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 his or her 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 voluntary is if they are immigrants to our country. They get to choose to get treated poorly by the Canada 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.
I think of the Yiddish proverb “With knowledge you are nowhere lost.” I was lost looking at the document in its original format. In very fine print, about six font on Bible-like scripture paper, this 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 Canada Revenue Agency. When a person from the CRA calls or sends a letter, one would automatically assume the person is correct in what he or she says. One would automatically defer to the person's better judgment simply because the tax code is 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 that 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 Canada 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 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.