Mr. Speaker, the act does not differentiate between levies, fines and penalties, and therein lies the problem. That is why the supreme court ruled that in the absence of any clarifying language, fines and penalties must be allowed at this time.
The whole issue could be resolved with a simple amendment to the Income Tax Act which would simply say “for greater clarity”--and the Income Tax Act is full of these clauses--“no fine or penalty that is imposed by law on a taxpayer should be considered a tax deductible expense”. It is one simple line.
If we agree that it is bad public policy, for the reasons cited and others, then we can fix that very quickly. The United States and United Kingdom have done it. Australia and most western developed nations have taken active steps to clarify their revenue and income tax acts so that business fines are not allowed as tax deductible. I believe that we should be making the same move in this country.