May 31, 1984

LIB

Jacques Guilbault (Assistant Deputy Chair of Committees of the Whole)

Liberal

The Acting Speaker (Mr. Guilbault):

Are there any questions or comments?

Topic:   GOVERNMENT ORDERS
Subtopic:   BUSINESS OF SUPPLY
Sub-subtopic:   ALLOTTED DAY, S.O. 62-NON-CONFIDENCE MOTION-REVENUE CANADA
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?

Walter David Baker

Mr. Baker:

Mr. Speaker, before I direct my question to the Hon. Member, I would like just to comment that it is quite unfortunate that a massive tax audit was started in the fall of 1979 when the Progressive Conservative Party was in power, and we saw for four years fishermen harrassed throughout Canada. Some of the statements made by previous speakers on the unfairness of the collection system certainly ring true. It is unfortunate that the tax audit was ordered in 1979. I am sure

May 31, 1984

that if the Liberal Government had been in power at that time it would not have been ordered.

Topic:   GOVERNMENT ORDERS
Subtopic:   BUSINESS OF SUPPLY
Sub-subtopic:   ALLOTTED DAY, S.O. 62-NON-CONFIDENCE MOTION-REVENUE CANADA
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PC

Henry Perrin Beatty

Progressive Conservative

Mr. Beatty:

It was and it did.

Topic:   GOVERNMENT ORDERS
Subtopic:   BUSINESS OF SUPPLY
Sub-subtopic:   ALLOTTED DAY, S.O. 62-NON-CONFIDENCE MOTION-REVENUE CANADA
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PC

J. Michael Forrestall (Deputy Whip of the Progressive Conservative Party)

Progressive Conservative

Mr. Forrestall:

You would not want to mislead the House, would you?

Topic:   GOVERNMENT ORDERS
Subtopic:   BUSINESS OF SUPPLY
Sub-subtopic:   ALLOTTED DAY, S.O. 62-NON-CONFIDENCE MOTION-REVENUE CANADA
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Walter David Baker

Mr. Baker:

The Hon. Member who introduced this motion was, I believe, a Cabinet Minister at the time. It is unfortunate that some of the good things he is suggesting now were not initiated by his own Government.

Topic:   GOVERNMENT ORDERS
Subtopic:   BUSINESS OF SUPPLY
Sub-subtopic:   ALLOTTED DAY, S.O. 62-NON-CONFIDENCE MOTION-REVENUE CANADA
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PC

Henry Perrin Beatty

Progressive Conservative

Mr. Beatty:

In those two months!

Topic:   GOVERNMENT ORDERS
Subtopic:   BUSINESS OF SUPPLY
Sub-subtopic:   ALLOTTED DAY, S.O. 62-NON-CONFIDENCE MOTION-REVENUE CANADA
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Walter David Baker

Mr. Baker:

My question deals with the third party demand. Does the Hon. Member have the same difficulty I do with a disgusting aspect of that third party demand on low-income people, the primary producers? The third party demand is made on the gross amount, not on the net. If a fisherman owes money to the dealer to whom he is selling fish and he has other expenses, the 25 per cent, sometimes 50 per cent, is taken right off the top. You take the Revenue Canada portion of the attachment, then you take out his expenses and he is left with zero, or sometimes less than zero. Does the Hon. Member find the same thing in dealing with primary producers in his part of the country?

Topic:   GOVERNMENT ORDERS
Subtopic:   BUSINESS OF SUPPLY
Sub-subtopic:   ALLOTTED DAY, S.O. 62-NON-CONFIDENCE MOTION-REVENUE CANADA
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PC

Arnold John Malone

Progressive Conservative

Mr. Malone:

Mr. Speaker, with respect to the Hon. Member's first comment, I can only tell him that after not being in power for the better part of this last half of the century, obviously when you come to power you cannot stop everything and start all over again. We inherited quite a hornet's nest when we came into Government. If the Hon. Member is saying that some things continued which ought not to have, then we concede that. We only wish that they had given us enough of an opportunity in power so that he would not have to lament his own actions today.

As to his question concerning the third party demand, I can only say that I believe from the tone of the Hon. Member that he and I would be in full agreement. Certainly the demand ought not to be on the gross, it ought to be on the net. As a person who represents farmers and ranchers, I have a great affinity with the people he represents in his area such as fishermen. In the primary resource sector, whether on land or on water, the economics are very similar, and I am sure we would share a similar view.

Topic:   GOVERNMENT ORDERS
Subtopic:   BUSINESS OF SUPPLY
Sub-subtopic:   ALLOTTED DAY, S.O. 62-NON-CONFIDENCE MOTION-REVENUE CANADA
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PC

William C. Scott

Progressive Conservative

Mr. Scott (Victoria-Haliburton):

Mr. Speaker, the Hon. Member has a farm background, and my question has to do with a fellow in the farm implement business who was assessed an amount of $750. He appealed the assessment and it cost him $10,000 in legal fees and procedural costs thus far. He has not yet come to the end of the case. It seems to me that an appeal like that is not worthwhile. This is why so many people will pay these smaller amounts rather than go through the cost of appealing the assessment. It does not make sense to appeal,

Supply

given the costs, even if you are right. I would like to get the views of the Hon. Member on that.

Topic:   GOVERNMENT ORDERS
Subtopic:   BUSINESS OF SUPPLY
Sub-subtopic:   ALLOTTED DAY, S.O. 62-NON-CONFIDENCE MOTION-REVENUE CANADA
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PC

Arnold John Malone

Progressive Conservative

Mr. Malone:

Mr. Speaker, the answer is obvious. Surely when the cost of an appeal is greatly in excess of the assessment, only those persons who are fighting for a principle will proceed with the battle. I know of cases, as do other Members, where a person has been reassessed and the cost of defending their case might be half as much as the reassessment. That does not sound so bad; you are reassessed $8,000 and it is going to cost you $4,000 to defend. But then comes the word from a Revenue Canada staff person who says, "We will continue to reassess you until you do pay". Then the person starts to think that there is no sense in winning because they are going to reassess and reassess. When that is the process, people just give up in fatigue. What my hon. friend is saying comes down to the need for a taxpayers' bill of rights. The Government has the right to make a reassessment, but when it loses the reassessment, it has the obligation to bear the burden of costs. If it does not, it can virtually destroy the private citizen economically through the process, which is absolutely wrong and must be done away with.

Topic:   GOVERNMENT ORDERS
Subtopic:   BUSINESS OF SUPPLY
Sub-subtopic:   ALLOTTED DAY, S.O. 62-NON-CONFIDENCE MOTION-REVENUE CANADA
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PC

William C. Scott

Progressive Conservative

Mr. Scott (Victoria-Haliburton):

Mr. Speaker, I am sure the Hon. Member will recall the meeting of the task force in Calgary where John Bullock, representing over 60,000 small businesses, appeared. He said that not only did he fully support the measures of the task force, but that the Conservative task force was the taxpayers' finest hour. I think you will recall that he was applauded and then he went on to elaborate.

Topic:   GOVERNMENT ORDERS
Subtopic:   BUSINESS OF SUPPLY
Sub-subtopic:   ALLOTTED DAY, S.O. 62-NON-CONFIDENCE MOTION-REVENUE CANADA
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LIB

Jacques Guilbault (Assistant Deputy Chair of Committees of the Whole)

Liberal

The Acting Speaker (Mr. Guilbault):

Order, please. The Chair regrets to interrupt the Hon. Member but the question period is up. For debate, the Hon. Member for The Batt-lefords-Meadow Lake.

Topic:   GOVERNMENT ORDERS
Subtopic:   BUSINESS OF SUPPLY
Sub-subtopic:   ALLOTTED DAY, S.O. 62-NON-CONFIDENCE MOTION-REVENUE CANADA
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NDP

Douglas Keith Anguish

New Democratic Party

Mr. Doug Anguish (The Battlefords-Meadow Lake):

Mr. Speaker, I see I have only about seven minutes left, but I want to put some comments on the record in the debate today. I agree with much of what the Official Opposition has said regarding the taxation system. I disagree with other aspects which they have touched on from time to time. The most important point I want to bring out is that both the Liberals and the Conservatives have overlooked a large part of the problems in the system, and I would like to touch on that briefly.

Since I have been a Member of Parliament I have had many farmers and small business people come to me about their feelings of being dealt with unfairly by the system, by auditors and collectors from Revenue Canada. In some cases they have had very just complaints. The most common complaint seems to be about the aggressiveness with which Revenue Canada sometimes pursues audits and collections. At the same time, I think people feel a great deal of unfairness, especially those involved in small business and farming operations. An auditor from Revenue Canada can tell an individual that his business or farm is not a viable operation and therefore he cannot deduct the year's losses or the legitimate expenses which he

May 31, 1984

Supply

feels he is eligible to deduct. The Department is going to have to consider that case very seriously. I have some confidence that the pressure of the Opposition will cause the Government to recognize that there is a problem and that it will be rectified in the future. It had certainly better be or we will not have many farmers left in many areas of western Canada other than long-time established farmers or those who have very large and wealthy farming operations, which is not the norm.

The other problem is that in pressing economic times many people, especially young farmers, find themselves leaving the farm to earn income, when they are not involved in the farming operation itself, to put bread on the table and enable themselves to live at a standard of decency that is above the poverty line. The issue of off-farm incomes and the arbitrary assessments by Revenue Canada people that a business or farming venture is not viable must be reckoned with.

In the literally dozens of cases which have come to me in the past four and a half years I have found most of the public employees within Revenue Canada to be quite helpful. There are some who are not, just as in any other organization or government Department. The taxation office in Saskatoon has been helpful, as has the regional office in Winnipeg. I usually deal at these levels with problems which constituents have brought to my attention.

I will turn to what I think both the Liberals and the Conservatives have overlooked. Our taxation system has become a nightmare of complexity and unfairness. As the Hon. Member for Crowfoot (Mr. Malone) pointed out, very few people anymore fill out their own income tax forms. That is just one example of the complexity of the system. The unfairness is what many of the politicians and parliamentarians are overlooking. The Canadian tax system is based on a simple premise that one pays taxes on income earned. The more money you make, the more taxes you should pay. In 1981, 8,000 people earned more than $60,000 and paid no taxes. That is what the Hon. Member for Kamloops-Shuswap (Mr. Riis) refers to as the golden loophole award for the people in those brackets. In 1981, 239 Canadians earned an average of $635,000 and paid no income tax. There were another 1,200 Canadians who earned $100,000 and paid no income tax.

Some of the largest and most profitable corporations in Canada have been able to defer taxes. In 1980, $25 billion, which was more than the deficit, was deferred in taxes. They say they do not owe this money. During the committee meetings on Bill C-155 when the Crow rate was abolished, CP said that it did not owe those taxes. It said those were deferred taxes. I think that is a good indication that it never intends to pay them.

I only have about one minute left. Since the mid 1970s the tax breaks to corporations have more than quadrupled. They now total more than $25 billion and are equal to roughly $1,000 in lost revenue for every adult Canadian. These tax breaks mean lower tax rates and higher profits for corporations. The result has been higher rather than lower unemployment. I see your clock is about one minute different from the clock on the wall.

Topic:   GOVERNMENT ORDERS
Subtopic:   BUSINESS OF SUPPLY
Sub-subtopic:   ALLOTTED DAY, S.O. 62-NON-CONFIDENCE MOTION-REVENUE CANADA
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LIB

Jacques Guilbault (Assistant Deputy Chair of Committees of the Whole)

Liberal

The Acting Speaker (Mr. Guilbault):

It being 5.45 p.m., it is my duty to interrupt the proceedings and put forthwith every question necessary to dispose of the business of supply in accordance with Section 9 of Standing Order 62.

Mr. Althouse, seconded by Mr. Lewycky, moved that the motion be amended by striking out the period at the end thereof and adding the following immediately thereafter:

-and further, to recognize the inequity of the appeal process by guaranteeing to taxpayers who are successful in an appeal through the courts that their legal costs will be paid for by Revenue Canada.

The question is on the amendment. Is it the pleasure of the House to adopt the amendment?

Topic:   GOVERNMENT ORDERS
Subtopic:   BUSINESS OF SUPPLY
Sub-subtopic:   ALLOTTED DAY, S.O. 62-NON-CONFIDENCE MOTION-REVENUE CANADA
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Some Hon. Members:

Agreed.

Topic:   GOVERNMENT ORDERS
Subtopic:   BUSINESS OF SUPPLY
Sub-subtopic:   ALLOTTED DAY, S.O. 62-NON-CONFIDENCE MOTION-REVENUE CANADA
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Some Hon. Members:

No.

Topic:   GOVERNMENT ORDERS
Subtopic:   BUSINESS OF SUPPLY
Sub-subtopic:   ALLOTTED DAY, S.O. 62-NON-CONFIDENCE MOTION-REVENUE CANADA
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LIB

Jacques Guilbault (Assistant Deputy Chair of Committees of the Whole)

Liberal

The Acting Speaker (Mr. Guilbault):

I declare the amendment lost.

Topic:   GOVERNMENT ORDERS
Subtopic:   BUSINESS OF SUPPLY
Sub-subtopic:   ALLOTTED DAY, S.O. 62-NON-CONFIDENCE MOTION-REVENUE CANADA
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NDP

Ian Deans (N.D.P. House Leader)

New Democratic Party

Mr. Deans:

Agreed. What are you talking about? Point of order.

Topic:   GOVERNMENT ORDERS
Subtopic:   BUSINESS OF SUPPLY
Sub-subtopic:   ALLOTTED DAY, S.O. 62-NON-CONFIDENCE MOTION-REVENUE CANADA
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LIB

Jacques Guilbault (Assistant Deputy Chair of Committees of the Whole)

Liberal

The Acting Speaker (Mr. Guilbault):

The Hon. Member for Hamilton Mountain (Mr. Deans) rises on a point of order.

Topic:   GOVERNMENT ORDERS
Subtopic:   BUSINESS OF SUPPLY
Sub-subtopic:   ALLOTTED DAY, S.O. 62-NON-CONFIDENCE MOTION-REVENUE CANADA
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NDP

Ian Deans (N.D.P. House Leader)

New Democratic Party

Mr. Deans:

I am sorry, Mr. Speaker, but there is a procedure one must go through in order to determine whether a vote has been carried or lost. You asked, "All those in favour?" We said, "Agreed", and they said "No". You do not declare the amendment lost. Surely you must ask for the yeas and nays.

Topic:   GOVERNMENT ORDERS
Subtopic:   BUSINESS OF SUPPLY
Sub-subtopic:   ALLOTTED DAY, S.O. 62-NON-CONFIDENCE MOTION-REVENUE CANADA
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May 31, 1984