Madam Speaker, I am quite happy to be able to speak to Bill C-9 because it has some significant issues in it that should be addressed.
The bill has some nine amendments in it but they affect 21 additional sections within the act. This tells us that the complexity of the Income Tax Act today makes all of those things necessary.
I would make one note. It is unfortunate that changes to one's income tax may be implemented by many things today. Even a press release can effect changes to one's income. Unfortunately without the proper legislative steps prior to implementing changes, the tax system becomes quite volatile and can be manipulated very easily.
I must start out by confessing to the House that I have mixed feelings about rising to address this bill. It enacts measures introduced by the previous Conservative government in its December 2, 1992 economic statement and its April 26, 1993 budget. These are obviously not new to Canadians.
On the one hand it would seem to be only prudent that we support what is generally referred to as a housekeeping bill. Much of what this bill enacts has already been policy for the past year or more and we are now just getting around to proclaiming it law. I would not pretend for a minute that it would be anything but irresponsible of us to oppose these measures merely on principle. On the other hand, I wish to make it clear that there are some principles here to which I am strongly opposed, as is my party.
The Income Tax Act has become an unwieldy monster symbolizing I suggest what many Canadians see is the problem with government in general: there is just too much of it.
As an accountant, Madam Speaker, I can assure you I am familiar with the act. I have studied it, worked with it and, yes, like everybody else, have had my problems with it in my day. I have burnt a lot of midnight oil in April trying to figure it out.
I want to assure my fellow accountants across this country that I am not advocating putting them out of work, but the act must be changed. It is time the average Canadian had a chance to understand not just the principle behind taxation but the mechanics of it as well.
The last attempt by the Conservative government to introduce tax reform led to an income surtax, an alternate minimum tax, tax deductions, tax credits and the complicated GST, all of which have further confused matters. It does not have to be this complicated.
Let me illustrate my point with a personal experience I had that I believe shows how this entire process has become symptomatic of a larger disease that is big government today. When I first began to look at Bill C-9 I was in my constituency office in Matsqui, British Columbia. My assistant had a copy of the bill here in Ottawa and I asked him how large it was. The answer was 68 pages. I thought 68 pages of amendments, how do I go through this in a week and try to figure all of it out. I asked him if he could find some kind of explanatory summary. He told me he had asked the Department of Finance for the summary and had received one very quickly. There was only one problem, the so-called summary of a 68-page document was 78 pages long.
These are the kinds of little stories to which even those of us who are new to Ottawa have become immune. The people who have sent us here, the people who have to struggle through the tax forms every single year, the people who pay our salaries, are not immune to these little stories. They are sick and tired of them quite frankly. I believe that was one of the strongest messages sent to this House last October.
We could help our deficit problems by addressing the vast amounts of money this country wastes on sustaining an army of tax accountants and tax lawyers which is what one needs to interpret the Income Tax Act.
We could dramatically reduce costs for individuals' businesses and governments by simplifying the system. We should make it a priority. I would encourage the Liberal government to make it a priority. The Reform Party has it as a very high priority.
I would like to make it clear that there are some good aspects to this bill that we would like to see the government continue or improve on in its up and coming budget. For instance, section 146.01, the home buyers' plan, is a good example of that. I think members heard that from the previous speaker as well.
Young people today cannot afford to buy homes because they are paying too much tax. While total incomes per capita have increased 170 per cent in the last decade, total direct personal taxes have risen by 235 per cent.
How are we doing with respect to other countries? Canadian government revenues as a percentage of gross domestic product increased from 24 per cent in 1950 to almost 43 per cent in 1990.
Six years ago, the tax burden in Canada was approximately 20 per cent higher than that of the United States. In 1992 it had risen to 25 per cent and it is projected to increase to 30 per cent by 1997. It is not just young people who are feeling the tax burden. It is all Canadians today.
The home buyers' plan which allows those savings for a home withdrawn from an RRSP to make a good down payment is a good idea. It not only puts the dream of home ownership within the grasp of more people but it provides economic spinoffs all the way down the line.
Sue Bennett, one of my constituents from Langley, British Columbia, has sent me some information on the plan. I would like to go through it briefly. A poll released in September 1993 by the Canadian Real Estate Association confirms that the homeowner buyers' plan has been a big success.
The poll done by Angus Reid was conducted in five major Canadian cities. It found that four of five buyers who used the plan said it was an important factor in their decision. It was especially important for 86 per cent of the first time buyers. Accountants usually take it. If it is very close, we have to say it does not average. However, nearly half the people said it would have been unlikely they would have been able to buy their home
without the plan. The plan helped a significant number of home buyers surveyed, 22 per cent of all first time buyers and 17 per cent of buyers generally.
Repaying their RRSPs is a high priority in this country. Eighty-one per cent of the respondents said that it is important to repay. Fully 88 per cent said that they would repay at least at the rate required by the plan and only 4 per cent said that they would not repay and would declare their withdrawals as income.
Therefore the impact of the plan is there. It is a positive plan. Home ownership was seen by 84 per cent of those surveyed as being at least somewhat important to retirement planning. Fifty-four per cent said that it was very important. Owning a home was rated by far as the most important source of income for retirement.
The Department of Finance has already reported that the numbers have been impressive. There were nearly 200,000 participants to the end of July 1993. It is significant.
Housing starts, as any economist will tell you, are a reliable indicator of the overall health of our economy. The housing industry directly employs as we know general contractors, carpenters, electricians, plumbers, dry wallers and real estate people among many others. Indirectly it benefits many other segments of society including, yes, even accountants. We are encouraged by such measures as the home buyers plan and, as I said, we are hopeful the new budget will include an extension of this popular program. Let us put more Canadian carpenters and plumbers back to work.
We in the Reform Party support a taxation policy that has as its principle objective the raising of funds to pay for government programs. If we look at the history of the act that is what it was originally intended to do, collect taxes ideally, and that would be done in an orderly, simple fashion.
Somewhere along the line we have lost the original intent of the tax system and we have allowed it to become a tool to influence people's behaviour. I am speaking now of social reform creeping into a piece of the financial legislation. That is not only inappropriate, it does not work. We propose working toward a simple, visible and proportional system of taxation.
The Minister of Finance announced in a December 20 press release that a proposal by the Conservatives to pay the GST rebates twice a year instead of quarterly has been dropped from Bill C-9.
At a briefing earlier this week the minister's department informed me the reason the proposal was dropped is because it was found to be more economic sleight of hand on the part of the previous government and that it would have made the deficit look a little better to the Canadian public. To reject that type of sleight of hand is a sound decision and I am encouraged by it.
I have mixed emotions. I am extremely concerned by the new government's lack of commitment to change the way it handles its economic affairs; no concentration on the debt or the deficit.
We sit here today perhaps to give assent to an amendment proposed by the last government. I therefore cannot help but be cautious in my optimism. All of us in this House should not need reminding of the resounding message sent to the last government on October 25. We cannot allow ourselves to slip into those ways even in the slightest way.
I call on the government today to assure us it will give reform of the Income Tax Act the priority it deserves. This will show the opposition parties that the government is making good on its promise of the new way of doing business. It will send a strong message to the provinces that they should follow the federal government's lead. Most important of all, it will show the Canadian people there really is hope for a new way of running government. We cannot let fear of media or any other kind of pressure inhibit our effort to reform. We have to try.
In closing, I would like to take a moment to remind my colleagues in the House that there is a big, fast moving, exciting world out there beyond these walls. Even with my brief experience in this House, I am often amazed at how this simple fact gets lost in the daily shuffle of papers that this institution sometimes seems to be.
I would like to leave you, Madam Speaker, and my colleagues with a final thought. Failure is not fatal but in these times failure to change may be. Let us simplify. Let us be fiscally prudent and responsible.
