Bill S-3 (Historical)

Tax Conventions Implementation Act, 2010

An Act to implement conventions and protocols concluded between Canada and Colombia, Greece and Turkey for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income

This enactment implements the most recent tax treaties that Canada has concluded with Colombia, Greece and Turkey.
The treaties implemented reflect efforts to expand Canada’s tax treaty network. Those treaties are generally patterned on the Model Double Taxation Convention prepared by the Organisation for Economic Co-operation and Development.
Tax treaties have two main objectives: the avoidance of double taxation and the prevention of fiscal evasion. Since a tax treaty contains taxation rules that are different from the provisions of the Income Tax Act, it becomes effective only after being given precedence over domestic legislation by an Act of Parliament such as this one. Finally, for each of those tax treaties to become effective, it must be ratified after the enactment of this Act.

Tax Conventions Implementation Act, 2010

[Some hon. members]

Agreed.

No.

[The Acting Speaker, NDP, Denise Savoie]

There is no unanimous consent.

On a point of order, the hon. member for Peace River.

The House resumed consideration of the motion that Bill S-3, An Act to implement conventions and protocols concluded between Canada and Colombia, Greece and Turkey for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, be read the second time and referred to a committee.

[Irene Mathyssen, NDP, London—Fanshawe, ON]

Madam Speaker, I would like to thank the members of this House who have taken a principled stand against, first, the Canada-Colombia free trade agreement and now this treaty that we see before us, Bill S-3, an act to implement the most recent tax treaties with Greece, Colombia and Turkey.

I did wish to note that there is nothing exceptional in tax treaties. Canada enters into such treaties to help individuals and corporations to work in both Canada and the home country without double taxation, and to prevent tax evasion.

However, in the context of the Canada-Colombia free trade agreement, I am convinced that in order for Bill S-3 to be successful, it is essential to divide the bill. We can then vote for the treaties with Greece and Turkey, and set aside the treaty with Colombia.

The reason for avoiding the treaty with Colombia is related to our concerns with the Canada-Colombia free trade agreement. Our concern rises from the fact that we in the NDP caucus challenge the ethics of that free trade agreement between Canada and Colombia. We need to examine the situation in Colombia and look at it carefully so that we can understand why I am making this statement. Why kind of partner is Colombia, in terms of any kind of treaty?

I have been aware of the circumstances in Colombia for a number of years. I have actually had the privilege of speaking directly to Colombians from all walks of life in regard to the situation that they face in their homeland under the Uribe government. In fact, I have many constituents who fled to Canada because they no longer felt safe in their home country of Colombia.

In the last session of Parliament, I spoke about the CCFTA and undertook to talk about the lack of environmental protection and labour rights in the agreement.

Violations of labour rights and violence committed against unionized workers are among Colombia's foremost human rights challenges. Colombia is the most dangerous place in the world to be a trade unionist. A deep-seated anti-trade union culture exists in that country, both within the government and among entrepreneurs. These entrepreneurs and the government see autonomous organizations of workers as a threat.

There were 2,690 trade unionists murdered in Colombia since 1986, with 46 deaths in 2008 and 27 murders in 2009. Impunity rates for these violations are unchanged. There is only a 3% conviction rate for those who murder. Tragically, these crimes are tolerated by the Colombian government.

Canadians must not be party to this tolerance for violence. It goes against everything we believe about ourselves. It goes against our sense of justice. So, in signing Bill S-3 or in approving a tax treaty with Colombia, I think we are betraying our values as Canadians.

The Uribe government continues to inaccurately denounce union members as guerrillas, statements considered by the unions to give carte blanche to paramilitaries to act, putting workers in extreme jeopardy. Substantive labour rights protections remain in a side agreement of the Canada-Colombia free trade agreement, rather than in the body of that agreement. Enforcement of these rights is entirely at the discretion of the signatory government.

It is not a matter of discretion. It is a matter of life. It is a matter of justice. That life and justice is denied because the complaint process in the CCFTA does not investigate nor evaluate the complaints. There are no independent judicial or even quasi-judicial bodies that could lead to real remedies, that could look at the complaints and expect a change.

As I said, only a matter of discretion in the FTA governs these labour agreements. Unlike the provisions for investors' rights, the agreement offers no trading sanctions, no countervailing duties or abrogation of preferential trade status in the event that a party fails to adhere to labour rights provisions.

What it does institute, though, are fines. Fines for murder. That is just beyond belief.

Investors have rights, very clear and substantive rights. Workers do not. It defies logic. It defies understanding, and it is basically a matter of kill a trade unionist, pay a fine.

This is hardly acceptable or effective. Fines neither address the causes of the violence nor generate substantive incentives or political will in the Colombian administration to address the crisis and bring an end to the violence against trade unionists. Quite simply, there is no justice.

Given the scale and the depth of labour rights violations in Colombia, neither the Canada-Colombia free trade deal, its side labour deal or this tax treaty should be implemented. The fact is that it is more likely that agreement provisions for market liberalization and investors' rights, which are substantive, will exacerbate conflict and violations of workers' rights.

How on earth can we be party to this? How can we do it? How can we talk about tax treaties and trade agreements with a country where people's lives are in danger simply because they stand up for their rights?

Once Canadians understand what the proposed Canada-Colombia free trade agreement contains and what it means to sign a tax treaty with such a regime, they will simply reject it and they will ask this Parliament to reject it.

I would like to also speak about the crimes currently committed by the Uribe government against indigenous Colombians.

In a new report released February 23 of this year, Amnesty International called for immediate international action to ensure the survival of indigenous peoples in Colombia. It stated:

The organization says guerrilla groups, state security forces and paramilitaries are responsible for grave human rights abuses against Indigenous Peoples. These abuses include killings, enforced disappearances and kidnappings, sexual abuse of women, recruitment of child soldiers, persecution of Indigenous leaders and forced displacement of communities from land that is rich in economic potential.

People are quite literally forced from their land because they live in areas that are valued for their natural resources, including oil and minerals. Amnesty has stated that the situation of indigenous people in Colombia is nothing short of an emergency. Until countries like Canada recognize the gravity of this situation and exert much needed pressure on the Colombian government, there is a real risk that entire indigenous cultures may be eradicated. Signing tax treaties is not exerting pressure. It is simply going along with what is happening there.

According to the National Indigenous Organization of Colombia, ONIC, the survival of 32 different indigenous people in Colombia is at risk as a result of the armed conflict, the impacts of large-scale economic projects and a lack of state support. According to ONIC, at least 114 indigenous men, women and children were killed, many others threatened, and thousands driven from their land in 2009 alone, in one year alone.

In its latest report, Amnesty International says the threats facing indigenous people are intensifying and is calling on guerrilla groups and state security forces to respect the rights of indigenous people not to be dragged into hostilities, and equally importantly, to respect the rights of indigenous people to own and control the land on which they depend for their cultures and livelihoods. Tragically, indigenous leaders in communities that try to defend their land rights commonly experience threats, killings and mass displacement.

Colombia's ongoing armed conflict has affected millions across the country and left tens of thousands dead, tortured and forcibly disappeared. The vast majority of victims are civilians. In the last seven years, more than 1,595 indigenous people were forcibly killed or disappeared as a result of the armed conflict, and in 4,700 collective reports, threats were reported. In the vast majority of cases, these crimes have not been properly investigated, nor have the perpetrators ever been brought to justice.

Just as with trade unionists, the death toll is rising and still the Conservative government is determined to pursue trade agreements that are highly questionable and to enact a tax treaty that is equally questionable.

As Amnesty International testified at the House of Commons Standing Committee on International Trade in November 2009, one of the most worrying trends is a dramatic increase in the number of Colombians forced to flee from their homes, as many as 380,000 in 2008, and there are more every day. That brings the total number of internally displaced people in Colombia to between three million and four million, among the highest in the world, and it is growing.

Forced displacement has paved the way for misappropriation of lands, mostly by paramilitaries but also by guerrilla groups. It is estimated that more than four million hectares of land have been stolen by paramilitaries in this way. Displacement is one of the greatest threats facing indigenous communities, as in the case of Colombia.

I do not believe it is a coincidence that this happens in oil and rich minerals, and remarkable biodiversity. International mining, agribusiness and those who extract oil have a vested interest in these territories, all at the expense of people who have a right to live on these lands. We know that multinationals, including Canadian businesses, are interested in Colombia and are participating in the exploitation of resources.

According to the director of the United Nations High Commission for Human Rights in Colombia, when this displacement to urban centres occurs, it becomes very complicated. Since most of the indigenous women do not speak Spanish very well, the immensity of the city frightens them with its anonymity and lack of solidarity among residents. The women face new problems in raising their children and relating to their partners because the city is not a customary environment.

In addition to this uncomfortable environment is the anguish of leaving their homes and running with whatever little they had or could carry in order to outrun death and desolation. Accepting new, unfamiliar realities and activities not traditional in indigenous cultures results in culture shock and disorientation. People experience a way of life and language radically different from their own.

This fracturing can result in a breakdown of cultural continuity, as young people find themselves in alien environments and deprived of the social and cultural networks and practices necessary for the survival of their communities. Displaced people are at heightened risk of destitution, sexual violence, exploitation by criminal gangs, armed groups and discrimination. Even in the places in which they seek refuge, they may face further intimidation or violence and have to flee once again.

The inadequate state response by the Colombian government to the needs of internally displaced communities means that some people return to the dangerous situations that they fled. Without support or safeguards that should be provided by the state, the right to traditional lands is crucial to these indigenous people and the right to support is equally crucial. It is vital as an element in terms of their sense of identity, livelihood, way of life, and it is crucial for their future.

This brings me to the bill that is before us. This bill, as I said before, is of profound concern because it enables the government. It enables Colombia to abrogate its responsibilities. It is completely inadequate for any country to say that this is just a tax treaty, that the government of that country should be allowed to do whatever that government wishes. When one considers murder, torture and the displacement of people, we are treading on very dangerous ground here in our association, both through the Canada-Colombia free trade agreement and this tax treaty legislation.

It is clear that the members of the Liberal Party and the Conservative Party want nothing more than for Canada to move ahead with the CCFTA despite all the human, environmental and ethical costs. I think that we have to answer the ethical questions that are put forward by this discussion. I wonder what Canadians would say if they knew that, in last month's legislative elections in Colombia, independent foreign observers reported vote buying and fraud that allowed narco-paramilitary candidates to maintain influence over the Colombian congress.

I wonder what they would think about the plea to the Canadian Council for International Co-operation from Methodist Church of Colombia Bishop Juan Alberto Cardona during his visit to Canada in November 2007, when the bishop said:

--but we know from other places like Mexico that these agreements might create more wealth for wealthy people, but they make inequalities worse. Whatever new wealth is created does not reach the poor people.

The Canada-Colombia free trade agreement was signed behind the backs of the Colombian people, without any real participation from civil society and without any study on the impacts. Now we are proposing to move ahead with a tax treaty, again, I would say, against the wishes of the people of Colombia.

This is something that must be made very clear to this Parliament and to the people of Canada.

The stage is set for further and increased human rights violations in Colombia. We know that the Uribe government is looking for re-election. We know that this will give it carte blanche. Colombians have asked Canadian society, this Parliament, to demonstrate solidarity with Colombian people by mobilizing against the CCFTA. We did not listen to them. We are moving ahead with that. I think that is a great travesty.

Likewise, I think we should be very careful about moving ahead with this tax treaty.

When I began my remarks, I said that the fight against the CCFTA was principled. I have not changed my mind. How can our country contemplate any treaty that legitimizes such a corrupt government as the Uribe government? I believe Bill S-3 would exacerbate this. Therefore, I believe we need to split Bill S-3 so we can go ahead with treaties with Greece and Turkey.

We should not be accessories to the crimes committed against Colombia workers, the Colombian environment, Colombians of African descent and indigenous Colombians by signing a treaty with any government that sanctions murder, rape, the dispossession of people and that sanctions drug dealing and crimes against the human community. Let us rather say in one voice that no treaty, be it a trade treaty or a tax treaty, is something on which Canada is prepared to embark when there are such risks to human dignity.

Because we value human rights, human life and the legitimate aspirations of the Colombian people, let us refuse to engage in anything that might give credibility to the Uribe government and to the things that it represents in terms of its behaviour. Let us stand here together and divide the bill to ensure that Greece and Turkey's tax treaties are respected, but let us not proceed with anything with the Colombian government.

[The Acting Speaker, NDP, Denise Savoie]

Before moving to questions and comments, it is my duty pursuant to Standing Order 38 to inform the House that the questions to be raised at the time of adjournment are as follows: the hon. member for Elmwood—Transcona, Chile; the hon. member for London—Fanshawe, Veterans Affairs.

Questions and comments. The hon. member for Elmwood—Transcona.

[Jim Maloway, NDP, Elmwood—Transcona, MB]

Madam Speaker, it was in 1971 that the federal government reviewed and overhauled Canada's tax system. One would think, now that we have 87 tax treaties signed, that it should be time to take another review of this system to see how well these tax treaties are working.

I asked the parliamentary secretary this morning whether he could tell me the number of tax evasion cases and the amount of money that has been recovered as a result of one or any of these tax treaties but he could not answer the question at all.

We have a government that comes to this House to respond to a bill from the Senate, which is the second go-around, and we have 87 treaties in place, but government members cannot tell us whether even one case of tax evasion has been solved by signing those agreements. They also cannot tell us the amount of money that has been recovered as a result. Yet they want to continue signing more and more of these agreements that may not even work for all we know because we do not know what the results will be.

The Conservatives say that it would reduce or eliminate tax evasion. Barbados is one of the 87 countries with these agreements. Since signing that agreement with Barbados, has it done anything to reduce tax evasion and the tax haven status of Barbados? I will bet that nothing has actually happened. The Bloc member today was giving the information about Barbados and it sounds to me like it is just as big a tax haven as it was before.

When we look at the list of countries that really are tax havens, the government has no agreements with them. One would think that if the Conservatives' intention is to close down tax havens, they would be aggressively looking at signing tax treaties with countries that are in fact tax havens.

I would like to ask the member whether she has any comments on this whole idea that somehow the government has no information about how the 87 tax treaties have worked since they have been signed and why it would be moving ahead to sign more when it cannot tell us the results of the first 87.

[Irene Mathyssen, NDP, London—Fanshawe, ON]

Madam Speaker, my colleague has raised a very salient point. It seems that the government is on automatic pilot, or going by rote, or simply responding to what the Senate dictates. The Senate says “thou shalt have a tax treaty in place, here is the bill, go to it”. Without any thought, without any judgment, the Conservatives simply go along. We have to sincerely question a government that seems to be rudderless.

As my colleague pointed out, it has been 40 years since any effective review. As my colleague also pointed out, when asked, the minister responsible could not provide any information or any answers. It would seem to me that if one is going to pursue a specific course, then one would be well advised to do the research, understand the rationale for that course and to bring something substantive and logical to this place.

We deal here with public policy. As leaders in this country, we need to ensure that the public policy we enact makes sense. The nation depends on our wisdom and our judgment. To hear that the minister responsible does not know the answer to very basic questions makes me very concerned.

In regard to tax havens, we know there has been significant loss in terms of the legitimate taxes owed to Canadians through tax havens. Billions of dollars have disappeared, billions of dollars that could have gone into affordable housing for people who are struggling or could have given us a national child care system. We have been waiting since 1984 for a national child care system. It is a little late in the day in terms of the kind of response that we should have had.

Those billions of dollars could have been invested in environmental protection. The government is oblivious to the fact that we have an international crisis with climate change and that we have a crisis in terms of oil spilling into the pristine, or once pristine, environment in the gulf. It has absolutely no plan in place to protect our Arctic waters from a similar spill. It also has nothing in place to address the real possibility that oil will enter the gulf stream and come right up the Atlantic seaboard and devastate our fishery and our coastlines as it has devastated the coastlines of Louisiana and Florida. Billions of dollars are in tax havens.

We need to get a response from the government. We need to know what it knows in regard to who is utilizing these tax havens and how we can repatriate the money owed to Canadian taxpayers. We need to enact the kind of public policy that makes sense, rather than, as the government is doing, blindly following along, dancing to the tune of a Senate bill without any substantive investigation or understanding of the impact and the effect.

[Meili Faille, Bloc, Vaudreuil—Soulanges, QC]

Madam Speaker, I completely agree with my colleague, who pointed out that Bill S-3 is a large bill, and that we must examine it thoroughly. I remind members of the initiatives that were introduced by the government, for example, in Bill C-9. The government opened loopholes in the Income Tax Act to allow corporations that are not registered in Canada to avoid paying their fair share of taxes. The Bloc Québécois also introduced a number of initiatives to combat tax evasion. Every time, something happened in Parliament, with prorogations or elections, and our bills died on the order paper. The Bloc Québécois also tabled some provisions to combat tax evasion that were not passed by the House.

I would like the member to share with us some real solutions for combatting tax evasion.

[Irene Mathyssen, NDP, London—Fanshawe, ON]

Madam Speaker, I think the member has pointed out some very important realities in her question. First and foremost is that we have a government that runs away. It runs away from its obligations when faced with any kind of situation. It prorogues and leaves the members of Parliament without the forum in which to discuss the kind of issues our country is facing.

In terms of Bill C-9 and the tax loopholes, I do not believe the government has any interest at all in closing those loopholes. In fact, I would say these loopholes have been deliberately created for the very people who support the government, who go to fundraisers for the government and who manage to support it in terms of the election and re-election campaigns. These are the very loopholes that undermine and eat away at our ability as a nation to do things for the people of this nation, which they deserve.

If we look at budget 2010, and I hope I can remember this accurately, currently corporations account for about $27 billion in taxes, and individuals, ordinary men and women, the people who work hard every day, pay $116.7 billion in taxes. By 2015, corporations will be up to something like $29 billion and the people of Canada, those hardworking individuals, will be paying $156 billion in individual taxes.

This is hardly fair. This is hardly the kind of tax system we should have. We need fair taxes. We need to abandon the practices of the past where we saw a Liberal prime minister, Paul Martin, give $100 billion in tax giveaways to profitable corporations and the current government give away $60 billion and in fact, in January 2010, an additional $1.5 billion in largesse.

[The Acting Speaker, NDP, Denise Savoie]

Resuming debate. Is the House ready for the question?

[Some hon. members]

Question.

[The Acting Speaker, NDP, Denise Savoie]

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

[Some hon. members]

Agreed.

On division.

[The Acting Speaker, NDP, Denise Savoie]

I declare the motion carried. Accordingly, the bill stands referred to the Standing Committee on Finance.

(Motion agreed to, bill read the second time and referred to a committee)