Mr. Pat Martin (Winnipeg Centre, NDP): Mr. Speaker, six months ago I asked the revenue minister to plug the tax loophole that allows businesses to deduct fines and penalties from their income tax as a business expense. Since when is breaking the law supposed to be tax deductible? The minister seemed to agree that it undermined the very purpose of a fine if they could use it as a tax write-off.

    Again, why is she letting yet another tax year go by without making a simple amendment to the Income Tax Act, putting a stop to this outrageous practice of business fines as tax deductions?

    Hon. Elinor Caplan (Minister of National Revenue, Lib.): Mr. Speaker, as a result of the Supreme Court decision, most fines and penalties are deductible as a business expense. However the court also said, and this is extremely important, that where fines or penalties were found to be egregious or repulsive, they could not be claimed as legitimate business expenses. Any change that would disallow fines and penalties, such as parking fines, would require a change in legislation and the Income Tax Act, and that of course is the responsibility of the Minister of Finance.

Mr. Pat Martin (Winnipeg Centre, NDP): Mr. Speaker, six months have gone by and Revenue Canada could not find time to put an end to this farce of tax deductible fines, yet it found plenty of time to crack down on disabled people. In fact it launched a nationwide campaign of harassment over the paltry $900 disability tax credit and drove 30,000 disabled people off the program.

    How can the Minister of National Revenue defend such a warped set of priorities? Will she agree today to put in place the simple amendment required that the court suggested to the Income Tax Act to plug the loophole, to do it in this session of this Parliament and before the end of this year?

    Hon. Elinor Caplan (Minister of National Revenue, Lib.): Mr. Speaker, the Canada Customs and Revenue Agency has responsibility to ensure that the Income Tax Act is implemented and administered in a fair way so that all Canadians are treated fairly. Whether it is the tax credit for those who suffer from serious disabilities or any other aspect, I want to assure the member, and I know that he would agree, that he would not want to see people receiving tax credits to which they were not entitled.