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Core 1..188 Hansard (PRISM::Advent3b2 15.25) House of Commons Debates VOLUME 146 Ï NUMBER 212 Ï 1st SESSION Ï 41st PARLIAMENT OFFICIAL REPORT (HANSARD) Friday, February 15, 2013 Speaker: The Honourable Andrew Scheer CONTENTS (Table of Contents appears at back of this issue.) 14187 HOUSE OF COMMONS Friday, February 15, 2013 The House met at 10 a.m. prorogation, those bills simply did not get through the House and were dropped. The next event that is of some importance is the Auditor General's Prayers report of 2009. The Auditor General made it crystal clear that there were major costs imposed by not acting more expeditiously in this area. I would like to read a few of the key recommendations that GOVERNMENT ORDERS were made by the Auditor General in 2009. Ï (1005) [Translation] [English] She said: TECHNICAL TAX AMENDMENTS ACT, 2012 For taxpayers, the negative effects of uncertainty may include The House resumed from January 28 consideration of the motion " higher costs of obtaining professional advice to comply with tax law; that Bill C-48, An Act to amend the Income Tax Act, the Excise Tax " less efficiency in doing business transactions; Act, the Federal-Provincial Fiscal Arrangements Act, the First Nations Goods and Services Tax Act and related legislation, be read " inability of publicly traded corporations to use proposed tax changes in their the second time and referred to a committee. financial reporting, because they have not been “substantively enacted”; Hon. John McCallum (Markham—Unionville, Lib.): Mr. " greater cynicism about the fairness of the tax system; and Speaker, I am pleased to rise on the subject of Bill C-48, which is " increased willingness to use aggressive tax plans. now before the House. The bill could be termed a housecleaning bill, which does not mean that it is unimportant because it is important to She continued: keep one's house clean and in this case we are talking about the For the tax administrator, the negative effects may include cleanliness of our tax system. The bill enacts into law previous comfort letters and other statements by the Department of Finance, " higher costs for providing additional guidance and interpretations to taxpayers and tax auditors; and which have already been enacted by CRA but which are not yet enshrined in the law. " higher administrative costs for reprocessing the tax returns after an outstanding legislative amendment is enacted and for obtaining waivers to extend the As I will indicate, the Liberal Party will support the bill. Our only limitation period for reassessment. complaint is that it is far too long in coming. There have been [English] massive delays to the point where the bill is almost 1,000 pages long with, I believe, 40-something amendments. This has caused great These points are extremely clear. The Auditor General makes it cost and great uncertainty to the tax system. We believe that it is very clear that the absence of housecleaning legislation presented simply bad public administration that the government should have promptly imposes major costs on taxpayers in terms of their ability delayed so long in bringing the legislation forward. to understand the law, their need for professional advice and also The last housecleaning tax bill passed by Parliament was in 2001, imposes greater delays on rulings by CRA, which further reduce the almost 12 years ago. We believe as a matter of course such bills efficiency of the system. should come before the House every year, so that the complexity of the tax system would be alleviated and taxpayers would have a Following the Auditor General's report, the parliamentary clearer idea of what their rights and obligations are. committee on public accounts met and I would like to read its recommendations, which were published in the year 2010: Let me begin by going through a little bit of the sad, lengthy history, which has led us from 12 years ago when the last bill was [Translation] passed to where we are today. As I said, in 2001, a tax housecleaning RECOMMENDATION 1 bill was passed, 12 years ago. The Liberal government prepared That the Department of Finance Canada facilitate the elimination of the backlog another one but then was defeated. The Conservatives made two by ensuring that bills making technical amendments to the Income Tax Act only attempts but both failed. Because of an election or because of relate to technical tax matters. 14188 COMMONS DEBATES February 15, 2013 Government Orders RECOMMENDATION 2 that effectively changes the system, unless it is placed in law within a That the Department of Finance Canada not wait until technical amendments bills certain time, such as a year or two years, it sunsets. It disappears. are passed by Parliament before releasing further proposed amendments to the This would be a good change to the system because it would be an Income Tax Act for comment. incentive for the Department of Finance or the government to RECOMMENDATION 3 implement these housecleaning bills annually or expeditiously so as That once the current backlog of technical amendments is passed, the Department of Finance Canada should prepare annual technical amendments bills for to reduce this growing complication of Canada's tax system. consideration by Parliament. RECOMMENDATION 4 Ï (1010) That the Canada Revenue Agency provide by 31 March 2011 a progress report to the Public Accounts Committee on actions taken to address the recommendations contained in Chapter 3 of the Auditor General’s November 2009 Report. However, as members will have heard from these quotes, the issue [English] goes further than simply these housecleaning bills. It has been 12 years since our last housecleaning bill and close to 50 years since our It is clear as we stand now, in 2013, that these recommendations of last full-scale examination of Canada's tax system. The last time that the public accounts committee were not followed. It called for this was done, I believe, the report was issued in 1966 and it was done by housekeeping legislation to be presented on an annual basis. It called the Carter commission. The accountants and I say that it is high time for a reduction in the time that CRA took to give its tax opinions or we have another overall study of Canada's tax system with a view to directions. This has not happened. The time has gotten longer, not simplifying it and making it more competitive, less complex and shorter. Again, I would argue that this is a case of really bad public more fair. This would be a major undertaking, and since it has not administration in an area that is not particularly exciting to the public been done in almost 50 years, it is high time that we do it. but is, nevertheless, critical to the good functioning of our economy. Now, one would think that accountants, of all people, would love One obvious unfairness, which would become apparent if such a tax complexity because they are paid for helping people to complete study were done, is the operation of our tax credits. The government their taxes. If the system is more complex, they are needed even offers tax credits for young soccer players or young violinists. Some more and they would make more money. However, quite to the economists would prefer that such measures be put into overall cuts contrary, both the chartered accountants and the certified general in income tax, but that is another issue. My point is that these tax accountants have recently been arguing very strongly in favour of credits are grossly unfair because they deliberately exclude those expeditious passing of the legislation as well as a more general people whose income is not high enough to pay significant tax. reform of the tax system. Therefore, low-income Canadians' sons and daughters might want to I would like to read from both the recommendations of the play soccer or the violin just as much as a child of a higher-income chartered accountants and the certified general accountants on these Canadian, but because their income is low and they do not pay tax or issues. In 2010, the Canadian Institute of Chartered Accountants much tax, they are excluded from the benefit. That is a gross said: unfairness. Item number one in reforming our tax system would be to make those tax credits refundable so that they are available for all Reducing complexity in Canada’s domestic tax regime is crucial to easing the regulatory burden placed on Canadian businesses and attracting investment. Canadians and not just for well-heeled Canadians. Simplifying our tax system would make the country more competitive and allow both individuals and business to prosper. According to The Global Competitiveness Report 2010 – 2011 issued by the World Economic Forum, tax regulations are among That is just one tiny item in the overall scheme of things. We need the top four most problematic factors cited by business executives for doing business an overall review of our tax system, which has not happened for in Canada. Many aspects of Canada’s tax system have become much too complex. nearly 50 years, and it is high time that this was done. We do support We recommend that the government establish a national consultation process to examine tax simplification measures. the bill. Our complaint is that it is far too late in coming. This is a government that talks all the time about caring only about the economy, about being competitive, about attracting foreign I will go over a few of the provisions of the bill. I obviously investment, and yet tax complexity is number four on the list of cannot cover in detail the nearly 1,000 pages of changed legislation.
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