Mr. Speaker, it was an honest mistake. Sometimes I forget, and I think the majority of Canadians tend to forget, that this is a different political entity. I guess my confusion comes from the fact that reform is still in the name. I do not understand why there is a difficulty in referring to the Reform Party. It is the same as calling the Progressive Conservative Party the Conservative Party, periodically, or the Tory Party. It was an honest mistake, Mr. Speaker, and I assume that Canadians will make that honest mistake in the next election, as well, in forgetting that the Canadian Alliance is nothing more than a corporate re-imaging or a revamping of the Reform Party.
Mr. Speaker, it is with pleasure today that I rise to support my hon. colleague's motions to remove clauses 35 and 36 from Bill C-32, the budget implementation act. I share with my colleague his concern that the revenue agency already has more than ample power to enforce tax policies in Canada, and that in fact it has too much power.
I have not had one constituent come to me seeking help to strengthen the abilities of Revenue Canada in collecting money from Canadians. I have, however, had numerous constituents come to me citing egregious examples of abusive practices being performed by Revenue Canada. People, particularly those in small businesses, are being clamped down on by Revenue Canada at a time when it is difficult, with our level of taxation and regulatory burden, to have a successful small business to begin with. To have as one of their greatest enemies the federal government, through the revenue agency, which is on the attack and out to destroy them if unwittingly they fall into one of those grey areas because of the complexities of our tax codes, is clearly unfair and not consistent with the government's efforts to supposedly create an environment within which business can grow and prosper in Canada. The best way to have a small business in Canada is to start a big one and wait.
I have seen numerous examples of the abuse of small business people over GST issues in my riding. The heavy handedness of Revenue Canada, now the new Canada Customs and Revenue Agency, is consistently unfair and has created a situation of fear across Canada in the small business community and with ordinary Canadians who live in fear of that call or that letter from Revenue Canada.
A few years ago there was a study which evaluated the psychological impact of a number of events in people's lives. The fact is that people receiving a letter telling them they are being audited by either the IRS in the U.S. or by Revenue Canada has the same psychological impact as the death of a close relative.
I am sure that none of us would want to see the death of a close relative, but compared to a full audit by Revenue Canada there are probably some relatives we would trade in quite easily. All kidding aside, this is a very serious issue and I intend to support the motions of my hon. colleague, my unreformed colleague, in this regard.
The tax tinkering that I see in the budgets coming from this government, whether it is on the enforcement side or in terms of general tax policy, is clearly unacceptable. Other countries are using tax policy as a vehicle to create greater levels of economic growth and opportunity for their citizenry. Here we are in Canada with this government continuing its pathetic, anemic tax tinkering which will not really do anything that will have a major impact on the future of Canada.
The government boasts of progress in the recent budget and of steps in the right direction because of the fact that there was some level of tax reduction. These are baby steps. Baby steps in the right direction do not help Canadians if other countries are taking gigantic leaps. The finance minister is bragging of these small steps in the right direction, but a tortoise on the autobahn that is moving in the right direction is still roadkill, because the cars are moving faster. We as a country cannot afford to be that tortoise moving in the right direction on the autobahn. We have to be moving ahead of the pack and we have to provide our citizens and our businesses with the tools to not just compete globally, but to succeed globally. That means not just tax tinkering, but significant levels of tax reform. I do not mean reform in a party sense; I mean tax reform in a more generic sense. I would not want to be accused of tomfoolery in the House of Commons.
The issue of tax reform is extraordinarily important. I am sure my hon. friend would agree with me that we need a greater level of tax reform in the upcoming years. One of the most important areas of tax reform would be the elimination of the personal capital gains tax in Canada, which represents one of the single largest impediments to growth in the new economy of any of our taxes.
I see my colleague in the New Democratic Party shaking his head because he believes that the capital gains tax reduction would be a tax cut for the rich. He could not be more wrong. Over half of personal capital gains taxes in Canada are paid by people who are making less than $50,000 per year.
In terms of the new economy, there is no form of taxation that is any more deleterious in terms of its impact on the new economy than the capital gains tax.
We are, through our capital gains tax disadvantages, driving entrepreneurs, driving venture capitalists, driving the innovators whom we need to strengthen the new economy out of Canada. There is a consensus on this issue. The Senate banking committee and the House of Commons industry committee have spoken of the significant need for a reduction in capital gains taxes. We have seen a movement in the right direction, but our capital gains tax is still 13% higher than that of the United States. A 13% disadvantage is a signal to our innovators in Canada that we do not want their innovation. These people could build a stronger country. They could build stronger businesses. I want those businesses. I want that country to be Canada. I do not want it necessarily to be the U.S. We are driving people out of Canada.
The capital gains tax issue is particularly important based on the degree to which the new economy uses stock options to compensate employees. In the new economy the beneficiaries of stock options will not just be the fat cats on Bay Street, but the ordinary people: the receptionists, the innovators, the software engineers and the assembly people. All employees will benefit from these types of initiatives. We would be far better served as Canadians if the government and parliament were to focus on these types of issues as opposed to trying to strength Revenue Canada's ability to pillage and burn the private fiefdoms of Canadians. We should be trying to reduce the tax burden and impediments that the government places on Canadian entrepreneurs by changing our tax system and by reducing not just the tax impediments, but also the regulatory impediments.
When the government hears the need for tax reform, I suggest that its emphasis is on the wrong syllable. The government thinks that tax reform means strengthening Revenue Canada so it can collect more taxes. We in the Progressive Conservative Party suggest that tax reform means reducing and simplifying the Canadian tax system such that more Canadians succeed and ultimately do not have to pay as much tax when they choose to build their futures here in Canada.