House of Commons Hansard #86 of the 38th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was estimates.

Topics

Questions on the Order Paper
Routine Proceedings

5:20 p.m.

Beauséjour
New Brunswick

Liberal

Dominic LeBlanc Parliamentary Secretary to the Leader of the Government in the House of Commons

Mr. Speaker, the following question will be answered today: No. 117.

Question No. 117
Routine Proceedings

5:20 p.m.

NDP

Judy Wasylycia-Leis Winnipeg North, MB

Based on investment data contained in Statistics Canada's report, “Canadian direct investment in 'Offshore Financial Centers'” of March 14, 2005, what is the government's calculation of the potential loss of tax revenues associated with these investments?

Question No. 117
Routine Proceedings

5:20 p.m.

Wascana
Saskatchewan

Liberal

Ralph Goodale Minister of Finance

Mr. Speaker, there is no link between the Statistics Canada report that is referred to and any quantification of tax revenues. The report is about investment flows, not taxes, and it provides no information whatsoever about the tax positions of Canadian companies.

More generally, it is difficult to draw empirical connections between statistics on legal outbound foreign investment and supposed tax revenue losses.

There are two main reasons for this. First, such an approach would require agreement as to the base case or starting point: what model for the taxation of international income is to be considered normative? If the answer were to use Canada's existing rules, then the only cause of revenue loss would be outright illegal tax evasion, the cost of which is by definition impossible to quantify. If on the other hand the norm were a so-called “exemption system” for the taxation of foreign source income, such as the ones operated by many other developed countries, then there would by defenition be no question of a tax revenue loss.

Those arguing that outbound investment automatically reduces tax revenue implicitly assume a third model as the norm: a system in which Canada taxes all foreign source income, with at most a credit for foreign taxes already paid. This would be a possible policy choice; some other countries do use such “credit systems”. To assume it as the benchmark is, however, to advocate a basic change in Canada's international tax rules, thus raising the second major difficulty whith this sort of analysis: the need to account for the behavioural changes that would almost certainly result from moving to a different system.

Both Canadian and foreign owned multinationals would react to a substantially higher rate of Canadian tax on foreign source income. Much of the income that now returns to Canadian parent companies, and is spent or invested in Canada, would no longer be repatriated. Similarly, it is unrealistic to assume that foreign controlled enterprises would leave offshore investments in the hands of their Canadian subsidiaries, paying Canadian tax on amounts they could have earned tax free through any number of other countries.

In short, simple statistical data do not translate into any meaningful assessment of “lost tax revenue”. First, a revenue loss can only be identified against a specific benchmark or standard. If Canada's existing tax rules, like those of many other countries, are considered the benchmark norm, as long as the taxpayers who invest abroad comply with the rules, there is no revenue loss. Second, measuring against a different standard, such as a “credit system”, is much more complex than is sometimes assumed, since account must be taken of the behavioural changes that would inevitably follow.

Questions Passed as Orders for Return
Routine Proceedings

5:25 p.m.

Beauséjour
New Brunswick

Liberal

Dominic LeBlanc Parliamentary Secretary to the Leader of the Government in the House of Commons

Mr. Speaker, if Questions Nos. 95 and 103 could be made orders for return, these returns would also be tabled immediately.

Questions Passed as Orders for Return
Routine Proceedings

5:25 p.m.

The Deputy Speaker

Is it agreed?

Questions Passed as Orders for Return
Routine Proceedings

5:25 p.m.

Some hon. members

Agreed.

Question No. 95
Routine Proceedings

5:25 p.m.

Conservative

John Williams Edmonton—St. Albert, AB

With regard to the shredding or destruction of documents and papers by government departments, agencies and Crown corporations in fiscal years 2002-2003 and 2003-2004: ( a ) what was the total amount paid to shred or destroy documents for each department, agency or Crown corporation; and ( b ) for each department, agency and Crown corporation, how many times was shredding and destruction of documents performed (i.e. how many “sessions” of shredding were purchased from outside services), what were the dates of the shredding or destruction of documents, what was the name and location of the company contracted to do the shredding, and what was the cost of the shredding as charged to the department, agency or Crown Corporation on a per-session basis?

(Return tabled)

Question No. 103
Routine Proceedings

April 20th, 2005 / 5:25 p.m.

NDP

Judy Wasylycia-Leis Winnipeg North, MB

With respect to the international bilateral agreements to which Canada is a signatory that result in the reduction of the 10-year residence eligibility requirement to qualify for old age security benefits: ( a ) with which countries does Canada currently have such agreements; ( b ) with which other countries is Canada currently negotiating such agreements; and ( c ) what are the criteria used by Canada in initiating negotiations toward such agreements?

(Return tabled)

Question No. 103
Routine Proceedings

5:25 p.m.

Liberal

Dominic LeBlanc Beauséjour, NB

Mr. Speaker, I ask that the remaining questions be allowed to stand.

Question No. 103
Routine Proceedings

5:25 p.m.

The Deputy Speaker

Is it agreed?

Question No. 103
Routine Proceedings

5:25 p.m.

Some hon. members

Agreed.

The House resumed consideration of the motion.

Committees of the House
Routine Proceedings

5:25 p.m.

Conservative

Leon Benoit Vegreville—Wainwright, AB

Mr. Speaker, the member for Mississauga South has been a good member of our committee but today I think he became very partisan in his presentation in the House.

The member talked about the fact that only 9 out of 20 committees reported the main estimates back to the House. That, no doubt, is true but why is that? The reason is that the information given in the estimates simply does not tell the story. It hides information rather that divulging information. For that reason and many others, many members of the committee simply do not see it as a useful thing to do, even though most committees do look at the estimates and do review them to some extent.

If the performance reports were being done appropriately by government they would give good information that would allow us to judge whether the government had carried through on what it promised to do in the budget, through the estimates process and so on, but they are meaningless. Interesting enough, in the performance reports no department ever does anything wrong, and we all know that simply is not the case.

I think part of the reason that many committees do not spend the time that they should on the estimates is that the information given simply does not make it a worthwhile exercise. That is wrong and that will change under our government.

The member talked about the firearms registry and claimed that no one questioned the spending on the registry. The fact is that my colleague, the member for Yorkton—Melville, on every occasion that a minister appeared on the estimates, asked the question about spending on the gun registry and the government hid the information. It did not give the information that we needed to know on that.

What is wrong with this process is that he government hides information instead of giving information.

Committees of the House
Routine Proceedings

5:25 p.m.

Liberal

Paul Szabo Mississauga South, ON

Mr. Speaker, the gun registry issue is important. The justice committee does have the tools to do that.

I know the hon. member he refers to has asked many questions. However it is up to the committee to dig into that and get the information. That is what did not happen early enough in the game.

The member makes a general statement that the estimates just do not tell members what is going on. Perhaps we should sit down and talk about how we should approach this. There are a couple of reports that recommend some changes.

The estimates is a book of the numbers but behind that book of numbers are plans and priority reports and internal reports. We can hear witnesses from any department that we want and as often as we want if we need explanations. We also have opportunities to either visit departments or the like. There are processes and there is a way to get all the information.

I do agree that in many cases the breadth of operations is such, such as Public Works and Government Services, that it is not possible to review it in its totality. One of the recommendations in the special report of the government operations and estimates subcommittee from the 36th Parliament was that we start emulating the approach of the Auditor General to reviewing the estimates, which is that we would do different aspects of each department each and every year. We would then get a blend and a mix and deal on a priority and risk basis. We would have a reasonable basis on which to make an opinion on the estimates, just as the Auditor General has a reasonable basis to opine on the financial statements.

Committees of the House
Routine Proceedings

5:30 p.m.

The Deputy Speaker

It is my duty to interrupt the proceedings on the motion. There are 54 minutes remaining of the three hours provided under Standing Order 66. Accordingly, debate on the motion is deferred until a future sitting of the House.