House of Commons Hansard #222 of the 41st Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was parents.
The House resumed from February 27 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.
Rick Norlock Conservative Northumberland—Quinte West, ON
Mr. Speaker, I am pleased to participate in this important discussion. I want to speak to the matter of taxes, generally, as opposed to specific elements of the bill, as my other colleagues will do so.
Creating jobs and growth in our economy is the government's top priority. Rest assured, we are working on a number of fronts to create optimal conditions for sustainable growth. We are making it easier for Canadian businesses to successfully compete in the global economy and are making it more attractive for others to invest in this country, with the end goals, obviously, being more jobs for Canadians and a healthy and thriving economy.
Key among the strategies we are employing is our government's low-tax plan for jobs and growth that has made Canada the best place in the world to invest. It began in 2007, when Parliament passed a bold tax reduction plan that started us down the road to branding Canada as the lowest-tax jurisdiction for business investment.
At the same time, our government also encouraged the provinces and territories to collaborate in supporting investment, job creation and growth in all sectors of the Canadian economy by establishing the goal of a 25% combined federal-provincial-business tax rate. Today we have made substantial progress toward that agenda.
The final stage of Canada's incremental reduction in federal business tax rates came into force on January 1, 2012. These substantial tax reductions have lowered the federal general corporate income tax rate from 22.12% in 2007 to 15% in 2012. Also in 2012, the last of the provincial general capital taxes will be eliminated. This follows the implementation, in 2006, of the federal capital tax and the introduction, in 2007, of a temporary financial incentive to encourage provinces to eliminate their general capital taxes.
I do not want to use my time rhyming off a list of measures we have taken since 2006 to fuel job creation and spur economic growth. However, I do want to cite several that are key. They include the provision of a temporary hiring credit for small business to encourage additional hiring by this vital sector; reducing the federal income tax rate that applies to qualifying small business income to 11% in 2008 and increasing the amount of income eligible for this rate to $500,000 in 2009; supporting manufacturing and processing activities by introducing a temporary accelerated capital cost allowance rate for investment in manufacturing or processing machinery and equipment and extending it to eligible assets acquired before the year 2014; eliminating tariffs on imported machinery and equipment and manufacturing inputs to make Canada a tariff-free zone for industrial manufacturers by 2015; and improving the availability of Canadian businesses to attract foreign venture capital by narrowing the definition of taxable Canadian property, thereby eliminating the need for tax reporting under section 116 of the Income Tax Act for many investments.
The fact is that our government's low-tax plan is working, and the world is increasingly noticing.
As a result of these and other tax changes, Canada now has an overall tax rate on new business investment that is substantially lower than any other G7 country and below the average of member countries in the Organisation for Economic Co-operation and Development. This is a significant advantage for Canada in the global economy and will be a key contributor to Canada's long-term economic prosperity. Little wonder that Statistics Canada announced that employment increased in February by 50,700 jobs. With February's strong growth, over 950,000 net new jobs have been created since the depth of the global recession in July 2009. It is important to note that 95% of these are full-time, and nearly 80% are in the private sector.
These are positive signs that we are on the right track for Canada's economic growth. Indeed, Canada has the best job growth record among the G7 countries in recent years, and we do not intend to stop there.
The next phase of Canada's economic action plan continues our efforts to preserve this country's advantage in the global economy, to strengthen the financial security of Canadian workers, seniors and families, and to provide the stability necessary to secure our recovery in an uncertain world.
As members know, Canada weathered the global economic and financial crisis well, particularly when compared to most other developed nations. At the same time, Canada is not immune to the challenges that emanate from beyond our borders. That is why I was extremely pleased to note that as he prepares budget 2013, the Minister of Finance has stated clearly that this is not the time for dangerous new spending that would increase deficits and raise taxes. In uncertain times such as these, the most important contribution the government can make to bolster confidence and growth in Canada is to maintain our sound fiscal position. That means maintaining our focus on fostering prosperity for Canadians and their families by growing the economy and helping to create high-quality jobs. In other words, we have to do everything we can to keep taxes low for Canadian families and businesses.
Since there is only one level of taxpayer, all governments must work together to ensure that Canada's fiscal house is in order, return to balanced budgets and prepare for future economic turmoil. It is important to add that balanced budgets are not important for their own sake.They are important for what they make possible and for what they avoid. Reducing debt frees up tax dollars that would otherwise be absorbed by interest costs. These dollars can then be reinvested in the things that matter most to Canadians: health care, public services, and of course, lower taxes.
Reducing debt keeps interest rates low, encourages business to create jobs and invests in our future. It preserves the gains made in Canada's low-tax plan, fostering long-term growth. It will create more and better-paying jobs for Canadians. Canadian tax reductions that play an important role in supporting economic growth are those that enable businesses to invest more of their revenues in their own operations. Such investments boost efficiency and productivity. It is this productivity growth that allows businesses to hire additional workers or to offer higher wages in order to expand production and earn more profits.
Our government is committed to lower taxes for all Canadians, and that is why we intend to introduce broad-based tax relief with more than 140 tax reductions, such as lowering the GST from 7% to 6% to 5% and introducing the tax-free savings account. Our strong record of tax reliefs is saving the typical Canadian family of four over $3,100 each and every year. What is more, our government has been aggressive in closing tax loopholes used by a small group of taxpayers to avoid paying their fair share of taxes. Ensuring tax fairness helps to keep taxes low for all Canadians and their families. I encourage all members to support this legislation before us today and to help create a better tax system and greater fairness for all Canadians.
I appreciate this opportunity to discuss what to many people are some very technical tax changes. In the end, the simple way of explaining the changes to average people like me is to state that we are making the system better. We are making the system fairer. We want to make sure that when people utilize tax loopholes unnecessarily, which causes the rest of us to pay more taxes, we are going to close those loopholes so that we can continue to create lower taxes and make Canada a better place in which to live and raise a family.
Raymond Côté NDP Beauport—Limoilou, QC
Mr. Speaker, I would like to thank the member for Northumberland—Quinte West for his praise of the government's economic record, which is quite far removed from the reality of Bill C-48. That is something we can agree on.
However, he mentioned something in his speech that particularly caught my interest. According to him, corporate tax cuts encourage investment. One very worrisome symptom we have been noticing for years is the dramatic increase in private corporations' cash reserves. In fact, these reserves almost equal the amount of Canada's federal public debt.
What explanation can my colleague give for this lack of investment by private corporations? How does he explain this? How does he think this is dangerous?
Rick Norlock Conservative Northumberland—Quinte West, ON
Mr. Speaker, my hon. friend is right that there is a lot of money, liquid assets, we want to see invested in Canada. If we make Canada a fertile place in which to grow businesses, which we have already done with our low-tax scheme for the average Canadian, the people who work for these companies, we will encourage these companies to invest. Quite frankly, it is the global economic uncertainty that is prohibiting these companies from investing the funds. In a recent statement, the president of Cisco Systems said that Canada is one of the best places to do business. What we are doing is setting up a system so that people will invest in Canada.
Stephen Woodworth Conservative Kitchener Centre, ON
Mr. Speaker, I want to begin by thanking my colleague for his obvious enthusiasm for these measures and for explaining them in a manner that people watching across the country can easily understand.
In the last number of years, on occasion, I have had to look some of my constituents in the eye and explain what the government is doing to get their jobs back. I often think that my opposition colleagues across the way have never had that opportunity, because all they seem to want to do is pile taxes on corporations and make them less competitive and drive them out of the country.
I would ask my colleague how he would compare and contrast the tax policies of our Conservative government with those that are likely to occur if the opposition ever manages to be in a position to govern.
Rick Norlock Conservative Northumberland—Quinte West, ON
Mr. Speaker, there is a distinct difference between this side and that side of the House. We look at lowering taxes. We look to incent businesses, especially small and medium-sized enterprises, to create jobs. Indeed, small and medium-sized enterprises are the engine driving our economy right now.
The difference, quite frankly, is that the other side would bring in schemes to raise taxes for the average Canadian to provide programs that in the end would mirror countries in eastern Europe, and in particular, in western Europe. I think of countries like Greece, where people live beyond their means. We know what has happened there.
If something like a carbon tax is brought in, yes, it will raise lots of revenue, and governments will have lots of money to spend on programs, but it is a disincentive for investment. That is the difference between this side and that side of the House. We want to make sure that there are fewer obstacles for businesses so that they can grow, employ Canadians and grow the economy, whereas the other side wants to create those obstacles. That is basically, in the simplest terms, what my fellow caucus mate was referring to.
Tarik Brahmi NDP Saint-Jean, QC
Mr. Speaker, it is a great honour today to take part in the debate on Bill C-48, the short title of which is the Technical Tax Amendments Act, 2012. Its full title is 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 is obviously an enormous bill, comprising nearly 1,000 pages. More particularly, it is a very technical bill for the majority of members and myself, who are not tax specialists.
The purpose of Bill C-48 is to make amendments to the Canadian tax system that have been developed over more than a decade. Although we may wonder why the bill is long and voluminous, we can downplay that aspect because this bill nevertheless deals with a single subject, which was not the case with the mammoth bills the government previously introduced, Bills C-38 and C-45. Those bills concerned matters that were unrelated but that had nevertheless been grouped together based on an utterly debatable and debated logic.
Let us talk a little about the importance of taxation to Canadians, especially in this month of March when all our constituents are completing their tax returns. I do not believe our constituents are opposed to the idea of paying taxes, but they are appalled at times to see how their taxes are used at every level of government.
We are currently thinking of Quebec, in particular. In my riding, I hear a lot of talk about the Charbonneau commission and about the investigations that UPAC is conducting in Quebec on how taxes have been diverted from their primary purpose, the creation of infrastructure, at the provincial and municipal levels. Faced with misappropriation and corruption, Canadians—and I believe this is particularly true here in Quebec—are appalled at times by the wrongful manner in which their taxes are used; they are not being used properly.
When taxes are used properly, to expand infrastructure, for example, Canadians are quite happy to take part in this national effort. They are even asking us to do more, particularly with regard to infrastructure.
Although we can only be pleased that good measures are finally being included in Canada's tax legislation, we have reason to be concerned about the size of a bill that is nearly 1,000 pages long. Although it is true for all governments, this nevertheless shows that this government in particular should manage the tax code more effectively and work harder to ensure that statutory measures designed to enact tax proposals are regularly introduced.
With respect to the matter before us, the last technical tax bill was passed in 2001. In the update that she tabled in the fall of 2009, Sheila Fraser, then Auditor General of Canada, said she was concerned that at least 400 technical amendments had not yet been adopted. Although 200 of the amendments she referred to now appear in Bill C-48, hundreds of others have not yet been passed.
Bill C-48 includes some promising measures. Part 4, for example, provides for technical changes to the Excise Tax Act, repealing a measure that has not been used since 1999. Part 7 clarifies the minister's authority to amend tax administration agreement schedules, provided that does not make any substantial change to the terms and conditions of those agreements. Part 7 also enables the First Nations goods and services tax, imposed under a tax administration agreement between the federal government and an aboriginal government, whatever it might be, to be administered through a provincial administration system that also administers the federal goods and services tax.
This change will simplify administration of the First Nations Goods and Services Tax Act. These are quite promising measures.
This bill also addresses an aspect that is very important for Canadians and, more generally, for people around the world, and that is the problem of tax evasion. My colleague who spoke earlier mentioned Greece. One of Greece's major problems was not necessarily mismanagement or living beyond its means, but rather its level of tax evasion, which was incompatible with the revenue inflows to be expected in a country that aims to be worthy of that name, a country that should have quite a high level of taxation to pay for the goods and services that every government should provide. Where tax evasion levels are too high, they have a direct impact on essential public services. We have seen this in Greece, for example, and it is indeed a serious problem. A number of social problems result directly from those taxation problems.
Any reasonable person would agree that any amendments that increase tax revenue, discourage tax evasion and, as a result, ensure the integrity of our tax system are positive. We therefore need to adopt them as quickly as possible. What is more, most of these measures have already been in place for several years since, tax measures often take effect as soon as they are proposed.
The NDP is of the opinion that cracking down on tax evasion and avoidance should be a priority for any honest and responsible government. That is what we will do when we take office in 2015. We will do even more to make combatting tax evasion a priority.
I must also say a few words about my NDP colleagues who are members of the Standing Committee on Finance and who, since the beginning of this new Parliament, have been continually pushing the committee to complete its study of tax evasion.
One of the questions we have been considering is this: how can we successfully combat tax evasion? We must use measures targeting certain rental properties and Canadian multinational corporations with foreign affiliates. We must impose limits on them with regard to the use of foreign tax credit generators.
I would like to add that the committee heard from a number of witnesses. I would particularly like to quote Denis St-Pierre, who testified during the pre-budget consultations held on October 15, 2012. Mr. St-Pierre, chair of the tax and fiscal policy advisory group of the Certified General Accountants Association of Canada, said:
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.
This reminds us of just how much tax professionals, including chartered accountants, want to see a provision that would make their everyday work clearer.
So, for the reasons I have just mentioned, I will support Bill C-48 at second reading. The main reason is that the tax measures it contains are a step in the right direction, and it has already taken too long to incorporate them into our tax legislation.
Rick Norlock Conservative Northumberland—Quinte West, ON
Mr. Speaker, I was listening to my friend across the way, a person I have a great deal of respect for. He mentioned that he will support the bill.
He also mentioned that the previous Auditor General said these are measures the government should enact, and I suspect she might have used the word “must”. As well, he mentioned the certified general accountant's deposition before the finance committee, who also said that these things should be done in an expeditious manner and that he would support the bill.
I have noticed that the bill has been before the House and debated here for some 100 days. If the member supports the bill, and he has mentioned people who have stated we need to get on with this and get these tax measures completed, passed and enacted as quickly as possible, then why are we here in the House? We are now going on to over 100 days. What is the explanation for that, if it is so important, if we should do it, and if it is in the right direction, as the member stated?
Tarik Brahmi NDP Saint-Jean, QC
Mr. Speaker, I would like to thank my colleague. I certainly share his concerns. I would like to congratulate him for the work he does with us on the Standing Committee on National Defence.
I am sure the member noticed that the bill is 1,000 pages long. It contains a large number of provisions that address various aspects of the tax code.
It is important that our parliamentary and political systems provide every member with the time to debate a particular aspect or provision contained in these 960 pages if they wish to do so. As the member noted, this bill is extremely complicated and technical.
Pierre Nantel NDP Longueuil—Pierre-Boucher, QC
Mr. Speaker, I would like to congratulate my colleague on his speech.
We may not be tax experts, but it seems obvious to me that it would make sense to make this information available more often, instead of waiting and introducing a 1,000-page brick. What does my colleague think?
Tarik Brahmi NDP Saint-Jean, QC
Mr. Speaker, my colleague is absolutely correct. A number of members have mentioned the fact that there have not been any technical amendments to Canada's tax provisions for 11 years.
Every government should be more diligent when it comes to updating tax provisions. The reality is that tax professionals—which we are not—who, every day, help businesses and individuals make the right tax choices need certainty and clarity.
The fact that it has taken a decade to implement these amendments has only added to their lack of clarity and certainty in giving advice to their clients.
Raymond Côté NDP Beauport—Limoilou, QC
Mr. Speaker, it was quite funny to see the government play the victim yesterday in committee.
My colleague from York Centre, with whom I have the pleasure of serving on the committee, also complained that we were taking time to study this. The witnesses themselves said it is absurd to study a bill that is almost 1,000 pages long because we were going to miss certain problems.
Could my colleague from Saint-Jean tell us more about the fact that the bill is very large and very difficult to study in so short a time?
Tarik Brahmi NDP Saint-Jean, QC
Mr. Speaker, I thank my colleague from Beauport—Limoilou for the exceptional and always very focused work he does on the Standing Committee on Finance.
I have to agree with him. These bills are extremely complex, from both a quantitative and a qualitative perspective, and it is important that the committees take the time to study these points properly.
Cheryl Gallant Conservative Renfrew—Nipissing—Pembroke, ON
Mr. Speaker, I am pleased to rise to speak to Bill C-48, the technical tax amendments act, 2012. It is a very important piece of legislation. While the legislation may be technical, it is nonetheless important legislation that would benefit all Canadians, providing the clarity and certainty to Canada's tax system.
Our government has conducted extensive consultations on the provisions of the bill, some provisions having been announced over a decade ago. As previous parliamentarians' efforts to pass these amendments were unsuccessful, the backlog has increased over the years, and it is more important than ever to pass these technical amendments. In fact, among those calling for Parliament to quickly pass the amendments includes the Auditor General of Canada, who in a 2009 report stated:
Taxpayers' ability to comply with tax legislation depends on their understanding of how the rules apply to their own circumstances. [...] Uncertainty about how the law should be applied can also add to the time taken and costs incurred by tax audits and tax administration.
I could not agree with the Auditor General more. However, it is not just the Auditor General who is saying this; it is all the other parties in the House, as the bill has all party support. In fact, earlier this week, during the finance committee study of Bill C-48, the NDP member for Parkdale—High Park, and finance critic for her party, said, “Obviously we support the goal of closing tax loopholes and making the tax system in Canada clearer and easier to understand for Canadians”. The NDP finance critic went even further, on Bill C-48's first day of debate, saying, “the official opposition [New Democrats] will be supporting the bill”.
One would think that after making such an unequivocal statement of support for the legislation that she and all NDP members would be eager to vote on this important piece of legislation and ensure its timely passage through the House of Commons.
Alas, the actions of the NDP seem to be at odds with the NDP finance critic's statement. I have to ask: What is the reason for the NDP delay? Even more puzzling, it is not simply the NDP finance critic who is displaying these bizarre tendencies; it is every member of the NDP. My hon. colleagues have all declared their support for the bill while at the same time trying to filibuster second reading, for over 100 days. This attempt to disrupt what is only the first stage in a long legislative process continues to delay the finance committee's opportunity to formally study the bill.
I have taken the liberty of reviewing the debate on the bill and, time after time, the NDP MPs are vocal in their support for this piece of legislation. For example, the NDP member for Rimouski-Neigette—Témiscouata—Les Basques said, “We will support this bill because it eliminates some tax loopholes and other measures that lead to fiscal inequity”. The NDP member for Beauport—Limoilou said, “It will be a great pleasure for me to support this bill”.
The NDP member for Manicouagan said, “We support the changes this bill makes, and particularly those aimed at reducing tax avoidance”. This sentiment was echoed by the NDP member for Surrey North, who said: “We support the changes being made in the bill, especially those aimed at reducing tax avoidance”.
The NDP member for London—Fanshawe said, “The bill makes important and long-overdue changes to the tax laws” , and then went on to say, “New Democrats support the bill..”. The NDP member for Algoma—Manitoulin—Kapuskasing said, “As the House is aware, the New Democrats are supporting the bill...”.
The NDP member for Scarborough—Rouge River even highlights that her reason for supporting the legislation is that many of the provisions have already been announced, declaring, “Once they've been announced, people accept them as adopted. It's for these reasons that we are supporting the bill”.
These kinds of comments from the NDP continue and continue. NDP member after NDP member have all voiced their support for this piece of legislation, which has been in Parliament for more than 100 days. Furthermore, all of these statements of support came on the very first day of debate; yet more than 100 days later, we are still debating the bill at second reading.
This is simply unbelievable. Why would members of the NDP support the legislation, but not ensure its passage at second reading to the finance committee for closer examination by their own NDP colleagues? One wonders what the NDP hopes to gain by prolonging the debate. Again, perhaps the members are unaware that many of the measures have already undergone extensive debate in this House.
In fact, Bill C-48 has been before Parliament for five months now, as it was introduced in November of last year. Do members know what this means? Clearly, the NDP members do not, and so I will spell it out for them.
Let me state again that the House of Commons has had more than 100 days to examine and debate this bill at second reading stage already. We have already had days and days of debate and heard hours and hours of speeches, but what has all this debate yielded from the NDP benches? As I have highlighted, it is repetition upon repetition of support and praise for this legislation.
Well, if NDP members truly do support it, I plead with the NDP to not stall second reading in debate. Let us work together and pass this important legislation that would help Canadians. Let us make Parliament work. That would be an important change for the NDP, as its members have repeatedly shown that they have a track record of delaying and opposing legislation that would be beneficial to Canadians. For an example of this, we need look no further than our Conservative government's economic action plan legislation in these recent years.
What is more, NDP members have shown time after time that they would prefer to vote against tax relief measures that help Canadians and our economy, such as the hiring tax credit for small business and the introduction of a tax-free savings account. They even voted against a reduction of the GST to 5%.
However, we all know what the NDP does support: a carbon tax. I find this very puzzling. On the one hand, the NDP would gladly support a reckless $21 billion carbon tax that would raise the price on essential goods and services for Canadians, but it would stall well-reasoned and thoroughly examined legislation like Bill C-48.
While the NDP finds these partisan procedural games amusing, Canadian taxpayers and businesses, who are waiting for these technical amendments to be passed, certainly do not.
Despite the NDP's bizarre position on this bill, Canadians can rest assured that their Conservative government will work to ensure the passage of Bill C-48 through Parliament so that taxpayers' confidence is not lost in Canada's tax system.
Jinny Sims NDP Newton—North Delta, BC
Mr. Speaker, it was very hard to sit here and listen to a comment that parliamentary democracy in the form of debating legislation, which is the duty of parliamentarians, is somehow considered as standing in the way of legislation passing.
This comes from a member of a government that has moved time allocation to cut off debate on critical issues, preventing fair discussion by parliamentarians and preventing parliamentarians from doing their due diligence when they look at the budget and other pieces of legislation.
My question is to the hon. member across the way.
This is a critical piece of legislation. The Auditor General wrote about the urgency of these amendments in 2009. He suggested 400 outstanding technical amendments; we see only 200 of these addressed here. It took four years for the government to address 200 of those, 50% of them. How much longer is it going to take the government to address the rest of the Auditor General's recommendations?
Cheryl Gallant Conservative Renfrew—Nipissing—Pembroke, ON
Mr. Speaker, these are bizarre arguments. On the one hand, opposition members are complaining about how long this bill is, at over 1,000 pages, and now we are hearing somebody complaining that not enough amendments are being addressed.
As far as debate goes, it is repetition after repetition. Is it any wonder people are calling them the new Bloc party?
Claude Gravelle NDP Nickel Belt, ON
Mr. Speaker, we can talk about bizarre. There is something that is bizarre right there. The member should stand up and apologize to every member in this House and to every Canadian for misleading them.
She said that we have been debating this bill for 100 days. I just checked with the table officers, and we have been debating this bill for nine hours. That is a long way from 100 days. In my community of Nickel Belt, miners work longer than nine hours a day. We have not even been debating this bill for a day, let alone 100 days. What a ridiculous statement.
Then the member went on to talk about the NDP cap and trade. I have in my hand a copy of the Conservative platform. Lo and behold, on page 32 of the platform, we see “Developing a cap and trade system”.
What a shame. What a bizarre thing to say on the member's part. She should stand up and apologize.
Cheryl Gallant Conservative Renfrew—Nipissing—Pembroke, ON
Mr. Speaker, even before this bill was introduced, it was consulted on for literally years in advance. There were repeated public consultations.
On top of that, this bill has before Parliament for five months now, as it was introduced in November of last year. That means that the House of Commons has had over 100 days to examine and debate this bill already.
We are only at the initial preliminary stage of a very long parliamentary process. We have had literally days and days of debate. We have heard hours and hours of speeches, all saying the same thing. All sides support this bill. All sides recognize it is technical bill, yet for some bizarre reason the NDP insists on filibustering it with 100-day delay.
While the NDP might find these games amusing, Canadian taxpayers and businesses—
The Speaker Conservative Andrew Scheer
If I stop the member there, we can accommodate one more question or comment. The hon. member for Ancaster—Dundas—Flamborough—Westdale.
David Sweet Conservative Ancaster—Dundas—Flamborough—Westdale, ON
Mr. Speaker, on this International Women's Day, I just thought I would point out the behaviour of the NDP members, who usually like to be the champions of decorum.
My colleague talked about the bizarre arguments that were being made. Then the NDP member pointed at my colleague and said that was what was bizarre. The member was pointing to my colleague and saying that she was bizarre.
It is right to criticize debate here, but to take it personally goes beyond the pale and is certainly not in the spirit of decorum that we want to see.
I would like to ask my colleague now, in a very civil way on International Women's Day, what the consequences will be if this bill is not passed.
Cheryl Gallant Conservative Renfrew—Nipissing—Pembroke, ON
Mr. Speaker, the consequences would be tax avoidance. When individuals as well as companies do not pay their fair share of taxes, the rest of Canadians have to take up the slack and pay it in their place.
I thank my hon. colleague for recognizing International Women's Day. It is great to be in the House of Commons on such a day.
Technical Tax Amendments Act, 2012Government Orders
Kamloops—Thompson—Cariboo B.C.
Conservative
Cathy McLeod ConservativeParliamentary Secretary to the Minister of National Revenue
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—
The Speaker Conservative Andrew Scheer
The hon. member will have five minutes for questions and comments after question period.
We will now move on to statements by members. The hon. member for Palliser.
Ray Boughen Conservative Palliser, SK
Mr. Speaker, first of all, I am pleased to congratulate Dr. Michael Pawelke on being named the next president of Briercrest College and Seminary. His 19 years as a senior pastor in Ontario foretells that he will continue an excellent tradition of leadership.
Second, I would like to offer thanks to the outgoing president, Dr. Dwayne Uglem, for his nine years of guidance to students in Caronport. Under Dr. Uglem's leadership, students ranked the college as one of the best in Canada in which to study in a national survey recently published by Maclean's magazine. This national ranking recognizes that the college offers an outstanding undergraduate education within a supportive and caring learning environment.
Congratulations to the faculty and staff at the college on receiving this superb national student ranking.
Nycole Turmel NDP Hull—Aylmer, QC
Mr. Speaker, my heart is filled with emotion as I rise here today to recognize International Women's Day.
Today, March 8, I would especially like to commend the women who have laid the groundwork for equality throughout history.
I am thinking of all those courageous women who fought to change the status quo, often putting their own lives in danger.
Without them, we would not be where we are today. However, we must not abandon our efforts now, when true gender equality is still a long way off.
In some parts of the world, women and girls are more likely to be raped than to learn to read.
In Canada, women earn on average only 73% of what men earn, and nearly 1 million women are victims of violence simply because they are women.
Each and every one of us has a moral obligation to ensure that women's efforts towards equality are expedited. We in the NDP are ready to lead the charge.