House of Commons Hansard #41 of the 42nd Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was jobs.


Taxpayer Bill of RightsPrivate Members' Business

11:05 a.m.


The Speaker Liberal Geoff Regan

Before we go to orders of the day, I have a point of order from the member for New Westminster—Burnaby.

Taxpayer Bill of RightsPrivate Members' Business

11:05 a.m.


Peter Julian NDP New Westminster—Burnaby, BC

Mr. Speaker, I rise on a point of order with some brief remarks about Motion No. 43 by the member for Calgary Rocky Ridge.

I do not wish to criticize my colleague, who is acting in good faith. He wanted to introduce legislation on a subject that matters very much to him. The entire NDP caucus and I would be glad to debate the taxpayer bill of rights and the services provided by the Canada Revenue Agency.

However, it is clear to me that Motion No. 43, as drafted and presented to the House, violates Standing Order 68(4).

Standing Order 68(4) states that only a minister can move a motion to do what Motion No. 43 seeks to do. I would like to quote part of that standing order:

A motion by a Minister of the Crown to appoint or instruct a standing, special or legislative committee to prepare and bring in a bill, pursuant to section (1) of this Standing Order, shall be considered under Government Orders.

I would now like to read from page 722 of O'Brien and Bosc, which is very clear about drafting by a committee:

A committee may be instructed to prepare and bring in a bill or a committee may be appointed for that specific purpose. Motions to this effect may be moved only by a Minister.

In my opinion, there is no question that Motion No. 43 is a private member's motion that will be debated during the time allocated for private members' business.

We asked the clerks of the House to tell us whether a committee has ever been mandated to prepare a bill under a private member's motion.

I would like to thank the clerks for getting back to us so quickly last Friday. They gave us two examples: Motion No. 411, placed on notice on April 1, 2003, and Motion No. 541, placed on notice on February 2, 2004.

However, neither of these two motions was debated in the House. We are therefore entering uncharted waters. There were no points of order raised regarding these motions either, but that must be because they were not debated.

Since Standing Order 68(5) came into effect, only two bills have been drafted by a committee, which suggested the wording for the bills under this standing order. One of those bills was drafted in response to an opposition motion that was moved by the member for Prince George—Bulkley Valley at the time and debated on October 30, 1997.

However, it is important to point out the differences in that case. That motion called on the government to:

...bring forward a motion, pursuant to Standing Order 68(4)(a), to instruct a legislative committee to prepare and bring in a bill to amend those sections of the Criminal Code which deal with impaired driving...

That is just part of the motion.

That same day, at around 3:40 p.m., the member for Abitibi at the time proposed an amendment. The government party thus instructed the Standing Committee on Justice and Human Rights to draft the bill.

When debate on the amendment finished at the end of the day, the amendment was adopted. The motion was then adopted as amended. When the Speaker announced it, the then minister of Human Resources Development moved a government motion as called for in the amended motion by the member for Prince George—Bulkley Valley.

The minister obtained the unanimous consent of the House to move the motion mandating the Standing Committee on Justice and Human Rights to prepare the bill. That motion was also immediately adopted. The committee presented the text of a draft bill in May 1999.

In the only precedent in which a committee prepared a bill as a result of an opposition motion, all the parties agreed to allow a minister to move a motion instructing the committee, which was in line with Standing Order 68(4).

This is not what Motion No. 43 does, since it does not require any ministerial involvement. As a result, with all due respect to my colleague from Calgary Rocky Ridge, his motion violates the Standing Orders, in particular Standing Order 68(4). This motion should be ruled out of order.

Taxpayer Bill of RightsPrivate Members' Business

11:05 a.m.


Andrew Scheer Conservative Regina—Qu'Appelle, SK

Mr. Speaker, I thank the hon. House Leader of the New Democratic Party for his speech, but he must understand my colleague's motion.

I would just like to take a few seconds to read out the procedural portion of the motion that the House is hopefully about to debate. It states that:

...the tabling of a report pursuant to this order shall be an order to bring in a bill based thereon; and when the member for Calgary Rocky Ridge, in proposing a motion for first reading of a bill, states that the bill is in response to the recommendations contained in a report pursuant to this order, the second reading and subsequent stages of the bill shall be considered under private members' business and the bill shall be placed immediately at the bottom of the Order of Precedence of private members' business as a votable item in the name of the member for Calgary Rocky Ridge.

I can appreciate that there is no standing order that would allow the member to propose something like this, and that is exactly what the motion is: it is a motion to have a provision to do that. The House does this all the time. We hear all kinds of motions, usually done by unanimous consent, as my colleague pointed out, but not necessarily. There are government motions from time to time that are debated and voted on that may direct the House to take a course of action or adopt procedural measures that are not necessarily contained in the Standing Orders.

The member is proposing an instruction to committee, and it comes with a special order to allow the House to deal with it. I do note that Standing Order 68(4) indicates what will happen when a minister does move a motion to have a committee bring in a bill. Standing Order 68 spells out exactly how that will operate, but that does not in and of itself prohibit other types of instances in which a committee could be instructed to bring in a bill, especially in a situation when we have a motion to do just that.

I understand that there is a standing order for ministers, and that is fine. Given that there is not one for private members' business, the member is responding by providing for a special order, and the House will have an opportunity to decide. The House obviously has had an opportunity to read what is in the motion, both in terms of the content of what the committee will look at and then what the House will do procedurally. It is up to the House to decide if it wants to adopt the special order, should there be a vote, hopefully, and we would encourage members to vote in favour of it. The House will ultimately have a decision to take, and the decision will guide the House procedurally in how to proceed further.

Taxpayer Bill of RightsPrivate Members' Business

11:10 a.m.


The Speaker Liberal Geoff Regan

I thank the hon. member for New Westminster—Burnaby for raising this concern about the motion.

I would like to thank the hon. member for Regina—Qu'Appelle for his intervention as well.

I will take this matter under advisement and inform the House in due time of my ruling on whether Motion No. 43 is procedurally in order.

In the meantime, given that the House was given notice that this was the motion to be debated at this time and is prepared to do so, and also in order not to penalize unnecessarily the member for Calgary Rocky Ridge in whose name it stands, I will now allow the debate to go forward today.

Taxpayer Bill of RightsPrivate Members' Business

11:15 a.m.


Pat Kelly Conservative Calgary Rocky Ridge, AB


That the Standing Committee on Finance be instructed to undertake a study to prepare and bring in a bill, and to report to the House on: (a) the steps necessary to establish an enforceable duty of care between the Canada Revenue Agency (CRA) and individual taxpayers; (b) the steps necessary to make the provisions of the Taxpayer Bill of Rights legally enforceable, such as by amending the Canada Revenue Agency Act to establish a duty of care owed by the employees of CRA to the taxpayer when performing duties and functions under all revenue related law, with the standard of care being defined as the rights contained in the Taxpayer Bill of Rights; (c) the steps necessary to amend the Taxpayer Bill of Rights with the following changes, (i) in Right 4, add the requirement that CRA take reasonable and necessary steps to avoid frivolous, vexatious, malicious, and/or grossly negligent actions toward taxpayers, (ii) in Right 8, add the requirement that information provided by CRA via any means, including but not limited to correspondence, telephone calls, and its website, be accurate, reliable, and in compliance with all applicable revenue law, and add the requirement that information provided by CRA to taxpayers by telephone be followed, within a reasonable time, by the same advice in writing, (iii) in Right 9, add the requirement that complaints about CRA’s service be addressed in a timely manner, add investigation and enforcement powers to the Office of the Taxpayers’ Ombudsman, including the power to dispense remedies to make a taxpayer whole in relation to the standard of care set out in the Taxpayers Bill of Rights, (iv) or, if the changes mentioned in (i), (ii), and (iii) are not possible, to add the additional rights mentioned in subsections (i), (ii), and (iii), as new rights; (d) the steps necessary to empower the Office of the Taxpayers’ Ombudsman to direct compliance with Tax Court rulings or formal decisions on specific cases; and (e) the steps necessary to impose reasonable limits on the rights forming the standard of care and duty of care created by the sections above; and, that the Committee report to the House no later than December 15, 2017, provided that in its report, the Committee shall recommend the principles, scope and general provisions of the said bill and may include recommendations regarding legislative wording; and, that the tabling of a report pursuant to this order shall be an order to bring in a bill based thereon; and when the Member for Calgary Rocky Ridge, in proposing a motion for first reading of a bill, states that the bill is in response to the recommendations contained in a report pursuant to this order, the second reading and subsequent stages of the bill shall be considered under Private Members' Business and the bill shall be placed immediately at the bottom of the Order of Precedence of Private Members' Business as a votable item in the name of the Member for Calgary Rocky Ridge.

Mr. Speaker, death and taxes are perhaps the two great certainties in life. Both are inevitable. However, the means of administering them bear debate. Law-abiding Canadians should not be figuratively taxed to death. They should not lose their business, their home, and their physical health due to gross negligence by the tax collector.

Although no one relishes the prospect of paying taxes, the vast majority of Canadians dutifully file their returns, keep their receipts, and claim only those deductions to which they are entitled. The Canada Revenue Agency, for its part, normally conducts its business fairly and efficiently. However, an egregious error by the Canada Revenue Agency can cost taxpayers dearly, through no fault of their own. Sadly, such errors do occur from time to time. Motion No. 43 aims to correct this problem by instructing the House of Commons Standing Committee on Finance to study and report on the means of creating an enforceable duty of care from CRA toward Canadian taxpayers. The motion also aims to make CRA more accountable for its communication, to empower the Office of the Taxpayers' Ombudsman, and to allow egregiously wronged Canadians to obtain remedies.

Several stories illustrate the need for such reforms. Irv Leroux was an enterprising British Columbian. In the early 1990s, he cleared a patch of land to build a campground and recreational vehicle park. His troubles began when CRA audited him in 1996. CRA required certain paperwork, which Mr. Leroux supplied. Through an egregious oversight, CRA first lost and then destroyed his original documents. However, this did not stop CRA from continuing to demand that he produce the original documents, or from refusing to accept copies that he painstakingly acquired and supplied. Instead, CRA continued to demand the originals that it had destroyed. It simply pressed on with its reassessment of his income, having destroyed the only evidence he could use in his defence. Ten years later, in 2006, CRA conceded that Mr. Leroux was correct all along and that he did not owe the taxes it had originally demanded. However, the damage was done. The struggle with CRA cost Irv his business, his home, even his physical health. Mr. Leroux sued CRA, and eventually the court ruled that CRA owed him a duty of care and had acted negligently. His is a story of one man being ruined by egregious treatment by CRA. This should never happen again.

In another case, a constituent of mine from Calgary Rocky Ridge, named David, was in a shared parenting arrangement with his ex-wife. In order to comply with the Divorce Act, he and his wife made an agreement that compelled each former spouse to pay support to the other based on their incomes. David did his best to comply with the law. He read the rules carefully and looked up information on CRA's website. He thought that he could rely on CRA's website for accurate tax information, especially since he found a seemingly helpful example on the website which matched his situation to a T. However, some years later, CRA reassessed him, denied the deductions that its own website indicated he was entitled to, and demanded a very large amount of back tax.

Clear and reliable communication from CRA to taxpayers would avoid much stress and cost to both tax-paying Canadians and to the treasury.

In a third example, Janet is a hard-working mom from southern Ontario. She pays her taxes, keeps her receipts, and complies with the law. However, through no fault of her own, someone at CRA checked the box to mark her as deceased. One click of the mouse caused months of trouble for this law-abiding taxpayer. CRA flagged her social insurance number, which stopped the payments of her universal child care benefit. It demanded reimbursement of an overpayment to her estate, yet still accepted source deductions from her employer, presumably as a new category of working dead. Worst of all, her status as primary caregiver for her son was withdrawn. Despite repeated calls to Service Canada and CRA, her son remained without a legal caregiver.

It is hard to imagine the stress and anguish of a mother facing the possibility of the state seizing her child and treating her like an abductor. Here is a woman who did nothing wrong but suffered months of stress, financial uncertainty, unnecessary extra work, and fear of losing custody of her child due to an administrative mistake with far-reaching consequences.

What would have happened had this occurred to a senior with reduced faculties who did not have an employer and a helpful member of Parliament in her corner like Janet did? How much suffering would ensue if someone's OAS, GIS, CPP, or other supports tied to their social insurance number, suddenly cease without notice? A more user-friendly resolution program with a stronger ombudsman could help reduce such strain on blameless taxpayers.

These stories illustrate problems which Parliament can address through passing this motion. Indeed, I believe it is our duty as an elected legislature to respond to injustices caused by Canada's tax collector. As members of Parliament, we must respond to developments in the law which come up through the courts. When a court, such as the Supreme Court of British Columbia in Leroux v. Canada Revenue Agency, makes a new finding in federal law which could have widespread consequences, it is incumbent upon Parliament to respond.

In paragraph 209 of the Leroux case, Justice Humphries concluded that “in the circumstances of this case, the employees of CRA–more specifically the auditors–owed Mr. Leroux a duty of care”. She went on to find in paragraph 311 “the standard of care [owed to Mr. Leroux was] that of a reasonably competent tax auditor in the circumstances”.

The precedent-following nature of Canada's common law means that courts throughout Canada will now treat this duty of care decision as persuasive, or a binding precedent, depending on their level. If appeals take the matter to the Supreme Court of Canada, this duty of care may well become the law of the land, without legislative input.

M-43 proposes that Parliament take up its responsibilities and get ahead of the courts to study the best way to address the issue. The motion instructs the House of Commons Standing Committee on Finance to study and report on the steps necessary to create a legally enforceable duty of care owed by CRA to Canadians. In plain language, a duty of care means that someone must consider the legitimate interests of the other party in a particular relationship so that the former takes care to not unduly harm the latter.

Whether we like it or not, all Canadians enter a relationship with CRA, an agency which is far more powerful than any individual or business. Such power may be necessary for a functioning tax system, but should include safeguards against abuse, such as a duty of care.

By having the finance committee study and report on the matter, Parliament can ensure that we receive information needed to make a wise decision. We can hear from a wide range of stakeholders, from CRA itself to tax lawyers, taxpayer advocates, accountants, research staff at the Library of Parliament, and ordinary Canadians. Referring the matter to committee also ensures that the different parties can have their say on a measure which will affect Canadians regardless of political persuasion. By sending the matter to committee, Parliament ensures that the deliberations are visible to the public, thus contributing to the government's stated objective of open government.

I recognize that the finance committee has many pressing matters to address in the coming months, so I have included a generous timeline for Motion No. 43. Instructing the committee to report back by the last sitting day of 2017 gives it a year and a half to address the matter without sacrificing other important priorities.

Creating a duty of care between CRA and taxpaying Canadians is an important step, one which should be taken carefully and correctly with the full participation of Parliament, but taken nonetheless.

This brings me to the specific measures that M-43 proposes and the reasons behind them. A duty of care is always accompanied by a standard of care by which it is measured. In the Leroux case, Justice Humphries found the standard to be that of a reasonably competent auditor. However, what guides reasonably competent auditors? What guides CRA as a whole in determining how to treat taxpayers?

The taxpayer bill of rights already provides a list of expectations for how CRA should conduct its affairs. However, the taxpayer bill of rights remains more aspirational than enforceable. M-43 seeks to remedy that by instructing the finance committee to study ways to make the rights contained in the taxpayer bill of rights enforceable as the standard of care to which CRA will be held.

The motion also contemplates expanding some of the rights contained in the taxpayer bill of rights to address the problems which the stories of Irv Leroux, my constituent David, and Janet from southern Ontario, faced.

Adding the requirement that CRA take reasonable steps to avoid frivolous, vexatious, malicious, and/or grossly negligent actions toward taxpayers would codify something that CRA should be doing anyway, thus giving clarity both to CRA employers and to Canadian taxpayers. Adding the requirement that CRA provide accurate and reliable information would address David's case. If someone who consults CRA's website for information about claiming a deduction or credits finds an example that matches his or her family's facts to a T, he or she should be able to count on the information being accurate. That brings me to the proposal to empower the office of the taxpayers' ombudsman to investigate, enforce, and dispense remedies.

A stronger ombudsman with these powers would prevent many disputes from going to tax court and would act as an internal correction measure, balancing the needs to collect revenue efficiently and an obligation to not abuse taxpayers. Most important, it would provide a way to make taxpayers whole if the ombudsman finds gross negligence. A stronger ombudsman could help sort out small mistakes with large consequences, such as when Janet was incorrectly marked as deceased. It could also discourage CRA employees from digging in and standing by their errors when they make mistakes, since a smooth investigation and remedy system could deal with mistakes quickly and quietly.

Rights always come with responsibilities, and this motion is no exception. In creating new rights or expanding the existing ones under the taxpayer bill of rights, we in the legislature are responsible for imposing reasonable limits on them so that they do not cripple the CRA's ability to collect revenue. The motion includes an instruction to the finance committee to study the steps necessary to impose reasonable limits on the taxpayer rights so that Parliament can strike the right balance between collecting revenue and protecting Canadians.

To be clear, this motion would not make CRA liable for every mistake made by its employees, but it would seek to hold CRA accountable for gross negligence. The finance committee is ideally suited to discuss these limits and consult with the Minister of National Revenue and representatives of her department on where to set them. CRA plays an essential role in financing the government, and so should not be impeded, except to the extent needed to protect taxpayers from egregious abuses.

Let me conclude by appealing directly to my honourable colleagues in each party. Members of the government and other opposition parties may be asking why they should support a private member's motion about the Canada Revenue Agency.

To my colleagues in the government, I would say that I support their campaign promise and the Minister of National Revenue's mandate to take action to make CRA more fair, more helpful, easier to use, and more, as they put it, client focused. This motion squarely fits with those laudable goals and offers a thoughtful way to implement them. Through this motion, it may be possible for my Conservative colleagues and me to help the government fulfill this particular plank from its election platform. We welcome the opportunity to work together to study the matter and draft a sensible solution that is good for all Canadians.

To my colleagues on my left on these opposition benches, I would say that the measures proposed in this motion go to the heart of their party's historic desire to be Canada's social conscience and ensure that ordinary Canadians get a fair shake. After all, this motion would be most beneficial to Canadians who cannot afford expensive professional tax advice when preparing their returns and cannot afford legal representation if they become part of a dispute.

Regardless of whether a Canadian votes Conservative, Liberal, NDP, Bloc, or Green, we all have to pay taxes, and we all want to be treated fairly by CRA. We can and we do disagree as parties on what the tax rates should be and how taxpayer dollars should be spent, but surely we can all agree that the tax collector should be efficient without crushing Canadians and that, when it comes to paying taxes and disputing a CRA ruling, the process should never be the punishment.

I urge all of my honourable colleagues from all parties to join me and vote in favour of Motion No. 43.

Taxpayer Bill of RightsPrivate Members' Business

11:30 a.m.


Larry Bagnell Liberal Yukon, YT

Madam Speaker, I thank the member for his thoughtful motion, and I certainly agree with the objectives of improving the work at CRA. That is why I am delighted that the government has put extra funds in the budget this time and advocated for the process, not only for CRA but for several other departments, to make them more efficient.

However, I am not sure that this is the exact way to ensure those rights, and I have a quick question.

The motion talks about it being “necessary to empower the Office of the Taxpayers’ Ombudsman to direct compliance with Tax Court rulings or formal decisions on specific cases;”. I do not understand that if there are rulings and formal decisions why they are not already enforced. If the court orders something, is it not enforced? As well, in empowering the ombudsman to order redress, it appears to be more powerful and extensive than any other powers of parliamentary ombudsmen. I wonder if the member has any precedents for such a move.

Taxpayer Bill of RightsPrivate Members' Business

11:30 a.m.


Pat Kelly Conservative Calgary Rocky Ridge, AB

Madam Speaker, I thank the member for Yukon for what sounded like support for the intent of this motion, which really ought to appeal to all of us as parliamentarians.

To answer his questions, certainly one would think that, if a court ruling is made, that should be the end of it and there would be no further direction required. However anecdotally, that does not appear to be the case, based on some complaints and discussions we have had over difficulties with the agency complying with the court ruling. Therefore, we included that in the motion specifically in response to what we have been told in our research.

As far as giving the ombudsman further teeth is concerned, I do not have a precedent in terms of other agencies, but the CRA is a unique agency in that it has unique power over Canadian taxpayers and businesses. Because of the reverse onus nature of the way the CRA works when assessing—

Taxpayer Bill of RightsPrivate Members' Business

11:30 a.m.


The Assistant Deputy Speaker NDP Carol Hughes

There are other people who want to ask questions, so if members can keep their questions and responses short enough, we will be able to get through this.

Questions and comments, the hon. member for Sherbrooke.

Taxpayer Bill of RightsPrivate Members' Business

11:30 a.m.


Pierre-Luc Dusseault NDP Sherbrooke, QC

Madam Speaker, I thank my colleague for his initiative.

I will let him continue to talk about the ombudsman, because that is something I also wanted to discuss. The motion states in (c)(iii):

...add investigation and enforcement powers to the Office of the Taxpayers’ Ombudsman, including the power to dispense remedies to make a taxpayer whole in relation to the standard of care set out in the Taxpayers Bill of Rights...

The motion states in (d): empower the Office of the Taxpayers’ Ombudsman to direct compliance with Tax Court rulings or formal decisions on specific cases...

How will the Standing Committee on Finance be able to do this? I am very intrigued by this. Right now, the ombudsman is an administrative ombudsman who was appointed by the Governor in Council. Changing the ombudsman's powers to that extent significantly changes the ombudsman's role. That would take more than this motion, and only the government can change the ombudsman's mandate.

What kind of solution does my colleague think the Standing Committee on Finance could find to address this potential impasse?

Taxpayer Bill of RightsPrivate Members' Business

11:35 a.m.


Pat Kelly Conservative Calgary Rocky Ridge, AB

Madam Speaker, I thank the member for the question allowing me to continue in somewhat the same vein as in response to the previous question.

Yes, we have asked the committee to study and report back on this issue and find ways to address the objectives. One of the objectives is to ensure that the office of the ombudsman has sufficient powers to help protect Canadian taxpayers. I would encourage other members to support the motion to allow the study to go ahead and find ways to enhance the powers of the ombudsman to ensure that taxpayers can be made whole when an egregious error occurs on the part of the Canada Revenue Agency.

Taxpayer Bill of RightsPrivate Members' Business

11:35 a.m.

Bourassa Québec


Emmanuel Dubourg LiberalParliamentary Secretary to the Minister of National Revenue

Madam Speaker, I welcome this opportunity to rise today to clarify the actions being taken, on multiple fronts, to uphold the rights and interests of Canadian taxpayers in a responsible manner.

The Canada Revenue Agency is committed to delivering real results and professional government to Canadians. Thanks to budget 2016’s infusion of $1 billion over five years in supplementary funding, the agency will be able to do just that.

In addition to combatting tax evasion and tax avoidance and enhancing tax collections, the CRA will put this new money to work to improve service to Canadians, especially low-income Canadians, newcomers, and indigenous communities. An investment of $185.8 million over five years will support enhanced telephone access and easy-to-understand correspondence, and several measures have already been taken to do just that, as well as increased outreach for vulnerable and low-income Canadians, including indigenous peoples.

As members can see, there is a fundamental flaw with Motion No. 43 moved by my colleague. While it is undoubtedly well-intentioned, it is unnecessary, and I will explain why. It is a solution in search of a problem, a problem that does not exist.

I am not disputing the stories my colleague shared with us, but I just want to say that there are measures in place to help these people who are encountering these types of problems with the Canada Revenue Agency.

Canadian taxpayers already have numerous means of recourse to resolve disputes if they disagree with their tax assessments. If the House were to adopt this motion, it would merely duplicate the full range of services and information currently available to taxpayers. The CRA's taxpayer bill of rights contains 16 rights as well as five commitments to small business. This confirms the CRA's commitment to serve taxpayers with professionalism, courtesy, and fairness.

The service rights of the taxpayer bill of rights are backed by the CRA's service complaints program and the taxpayers' ombudsman. More to the point, many rights found in the taxpayer bill of rights are already enforceable under the Income Tax Act, the Official Languages Act, and the Privacy Act. These statutes ensure judicial recourse for Canadians, such as the right to object to a tax assessment or the right to privacy and confidentiality.

Moreover, the Supreme Court of Canada has already made a distinction between policy decisions and operational decisions. The court has ruled that operational decisions, the implementation of government policies, are already subject to a duty of care. Accordingly, the creation of an enforceable duty of care would be legally redundant. Simply adding the term “enforceable duty of care” to the taxpayer bill of rights would have no more force than what exists at the moment.

I should point out that the taxpayer bill of rights was amended in 2013. This provided the opposition with ample opportunity when it was the government to make the improvements it deemed necessary. It is curious that the hon. member for Calgary Rocky Ridge now feels that it failed to do an adequate job and must call for these amendments.

Presumably, the authors of those recent amendments recognized that CRA's mix of legislated and service rights is the right approach. It is consistent with the way many other OECD countries address these issues.

I would also note that the member has cited particular cases in media interviews as inspiration for his motion. One of the cases began 19 years ago, well before many of the avenues of recourse that exist today were in force.

While I share his concerns about the taxpayers in his riding who had difficulty with recourse to the Canada Revenue Agency, I can report that the case in question was resolved shortly after this government came to power.

The hon. member cited the case of one of his own constituents as well. It is not appropriate to discuss detailed information. According to section 241, the Canada Revenue Agency cannot discuss specific cases. However, I would hope that my colleague has advised the individual of the recourse mechanisms provided by the CRA.

My second argument against the motion relates to the Office of the Taxpayers' Ombudsman. The ombudsman provides an impartial review of unresolved service complaints from taxpayers. The Office is neither an advocate for the taxpayer, nor a defender of the CRA. Rather, it investigates complaints related to service delivery to determine whether taxpayers received accurate, clear and complete information in a fair, courteous and timely manner.

The ombudsman investigates the facts and, when required, recommends corrective action to systemic service problems. This approach makes it possible for taxpayers to avoid an adversarial, protracted and litigious process. This is the fairest way to address contentious issues, since these rights are extended to all Canadians and not only those who can afford to go to court.

Perhaps even more importantly, this fosters an open and co-operative relationship between taxpayers and the Agency, allowing the CRA to resolve complaints quickly and at minimum cost. Some complaints and disputes are caused by a lack of information or by a simple miscommunication. That is why people working at the CRA want taxpayers to talk to them and stay in contact.

I would remind hon. members that we are making an unprecedented $188-million investment to improve client services. My colleague's concerns are welcome; however, we have already launched a number of measures to resolve some of the disputes.

Briefly, if a taxpayer is having problems with the Canada Revenue Agency, there are a number of ways to address this. A number of measures including My Account, My Business Account, and Represent a Client are in place to help taxpayers resolve their disputes with the CRA.

This motion proposes that a formal letter be mailed out to taxpayers following each telephone call to the CRA. All that would do is put in writing the information that taxpayers already received from an agent on the phone.

I would remind my colleague that last year, in the last Parliament, the Canada Revenue Agency even looked into whether its phone services were satisfactory or not. I wonder what was done about it. The Conservatives were in power at the time.

Now we are in power. We are investing an incredible $185 million to improve telephone and documentation services. We want taxpayers to be treated as clients.

That is why we are voting against my Conservative colleague's motion.

Taxpayer Bill of RightsPrivate Members' Business

11:45 a.m.


Pierre-Luc Dusseault NDP Sherbrooke, QC

Madam Speaker, first of all, I would like to thank my colleague for this morning's initiative, which is certainly motivated by the best intentions.

I, too, will begin by summarizing the content of the motion and touching on what I find, at the very least, problematic, without taking anything away from the member's good intentions.

First, the motion calls for the following unusual steps: that the items it contains be referred to the Standing Committee on Finance so that they may be incorporated into a bill; to report to the House the bill drafted by the Standing Committee on Finance in the name of the member for Calgary Rocky Ridge; that this bill then be placed on the order of precedence; and finally, that the member debate the bill as though it were his own private members' bill.

We have to acknowledge that this request is rather unusual. Our colleague, the member for New Westminster—Burnaby spoke about it this morning in his point of order, and we hope that the Speaker will clarify the precedents for creating this type of motion and the feasibility of this practice.

Today, I would like to spend more time on the content, because that is what people are really interested in. This is a long motion, and it was read earlier.

In short, part (a) is about adding an “enforceable duty of care” for agency employees to the Canada Revenue Agency Act.

Part (b) is about entrenching the taxpayer bill of rights in the law. I used the word “entrench” because that is exactly what this is. Obviously, as my colleague pointed out, that could create a number of problems.

Part (c) is about amending certain rights. If the Standing Committee on Finance were to study this matter and entrench the rights in the law, my colleague would like to have the option of amending rights 4, 8, and 9.

Part (d), which intersects part (c) to a degree, is about changing the authorities and mandate of the Office of the Taxpayers' Ombudsman, which is one of the most problematic parts. My colleague raised that point as well.

At first blush, the proposed changes seem good, but we have a number of concerns about the legal feasibility of these proposals. The last thing we want to do is give the Standing Committee on Finance an assignment that includes things set out in a motion that are, for all intents and purposes, virtually impossible to include in legislation. The Standing Committee on Finance would be given a mandate to draft a bill with what would be voted on later in this parliamentary session by June.

Let us talk a little bit about the legal framework within which we are working and the problems that could arise if the taxpayer bill of rights was included in the law, which is not currently the case. The taxpayer bill of rights is a reference document for the Canada Revenue Agency with regard the services it offers to Canadians. These are extremely important rights for taxpayers.

This bill of rights was enacted under the previous Conservative government. It sets out a total of 16 rights, and some of them are purely legal rights that the Canada Revenue Agency is legally obligated to uphold. My colleague mentioned that.

The bill of rights indicates that Canadians have the right to receive the amounts owed to them by the Canada Revenue Agency. It is the least the CRA can do to give Canadians the money it owes them, and the CRA is legally obligated to do so. In our opinion, the right to service in both official languages is an extremely important obligation. It is important for that right to be a legal one. Canadians also have the right to privacy and to the protection of their personal information. Laws already protect those rights. Then, there is the right to have the law applied consistently. Obviously, that overlaps a bit with the first right.

Right 9 states that individuals have the right to relief in certain circumstances. This relief can be given in accordance with the Income Tax Act.

I went over right 4 quickly, which is the right to a formal review and an appeal of Canada Revenue Agency decisions. This is an extremely important right.

Rights 5, 6, 9, 10, 11, 13, 14, and 15 mostly have to do with service standards that the Canada Revenue Agency is required to uphold. I will give a couple of examples. Right 5 talks about being treated professionally, courteously, and fairly. Right 6 talks about the right to complete, accurate, clear, and timely information. Obviously, timely information is important as well. This is something my colleague brought up. However, there is a danger to integrating all of these rights into a law to make them legally binding. Treating people professionally, courteously, and fairly, or providing timely information could create some legal challenges, to put it lightly.

These rights, which are not necessarily protected by law, are protected by the taxpayers' ombudsman. He is responsible for enforcing taxpayers' administrative rights. Their legal rights are already protected and can be submitted to the courts.

In fact, in CRA's frequently asked questions there is some discussion about the bill of rights. Question 8, for example, asks whether these rights are legal. Here is the answer given on the Canada Revenue Agency website:

Administrative rights are the rights created by CRA to govern its relationship with taxpayers, in recognition of the fact that good service cannot be legislated; rather, it is founded on a corporate culture that emphasizes and rewards good service.

That is the answer on Canada Revenue Agency's own website, where it talks about taxpayers' administrative rights, which are extremely important. Far be it from me to suggest that these rights are less important than any other rights. I simply wanted to point out that there is a difference between certain rights in the bill of rights, and that putting them all in the same piece of legislation can create a legal problem.

I mentioned the Office of the Taxpayers' Ombudsman earlier. In my question for my colleague, I said the initial appointment was in 2007. The office was created through a Privy Council Order, P.C. 2007-0828, under the Conservatives, in order to better protect taxpayers in the event of breaches or nasty situations, like the ones my colleague mentioned, which are extremely troubling. That office was created to protect the administrative rights that were later set out in a taxpayers' bill of rights.

The only way to change the Office of the Taxpayers' Ombudsman and its mandate is by order in council. That could put the Standing Committee on Finance in a tricky position with respect to the ombudsman's authorities. This motion would change a number of things about its mandate and its authorities. Unfortunately, the power is in the hands of the Governor in Council and therefore in the hands of the government itself. That is not necessarily something that can be done via legislation. Furthermore, it is clearly stated that the taxpayers' ombudsman is an administrative ombudsman, which means that he reports to the head of the organization he investigates. This is not a legal mandate, unlike that of other ombudsmen, such as the procurement ombudsman, who has a legal mandate and therefore has legal powers at his disposal to enforce the law and regulations.

I thank my colleague for his initiative on this matter, and I am keen to hear the discussion to follow.

Taxpayer Bill of RightsPrivate Members' Business

11:55 a.m.


Tom Kmiec Conservative Calgary Shepard, AB

Madam Speaker, we need to think clearly on the motion. The very fundamental principle that should apply to taxpayers is that every taxpayer in Canada should be able to fill out their tax forms without the assistance of a professional accountant. They should be able to deal with the CRA without the need of any type of professional help.

The relationship taxpayers have with the Government of Canada and the Canada Revenue Agency is not voluntary. It is imposed upon them the moment they are born. The only time it is not voluntary is if they are immigrants to our country. They can choose to get treated poorly by the Canadian Revenue Agency.

The income tax code is about 2,500 pages. I was very much tempted to print the entire document and put it on my desk to use it as a podium, to read from it.

I think of the Yiddish proverb, “With knowledge you are nowhere lost”. I was lost looking at the document in its original format. It is very fine print, about six font in Bible-like scripture paper. The document is unreadable and unusable to most Canadians. It does not even include all the information bulletins, the opinion pieces produced by professional accounting firms, and the other material out there that is meant to interpret the tax code.

From the very beginning, the taxpayer is placed at a disadvantage when dealing with the Canadian Revenue Agency. When a person calls or sends a letter from the CRA, one would automatically assume the person is correct in what it he or she says. One would automatically defer to the person's better judgment because the tax code is simply so complicated.

Therefore, the motion is critical toward getting a better relationship and more equitable treatment for taxpayers. All it does is ask the committee to look at the issues, and it iterates some of the problems. Right 9 states, “...add the requirement that complaints about CRA’s service be addressed in a timely manner, add investigation and enforcement powers to the Office of the Taxpayers’ Ombudsman...”. Those are points of consideration.

The committee could consider all of these things, consult, and report back. These were things the government was clearly wanting to do more of. It is also an opportunity to call witnesses. I would love nothing more than to call witnesses from my riding and some of the other people who send me emails, discussing their cases with me. I have talked to many people on the phone who have had poor treatment from the CRA, or have had their businesses destroyed because of errors by auditors or an assessment. Those are patently unfair.

The member for Bourassa pointed out how much money CRA was spending. I agree, some of these investments are pretty good. Let us look at the workload of the Canada Revenue Agency.

On page 206, chapter 7 of the budget, it says that the CRA answers over 23 million calls in a typical year. CRA sends out over 130 million pieces of correspondence each year. It sets out that it will make it an easier to read format. I am all for an easy to read format. Plain language is a great idea. The problem is it does not address the problem of enforcement. What if this plain format is still wrong when it is sent to taxpayers? What if it leads taxpayers to commit an error, like in the Leroux case, where their businesses and livelihoods are destroyed?

Also, page 207 of the budget document, states:

...fairness by making it easier for taxpayers to avoid errors and comply with their tax obligations, allowing the CRA to direct its compliance efforts toward cracking down on tax evasion and aggressive tax avoidance.

What about taxpayers who are facing an aggressive auditor or an incorrect assessment? What about their rights? Where is their opportunity to stand up to the CRA and say that it is wrong, that it is committing an error that will cost them time and money, possibly destroying their livelihoods as well.

Page 217 of the budget, chapter 8, states, “Budget 2016 proposes to provide $351.6 million over five years”. The motion provides a great opportunity to inform the government on where to spend this money to maximize the usefulness to the taxpayer. It should not be the usefulness to the government, or to the Canadian Revenue Agency. It should be customer service oriented. Taxpayers in this case are the customer. They must be treated fairly.

Reading the rest of the budget document, an exquisite piece of marketing sophistry, those are the points I find most useful.

The average taxpayer simply does not have the means to fight it all the way to the Tax Court of Canada and win. For very many taxpayers, once we tell them they have to go to the Tax Court of Canada, they simply give up. I haven spoken to many constituents, and people across Canada who have called my office. They have said that is not an option for them. They do not want to litigate for a decade and maybe win. It makes lawyers rich. It does not make the taxpayer rich. It does not make it right.

It is interesting to note that KPMG was able to get out of paying for running a $130-million tax dodge on the Isle of Man. In that case it reached an agreement of some sort with the CRA.

According to an article by CBC, CRA employees were treated to hospitality suites at the Rideau Club. Menus for private receptions at the time included such sumptuous fare as scallop ceviche, duck rillettes crostini, and herb-roasted rack of lamb. I am not a philistine, but I am pretty darn close to it. The taxpayers in my riding cannot afford a menu like that to try to convince the CRA that they have been ill-treated.

This motion is for the average everyday taxpayer who does not have the means to go to a tax lawyer or a professional accountant. The average taxpayer has a regular job and a family. They have their lives to live. They do not want to deal with the CRA any more than they must. Each of us feels that way. I feel that way. Dealing with the government is the last thing on my mind and now I have to deal with it every single day.

Madam Justice Humphries mentioned the duty of care in the Leroux decision. Every member should get acquainted with this important decision. She mentioned proximity and foreseeability, the two most important considerations in determining duty of care.

In paragraph 204, Madam Justice Humphries mentioned the Taxpayer Bill of Rights, which gives individuals the right to have the law applied consistently. They also have the right to lodge a service complaint and to be provided with an explanation of CRA's findings.

The problem is that oftentimes an explanation is difficult to understand at best. It can be completely incomprehensible for most taxpayers. I have read some of these documents and I do not even understand them, but I am not a tax lawyer. Canadians should not have to rely on the expertise of a tax lawyer to understand what the government is trying to tell them when they are are trying to comply in good faith with the rulings and decisions it is making. For many people it can destroy their livelihoods. In the case of Mr. Leroux, it destroyed his business, his livelihood. He fought for decades. No taxpayer in Canada should have to fight the government for decades to right a wrong. It simply should not work this way.

I am going to read a part of the decision because it is important to see where Justice Humphries went on this. Paragraph 247 says:

The interests of CRA and taxpayers are inherently opposed. The self-reporting self-assessing tax scheme set out in the Income Tax Act depends on the honesty of taxpayers who must make detailed and complete disclosure.

The same should apply to the CRA.

I am going to refer to a couple of cases involving constituents in my riding. I will not use their names because I do not want them to have further problems.

I think of a man in my riding. He had a business for three years. His bookkeeper made a mistake. He admitted that a mistake had been made. However, CRA made a mistake as well for three years. When it realized its mistake, the CRA assessed the man with a penalty of almost $75,000, including interest, because it was over $50,000. The CRA garnished the bank account of his business down to the last 10¢ in it. The CRA took everything. He had to fire all of his employees. He could not pay his vendors. He could not pay his rent. That was unreasonable. The CRA should have warned him and provided him with an opportunity to comply. He said he made a mistake. He is willing to comply, but he just needs to understand how to comply. Now he has a tax accountant.

There is another case from my riding which I would like to raise. A couple is facing a $6,900 bill. They wanted to pay the bill, but Alberta is facing a tough economic situation and neither one of them is working. What more can they do? They have sold their cars and downsized from their house. Does the CRA want them to sell their home and move their family out? That is pretty much where this is going.

The last case I want to mention is that of a woman who has been trying to take advantage of the disability tax credit for her daughter who has PKU, a rare condition. Other families have told her that they have taken advantage of the disability tax credit for PKU-related expenses and have had no problem. She has appealed the decision many times and has been refused, but other families facing the same situation are getting refunds.

Consistency in the application of the law is what we want here. The motion would get us to that point. The motion would get the committee looking at the issue. The motion is basically proposing guidelines, the possibility for the committee to call witnesses, and to provide recommendations. I call upon all members to support the motion.

Taxpayer Bill of RightsPrivate Members' Business

12:05 p.m.


David Graham Liberal Laurentides—Labelle, QC

Madam Speaker, in principle, the motion sounds very interesting, the idea of bringing in a bill to require that the Canada Revenue Agency not make mistakes and to redress mistakes, but I have a number of implementation questions about such a bill.

First, the Conservatives were in power for a number of years and I am wondering why they did not do this already. I also want to know why the ombudsman would be given powers that no other ombudsman has. This is not a power that is normally given to ombudsmen. They do not get the power to enforce. They get the power to look at issues and make recommendations.

I am also not clear on how adding an enforceable duty of care to the Taxpayer Bill of Rights would provide more force than what currently exists. I do not see an improvement.

Again, in principle, I think the idea of having a bill is not a bad one, but I want to know how these things would actually help us in real tangible terms.

The budget which the government just presented dedicated $185 million to address the government's commitment to service excellence through a number of initiatives already, such as for telephone services and correspondence. We are already doing some of the things that the motion would require us to do.

As for the taxpayer ombudsman reports being directed to the Minister of National Revenue, the ombudsman is neither an advocate for the taxpayer nor a defender of the CRA. Empowering the ombudsman to order redress is inconsistent with other ombudsman officers appointed by Parliament who have no such authority. Again, why would we create new rules for the ombudsman that do not exist elsewhere?

Since the Canada Revenue Agency administers tax for all of Canada except Quebec, the provinces would likely be interested in actions taken to improve compliance rather than establishing a statutory approach that would increase the overall cost of administering tax legislation without clear benefits.

I do not have a lot more to say on this. I am very concerned about the office of the ombudsman, the increased powers a bill would provide it. I also am concerned that this would limit the power of the minister to deliver on her mandate.

Taxpayer Bill of RightsPrivate Members' Business

12:05 p.m.


Karine Trudel NDP Jonquière, QC

Madam Speaker, any time the Conservatives introduce a bill or move a motion, it always leaves me a little perplexed. From the title of today's motion, one might actually believe that they finally understand that we need to provide services to Canadians and be there for them. As the expression goes, however, the devil is in the details. In this case, the devil is all over Motion No. 43. This is just one more example of that party's tried and true tactics to mislead the public. That is why it was imperative that the previous government be replaced.

I am proud to represent the riding of Jonquière, and every time I rise in the House, I feel duty bound to represent the people of my region to the best of my ability. When I ran for office, I had a clear idea in mind: to try to improve the daily lives of Canadians and defend and promote their rights. It was with this in mind that I introduced my bill to ban replacement workers in order to protect Canadian workers. However, in the case of the motion currently before the House, I unfortunately do not have the sense that we are defending the interests of our constituents.

Motion M-43 makes no sense. Let me briefly explain why. First, when the ombudsman position was created by the Conservatives in 2007, there was never any question of giving that person this type of power. The ombudsman had the power to assess service delivery only. It was made very clear that the ombudsman was not to review the administration or application of tax legislation, unless that review was on service-related matters.

The Conservatives created an ombudsman position to defend the interests of our constituents without providing the necessary tools to do so. Now that they are no longer in power, they suddenly would like to provide the ombudsman with those tools. I call that bad faith. Speaking of bad faith, the Conservatives are smearing public servants and the service they provide. That is unacceptable.

I am proud of Canada's public servants, the services they provide, and their professionalism. When they are not given the money they need to do their jobs properly, that is when we run into problems. There have been so many cuts since 2012. The last budget cut $314 million, eliminating jobs and a direct service.

In my riding of Jonquière, I have seen direct services being provided to people. People would wait for officers' lunch break to seek help and answers either because they could not afford Internet service or because they were unable to reach an officer by telephone as a result of the cuts in services at the CRA. These people needed to talk to someone and, because of the recent cuts, they were unable to get an answer. However, that is not because public servants are doing a poor job, but because their job has been eliminated.

I want to say that public servants do very good work and that they have to have the resources that will enable them to continue providing these services to Canadians.

Taxpayer Bill of RightsPrivate Members' Business

12:10 p.m.


The Assistant Deputy Speaker NDP Carol Hughes

The member will have six minutes when the House resumes debate on this motion.

As it is now 12:15 p.m., the time provided for the consideration of private members' business has now expired and the order is dropped to the bottom of the order of precedence on the Order Paper.

The House resumed from April 15, 2016, consideration of the motion that Bill C-10, An Act to amend the Air Canada Public Participation Act and to provide for certain other measures, be read the second time and referred to a committee, and of the amendment.

Air Canada Public Participation ActGovernment Orders

12:10 p.m.


David Graham Liberal Laurentides—Labelle, QC

Madam Speaker, I will pick up where I left off on Friday.

The law clearly intended for Air Canada to continue maintaining its aircraft in certain regions of Canada. At the same time, the law was designed with one key public policy objective in mind, which was to privatize a crown corporation and allow it to become a competitive and viable private company.

As members no doubt realize, the airline industry has changed quite a bit since the law came into force in 1989. In 2015, Air Canada carried more than 41 million passengers and provided regular, direct service to 63 Canadian airports, 56 American airports, and 86 other airports worldwide, in Asia, Oceania, Europe, Africa, and South America.

Air Canada cannot escape the highly competitive international market. For example, the other national and international airlines are not subject to the same requirements regarding their maintenance facilities.

We must also consider Air Canada in the context of the global marketplace, a market that is characterized by large, multinational companies that operate over vast networks and with extremely expensive equipment.

Given the market's cyclical nature, it is also very sensitive to fluctuations. All it takes is an unfortunate incident, such as a pandemic, an accident, or a terrorist act, for the market to flounder and an airline's revenue and profit to be significantly affected.

Air transportation provides vital connectivity both within our vast country and with the outside world. It is also a significant source of jobs. For example, Air Canada alone employs nearly 25,000 people.

In light of this economic context, we believe that the Air Canada Public Participation Act may be limiting the company's ability to be competitive and profitable.

We therefore believe that the current law is inconsistent with an approach to air transportation based on competitive and market forces as the best way to provide passengers with reasonably priced services.

Like any company, Air Canada needs more flexibility in order to operate in a competitive environment and remain viable in the long term. Accordingly, the federal policy on Canada's air transportation industry focuses on competitive and market forces.

We also apply the user-pay principle for infrastructure and services, which is not the case in all of the countries that compete with us. As such, we cannot rest on our laurels because the aviation world is changing rapidly.

Naturally, we were all concerned by the closure of Aveos Fleet Performance, which resulted in layoffs across the country. Although portions of Aveos were purchased during bankruptcy proceedings and continued to operate, some employees did not end up finding work in their field.

Of course we were concerned by this closure and by the fact that Air Canada stopped having certain kinds of maintenance done in Canada. Air Canada's recent announcement about the C Series and its collaboration in developing centres of excellence gave us hope that highly skilled workers would find work in this high-tech sector.

Air Canada's plan to purchase C Series aircraft would bring together two sectors that are vital to Canada's economic development: air transport and the aerospace industry.

It would enable Air Canada to operate cutting-edge planes, thereby reducing its costs, its fuel consumption, and its greenhouse gas emissions, while minimizing noise.

The planes will be designed, built and maintained in Canada. The creation of centres of excellence for the maintenance of C Series planes in Quebec and Manitoba will certainly have a positive impact on the industry and will probably attract other air carriers to use the services available.

The Government of Quebec estimated that the centre of excellence could create 1,000 jobs over 15 years. In addition, manufacturing the C Series planes would enable Air Canada to create another 300 jobs.

Moreover, the creation of a centre of excellence for western Canada would create an additional 150 jobs in Manitoba.

In closing, changing the language used to describe the activities and where they might be held, will allow us to modernize the legislation and make it more relevant.

Air Canada Public Participation ActGovernment Orders

12:20 p.m.


Rachel Blaney NDP North Island—Powell River, BC

Madam Speaker, I want to comment on the fact that across Canada we are seeing growing disparity. We know that well-paying jobs are getting harder and harder to come by. A lot of that has been led by a past Conservative government that did not really put the time into making sure we look after workers.

Knowing that we are really giving power to a business to make some decisions that would potentially leave workers behind in this country, and knowing that this would open the doors to allow a company to bring workers in rather than making sure those jobs stay with Canadians, how does the hon. member feel that is going to make an impact in this country?

Air Canada Public Participation ActGovernment Orders

12:20 p.m.


David Graham Liberal Laurentides—Labelle, QC

Madam Speaker, I do not see it quite the same way as the member does. I agree that protecting workers is very important, but I see these changes permitting Air Canada to bring in not necessarily fewer workers but possibly more workers, because it can leave the no-longer-existent Montreal urban community, go off the Island of Montreal, and go outside of Winnipeg. It can go to other parts of the provinces and do the maintenance.

The aircraft Air Canada is purchasing, the C Series, is not manufactured on the Island of Montreal but very close. These purchases create jobs. The aviation industry creates jobs. The ability to have market flexibility allows the airline to remain competitive, which would guarantee the 25,000 jobs at the airline and not just a few.

Air Canada Public Participation ActGovernment Orders

12:20 p.m.


Kelly Block Conservative Carlton Trail—Eagle Creek, SK

Madam Speaker, I wonder if the member could tell the House what savings Air Canada would gain from the legislation, and how many Canadian jobs these savings would cost Canada.

Air Canada Public Participation ActGovernment Orders

12:20 p.m.


David Graham Liberal Laurentides—Labelle, QC

Madam Speaker, I cannot speak for Air Canada in terms of how many jobs would go up or go down. However, I can say that the bill before us would help with the competitiveness of Air Canada, because it would take locks off it, which its opponents do not have. I think that is important to help Canadian business.

Air Canada Public Participation ActGovernment Orders

12:20 p.m.

Aurora—Oak Ridges—Richmond Hill Ontario


Leona Alleslev LiberalParliamentary Secretary to the Minister of Public Services and Procurement

Madam Speaker, it is a privilege to speak today. The bill is about modernizing the Air Canada Public Participation Act to make it more in keeping with the realities of the global air transport sector, and to ensure that the act will continue to be relevant as the aviation sector evolves in the future.

First, it is important to recall that the Air Canada Public Participation Act was brought into force in 1988 primarily to provide the federal government with a legislative framework to enable the divestiture of Air Canada. This was made possible by permitting the government to organize Air Canada not as a federal crown corporation, but as a share capital enterprise incorporated under the Canada Business Corporations Act.

By holding Air Canada as a share capital enterprise, the government could dispose of its equity in the company by allowing Air Canada to issue shares for public investment, which the company did through two public offerings, the first in 1988 and the second in 1989.

Air Canada returned nearly all the proceeds from those share offerings to the Government of Canada, allowing a return to be realized as compensation for support the company had during the time it was a federal crown asset.

With that second public offering, Air Canada was fully divested by the government, and it has since been engaged in the air carrier industry as a private sector company.

The Government of Canada's divestiture of Air Canada was in keeping with the evolution that was happening to Canada's air carrier industry at that time.

Then, under the legislated framework of economic deregulation that began in 1987, Canada's air carrier industry was evolving from being a regulated industry to one that had to deal with market forces. Competition was the order of the day, providing discipline to pricing and capacity in the marketplace.

Nearly three decades have passed since deregulation took effect, and it is now time to update the Air Canada Public Participation Act to reflect the evolution in the aviation sector. I am referring particularly to the obligation in paragraph 6(1)(d) that requires Air Canada to include in its articles of continuance "provisions requiring the Corporation to maintain operational and overhaul centres in the City of Winnipeg, the Montreal Urban Community and the City of Mississauga".

To be viable as a going concern in today's air carrier industry means that inputs from the supply chain must be cost competitive, and that includes the provision of aircraft maintenance.

Air Canada is the only carrier, both domestic and international, that has obligations such as these. All of the other carriers, including other Canadian air carriers, are free to take advantage of competitive undertakings to support their aircraft maintenance.

The Province of Quebec, with intervening support from the Province of Manitoba, and Air Canada have been litigating the matter of that company's aircraft maintenance for a number of years.

This began with the insolvency in March 2012 of Aveos Fleet Performance, a third-party provider of aircraft maintenance repair and overhaul services. On February 17 of this year, the Province of Quebec and Air Canada mutually agreed to pursue an end to their differences in favour of a better way forward.

Then, on March 14, the Province of Manitoba and Air Canada announced a collaboration of their own. In both cases, these ways forward include co-operating in the establishment of centres of excellence for aircraft maintenance, one in Montreal, and the other in Winnipeg.

As well, Air Canada is committing to maintaining all of its newly acquired CS300 aircraft in Quebec for at least 20 years. These aircraft will also be designed and manufactured by Bombardier of Quebec.

In Manitoba, Air Canada will be facilitating and supporting the establishment of a western centre of excellence by three of its longstanding suppliers and partners, including Hope Aero Propeller and Components, which specializes in propellers, wheels, brakes, and batteries; Airbase Services, which specializes in aircraft interior equipment maintenance; and Cargojet Airways, to which Air Canada has agreed to lease one of its Winnipeg hangars on favourable terms to enable it to establish aircraft maintenance activities.

The centre of excellence in Winnipeg is expected to create 150 jobs, starting in 2017, with the possibility of further expansion and job creation in the future. These are net new job increases.

These developments are consistent with a company and an industry that must continually seek competitive ways of operating to stay in business. These are progressive developments whereby the parties are collaborating instead of litigating. This conduct should be encouraged.

The legislation, as it is currently written, lent itself to this litigation about how it should be interpreted. That is why this government is proposing to amend the Air Canada Public Participation Act to remove any doubt that Air Canada can seek best-in-class, cost-competitive aircraft maintenance wherever it is offered, a choice to which all other air carriers are entitled.

At the same time, we are reinforcing the expectation that Air Canada will continue to carry out aircraft maintenance in Manitoba, Ontario, and Quebec.

The amendment would also induce providers of aircraft maintenance in Canada to be cost competitive, given the potential business from Air Canada, which should be able to choose from among those services on the basis of best Canadian value.

As well, the establishment of a centre of excellence for aircraft maintenance would reinforce Montreal's role as a world-class aeronautical hub, bolstered also by the Montreal-based headquarters of the United Nations International Civil Aviation Organization; the presence of the International Air Transport Association; the aviation and aeronautical programs at McGill and Concordia, to name but two; and industry stalwarts such as Pratt & Whitney, CAE, Bombardier, Air Canada, and others.

The centres of excellence are good for Quebec and Manitoba, and for Canada, raising the profile of local expertise and thus generating positive attention and more investment in our nation's skilled trades and knowledge-based economy—and it all begins with co-operation and collaboration by all of the parties, who were formerly in dispute but are now working together toward a common purpose. I ask that members offer the same level of support.

It is my pleasure to speak to the bill, to support it, and to ask all members to do the same as the government moves to support the competitiveness of the Canadian airline industry in the 21st century.

Air Canada Public Participation ActGovernment Orders

12:30 p.m.


Garnett Genuis Conservative Sherwood Park—Fort Saskatchewan, AB

Madam Speaker, we know the bill would cost Canadian jobs. The member talked about 150 new jobs in Manitoba, but she did not mention the 400 jobs that were lost as a result of Air Canada failing to comply with its obligations under the act.

The member talked about a condition that is holding Air Canada back, allegedly, a condition that does not apply to other companies. However, at the time of privatization, not one but four conditions were put upon Air Canada, one being that Air Canada abide by the Official Languages Act.

Does the member think that Air Canada should still have to abide by the Official Languages Act, since that does not apply to other companies, and why pick on this one out of four conditions that in fact would lead to job losses in Canada?

Air Canada Public Participation ActGovernment Orders

12:30 p.m.


Leona Alleslev Liberal Aurora—Oak Ridges—Richmond Hill, ON

Madam Speaker, I clearly reject the assumption that we know it would lead to job losses in Canada.

We have a very viable Canadian aircraft maintenance and repair and overhaul capability, and we have for many years, but the airlines are focused upon delivering air service, to moving people from places across the country. Their core business is not aircraft manufacturing. What this bill would allow them to do is to purchase and procure services from companies whose core business is aircraft maintenance.

We are very fortunate to have extensive capability in Canada and now we even have the potential of increased service in centres of excellence, which would ensure that our airline industry, the commercial carriers, can focus upon their business of carrying people and the aircraft maintenance organizations can focus upon maintaining aircraft.

That is why this part of the amendment of the Air Canada Act is focused upon that specifically.