Bill S-6 (Historical)

Canada–Madagascar Tax Convention Implementation Act, 2018

An Act to implement the Convention between Canada and the Republic of Madagascar for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income

This enactment implements the Convention between Canada and the Republic of Madagascar for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and a related protocol.
The convention is generally patterned on the Model Tax Convention on Income and on Capital developed by the Organisation for Economic Co-operation and Development (OECD).
The convention has two main objectives: the avoidance of double taxation and the prevention of fiscal evasion. Once implemented, it will provide relief from taxation rules set out in, or related to, the Income Tax Act. That implementation requires the enactment of this Act.

Third Reading

[Larry Bagnell, Liberal, Yukon, YT]

Mr. Speaker, first I want to acknowledge that we are on the traditional territory of the Algonquin Anishinabe people.

I have a speech, but I think I will start by trying to answer questions and concerns that have been brought up. If I do that, then members could vote unanimously for this bill.

The first thing members have been asking is why there are only five more hours to debate this bill. For a lot of bills, that would be a valid question, but at this particular time we have had Conservative after Conservative getting up and not talking about the bill. We heard a lot about Bill C-48, Bill S-6, a letter from premiers not related to this bill, Bill C-15 and a northern moratorium.

I have been here awhile, and last night I witnessed an amazing situation. One of the Conservative speakers, in a 10-minute slot to speak on this bill, spent nine and a half minutes talking before they got to the bill, and then answering three questions by not referring to anything in the bill.

If the public wonders why Parliament has decided to call time allocation on this bill, it is obviously because the Conservatives have nothing more to say. We have heard the same arguments over and over again, and they are not valid. I will go through them one by one right now.

I am not sure why a party would want to stretch out a debate on a terrible injustice that it has caused, and it has done this a number of times. It is strange. Why would they want to put that in the light? Why would they not want to fix that injustice by supporting this bill? One of the members mentioned that he was not here at the time that it happened, so in good justice, he could support the bill.

People have asked what we have been doing for the last four years and why we did not debate this bill earlier. Some of the people in the House now have actually asked this question. This Liberal government has passed something like 85 bills. I think some members' constituents would like to ask them where they have been while these very important 85 bills were being discussed and debated.

One bill in particular was in the exact same situation as this one. It was Bill C-17. Again, the previous government had unlawfully, either technically or in spirit, abrogated a modern treaty, a constitutionally protected treaty, and tried to pass a law that got around it. That was certainly disrespectful.

Some may ask why Liberals did not get more things done, and a good example was what happened when Bill C-17, related to the treaty, was ready to pass. There was a grand chief, chiefs and aboriginal people here in the galleries. It cost thousands of dollars for them to get here from the Yukon. What did the Conservatives do at that time? They called a dilatory motion that the next speaker be allowed to speak, and then the bill could not be done. Some members ask why things are not done, yet they continue to do tricks like that.

This particular bill broke a constitutionally protected treaty, as I said earlier, a land claim. The members opposite have asked—and it is a good question for the ones who were not here before—why Liberals voted for that bill. This question has been brought up a number of times. The reason is that the part of the bill in which the law was broken in spirit or in technicality was snuck in in a much larger devolution bill.

The devolution bill transferred the remaining federal powers to the territorial government. That was a tremendous move, and that is why the party supported that initiative. Unfortunately, even though the people affected by this wanted this taken out and some parliamentarians tried to get it out, the Conservatives pushed ahead with the bill, and that is why the other parties voted for it.

Another concern the Conservatives have noted a number of times is that there are two parts to the bill. I think the member for Northwest Territories corrected them and said there are three parts. Nevertheless, they said there is part 1 and part 2, and there was no consultation regarding part 2. That is not true at all. When we consulted, we consulted with all the local governments involved regarding the entire bill, both part 1 and part 2. Shortly, I will read to members some of the things they said, because the opposition has suggested they did not support both parts of the bill.

The bill concerns the Sahtu, the Gwich’in and the Tlicho. When the Tlicho signed its constitutionally protected land claim and its self-government agreement, I was parliamentary secretary to the Minister of Indigenous Affairs. At that time, unfortunately, we had to fight against the Conservatives to get that agreement signed. At least the Conservatives can now make peace with that wrongdoing of the past and support the bill.

I will read some comments of support, because the Conservatives have said that indigenous groups did not support part 2 or the bill.

Grand Chief George Mackenzie, from the Tlicho Government, said, “We urge the community to move swiftly and decisively to ensure that Bill C-88 comes into force during the current session of Parliament.”

David Wright is legal counsel to the Gwich'in Tribal Council. I say to David, drin gwiinzih shalakat. He said the following at the INAN committee:

If Bill C-88 is not passed, not only will Canada not have fulfilled its commitment to Northwest Territories indigenous communities, but these communities will be forced back into time-consuming, expensive, acrimonious litigation, all adversely affecting that treaty relationship and the broader reconciliation project. Further, this would generate regulatory uncertainty that benefits no one....

I know the Conservatives have spoken against uncertainty in the past, so that is another reason for them to support the bill.

Premier McLeod and Grand Chief George Mackenzie, in a joint letter, said:

[W]e are hopeful that Bill C-88 will proceed expeditiously through the legislative process and receive Royal Assent [in this Parliament].... The negative implications of the status quo are significant.

Mervin Gruben was also quoted as supporting the bill, as well as Duane Smith from Inuvialuit. It was suggested he was not allowed to come to committee, but he was actually invited. He did provide a written submission, and it was nice to have that information added to the record.

A Conservative member talked about not listening to indigenous people and indigenous voices. The member said that not listening to the people of the north is arrogance. I just read that the four governments involved, the Sahtu, the Gwich’in, the Tlicho and the GNWT, all support the bill. Conservatives are right; we should listen to those people. They should listen to those people as well, along with the rest of the parties supporting the bill, and support the bill.

Another thing the Conservatives have talked about a lot is support for resource development. I am sure all other parties agree with sustainable development. It is another reason the Conservatives should vote for the bill. I will read some comments about how the bill promotes and ensures this.

Chief Alfonz Nitsiza, from the Tlicho Government, said:

[F]ailure to resolve this matter co-operatively would damage our treaty relationship and undermine the process of reconciliation as directed by the courts. Long-term regulatory uncertainty for any reason will damage the economy of the Northwest Territories, including within the Tlicho community. This is all avoidable with the passage of Bill C-88.

David Wright, legal counsel to the Gwich'in Tribal Council, said, “Bill C-88 is a step toward certainty in the Mackenzie Valley, and that is a step that should be taken at this time”.

Finally, Premier McLeod said:

The proposed amendments to the MVRMA in Bill C-88 would increase certainty around responsible resource development in the Northwest Territories. That certainty is something our territory needs as we continue to work with the indigenous governments in the territory to attract responsible resource development.

Conservatives, to be true to the values they so eloquently put forward on resource development, can support those values by supporting this bill.

I support Bill C-88, an act to amend the Mackenzie Valley Resource Management Act and the Canada Petroleum Resources Act. Although the debate so far has focused on the content of the proposed act, I want to talk about what is not in Bill C-88 and why it would be a mistake to make major amendments at this stage.

Amending Bill C-88 at this stage of the process would defeat its overall purpose, which is to resolve a court challenge arising from the previous government's decision to merge the land and water boards without holding appropriate consultations.

The Northwest Territories Devolution Act, Bill C-15, was assented to in March 2014. The act transferred the administration and control of public lands and waters to the Government of the Northwest Territories and amended the Mackenzie Valley Resource Management Act. The act includes provisions restructuring the Mackenzie Valley land and water boards.

The Tlicho government and Sahtu Secretariat Incorporated challenged the changes to the Mackenzie Valley Resource Management Act that would have dissolved their regional land and water boards. They argued that theses changes violated their land claims agreements and infringed on the honour of the Crown. They added that the consultations had been inadequate. On February 27, 2015, the Supreme Court of the Northwest Territories granted an injunction that suspended the proposed board restructuring, along with the coming into force of other regulatory amendments.

I would like to point out that those regulatory amendments, which included the addition of a regulation-making authority for cost recovery, administrative monetary penalties, development certificates and other provisions related to regional studies, all passed through the parliamentary process in 2014. Those same provisions are being presented today. However, they were rewritten to ensure that they could apply under the existing four-board structure. They were not part of the court challenge. Bill C-88 responds to the court challenge by reversing the provisions to merge the boards and re-introducing some regulatory elements that are applicable under the existing four-board structure.

On September 23, 2016, the Minister of Crown-Indigenous Relations sent a letter to indigenous governments, organizations and stakeholders to launch the consultation process on Bill C-88.

Consultations were held with indigenous governments and organizations in the Mackenzie Valley, transboundary indigenous governments and organizations, resource co-management boards, organizations from the mining, oil and gas sectors, and the territorial government. To ensure that the indigenous governments and organizations were able to fully participate in the process, the Government of Canada provided funding to these groups and to the resource co-management boards that took part in the consultations.

Representatives from Crown-Indigenous Relations and Northern Affairs Canada, or CIRNAC, held a teleconference with stakeholders to consider next steps and to discuss the consultation plan. A legislative proposal to repeal the board restructuring provisions was drafted and submitted to the groups for review. During the review period, the groups had the opportunity to meet with CIRNAC representatives in Yellowknife to talk about the content of the proposal and to ask questions. This was also an opportunity for CIRNAC representatives to determine whether any part of the proposal was unclear or could be improved, based on the feedback they received.

I will not have time to finish, but I do not want to miss this particular point. The only other questions someone could ask that I have not already answered are whether the consultation that was done was serious and, although they were in agreement at the end, whether any changes were made. The answer is yes. I will give an example of two of the changes that were made.

The first was that because of the consultations with the people involved, a court jurisdiction related to a judicial review of administrative monetary penalties, AMPs, was modified in order to ensure consistency with the exclusive jurisdiction of the Northwest Territories Supreme Court under section 32 of the Mackenzie Valley Resource Management Act.

A second change was that consultation obligations related to the AMPs were added to the bill to ensure consistency with the comprehensive land claim agreements.

The only other thing I think someone might ask is related to the position of national interest and whether this is the only case of that. The answer is no; it is a clause, an idea, that comes up in different legislation. I will give members some examples from the north: the Mackenzie Valley Resource Act, Statutes of Canada 1998, chapter 25, section 130, and the Nunavut Planning and Project Assessment Act, Statutes of Canada 2013, chapter 14, section 2.

Section 94 of the Mackenzie Valley Resource Management Act provides for the federal minister to refer a proposed project to the Minister of Environment for the purpose of a joint review of the Canadian Environmental Assessment Act if it is in the national interest to do so.

The Nunavut Planning and Project Assessment Act also provides for the responsible minister to reject a board decision or to reject or vary recommended terms or conditions if it is in the national interest to do so.

A few close references can also be found in section 51 of the Yukon Act, Statutes of Canada 2002, chapter 7, and in section 57 of the Northwest Territories Act, Statutes of Canada 2014, chapter 2, section 2.

To boil it all down, basically an act was passed that abrogated the land claim and went against a constitutionally protected law of Canada, which we cannot change by just doing another law. Of course, the court found that out and would not let it go ahead. All this bill would do is to put into law what the court had ordered.

[The Assistant Deputy Speaker, Liberal, Anthony Rota]

I have the honour to inform the House that a communication has been received as follows:

May 27, 2019

The Honourable

The Speaker of the House of Commons

Ottawa

Mr. Speaker:

I have the honour to inform you that the Right Honourable Julie Payette, Governor General of Canada, signified royal assent by written declaration to the bills listed in the schedule to this letter on the 27th day of May, 2019 at 1:37 p.m.

Yours sincerely,

Assunta Di Lorenzo

Secretary to the Governor General and Herald Chancellor

The schedule indicates that the bills assented to were Bill C-85, An Act to amend the Canada-Israel Free Trade Agreement Implementation Act and to make related amendments to other Acts, Bill S-6, An Act to implement the Convention between Canada and the Republic of Madagascar for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and Bill C-55, An Act to amend the Oceans Act and the Canada Petroleum Resources Act.

Canada–Madagascar Tax Convention Implementation Act, 2018

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

Mr. Speaker, after so many tributes to one of our colleagues, it is hard to get back to the debate on a bill like Bill S-6.

I want to take this opportunity to congratulate the member for Sydney—Victoria on all he has done. The kind words coming from all sides of the House prove that he was obviously very well liked and wonderful to work with all these years. I too would like to wish him all the best.

We are here today to debate Bill S-6. Our job is to talk about bills and discuss the various motions brought before the House. Bill S-6 implements the convention between Canada and the Republic of Madagascar for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, and a related protocol.

The convention is based on the Organisation for Economic Co-operation and Development's model tax convention on income and on capital. A bill like this is introduced for two main reasons. The first is to avoid double taxation, and the second is to prevent fiscal evasion. Once this bill is implemented, it will provide relief from taxation rules set out in the Income Tax Act. It cannot be implemented until the bill is passed. We on this side of the House plan to support the bill.

Since we are talking about international relations, I want to talk about a speech that the Leader of the Official Opposition gave to the Montreal Council on Foreign Relations, or MCFR. He gave his excellent speech to a full house on May 7 in Montreal.

The Leader of the Official Opposition spoke about this country's foreign affairs, which is why I am making a link to the bill we are debating today. Maintaining healthy relations with other countries based on respect and rules is what enables us to continue to prosper and find our place in an ever-changing, fast-moving world.

Before I talk about the opposition leader's vision for foreign affairs, I want to talk about the government's track record in that regard. Shortly after the 2015 election, the Prime Minister said that Canada was back. He took credit for the good reputation that Canada had built over the years under all of the previous governments. Unfortunately, in 2019, it seems that Canada has gone nowhere. Here is what the opposition leader had to say, and I quote:

The profound arrogance of [the Prime Minister]'s words foreshadowed how the new Prime Minister would conduct Canada’s foreign affairs: with style over substance.

It is public knowledge that the government has made many serious mistakes, and they are almost always attributable to the Prime Minister's poor judgment. Let us not forget the trans-Pacific partnership. He was a complete no-show for a very important meeting. Observers said at the time that the Japanese were seething about what they perceived as a last-minute betrayal by the Prime Minister of Canada.

We all know the details of his trip to India. Certain images come to mind every time someone mentions it. As the Leader of the Opposition said before the MCFR, what is perhaps less known is how seriously that trip hurt Canadians. Bilateral trade with India totals about $9 billion annually. The Prime Minister's trip to India seriously set us back in terms of helping Canadians benefit from increased trade.

We need to look at what is behind the image and the photo ops, at the impact of these actions. As former Liberal minister Ujjal Dosanjh stated, it is disappointing that the Canada-India relationship could have gone to the next level, but we have bungled it.

More recently, we have witnessed the government's defeatist attitude toward China. A wait-and-see approach has now become the norm. China has taken totally unjustified trade actions directed against Canadian farmers, canola farmers, the pork industry, and livestock genetics companies. Unfortunately, the crisis only seems to grow worse every day.

The Minister of Agriculture and Agri-Food has just returned from a G20 ministerial meeting in Japan, where she had an opportunity to talk to her Chinese counterpart and clearly state Canada’s position on the canola crisis, which is preventing Canada from exporting canola seed to China. However, this meeting on the importance of market access rules-based trade for Canadian agri-food products and opportunities was inconclusive.

According to the news release issued by the minister, she had an introductory conversation with the Chinese minister of agriculture on the margins of the G20 meeting and expressed Canada’s deep concern with the suspension of Canadian exports. The Minister of Agriculture has been asking China to allow her send a technical delegation to verify the Chinese government's allegations about the quality of Canadian canola for a month now, but she is satisfied with an introductory conversation with the Chinese minister of agriculture.

Unfortunately, the department’s news release makes no mention of the Chinese minister’s response. We do not know what he said, and unfortunately, we do not expect a technical delegation to be sent to China, since the minister surely did not want to displease her Chinese counterpart, while China is causing billions of dollars in damage to the Canadian economy.

That is not all. Today, Grain Growers of Canada called on the federal government to provide meaningful support to the Canadian agriculture industry. They want it to develop a strategy to address an increasingly unpredictable trade environment that is affecting the incomes of grain farmers. The strategy should recognize that China’s blocking of Canadian canola is politically motivated, which was acknowledged last week by the Prime Minister. However, government politicians are hesitant. The ministers refuse to stand up to China, and we are seeing the consequences. We are caught in the middle of the trade war between the United States and China. That has serious repercussions for all grain farmers in Canada.

The GGC press release also reveals that, in addition to the suspension of canola imports from Canada, soybean prices are dropping and imports to China have slowed to a trickle, reaching levels not seen in a decade. Industry and government officials have confirmed that Chinese importers are reluctant to sign contracts for other Canadian agricultural products given the uncertainty in the market.

Grain Growers of Canada chair Jeff Nielsen says the time has come for the Canadian government to aggressively defend the interests of Canada's agricultural sector in China and around the world. GGC vice chair Markus Haerle of St. Isidore, Ontario, says that the issues we are seeing with trade into China can no longer be said to be commodity-specific. As a soybean farmer, he has seen his prices plummet and markets close due to the flooding of the market by U.S. product.

The press release concludes by saying that, in addition to Chinese disruption, the loss of the Indian pulse market and the Italian durum market has added to the long list of risks that farmers are expected to manage. That is what we have been saying for months. For at least two months now, we have been telling the House that the Government of Canada has to stand up to China because it did not stand up to Italy, it did not stand up to India when that country imposed tariffs, and it did not stand up to Vietnam. The Liberal government's inaction and wait-and-see approach are causing billions of dollars' worth of damage to the Canadian economy.

When we are talking about billions of dollars in damage to the Canadian economy, we have to spare a thought for every farmer in every province of Canada. Each of them has suffered losses on the order of $10,000, $20,000, $50,000 or $100,000 since the beginning of the year because they cannot sell their product.

We asked for three things. First, we asked for changes to the advance payments program. The Leader of the Opposition had to pressure the government into tabling a plan to help canola farmers. Second, we asked for a complaint to be filed with the World Trade Organization. There has been radio silence on that from the Liberal government. Lastly, we asked the government to appoint an ambassador to China. It seems obvious to me that if we want to resolve a crisis—

The House resumed consideration of the motion that Bill S-6, An Act to implement the Convention between Canada and the Republic of Madagascar for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, be read the third time and passed.

[Chris Bittle, Liberal, St. Catharines, ON]

Mr. Speaker, I could not agree more with the hon. parliamentary secretary and his comments. A million new jobs is something to brag about. It is significant. Canadians have worked very hard and it is clear our policies have worked to help fuel that innovation and entrepreneurship. Part of that is our trade strategy, whether it is with Europe, Asia, or standing up to the United States or by standing firm on our commitments and with our industries.

Canada has unprecedented access to global markets. That speaks well to the economy. Bill S-6 is a small part of that and it will move us forward. We are always looking forward to creating new jobs and helping Canadians in their entrepreneurship and in investing.

[Chris Bittle, Liberal, St. Catharines, ON]

Mr. Speaker, as I mentioned in the introduction, the thrust of my speech is about tax fairness, as Bill S-6 is about tax fairness, and talking about the other measures the government has taken with respect to tax fairness. I am happy to continue and bring it back again.

Next year, the combined federal-provincial-territorial average tax rate for small businesses will be lowered to 12.2%, by far the lowest in the G7 and the fourth lowest among OECD countries.

However, tax fairness requires action on multiple fronts, not just Bill S-6.

For example, in each of our budgets we have taken steps to strengthen the Canada Revenue Agency's ability to crack down on tax evasion and combat tax avoidance. I know those are issues that have been discussed by the opposition members in questions they have brought up.

The government has also taken action to close loopholes that result in unfair tax advantages for some at the expense of others. Actions like these help ensure the government's ongoing ability to support the programs and services on which Canadians rely.

Today's legislation, Bill S-6, targets strategies used by businesses and wealthy individuals to exploit gaps and mismatches in tax rules to inappropriately reduce or avoid tax. Bill S-6 greatly enhances our ability to counter tax avoidance strategies that would otherwise abuse Canada's tax treaties and reduce or avoid Canadian tax.

While we have made significant investments in the CRA, we know that fighting tax avoidance is not something that we can do alone. It is not easy work. Bill S-6 implements a multilateral convention that contains a number of treaty-related measures to combat base erosion and profit shifting, or BEPS. BEPS refers to tax avoidance strategies in which businesses and wealthy individuals can use gaps and mismatches in tax rules to avoid tax or shift profits to low-tax or no-tax locations. In other words, these strategies enable businesses and wealthy individuals to avoid paying their full or fair share of taxes.

To implement all these measures in a timely and effective manner, a new approach was required. This new approach is the multilateral convention contained in the bill, ultimately known as the multilateral instrument, or MLI. The MLI is a product of a global initiative, working with more than 100 countries and jurisdictions, including Canada. The purpose of the MLI is to allow participating jurisdictions to adopt measures to combat BEPS without having to individually renegotiate their existing tax treaties. The MLI would also improve the functioning of international tax systems by including measures designed to better facilitate the timely and effective resolution of disputes under tax treaties.

We have listened to Canadians. They want the government to take action to address tax avoidance, and we are committed to that. We are making significant progress.

The bill builds on the government's ongoing work to ensure that we have a tax system that is fair for everyone. Starting with budget 2016, the government has been giving additional funds to the Canada Revenue Agency, so that it can more effectively crack down on tax evasion and combat aggressive tax avoidance. These additional investments continued in 2017, and again in 2018, and they are already paying dividends.

At the close of 2017-18, CRA had 50 ongoing criminal investigations related to the transfer of money that rightfully belongs in Canadian coffers to low- or no-tax jurisdictions. The government is also targeting those who promote tax avoidance schemes and has imposed more than $44 million in fines on those third parties.

We are joining this international collaboration in making these investments in the CRA because Canadians want their money back and want the loopholes through which these tax dollars flow out of Canada closed. If our economy does not work for everyone, if people do not pay their fair share, Canadians grow concerned and they want action.

We invested in the CRA, after years of cuts under the Harper government. Of course, it limited the CRA's ability to prosecute tax offences. We need to fund those who are on the ground. They are essentially police officers, and we saw today in Ontario, during Ontario Police Week, the provincial government cutting $46 million to front-line policing and the OPP.

We are doing the opposite. When we see criminal or illegal activity, in this case tax avoidance, we need to step up and take action. That is why we invested in the CRA. That is why we are putting more officials on the ground. This is not easy work.

Through my legal practice, I know that dealing with cases of fraud and white-collar crime is a very difficult burden for investigative agencies like the CRA. It is not a matter of seeing something on camera or hearing from an eyewitness. It takes a great deal of work to bring forward cases for enforcement and prosecution.

In the absence of investment, there will be a decline, and it will be easier for Canadians to avoid taxation and move their money overseas without fear of getting caught. This needs to be emphasized. The tax system needs to be seen to be fair. Justice should not only be done; it should be seen to be done.

This has been an important part of our investments in the CRA, ensuring that we have a tax system working for every man, woman and child in this country. That is money that needs to work for Canadians, including through some of the tax programs I talked about. It is about making our entire tax system fairer.

We talked about the CCB making the system fairer. I had a wonderful conversation with a constituent who is no longer receiving the CCB. She was able to use the CCB to start up her small business. There is more money in her pockets, tax-free. The opposition voted against this, but she received this benefit and was able to start up her business. She is now making enough money that she no longer receives the CCB. She is employing Canadians. She was able to take the step to help herself and better our community, and that is significant.

Coming back to the middle-class tax cut, I note that one of the first things we did as a government was lower taxes on the middle class and raise them on the wealthiest 1%. Again, it is about a tax system that works for everyone. We were shocked that the opposition voted against this, but it is a measure that Canadians wanted. They wanted to ensure that the wealthiest in our society paid a little more so those who make a little less could get a bit of a break, so that is what we did.

The previous speaker, the hon. member from eastern Ontario, said that families are not better off under our government. Nothing could be further from the truth. The average family is $2,000 better off—

[Chris Bittle, Liberal, St. Catharines, ON]

Mr. Speaker, thank you for allowing me to speak to Bill S-6. I will be splitting my time with the hon. member for Sydney—Victoria.

Bill S-6 proposes measures that would make the tax system fairer by addressing aggressive international tax avoidance.

To have an economy that works for everyone, we need a tax system that is fair, and we need all Canadians to pay their fair share. A fair tax system instils confidence and helps create opportunities for everyone. That is why, as one of our first measures upon coming into office, we introduced a middle-class tax cut. Single individuals who benefit from this middle-class tax cut are saving, on average, $330 per year. Couples are saving, on average, $540 per year.

We are providing simpler, more generous and better-targeted support for Canadian families who need it the most: the Canada child benefit or the CCB. As a result of the CCB, nine out of 10 Canadian families with children are better off than they were under the previous system of child benefits. On average, families benefiting from the Canada child benefit are getting $6,800 this year, to help pay for things like healthy food, back-to-school clothes and new winter boots for growing kids. Since its introduction, the CCB has lifted approximately 300,000 children out of poverty.

[Gord Johns, NDP, Courtenay—Alberni, BC]

Mr. Speaker, I want to thank my hon. colleague from Leeds—Grenville—Thousand Islands and Rideau Lakes for his passion since he has entered the House of Commons. I really appreciate his enthusiasm.

The member talked in his speech about ways to tackle climate change in his own riding, and I am really grateful to him for that. He said businesses in his community are taking action.

Conservative members have raised concerns over the carbon tax in 2,100 interventions and there have been over 762 questions in the House of Commons against the carbon tax, so it is refreshing to hear that member talk about solutions. Those were lost opportunities. Those 2,100 interventions and 762 questions could have been pressing the government with solutions. I really am excited to hear about their plan.

Let me get back to Bill S-6, the bill that we are talking about today and a bill we all agree with.

A bigger problem in this country is tax avoidance. Billions of dollars are leaving this country, a country where hard-working people are paying their fair share and where large corporations, the elite and those at the top are not. Would the member agree that we should be making legislative and regulatory changes to prevent that from happening?

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

Mr. Speaker, I am pleased to rise today to speak about Bill S-6, an act to implement the Convention between Canada and the Republic of Madagascar for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income.

There seem to be good measures found in this bill, especially on double taxation. This bill contains provisions for tax in both Madagascar and Canada.

In the case of Madagascar, double taxation shall be avoided as follows:

(a) where a resident of a Madagascar derives income which, in accordance with the provisions of this Convention, may be taxed in Canada, Madagascar shall allow as a deduction from the tax on the income of that resident, an amount equal to the income tax paid in Canada. Such deduction shall not, however, exceed that part of the income tax, as computed before the deduction is given, which is attributable to the income which may be taxed in Canada.

It is great to see the government is making a move that might keep more of people's money in their own pockets instead of going toward paying for the government's reckless spending. It is also good to see the government is concerned about double taxation. It is just a shame that it is only concerned about it when it is happening in the Republic of Madagascar and not here in Canada.

Would it not be great if the government made such an effort to avoid double-taxing Canadians? However, the government is doing exactly that with its carbon tax on everything. The Prime Minister is charging GST on top of that carbon tax. I would say that is a tax on a tax. That is just it. The government does not particularly care about the average Canadian, and especially rural Canadians, such as those in my riding of Leeds—Grenville—Thousand Islands and Rideau Lakes.

When the carbon tax took effect, it immediately raised the price of everything, from gas to home heating to groceries. Canadians are being taxed twice for living the life of luxury by heating their home and driving to work or driving their children to soccer or dance, or even driving to the doctor.

If the carbon tax were actually an environmental plan, would it not be logical that the great emitters of pollution in this country would pay most of this tax? They are not. Canada's biggest emitters are exempt from the carbon tax, while small business owners, commuters, hockey moms and dads, and farmers are expected to take public transit. That is not possible for many rural Canadians.

The Prime Minister expects rural Canadians to just hop onto public transit or buy a new Tesla. That does not jive with what is happening across Canada, and certainly not in my riding of Leeds—Grenville—Thousand Islands and Rideau Lakes. It does show how disconnected the Prime Minister really is with average Canadians. Average Canadians, at least half of them, are $200 away from insolvency, but they had better rush out and buy that new Tesla.

We have amazing farmers in my riding, and it would be great if this bill protected them from double taxation, but it does not. They are hit by the carbon tax and the GST on top of that.

The farmers in my riding are some of the greatest stewards of the land that we have in this country. They have long been at the forefront of sustainability and innovation. The way farmers have incorporated new technologies like biofuel and robotics into their operations is very interesting. The prevalence of the use of biogas and biofuel on today's farms is particularly noteworthy. Biogas is methane that is produced with the use of anaerobic digesters on the farm. Usually manure and leftover waste like corn stalks and husks are introduced into the anaerobic digester to create methane for use on the farm; then the solid byproduct of the methane production can be used as fertilizer.

Cavendish Farms, a large potato processing operation with plants in Alberta, Ontario and the Maritimes, has reduced emissions by 50% over the last decade through the use of biogas, not because they were forced to by a nonsensical carbon tax on everything but because it made good business sense and because it was the right thing to do.

In addition to that, biodiesel can be created on the farm through high-energy waste such as vegetable oil. We know that most of the machinery on the farm will run on diesel. If farmers can meet some 20% of their diesel needs by creating biodiesel, then they are reducing emissions and helping their bottom line at the same time.

These investments in sustainability and innovation have occurred because it makes good sense for farmers, their families and businesses, not because they were threatened with taxes.

Now the Prime Minister's carbon tax is raising the cost of bringing crops to market, buying fertilizer and drying grain, which causes margins to shrink, and farmers cannot afford new investments in innovation when they are worried about that bottom line. The question still stands as to why the government is concerned with people abroad keeping more money in their pockets while it neglects people at home. The answer is clear: The Prime Minister simply needs the revenue to pay for his reckless spending, which will be paid for on the backs of everyday Canadians.

This reckless spending has come with massive deficit after massive deficit, the latest of which came in the form of the 2019 cover-up budget. In the midst of the SNC-Lavalin scandal, the Prime Minister must have sat down with the Minister of Finance to make a plan to distract Canadians from the corruption and contempt the Liberals have shown for the judicial system, which they continue to demonstrate, so the Liberals announced a budget with a $20-billion deficit and $41 billion in new distraction-spending.

We saw a large corporation, with the clock ticking, launch a full-court press lobbying campaign. The corporation got the Prime Minister's top advisers and top government officials on board. Then we saw a former attorney general who respected the rule of law and would not cave to pressure from the PMO. Then there was a convenient cabinet shuffle that saw the attorney general fired and replaced with a Montreal MP from right next door to SNC-Lavalin, one who was willing to support the government's disregard for the rule of law.

Knowing the trial of Vice-Admiral Mark Norman was soon to be in court, the Liberals released this cover-up budget. It is clear the Prime Minister was trying to cover his tracks with this budget. There is overwhelming evidence that the Liberals politically interfered in this case and tried to destroy a decorated military officer, the vice-chief of the defence staff, Vice-Admiral Mark Norman. The prosecution made clear that the documents the Prime Minister and the Liberals were fighting to keep secret were the very documents that caused the charges to be dropped. This fact strongly suggests the government was deliberately withholding and suppressing documents to prolong the politically motivated attack on the vice-admiral.

From withholding documents that would have exonerated the vice-admiral to using code names in emails to having government lawyers coach witnesses, the interference and the lengths to which the government was willing to go were very clear. It is no wonder the government needed to rack up record spending and record deficits to distract Canadians.

If my memory serves me correctly, 2019 was supposed to be the year the budget would balance itself, like so many babies on the campaign tour that the Prime Minister is now on. In 2015 he said, “I am looking straight at Canadians and being honest the way I always have. We said we are committed to balanced budgets, and we are. We will balance that budget in 2019....”

That could not be further from the truth. The free-spending Prime Minister's and finance minister's own finance department documents show the budget will not be balanced until 2040. What they are engaged in is nothing short of intergenerational theft.

It is shameful. The government spent $50 million to impress a celebrity on Twitter, gave $10.5 million to a convicted terrorist who murdered U.S. Army Sergeant Chris Speer, and the Prime Minister is willing to raise taxes on everyday Canadians to pay for it.

While Bill S-6, an act to create a tax convention between Canada and the Republic of Madagascar for the purpose of avoiding double taxation and the prevention of fiscal evasion with respect to income taxes is a solid measure, the real issue is that the government has neglected to take the same measures on double taxation here at home. Canadians should not have to pay for the Prime Minister's reckless spending through raised taxes and double taxation for generations to come.

The Prime Minister advertised that he would balance the budget in 2019. As Canadians have learned over the last three and a half years, the current Prime Minister is just not as advertised.

[Steven Blaney, Conservative, Bellechasse—Les Etchemins—Lévis, QC]

Mr. Speaker, before I begin, I want to let you know that I will be sharing my time with the member for Leeds—Grenville—Thousand Islands and Rideau Lakes.

It is always a privilege to rise in the House and talk about matters of state. That is all the more true today as the end of the parliamentary session draws near. We have just a few weeks to go until the summer recess, and there is going to be an election this fall. With that in mind, I would like to express my support for Bill S-6, an act to implement a tax convention between Madagascar and Canada for the avoidance of double taxation and the prevention of fiscal evasion, as my colleague opposite just explained.

As a number of members have said today, we already have 93 such agreements, some of which were signed by our government before 2015 and all of which are meant to prevent tax evasion. I want to emphasize that tax evasion is a scourge that prevents the government from collecting monies owed, which it uses to provide services to Canadians.

Of course, the important thing is that there be trust between two countries. It is the reason why we are supporting the bill. Trust between the public and the government is equally important, but it has been shaken. It has been shaken because, as we are about to sign an agreement with Madagascar, we have to face the fact that Canada has its own major challenges with tax evasion.

For example, in an article published by the Journal de Montréal, Guillaume St-Pierre said that the Canadian treasury is losing up to $3 billion each year in unpaid taxes because wealthy Canadians are hiding money in tax havens.

A Canada Revenue Agency study revealed that Canada is losing significant tax revenue to tax evaders. These people use complex schemes to hide taxable income abroad. The $3-billion figure could be just the tip of the iceberg. It has been suggested that companies or individuals who evade or avoid taxes could owe as much as $17 billion in unpaid taxes.

Our system already has certain weaknesses. It is important that Canadians pay their fair share of taxes. This week, we learned that British Columbia also has challenges with money laundering, which is pouring huge amounts of money into B.C.'s real estate market. Several billions of dollars have been injected into the real estate market.

When the time comes to meet a need as fundamental as housing, the average Canadian who pays his taxes must turn to the real estate market, where he is in competition with unknown sources of money.

We support Bill S-6, but the trust between Canadians and the government has been undermined at a time when we are headed towards an election. I would like to remind those listening that, on taxation, which is the issue we are discussing today, the Liberal government looked us in the eye and promised that by now, so in 2019, there would be no deficit because the budget would be balanced.

Why is this important?

It is important to balance the budget, because a period of relative economic prosperity is the perfect time to generate revenue and pay down the deficit so we can get money flowing in the event of an economic crisis, in order to stimulate and support the economy. That is what our Conservative government did.

The difference between what is happening now and what we went through is that we were faced with an economic crisis. The Conservative government did three things: we paid down debt, stimulated the economy in a period of economic crisis and balanced the budget.

The Liberal government's four-year term is almost over, and we have yet to see the government taking any of these measures. In fact, it has done the opposite and plunged us into a bottomless deficit pit.

Writing about the 2019 budget for the Journal de Montréal, Michel Girard mentioned the $71-billion deficit and called the budget blatant vote buying. He wrote:

True to form, the Trudeau government is spending like there's no tomorrow. That is why, for the fourth time in a row, it's kicking off the new fiscal year with a colossal deficit.

I mentioned trust, and members will recall that we were promised a balanced budget and modest deficits.

Michel Girard goes on to say:

How big will it be this time? Nearly $20 billion, including a “small” $3-billion cushion.

Adding it all up, since [this Prime Minister and the Liberals] came to power, they have dug a massive $71-billion hole with four successive huge deficits.

As a result, [at a time of relative economic prosperity, under the Liberals' watch] the net federal debt has skyrocketed by $100 billion.

Where is that $100 billion going? Is it being invested in families, in infrastructure or in the fight against climate change?

Most of the Liberal government's spending is the result of direct program expenses, particularly expenses associated with the federal government's departments, agencies and Crown corporations.

What concrete benefits are there for taxpayers? Most of that $100-billion deficit goes to the departments. Basically, it goes into bureaucracy, unfortunately.

Direct program expenses have skyrocketed by $30 billion. Who is footing the bill? Ordinary Canadians are. Since the Liberals came to power in 2015, government revenues have increased by $43 billion. Money does not grow on trees. The Liberals are taking that money out of taxpayers' pockets, the same taxpayers who have recently been burdened with a carbon tax whose effects are still unknown.

Such is the government's record. It has lost the trust of the people.

It is okay for the government to sign partnerships with Madagascar, as it has done in 93 other cases, but it is not okay for the government to break its word.

I was saying that the Conservatives restored budgetary balance and that we invested during the economic crisis and paid down the debt. The Liberals spend left and right with no real result. I just explained today how this money went to the bureaucracy and taxpayers are the ones paying an extra $45 billion. Unfortunately, that is not all. This deficit includes measures that taxpayers will not benefit from but will have to pay for. For example, the Parliamentary Budget Officer told us that the government paid $4.5 billion for a pipeline. Taxpayer money is being used to pay an expense that will not even help Canadian energy access the market at a fair price.

I see that my time is running out. I will simply say that it is important that there be trust between countries, as is the case between Canada and Madagascar in this agreement, but the trust between the Canadian public and the Liberal government has been broken.

[Greg Fergus, Liberal, Hull—Aylmer, QC]

Mr. Speaker, I thank my colleague for her question, but I would like to set the record straight. The title of Bill S-6 being discussed today is very clear. It is an act to implement the convention between Canada and the Republic of Madagascar for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income. It is not unlike the bills we adopted to implement the 93 other agreements we concluded with other countries. It features the same measures.

There are indeed measures for avoiding double taxation, but there are also measures meant to reassure the public and to make transactions more transparent. The bill connects the Canada Revenue Agency and Madagascar's agency to ensure that there is no tax evasion by Canadians working in Madagascar or vice versa, by the people of Madagascar working here in Canada.

[Karine Trudel, NDP, Jonquière, QC]

Mr. Speaker, I listened carefully to my colleague's speech. The NDP will support Bill S-6. Sadly, however, it includes no provision to combat tax evasion. Its title is misleading. This treaty seeks to avoid double taxation between states; it does not directly address tax evasion.

I have a straightforward question for my colleague. Why do he and his government keep misleading Canadians with a bill like this, which clearly includes no provision to deal with tax evasion?

[Greg Fergus, Liberal, Parliamentary Secretary to the President of the Treasury Board and Minister of Digital Government]

Mr. Speaker, I am pleased to be participating in this debate on Senate Bill S-6 in my new role.

I would like to start by saluting my colleague opposite for his fine speech on this bill. I will continue in the same vein and express my support for this bill.

Until just recently, I was a member of the Standing Committee on Finance. I sat on the committee for nearly three years, and I absolutely loved it. We got to examine all the issues that fall to the federal government, including all bills related to taxation authority, and review our government's finances. One of the last studies I took part in was about Bill S-6, an act to implement the convention between Canada and the Republic of Madagascar for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income. It is part of our government's agenda for ensuring tax fairness and a fair tax system.

Before I get into the details of the legislation, I would first like to underscore the fact that this is not only part of this government's tax fairness agenda, but this also places itself within a whole framework of what we are trying to achieve to help Canadians who are trying to keep their taxes low, including small businesses as well as for middle-class families.

When our government took office three and a half years ago, we made a commitment to invest in growth and we made it while upholding the principle of fairness for all taxpayers. This proposed legislation goes a long way toward that end.

A fair tax system is key to ensuring that the benefits of a growing economy accrue to all and are felt by more and more people, especially people with good, well-paying jobs for the middle class and for everyone who works hard to join it.

I would like to remind hon. members that one of the first things our government did was lower taxes on the middle class and raise them for the wealthiest 1%. Over nine million Canadians benefited from that measure. That really fills me with pride. All members can take pleasure in knowing that nine million Canadian families enjoy a much lighter tax burden today.

After the middle-class tax cut, we took steps to replace the old system of child benefits with the Canada child benefit. I take pride in that measure because it fulfilled an election promise. The leader of the Liberal Party of Canada made that promise in my riding, Hull—Aylmer, surrounded by middle-class families and families hoping to join them. These people work hard to build a stable family life.

It is one of the biggest promises we have ever made, and the result is that 300,000 children were lifted out of poverty in Canada. That is remarkable.

I have been involved in federal politics for a long time now. I started here, in 1988, as a page in the House of Commons. I remember there was a debate that year called “campaign 2000”. The idea was to eliminate child poverty by the year 2000.

We made that commitment in 1988. Every single government since has made it too. However, it was not until 2015, when the current Liberal government was elected, that we were able to accomplish great things in that area. We cut the child poverty rate by a third, which is remarkable, and we did it in one fell swoop. It was one of the most important social programs—if not the most important—to have ever been implemented in Canadian history.

I would now like to return to the bill on the convention between Canada and the Republic of Madagascar. As I said earlier, I am on the Standing Committee on Finance; we examined the provisions of the bill and we unanimously voted to support this bill without amendment. I am very proud that we have now reached the stage where it is up to the House of Commons to approve it.

I know that this is not something that we generally do when we introduce a bill, but as a former member of the Standing Committee on Finance, it is very important for me to review and explain the five major clauses of the bill without getting into too much detail.

First, this bill sets the maximum withholding tax rate on dividends at 5%. That is important, particularly if the beneficial owner is a company that controls at least 25% of the voting power in the company paying the dividends. It sets the maximum withholding tax rate at 15% in all other cases. The first provision is consistent with other double taxation treaties that Canada has with a number of other countries in the world.

Second, the bill sets the maximum withholding tax rate on interest at 10% and eliminates withholding taxes when interest is paid in respect of a loan made, guaranteed or insured by a public agency or the central bank of one of the states or when the beneficial owner of the interest operates exclusively to administer or provide benefits under one or more pension, retirement or employee benefits plans, subject to certain other conditions. As I said, that is completely normal. That is something we do in the 93 other double taxation treaties that Canada has with other countries.

The third element of this double taxation treaty sets the minimum withholding rate of 10% of the gross amount of royalties and further provides for the withholding tax on certain royalties. This is particularly important, especially for people who might be involved in companies such as in the mining sector.

As members know, Canada is a worldwide leader with respect to investment in mining companies and in doing these investments around the world. It is very important for Canadians who are working for these companies in these countries to have this opportunity to participate and be protected by these taxation agreements.

The fourth element includes a provision to avoid potential double taxation that can arise in respect of the capital gains that an individual realizes on the deemed disposition of property upon immigration between two states, in this case between Canada and Madagascar.

This proposed bill will benefit Canadians by boosting our exports abroad, making it easier for Canadians to take part in these activities. In doing so, Canadians will know they are protected by these measures on double taxation.

Tax fairness is as important to Canadians as it is to our government's plan for economic growth. It is very important that Canadians know their hard work will be rewarded with greater opportunities and a fair chance of success. They need to know that their fair chance of success and opportunities are being protected and that their efforts will not end up being for not when they are caught in between differential taxation treaties between two different countries.

The legislation before us today will build on Canada's extensive network of income tax treaties. As I mentioned earlier, we have 93 comprehensive tax treaties that are currently in force with countries around the world. Canada's tax treaties are a part of a larger global network of approximately 3,000 tax treaties between nations worldwide. Therefore, we have 93 of 3,000 treaties. We have been doing quite well in ensuring we are protecting Canadians, their investments and efforts abroad.

This network of tax treaties is really fundamental to economic growth, not only for Canada but for many countries. It is fundamental to our trade and investment. At the end of the day, we can talk about companies but we really are talking about people. We are talking about how people are putting their creative efforts into creating economic opportunities through entrepreneurial opportunities that present themselves. This gives them that opportunity to ensure they are fairly taxed and their efforts are protected.

By eliminating double taxation, these treaties provide the certainty which Canadians need to support open and advanced economic opportunities and encourage our friends in our countries, in this case Madagascar, to support open and advanced economies as well. They permit the exchange of information needed to prevent international tax fraud and tax evasion.

From what I have gathered in listening to the speeches presented in the House today and with the support of all major political parties for this treaty and others like it, we are really creating a whole network of opportunity for Canadians to ensure they can take their economic activities abroad. Yes, we want investment here and yes, it is important, but we also have to ensure that we have equipped Canadians with the opportunity to go abroad, to find and create opportunities. This is not only be good for them individually, but also good for Canada in creating more international trade opportunities. I dare say if it is done in the right conditions, there are certainly great economic opportunities for the countries in which we decide to put our entrepreneurial know-how to work.

Bilateral double tax conventions are also fundamental to eliminating tax barriers to trade and investment between two countries. They achieve this purpose in a number of ways.

First, tax treaties provide greater certainty to taxpayers regarding their potential liability to tax in the other country.

Second, they allocate taxing rights between the two jurisdictions, thus eliminating double taxation.

Third, treaties like this one reduce the risk of burdensome taxation that may arise because of excessive withholding taxes.

Fourth, they ensure that taxpayers will not be subject to discriminatory taxation in the other country.

Fifth, tax treaties authorize the Canada Revenue Agency and its foreign counterpart to exchange tax information for the purpose of preventing tax evasion and tax fraud.

Last, tax treaties give jurisdictions a dispute resolution mechanism.

All of these objectives are important, and this bill will enable us to achieve them.

By updating our tax relationship with Madagascar, we can strengthen trade and investment between our two countries. By doing so, we are showing the world that Canada is an outstanding place to invest and to do business in and, more important, we are creating stability for Canadians to invest and do business outside of our country. We do this because we know that Canada's economic success rests on the hard of Canadians but also on the strong relationships that inform direct investment.

I would like to draw the attention of the House to the importance of signing such tax treaties.

Canada has 93 tax treaties with 93 countries around the world. These treaties are part of our government's efforts to ensure Canada's economic well-being. Since budget 2016, our government increased the Canada Revenue Agency's resources and funding in order to strengthen its ability to crack down on tax evasion and tax avoidance. The CRA's compliance programs now help them to better target those posing the highest risk of tax avoidance.

These efforts are producing tangible results for Canadians. Through the new system in place, our government can monitor international electronic funds transfers of $10,000 or more that enter or leave the country. This represents over one million transactions per month. Monitoring these transfers helps us better assess the risk of individuals and companies committing unfair tax avoidance.

In closing, by increasing the number of tax treaties we have with our partners, the Government of Canada is helping to create favourable conditions for long-term economic growth that will help strengthen Canada's middle class and support those working hard to join it. The bill we are introducing today is an important step towards achieving that goal.

I encourage all my hon. colleagues to support this bill. That concludes my speech. I thank my colleagues for their attention and hope to have the unanimous support of the House to pass this legislation.

[Kevin Sorenson, Conservative, Battle River—Crowfoot, AB]

Mr. Speaker, it is always good to rise in the House, and as I have announced I will not be running in the next election, every time I rise in the House, I am still overwhelmed with not just the beauty of the chamber, but also the great responsibility I have had from the people of Battle River—Crowfoot in being entrusted with bringing their voices to Ottawa.

Today we rise to support Bill S-6, an act to implement a convention between Canada and the Republic of Madagascar that has the objective of eliminating double taxation and preventing tax evasion. Tax treaties of this nature meet this objective through the sharing of information between signatory countries.

We know that for governments to build strong economies at home, it is important that they look at a number of very important subjects. All three or four of the points that I want to make today deal with having a strong economy at home. They deal with making sure that jobs stay here at home, making sure that our young people are not travelling overseas necessarily to work but can find jobs here so that we can prosper here at home, and making sure that Canadians who invest abroad or find work abroad will have a better opportunity to prosper there.

There are some very important conditions that have to be laid out in order to find that prosperity and allow those jobs to be created. We know in the Conservative Party know that one of the vitally important aspects of securing a strong economy and creating jobs is trade. We are an exporting country. Canada, whether it is resources or agriculture, exports more than what we use at home. We are a vast country. Our geography and land mass make us a country of amazing opportunity. It is one of the largest countries in land mass in the world.

However, compared to many other countries, our population base is fairly small. We have only 35 or 36 million people. How do we guarantee that we will be able to prosper in spite of having a small population base? One way is through trade, through making sure that our resources and our agriculture can be sold and marketed around the world.

I live in a fairly rural riding in Alberta, a province whose economy has been hurt over the last four or five or six years in a remarkable way. In my riding, we have many different industries and many different sectors of the economy: gas and oil, resources, coal. We are rich in resources in Alberta, and my riding is also very strong in agriculture.

With all of these, we have a high level of exportation of our products. In order to have a free trade agreement in South America, we realized that people there had a desire to secure a safe food supply and were looking to Canada to provide grains, oilseeds, pulse crops, and other agricultural products, including beef and pork. Much of the food stock for the world is created in Canada, and much of it in Alberta.

We realized that we want to have free trade agreements with many countries, and if we do not have a free trade agreement with a country, we still want to have some kind of opportunity to trade with that country.

We do not have a free trade agreement with China, but we still carry on a great amount of trade with China. However, always, agreements enhance our trade. Likewise, agreements on taxes will enhance it as well.

Regarding our agricultural products, right now we are really feeling the pinch with canola. We are feeling the pinch, with one of our largest markets, China, basically stopping our canola from coming into that country. We believe that this is unfair and ungrounded. We have no doubt that this is not about food safety. It is not about the product. As I have said, we have the safest, best product in the world. However, we do not have a free trade agreement with China. Maybe when we see what is happening, we understand why we do not have a free trade agreement with China.

Right now, our canola farmers are really feeling the pinch. Indeed, at this time of year, in the spring, when our crops are being planted, I am getting calls to my office asking me if I am expecting the market to open up. They are asking whether they should be planting canola or cutting way back, although their rotation does not allow them to do that. We are hearing all the concerns coming from agriculture with regard to trade.

The Conservative government had a free trade agreement with Europe. We were pretty well ready to sign onto the TPP. It was not ratified, but everything was laid out. We wanted to get our product into these countries so that we could prosper at home.

However, it is not all about trade. If we want a strong economy, we also have to recognize that we have to have training. We have to have a skilled workforce. We have to be able to invest so that when times get tough, if we cannot compete with Mexico on wages to manufacture, we can compete with the skill sets we have here in Canada. Therefore, we invested greatly in training young people and enhancing the skill sets our workforce had already. This was a driving force in our Conservative government in the last 10 years we governed. We put money into innovation and training.

It was trade, training and red tape. How are we going to have job creation? How are we going to enhance it? How are we going to attract businesses to start up in Alberta, or wherever in Canada, if the red tape to get that business going is a mile long?

We brought forward a red tape reduction strategy to make it easier for businesses, investors and job creators to create those jobs right here at home. That job is unending. With more government and more bureaucracy, the tendency is to see red tape grow. One of the strong things we brought forward was making sure that we were able to cut red tape, and we still need to do it. Therefore, I am pleased that Premier Kenney is committed to the reduction of red tape. There is a level of optimism we have not seen in Alberta for many years. I would also say that our government has always and would continue to look at ways to enhance job creation through the cutting of the red tape burden.

The fourth and final aspect, besides trade, training and red tape, is taxes. If we are not a country that can attract manufacturing and investment because our tax regime is so out of whack, then we cannot expect to see our economy grow. We cannot expect that people will have confidence in investing their capital here in Canada. In Alberta, because of regulation, red tape and high taxes, including the carbon tax, we saw between $80 billion and $100 billion in foreign investment capital flee, and with that went jobs and hope for a lot of young Canadians and Albertans.

To have a strong economy, we have to make sure that we have a strong tax system that has integrity but is also not overly burdensome. When the Conservatives came to power, and when the world fell into a global recession, we moved our corporate rate from 22% to 15%, because we knew that business and manufacturing would flee to the United States or Mexico, predominantly, and other places if we did not compete with a tax structure or a tax rate that would attract investors to Canada.

A lot is about taxes. A lot of what we want to do in building a strong economy is in regard to the tax structure. Tax levels make a large impact on investment, and we have seen that.

Canada not only mines and extracts resources around the world, it invests around the world. We have people who prosper and earn an income from foreign investment. We want to be sure that if we are allowing that, we avoid double taxation. If taxation is important, who, as an investor, would want double taxation, where a country, Madagascar, in this case, would tax us, and then Canada would when we came back home? How much investment do members think would take place in those countries, and here, if we allowed double taxation?

Predominantly where we have massive investment, we have double taxation treaties. A tax treaty contains rules regarding the circumstances under which a signatory country may collect certain taxes on income so that when investors invest, they are aware. They look at the treaty and say that this is what we have to pay, this is what we do not have to pay and this is what we will pay back home. It is a single tax base. In the absence of a tax treaty, the income of a Canadian citizen abroad would be hit on both sides, and investors would flee.

For that reason, we come to this today. This debate, I would say, is the meat and potatoes of what is going on here in Parliament. This is not a day when we are talking about the issues that are really important to Canadians. I do not know if I have had a call to my office in Camrose about Madagascar. My constituents expect that we are taking care of business so that they can prosper, whether on the farm, in investing or in the oil patch.

Most of the tax treaties to which Canada is partnered follow the Model Tax Convention. This is a tax treaty or convention that is given as a model by the OECD, the Organisation for Economic Co-operation and Development. This was done in 1963, and subsequent to that, there have been a number of occasions when it has been revised. Currently, Canada is signatory to 93 agreements. This is not something new. We are not stepping out into uncharted territory. This is common.

As I said at the outset, I fully support the intent of Bill S-6, but I am particularly concerned about the tax evasion side. We have heard much from all parties today about tax evasion and the ability of the Canada Revenue Agency to consistently enforce compliance rules and collect taxes.

I do not like high taxes. I look for ways to cut taxes. I formerly served as the minister of state for finance. We looked at every opportunity we could to drive this economy by lowering taxes and keeping more money in the pockets of Canadians. However, tax evasion is different. I think every Canadian expects that there is a certain level of taxes that they are required and willing to pay, not just by law but in order to have the services we have here in Canada.

From report 7 of the 2018 fall reports of the Auditor General of Canada, on compliance activities of the Canada Revenue Agency, the public accounts committee, which I have had the privilege of chairing, learned the following: “Most taxpayers are individuals with Canadian employment income. We found that the Agency requested information from these taxpayers more quickly,” and this is the important part, “and gave less time to respond, than it did with other taxpayers, such as international and large businesses, and taxpayers with offshore transactions.”

The Auditor General went on:

For example, if the Agency asked an individual to provide a receipt to support a claimed expense and the taxpayer did not provide the receipt within 90 days, the Agency would automatically disallow the expense as an eligible income tax deduction. The Agency would assess the taxpayer’s income tax return on the basis of the information it had available and would notify the taxpayer of the taxes due.

In other words, average middle-income Canadians are not cut much slack when it comes to their domestic income here in Canada.

Comparatively, the Auditor General's report states:

For other taxpayers, such as those with offshore transactions, we found that the time frame to provide information was sometimes extended for months or even years. For example, banks and foreign countries could take months to provide information on the taxpayer’s offshore transactions to the Agency or the taxpayer.

It continues, and this is important:

Sometimes the Agency did not obtain information at all, and the file was closed without any taxes assessed.

We can see that these agreements are vital. These agreements enhance what the CRA is given. If people understand the treaty, they know what to claim, they know what to put forward and they know what to show CRA. They feel less vulnerable to the Canada Revenue Agency and can also invest with greater confidence.

The Auditor General's office said that “over the past five years...the Agency took, on average, more than a year and a half to complete audits of offshore transactions.”

These agreements speed that up. The fall 2018 report was not the first time the Auditor General noted how long it took the agency to enforce compliance. The Auditor General further stated:

As we noted in the 2013 Spring Report of the Auditor General of Canada, Chapter 3, Status Report on Collecting Tax Debts—Canada Revenue Agency, the longer it took the Agency to enforce compliance, the less likely it could collect the taxes due. This was especially true for taxpayers with offshore assets, who may have been inclined to liquidate assets or transfer funds to make it more difficult for the Agency to obtain information and collect taxes due. On the other hand, for individuals and domestic businesses, the Agency had a better likelihood of collection by garnishing wages and seizing assets.

To add insult to injury, the Auditor General found that the Canada Revenue Agency did not proactively consider waiving penalties and interest consistently for all taxpayers. Again, the Auditor General stated:

We found that the Agency offered to waive interest and penalties for taxpayers in some compliance activities but not others—even when the Agency had caused the delays.

The inconsistent application of relief for taxpayers contradicts the Taxpayer Bill of Rights, according to the Auditor General. The report states:

[the] Taxpayer Bill of Rights gives all taxpayers the right to have the law applied consistently. It also gives all taxpayers the right to receive entitlements, such as benefits, credits, and refunds, and to pay no more and no less than what is required by law.

Although it may not quite be unanimous, I am pleased that most in this House, as far as I can see, see the importance of these kinds of meat and potatoes regulations and bills. Coming into compliance and making sure that Canadian investors are not vulnerable or put on an uneven playing field is imperative if we are going to increase foreign investment coming to our country and our investment in those countries, all of which will help build the economy, help Canada prosper and help us create jobs.

[Kevin Lamoureux, Liberal, Parliamentary Secretary to the Leader of the Government in the House of Commons]

Madam Speaker, I have listened to the debate on Bill S-6 this morning and I must say there are plenty of things that one can draw upon in order to shed more light and to be a bit more forthright with respect to the bill.

The Government of Canada and the Liberal Party of Canada recognize the important role that trade plays in the development of our nation. Having observed the NDP for many years now, it is my experience that as a general rule that party does not support trade agreements.

There have been dozens of trade agreements. On one occasion, the vote was not a recorded vote, so NDP members claimed not to have voted against the bill. They might have voted in favour of one other bill. A couple of MPs have indicated they have voted in favour of trade, but as a general rule the NDP does not support trade agreements between Canada and other countries, and that is somewhat unfortunate.

Bill S-6 is about a tax treaty with Madagascar. Madagascar has wonderful opportunities for Canadians, and individuals from that country have opportunities here in Canada. We have many tax treaties with countries around the world, and tax treaties provide significant benefits to both countries.

That is why it is with pleasure that I rise today to address this legislation and to add my comments on a wide variety of issues, all stemming from our economy, social justice and the tax laws that we currently have. I have a fairly wide spectrum to work from based on the debate I have heard so far today. Let me attempt to do it in the best way I can.

The number that comes to my mind, which ultimately demonstrates what this government has been able to accomplish by working with Canadians, is one million, and that is a fairly recent number that has come out relating to employment.

It is worth mentioning that since we took office in October 2015, we have seen the generation of over one million new jobs. That is historic, in the sense of the last 40 or 50 years. It is an incredible number of jobs, and it is due in good part to the policies that this government has put in place, budgetary measures and legislative measures, all with the idea of supporting Canada's middle class and those aspiring to be a part of it.

Day after day, for weeks, months and years, our government has taken Canada's middle class seriously. We have developed progressive measures to assist middle-class Canadians, bringing forward policies that will support them, policies such as the Canada child benefit program and the guaranteed income supplement for our seniors, which have added great value to our economy.

We hear a lot about taxation. People expect to pay their fair share. From day one, our government has taken this very seriously.

Members will recall that during the last election, today's Prime Minister made a commitment to Canadians that there would be a tax cut for the middle class. If members look at Bill C-2, which was our first piece of legislation, they will see that we delivered on that tax cut, which put hundreds of millions of dollars into the pockets of Canadians. I would argue that the money going into the pockets of Canadians enabled them to increase their disposable income, allowing them to spend more into the economy, and it is one of the reasons for the one million-plus jobs that have been generated. Working with Canadians, investing in Canadians, allowing Canadians to have more disposable income has allowed Canada's economy to perform that much better.

Taxation policy matters. The NDP and the most recent speaker talked about tax fairness and said that the rich need to pay more. That was an important part of the very first budget we brought forward, in which Canada's wealthiest 1% had to pay more. The millions raised through that one initiative supported giving Canada's middle class a tax break. The issue of tax fairness, much like the tax break, has been of the utmost importance to this government. It was one of the very first actions taken when we assumed office in 2015, recognizing some of the comments made today, whether it was the NDP talking about tax fairness or the Conservatives talking about the tax on Canada's middle class.

When the member for Calgary Shepard asked who benefits from the tax break that we gave to the middle class and then said it is members of Parliament who benefit, I think of the tens of thousands of teachers, the tens of thousands of nurses, the tens of thousands of factory workers or the tens of thousands of people who work for our financial institutions. Those individuals also benefited from that tax break.

I indicated that when I had the opportunity, I would put some facts on the record, and there is no disputing what I have said, because it is all factually correct. The government has consistently gone out of its way to develop policy through legislation and budgetary measures that has had a positive impact on Canada's middle class.

The tax treaty that we are debating today is all about international relationships and ways for these treaties to further advance Canadian interests. This is not the only tax treaty legislation that we have put forward in the last three years. Bill S-4 also dealt with tax treaties. It is not the first time we have had to deal with tax treaties, because we understand and appreciate the true value of having these types of treaties with countries. It allows us to have a better sense of taxes flowing, both here in Canada and in the country in question. It provides additional security, if I can put it that way, for investments flowing to countries with which we have tax treaties.

We recognize, as we do on the broader picture, trade and international relations. No government in recent history has done more with respect to trade agreements than this government. The previous government likes to say that it had 30-plus trade agreements, but that is just not true. Through this administration, we have been able to sign more trade agreements than any other government in the last 40 to 50 years. Since trade agreements have been tied into tax agreements or tax treaties, I would challenge any member in the House to list a government that has been able to accomplish so much in such a short period of time on that file.