Madam Speaker, I rise to speak about this issue, although it does not seem to be that important compared to all the other problems that we have. That being said, the Governor General plays a very important role, and one of his duties is to stand as a symbol. It would be very symbolic if the Governor General were to pay taxes like all Canadians, and so the Liberal members will support this motion.
I would like to close by making a suggestion, in the hopes that the government is listening. The parliamentary secretary stormed out earlier. If she is listening, perhaps she will agree with me and we can all vote in favour of this motion, if everyone agrees with the Liberals' suggestion.
The Governor General's salary should be subject to the general tax regime. This is not currently the case because his salary is tax-exempt under the Income Tax Act. Since this is a statutory expenditure approved by Parliament under the Governor General's Act, it is within Parliament's power to change this practice and make the Governor General's salary taxable. This is not a constitutional issue, and it can be resolved through legislation. There are three reasons to tax the Governor General's salary.
First, the Liberals would like compensation to be more transparent. That is why, in 2001, the previous Liberal government replaced members' tax-free allowance with a taxable salary.
Second, the pension paid to former governors general, which was $130,000 in 2011-12, is taxable under the Governor General's Act and the Supplementary Retirement Benefits Act. It is indexed once a year based on the consumer price index. There is no reason not to do the same with the Governor General's salary.
Third, there is ample precedent for this policy, and my colleague just mentioned it. All of Canada's provincial lieutenant-governors pay income tax. Both Australia and New Zealand have amended their income tax legislation to make the salaries of their Governors General subject to income tax, and even the Queen voluntarily pays income tax in the United Kingdom. Indeed, the Queen pays income tax. On the official website of the British monarchy, one may read:
The Queen volunteered to pay income tax and capital gains tax, and since 1993 her personal income has been taxable as for any other taxpayer.
That is since 1993. We are now in 2012.
The Queen has always been subject to Value Added Tax and pays local rates on a voluntary basis.
God save the Queen.
In Australia in 2001, the Income Tax Assessment Act 1997 was amended to remove income tax exemptions from the Governor General. In New Zealand, although the Governor General's allowance remains tax exempt, in 2010 the Income Tax Act 2007 was amended to make the Governor General's salary taxable. However, in New Zealand the salary was also increased to reflect this change. The salary is $311,000 New Zealand, which is approximately $253,000 Canadian. In Australia, the Governor General's salary in 2010 was $394,000 Australian, which is approximately $410,000 Canadian.
To recap because there are a lot of numbers, in New Zealand $253,000 Canadian is paid to the Governor General per year. In Australia, $410,000 Canadian is paid to the Governor General per year. The conclusion is that it seems Canadians have their Governor General for a bargain.
In fact, in 2011, the Governor General of Canada's salary was $134,970. If this income had been taxable, the Governor General would have had to pay exactly $42,767 in taxes, leaving a net income of $92,203 after 2011 federal and Ontario provincial taxes. That would be $92,203 for the Governor General of 33 million Canadians, compared to $253,000 for the Governor General of 4 million New Zealanders and $410,000 for the Governor General of 23 million Australians.
I believe that it would be quite reasonable to say that Parliament could tax the Governor General's salary and at the same time give him a small raise. Although the government is going through tough economic times, Parliament should ensure that the Governor General's pre-tax salary is adjusted to prevent a punitive reduction as a result of taxes. After all, that is what Parliament did for its members in 2001.