Speech

Speaking Notes for
the Honourable Martin Cauchon
Minister of National Revenue

For the conference

Tax Administration
in an Electronic World Conference

Montréal, June 4, 2001

Check against delivery

Good morning Ladies and Gentlemen.

It is my great honour as Minister of National Revenue responsible for the Canada Customs and Revenue Agency (CCRA), to welcome you to Montreal for the Tax Administrations in an Electronic World Conference 2001.

I am very pleased that the CCRA is hosting this global conference, which I am proud to say is the first of its kind!

We are here to discuss issues and challenges raised by electronic commerce.

Your presence here confirms the importance of this subject. Some 106 countries and 5 international organizations are represented in this room.

Altogether, there are over 260 delegates, including over 40 heads of tax administration departments ready to engage on what must be perhaps the most crucial challenge that you may face -- how, as tax administrators, you can address the opportunities and challenges of electronic commerce.

I would like to take this opportunity to personally thank our five sponsoring organizations for making this event possible: the Commonwealth Association of Tax Administrators (CATA); the Inter-American Centre of Tax Administrations (CIAT); the Centre de rencontres et d'études des dirigeants des administrations fiscales (CRÉDAF); the Intra-European Organisation of Tax Administration (IOTA) and the Organisation for Economic Co-operation and Development (OECD).

Never before has there been a global conference of tax administrators on anything approaching this scale. I believe that this signals an important new level of collaboration between tax administrations. It is a partnership that will ensure that all our countries benefit from e-commerce and that the integrity of every countrys tax base is protected.

E-commerce brings both challenges and opportunities. On the one hand, we must address the increasing complexity of economic activity: Where does it occur? How can we measure and track it? What are the implications of electronic commerce for different jurisdictions? How can the governments we serve project their revenues, and therefore engage in sound fiscal planning?

With its many opportunities, electronic commerce also operates in a world of increasing uncertainty and rapid transitions, where economic activity that exists today may be gone tomorrow.

How complex has it become? As an example, a business in Montreal could order from Finland some customised computer software, the product having been developed in a joint venture between firms in India and Singapore. And the software is delivered electronically to the business in Montreal, which provides services to the Caribbean.

From this small example arise a series of questions: where was the contract signed? where was the product supplied from? where is the product being used? and perhaps of most relevance to us, how do we apportion the revenue related to these activities?

It is issues like these that, I hope, will be closer to resolution through international consensus as a result of the discussions you will have this week.

That is but one of the challenges. On the other hand, we as tax administrators have just begun to capitalize on the opportunities presented by electronic commerce.

We know that e-commerce provides a way to better serve our citizens and to simplify their compliance obligations. It also allows us to reduce the administrative burden for our businesses and therefore improves their efficiency and competitiveness.

Many of us have already made significant commitments to technology, but despite this, we all know that we have much to learn from each other. These are "early days", and every new experience that can be shared adds to knowledge of us all.

Over the next three days, you -- practitioners and experts of the highest calibre in tax administration -- will have the opportunity to share experiences and knowledge.

Through the workshops and panels, you will be able to exchange best practices and learn from each other. This conference will have served its purpose admirably if it promotes and environment where you can seek common ground on the issues and challenges of electronic commerce, and to find areas of productive collaboration and cooperation.

Your agenda over the next three days is impressive, ambitious, and comprehensive. It addresses squarely challenges and opportunities that e-commerce presents.

An electronic service delivery strategy for a tax administrator is extremely sophisticated, yet simple. We all want to improve compliance, accuracy and timeliness and we all seek greater efficiencies and cost-effectiveness for our clients and in our own internal processes.

That is only one of the topics that you will be addressing in the next three days. You will be talking about electronic tax filing, assessment and payment, electronic training methods, providing better access to tax information, and the development of accessible user-friendly tax administration web-sites.

We in Canada are no different than you -- we are determined to exploit the benefits of electronic commerce as much as possible, while minimizing the challenges,

And Canada certainly has challenges that make electronic service delivery a high priority. We are the second largest country in the world, and while a high proportion of Canadians live in our cities, there are those who are spread out across the less populated regions.

Electronic commerce gives us a double opportunity: we can substantially improve service to Canadians in our urban areas, while at the same time providing these same improvements to all Canadians living in the far reaches of this huge country.

Providing equality of service quality for all Canadians, no matter where they live, is our goal as a country, and it is no less a goal for the Canada Customs and Revenue Agency.

As the Minister responsible for the CCRA, I am particularly proud of our record on electronic service delivery.

For example, the 20,000 CCRA documents which are available on the Internet.

Our Customs operations have been using electronic networks to improve the clearance of imports for more than a decade, and now almost all of the importing transactions to Canada are cleared electronically.

We have taken steps to provide our services directly to Canadians -- this year , over 1.3 million Canadians took advantage of our internet-based service to file their tax returns.

Indeed, electronic filing now accounts for a third of all individual returns filed with the CCRA.

These service improvements are not just for individuals. Increasingly Canadian businesses can now jointly register over the Internet with the CCRA and provincial tax administrations. Such partnerships are easing the compliance burden for businesses.

It must be plain to all of us that collaboration is the key to progress in addressing the challenges and opportunities posed by electronic commerce.

That kind of cooperation and discussion is essential -- within each of our countries; bilaterally between tax administrations; multilaterally, at events such as this; and through the multilateral institutions in which we participate.

In Canada, for instance, we have Advisory Groups to help us address electronic commerce issues.

Business leaders, lawyers, tax professionals and computer experts provide ongoing advice to me and the CCRA to help us develop the most effective strategies to benefit from the growth of e-commerce.

Their generous contribution of time and energy is greatly appreciated.

Canada is committed to working through many international institutions. In addition to our co-sponsors of this conference, we have active and productive relationships with the WCO, PATA, the World Bank, and the IMF, to mention only a few.

We also have special bilateral arrangements with many of you; agreements intended to promote cooperation and exchange. In fact, during this conference the CCRA will sign a Memorandum of Understanding with the Direction générale des impôts de France--which will intensify the working relationship between the two agencies.

The MOU, like many which I'm sure all of you have worked with, will intensify the working relationship that already exists between the two agencies.

It will focus on best practices for a range of issues that concern tax administrators, including user services, management of the tax base and tax collection, international comparative analyses, risk analysis and tax audit methods.

On a broader front, your presence here today is ample demonstration of the interest and concern all governments show in the potential and the challenges of living and working and the cyberworld.

I urge you to pursue your discussions. Lay down the highest standards for future efforts of this type. I applaud your efforts to build higher levels of cooperation and increased sharing of knowledge and experience.

Once again, I welcome you to Montreal. I hope your stay here will be enjoyable and your discussions productive.

Thank you.