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SUPPLEMENTARY OPINION TO THE REPORT
OF THE STANDING COMMITTEE ON PUBLIC ACCOUNTS


I fully concur in the Committee's report, and I would like to begin this supplementary opinion by congratulating the Minister of Finance on having taken the necessary steps to clarify the tax rules governing transfers of assets and property outside Canada.

It is important to note that the events (the advance ruling) that were the subject of review by the Auditor General occurred on and about December 23, 1991, when the previous government, the Conservative government, was in power.

I have frequently praised the quality of the Auditor General's work, and the report of the Committee underlines its excellence, but I think it is important to reiterate our congratulations.

Both the individual and the Office he represents deserve our respect and consideration as the elected represent of the people.

The integrity of our tax system is vitally important, and in that regard I must pay tribute to Revenue Canada's open approach. In its taxpayer information circular entitled "Revenue Canada - The Rulings Directorate Service", the Department says,

The role of the Public Accounts Committee as I see it is, among other things, to give Canadian taxpayers the opportunity to have their elected representatives review the financial administration and management of the various government departments and agencies. The Committee is a forum where senior officials and managers have to account for their stewardship of public funds.

The matter we have dealt with here concerns taxation of capital gains when a taxpayer decides to leave Canada and live elsewhere.

In this case, the vehicle used to transfer assets was a family trust, but it could have been something else. It is not the vehicle we should focus on but the taxation of Canadian capital gains in the event of emigration.

The present case does however highlight two points that merit analysis in light of the ordinary taxpayer's perception:

In the present case, the use of a family trust as the transfer vehicle tends to accentuate rather than minimize the gap, even though legally family trusts are open to anyone.

In conclusion, in addition to supporting the conclusions of the majority report, I hope that the government and the Department of Finance will put forward a genuine proposal for reform of Canada's tax system, both as it affects individuals, organizations and corporations and from a technical standpoint.

Respectfully submitted,




Denis Paradis
MP for Brome--Missisquoi and
Vice Chair of the Public Accounts Committee

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