Mr. Speaker, I want to thank the hon. member for Abitibi—Baie-James—Nunavik—Eeyou for his question and the concerns he is presenting here in the House on behalf of his constituents.
Canada's income tax laws are based on the principle that each individual will calculate and remit the tax as they owe based on the income they received during the taxation year.
The Income Tax Act is very clear. It states that tips and gratuities are in fact income. If the employer does not record and report tip income on the taxpayer's T4 slip, the individual is responsible for keeping track of his or her income and remitting the taxes that are owed.
The Canada Revenue Agency provides information assistance through various channels such as the Internet, publication and by telephone to assist individuals in calculating their income for tax purposes.
Let me quote directly from the agency's publication on the topic of tips. It says:
If you do not get a T4 slip to show your income from tips, you are required to report all tips received in the course of your work and report the amount on line 104 of your return. It is your responsibility to keep track of all amounts received in the course of your employment.
When the taxpayer reports tips, gratuities or other occasional income, or should have reported tips but did not, the agency may ask for records or other reporting materials to determine whether the correct amounts have been reported. The CRA raises assessments on tips income based on the particulars of individual cases, the available information and in accordance with the provisions of the Income Tax Act.
As with any assessment, the taxpayer has a right to object and to have the assessment reviewed. They can present their case to the Tax Court of Canada and this can be done informally, without incurring any costs associated with acquiring legal counsel.
Agency officials administer tax laws for us and for the provincial and territorial legislatures. The government has confidence in the Canada Revenue Agency and its ability to effectively and efficiently serve Canadians.
There is not time now to even mention many complex programs and processes that the agency uses to administer our tax laws. I can assure all Canadians that the government continues to examine other ways to promote and encourage compliance with our existing tax laws.