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.