Cathy McLeod

[Bill C-48, Technical Tax Amendments Act, 2012, May 27th, 2013]

Mr. Speaker, I believe that, while the Conservatives have a strong stable majority government, we will move forward on a regular basis to update this important piece of legislation.

This piece of legislation and the timeliness goes back a number of years to when the member's party did not see fit to bring forward these important measures.

What I really want to focus in on is how our business community and our accountants have said it was so important. During our pre-budget consultations, we heard about how it would give stability to the organizations and the accountants. Again, they all encouraged us.

I do want to say that I am very pleased that all parties actually saw fit to move forward again and support the legislation.

[Bill C-48, Technical Tax Amendments Act, 2012, May 27th, 2013]

Mr. Speaker, I am delighted to respond to the question. I, too, am someone who has worked shift work for many years.

I think we all recognize that there are some pieces of legislation that are very fascinating. This is fascinating, also, in terms of the importance of what we are actually dealing with.

I guess I have to speak to the idea of our moving forward with it. I believe it was at second reading where there was delay after delay. We finally felt it necessary to create some sort of framework around the conversation. Obviously people were asking for this legislation. We wanted to get it to committee.

I do not think our government has any lessons to learn from the NDP members in terms of trying to move legislation forward in a timely way. They seem to obstruct the progress on a fairly regular basis.

[Bill C-48, Technical Tax Amendments Act, 2012, May 27th, 2013]

Mr. Speaker, I am delighted to stand to talk to this very important piece of legislation. As many members in the House may be aware, I had actually started the speech and was a good 10 minutes into it when I was interrupted. Of course, I had to defer it until this fine hour. In spite of the many jokes I have heard tonight about talking about the technical tax act at 11:20 in the evening, it truly is an important piece of legislation. Even though the insomniacs will enjoy it, it is a very important debate we are having in the House tonight.

At this point, I need to pick up where I left off. I had talked a bit about the process and how we actually prepared this important piece of legislation. I had talked about the significant consultation that happened previously, and I also recognized in the House the work of all the finance committee members from all sides in terms of saying that this was an important piece of legislation and that it was time to move forward.

The other items I talked about in my first number of hours were parts 1 through 4, so I will not actually go back through parts 1 to 4. I will pick up right where we left off with part 5 of the legislation.

Part 5 of the legislation is designed with fairness for the taxpayers in mind. It sets out to close tax loopholes to ensure that all Canadians pay their fair share of taxes. Some of the specific things the act would do is close loopholes related to specified leasing property and ensure that the conversion of specified investment flow-through trusts and partnerships into corporations would be subject to the same rules as transactions between corporations. It would prevent schemes designed to shelter tax by artificially increasing foreign tax credits. Finally, it would implement a regime for information reporting of tax avoidance transactions.

As we can see, when this is viewed as a whole, these measures would play a very important role in the government's fight against tax avoidance and would help improve the integrity of the tax system. This is a really important goal, and we are proud of our record. Not only are we moving forward with this landmark piece of technical tax legislation, but our economic action plan 2013 affirms our commitment to making the tax system more fair and equitable for all Canadians.

Setting aside the legislation before us today for just a moment, I would like to remind members why improving the integrity of our tax system is so important. By neglecting to close loopholes that allow a select few businesses and individuals to avoid paying their fair share of tax, ordinary law-abiding Canadians are punished with higher taxes.

We will not let this happen. We are committed to building on our strong record of closing tax loopholes. It is a record that speaks for itself, because we have acted to close tax loopholes more than 50 times. By ensuring that taxes are applied fairly and are consistent with their intended objective, we have gained over $2 billion in added revenue for the government, which is used to fund important front-line services for all Canadians.

I would hope that all parliamentarians would agree that closing loopholes that permit a few select corporations and individuals to skip out on paying their fair share of tax is important. In support of that goal, today's legislation would combat many complex tax planning schemes, as I identified in my remarks a couple of days ago.

I would like to pause here for a moment to note that many provincial governments are looking at this legislation to help guide their further actions, especially when it comes to closing tax loopholes. As a matter of fact, the Province of Ontario tabled its 2013 budget in May of this year. In that document, there was a section on closing tax loopholes that underlined the common belief among all the governments, federal and provincial, that everyone should pay their fair share of taxes. As part of its campaign to crack down on tax loopholes, the Ontario government looked specifically at the federal government's technical tax amendments act 2012 for inspiration.

Indeed, let me quote verbatim from page 266 of the Ontario budget document, “In addition, the [Ontario] government will be proposing legislation to introduce new disclosure rules for aggressive tax avoidance transactions similar to the rules introduced by the federal government as part of Bill C-48”. We can see they are even directly referring to the important legislation that we put forward. “This new measure would require taxpayers to report aggressive tax avoidance transactions that attempt to avoid Ontario tax.”

Again, this is an important reason to finally move forward with this important legislation.

I want to assure this House and Canada that, as we move forward, our Conservative government will keep taking the necessary steps to protect the integrity of the tax system. By doing that and helping end tax loopholes, we are going to help keep taxes low for Canadians and their families.

Before continuing to part 6, I want to outline that part 5 also includes numerous, more technical changes. These changes would merely be made to ensure the income tax system works in the same way as the underlying policy intent that guides it.

I should flag that many of these technical changes are relieving, addressing issues identified by individual taxpayers in the course of interacting with their income tax rules and how these rules apply to their own situations.

Finally, we will be looking at implementing an income tax amendment relating to the enactment of the fairness for the self-employed act. Thanks to this new initiative recently enacted by the Conservative government, self-employed Canadians will no longer have to choose between their families and their business responsibilities. I think we can all agree that this initiative was good family policy. It represents one of the most significant positive measures for the self-employed in decades.

The technical tax amendments act, 2012, would make some changes to help fully implement that legislation. Specifically, consequential changes to the Income Tax Act are required in order to provide for a personal income tax credit in respect of premiums paid consistent with the existing credit in respect of employee EI premiums.

Moving on, part 6 of the bill would implement a series of technical improvements to the GST-HST framework, such as relieving the GST-HST on administrative costs of collecting and distributing the levy on blank media imposed under the Copyright Act.

Part 7 of the bill, and I am sure members are waiting for part 7, the last part of the act, simply, would provide for a few minor and administrative changes to the federal-provincial fiscal arrangements act.

Before ending my remarks, let me again thank the members of the finance committee of all parties for their unanimous support of this legislation and their co-operative attitude to ensure a swift implementation; something that we hope continues into this third reading debate. I think all members on the finance committee would agree that, in a nutshell, it is so important to pass this lengthy bill. It would provide certainty for taxpayers, it would make compliance easier and it would improve tax fairness for all Canadians.

Like I did during my remarks at second reading, I would like to finish with a quote from an op ed in the June 2011 edition of The Globe and Mail written by Tim Wach, a respected tax professional with Gowling Lafleur Henderson LLP:

When taxpayers are uncertain about their obligations, their trust and faith in the system diminishes....parliamentarians can bring a higher degree of certainty to our tax laws by moving swiftly, in a non-partisan, non-politicized manner, to enact outstanding changes. Let's hope they do just that.

I know I might have a minute left but I think, at this point, I would like to close and, again, just say it is an incredibly important piece of legislation. It is a lengthy piece of legislation. It has been a long time in the making. Certainly, as we have done pre-budget consultations year after year, we have heard from accountants and business people across this country that this is timely and it needs to be done now.

[Public Works, May 24th, 2013]

Mr. Speaker, the CRA is always looking for ways to improve its efficiency and the services that it delivers to Canadians. The creation of a second T3 processing site is in line with CRA best practices and would allow CRA to maintain a high standard of service for Canadians.

CRA identified Summerside as an ideal location as it provides access to existing expertise and state-of-the-art facilities.

[Canadian Museum of History Act, May 22nd, 2013]

Mr. Speaker, I am really delighted to hear tonight about the plans to move forward. I had the opportunity within the last month to visit the Museum of Civilization and then to visit a little museum in Clinton, British Columbia, which had an amazing collection from the gold rush times. It was quite a delight to tour this very small museum.

I would like to hear more from the minister in terms of how he perceives that these will knit together. We heard about the opportunity for small museums to bring collection items one way. Will there also be an opportunity to have more of a two-way, and that also includes things like the Japanese camp he acknowledged in his comments regarding Midway? Will there be a bit more back and forth with this plan?

[Technical Tax Amendments Act, 2012, May 21st, 2013]

Mr. Speaker, I am pleased to begin third and final reading at debate stage of this important piece of legislation for taxpayers and tax professionals, Bill C-48, the Technical Tax Amendments Act, 2012.

I have to admit that it is certainly not the most riveting or the most exciting piece of legislation that has ever come before Parliament. However, it is a very important piece of legislation and it is going to go a long way and a significant way toward the goal of simplifying Canada's tax system.

As previous Parliaments' efforts to adopt these technical tax amendments were unsuccessful for a variety of reasons, we have seen a considerable backlog develop over the years, making it more important now to act and to finally pass these technical tax amendments.

We all recall even the Auditor General of Canada recently cautioning over a growing concern, and outlining that concern in a 2009 report. She said:

Taxpayers’ ability to comply with tax legislation depends on their understanding of how the rules apply to their own circumstances. ... Uncertainty about how the law should be applied can also add to the time taken and costs incurred by tax audits and tax administration.

Of course, I could not agree more with the comments from the Auditor General. Furthermore, I would also like to flag that the Auditor General also made some important observations about the impact of not dealing with this issue in a timely manner, an impact with far-reaching implications.

Among the many negative effects for taxpayers of the uncertainty over the backlog of outstanding income tax amendments, the Auditor General's report identified:

higher costs of obtaining professional advice to comply with tax law; less efficiency in doing business transactions; inability of publicly traded corporations to use proposed tax changes in their financial reporting, because they have not been “substantively enacted”; ...and increased willingness to use aggressive tax plans.

Before continuing, let me pause here to thank my colleagues on the finance committee from all sides for their timely and swift consideration of the technical tax amendments, 2012, earlier this year. I also want to thank them for giving their unanimous support to the legislation. It is little wonder, as during the multiple hearings the finance committee held, we heard from dozens of witnesses ranging from the Certified General Accountants Association of Canada to the Canadian Institute of Chartered Accountants to the Canadian Tax Foundation, and many more. They were all calling for the timely implementation of today's legislation.

Permit me to share with the House and with all Canadians some snippets of what we heard at committee, all underlining the lengthy process to get this legislation to this stage and the importance of Parliament finally adopting it.

First, allow me to quote from the Canadian Institute of Chartered Accountants, which said:

Bill C-48 marks the end of a very long road, one with many twists and turns over the years. The last technical bill on income tax received royal assent in 2001....

That speaks for itself. It was a long time ago. They continued to say:

...it is fair to say that we greet the technical tax amendments act of 2012 with a sense of relief. We support Bill C-48. The CICA understands how important it is for taxpayers to have greater certainty and a clearer understanding of Canada's federal income tax system.

We listened to the Canadian Tax Foundation, and again I will quote at length. The CTA said:

We live in a rapidly changing world, and this legislation must respond dynamically to changes in commercial transactions. Can you imagine how much work would be required if you made no repairs to your home or your car for more than 10 years? That is what has happened with these two statutes. The last bill addressing technical amendments was passed in 2001. ... [The Technical Tax Amendments Act, 2012] represents 10 years of repairs and maintenance in updating the Income Tax Act and the Excise Tax Act. Its passage is important to all Canadians. ... I want to emphasize it again. Its passage is very important to all Canadians. ... Delays in the passage of tax legislation leave taxpayers and their advisers in a no man's land of uncertainty. My message for the Standing Committee on Finance is that you should encourage passage of this legislation....

I will give the House another example. The Certified General Accountant's Association of Canada told finance committee:

...we encourage you to move swiftly to pass this important piece of legislation. The bill deals with a massive backlog of unlegislated tax measures. Its passage would, in our opinion, bring greater clarity to the tax system and strengthen the integrity of our laws.

We all know these delayed technical amendments cause serious difficulties for taxpayers, businesses, professional accountants and their clients, and of course, government. We heard some very vocal support for the technical tax amendments act, 2012 at finance committee from these and many other public interest organizations and tax professionals. The support was a big part of the reason the legislation received unanimous support from all members, from all parties, on the committee.

For those watching at home, and parliamentarians, I want to briefly recap the content of the technical tax amendments act, 2012. As I alluded to earlier, the vast majority of these amendments have already been publicly released in either a previous budget or a previous technical tax bill. In addition to that, the vast majority of it was previously and extensively released prior to introduction during the multiple public consultation phases. The ultimate legislation, in point of fact, incorporates a tremendous amount of the feedback provided by Canadians during those many public consultations.

Today's act, among other things, would further simplify Canada's tax system through numerous technical amendments to the Income Tax Act, the Excise Tax Act and related legislation. I would like to further add that today's legislation also takes key steps to close some tax loopholes to create a stronger and fairer tax system for all Canadians.

I want to quickly review the legislation, part by part, to highlight some key measures and what they hope to achieve. Even though today's act is obviously extremely technical in nature and includes seven different sections, I will keep my remarks brief.

I will commence with Part 1 of the bill, which would modify the Income Tax Act by taking into account comments we received during our extensive consultations and which would create simpler rules for non-resident trusts.

Parts 2 and 3 deal directly with the taxation of Canadian multinational corporations with foreign affiliates, implementing changes, some of which date all the way back to 2004, that would make Canada's tax system more fair and equitable, and of course, easier to administer. As is the case with the majority of measures contained in the bill, these changes, again, are the result of extensive public consultations.

Part 4 of the bill deals with the concept of bijuralism. More specifically, it contains amendments that will ensure that the bill will function effectively under both common and civil law. This means that amendments dealing with certain legal concepts, such as rights, interest, real and personal property, life estate and remainder interest, tangible and intangible property, and joint and several liability, will accurately capture common and civil law in both official languages.

Part 5 of the bill is designed with fairness for taxpayers in mind and sets out to close tax loopholes to ensure that Canadians would carry their fair share. The act would close tax loopholes related to specified leasing property, ensure that conversion as specified investment flow through trusts and partnerships into corporations are subject to the same rules as transactions through corporations—

[Economic Action Plan 2013 Act, No. 1, May 2nd, 2013]

Mr. Speaker, the excellent speech by the member for York Centre really highlighted some important features of the budget implementation act no. 1. What I especially appreciated was his talk about the preferential tariffs and how this was a very positive measure.

We hear the NDP regularly say that it supports Canada, it supports jobs and it supports measures. On the other hand, we also hear the NDP argue against these important changes that would really help our manufacturers and create a playing field that would be fairer and would no longer needed because they were not developing countries.

[Economic Action Plan 2013 Act, No. 1, May 2nd, 2013]

Mr. Speaker, I would like to ask the member to take note of a few things in the budget implementation act that I believe are of benefit not only to his riding and to Quebec but to all of Canada.

I would ask if he is prepared to support and is interested in supporting the program that is going to look for youth entrepreneurs. It is a very important program that I know has had great benefits.

Genome Canada is well known across the country in terms of the very important work it does, as is CNIB in terms of the hub that it will be creating, and I could go on and on about the improvements in veterans' benefits.

How can and how will the member justify to his constituents his voting against all of these very important measures that will help him directly in his riding, as well as help Canadians across the country?

[Economic Action Plan 2013 Act, No. 1, May 1st, 2013]

Mr. Speaker, as I stated in my opening remarks, we are the government that understands that every dollar we spend is a dollar out of Marsha the nurse's pocket and a dollar out of someone else's pocket.

As I looked at the NDP platform and saw the extraordinary list of expenditures they intended to make, I could feel many people wanting to tighten up, sew up, their pockets to protect their very hard-earned dollars.

[Economic Action Plan 2013 Act, No. 1, May 1st, 2013]

Mr. Speaker, certainly the tradition of the House has been that there is a budget that is tabled and there is legislation that follows, so I cannot speak to what will be coming.

We do know that in the budget there were a few other measures that the Minister of Finance will perhaps look at moving forward at some other date.