Cathy McLeod

[Technical Tax Amendments Act, 2012, March 8th, 2013]

Mr. Speaker, I am delighted to participate in this important discussion on Bill C-48, technical tax amendments act, 2012.

This legislation, as clearly stated in its title, is technical. It is nevertheless important, especially to the many taxpayers who want certainty after over a decade without the technical tax bill being passed by Parliament.

The technical tax act, 2012, moves to clear the backlog, with the inclusion of outstanding income tax and sales tax amendments, the majority of which have already been released for public consultation. Specifically, from 2009 to 2011, in advance of the technical tax amendments act, 2012, the government engaged in open and public consultations on the vast majority of the proposed amendments included in the legislation. I should also note that the Auditor General of Canada has identified the backlog of technical amendments as an issue requiring attention.

While outlining the delays and addressing the current backlog of outstanding income tax amendments, the Auditor General made some key observations about the impact of failing to deal with this issue in a timely manner and, of course, it has very far-reaching implications.

With regard to one of the many negative effects on taxpayers from the uncertainty caused by the backlog of these outstanding income tax amendments, the Auditor General noted the following: 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 substantially enacted; and increased willingness to engage in aggressive tax planning. As such, I think we need to applaud the Conservative government for taking action in this over decade-long backlog, and the Auditor General for the report that helped to crystallize this issue for Canadians.

As parliamentarians, it is important that we now move forward to address this problem. That means we all need to work together to put an end to this backlog of technical tax amendments.

We have seen that, to some extent, all parties have publicly declared support for Bill C-48. Indeed, the NDP has spent literally days of debate, with very similar sounding speeches, to make that point. To be quite frank, their behaviour looks suspiciously like political procedure games, as we have been at second reading for over 100 days at this point. We need to move past such games and focus on what would actually help taxpayers.

I want to applaud the work of my fellow colleagues on the finance committee, from all sides. We realized the need to move forward in a timely way with this legislation and we actually started to pre-study the bill a number of weeks ago. We have already heard from witnesses. Every single one of them is supporting moving ahead with this important piece of legislation.

We have heard from groups like the Canadian Institute of Chartered Accountants, who have said the technical tax amendments associated with Bill C-48 will help to improve clarity and certainty. We greet the technical tax amendments act, 2012, with a sense of relief.

We also heard from an expert tax lawyer, who stated:

The adoption of this bill will be welcomed, as it will formally enact provisions, many of which were originally proposed in 1999, and will have effect from 2007 or 2010 and in certain instances even earlier.

He also stated that many of the amendments found in this act have been brought before the House of Commons and the Senate on a number of occasions in the past.

In my remaining time today, I would like to spotlight some of the measures that may have been overlooked in today's legislation, or certainly overlooked in the debate, because there are many technical pieces. I want to highlight a few of them.

One such group of Canadians who will be assisted will be the self-employed, as the technical tax amendment act, 2012, will make some helpful, albeit minor, changes to fully implement a very popular recent initiative of our government, and that is to assist the self-employed. I am referring to the Fairness for the Self-Employed Act.

As parliamentarians may recall, that legislation extended employment insurance special benefits, including maternity, parental, sickness and compassionate care benefits, on a voluntary basis to the self-employed. Thanks to that new initiative, self-employed Canadians will no longer have to choose between their family and their business responsibilities. I think we can all agree that this initiative was good family policy. It represents a very significant positive measure for the self-employed.

As I also noted earlier, the technical tax amendments act, 2012, would make some helpful changes to fully implement that legislation. Specifically, the measure in question would amend the Income Tax Act as a consequential enactment to the Fairness for Self-Employed Act. It would provide for a personal income tax credit in respect of premiums paid consistent with the existing credit in respect of employees' EI premiums.

Another helpful measure, and this is important, specifically in terms of some of the work we are doing currently around tax avoidance and the use of tax havens, is the multi-lateral convention on mutually administrative assistance in tax matters, which is normally known as the convention. The convention was concluded in 1988 to create a multinational network to facilitate, improve and extend the exchange of information between national tax administrators. The objective was to combat international tax evasion. In April 2009, the G20 called for action to make it easier for developing countries to secure the benefits of the new co-operative tax environment, including the multilateral approach for the exchange of information.

In response, the OECD and the Council of Europe developed a protocol to amend the convention to bring it in line with the international standard on exchange of information for tax purposes and to open it up to all countries. We call this the amended convention. This amended convention is a useful instrument to fight against offshore international tax evasion and is consistent with the government's policy on exchange of information. Previously, it was open to members of the OECD and the Council of Europe. Now, more than 40 countries, including Brazil, Germany, the U.K. and the U.S., have signed the amended convention, and many more have stated their intention to do so.

The amended convention supports Canada's G20 commitment to implement the latest OECD standard on the exchange of tax information, which is to provide that bank secrecy should not prevent a country from exchanging information for tax purposes. However, the amended convention has not yet been ratified, since section 241 of the Income Tax Act must be amended first. With the passage of Bill C-48, it would be in a position to do so. This is very technical legislation but critically important.

As members may recall, another example is the First Nations Goods and Services Tax Act, or the FNGST. This is a tax applied by participating aboriginal governments on goods and services within their reserves or lands. On reserve, it effectively replaces the GST. The longstanding FNGST arrangements promote self-reliance and political accountability of aboriginal governments to their members, as well as the effectiveness of a national tax system. The FNGST is available to both self-governing aboriginal groups and to interested Indian bands that continue to operate primarily under the Indian Act.

Under the terms of the tax administration agreement, the FNGST is collected and administered free of charge by the Canada Revenue Agency, which acts as the agent of the taxing aboriginal government. That is where the amendments in part 7 of the technical tax amendments bill come into play. These are very big improvements in terms of how we will move forward on this important issue for our aboriginal communities.

As I mentioned earlier, it has been over a decade since Parliament last passed a comprehensive package of technical income tax amendments, so we must move forward. My colleagues and I on the finance committee heard from KPMG, which asked Parliament to act decisively and pass Bill C-48 to essentially clean up the slate of this old legislation and finally bring the Income Tax Act up to date. Taxpayers could then move on and focus on running their businesses and the CRA could carry on administering—

[Technical Tax Amendments Act, 2012, March 7th, 2013]

Mr. Speaker, I think what we really need to talk about today is the difference between appropriate debate and the appropriate role of the opposition, versus obstruction.

Today we heard from a number of people saying that this bill would affect hundreds of thousands of taxpayers.

In committee today, Mr. Vineberg, Ms. Presseault, Mr. Hickey, Mr. Kingissepp, were saying that there is nothing controversial about this bill, to please pass this bill as quickly as possible, that it is very important and that it has been widely consulted on.

I would ask the minister what the tax loopholes are that would be closed in this bill.

[Not Criminally Responsible Reform Act, March 1st, 2013]

Mr. Speaker, I really appreciated hearing my colleague say that New Democrats are concerned about the words of victims. I do not know if he is aware, but there was a very difficult case in British Columbia, the Schoenberg case. When this particular piece of legislation was announced, the victims of that crime, who have had horrific difficulties over the last few years, asked Parliament to please pass this legislation and pass it quickly.

My question to the hon. member is this: is he willing to move this forward very quickly so that victims will have their voices heard throughout the whole process?

[The Economy, March 1st, 2013]

Mr. Speaker, under the leadership of our Prime Minister and Minister of Finance, Canada has become a leader in a very troubled global economy. Today Statistics Canada revealed our economic growth in the last quarter has led all G7 countries. Under our government, Canada has also led the entire G7 in job creation, with over 900,000 net new jobs created since July 2009.

While our government is creating jobs, the NDP is proposing a $21 billion job-killing carbon tax that would increase the cost of gas, electricity and everything, but that is not all: the NDP is also proposing over $50 billion to implement an array of social programs, from a 45-day work year to state-run child care.

Canadians simply cannot afford the NDP.

[Canada Revenue Agency, February 8th, 2013]

Mr. Speaker, the way that Canadians file their taxes is changing, and we are also changing to meet those needs. CRA encourages Canadians to file online, and a growing number of Canadians are taking advantage of that safe and secure option. Taxpayers can still file on paper, and tax forms remain available on request or at a local post office.

Again, last year roughly 1.3 million packages that were mailed out were never used. I certainly think everyone can appreciate that we should not be spending money in that way.

[Business of Supply, February 7th, 2013]

Mr. Speaker, that is an excellent question from my colleague. We have looked at the analysis done by the PBO and, as he indicated, the budget that will be presented is a very vast document. If we look at the presentations from the 600 individuals who came forward, they were not about numbers but how we as a country could move forward. An example is how we might look toward improving some programs with our first nations communities and economic opportunities.

It is important to recognize that where we go with the budget is really about growth and long-term prosperity for Canadians and it is truly a policy document.

[Business of Supply, February 7th, 2013]

Mr. Speaker, as we are aware, the term of the Parliamentary Budget Officer is coming to an end. The Library of Parliament is undergoing a very active process in engaging the next parliamentary budget officer. We recognize that there is certainly more than one man. However, at the finance committee we have heard excellent input from the whole department and he often comes with many capable individuals to the table in terms of the analysis they do.

Again, I would like to reiterate that there are many areas that are available for all parliamentarians to get the information they need. Certainly, we all look forward to the budget that will be presented sometime this spring.

[Business of Supply, February 7th, 2013]

Mr. Speaker, we are very proud that we created this position, which is a resource for all parliamentarians. We are certainly moving forward in looking at the replacement process with the Parliamentary Budget Officer. However, transparency and accountability is more than just one position. I would again refer all hon. members to look at the enormous resources and amount of information that is very transparent for the first time ever in terms of what our government does with budget consultations and with the prebudget process.

Again, I am very proud of our record, and our record is seeing results. Just look at how we have seen our way through a great recession and how Canada remains the envy of the world.

[Business of Supply, February 7th, 2013]

Mr. Speaker, thank you for the opportunity to lend my voice to the debate today on the NDP motion presented by my colleague on the finance committee.

While I may not agree with her and the NDP's economic agenda of higher taxes, carbon taxes and more deficit spending, I also recognize that the majority of Canadians do not either, so I think we can take some degree of comfort in that.

Right from the start I will note, as many of my Conservative colleagues have done already, that we have no intention to move the Parliamentary Budget Officer outside the Library of Parliament. We want to see a Parliamentary Budget Officer who is a non-partisan, credible source of opinion on fiscal matters, and allowing the Library of Parliament to do that is the best course of action.

During my time, I would like to focus on our Conservative government's landmark achievements in enhancing budget and fiscal transparency since forming government in 2006. This issue has certainly received a lot of media attention of late, especially in the context of today's debate. Therefore, I am happy to provide some insight to parliamentarians and all Canadians.

I am really proud to say that our Conservative government has already established a solid record of keeping Canadians very well informed about government expenditures. This includes creating the Parliamentary Budget Officer.

Preparing the federal budget essentially means drawing a blueprint for how the government intends to set the annual economic agenda for Canada and how we will allocate taxpayers' money. It sets out our country's economic priorities and the means by which these goals will be achieved.

Because the budget is ultimately funded by Canadian taxpayers, we not only believe Canadians have every right to know exactly how and where their tax dollars are being spent; we also believe that all Canadians should participate in the process. I would like to highlight a few specifics of the budget-making process and talk about the consultations phase, a process that really engages Canadians directly.

The way we prepare the budget has changed dramatically since the first budget was presented on December 7, 1867, but the basic principles behind it have changed little.

Traditionally, the budget process was done in the backrooms of Ottawa, with little consultation with everyday Canadians. Today, things are very different. This year, as in previous years, our government undertook a series of extensive public consultations, as did the finance committee.

Additionally, when it comes to economic projections, no longer do we rely on projections made in secret with little transparency of where or how they were determined. That has changed so much. For instance, in 2012, the Minister of Finance consulted with private sector economists in March and October on their forecasts, before presenting the budget and fall update.

Indeed, this has been a long-standing practice, where the government surveys more than a dozen of the most prominent private sector forecasters—Canada's leading independent and impartial economists from Canada's leading banks and academic institutions—to obtain their projections of economic growth and other key variables such as interest rates, the unemployment rate and the inflation rate.

I should also note that all these details and all the details on the government's spending are, for the first time ever, often available free of charge and displayed openly and transparently on websites of the Department of Finance and the Treasury Board Secretariat.

I would encourage all hon. members to explore those websites, because the information on those websites is absolutely phenomenal. On the finance website, the publications and reports contain detailed information that is very illuminating. I encourage everyone to explore those websites because they are quite phenomenal in terms of the information that is there, which can really guide us as we move forward in our decision-making.

The economic forecast that is used as the basis for fiscal planning in the annual budget and update of economic and fiscal projections is the average of that survey of private-sector forecasters. This gives the government an impartial, outside view of the economy and introduces an element of independence into the government's fiscal forecasting process. This is supported and applauded by such organizations as the International Monetary Fund.

This is an approach that has made a significant contribution to the strength and resiliency of the Canadian economy, a record that most others envy.

I would like to remind the NDP, which is so fond of talking Canada's economy down, that we have created over 900,000 net new jobs since July 2009, 90% of them are full time and 75% of them are in the private sector. This is the best job growth record in the entire G7, which is something that even the NDP cannot deny. In fact, what people will not hear from the NDP is that many around the world are looking to Canada's economic leadership as a model to follow.

I would like to share a quote from Tom Donohue, the president of the U. S. Chamber of Commerce. Recently he said this about our economic achievements, “The great Canadian miracle is something we should follow”.

Returning to the budget process, I want to underline the importance of public consultations with everyday Canadians in creating this document, which is something I am sure all finance committee members can relate to. Indeed, at finance committee, we met with hundreds of groups and individuals from across Canada. We heard from over 600 individuals, business groups and organizations.

Additionally, the Prime Minister and the Minister of Finance, along with other ministers and MPs fan out across the country to directly consult with citizens on their budget priorities and how best to meet them. In my riding I am, and I am sure MPs from across the country are, taking that time to sit down with business owners and individuals. It is absolutely amazing to hear the very important suggestions and excellent insight that we get from Canadians from coast to coast to coast, and that actually forms the foundation of our budget.

Every year, I am so delighted to see some of those observations made by Canadians. When we look at it in the budget process, we have seen it come from a simple idea, or not so simple idea at times, into the format that will move Canada forward.

We really support and encourage consultation from coast to coast, This year, for the first time, we tried online prebudget consultations as another format. In fact, since 2006, our Conservative government was the first government in history to open doors to online prebudget consultations to all, again, ensuring that people who wanted their voices heard would have the opportunity.

In fact, even though it is getting a bit late, there is still an opportunity to have some input. Just go to the Department of Finance website, www.fin.gc.ca. The current online consultation that started on November 30 asks Canadians for their ideas on cost neutral or low cost measures to further solidify our economic recovery.

The budget planning process in recent years has opened up even further to encourage all governments to work together and consult with interested groups. That is transparency. That is engagement.

These consultations are critical to ensuring that, at the end of the day, the budget reflects the priorities of Canadians and that government maintains the focus on job creation, economic growth and long-term prosperity.

As our government has done since 2006, this budget will reflect our country's key priorities for creating a strong economy that will benefit all Canadians. Specifically, economic action plan 2013 will continue to build on the strengths and the key pro-growth initiatives our government has been working on in the past year.

We will remain focused on what matters to most Canadians, jobs and economic growth, and ensure that Canada's economic advantage today will translate into the long-term prosperity of tomorrow.

Canadians should expect nothing less from Canada's budget and their government.

[Disability Tax Credit Promoters Restrictions Act, February 5th, 2013]

Mr. Speaker, I am certainly pleased to stand today to speak to this private members' bill that the hon. member for Renfrew—Nipissing—Pembroke has brought forward. It is very important legislation.

Perhaps before starting, I would point out that I was very surprised to hear some of the comments by the hon. member for Victoria and the hon. member for Saint-Léonard—Saint-Michel. If one actually looks at the application form, there is a small part that has to be done by the promoters. Actually, as someone who has experience in the health care field, as I go through the section that the medical practitioners fill in, it is very logical. It is quite a simple form, in terms of the areas that are non-applicable and that one can really target. Thus I find their comments about the application process surprising.

I have heard from many people about the responsiveness of the CRA when they have called it, and how willing, able and quickly helpful CRA is when dealing with any of these issues. I do not know if the hon. members were trying to find areas of disagreement for disagreement's sake. I think sometimes it would be nice to just look at what is a really good piece of private members' business, not government business, and to look at it in the spirit with which it was brought forward.

Certainly our government understands that Canadians have a difficult time making ends meet. As a result we offer a very generous range of tax credits. In fact, the tax credits are key to our economic action plan, a plan for jobs and growth that is working for Canadians as we face the global economic downturn. I could go on at length about some of those very important measures, whether the universal child care tax benefit or the home buyers' tax credit. These have been very helpful, as I hear every day in my office.

Since forming government, we have continued to lower taxes for hard-working Canadians. The average family now pays $3,000 less in taxes each year.

We are certainly committed to enhancing the participation of people with disabilities. Through our policies and programs we support the full and equal involvement of those with disabilities in every aspect of Canadian life.

A key component of our strategy to assist the estimated 4 million Canadians with disabilities is the use of tax measures, particularly personal income tax provisions. As the House is aware, the Department of Finance is responsible for developing federal tax legislation in the areas of personal and corporate income tax. The Canada Revenue Agency administers this legislation and the various social and economic incentives delivered through the tax system.

One of the most important measures to help Canadians with disabilities is the disability tax credit. It recognizes that the cost of some disability related expenses can affect a person's ability to pay tax, and provides a tax reduction to people with a severe and prolonged impairment in physical or mental function. Their disability must be severe enough to restrict them in their basic activities of daily living or cause a person to take an inordinate amount of time to perform such activities, even with appropriate therapy, medication and devices. The restriction must be expected to last for a continuous period of at least 12 months and must be present at least 90% of the time.

People may also be eligible under the cumulative effect of two or more restrictions, which in combination are present 90% of the time. To claim this fund, the affected person or family members caring for him or her need to complete the disability tax credit certificate.

Members have talked about the process and the form, and how it certainly is a very sensible form. There is a section for a medical practitioner to fill out information on the impairment. Again, contrary to what the opposition members say, I think it is very sensible and well laid out. The first page is also very simple.

Once that step is complete and the CRA confirms that the person is eligible for the credit, the disability amount can be claimed on their income tax return. If for any reason someone with a disability or family member providing care needs assistance, there are agents who specialize in the disability tax credit. They are available to assist taxpayers and qualified practitioners by providing information on both the criteria and the application process. They are readily available and very helpful.

As Bill C-462 underscores, however, Canadians with disabilities applying for the credit are not always treated fairly. In recent years the Canada Revenue Agency has witnessed an increase in the number of businesses promoting their services to people with disabilities and their families who want to apply for the disability tax credit, or the DTC. Often, these businesses are focused primarily on completing the application form. Again, it is that early section, part A, I referred to. They are charging up to 40% of the amount of the person's income tax refund, often amounting to thousands of dollars, for something that is very simple to do. That can hardly be called fair. People with disabilities receive as little as 60% of the amount they are entitled to receive.

In 2012, the federal tax savings for someone eligible for the DTC will be up to $1,132 for adults, and can be as much as $1,792 for a child under the age of 18 and/or the family member supporting them. Of course, as we have mentioned already, these can be claimed retroactively, so thousands of dollars are at stake. For the one in five 5 Canadians with disabilities, living on lower incomes, this can be a tremendous amount of money. We should not forget that disabilities are also frequently an issue with seniors.

The Government of Canada is committed to ensuring that all Canadians are treated fairly by the tax system. The disability tax credit should be given to the person for whom it was intended. To make sure that happens, Bill C-462 would restrict the fees that can be charged or accepted by businesses that request a determination of DTC eligibility on behalf of someone with a disability. That is the key point, which also speaks to some members' concerns about whom this is targeting. It is not targeting practitioners but the person who has submitted the eligibility form on behalf of someone with a disability.

The legislation would prohibit firms from charging or accepting more than an established maximum fee. That would be determined following consultations. We certainly do not want to interfere with a fair and free market and inadvertently hurt businesses that charge reasonable amounts consistent with the value of the services they provide. Our goal is simply to ensure that when Canadians with disabilities are eligible for the tax credit, especially if their claim goes back many years, they receive the maximum amount due to them.

To discourage those companies that charge their clients more than a reasonable fee, Bill C-462 would require businesses to notify the CRA of any fee charged in excess of the maximum amount permitted. If they fail to do so they would face fines of $1,000 to $25,000 for not notifying the CRA, or for any false or deceptive statements. A separate fine equal to 100% to 200% of the excess fees could also be applied in addition to the penalty. Such fines would be applied in serious cases, such as repeat offenders.

There is very little to fault in the legislation, which is why it earns my endorsement, with several small caveats. To enhance the bill's effectiveness, our government proposes three amendments. First, we want to strengthen the monetary value of the penalty so that it will represent more than just a return of profits. Without this amendment the penalty as written could be perceived as an unacceptable business risk. We also want to make sure that the provisions of the bill apply to all types of DTC promoters and preparers, regardless of how their businesses are structured. Finally, we want to ensure that the CRA is allowed to make full use of the information at its disposal to identify non-compliance and to enforce the provisions of the bill.

With these improvements, Bill C-462 earns my wholehearted support. I trust I can count on all members of Parliament to give their stamp of approval to this very worthy legislation.