Mr. Speaker, I am delighted to participate in this important discussion on Bill C-48, technical tax amendments act, 2012.
This legislation, as clearly stated in its title, is technical. It is nevertheless important, especially to the many taxpayers who want certainty after over a decade without the technical tax bill being passed by Parliament.
The technical tax act, 2012, moves to clear the backlog, with the inclusion of outstanding income tax and sales tax amendments, the majority of which have already been released for public consultation. Specifically, from 2009 to 2011, in advance of the technical tax amendments act, 2012, the government engaged in open and public consultations on the vast majority of the proposed amendments included in the legislation. I should also note that the Auditor General of Canada has identified the backlog of technical amendments as an issue requiring attention.
While outlining the delays and addressing the current backlog of outstanding income tax amendments, the Auditor General made some key observations about the impact of failing to deal with this issue in a timely manner and, of course, it has very far-reaching implications.
With regard to one of the many negative effects on taxpayers from the uncertainty caused by the backlog of these outstanding income tax amendments, the Auditor General noted the following: 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 substantially enacted; and increased willingness to engage in aggressive tax planning. As such, I think we need to applaud the Conservative government for taking action in this over decade-long backlog, and the Auditor General for the report that helped to crystallize this issue for Canadians.
As parliamentarians, it is important that we now move forward to address this problem. That means we all need to work together to put an end to this backlog of technical tax amendments.
We have seen that, to some extent, all parties have publicly declared support for Bill C-48. Indeed, the NDP has spent literally days of debate, with very similar sounding speeches, to make that point. To be quite frank, their behaviour looks suspiciously like political procedure games, as we have been at second reading for over 100 days at this point. We need to move past such games and focus on what would actually help taxpayers.
I want to applaud the work of my fellow colleagues on the finance committee, from all sides. We realized the need to move forward in a timely way with this legislation and we actually started to pre-study the bill a number of weeks ago. We have already heard from witnesses. Every single one of them is supporting moving ahead with this important piece of legislation.
We have heard from groups like the Canadian Institute of Chartered Accountants, who have said the technical tax amendments associated with Bill C-48 will help to improve clarity and certainty. We greet the technical tax amendments act, 2012, with a sense of relief.
We also heard from an expert tax lawyer, who stated:
The adoption of this bill will be welcomed, as it will formally enact provisions, many of which were originally proposed in 1999, and will have effect from 2007 or 2010 and in certain instances even earlier.
He also stated that many of the amendments found in this act have been brought before the House of Commons and the Senate on a number of occasions in the past.
In my remaining time today, I would like to spotlight some of the measures that may have been overlooked in today's legislation, or certainly overlooked in the debate, because there are many technical pieces. I want to highlight a few of them.
One such group of Canadians who will be assisted will be the self-employed, as the technical tax amendment act, 2012, will make some helpful, albeit minor, changes to fully implement a very popular recent initiative of our government, and that is to assist the self-employed. I am referring to the Fairness for the Self-Employed Act.
As parliamentarians may recall, that legislation extended employment insurance special benefits, including maternity, parental, sickness and compassionate care benefits, on a voluntary basis to the self-employed. Thanks to that new initiative, self-employed Canadians will no longer have to choose between their family and their business responsibilities. I think we can all agree that this initiative was good family policy. It represents a very significant positive measure for the self-employed.
As I also noted earlier, the technical tax amendments act, 2012, would make some helpful changes to fully implement that legislation. Specifically, the measure in question would amend the Income Tax Act as a consequential enactment to the Fairness for Self-Employed Act. It would provide for a personal income tax credit in respect of premiums paid consistent with the existing credit in respect of employees' EI premiums.
Another helpful measure, and this is important, specifically in terms of some of the work we are doing currently around tax avoidance and the use of tax havens, is the multi-lateral convention on mutually administrative assistance in tax matters, which is normally known as the convention. The convention was concluded in 1988 to create a multinational network to facilitate, improve and extend the exchange of information between national tax administrators. The objective was to combat international tax evasion. In April 2009, the G20 called for action to make it easier for developing countries to secure the benefits of the new co-operative tax environment, including the multilateral approach for the exchange of information.
In response, the OECD and the Council of Europe developed a protocol to amend the convention to bring it in line with the international standard on exchange of information for tax purposes and to open it up to all countries. We call this the amended convention. This amended convention is a useful instrument to fight against offshore international tax evasion and is consistent with the government's policy on exchange of information. Previously, it was open to members of the OECD and the Council of Europe. Now, more than 40 countries, including Brazil, Germany, the U.K. and the U.S., have signed the amended convention, and many more have stated their intention to do so.
The amended convention supports Canada's G20 commitment to implement the latest OECD standard on the exchange of tax information, which is to provide that bank secrecy should not prevent a country from exchanging information for tax purposes. However, the amended convention has not yet been ratified, since section 241 of the Income Tax Act must be amended first. With the passage of Bill C-48, it would be in a position to do so. This is very technical legislation but critically important.
As members may recall, another example is the First Nations Goods and Services Tax Act, or the FNGST. This is a tax applied by participating aboriginal governments on goods and services within their reserves or lands. On reserve, it effectively replaces the GST. The longstanding FNGST arrangements promote self-reliance and political accountability of aboriginal governments to their members, as well as the effectiveness of a national tax system. The FNGST is available to both self-governing aboriginal groups and to interested Indian bands that continue to operate primarily under the Indian Act.
Under the terms of the tax administration agreement, the FNGST is collected and administered free of charge by the Canada Revenue Agency, which acts as the agent of the taxing aboriginal government. That is where the amendments in part 7 of the technical tax amendments bill come into play. These are very big improvements in terms of how we will move forward on this important issue for our aboriginal communities.
As I mentioned earlier, it has been over a decade since Parliament last passed a comprehensive package of technical income tax amendments, so we must move forward. My colleagues and I on the finance committee heard from KPMG, which asked Parliament to act decisively and pass Bill C-48 to essentially clean up the slate of this old legislation and finally bring the Income Tax Act up to date. Taxpayers could then move on and focus on running their businesses and the CRA could carry on administering—