moved that Bill C-43, an act to establish the Canada Customs and Revenue Agency and to amend and repeal other acts as a consequence, be read the second time and referred to a committee.
Mr. Speaker, I am pleased to rise in the House today to lead off debate on second reading of Bill C-43, an act to establish the Canada Customs and Revenue Agency.
This bill represents a major milestone in the evolution of tax administration, customs service and trade administration in Canada. It is an integral part of our government's drive for better service for all Canadians.
The genesis of this bill is quite simple. It is built on five simple facts about tax collection. I would like to discuss those facts quite briefly. Flowing from those facts are five clear principles. Those principles, those values, I would like to describe in some detail for they are the principles, the values, which are the foundation of the legislation before us.
Fact number one is easy. Nobody particularly likes to pay taxes. The truth is that since the Prime Minister named me Minister of National Revenue I have not had a Canadian come up to me and say “Herb, my taxes are too low. Can you find a way to raise my tax bill?”
Fact number two is equally easy. We live in a country where millions upon millions of citizens voluntarily pay taxes. Something which we can all be really proud of is that in our country citizens voluntarily fill out their tax forms and remit the money they owe. In our society small businesses fill out their GST forms and send in the money owing. In our nation, millions upon millions of citizens make their declaration of customs openly and honestly.
This leads to fact number three. The reason Canadians pay their taxes is because we understand the imperatives of our democracy. We understand that we are rated number one in the world by the United Nations because of our health care, our support for young people, our support for senior citizens, our commitment to safety and security for families and our determination to bring out the best in our nation.
Canadians understand that meeting those objectives and rising to those ideals costs money.
Fact number four is the logical corollary of the other facts. Canadians want to ensure that the system is fair. We want to ensure that the system is as logical and straightforward as possible. Since we are so amazingly and willingly ready to pay taxes voluntarily, we rightly expect the system to be as modern, as intelligent, as streamlined and as service oriented as possible.
Fact number five is that there are two ways to improve the tax system. The first way is through changes to the tax law, which is something we address annually when the finance minister brings down his budget. The second way is to improve the structure of the tax system, to improve the process, to modernize the method of service, to modernize the method of management, to simplify the means of compliance and to eliminate overlap and duplication among the different levels of government.
Those are the facts and the realities on which our tax system is built. Those are also the facts which lead to the five principles, the five values of this bill. The principles and values are very simple. Canadians want service and fairness. They want to work in partnership. They want accountability and modern management of resources.
This bill before the House of Commons will deliver what Canadians want: more efficient customs service; less federal-provincial overlap; lower compliance costs for businesses; more flexibility to meet a changing world; a more simplified system for taxpayers; less cost for Canadians.
We are talking about service for over 22 million taxpayers. We are talking about administering over $600 billion in trade. We are talking about serving over 100 million travellers annually. We are talking about service for over 75,000 charities, service for nine million Canadians who receive GST credits, service for over three million parents who receive the child tax benefit.
Combining a new form of management structure with strong ministerial accountability and strong traditional Canadian values, the new agency will ensure better service for all those Canadians and for our country.
The introduction of this new agency structure will maintain parliamentary accountability to clients and to the public. The agency will be accountable to parliament and to all Canadians. The new agency will benefit from management practices that are characteristic of successful organizations outside of government. Yet the Canada customs and revenue agency will be part of the public service of Canada. It will be a vital component of our democratic parliamentary system.
We were told by Canadians that it is important that there continue to be ministerial accountability for how tax, tariff and trade systems operate. We have listened attentively and responded fully.
The Minister of National Revenue will be fully responsible for the agency to parliament. The Minister of National Revenue will still be responsible for the powers, duties and functions vested by the Income Tax Act, the Customs Act and all other program legislation. The Minister of National Revenue will still be able to direct how taxes are assessed, to seize and release goods, and to determine how import and accounting data should be processed. I will still be answerable to all members of parliament and through them to the citizens we are all elected to serve.
In Canada we have always made sure that individual taxpayers retain their privacy and are not subject to political influences. We have a longstanding practice in this country that the Minister of National Revenue does not become involved in interpreting the law in individual cases. The minister may however inquire into specific cases in order to guarantee fairness for all taxpayers. Questions are often asked in the House of the minister. The power of the minister to inquire into these matters and respond to the House will be maintained under the new agency.
Canadians will continue to have a Minister of National Revenue whose primary concern will rightly be to ensure that citizens are given the full benefit of the law. In short, Canadians' right both to impartial decision making and to redress through the minister will be retained.
Accountability and fairness are cornerstones of our Canadian system of revenue collection. These vital principles must and will remain paramount. Fairness forms the basis for the millions of tax, customs and excise transactions. It is at the heart of every communication Canadians have with tax officials on the telephone, or with our employees at the counter, or with customs officers while crossing the border. It underpins all our programs and services.
Notwithstanding an excellent record, we can and must do more. Last March I launched the fairness initiative to consult with individual Canadians and businesses on how fairly we administer our programs and to identify ways to enhance fairness. We have consulted widely and we will shortly have a report produced by an independent organization, the Conference Board of Canada.
I intend to issue a fairness action plan that will continue to ensure that Canadians continue to receive the fairest customs and revenue administration possible. Fairness is a fundamental priority for Revenue Canada and fairness will be a fundamental priority for the new agency.
Another fundamental priority for the new agency will be a true spirit of practical partnership with other levels of government and all Canadians. By working even more closely with the provinces and the territories, the new agency will be able to expand the programs and services that we provide.
I should point out that provincial participation will be completely voluntary. This is not a power grab by the federal government. In fact the agency's structure gives for the first time ever a real say to the provinces and territories in managing how we collect taxes.
Right now we administer social benefit programs for British Columbia, Alberta, New Brunswick, Saskatchewan, the Northwest Territories and Nova Scotia. We collect personal income taxes for nine of the provinces and we collect corporate income taxes for seven.
With the agency we want to create real opportunities for greater partnership with the provinces. We want to reduce overlap and duplication. We want to save money for the provinces. We want to save money for Canadians. What we are trying to build today is an organization that will create more win-win situations for tomorrow.
We are currently engaged in joint studies with several provinces on the feasibility of the new agency administering more of their programs. There is only one level of taxpayer and that taxpayer should only have to deal with one level of tax administration.
I should tell the House that my provincial counterparts generally like the concept of an agency. They see it as an important step toward pragmatic forward thinking reform on behalf of and for Canadians.
To guarantee that the provinces and territories truly have a central role to play in the new agency, they will nominate 11 of the 15 members of the new agency's board of management. This will provide for sensitivity to provincial and regional concerns. The members will be appointed by the governor in council. This board of management will bring a client oriented approach to the provision of services, and a more progressive and businesslike approach to management.
Operational accountability will not be as diffused under the agency as it is now under Revenue Canada. That is because the authorities for management and administration which are now shared among Treasury Board, the Public Service Commission and other government departments and agencies will be united under the new agency. The agency will be more directly accountable for the results it achieves. It will be accountable to parliament and to Canadians.
The move to new models in improving the efficiency, effectiveness and accountability of government services is a worldwide phenomenon. Countries like the United Kingdom, Australia and New Zealand with parliamentary systems similar to ours are all pursuing new administrative arrangements to improve service delivery to citizens.
Although the new agency will remain part of the public service, we propose to make important changes that will shift certain management responsibilities directly to the agency. Specifically, a modern tax and customs administration needs the flexibility to tailor its human resource systems, such as staffing, classification, training and recourse, to meet the needs of Canadians and to meet the needs of employees.
Presently the staffing process at Revenue Canada can take between six to twelve months. That is simply too long. Agency status will allow us to develop a staffing system that is faster, more flexible and more progressive in providing opportunities for employees and rising to the challenges and opportunities of the modern technological era.
The proposed Canada customs and revenue agency will provide us with the flexibility we need to meet the needs of the future head on.
More and more transactions are taking place through electronic commerce. Why not have a single, virtual office window for federal and provincial tax as well as customs administration? Why not employ a single business number approach to increase efficiency even further and yes, to enhance compliance as well?
My roots are in the business community. Because of this, I know firsthand just how important customs, trade and revenue administration can be to the well-being of a business. I believe that streamlining and simplifying procedures is a critical issue for the growth of Canada's business enterprises, and consequently for the growth of the Canadian economy.
Revenue Canada is already a leader in areas such as electronic tax filing. We would like to take those initiatives further by putting a framework in place that will allow us to expand the reach of our service to and for Canadians.
I want to emphasize that this is not an exercise in changing departmental organization charts. This is an exercise in changing our approach in how we do business, in how we deal with the people we serve.
We want to work together with all our partners for the benefit of Canadians. Even now, Revenue Canada is highly involved with formal and informal consultations that include business people, customs brokers and tax professionals among others. Their input was important in the preparation of the legislation that I am placing before this House.
Canadians want their system to be user friendly and transparent. They want it to be fair, where fairness means equal and efficient treatment. Canadians want us to minimize the costs of compliance with the tax system.
In January 1998 the Public Policy Forum released an important study on the costs of compliance with Canada's tax systems. The forum estimates that with a single administration, there are potential annual savings to Canadian business of between $116 million and $193 million. In addition, the forum estimates between $37 million and $62 million in potential savings in administration costs for governments.
The transition to agency status is a means to an end. It marks a realization of our commitment to fairness and excellent service for all Canadians, our commitment to work with the private sector and our commitment to maintain Canada's reputation as a world leader in revenue, customs and trade administration.
It is something else too: a new model for governance, where success builds on the blending of governmental accountability and private sector flexibility. The best of both worlds: one unified better way of doing business, one unified better way of serving Canadians.
The Government of Canada is working with all Canadians to address our shared needs and our individual aspirations, and to help ensure all of Canada's citizens can reap the benefits of building our country for the next millennium. What we have before this House is an important stepping stone in that process. It is an opportunity to strengthen bridges among governments and on behalf of the Canadians we all seek to serve.
I believe that the creation of the Canada customs and revenue agency is a positive, a practical and a philosophically sound step forward.
What we want to create is an organization with a state of mind that is the state of the art.
The new agency promises to usher in a new era in revenue administration and customs administration as we enter into a new millennium; a new era of service, fairness, partnership, accountability and wise management of our resources; a new era that clings fast to values on which our country is built but meets the needs of our times and the times to come.
