Finance Committee on June 19th, 2006

[Judy Wasylycia-Leis, NDP, Winnipeg North, MB]

Yes. It's a very good friendly amendment.

[The Chair, Conservative, Brian Pallister]

Okay. Please proceed to answer Mr. McKay's question; or, if you wish, you can defer, and I'll let Mr. Crête pose some kind of question.

[Judy Wasylycia-Leis, NDP, Winnipeg North, MB]

Well, let me make one clarification.

This motion doesn't refer to any particular province. This allows for the Criminal Code exemption to take place whenever a province requests such an exemption and when it has a regulatory framework in place to regulate payday loans. It is therefore for any province that meets those requirements and is ready to move on this issue.

[The Chair, Conservative, Brian Pallister]

Monsieur Crête.

[Paul Crête, Bloc, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Mr. Chairman, in Quebec, this comes under the Office de la protection du consommateur, and the maximum rate is, I believe, in the order of 35 per cent rather than 60 per cent. As a result, in reality, there are no payday loans, because no one in that industry wants to get into this type of business. At 35 per cent, it just doesn't pay. There has to be a payoff, you have to be able to charge interest rates of up to 50, 55 and 60 per cent. I certainly wouldn't want to prevent the rest of Canada from doing whatever it wants to do about this, but I'd like to make sure that the text as drafted clearly indicates... It says: [...] to amend the Criminal Code to provide for the exemption of payday loans from section 347 of the Criminal Code in circumstances where provincial regulation of the payday lending industry has been established, and a request for such an exemption made.

In Quebec, we could make a request for exemption based on the fact that the Office de la protection du consommateur has called for the maximum rate to be 35 per cent instead of 60 per cent. However, if I'm not mistaken, there is no provincial regulation on the payday lending industry. In Quebec, the motion as it stands could have the opposite effect of what was intended. Although the maximum interest rate is 35 per cent and there are no payday loans, we could be forced to apply the code because we have no regulation given that the bar has already been set through the interest rate. I would like this matter clarified.

The purpose of the motion is to allow a province that has regulated the payday lending industry to have an exemption. Quebec has not established such regulation because the maximum interest rate is set by the Office de la protection du consommateur. I would like this matter clarified so that we don't end up in a situation other than what was intended.

[The Chair, Conservative, Brian Pallister]

Ms. Wasylycia-Leis is going to respond.

[Judy Wasylycia-Leis, NDP, Winnipeg North, MB]

Do you know what? I'm not sure I can answer that question pertaining to the impact on Quebec. I would be happy, Mr. Chairperson, to hold off on any further discussion on this until I've pursued any impact that this motion may have on the province of Quebec. I'll try to bring it back for Wednesday, if that's suitable.

Clearly, there is a unique situation vis-à-vis the Consumer Protection Act in Quebec, which does have a lower rate of interest than the federal one and which has led to a certain scheme at that level.

If you're willing, we could put this on hold until I get more information.

[The Chair, Conservative, Brian Pallister]

The mover has asked permission from committee members to table it, and I see no opposition to that.

[Diane Ablonczy, Conservative, Calgary Nose Hill, AB]

Just on another point--

[The Chair, Conservative, Brian Pallister]

I'm hesitant to have further discussion on something once the mover has asked for it to be tabled.

If there's no disagreement to the tabling of it, we'll move to the next item on the agenda.

[Some hon. members]

Agreed.

[The Chair, Conservative, Brian Pallister]

Very well. We'll recommence discussion on Wednesday; we have time available at that point.

The second issue.... Yes, Mr. Pacetti.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

We're tabling it for how long? That's my question.

[The Chair, Conservative, Brian Pallister]

That's up to the mover to reintroduce it.

The second issue is Mr. Loubier's motion. He spoke to it earlier, and I would invite discussion on that.

Mr. McKay will commence, and then Mr. Pacetti.

[John McKay, Liberal, Scarborough—Guildwood, ON]

This motion looks a lot like previous motions and incarnations of this motion.

I see it as political theatre, grandstanding, and pretty well anything but a useful exercise of the committee's time.

I notice, first of all, in the motion that he wants it to be televised. I can't imagine why. I guess I'm just an innocent in this game. He then wants the former Minister of Finance, presumably Paul Martin, to be his first witness. Again, I can't imagine why. Then he wants the members of the board of directors of Canada Steamship Lines to be here, and again, I can't imagine why. The members of the board of directors of CSL International.... Do you think there's something going on here? Do you think there's a pattern? And how about André Lareau, a tax lawyer, who's already written in this area, a forensic accountant, and a tax expert, all of whom have previous publications in the area? Apparently not interested in OECD, or their efforts with respect to the whole issue of tax treaties.... He's certainly not inviting any of the CARICOM nations. He's not interested in the Barbados high commissioner, on either side--

[The Chair, Conservative, Brian Pallister]

I hesitate to interrupt. However, his motion does read “and any other individuals or groups who request to appear”. If you would like to go to the meat of your objections, please do so now.

[John McKay, Liberal, Scarborough—Guildwood, ON]

You would have thought he would have been interested in a far broader discussion of how this may impact upon Canadian businesses doing business abroad. If in fact the ultimate result is to simply chase Canadian companies out of Barbados, well, I suppose that's an accomplishment of some sort, but I don't know it's in the best interests of other Canadians or Canadian companies.

In my view, this is a motion that is simply there for the pure politics of it. It is without base and without merit.

[The Chair, Conservative, Brian Pallister]

Mr. Pacetti.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Thank you, Mr. Chair.

To add a little bit of history, we looked at this motion. Originally, the motion, during the last parliamentary session, read simply to have the Department of Finance officials in so that we can review the treaty. Everybody was satisfied. Nobody determined that we should look at prolonging the treaty that we have with Barbados, then all of a sudden the motion came through where he was going on a fishing expedition. So I'm not sure where this is going.

We have to keep in mind that this is not an exhaustive list. If we're to go back and review the Barbados tax treaty...it's up for renewal anyway, so even if we did do it, I don't think it's anything that's pressing. But I don't think these witnesses would be enough to get both sides of the story, so we'd be looking at this whole story for not much reason.

[Thierry St-Cyr, Bloc, Jeanne-Le Ber, QC]

Mr. Chairman, I think we have to get to the bottom of this. The Office of the Auditor General has already issued five warnings about this, but we have always refused to really get to the bottom of things and clarify this issue. It would be irresponsible for committee members not to delve further into this matter.

In terms of the relevance of this, I would simply say that it's a matter of public confidence. I don't know whether my colleagues from the Liberal Party campaigned door to door like I did, but I was able to observe that people have a persistent perception — perhaps wrongly, but we will find that out if we do the study — that some people who should pay tax aren't paying and that some legislation gives certain individuals and elected officials an unfair advantage. This needs to be brought into the light of day. If we refuse to do so, we run the risk of seeing public confidence continue to dwindle. However, if we feel that the list is incomplete, at this point, I quite agree.

That is why the motion provides for the addition of people whom we consider it appropriate to consult. This motion was presented in the last Parliament. The Liberals were opposed to it, and I'm not surprised today that they've changed their minds. I hope the Conservatives are still in favour of getting to the bottom of things as far as this matter is concerned and that they are going to support us again.

[The Chair, Conservative, Brian Pallister]

Madam Ablonczy, then Mr. Turner.

[Diane Ablonczy, Conservative, Calgary Nose Hill, AB]

Mr. Chairman, I too wish the motion had been worded in a less partisan manner. I think if the committee is to study an issue, it should be truly in the interests of Canada and Canadians. That having been said, I think we're well on record as having some concerns about the treaty and I certainly wouldn't object to its examination. However, I would point out to the mover of the motion that the way it is worded does to some degree taint the credibility of the motion, I think, and I find that unfortunate.

[The Chair, Conservative, Brian Pallister]

Mr. Turner.

[Garth Turner, Conservative, Halton, ON]

I concur. I think it's a highly partisan motion. I think it would raise some serious questions about the impartiality of the committee to really launch into this kind of an expedition.

I do, however, believe there's an issue of interest here, and that's the growing issue of offshore tax shelters by Canadian citizens. That is of concern, and CRA definitely has been taking steps toward that. We have an increasing number of financial advisers across Canada right now who counsel people on how to evade—not avoid, evade—Canadian taxes by moving money offshore. We could certainly include this in the scope of that, but I think that in order for the committee to do useful work and use its time productively, we would have to look at something more generic.

I would support that, but not this motion.

[The Chair, Conservative, Brian Pallister]

Are there any other speakers to the motion?

Madam Wasylycia-Leis, and then Mr. Crête.