Mr. Speaker, I am pleased to rise today to speak about 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.
The title is long, and the bill is voluminous. It is a necessary bill that makes amendments, and thus changes. The vast majority of the measures it contains have been in place for several years now. This bill makes them law.
Many people wonder why it has taken so long to introduce this bill. It is true that it is highly complex. Having studied law, particularly tax law, I can say that reading this bill is quite a difficult task. Let us just say that no one will be reading it for fun. The right frame of mind is essential.
I would like to thank the Department of Finance people who helped us during the briefing. They were very clear. They answered all our questions, unlike what the Conservative government is doing. The department's co-operation with us on this bill was good.
As my colleagues have already mentioned, no technical changes or clarifications have been made since 2001. That is a problem because we need more constant and regular review to achieve a degree of credibility and stability so that we can clearly understand the laws. In this case, the Conservatives have been asleep at the switch. It is time for them to wake up and do their job.
Sheila Fraser, the Auditor General of Canada, stated the following in her 2009 report:
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.
Yet, of the some 400 amendments in question, only 200 are included in this bill. There is therefore a problem with the government's approach. The government needs to do some housekeeping. It is important in order to build some degree of stability and understanding.
In this regard, the Standing Committee on Finance—of which I was a member not long before I joined the Standing Committee on Justice and Human Rights—mentioned tax simplification in its report. Many organizations testified before the committee of its importance. Tax simplification was even included in the Standing Committee on Finance's recommendations.
What is meant by tax simplification? With this 1,000-page bill and the Income Tax Act, tax legislation is piling up and becoming increasingly complex. Tax professionals and tax lawyers are increasingly sought after in order to sort everything out.
The more complicated this legislation gets, the more chances there are for loopholes or opportunities for evasion. Fortunately, this bills implements certain measures to close these loopholes.
The government is not doing enough to stop tax evasion. However, I am very pleased that our colleagues from the finance committee are currently examining the issue of tax evasion and tax havens. My colleagues know that I feel very strongly about this issue since I am the one who moved the motion. I am therefore very happy that the finance committee is moving forward on this. That being said, the government is clearly not doing enough from a practical standpoint.
In fact, the government has no estimate of how much money Canada is losing. Canada is losing billions of dollars, but they seem to be saying they are working on it. However, when we look at how the government is working on it, we see that there have been cuts at the Canada Revenue Agency and that the positions of people responsible for looking into tax evasion are even being cut.
To come back to the bill, I will say that some measures tackle tax evasion, or rather what is called tax avoidance, to close the loopholes. That is very important.
The bill is quite lengthy, but some parts are very worthwhile. As I explained, the bill is very technical and very lengthy. However, in order to understand the bill better and have a better idea of its scope, I am going to refer to a few aspects of it.
Part one deals with offshore investment fund property and non-resident trusts. The changes are aimed at taxing the worldwide income of Canadian residents.
It is therefore a good proposal.
Parts two and three deal with the taxation of foreign affiliates of Canadian multinational corporations. Again, that is an interesting and important issue.
Part four deals with amendments to ensure that provisions that use certain private law concepts reflect both the common law and civilian law in both linguistic versions.
It is quite technical, but it is important to make progress in this regard.
Part five of the bill implements a variety of technical elements.
In this case, I will not go into too many details, because it is rather tough going. Generally speaking, it is quite technical, but these are necessary amendments.
Part six includes housekeeping changes to the Excise Tax Act, repealing a provision that has not been used since 1999.
Once again, we see that the existing measures have not really been used, and that it takes a long time for the government to do something.
Part seven talks about certain powers of the minister. Certain things relating to that are dealt with.
Part eight says that Bill C-48 covers all of the amendments made in Bill C-45, which was introduced last fall.
To come back to what I was saying in relation to simplification and the fact that the government is not doing that enough, as I said a minute ago, I can tell you what people are saying about the need to make things simpler.
For this I blame both the Conservatives and the Liberals, who talk about simplifying taxes and ask why nothing has been done since the Carter Commission, that is, for several years now. Neither the Conservatives nor the Liberals have done anything in this regard. I find that quite deplorable, and I am not the only one. A number of groups, including the certified general accountants, a rather important group that has much to propose in this regard, feel the same way. I am going to read the recommendation made by that group in the pre-budget consultations.
—we strongly feel that implementing a sunset provision would ensure that tax amendments are legislated, which ultimately will eliminate the ever-growing backlog of unlegislated tax measures once and for all. With this provision, if a tax policy change is announced and not incorporated into legislation within a reasonable amount of time, the measure would lapse. This would bring greater clarity and certainty to tax legislation, reduce the compliance and paperwork burden, and, perhaps most importantly, prevent any future legislative backlogs. Those are a few simple but important steps that would go some distance in improving and strengthening Canada's tax system.
Those are a few simple but important steps that would go some distance in improving and strengthening Canada's tax system.
Again, the sunset provision is important; it should be a priority. It would keep us from having so many bills that go back more than 10 years, as has been mentioned, and whose tax measures have not been implemented.
Bill C-48 is a good start, but we would like the government to be more responsible, both administratively and fiscally.