Peggy Nash

[Government Accountability, January 28th, 2013]

Mr. Speaker, yesterday the minister had the gall to attack Kevin Page, claiming his reports were “wanting”.

What is left wanting is the Minister of Finance. He has been proven wrong on every major prediction. Just today, Moody's downgraded six Canadian banks.

It is clear the Conservatives want to gut the office of the Parliamentary Budget Officer for one reason: sometimes the truth hurts. Will the minister just admit his plan is to turn the office of the PBO into a Conservative echo chamber?

[Government Accountability, January 28th, 2013]

Mr. Speaker, concrete steps? The fact is the Conservatives failed to consult with any Canadians before ramming through their budget bills.

The Minister of Finance claimed Conservative cuts would affect back operations and not front-line services. Now he has been proven wrong. The PBO reports that back office spending has gone up by 8%, where services Canadians rely on have been cut by 4%.

Will the minister just come clean and admit that his reckless cuts have been a mistake?

[Technical Tax Amendments Act, 2012, January 28th, 2013]

Mr. Speaker, I welcome my colleague from Kings—Hants back to the House. I look forward to continuing to work with him on the finance committee.

I appreciated his comments on tax avoidance and tax havens. Certainly that is why New Democrats on the finance committee have been pushing hard to get the government to complete its study of tax havens, which began under the previous government. We believe, especially at a time of fiscal restraint, which the government chooses to address through austerity measures, that if there is money being put in tax havens that ought to be collected by CRA and used for all of the services and programs Canadians want and need, then we should have that money so everyone is paying their fair share.

My colleague emphasized the importance of ensuring that tax changes follow announcements of the measures when they were announced by government. It has been over 11 years since the last changes were made. The last technical tax bill was passed in 2001. Until 2006 a Liberal government dealt with this, a government that also let things slide for several years. During the time the Liberals were in power, why did they too did not live up to their responsibility to ensure these technical changes were passed in a timely fashion for Canadians?

[Technical Tax Amendments Act, 2012, January 28th, 2013]

Mr. Speaker, that is an interesting question because, as part of the cuts by the federal government, there have been cuts to the CRA, the body that oversees our tax compliance. It would lead me to think we would be less vigilant in ensuring our laws are complied with. We do not know exactly how these cuts would take place because the Parliamentary Budget Officer has had such a difficult time getting this information that we need to have. CRA staff members are the ones who ensure that people comply with the legislation.

Once the rules are in place, we want to ensure all Canadians and businesses are paying their fair share.

[Technical Tax Amendments Act, 2012, January 28th, 2013]

Mr. Speaker, it is a basic measure of good public administration and respect for the hard work of Canadians that we would want to clarify and keep current our tax legislation. It is yet again a misallocation of priorities to let this kind of bill sit and these changes accumulate for 11 years. I also note that when the member's party, the Liberal Party, was in government, there were changes that accumulated for many years and were not enacted. We have 11 years of changes that have been announced and which accountants, families and businesses have been living by but the changes have never been enacted into law.

One would say that is a failure in the realm of public administration. I argue it is. The government needs to capture these outstanding changes in legislation and also to implement what has been recommended many times, and that would be a sunset act to say that if the government announces a change and does not change the law within a year, that change would fall by the wayside and no longer would be applicable.

[Technical Tax Amendments Act, 2012, January 28th, 2013]

Mr. Speaker, I would like to thank the hon. member for his question. I welcome him as a new member of the Standing Committee on Finance.

With regard to catching up, these changes should be made every year, or so suggests a number of parties including the former Auditor General. I have already asked the parliamentary secretary this question, but I did not get a clear answer.

The government should decide to make changes with regard to fiscal transparency every year. In terms of forecasts, transparency and accountability, it is better to make changes every year. As we now know, it took 11 years for these changes to be made. Yet, they should be made every year.

[Technical Tax Amendments Act, 2012, January 28th, 2013]

Mr. Speaker, I thank my colleague for his very important question.

Legislation that is too complicated poses a challenge, even for tax experts. If it is too complicated for the people who work with Canadian tax laws every day, it presents an even bigger challenge for Canadian families and businesses.

The government claims it has simplified things by saying that things are black or white. But the act becomes increasingly complicated with every tax loophole. That is why we must simplify the Income Tax Act. Our taxes must be fair and progressive. They must also be simpler so that people understand how to pay their taxes every year. The legislation must be simpler for businesses to better plan their investments. This would help create more jobs for Canadians during a time when unemployment is far too high.

[Technical Tax Amendments Act, 2012, January 28th, 2013]

Mr. Speaker, I want to take this opportunity to welcome all my colleagues back to the House. I trust they had an enjoyable break over the holiday period, and that they are all energized and looking forward to getting back to what I am sure will be a very busy winter and spring session.

Today I am pleased to rise on Bill C-48. The bill implements over a decade of highly technical changes to Canada's tax code.

The way I feel about it is that one of the most if not the most important work for us, as elected members of Parliament, is to make decisions about taxation and spending. It is about respecting how hard Canadians work to earn the money they get. We make decisions about taxing that money so we can provide for public services, public infrastructure and democratic machinery.

Most Canadians accept the principle of paying taxes as something that keeps a healthy society. However, they want us to have a very careful eye on their tax dollars and on how that money is spent. I think most Canadians want, and I fear they do not feel they get enough of, is transparency and integrity in our system of tax collection and spending and in our government. They want accountability. They want respect for every dollar they send here.

When we have a situation, for example, like the Parliamentary Budget Officer, who has to take the government to court to get information about how tax dollars are being spent or what cuts to services, which Canadians depend on, are being made, that decreases confidence in our system, in the accountability and transparency of government.

So too does the complicated nature of our tax legislation. Individuals who may not have English or French as their first language, or seniors or young people really struggle with the complicated nature of our tax legislation and certainly yearn for greater simplicity.

That brings me to this bill. Many of these changes seem like they make a lot of good sense. There are provisions in Bill C-48 to ensure that all of an airline corporation's taxable income will be attributed to the provinces and territories in which the corporation has a permanent establishment. There are provisions to discourage tax avoidance in the taxation of foreign affiliates of Canadian multinational corporations. There are anti-avoidance measures for specific leasing of property, limits on the use of foreign tax credit generators for international tax avoidance, as well as housekeeping changes to the Excise Tax Act such as repealing a provision that has not been in use since 1999.

We believe these changes in total will be revenue positive and that they generally move to discourage tax avoidance and therefore ensure the integrity of our existing tax law. Furthermore, the vast majority of these measures have already been in practice for several years, since it is standard practice for tax measures to take effect upon their proposal. Once they have been announced, people accept them as adopted. For these reasons the official opposition New Democrats will be supporting the bill.

Bill C-48 implements over a decade of highly technical changes to Canada's tax system.

In the end, we believe that these changes will be revenue positive. They generally move to discourage tax avoidance and ensure the integrity of the tax system.

The vast majority of these measures have been in place for several years, since it is standard practice for tax measures to take effect upon their proposal. For these reasons, the official opposition will be supporting this bill.

New Democrats believe in cracking down on tax avoidance and tax evasion, while ensuring the integrity of our tax system. That is why we have pushed, since the election in 2011, to have the finance committee complete its study of tax evasion. It looks like we will finally be doing that this year. However, that is why we support the changes being made in the bill, especially those that aim to reduce tax avoidance.

I do want to raise some concerns relating to the size of the bill, which comes to us at close to 1,000 pages.

First, the massive scale of the bill indicates that the government needs to be more responsible regarding its handling of the tax code. In particular, it must ensure that tax proposals are legislated on a regular basis. In fact, the last technical tax bill was passed in 2001. In her fall 2009 update, the former Auditor General, Sheila Fraser, raised concerns about the fact that there were at least 400 outstanding technical amendments to the tax code, which had not yet been put into legislation.

No technical income tax bill has been passed since 2001. Although the government has said that an annual technical bill of routine housekeeping amendments to the Act is desirable, this has not happened. As a result, the Department of Finance Canada has a backlog of at least 400 technical amendments that have not been enacted, including 250 “comfort letters” dating back to 1998, recommending changes that have not been legislated.

Over 200 of these outstanding changes are addressed in Bill C-48, but that still leaves hundreds of outstanding amendments.

I spoke recently in Calgary to a group of more than 1,000 tax practitioners, general accountants, certified general accountants and tax lawyers. They agreed that the comfort letter process works, but they wanted the clarity of having these laws fully in place. It would make their jobs so much easier and create greater clarity for Canadians. The Auditor General's 2009 fall report also expressed a need for these legislative changes so that the comfort letters identified could be enacted.

During this fall's pre-budget consultations, the Certified General Accountants Association of Canada told the finance committee:

—the government must introduce a technical tax amendments bill. The last time a technical tax bill was passed by Parliament was over 11 years ago. Literally hundreds of unlegislated tax amendments to the Income Tax Act...have been proposed, but not yet enacted, which brings uncertainty and unpredictability to the process.

These are the experts speaking, the tax practitioners who deal with this work every day of the week. The quote continues:

—we strongly feel that implementing a sunset provision would ensure that tax amendments are legislated, which ultimately will eliminate the ever-growing backlog of unlegislated tax measures once and for all. With this provision, if a tax policy change is announced and not incorporated into legislation within a reasonable amount of time, the measure would lapse. This would bring greater clarity and certainty to tax legislation, reduce the compliance and paperwork burden, and, perhaps most importantly, prevent any future legislative backlogs.

What they are asking for is a sunset clause so that if government announces tax changes in one year, by the end of that year, it would bring those changes into law. It makes perfect sense. We should not be waiting 11 years to get clarity on tax changes the government has already made. We strongly support this recommendation from the CGA.

The Income Tax Act is a living document, perhaps more so than any other piece of legislation. Feedback from the lived experience of taxpayers and tax practitioners can help us make amendments in order to ensure the integrity of our tax system. The responsible management of the tax code means that these changes must be made on an ongoing basis. Failing to do so can lead to uncertainty for business and for tax practitioners.

One thing I have heard, while going across this country and talking to businesses from the east to the west coast and in many places in between, is that they find the government takes too much action on an ad hoc basis for political reasons and does not create enough certainty by laying out a plan and following that plan.

Anything we can do to create greater certainty for business leads to a better investment climate. It helps businesses make decisions about investing in machinery and equipment and creating more jobs, because they have greater certainty of what the future will look like. Clear tax legislation helps do that. Failing to do so leads to uncertainty. That is why we need the government to act so we do not have decisions being made on an ad hoc basis. People and business want predictability and reliability in our tax system. Without these basic building blocks of predictability and reliability, businesses cannot do effective fiscal planning.

Canadian families need the same certainty. These ad hoc, boutique tax credits, which undermine our tax base and take revenue out of our tax system, are also unpredictable for Canadian families. Their introduction on an ad hoc basis means that it is difficult for families to plan ahead for their tax obligations.

As the former Auditor General noted:

If proposed technical changes are not tabled regularly, the volume of amendments becomes difficult for taxpayers, tax practitioners, and parliamentarians to absorb when they are grouped into a large package.

Amen. That is what we have today, a bill of about 1,000 pages. Bringing more than a decade of tax changes into one bill does not create a situation of the greatest transparency. Yet we need transparency and accountability for our tax legislation, which is something that touches all Canadians and all businesses. It has become a pattern in this Parliament to create these massive omnibus budget bills with hundreds of pages of legislation and very little time to examine them. Furthermore, only a fraction of MPs, similar to the Canadian public in general, are tax specialists.

With regard to Bill C-48, tax lawyer Thomas McDonnell said that we should also remember the huge so-called technical tax bill introduced last fall. The hard copy of the amendments and explanatory notes was over 900 pages. He believes that this bill will also be passed without an informed debate in the House of Commons, and most parliamentarians who vote on the bill will admit that they did not read it or really try to understand the impact of their vote no matter which way they vote. He added that this is not the way Parliament is supposed to carry out one of its main duties, which is to generate revenue. It is sad to say, but he believes that most parliamentarians do not understand this aspect of Parliament's role or they do not have the courage to stand up and defend this role.

While we do not support the government's serial use of omnibus legislation, we recognize that it makes a big difference that Bill C-48 makes technical changes to a smaller number of closely related laws. The vast majority of these measures have already been in practice for several years and have incorporated feedback from tax practitioners. This is a stark contrast to the Conservatives' Trojan Horse budget bills, Bill C-38 and Bill C-45, which made sweeping changes to everything from environmental protection and government accountability to immigration and EI, all without thorough consultation, debate or scrutiny.

That being said, the bill still poses a definite challenge for most parliamentarians, who will not have the opportunity to thoroughly study it and will not be able to study it at committee.

Transparency must be at the heart of our work as publicly elected representatives. We must do everything in our power to ensure that legislation receives full and informed debate in the House. I therefore urge my colleagues to ensure that the legislation receives thorough debate and consideration at all stages, but we also need to go further.

It is our responsibility as MPs to be continually examining how we can most effectively represent the interests of our constituents, including in the tax system. People lose confidence when they see the government's ineptitudes, such as the financing of the F-35 procurement program or individual expenses such as $16 orange juice.

However, in the tax system, when a dishonest few refuse to live up to their responsibilities not only do the rest of us pay more to make up for it, but those who do seek to live up to their responsibilities are put at a competitive disadvantage, and I am thinking of businesses here. This places enormous pressure on corporations and business owners. Too many businesses find themselves in a race to match the tax avoidance measures of their competitors. Yet public budgets provide so much of what Canadians value most. Basic government services are the foundation of our economy: infrastructure, police, education, our legal system.

In testimony to the Senate banking committee Marlene Legare, the former chief of the sales tax division in the Department of Finance's tax policy branch, explained:

Until now, the choice has probably been more in favour of combining measures so as to put forward fewer bills. I think the lesson that we learned from this experience is that it may be preferable to change the balance somewhat.

She is speaking of the omnibus bills. She continues:

That may mean putting forward smaller bills which would contain measures that would be enacted on a more timely basis.

That is, going forward, let us make the changes within a year after they are announced so that there is clarity for taxpayers and for tax practitioners, and so that we are fully recouping the tax dollars for changes that have been announced. It is inexcusable that it has taken so long for the sitting government to take action on these changes.

The official opposition stands firmly in support of focusing on compliance and creating clear tax structures in a timely manner to ensure the integrity of our tax system. That is why we are supporting Bill C-48. However, the massive size of the legislation demonstrates that there is still a huge amount of work to do in getting such technical changes legislated in a timely fashion. Failing to do so hurts taxpayers and tax practitioners and makes it difficult for a proper evaluation by Parliament.

The official opposition stands firmly in support of focusing on compliance in order to ensure the integrity of our tax system. That is why we are supporting Bill C-48.

However, the massive size of this legislation demonstrates that there is still a huge amount of work to do in getting such technical changes legislated in a timely fashion. Failure to do so would hurt taxpayers and tax practitioners and make it difficult for a proper evaluation by Parliament.

I therefore urge my colleagues on all sides of the House to work to ensure that the bill receives thorough examination and discussion in Parliament. We will continue to work to ensure the integrity of our tax system with a more effective process when it comes to technical tax legislation. We need to continually demonstrate our respect for the hard work of Canadians and the taxes they send to Ottawa, and to reward that with transparency and predictability. New Democrats, when we get the opportunity in 2015, will do just that.

[Technical Tax Amendments Act, 2012, January 28th, 2013]

Mr. Speaker, I thank the hon. member for her comments and look forward to continuing to work with her on the finance committee.

She is quite right that there is a huge backlog of tax changes that have been announced but not implemented in law. In fact, there is well over a decade's worth of changes, which creates uncertainty and unpredictability around our tax legislation. Therefore, we acknowledge that it is important to get these changes coded into law.

However, my question to the hon. member is this. Given that there are still hundreds of outstanding changes that have been made or addressed in comfort letters or other ways, will the government wait another decade or more before bringing in additional technical changes, or will it agree with the recommendations that have been made to bring in technical changes on an annual basis to create greater certainty, predictability and transparency in our tax system?

[Committees of the House, December 12th, 2012]

Mr. Speaker, the New Democrats are presenting a minority report. We produced a minority report because we do not believe that the report's recommendations present a comprehensive solution to the most important issues that we are facing today and the issues that we heard during the budget hearings. In this unstable economic climate, we need a comprehensive strategy. We did not hear that coming forward.

Budget 2013 needs to be about job creation, getting Canadians back to work now and addressing the persistently high unemployment situation that has persisted since the 2008 recession. We need to address the skills mismatch that our economy is facing and very weak productivity growth.

In our minority report, we are presenting recommendations promoting jobs and skills development in a balanced economy, closing the infrastructure gap with strategic investments, building a sustainable vision for Canada's energy economy and supporting Canadian families.

Most important, we need a commitment to open, transparent and accountable government. Canadians want real consultation and partnership from their government. They deserve better.