Mr. Speaker, I am pleased to rise to speak to Bill C-43, an act to establish the Canada customs and revenue agency.
As with any new government undertaking there is always the question of what the costs will be. During the committee's consideration of the bill the Minister of National Revenue tabled a report with the committee on the amount of money spent by the department to develop this agency concept. As I am sure members of the committee have realized, these expenses have been very reasonable, especially considering the significant proposed changes to the agency.
Over the last two and half years Revenue Canada has had between nine and fifteen persons working at any one time directly on this agency proposal. This staff has been drawn from other areas within the department. The total cost over that two and a half years has been just over $3 million.
In addition, considerable work has been done on the design and development of a new human resources regime. This work has contributed to the broad objectives for public service renewal such as la relève, as well as the human resources requirements for the agency. Like all other departments, Revenue Canada has been focusing a great deal of attention on its human resources needs. The expenditures to date of about $2.8 million over three years will be a very worthwhile investment in the future of Revenue Canada employees.
I emphasize that the money spent today on design and development is an investment that will reap tremendous benefits in the future efficient and effective management of the Revenue Canada agency.
We are talking about some very important changes in management style as well management processes and procedures which will bring productivity gains that will pay for the development costs many times over. The agency will benefit from a significant reduction in time and effort spent on complex and cumbersome administrative processes. Reducing hiring time and eliminating the large number of vacant positions will substantially reduce staffing costs.
Simplification of the classification system will also allow employees to transfer more easily to jobs that need to be filled. Simplified and more responsive recourse mechanisms will also significantly reduce the waste of time and energy and the cost of litigation.
The result of all this will be to allow employees at all levels to concentrate on their job of providing service to the Canadian public rather than wasting their time on administrative activities.
Savings from the productivity gains will be reinvested in the tax and customs programs of the agency in order to improve levels of service to the public while maintaining the integrity of our overall income tax system.
There are savings to be made through modernizing many of the administrative processes that Revenue Canada must now follow. To do this effectively new authorities are required. The fundamental changes that are foreseen simply cannot be accomplished in the existing departmental structure. The changes are too great and the existing structures are all too rigid.
There are some very important safeguards in the proposed new structure, especially in so far as financial management is concerned. I can assure that the parliamentary oversight of the agency's financial management will be retained. The agency will still be governed by the Financial Administration Act as well as the policies and procedures of the Treasury Board and the Receiver General for Canada with respect to matters of financial management and the treatment of public moneys.
The budget of the Canada customs and revenue agency will still have to be approved as part of the government's overall expenditure management system. It will be subject to the normal Treasury Board approval process and no money will be spent before being approved by parliament. Parliament will also continue to receive at least as much information for the agency as it does now for Revenue Canada. The agency's financial statements will be prepared in accordance with standard government accounting practices.
I want to talk a little about the user fees issue for a moment. Quite a myth has been built up over the potential use by the agency of increased user fees. I want to lay this myth to rest. Nothing in the bill would give the agency the authority to set fees. The situation respecting user fees will be the same as it is now with Revenue Canada. There are many controls in the current system over the charging of fees to which the agency will be subject. Let me outline these controls.
First, the minister will have to approve any new or increased fees.
Second, the full regulatory process must be used for new or increased fees, including the requirement to consult with those affected and to receive governor in council approval.
Third, the agency's corporate business plan will have to outline the strategy related to the spending of fees. This plan must be approved by Treasury Board and the summary must be tabled in parliament.
Fourth, parliament will have to approve the agency's appropriations which include the proposals for the spending of fees.
There is no danger that the agency will abuse user fees because the government and parliament will have full control over how fees are established.
Some significant savings will arise from the new agency as have been outlined by a number of colleagues who have already spoken on the bill. The public policy forum, an independent organization with extensive experience in public sector management, outlined in its study examining costs of compliance with and administration of Canada's tax systems and the savings from a single administration system, said there could be significant savings to Canadian businesses, particularly small businesses, from a single revenue administration.
Mr. Peter O'Brien, vice-president of Atlantic Canada for the Canadian Federation of Independent Business, confirmed this when he appeared before the House of Commons Standing Committee on Finance on November 24, 1998. He said:
There's only one taxpayer in the end, and to have more than one agency... I think is inefficient.... Time is very significant for business, particularly smaller firms.
More precisely, the public policy forum study estimated that the level of compliance savings to business each year would be between $116 million and $193 million at a minimum. The study also examined the administrative cost to government of tax collection and the potential savings. It found that there was a high potential for savings in the areas of personal income tax, corporate income tax and payroll tax because of the similarities at the federal and provincial levels as well as in a common collection system. This reduction in overlap and duplication will result in real savings to governments at all levels.
As the study outlined, in total it was estimated that administrative costs to governments could be reduced by between $37 million and $62 million annually at a minimum.
Right now the provinces, the territories and the federal government have tax measures and tax administrations that deal with similar kinds of transactions with the same taxpayers. This in essence is the reason why consolidation of these activities is so important.
Provinces and territories will obviously invest their money where they can achieve real savings from the central administration of a program. A single administration would result in real cost savings to the provinces. The point to be made is that the potential savings to individual Canadians, businesses and governments far outweigh the start-up and new operating costs of the proposed agency.
We are entering the new world of the 21st century. There will be a vast array of new technologies. Electronic commerce is becoming one of the most important new mechanisms of the 21st century, which has the potential for creating significant improvements in productivity of Canadians in general. It also has the potential for making it much easier to deal with the tax man through such mechanisms as electronic filing.
Electronic commerce, which involves the transfers of billions of dollars from one jurisdiction to another, also has frightening potential to hide money. Transactions that take place in the wink of an eye are very difficult to track. We need to be able to respond to that. It concerns me that the federal and provincial governments might take approaches to this issue which are not well co-ordinated. One way to start co-ordinating this activity would be to have tax administrations that are well co-ordinated.
Modern problems require modern solutions. The time has come to seize the opportunity presented to us with the new Canada customs and revenue agency for the generation of benefits to the provinces and the territories as well as to Canadian businesses and our citizens.
In conclusion, as we enter the new millennium, Canada needs a revitalized and more comprehensive Revenue Canada to serve the best interest of all Canadians.