Mr. Speaker, it is an honour to rise in this House to speak to the government's second budget, entitled “Building the Middle Class”.
My constituents elected me to serve as part of a government that will help the middle class and those working hard to join it. To be able to represent these priorities of the residents of Brampton East in this House is a privilege.
I am lucky to be a member of the Standing Committee on Finance, which has kept me quite busy thus far. Recently the finance committee concluded a study on tax fairness for all Canadians. It studied tax evasion and tax avoidance. The committee's report contains 14 recommendation for the government on topics such as conducting a review of the voluntary disclosures program and requiring all tax advisers to register their tax products with the CRA.
I am proud to share that in response to the finance committee's recommendations, the government affirmed its support for all 14 recommendations. Additionally, the government shared the work that has already been done or is currently being undertaken to ensure all Canadians pay their fair share of taxes to our great nation.
Paying our fair share of taxes is an essential part of financing measures that enhance all Canadians' quality of life. When certain individuals and companies find ways to cheat the system, it is the middle class that usually picks up the tab. That is totally unacceptable and counterproductive to our country's goals. That is why making the tax system more fair is an ongoing priority of our government.
In support of this objective, budget 2017 proposes to invest additional resources to combat tax evasion and aggressive tax avoidance. Budget 2017 also proposes legislative changes to the tax rules. These changes would close tax loopholes that result in unfair tax advantages for some at the expense of others, invest additional resources to crack down on tax evasion and combat tax avoidance, make existing tax relief for individuals and families more effective and acceptable, eliminate ineffective and inefficient tax measures, and provide greater consistency in the operation of tax rules.
Going forward, we will continue to eliminate poorly targeted and inefficient tax measures and make our tax system more fair and efficient. The government is committed to taking these steps because we know and understand that fairness is essential to ensuring Canadians have confidence in their tax system.
Last year in budget 2016, our government committed to undertake a wide-ranging review of increasingly complex tax expenditures that now exist. This review of federal tax expenditures has highlighted a number of issues regarding tax planning strategies using private corporations, which can result in high-income individuals getting unfair tax advantages. A variety of tax reduction strategies are available to these individuals that are not available to other Canadians. An example of such a strategy is the use of private corporations to reduce taxes through sprinkling income to family members.
Budget 2017 sends a strong signal that the government is taking action to ensure that high-income individuals cannot use strategies involving private corporations to gain unfair tax advantages. The government will release a paper in the coming months setting out the nature of these issues as well as proposed policy responses. In addressing these issues, the government will ensure that corporations that contribute to job creation and economic growth by actively investing in their businesses continue to benefit from a highly competitive tax regime.
A fair tax system requires constant attention. Ongoing legislative adjustments are needed to ensure that rules are functioning as intended, and they do not result in some taxpayers paying less than their fair share, for example, through complicated tax planning arrangements.
To ensure the tax system operates as fairly and effectively as possible moving forward, the government will continue to study, identify, and address tax loopholes and tax planning schemes. Tax evasion and avoidance is unfair to the vast majority of Canadian individuals and businesses that play by the rules.
The measures in budget 2017 will build on previous investments to support the Canada Revenue Agency in its continued efforts to crack down on tax evasion and tax avoidance. To do this, the CRA is increasing its verification activities, hiring additional auditors and specialists with a focus on the underground economy, developing robust business intelligence infrastructure and risk assessment systems, and improving the quality of investigative work that targets criminal tax evaders.
Budget 2017 will invest an additional $523 million over five years to support these efforts. As CRA has a proven track record of meeting expectations from targeted tax compliance, budget 2017 accounts for the expected additional revenue of $2.5 billion over five years from these measures that crack down on tax evasion and combat tax avoidance.
We know that in a globalized world it is not enough to simply concentrate our efforts here at home. We need to have an international focus as well. To this end, Canada is part of a coordinated international effort to address what is known as base erosion and profit sharing or BEPS. BEPS refers to tax planning arrangements used by multinational enterprises to unfairly minimize their taxes. Canada has implemented, or is in the process of implementing, agreed international standards under the BEPS project.
This includes recently enacted legislation which requires large multinational enterprises to provide information about the international distribution of their activities. This information will enable tax authorities to better assess tax avoidance risks. We will continue to work with our international partners to ensure a coherent and consistent response in fighting tax avoidance through BEPS.
Over the past year, we have worked to build a fairer tax system that benefits the middle class. Our review of tax measures identified opportunities that make existing tax measures more effective, equitable, and accessible to all Canadians. Specifically, budget 2017 proposes to simplify and improve existing tax measures for caregivers, persons with disabilities, and students.
Right now, Canadians who are caring for loved ones face a caregiver credit system that is complex and difficult for families to navigate, so we have simplified it by introducing the Canada caregiver credit. This new non-refundable credit will provide greater support to those who need it the most and will apply to caregivers whether or not they live with the family member who is receiving the care. This measure will provide $310 million in additional tax relief over the 2016-17 to 2021-22 period and will support families struggling to take care of loved ones.
Canada is a country founded on the belief that with hard work comes success and that with success comes a responsibility to help others. Canadians share the understanding that success as a nation is only as great as the success of our most vulnerable. They know that challenging the barriers that persist is a necessary part of moving our country forward.
Budget 2017 takes the next step in the government's long-term economic plan, understanding that in the face of unprecedented change, a confident Canadian middle class will always be the beating heart of our country and the engine of our economy.