figure. It is the figure of the minister of revenue. He is quite proud of boasting that his department collects a billion dollars each business day. It is about $120 billion that is collected in normal revenues, the gross revenues of the GST plus corporate tax revenues. The figure is enormous.
At the end of the day, Canadians are telling us that they are paying too much tax, that the tax system is too complex. Too often when they are dealing with Revenue Canada, they feel guilty until proven innocent under the current tax system. That is just plain wrong.
A voluntary system such as ours which relies on voluntary compliance requires the absolute trust of taxpayers in the collection system. The moment that trust is impugned, the moment Canadians lose trust in the tax collection process, the basis of a voluntary compliance system is thrown into question.
That is why we need to be absolutely certain in debating this bill that the agency we are creating enhances and does not diminish the trust between the taxpayer and the tax collector. It is why we must be absolutely clear that this bill strengthens rather than weakens the accountability of the tax collectors in this agency to taxpayers through their elected representatives in this parliament.
It would be a grave error were we to adopt a bill which included even the possibility, the mere potential of a diminishment of parliamentary accountability of the tax collecting agency and that accountability through this parliament to taxpayers.
Parliament came into being as members well know largely as a result of the tension between the commoners, the taxpayers in earlier parts of our history and the crown. Parliament essentially became the body which ensured that the taxes collected by the crown were done so in a fair, legal and democratic way. It ensured that no one, including the monarch, was above the law.
And here we are today contemplating the passage of a bill that will give the executive branch of government further enormous power in tax collection through this agency and has the potential of diminishing parliamentary accountability. The minister will say that he remains responsible for the revenue agency under this bill and that therefore the accountability could not possibly be diminished.
Among other substantive amendments put forward by the opposition last night, the government voted against a motion in my name saying that the minister was responsible for “all aspects of the revenue agency”. We simply wanted some minor amendments to clarify that the minister would be responsible for all aspects of the agency because the bill is unclear about that.
The bill gives responsibility to the minister in section 6, but later it gives responsibility for the agency to a board of management in section 14. Even later it gives responsibility to a chair in section 22, and in later sections of the bill it gives responsibility to a commissioner.
The government says these are different kinds of responsibility that will be exercised in different ways. I do not understand that bureaucratic bafflegab. All I understand is that the bill takes responsibility, which today is completely in the hands of the minister who is accountable to the House and through the House to millions of Canadian taxpayers, and delegates it to a board of patronage appointees, to a commissioner appointed by cabinet and to this agency. Where does the buck stop? It is not absolutely clear.
It is with the very grave concern of diminished accountability that we in the official opposition have proposed a series of amendments which would enshrine due process in the tax collection administration of the government. We have proposed a taxpayer bill of rights and the creation of an office for taxpayer protection, which we say would strengthen and deepen accountability rather than diminish it.
Why is that necessary? I have talked about the theoretical argument that tax collection is an awesome power. Next to the criminal law power that we wield in parliament, the power to collect taxes is the most significant and potentially destructive power. Some have said that the power to tax is the power to destroy. It is an awesome power that we wield here. It is an awesome power that we grant to officials of the revenue department and the future revenue agency to exercise on our behalf, on behalf of the crown and parliament.
Sometimes, believe it or not, that power is abused. The Minister of Revenue thinks his department and all his 45,000 officials are completely above and beyond reproach. I have no doubt that most of them are, but I equally have no doubt that from time to time, in fact every day, honest, law-abiding, voluntarily complying Canadian taxpayers find themselves harassed by overzealous, non-compassionate and out of control tax bureaucrats.
Every member of the House, I am sure, has faced case files from constituents who have done everything according to the law, everything ethically, exercised due diligence and have nevertheless found themselves getting the short end of the stick from Revenue Canada.
I raise the matter, for instance, of Mrs. Suzanne Thiessen from Winnipeg. I have raised this matter before in question period and elsewhere. Suzanne Thiessen is a Manitoba taxpayer who found last year that she had to make an insurance claim with the Manitoba Public Insurance Corporation, the MPIC. She discovered that somehow, without her authorization, the Manitoba Public Insurance Corporation had obtained confidential knowledge from her tax returns to the MPIC.
How does it happen? The minister says that confidentiality will not be compromised by the bill. He says it is not by the current department, but we know that is not the case because I have received through the Thiessens and others over half a dozen files of individuals in Manitoba who had their confidential tax information leaked by Revenue Canada to that provincial crown corporation.
This is against the law, but what can somebody like Mrs. Thiessen do? She is a person of ordinary means. She cannot afford to hire some high priced downtown Winnipeg tax lawyer. She is not connected to senior officials in the department, so she complains and raises her concern with a member of the opposition, as well she should. Part of our role is to act as ombudsmen.
I am duty bound to raise the matter with the minister of revenue, as I have done twice in the House. What kind of response do we get to this breach of confidentiality? None whatsoever. The minister and his previous parliamentary secretary have said on this file that they would look into it. This was more than six months ago and we still have not get received an answer.
When it comes to the confidentiality of Mrs. Thiessen's tax information, the current process of accountability did not work. It will be even less likely to work under the governance of the new agency, its commissioner and board that are not immediately accountable to parliament.
I have raised what I think is the most outrageous case of taxpayer abuse with which I am familiar, the case of Janice Collingridge, a lady who lives in Calgary. Janice Collingridge is a high stem quadriplegic. She cannot move. She cannot speak. She cannot breathe without the assistance of a respirator. She lives independently in an apartment with the assistance of a provincial government disability grant. The provincial Government of Alberta has provided her with this grant to contract with home care workers to come in and help her live independently.
Mrs. Collingridge was going about her life, living independently with the assistance of the grant, and along came the tax cops from Revenue Canada who said that they were going to audit Mrs. Collingridge's books. She asked “What is there to audit? All I get is the grant”. They said they were going to take a look at how she was spending it.
They found that Mrs. Collingridge using some modern technology had managed to print out on a computer some kind of a work schedule for her home care contractors. The Revenue Canada bureaucrats said they were sorry to tell Mrs. Collingridge that the work schedules constitutes essentially terms of employment. These people who are working in her home were actually employees, not contractors, and she is therefore liable to pay Revenue Canada over $5,000 in back payroll taxes because they have been employees of hers for years and she has been evading taxes.
Can we believe it? This is more money than she has in her life savings. She is a high stem, low income, non-verbal quadriplegic, and the officials of the government dragged her into tax court in Calgary. These heartless, cruel and non-compassionate tax collectors trying to meet their de facto quota dragged this person who does not have the resources, even the physical resources, to defend herself into court. They tried to shake her down for that $5,000 plus interest and penalties. That is what is wrong with the tax system.
I have raised this matter with the minister. I know there are other matters like it. Tax lawyers can tell us about them. MPs can tell us about them. What does the minister say? He says “We will take a look at the file”. No response.
I raised it in September 1997. It has been 12 or 13 months with no answer as to whether the government believes that home care grants from the government to the severely disabled constitute taxable income for payroll tax purposes. It will not answer that question.
If the minister who has to sit here and evade my questions will not answer them and will not look into this kind of gross and extreme abuse, how much less likely is he to answer, if he can say “Mr. Speaker, I am the minister responsible for an agency and there is a board and a commissioner in place which have to deal with these policies. I as minister cannot possibly second guess those officials?” That is my concern. It is a serious concern that has not been addressed by the government.
That is why exercising our responsibility to provide an alternative to the government, the official opposition has put forward a series of amendments which would ensure that the Suzanne Thiessens and the Janice Collingridges of the country and thousands of others receive the help that is needed.
I will comment on another case. It is a case of a dentist in Calgary who came to my office recently to tell me what had happened. He was subdividing some land he owned for development. Before the subdivision he sought a ruling from Revenue Canada, exercising his due diligence as an honest and ethical taxpayer, as to whether or not GST would be applicable to the sale of these lots. A Revenue Canada official looked at it and responded with a letter, an opinion, saying no, that under the current tax laws the sale of these lots would not have GST applied to them.
This honest taxpayer sold his lots and made his profit after having taken a risk and having created some wealth for our economy. A year later Revenue Canada came along and said “Excuse me, sir, but we are afraid to inform you that the day before you sold those lots Revenue Canada sent out an interpretation bulletin changing its understanding of the tax act and the application of the GST. We are now telling you our ruling notwithstanding, that you are to be retroactively assessed tens of thousands of dollars in back GST on those lots. Even though you exercised due diligence, even though you planned according to the information we gave you, we sent out an interpretation bulletin that probably not more than a half dozen bureaucrats and tax lawyers read, and you are going to have to pay us back taxes”.
Those kinds of things happen every day of the week in Canada. There is no accountability when it happens. There is no way that people like the Janice Collingridges, the Suzanne Thiessens and the thousands of others have recourse to high price tax lawyers. Janice Collingridge only managed to get her matter thrown out of court because she had a lawyer offer her assistance pro bono.
That is why we have proposed the adoption of a taxpayers bill of rights. Let me be crystal clear. I said all along to the government that if it were to adopt or agree even to consider adopting a taxpayers bill of rights and an office for taxpayer protection along the lines of what we have proposed, we would support the bill because we would see enhanced rather diminished accountability. The government has not even had the straightforwardness to respond to our offer.
What would the proposed taxpayers bill of rights do? Essentially it would enshrine in one piece of legislation all the rights to due process taxpayers ought to have. Some people would ask whether we already have a taxpayers bill of rights. No. What we have is a declaration of taxpayers rights brought in by then minister Perrin Beatty in 1985. It is a worthwhile document. Basically it is a motherhood statement, but it has no teeth, no sanctions. It is just a statement of principle. It is not legislation. It does not have statutory force. It does not impose any sanctions on Revenue Canada if it steps out of bounds.
Our taxpayers bill of rights has teeth, has sanctions and clearly guarantees accountability. It would, among other things, enumerate the right of taxpayers to understand the tax laws they are required to comply with in plain language. It would give them the right to be treated in a professional manner by the agency. It would give them the right to complain about poor treatment or service and to receive a written response from the employee's supervisor. If the response is not satisfactory, the taxpayer would have the right to be heard by more senior officials. It would give taxpayers the right to pay the amount of tax required by law and no more. Revenue officials would be required to inform taxpayers of overpayment.
We recently saw in the auditor general's report cases where millions of dollars were collected in overpayments by the government, millions coming from pensioners on fixed incomes who cannot afford tax accountants and are paying more than they should.
It would give taxpayers the right to know for what purpose information will be used and what penalties will apply if information is not provided. It will give them the right to represent themselves or appoint someone to act in their place in any dealings with the agency, and the right to record any and all meetings with agency officials without being required to give advance notice.
It would give them the right to continue to to appeal agency rulings, first administratively through the existing appeals branch and a fairness process and, if necessary, through the judicial system. It would require that the agency waive penalties and interest wherever it can be shown that a taxpayer acted in good faith, as the dentist in Calgary did with respect to his lot sales, and without the intention to evade, or where the taxpayer relied upon incorrect advice provided by an agency official as in the case I mentioned.
In cases where penalties and interests can cause severe financial hardship or in cases where reassessments can be proven to cause severe financial hardship, alternative arrangements could be made through abatement or negotiated repayment schedules. Where fraud or evasion is suspected, officials would be permitted to seize or freeze assets after first demonstrating a compelling reason why such action should be taken and taxpayers would have the right to complain to the office for taxpayer protection in cases where freezing or seizing of assets could be expected to create serious financial hardship for others.
We have cases where that has happened, including a disabled young man in Niagara who had his personal bank account frozen because Revenue Canada was investigating his father. He could not pay rent or buy groceries.
All these rights I have just enumerated would be enforced by a taxpayer ombudsman, or the office for taxpayer protection, who could issue taxpayer protection orders where necessary to protect taxpayers from arbitrary treatment or treatment that could lead to undue financial hardship. He would report to parliament once a year. He would give a summary of at least 25 of the most serious problems encountered by Revenue Canada. He could assist taxpayers in resolving disputes with the agency. He could make recommendations on changes to the administrative and legislative apparatus of the agency.
I hope the government will give serious consideration to this honest effort on our part to deepen accountability in the tax collection process. I regret that because it has not yet done so, as the official opposition we have to vote against Bill C-43.