Mr. Speaker, as a tax lawyer, I am very pleased to speak to a bill that should have been introduced a very long time ago.
It has been 11 years and the Conservatives have not introduced a technical bill. Unfortunately, they are not the only ones to blame. The Liberal government shares that blame. We now have 200 amendments to the Income Tax Act in a 1,000-page document. We have only nine hours to debate a 1,000-page document.
I would like to know how many parliamentarians here in this House understand how important this bill is. I am sure that in nine hours of debate, no one here has been able to make it through 1,000 pages. Supporting this bill is an act of faith. We are putting our trust in the professionalism of the people who drafted this bill and the officials at the Canada Revenue Agency, because it is clear that parliamentarians are not sure about what they are voting for. That is serious.
The Income Tax Act is probably the most important statute in Parliament. Without this legislation, we are not able to pay police officers, public servants or nurses. It serves as a financial and economic foundation for the government, but the Conservatives decided that this act was not important enough to be addressed every year.
The purpose of this bill is to do nothing more than catch up on the backlog of comfort letters. This bill includes 200 of 400. We will still have to catch up on 200 letters, and we will also have to assume that every budget bill will lead to an amendment of the comfort letters. This should be done every year. Clearly, that has not been the case.
That is why we are blindly working our way through an obstacle course. No one can tell me that parliamentarians sat down and read 1,000 pages. In our legal system, ignorance of the law is no excuse. Unfortunately, the Income Tax Act is obviously an exception to that. Tax experts, who appeared in our committees, told us that they did not know what was in force and what was not.
How can we enforce a law that is not written or that will only be enforced at a given time? Can we say that we will enforce the law when we have the time? How wonderful. One of the main reasons Italy and Greece had financial problems was because these governments were not able to claim the taxes they were owed.
The European crisis is a financial and tax crisis. Those people were expecting their government to have money coming in. The money never materialized because their government did not implement measures to ensure that the ministry of revenue was able to collect the taxes owed to the government.
Here in Canada, there are tax avoidance problems. Tax avoidance is the use of means within the law to avoid or delay payment of taxes. It is legal. For example, RRSPs generally lend themselves to tax avoidance. By contributing to RRSPs, we avoid paying taxes. That is legal.
Unfortunately, the law is now so riddled with holes, confusion and contradictions that a good tax expert can find a legal way for a client to avoid paying taxes. It is legal. It was not planned or foreseen by the government, but the law is so poorly drafted that it allows a good tax expert to find loopholes, and that is legal.
We try to prevent tax avoidance by prohibiting aggressive tax planning. The abuse cannot be censured if the law is poorly drafted. The responsibility lies with the government.
There is tax evasion and tax avoidance. What is the difference? Tax evasion involves breaking the law, circumventing it by fraudulent means, and involves white collar criminals. We have to prohibit tax evasion and implement means to fight it. When a law is poorly written or when officials do not know what to do, it is difficult to put an end to these fraudulent practices. Tax avoidance entails finding legal means to avoid paying taxes that are owing. Tax evasion is a criminal offence. In both cases, and despite commendable efforts, the government is losing control of the enforcement of its legislation. That is a serious threat.
For many years, any tax experts who appeared before the Standing Committee on Finance, the Standing Committee on Public Accounts and all committees that are economic in nature indicated that the text of the Income Tax Act had areas that were underlined and shaded in grey. This indicates that a comfort letter was issued, but the change has not yet been incorporated into legislation. There are 400 examples of this. Understandably, people want this to be corrected, and quickly.
Imagine a tax expert who presents a tax plan. That person is told that these comfort letters might be adopted one day, or maybe not. Uncertainty reigns. When there is a change in government, the new government can decide not to approve a comfort letter and never to enforce it; it can reject it. For 11 years, a tax expert might not know if his or her carefully prepared plan is legal or not.
When a comfort letter is drafted, the corrections that it makes should be applied immediately in the months that follow. That is the main message. We are in favour of adopting all 400 comfort letters. The government has presented only 200, but another 200 are still to come. They must be incorporated into the Income Tax Act.
Our hope now is that, in the future, this government will have the decency to amend the Income Tax Act relatively quickly and incorporate these comfort letters any time it brings down a budget that includes comfort letters. This is an absolute necessity if we do not want to find ourselves in the same situation as Greece, Italy and Spain, countries that lost control of their taxes and can no longer collect them and pay their debts.
