Of “Superfluous And Tedious Statutes ”

Abstract

Abstract Nobody knows better than the petroleum industry that the legislative network confronting the industry is one of Canada's most infamous growth stories, as this country's legislators continue to complicate the income tax and other laws. At some magical point, there is presumably some balance to be struck between legislation which is equitable and unambiguous on the one hand, and at the same time is efficiently complied with and administered. It is becoming increasingly clear that the legislation is not in balance, and that there is a pressing need for some simplification of the income tax rules and regulations —especially in areas of critical importance to the resource industries — even though such simplification will likely involve some sacrifice of equity and certainty. Introduction "I would wish that...the superfluous and tedious statutes were brought into one sum together, and made more plain and short, to the intent that men might better understand them." Edward VI, King of England 1547–1553. Regal decree notwithstanding, the legislation of most developed nations continues to become more complex, lengthy, and confusing than ever before. Canada's income tax system cannot escape the accusatory finger pointing at examples of this serious problem which plagues all of us today. Although many areas of our tax law could easily warrant some degree of simplification, for those who are involved with this country's resource sector, that horrendous, almost unreadable, part of our tax legislation which deals with resource taxation must be regarded as a prime candidate for simplification. In recent decades, but particularly in the past ten years since tax reform in 1972, budget after budget, both federal and provincial, have amended, massaged, modified, and manipulated the resource tax rules to the point where not only are taxpayers totally lost in their attempts to make some sense of the entanglement of rules, but also the draftsmen themselves acknowledge that the outer limits of complexity are being reached, and that the whole set of rules is on the verge of grinding to a groaning halt under its own weight of nonsense and frustration. In fact, the petroleum industry probably suffers considerably more than other industries, in terms of having to deal with complex fiscal regimes. No other industry has to face the multiple perils of the Petroleum and Gas Revenue Tax, the Natural Gas and Gas Liquids Tax, the Incremental Oil Revenue Tax, and the Petroleum Compensation Charge. In addition, each of the producing provinces levies its own production royalties, with rates and bases varying from province to province, and even within a province depending on the type of oil, the age of the discovery, and other factors. The clamor for simplification of the tax system is nothing new, but little, if anything, has been done about it. Why not? The easy answer is that "nothing can be done about tax simplification ". This answer is unacceptable! As this article suggests, something can be done about minimizing the complexities of our income tax legislation.