House of Commons Hansard #212 of the 41st Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was citizenship.
The House resumed from January 28 consideration of the motion that Bill C-48, An Act to amend the Income Tax Act, the Excise Tax Act, the Federal-Provincial Fiscal Arrangements Act, the First Nations Goods and Services Tax Act and related legislation, be read the second time and referred to a committee.
John McCallum Liberal Markham—Unionville, ON
Mr. Speaker, I am pleased to rise on the subject of Bill C-48, which is now before the House. The bill could be termed a housecleaning bill, which does not mean that it is unimportant because it is important to keep one's house clean and in this case we are talking about the cleanliness of our tax system. The bill enacts into law previous comfort letters and other statements by the Department of Finance, which have already been enacted by CRA but which are not yet enshrined in the law.
As I will indicate, the Liberal Party will support the bill. Our only complaint is that it is far too long in coming. There have been massive delays to the point where the bill is almost 1,000 pages long with, I believe, 40-something amendments. This has caused great cost and great uncertainty to the tax system. We believe that it is simply bad public administration that the government should have delayed so long in bringing the legislation forward.
The last housecleaning tax bill passed by Parliament was in 2001, almost 12 years ago. We believe as a matter of course such bills should come before the House every year, so that the complexity of the tax system would be alleviated and taxpayers would have a clearer idea of what their rights and obligations are.
Let me begin by going through a little bit of the sad, lengthy history, which has led us from 12 years ago when the last bill was passed to where we are today. As I said, in 2001, a tax housecleaning bill was passed, 12 years ago. The Liberal government prepared another one but then was defeated. The Conservatives made two attempts but both failed. Because of an election or because of prorogation, those bills simply did not get through the House and were dropped.
The next event that is of some importance is the Auditor General's report of 2009. The Auditor General made it crystal clear that there were major costs imposed by not acting more expeditiously in this area. I would like to read a few of the key recommendations that were made by the Auditor General in 2009.
She said:
For taxpayers, the negative effects of uncertainty may include
• higher costs of obtaining professional advice to comply with tax law;
• less efficiency in doing business transactions;
• inability of publicly traded corporations to use proposed tax changes in their financial reporting, because they have not been “substantively enacted”;
• greater cynicism about the fairness of the tax system; and
• increased willingness to use aggressive tax plans.
She continued:
For the tax administrator, the negative effects may include
• higher costs for providing additional guidance and interpretations to taxpayers and tax auditors; and
• higher administrative costs for reprocessing the tax returns after an outstanding legislative amendment is enacted and for obtaining waivers to extend the limitation period for reassessment.
These points are extremely clear. The Auditor General makes it very clear that the absence of housecleaning legislation presented promptly imposes major costs on taxpayers in terms of their ability to understand the law, their need for professional advice and also imposes greater delays on rulings by CRA, which further reduce the efficiency of the system.
Following the Auditor General's report, the parliamentary committee on public accounts met and I would like to read its recommendations, which were published in the year 2010:
RECOMMENDATION 1
That the Department of Finance Canada facilitate the elimination of the backlog by ensuring that bills making technical amendments to the Income Tax Act only relate to technical tax matters.
RECOMMENDATION 2
That the Department of Finance Canada not wait until technical amendments bills are passed by Parliament before releasing further proposed amendments to the Income Tax Act for comment.
RECOMMENDATION 3
That once the current backlog of technical amendments is passed, the Department of Finance Canada should prepare annual technical amendments bills for consideration by Parliament.
RECOMMENDATION 4
That the Canada Revenue Agency provide by 31 March 2011 a progress report to the Public Accounts Committee on actions taken to address the recommendations contained in Chapter 3 of the Auditor General’s November 2009 Report.
It is clear as we stand now, in 2013, that these recommendations of the public accounts committee were not followed. It called for this housekeeping legislation to be presented on an annual basis. It called for a reduction in the time that CRA took to give its tax opinions or directions. This has not happened. The time has gotten longer, not shorter. Again, I would argue that this is a case of really bad public administration in an area that is not particularly exciting to the public but is, nevertheless, critical to the good functioning of our economy.
Now, one would think that accountants, of all people, would love tax complexity because they are paid for helping people to complete their taxes. If the system is more complex, they are needed even more and they would make more money. However, quite to the contrary, both the chartered accountants and the certified general accountants have recently been arguing very strongly in favour of expeditious passing of the legislation as well as a more general reform of the tax system.
I would like to read from both the recommendations of the chartered accountants and the certified general accountants on these issues. In 2010, the Canadian Institute of Chartered Accountants said:
Reducing complexity in Canada’s domestic tax regime is crucial to easing the regulatory burden placed on Canadian businesses and attracting investment. Simplifying our tax system would make the country more competitive and allow both individuals and business to prosper. According to The Global Competitiveness Report 2010 – 2011 issued by the World Economic Forum, tax regulations are among the top four most problematic factors cited by business executives for doing business in Canada. Many aspects of Canada’s tax system have become much too complex. We recommend that the government establish a national consultation process to examine tax simplification measures.
This is a government that talks all the time about caring only about the economy, about being competitive, about attracting foreign investment, and yet tax complexity is number four on the list of negative factors, according to companies, investors. The government has done nothing since these recommendations of 2009-10 until three years later, today, notwithstanding the pleas from the accountants, the Auditor General and the public accounts committee, to act expeditiously.
Let me now read what the certified general accountants said:
Modernize Canada’s tax system – make it simple, transparent and more efficient
Introduce and pass a technical tax bill to deal with unlegislated tax proposals
Implement a “sunset provision” to prevent future legislative backlogs
Appoint an independent panel of experts to recommend steps to reform Canada’s tax system
That statement about a sunset provision is interesting because it would say that when Finance issues a declaration or a comfort letter that effectively changes the system, unless it is placed in law within a certain time, such as a year or two years, it sunsets. It disappears. This would be a good change to the system because it would be an incentive for the Department of Finance or the government to implement these housecleaning bills annually or expeditiously so as to reduce this growing complication of Canada's tax system.
However, as members will have heard from these quotes, the issue goes further than simply these housecleaning bills. It has been 12 years since our last housecleaning bill and close to 50 years since our last full-scale examination of Canada's tax system. The last time that was done, I believe, the report was issued in 1966 and it was done by the Carter commission. The accountants and I say that it is high time we have another overall study of Canada's tax system with a view to simplifying it and making it more competitive, less complex and more fair. This would be a major undertaking, and since it has not been done in almost 50 years, it is high time that we do it.
One obvious unfairness, which would become apparent if such a study were done, is the operation of our tax credits. The government offers tax credits for young soccer players or young violinists. Some economists would prefer that such measures be put into overall cuts in income tax, but that is another issue. My point is that these tax credits are grossly unfair because they deliberately exclude those people whose income is not high enough to pay significant tax. Therefore, low-income Canadians' sons and daughters might want to play soccer or the violin just as much as a child of a higher-income Canadian, but because their income is low and they do not pay tax or much tax, they are excluded from the benefit. That is a gross unfairness. Item number one in reforming our tax system would be to make those tax credits refundable so that they are available for all Canadians and not just for well-heeled Canadians.
That is just one tiny item in the overall scheme of things. We need an overall review of our tax system, which has not happened for nearly 50 years, and it is high time that this was done. We do support the bill. Our complaint is that it is far too late in coming.
I will go over a few of the provisions of the bill. I obviously cannot cover in detail the nearly 1,000 pages of changed legislation. One of the problems with it is that it is just too much to absorb correctly all in one bite and to analyze appropriately. However, I will mention some of the things that would be changed.
There would be changes to the foreign affiliate rules, which would probably be the most important changes for business. These changes would generally be considered to be relieving for business, although they also would increase the complexity of meeting those tax obligations.
On income trusts, the bill would affect how debt would be treated when an income tax trust is taken over by a corporation after the infamous 2006 income trust tax announcement.
There would be a change for employment insurance. Now that self-employed individuals can contribute to EI, Bill C-48 would ensure those contributions would be deducted from annual income for taxation purposes in the same manner that an employee's contributions are deducted.
On GST, first nations would be able to choose to levy a sales tax on reserve by allowing the Canada Revenue Agency to collect and administer the tax. All money collected would be returned to the band council. Bill C-48 would allow Revenu Québec to fulfill that same function.
On labour-sponsored venture funds, in 2010 the Province of Ontario announced it was phasing out its tax credit for labour-sponsored venture funds by 2014. Many of those funds are no longer attracting the capital they need to continue as labour-sponsored funds, and the fund administrators have asked that they become mutual funds. However, the Income Tax Act imposes some severe federal penalties for making that switch. Bill C-48 would waive those penalties in recognition of the Ontario government's change. It would also allow shareholders to sell their shares to other investors instead of back to the fund.
Finally, on airlines, provinces and taxes, this clarifies the allocation of miles flown over certain territorial waters for the purpose of provincial taxation.
As we will see from that list, none of those items is likely to make a headline, but cumulatively, when added together, the absence of such provisions in our income tax law adds complexity and costs and reduces the competitiveness of the Canadian economy. That is why the Liberal Party, while supporting this bill, would also make a plea to the government that the next such housecleaning bill be introduced in the House approximately one year from today.
Colin Carrie ConservativeParliamentary Secretary to the Minister of Health
Mr. Speaker, from my colleague's speech, I take it that it is a certainty that he will be supporting the Conservatives in moving forward with these amendments to close loopholes. However, I am wondering if he could clarify the position of the Liberal Party.
His colleague from Kings—Hants, I believe, put through 3,000 amendments. Some of the amendments would actually stop us from closing some of these loopholes. In the best interests of Canadians, would he clarify what the Liberal position is? Would he and the Liberal Party be working with us to make sure that this is expedited and moved through as quickly as possible?
John McCallum Liberal Markham—Unionville, ON
Mr. Speaker, I guess the hon. member would have to consult the member for Kings—Hants to get clarification on that point.
My own view is that these measures are far too late, perhaps 11 years too late. My view is that if they can be passed, they should be passed as quickly as possible. As I also said, I hope we have another much smaller set of technical amendments, perhaps a year from now.
Randall Garrison NDP Esquimalt—Juan de Fuca, BC
Mr. Speaker, New Democrats are certainly interested in closing tax loopholes. I was very interested in the parliamentary secretary's comments on amendments introduced by the Liberals that might prevent us from closing tax loopholes.
The hon. member talks about this being 11 years late. However, during the first five and a half years of that 11 years, his party was in government, and I believe that he was a minister. If he believes that these should be introduced every year, what happened during those five years when the Liberals were in government?
It is important that we update our tax code and that businesses have a clear idea of what is expected.
John McCallum Liberal Markham—Unionville, ON
Mr. Speaker, I am not saying that the Liberal governments of the past were in every respect 100% perfect. However, I think we were certainly much better on this issue than the current government, because we introduced changes that took effect in 2001 and other changes that would have taken effect under a Liberal government in 2005. When we were defeated, the Conservatives took over those changes, and they dropped the ball until today.
I think there is scope for improvement on the part of all Canadian governments. I do not think any of them have brought in changes as frequently as once per year. In the intervening time, since the Auditor General's report of 2009 and the accountants' reports I quoted earlier, it has become clearer to all that once per year would be the ideal frequency of these housekeeping bills.
Hoang Mai NDP Brossard—La Prairie, QC
Mr. Speaker, I will continue in the same vein as the hon. member opposite.
In committee, the Liberals moved amendments to try to delay the application of the rules to close the loopholes.
My Liberal colleague said that the Liberal governments of the past were not perfect—clearly not. However, it is strange to listen to them talk out of both sides of their mouths. Today, they are saying that they want to close the loopholes, but they are not doing so. What is more, when they were in power, they did nothing to stop tax evasion or simplify taxes.
The Liberals often say that taxes need to be simplified and that nothing has been done since the Carter commission. Why did they not do anything about tax simplification and tax evasion when they were in power?
John McCallum Liberal Markham—Unionville, ON
Mr. Speaker, as I said before, we passed a tax housecleaning bill in 2001, and we drafted a second bill in 2005.
We tried, but then the Conservatives took power. The Conservatives have now been in office for seven or eight years, and it took them that long to introduce a bill in the House. That is far too long.
Hélène LeBlanc NDP LaSalle—Émard, QC
Mr. Speaker, since we are all wondering about it, I would like to ask my colleague how it is that he is proposing an annual review.
Could he explain why? Could he explain the background on this? How is it that this was not done between 2001 and 2007-08? Are there really problems? Is it realistic for him to request annual reviews? Can he explain why this was not done under the Liberal government?
John McCallum Liberal Markham—Unionville, ON
Mr. Speaker, I do not think that the idea of annual bills even existed before 2009, and we were not in power at that time. Accountants had the idea.
As far as I know, no one made that suggestion when we were in office. It is a much more recent thing. Given the problems that this 12-year delay is causing for us today, this would be a feasible and practical reform, even though no one did things this way in the past. This is a relatively new idea that we can examine in the future.
Robert Chisholm NDP Dartmouth—Cole Harbour, NS
Mr. Speaker, I do not want to belabour the point about what the Liberals did when they were in power. That was a while ago, and it will be a lot longer before they have the opportunity to not do things. I think we will all be better off for that.
I want to ask the member, who spoke quite eloquently about what the Conservatives have not done, a question. I do not disagree with the member and will make some of the same points myself later on this morning when I have the opportunity to speak to this bill.
In response to an earlier question, I noted that he said that the Conservatives had not moved on the need for annual updates and annual legislation to update the tax regime since 2001. In fact, we have had Auditor General reports. We have had submissions from tax experts, certified general accountants, before the finance committee for many years. They have advocated just that thing.
I wonder if the member could perhaps explain why it is that his government failed when it had the opportunity. I know that it will be the last opportunity for many years. Perhaps the member could try to give us a better explanation of why the Liberals were not able to move forward. That will help us in weighing the veracity of their complaints against this government.
John McCallum Liberal Markham—Unionville, ON
Mr. Speaker, I certainly agree with the hon. member's first statement that it has been some years since the Liberals were in government. I think his second statement that it will be many years before that happens again reflects a certain arrogance in the assumption made by some members of the NDP that they have God's will to become the next government. On that point, I disagree.
It is my understanding, and I might be wrong, that this proposal for annual housecleaning bills began after we ceased to be the government, which was from 2006 onwards. I know that the quotes I read were from 2009, 2010 and 2012. It is possible that such recommendations were made before 2006. I do not deny it, if that is true. I am simply not aware that this was the case.
Rosane Doré Lefebvre NDP Alfred-Pellan, QC
Mr. Speaker, before I begin, I want to say that I will be sharing my time with the hon. member for Montmorency—Charlevoix—Haute-Côte-Nord.
I am rising in this House today to speak to Bill C-48, An Act to amend the Income Tax Act, the Excise Tax Act, the Federal-Provincial Fiscal Arrangements Act, the First Nations Goods and Services Tax Act and related legislation. This bill affects many pieces of legislation.
We in the NDP believe that this bill will have a positive impact on revenues and will generally discourage tax avoidance. Frankly, a technical tax bill was overdue. I am pleased to see that Parts 2 and 3 of Bill C-48 deal with the taxation of Canadian multinational corporations with foreign affiliates. These changes reflect the proposals made in the budgets of 2007, December 2009, February 2010, August 2010 and August 2011, and I am pleased to see that they seek to ensure the integrity of the tax system and discourage tax avoidance.
The NDP is in favour of cracking down on tax evasion and tax avoidance. That is why my colleagues at the Standing Committee on Finance have been pushing the committee to complete its study on this.
As an aside, I want to thank our official opposition finance critics: the senior critic, the hon. member for Parkdale—High Park, and the deputy critic, the hon. member for Rimouski-Neigette—Témiscouata—Les Basques. Over the past few months, they have done tremendous work on finance bills, including the omnibus budget bills and the current omnibus tax bill. I thank them. Their work is much appreciated, and it helps us to better understand the bills that are being introduced.
I am also pleased to see that this bill makes changes in order to reduce tax evasion. What is more, it seems that the committee will continue its study on the matter this year.
It is quite something to think that it has been 11 years since a bill like this has been passed. Tax practitioners have said time and again that Canada is very far behind because this government has taken too long to legislate these technical changes.
In a report released in 2009, Auditor General Sheila Fraser noted that:
If proposed technical changes are not tabled regularly, the volume of amendments becomes difficult for taxpayers, tax practitioners, and parliamentarians to absorb when they are grouped into a large package.
We could also see that the Department of Finance Canada had at least 400 technical amendments that, unfortunately, had not been enacted. I believe it is crucial that this type of delay does not happen again.
I also agree with the Certified General Accountants Association of Canada, which, during prebudget consultations, proposed to the Standing Committee on Finance that Canada's tax system be modernized to make it simpler, more transparent and more efficient. The association also proposed that a technical tax bill be introduced and passed to deal with unlegislated tax proposals. Finally it suggested that a sunset provision be implemented to prevent further legislative backlogs.
It is also true that the complexity of tax legislation makes this task extremely difficult. Our seniors, our youth and those who do not consider French or English as their first language would obviously prefer a simpler system that is easier to understand. Being a responsible, honest Canadian should not be so complicated.
This huge bill makes things even more complex. We know that this government is a great believer in omnibus bills, as it has demonstrated over the past year with Bills C-38 and C-45. Luckily, this time, I can see that the bill proposes technical amendments to a small number of closely related laws and not laws in other areas. The other two bills, on the other hand, amended laws related to environmental protection, government accountability, immigration, employment insurance and so on.
I still find it ironic that this government is introducing a bill that is so long when it did not hesitate to denounce such a practice before.
During the debate on Bill C-22, Income Tax Amendments Act, 2000, in the 37th Parliament in 2001, my colleague from Calgary Southeast, who is now the Minister of Citizenship, Immigration and Multiculturalism, had this to say:
Let me say at the outset that the bill before us is a classic example of what has gone wrong with parliamentary oversight of legislation, particularly with respect to taxation. The bill before us has some 513 pages of technical amendments. I can say with a fair degree certainty that not a single member of this place, let alone the parliamentary secretary who just spoke or the minister he represents, has read or will read. It is a bill that exercises enormous power over the lives of Canadians through the Income Tax Act which in itself has coercive powers delegated to it by this parliament. The some 500 pages of amendments in the bill are amendments to a tax act which runs over 1,300 pages long.
I think the same observations apply to Bill C-48, especially since it is twice as long as Bill C-22.
I believe that Canadians deserve to be represented by parliamentarians who make sensible decisions when it comes to taxes and spending. Canadians want accountability, and rightly so.
When we see things like the Parliamentary Budget Officer having to take the government to court to get information about how tax dollars are being spent and what cuts are being made to the services Canadians need, I think the public is entitled to ask some questions and to admit that they have lost confidence in this government.
Out of respect for Canadians, a government should be accountable and transparent. Frankly, that should be the very least they can expect.
Since I was first elected, not a day goes by without someone from my riding of Alfred-Pellan contacting me to share their concerns about this government. They are worried about how transparent it is, and if you ask me, they are right to be worried.
In closing, I am thrilled that this bill has been introduced, even though it took a while, because it implements over a decade's worth of highly technical changes to Canada's tax system.
Before I finish, I want to reiterate that the people of Alfred-Pellan contact me often about the omnibus bills. I recently received letters from some of them that I would like to share in the House so that everyone can understand that the public does follow what is going on in Parliament and that it is important to listen to them.
I will quote some of my constituents from Alfred-Pellan. First, Mr. Nadeau said that the Conservative Party is running the country with its own members in mind, and Mr. Nadeau is against the massive bills introduced by the Conservatives. According to him, they are using these bills to try to push through all of their ideas en masse, and it is very sad to see these bills being introduced.
Mr. Prejent said that it is impossible, or at least very difficult, to meaningfully challenge a particular issue. It is becoming clear that this approach allows the government to pull a fast one on the opposition, and by extension the Canadian public.
To Mr. Prejent, I would say that the Canadian public is not affected by extension. This affects the Canadian public directly and the opposition by extension. We see these kinds of things every day.
One of my other constituents, Mr. Jetté, is not happy about these omnibus bills. He said that the Conservatives should talk with the opposition before bringing in such bills, and that it is arrogant and a bit too self-serving not to. He apologized for saying such things, but it is what it is.
I also heard from Mr. Bergeron, who said it was unbelievable that in 2012, the government forgets and fails to listen to the Canadian people.
People are not happy that such bills are being introduced, and I understand. I know how important these amendments can be, especially when things have dragged on and on with this government and also with the Liberals in the past. So it is important to deal with these issues, but we must be cautious. We must also ensure that these laws are useful to the public, because it is extremely complicated to make so many changes in one fell swoop. We must be cautious about the complexity of the law, especially when it comes to taxes.
I think that everyone, in all ridings, just wants to be able to properly fill out their tax returns. We need to give them the right tools. We must make their lives easier and make things as simple as possible.
As parliamentarians, we have a duty to ensure that Canadians trust their government and trust that it is transparent when it manages taxpayer money. Unfortunately that is not always the case with the current government. But I am happy to be part of a team that, in 2015, will show that it is possible to have a government that works fairly, efficiently and transparently.
Hoang Mai NDP Brossard—La Prairie, QC
Mr. Speaker, I would like to congratulate my colleague on her speech and also on the baby she is expecting.
My colleague has raised some very good points about the fact that the current government is introducing omnibus bills.
In this case, these are important technical amendments relating to taxation.
Nevertheless, we are wondering why this has taken so long and why the government waited so long before introducing a technical bill. This kind of bill should actually be drafted on a regular basis. Furthermore, the fact that they waited so long has an impact on the government’s transparency and the public’s understanding of the bill.
Does my colleague believe that this government is transparent with regard to its bills?
Rosane Doré Lefebvre NDP Alfred-Pellan, QC
Mr. Speaker, I thank my colleague from Brossard—La Prairie for his very accurate comments about the transparency of the Conservative government.
There is more to the story. The government often talks about how very responsible it is with regard to the economy and prosperity. So I find it sad that the Conservatives have taken so long to bring in tax measures, all the while claiming to be champions of the economy. However, I am pleased it is being done.
Regarding transparency, we could go over it again. This is precisely what angers my constituents in Alfred-Pellan. I assume that my colleague from Brossard—La Prairie has also noticed that his constituents feel the same way.
People are angry about the lack of transparency. They get in touch with us every day to tell us about the government’s lack of transparency, primarily with regard to the omnibus bills that it brings in for the various budgets.
Unfortunately, there is a double standard here. It is a good thing that these measures are being introduced, but I still have many questions about the fact that the bill is omnibus in nature.
It is sad to see that the Conservatives have to pass this kind of bill in order to get their message across.
Colin Carrie ConservativeParliamentary Secretary to the Minister of Health
Mr. Speaker, I want to thank the NDP for finally taking this opportunity to think about Canadian taxpayers' pocketbooks.
Obviously we disagree on what we should be doing for Canadians. Our government lowered the GST, from 7% to 6% to 5%. The NDP voted against that. We have lowered taxes for Canadian families by $3,000 since we have been in government. We have actually cut taxes over 140 times. However, the NDP voted each and every time against that.
Now it has new-found thoughts for Canadian's pocketbooks. If we look at its platform, the NDP has promised $65 billion in unfunded tax promises. These are promises for things it would do if it ever had the opportunity to form government. We know it has a $21 billion carbon tax, which is huge, but there is still a huge shortfall in income to pay for $65 billion in unfunded promises. Therefore, I was wondering, where is the NDP going to be making up the difference? Is it going to raise the GST too? Canadians would like to know where the NDP is going to come up with that difference, over $40 billion in unfunded promises.
Rosane Doré Lefebvre NDP Alfred-Pellan, QC
Mr. Speaker, I thank the parliamentary secretary.
As he knows, a budget involves choices. According to the latest study from the Department of Finance on the budgets presented by the different parties, the most balanced and the most reasonable budgets come from the NDP. Next come the ones presented by the Conservatives, and trailing far behind are the budgets by the Liberals, unfortunately.
Budgets involve choices. We can talk, for instance, about their attacks on employment insurance, the hidden taxes they pass on to consumers and the fees imposed on small businesses. We could talk for quite a while about that.
However, I find it interesting that we agree on the principle in the House today. It is nice to work together on a bill.
I hope this co-operation will continue during the committee’s consideration of the bill and that the Conservatives will listen to the official opposition, which does not just whine for the sake of whining. Constituents do not agree with the decisions being made by this government, and we represent them. The government must listen to Canadians.
Jonathan Tremblay NDP Montmorency—Charlevoix—Haute-Côte-Nord, QC
Mr. Speaker, to show support for my colleague following that last question from the government, I would like to say that we on this side will always oppose omnibus bills that directly attack the economies of our regions or certain segments of the population, even though an omnibus bill may contain some decent measures. There are always negative measures and, unfortunately, they overshadow the rest.
I am pleased to speak to Bill C-48, An Act to amend the Income Tax Act, the Excise Tax Act, the Federal-Provincial Fiscal Arrangements Act, the First Nations Goods and Services Tax Act and related legislation.
Generally speaking, bills should not be this lengthy. But since it should have been introduced years ago, we can understand why it is so large. It contains amendments that should have been made long ago and that must be made now.
I would like to congratulate the minister on finally introducing this bill, given that the last time Parliament passed a technical tax bill was in 2001. I believe we can say that this is long overdue.
In her 2009 fall report, the Auditor General at the time, Sheila Fraser, said this:
No income tax technical bill has been passed since 2001. Although the government has said that an annual technical bill of routine housekeeping amendments to the Act is desirable, this has not happened. As a result, the Department of Finance Canada has a backlog of at least 400 technical amendments that have not been enacted, including 250 “comfort letters” dating back to 1998, recommending changes that have not been legislated.
How is it that the last technical tax bill was passed in 2001, when the government acknowledged the need to introduce such a bill every year? Perhaps those were simply meaningless words from the minister. It happens all the time with bills. This is not the first time this sort of thing has happened with a bill.
A few months after he came to the position, the Minister of Finance introduced the first version of a bill to make technical reforms to the tax system. I say “introduced” rather than “enacted” for a reason.
It was not possible to enact that bill, and not because it had not gone through all the necessary steps in the House; rather, it was because the government decided to throw everything out and prorogue the first session of the 39th Parliament, in 2007. The bill was reintroduced, but it must be noted that two elections and three prorogations later, no legislation has yet been enacted.
It is all very well to recognize that a bill like Bill C-48 needs to be introduced every year, but let us not forget to pass it. Let us hope that in the case of this bill, the Conservatives are not preparing us for another prorogation.
Bill C-48 implements about 200 technical amendments to the tax system, spread over more than a decade. It is therefore essential that we pass it, because ultimately, these changes to the system will have a positive impact on revenues and will deter tax avoidance.
We in the New Democrats have long spoken out against tax avoidance, unlike former governments. We believe that we must fight tax avoidance and tax evasion, while preserving the integrity of our tax system. For that reason, I will be supporting the changes made by this bill. It does not solve everything and we will have to do more to deal with tax evasion, but this kind of bill needs to be passed.
I would now like to talk about how thick Bill C-48 is. In the last year and a half, we have learned how fond the Conservatives are of giving us a lot to read. But they do not give us figures, testimony, scientific studies or exhaustive data to read—just a lot of different laws in a single omnibus bill.
It is not reasonable for one bill to lead to so many changes to so many laws. For once, at least, the laws are closely connected. I will therefore not accuse the minister of putting everything but the kitchen sink into one bill, this time.
I simply want him to understand that if he had done his job properly and each year we had passed a bill like this one, we would not be having to consider a brick like this. The work of Parliament would then be much more effective, and more importantly, much more transparent, not to mention the fact that we would have a good administrator for a government. This government is unfortunately proving that the opposite is true.
The massive size of the bill proves that there is still much work to be done in order to transpose these kinds of technical changes into legislation. If the job is not done, it will penalize the business community and complicate the process of the evaluation that Parliament must do.
However, I would like to reassure the minister: he is not the only one to blame. He did introduce a similar bill in the past, but we might say that his boss did not think it important enough to be passed. He preferred to keep opening Parliament and shutting it down.
It is difficult for a bill of this magnitude to get through the whole legislative process. We must not forget that the Liberals are also partly responsible. They were in power for the first five years after the last such bill was passed in 2001. What is more, some Department of Finance comfort letters date back to 1998. I am not an accounting expert, but according to my calculations, fifteen years have passed since 1998. The government should have been doing this work regularly every year for a long time now.
There were also warnings when the Liberal government was in power. For example, Marlene Legare, former senior chief of the sales tax division of the Department of Finance, said the following when she appeared before the Standing Senate Committee on Banking, Trade and Commerce on September 20, 2000:
Until now, the choice has probably been more in favour of combining measures so as to put forward fewer bills. I think the lesson that we learned from this experience is that it may be preferable to change the balance somewhat. That may mean putting forward smaller bills which would contain measures that would be enacted on a more timely basis.
Yet, here we are 12 years after the most recent technical bill. The idea of a greater number of “smaller bills” does not apply here. At this very moment, as we debate this bill, there are still 200 more changes announced in comfort letters, which are agreements approved by Parliament. As everyone knows, in Canada, Parliament passes laws. That is the case even though we sometimes get the impression that some people would prefer that it be done another way.
Bill C-48 contains a number of positive changes. I would like to mention three changes that have not yet been pointed out by the government. First, some income tax restrictions have been removed to help labour-sponsored venture capital corporations address transition issues resulting from the elimination of the support program for such corporations.
Second, the formula for allocating the taxable income of air transportation companies has been changed to ensure that the income generated by taxing these companies is allocated to the provinces and territories where the company is permanently located.
Finally, there is the implementation of a measure concerning the tax treatment of shares held by short-term residents, for the purposes of the air transportation tax, according to the comfort letters dated 2003 and 2007. The bill is not a step in the wrong direction. I simply want the minister to understand that in the future, it should not take so long to get this through.
To conclude my speech, I would like to quote Denis St.-Pierre, chair of the tax and fiscal policy advisory group of the Certified General Accountants Association of Canada:
First, the government must introduce a technical tax amendments bill. The last time a technical tax bill was passed by Parliament was over 11 years ago. Literally hundreds of unlegislated tax amendments to the Income Tax Act—which I showed this committee last year by bringing the Income Tax Act, if you recall—have been proposed, but not yet enacted, which brings uncertainty and unpredictability to the process. Second, we strongly feel that implementing a sunset provision would ensure that tax amendments are legislated...
He went on to say that it was necessary and healthy for our economy to introduce amendments annually or on a regular basis.
Sadia Groguhé NDP Saint-Lambert, QC
Mr. Speaker, to begin with, I would like to congratulate my colleague on his speech.
Unfortunately, the Conservatives took a long time writing these technical amendments into law. In a report tabled in 2009, the Auditor General at the time remarked that the Department of Finance had accumulated at least 400 technical amendments that were outstanding.
Can my colleague tell us about the actual scope of such a bill?
Jonathan Tremblay NDP Montmorency—Charlevoix—Haute-Côte-Nord, QC
Mr. Speaker, the actual scope of such a bill is important because legislation must be amended. The bill we have before us now is Bill C-48.
However, there is a problem because while this bill is being debated, other amendments that need to be passed pile up. This bill already contains a huge number of amendments. So, the process needs to be undertaken regularly. It is good for our economy and will combat tax avoidance. It is necessary and, in the future, it must be done every year.
Shelly Glover ConservativeParliamentary Secretary to the Minister of Finance
Mr. Speaker, I have been listening carefully to my NDP colleague and I would like to know, in clear terms, how the NDP will vote on this bill. Moreover, I would like to know whether we can count on the NDP regarding the measures we have put forward to reduce Canadians' taxes.
Obviously, in the past, the NDP said that it wanted to increase the GST. Twice, the New Democrats voted against the cuts proposed by this government. However, today, things are clearer and the NDP members are perhaps ready to say that they will support tax cuts for Canadians.
Jonathan Tremblay NDP Montmorency—Charlevoix—Haute-Côte-Nord, QC
Mr. Speaker, the NDP will always be in favour of reducing the tax burden on Canadians. Still, we are talking here about all Canadians. It is not true that the NDP would decrease taxes on large corporations without requiring that they reinvest in their communities, as the Conservatives have done.
We can all agree that tax reductions were provided to large corporations without any conditions. They simply put the money in their banks. That was money belonging to the Canadian people, which has not been redistributed throughout the society and which is not making any contribution at all to the economy. That is not good economic management.
Hoang Mai NDP Brossard—La Prairie, QC
Mr. Speaker, I would like to thank the hon. member for his speech.
When we talk about technical amendments to the Income Tax Act and other complex acts things are not always obvious, especially when the bill has some 1,000 pages. The issue is not necessarily the number of pages in the bill, but the fact that it has taken so long to be introduced.
When we talk about technical amendments, we know that it is a good idea, not only to clarify the law governing income tax and related matters, but also to reassure the entire business community.
What does my colleague think about the government taking such a long time? This is really a long time, because the amendments in this bill date back to 2001, more than 10 years ago. What impact will this have on ensuring that the public is well aware of the bills that affect us all?
Jonathan Tremblay NDP Montmorency—Charlevoix—Haute-Côte-Nord, QC
Mr. Speaker, it tells me that up to now we have been governed by poor administrators who have created uncertainty in the economic sector and among the general public. If we suddenly bring in tons of amendments to the statutes that affect the economy, the transition will be much more difficult than if a few laws were changed each year.
Thus, we have some poor administrators and they must realize that there are important things to be done, and that a bill like this should be introduced at regular intervals, and not once a decade.
Shelly Glover Conservative Saint Boniface, MB
Mr. Speaker, I am excited to return to Saint Boniface this afternoon for the start of our world-class winter celebration called Festival du Voyageur.
This 10-day Métis and Franco-Manitoban event celebrates the joie de vivre of the voyageur and fur trade era. The Festival du Voyageur was founded in 1969 by a group of entrepreneurs from Saint Boniface and has become one of the premier annual celebrations in my home province of Manitoba.
People from around the world come to experience the Métis and Franco-Manitoban history, culture and dance.
The festival includes snow sculptures, delicious French-Canadian food and Métis games. As a Métis woman, I am very proud to celebrate our roots along with the rest of the country. I invite everyone to put on a colourful sash and join me for a trip to the past, to discover the world of the voyageurs and the Métis fur trade.
I would like to send a huge thanks to the organizers, volunteers and participants.
Hey Ho! Meegwetch!