Debates of Nov. 26th, 2007

Canada-United States Tax Convention Act

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

Mr. Speaker, I thank my colleague for his question, which is particularly relevant since he, like me, is the member for a border riding.

As I said at the beginning of my speech, border ridings have been having rather a hard time of it for about a decade now. The tax convention with the United States was amended, which led to negative consequences for a lot of workers in Quebec and the rest of Canada, specifically, that their incomes were subject to additional taxes.

Workers in the forestry sector—in my riding, these are people who worked in Maine—were often penalized by the situation, in terms of their pension incomes. We had to work very hard to fix that situation. At that time, we calculated how many people there were working in the United States. Thousands of people earn income in the United States every year. In some cases, it is a substantial income; in other cases, it is extra income that is earned at a particular time of year. That is why this tax convention has to be studied carefully.

As well, there is an impact on people as individuals, on the businesses where those people work and on the economic benefits that flow from improvements to a tax convention like this. There are major complexities in tax practice that can hinder regional economic development.

At the same time, we have to ensure that in fixing the problems we do not standardize things in a way that does not reflect the spirit of the legislation in Quebec and Canada, which is not the same as in the United States.

We will therefore look closely at how this amendment of the tax convention will impact people here. At first glance, and after preliminary study, it seems to us that this bill to amend the tax convention is beneficial. The vast majority of what we see in the bill will benefit the border regions, their people and businesses. There are a few matters that must be considered more closely to ensure that we will ultimately have a better tax convention.

In practice, we realize that once these aspects are corrected, once it is signed and becomes official, it is then very difficult to make corrections. The advantage of the decision-making board will certainly mean that any negative impact can be mitigated. In my opinion, everyone wins when the basic principle of “one tax for one income” can be applied. At the same time, we cannot proceed without ensuring that we have given sufficient consideration to the question of how to avoid tax loopholes, because we are familiar with federal practice.

In the past, the agreement with Barbados was made to the real detriment of Canadian taxpayers and to the benefit of a number of people whom that tax convention, that loophole, has served well. We absolutely must ensure that this model is not repeated in a tax convention with the Americans. Let us hope that the collaboration on the tax convention between Canada and the United States will send a message to the Americans: we have to pursue the same kind of collaboration even further to ensure fluidity at the border. Because in this respect there seems to have been some ground lost in recent years.

[Joe Comartin, NDP, Windsor—Tecumseh, ON]

Mr. Speaker, I am pleased to have the opportunity to speak to the bill. I have a couple of preliminary points on Bill S-2.

First, as I think most Canadians are aware, the New Democratic Party is opposed to the continued existence of the Senate. We are always concerned when a bill originates from that house when in fact it should originate in this House. The other place is simply not a democratically elected institution whatsoever. When we are dealing with a bill, and this bill is an important one, any bill of any import at all should originate in the House. We draw that to the attention of the government and insist that it consider any important bill always originating in this House.

The second point with regard to the bill is it has a scope that is generally acceptable to our party. We will be supporting it going through second reading and on to committee.

I am advised by our finance critic that some technical points give us some cause for concern but we expect those issues will be addressed, either amended if necessary or more likely explained to our satisfaction in committee. Then the bill can go ahead and come back to the House for third and final reading.

With regard to the bill itself, as we have already heard from some of the other members, it addresses a number of outstanding irritants between ourselves and the United States around tax matters.

I come from a community that has a very large population. For employment purposes, people move back and forth across from the Windsor-Essex County area into Michigan and even other parts of the United States on a daily basis. We also have a reasonable number of Americans who do the same in reverse and work on the Canadian side. Inevitably that produces some inequities in the taxation of the incomes derived by citizens living in one country but working and deriving all or most of their income from another country. The bill addresses a number of those issues.

Again, as I have indicated, with some slight concern on our part, we think it is a step forward. In particular, we are constantly being confronted, and I hear this from some of my constituents, with them being double taxed, being assessed a tax both in Canada and in the United States.

These individuals are Canadian citizens living in Canada, having a full time residence in Canada, but deriving their income from the U.S. side. They face the situation where there is double taxation on that revenue. It may be even a bit more complex, and I know the bill attempts to address this issue.

We have situations with a registered retirement savings plan on our side and the 401(k) on the U.S. side, which is the corresponding plan in the U.S., and not being able to get full credit for those types of deductions. These are pension savings for retirement purposes. The bill goes some distance to address that. Whether it goes far enough is a bit of a concern.

It is also good that the bill has an arbitration provision between the two countries so the two countries can rely on that rather than an individual having to challenge it or perhaps state to state having to challenge each other. If there are unforeseen problems with the arrangement we establish in the bill, it will give us a relatively efficient and hopefully quick mechanism to resolve those. Therefore, we would want to support that.

The largest concern we have with the legislation is what has happened historically with the protocols that have developed under these treaties with the United States. I believe this is either the fifth or sixth protocol starting back in the late eighties.

The one issue that has given us the greatest concern, and it has been a major issue in my riding, in Windsor-Essex county and, to a lesser degree, in a number of other communities across the country, involves the large number of people who have retired to Canada and are receiving social security benefits. Bill S-2 does not address this issue.

Protocol number four set out how these pension benefits would be treated for Canadians in our country and Americans in their country. They were to be taxed at a certain rate in Canada and the United States was to do the same with regard to the taxation of Canada pension benefits received by Americans who had obtained those benefits while working in Canada but who had retired to the United States. It was a sound approach to solving an irritant between the two countries. It made it clear how people who were receiving those respective pension benefits in those respective countries would be treated.

Although the United States has honoured its part of the treaty, both in spirit and in the letter of the law, Canada has not since 1997. This has been a gross injustice to a number of Canadians, a good number of whom live in my riding and in Windsor West and in the riding of Essex. A highly disproportionate number of people living in those three ridings suffer this injustice.

What first happened under the Liberals, but which has not been corrected under the current Conservative government, is that the level of tax has been substantially higher than what it was when these funds were being taxed on the U.S. side and substantially higher than they were supposed to be. The wording of the protocol was that the tax rates would continue as they had before the treaty came into effect but that the funds would be collected by the other country.

Canadian citizens residing in Windsor, who retired in the U.S. but were receiving social security benefits, were supposed to be taxed at the same rate had they retired in the United States and receiving those benefits. In fact, they are being taxed a full 35% higher than if they were residing in the U.S. and being taxed there. Despite comments made by an advocacy organization that has been before committees of both the House and the other chamber on a number of occasions, and in spite of the prior Liberal governments over several administrations, going back to 1996-97 when this became apparent, this continues to be the reality in spite of some very minor changes.

What I now find offensive is that we are now going into another protocol. What is to say that we will not run into the same situation, if the bill goes through, is ratified and the United States signs it, that we will not ignore or breach some of its provisions and our citizens will suffer? It always raises the question of whether the U.S. at some point will do the same thing. The U.S. may decide that since we did not honour one protocol it will not honour one of the new ones. This history is of great concern. I find it particularly offensive right now because there have been a number of private member's bills introduced on this point to correct this injustice.

I want to make this a little personal in terms of the injustice that has occurred here. I have met with a number of people in my riding and in the Windsor-Essex county area generally who have suffered significantly. I think of a couple who were members of our church. They both had worked on the U.S. side and came back to Canada to retire. They bought a house and had only finished the purchase about two months before they were notified that all of a sudden they would be taxed at a 35% increased rate on their pensions. It was a significant financial burden for them, compounded, quite horribly, by the fact that the husband came down with a terminal illness and passed away within about a year. His wife could no longer carry on the mortgage and had to sell the house.

Another instance is about an individual I heard about when I was canvassing in the 2000 election. The brother of this individual told me that his brother had been hit so hard with the increased tax that he had to give up his apartment and move in with him and his wife and never came out of his room. This man had become a total recluse. He usually only came out for meals and the rest of the time he basically stayed in his room. It totally destroyed his life.

This is not something that senior citizens who have contributed to both countries by their endeavours should ever have to face. I could give substantially more stories like that.

It is a situation where quite often people are living on relatively low fixed incomes and then they are hit with this severe tax penalty that they had no reason whatsoever to plan for. As those negotiations went on, as they are with this bill, it was clear that this was the way it would be handled, that it would not change the tax rate in Canada. Then they were hit with this increase after the fact. It significantly destroyed a number of lives and curtailed the ability of many people to enjoy their retirement years in many respects.

What happened later is that on two different occasions, one back in 1998 and again in 2001, the member from Calgary, the current Secretary of State (Multiculturalism and Canadian Identity), presented private members' bills to correct this. The wording in those bills was quite straightforward. It is one or two paragraphs in each case. All they simply said was “change this part of the Income Tax Act to say that the income received in the form of social security pensions will be taxed in this manner”.

We had those private members' bills but they never went to a vote. Two more were presented by the member for Essex, who is a member of the government, one bill in 2004 and another one in this Parliament in May 2006. The final one is still before a committee but I think it may be close to being completed.

However, the reality is that the bill will probably not survive the final vote because it needs a royal proclamation and it will not get it because the government, in spite of those two members from the government who have advocated on it, have not been able to deliver. That is the situation as of today.

We have gone a full 10 years since this injustice has been perpetrated on our retirees. The Liberal government would not do anything about it and now, after two years with the Conservative government, it has not done anything about it. It is not in this bill nor is it in any government legislation. It was not in either of the two budgets that the government brought forward. I have not heard anything that says it will be in the next budget, assuming the government survives that long. When we see something like this it should be corrected. It begs the question, when we come back to Bill S-2, of whether we will see the same type of thing happen because this protocol will not be fully honoured by our government.

It is a shameful set of circumstances. It is a gross injustice that has been perpetrated now for over 10 years. There have been numerous opportunities to correct this.

I will perhaps finish with the fact that we are not talking billions of dollars here. We are not talking about the $10 billion or $12 billion that the government put back into various sources. It is a very small amount of money because so many of these individuals have passed away in the last 10 years, oftentimes simply because of the financial crisis they were facing. We are talking about $20 million to $25 million a year range, a very small tax credit, if one wants to think of it in those terms, to people who are greatly deserving of it because of what they were led to expect would happen and then had the tables turned on them, with no ability to alter how they were to be treated.

The government must fix this problem. It knows it is very simple to do. It would be a one paragraph amendment to the Income Tax Act. It must ensure that it does not repeat the same kind of injustice, assuming that Bill S-2 becomes law at some point.

[Claude Bachand, Bloc, Saint-Jean, QC]

Mr. Speaker, I am pleased to rise today to speak to Bill S-2, which has to do with the tax convention between Canada and the United States. We could see a rather important conclusion reached here today, but this is hardly anything new. This is not the first time that the economy, culture or any other aspect of society has had to be managed between two countries. This is not a recent phenomenon. Significant demographic exchanges have been taking place between Canada and the United States for years.

Naturally, at the time, no one seemed to be too concerned about this overall dynamic. For example, when the United States of America achieved independence, many loyalists left that country and came to settle in Canada, including many in the Kingston area and in the Saint-Jean-sur-le-Richelieu area, where I am from. Many people from Lacolle are close to the American border and are descendants of loyalists. These people wanted to maintain their allegiance to the British crown and therefore came to Canada.

The reverse is also true. At one time, jobs in Canada were very rare and there was a great deal of immigration to the United States. My riding is right next to Burlington, in the state of Vermont. Many Quebeckers crossed the border in search of work on the American side. Furthermore, at present, nearly a third of the population of New England is of francophone descent. It was immigration following difficult working conditions here at home that led these people to cross the border to work and to start their family. Francophone generations have followed one after the other in an interesting manner. Family names often associated with Quebec have been changed slightly on the American side. However, everyone is perfectly aware of this and anyone you talk to who has these names will say that they are of francophone origin and that this carries some importance for them.

One thing leading to another, the economy and culture have developed on both sides of the border. I think that is forcing both governments to come to an agreement on economic practices. We cannot talk about integration, since the tax convention will be signed by two sovereign states, but this is forcing them to adjust to new realities, which are important. Just 60 kilometres or so from here, in Plattsburgh, in the State of New York, the Buy America Act, legislation enacted in the U.S. to encourage foreign investments to maintain a workforce in the U.S., ensures that 700 people work at the Bombardier plant located there.

This goes to show that the economy is stretching and shattering borders, and the situation is becoming increasingly complex. There was a time when the people working across the border fell into a kind of grey zone. They did not know to which side to pay their taxes or how they could claim deductions for a retirement plan. New situations and the new world are forcing countries like Canada and the United States to sign tax treaties to ensure fairness for all workers and industries as well.

I look at the issue of the new generation of workers. For instance, my daughter Geneviève started by working for Deloitte & Touche in Montreal, then was transferred to Toronto, and finally ended up in New York City. Many of our young people do not necessarily feel any particular ties to one country or another anymore. Theirs is almost an international mindset, and they go wherever their work takes them. This forces countries to think about the type of tax measures or tax treaties that should be put in place.

So this is nothing new. It has developed gradually over time. Today, the reality is that we have to adapt and that is the purpose of this piece of legislation.

As I was saying earlier, the pension plans for Canadians working in the United States were problematic, among other things. Those workers could be told they could not contribute to a Canadian pension plan. This had significant consequences. We have to understand that those who want to secure a decent future today have to invest in RRSPs, for example. If they do not, they will fall back on the public plan, which, in a few years, will no longer be able to pay the same level of benefit it does today.

Imagine someone who left Canada to work just across the border. That person could not secure a decent pension plan for himself. The purpose of the legislation before us is to correct that situation. The reverse situation of an American working in Canada was the same. The Americans probably told that person they could not invest in a pension plan because they were not working in the U.S. The bill before us resolves the issue of pension plan contributions for those workers. This allows a migration of workers from one side to the other and that is important.

I want to come back to the Buy American Act in effect in the United States. Earlier I gave the example of the Bombardier plant in Plattsburgh, New York. It employs Quebeckers since its headquarters are not in the United States, but in Quebec. Quebeckers will work there for significant lengths of time. This will allow them to save money in their pension plan as though they were working in Canada. That is important.

There is a second, equally important aspect of this bill that we support and that is the use of an arbitration board. This type of tax convention can leave room for anomalies or be open to interpretation. The bill provides workers with the opportunity to go before an administrative body to argue that they have been treated unfairly under part of this tax convention. This is a good addition because it is important for a worker to have legal recourse when he or she suffers an injustice. Furthermore, the composition of the board seems fair. Naturally, there is a representative from Canada, a representative from the United States and a third person selected by both countries. Understandably there might be alternation. For example, if the chair of the board has been filled by an American for some time, then it will likely be filled by a Canadian the next time around and so forth.

We believe that it is very important to have a board for a true hearing of the problems. We find that smart. We should not fall into the trap of international treaties where there is no recourse in the event of differences. Unfortunately, in our society, this still happens. Individuals suffer an injustice and face a void. Often there is not even an appeal mechanism. Having a board to hear difficult cases and to resolve issues is an important addition.

We are pleased to note efforts to plug certain tax loopholes. Tax law and various laws pertaining to tax treaties could allow companies to have it both ways. We must avoid that. We must avoid tax havens. From our perspective, it is an absolute disgrace. Take Barbados, for example. Canada had tax treaties with about a dozen countries that were tax havens. This allowed large companies to take part of their profits and invest them in these tax havens, where they could not be traced. What is truly ironic is that these big companies paid no taxes as such.

Canada loses hundreds of millions of dollars every year because of this type of tax haven. Thus, it is important that we not repeat the mistake even though tax havens continue to exist. I find fault with the former prime minister of Canada who one day announced that he was setting everything right and shutting down about 11 tax havens. Good for him. Except that in the meantime he did not tell us that his own company had transferred all its assets to Barbados, which was the only tax haven he was not shutting down.

Problems still exist. This part of the bill before us ensures that companies cannot play with two investment systems, two different tax systems and ensures that these companies will pay their due where their head office is located.

There are some amazing statistics on tax havens and offshore financial centres. Between 1990 and 2003, Canadian investment in tax havens and offshore financial centres rose from $11 billion to $88 billion. I would remind hon. members that companies avoid paying tax on this money, which means that Canadians lose. These companies are not doing their part and are poor corporate citizens, because they are not contributing to the public sector of Canada, Quebec or the provinces. These loopholes must be plugged.

The financial sector is another absurd example where investments in tax havens rose from $8 billion in 1990 to $72 billion in 2003. The financial sector is truly a poor corporate citizen, because it is not doing its part to support its country, its province or its municipality. This money is lost to the public coffers, which is totally unacceptable.

Consequently, with regard to the tax treaty covered by the bill that is before us, we are going to make sure companies cannot have it both ways. That will improve this bill.

The bill also clarifies the investment rules. This is more or less what I was just saying. Often, investors can deduct a portion of their fees. From now on, these investment rules will be harmonized, for greater tax fairness. There will be no loopholes, and both countries will come out ahead.

In conclusion, we are fairly satisfied with the bill. It could create a precedent. It would be good if this tax treaty served as a cornerstone for other types of tax treaties elsewhere, so that we get back to basics and big corporations pay their fair share and stop avoiding tax on their profits or setting up shop in tax havens to protect themselves. They need to do their fair share.

Finally, this is a good thing for workers. Regardless of which side of the border they work on, this shows that there is a great union between the United States and Canada and that these workers will be subject to the same rules and will be treated more equitably.

[Christian Ouellet, Bloc, Brome—Missisquoi, QC]

Mr. Speaker, I thank the hon. member for Saint-Jean for explaining really clearly the benefits of this bill.

However, I am wondering if he could clarify a point. Double taxation with Canada and the United States is something possible. It is also possible that Canadians who have loans and who want to invest in the United States could be faced with a problem.

What actual measures will this bill provide to avoid double taxation, as it currently exists between Canada and the United States?

[Claude Bachand, Bloc, Saint-Jean, QC]

Mr. Speaker, there is indeed a problem that we will have to look at.

If a Canadian taxpayer borrows money in the United States to do business, Canada can withhold up to 10% of the interest amount paid to an American bank. As indicated, the American bank will impose an additional charge on loans provided to Canadians, in order to make up for this deduction. So, there are provisions in the tax treaty that will ensure that investors are not unduly penalized.

As regards workers, and also companies for that matter, they cannot take advantage of a tax system, or a permit, that is more beneficial on either side of the border. There is a degree of harmonization. I believe that it results in more fairness under the tax treaty as such. It results in greater justification for the treaty, and it also ensures greater harmonization.

Therefore, I think it is important to reflect on the hon. member's comments.

[Pierre Paquette, Bloc, Joliette, QC]

Mr. Speaker, I am pleased to take part in the debate concerning Bill S-2, to implement the tax convention between Canada and the United States.

As my colleague from Saint-Jean observed, the Bloc Québécois clearly supports Bill S-2 in principle, since it will allow cross-border workers to enjoy the same tax advantages as resident workers, it will institute a bipartite board for resolving tax disputes, it provides for rules governing certain types of companies that will make it more difficult to use various tax loopholes, and it will eliminate certain provisions regarding double taxation of capital gains.

As I noted, we support this bill. However, examination of the bill in committee will allow us to clarify certain of its provisions, in particular, the proposals for eliminating withholding tax on foreign interest payments and the tax treatment of cross-border corporations.

As we know, the Bloc Québécois has always supported tax conventions between countries that have taxation levels within the normal range. There are tax conventions between Canada and certain countries that do not tax according to the standards in countries where the government plays a proper role. Those are the tax havens. It is mainly this issue that comes to my mind when I look at this bill.

So we have before us a bill concerning tax conventions between Canada and the United States. As I said, this bill contains extremely positive elements. But at the same time, how is it that the government is not asking itself about some other tax conventions, the ones it in fact denounced when it was in opposition, with countries like Barbados, Bermuda and the Bahamas, where tax rates are ridiculously low? We must not look the other way; there are companies, including Canadian companies, that establish themselves in those three jurisdictions specifically to evade their responsibilities as corporate citizens of Canada and Quebec.

I would point out that tax havens attract everyone who refuses to carry their share of the tax burden. As I said earlier, that can mean both businesses and individuals. I have always said that when it comes to tax evasion or tax avoidance, we are talking about grey money, dirty money. What is extremely disturbing is that this grey money, when we are talking about tax avoidance, and dirty money, when we are talking about tax evasion, is used in large part for money laundering. That fact is recognized internationally.

I would point out that it has been estimated that this involved $6 trillion: $5 trillion in tax avoidance, and $1 trillion that is simply fraud. Still, it is extraordinary that the Conservative government, which has been presenting us with a constant stream of bills to increase sentences for young offenders, for example, or to introduce minimum sentences in a number of areas, has so far not expressed this kind of concern by revising the tax conventions with those countries. We must recall that the money we are talking about comes from crime, drugs, prostitution, arms trafficking, corruption and terrorism.

If this government were serious about wanting to fight crime, and particularly all the crimes that involve money laundering by terrorist networks, it should have announced—yes, this bill will be sent rapidly to the Standing Committee on Finance—that it was initiating a study to review a number of tax conventions with countries that, as I said, have ridiculously low taxation rates.

There are governments, including the Canadian government, that tolerate and even encourage these tax havens. In 1999, Canadians invested $17 billion in Barbados, which is recognized internationally as Canada’s tax haven. In 2001, that figure rose to $23.3 billion.

That was an increase of more than $5 billion in two years. Barbados is the third most popular destination for Canadian direct investment. This is rather troubling, however. Barbados ranks third, after the United States and Great Britain, as a destination for direct foreign investment by Canadian individuals and companies.

I seriously wonder what sort of real economic activity has, to date, required roughly $25 billion in Canadian direct investment—or even more, since the figure has no doubt risen. We are talking about an island that is known as a nice place to live, but that still has a rather small population and where industry centres mainly around recreation and tourism.

So why are Canadians finding ways to invest in Barbados to the tune of $25 billion or $26 billion, making it the third most popular destination, after industrialized nations the size of the United States and Great Britain, if it is not because investing in Barbados makes it easier to evade taxes?

Not only is investment growing, but it is being encouraged by the tax treaties signed between Canada and Barbados. As I mentioned, besides Barbados, only seven countries that have a tax treaty with Canada are or were considered tax havens by the OECD. It is interesting to know that the OECD classified the main tax havens a few years ago but has now completely given up making that list. Barbados was not included in the most recent OECD list. We learned that Barbados was removed in large part because of pressure from Canada—and I imagine from Barbados as well—on the OECD. Once again, in my opinion, this is proof that the Government of Canada, be it Liberal or Conservative, tolerates this sort of tax loophole, whether it serves legitimate purposes or is used to launder money.

When I refer to ridiculous taxation rates, I mean that the taxation rate in Barbados varies from 1% to 2.5%. This would be astonishing in our progressive tax system, although it is true that, at present, with the successive Liberal and Conservative governments, taxes and the Canadian tax system are less and less progressive. However, the concept is still part of Canada's tax philosophy.

In Barbados, the more profit one makes, the less tax one pays. For example, companies or individuals who have made US$15 million or more pay 1% tax. It is crazy to think that this tax rate is equivalent to those in countries where the tax system actually meets the needs of the people. The strangest thing of all is that, as I said, those who make $15 million or more pay 1% tax. As profits go down, the taxes go up, and those making less than $5 million in profits are taxed at 2.5%.

According to Canada's tax treaty with Barbados, Canadian companies and individuals who pay tax in Barbados do not have to pay tax in Canada because they have already discharged their tax obligations under Barbados' ridiculous and regressive tax system. That is totally absurd. Furthermore, year after year, the government is encouraging more and more money to leave Canada for Barbados, and that applies to Bermuda and the Bahamas as well.

In Barbados, not only is the tax rate between 1% and 2.5% for corporations, as I said, but there are no taxes on capital gains and there is no monitoring, which allows criminal organizations to launder money using a system the Canadian government itself put in place.

For example, in Canada, the five largest Canadian banks are operating in 26 tax havens, many of which were blacklisted by the Financial Action Task Force on Money Laundering (FATF) and the OECD when it kept such a list. We have to wonder about this. These banks claim to be doing everything legally, which is true. However, this also means that the Government of Canada—whether Liberal or Conservative—is sanctioning such opportunities to avoid responsibilities to society. In total, 61 branches of Canadian banks are located in tax havens.

I would like to mention that, a few years ago, a citizen wrote to the banks to ask them what they were doing in tax havens, and what they were thinking when investing or transferring their assets in these tax havens. This man received some rather interesting answers. For example, the Royal Bank of Canada, the RBC, provided the following reply to Mr. Gosselin, who had made the request. I am just quoting one paragraph in the reply given by the customer relations centre: RBC Financial Group would be very adversely affected, from a competitive point of view, and its actuarial asset value would be significantly reduced if it decided unilaterally to stop its operations in any of these territories. Unless expressly prohibited to do so by the legislation, RBC Financial Group must be allowed to take advantage of business opportunities in any region, so as to provide its clients with integrated financial services at the international level.

I am just wondering if having branches in some of these 26 tax havens really benefits the vast majority of RBC Financial Group customers, or whether it is only the small minority that has access to high level accounting services that actually can take advantage of that option.

RBC Financial Group also points out that if everyone were prohibited from doing this, it would not take advantage of that opportunity, but that it does for the time being, because if it did not, it would not be competitive. In my opinion, the bank and the government are both responsible for ensuring that these businesses do not benefit from this type of tax avoidance.

A similar reply was received from the CIBC, which essentially said the same thing. The Scotiabank also provided a similar reply. So did the Bank of Montreal. I found the Scotiabank reply particularly amusing, because the bank claimed that, if it were to leave these countries, local populations would suffer from such a move. Indeed, since these poor people would have less to do with Canada, they would not benefit from jobs, from direct and indirect economic benefits. Of course, we know full well that this is not the case. When I read the Scotiabank letter, I really thought we were dealing with a modern day Robin Hood.

It is a well-known fact: tax havens are most beneficial for people who have capital and there are no spinoffs for the tax haven countries themselves. Government action is needed here, on an international scale, to put an end to these loopholes.

Who benefits from these tax havens? First of all, one must recall that a tax haven is a country where there is a kind of free zone that promotes bank secrecy, where the officials are not very inquisitive and where the taxes are light, as I pointed out.

As we all know, the former prime minister, also a former finance minister, had a company operated by his sons called Canada Steamship Lines International and that company took advantage of the provisions set out in the legislation.

This exists among many business leaders and is going too far. The very fact of it is attacking the foundations of our society. The Auditor General reiterated this. Year after year, the use of tax havens by a growing number of people—they are still a minority, a tiny minority, which is why it is important to act quickly—erodes the tax base and threatens our social foundations.

Indeed, people here in Canada are benefiting from the fact that there are collective tools. We have social programs that have unfortunately been attacked quite a lot in recent years. These programs ensured more than one form of security, as the Conservatives are seeking. They provided social calm and social cohesion. These people therefore benefit from the efforts of the entire middle class and some less fortunate members of society. In that sense, there is definitely a problem. The former Auditor General mentioned it and the current Auditor General reiterated the problem. More and more, the upper middle class is entering into that kind of casino operation, thereby jeopardizing our social cohesion, the foundation of our society.

I was also saying that tax havens have greatly benefited Canadian companies and that our banks, in particular, have profited considerably from them. I would simply like to point out, since I found my document, that 61 branches of Canadian banks are in tax havens. There are 23 Bank of Nova Scotia branches in a whole series of tax havens. The Bank of Montreal is in 5 tax havens and the Toronto-Dominion Bank is in 3. The CIBC is in 12 tax havens and Royal Bank is in 17. All of this has allowed the banks to save $2 billion in taxes. These figures are from a few years ago.

When we look at the reports of each of these banks—I had the opportunity to look at them because I was rather incredulous— we see at the bottom of the page how much money the big banks did not have to pay in taxes like everyone else. I mentioned this earlier and, in my opinion, that is what our discussion should have been about.

Although the bill before us corrects a number of inequities and problems cross-border workers have to deal with, it does not really address the problem of tax avoidance and tax evasion that is going to cause major problems in the future.

We strongly believe that all income earned in Quebec, in Canada and by all Canadian companies abroad should be taxed in Canada, even though we entirely agree that countries with similar taxation can have tax conventions to avoid double taxation. Nonetheless, Barbados, Bermuda, and the Bahamas are very clearly not in that category.

I expect the Conservative government, if it is the least bit consistent, but I doubt it, in the coming days and weeks to bring us tax conventions to review and correct once and for all in order to put an end to these heavy losses in tax dollars that are putting our social programs and our way of life at risk.

It is true for Quebec and it is true for Canada. I am calling on my colleagues to help wake the Prime Minister and the Minister of Finance out of their indifference.

[The Acting Speaker, Conservative, Royal Galipeau]

Order. It is my duty pursuant to Standing Order 38 to inform the House that the question to be raised tonight at the time of adjournment is as follows: the hon. member for Moncton—Riverview—Dieppe, Elections Canada.

Questions and comments. Is the House ready for the question?

[Some hon. members]

Question.

[The Acting Speaker, Conservative, Royal Galipeau]

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

[Some hon. members]

Agreed.

[An hon. member]

On division.

[The Acting Speaker, Conservative, Royal Galipeau]

I declare the motion carried. Accordingly, this bill is referred to the Standing Committee on International Trade.

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

The House resumed from November 22 consideration of the motion that Bill C-25, An Act to amend the Youth Criminal Justice Act, be read the second time and referred to a committee, and of the motion that this question be now put.

Youth Criminal Justice Act

[Ruby Dhalla, Liberal, Brampton—Springdale, ON]

Mr. Speaker, it is a pleasure to stand before you today and speak to Bill C-25, An Act to amend the Youth Criminal Justice Act.

It is an act that is extremely important to many of my constituents in Brampton--Springdale. When we take a look at the recent deaths of youth in my riding, they have caused extreme fear, angst and anguish among those living in our community.

As one of the fastest growing cities in the country, Brampton has become a true symbol of hope for so many. However, the recent deaths of youths across Brampton have left many feeling shocked, dismayed and with a feeling of profound sadness. From youth who have been killed by gangs to people dying as a result of drunk drivers, families not only in Brampton but across Canada are suffering.

Many constituents in my riding have written to me to express their frustration about these senseless acts of violence. They, like many Bramptonians, are calling on the federal government to take a stand against the violence that is plaguing our communities.

What we need is a comprehensive crime strategy, one that commits to putting more police officers on our streets, more prosecutors in the courts, and protecting the most vulnerable, our children and seniors. We must ensure that our police officers have the resources and tools that they need to do their jobs, and we must demand that government bring forward legislation which will make people think twice about their actions.

However, in talking to many of these constituents and Canadians across the country, one realizes that the answer to fighting crime is not the republican or the Bush strategy of locking everyone up and throwing them in jail.

To ensure the safety of all Bramptonians, we need an effective program to fight crime, one that has input and involvement from our young people. Spending money today on skills training and providing youth with opportunities is going to ensure that if we combine that with strategies to fight crime, it will actually prevent it. It will be money that is saved in the future on putting people in prison.

We need to listen to the youth of Canada. To help jump-start this process in my own riding of Brampton--Springdale, I have created a youth advisory council which will provide student representatives from all the schools in Brampton--Springdale an opportunity to speak openly and directly to their elected officials and community organizations on issues that matter to them, on issues of violence, gangs, and drugs in their schools and neighbourhoods.

It is my hope that this youth advisory council will empower students, community members and elected officials to take a stand against violence, the violence which we are discussing in this particular act today. The youth advisory council will work closely with all stakeholders and organizations to discuss strategies that will actually prevent crime, initiatives to create a safe city and rehabilitate criminals.

The Liberal Party has been trying to put an end to violence in our neighbourhoods by offering to fast-track many of the pieces of justice legislation. Unfortunately, many of these bills have not moved forward. In fact, last fall, we offered our support to the government for fast-tracking six of these criminal justice bills, but unfortunately, rather than accepting our offer, it chose to only fast-track one of the bills.

These delay tactics have resulted in Canadians having to live without effective legislation. We need to put aside political gamesmanship. We need to put aside political partisanship and ensure that we get results for the people that we are representing.

We acknowledge that the Youth Criminal Justice Act has been a significant improvement over the old young offenders legislation, and we now see that there are gaps in the legislation, specifically with respect to repeat violent youth offenders. We must address these gaps, but we must ensure that this bill is not undermined by any of these amendments that are being brought forward today.

We have been stating for some time that the Conservatives need to look at the report that was issued by Justice Nunn in Nova Scotia for reasonable reforms to the Youth Criminal Justice Act to address the problem of repeat youth violence. We believe that Justice Nunn, who led a public inquiry on this issue, actually struck the right balance with the recommendations that he provided.

Some of the changes that are being proposed in this particular bill today are actually similar to the recommendations made by Justice Nunn.

However, there are some changes that are contained in the bill which have not been supported by nor come from Justice Nunn. We need to ensure that the changes brought forward actually concern a judge's ability to detain repeat violent offenders pre-trial.

We must ensure that when we talk about this bill and the amendments being brought forward that there is the right balance to achieve the goals to prevent youth violence across the country. In particular we take a look at this bill and realize that the Conservatives are attempting to reintroduce deterrence, a sentencing principle which many experts across the country have warned is a mistake.

Martha Mackinnon of Justice for Children and Youth, a legal aid clinic for low income youth, has stated that the Conservatives are addressing a perception that has actually been exacerbated by politicians and the media. She has criticized the government's move to bring back general deterrence for youth and has pointed out that there is no evidence that deterrence works for young people.

It has been said that this bill ignores many of the important concerns Canadians have about legislation which is going to be fair and adequate and which is actually going to produce results. Canadians and Bramptonians are looking for real leadership when it comes to fighting crime in Canada.

We need to have a comprehensive and integrated strategy that talks about the root causes of crime. We need to have a strategy which is comprehensive and talks about the rehabilitation of those who have committed crimes. We need to ensure that we provide assistance for those who are the victims. It is only going to be by putting aside our partisanship and our gamesmanship that we are going to ensure that we have legislation which is fair and adequate, and ultimately produces results for our end goal, which is to help the children of Canada.

[Réal Ménard, Bloc, Hochelaga, QC]

Mr. Speaker, I thank my hon. colleague for her speech. It brought back fond memories of the time when we were both sitting on the Standing Committee on Health. Unfortunately, I no longer have the pleasure of sharing that experience with her, but I am convinced that the member for Québec does so brilliantly.

Our colleague has concerns, and rightly so, about this being a somewhat isolated bill, about the government's lack of vision and scope when it comes to strategies to fight poverty or help young people.

We in the Bloc Québécois have had longstanding concerns about the whole issue of poverty reduction. On many occasions, we introduced bills or motions on the subject. For example, we have introduced a motion to amend the Canadian Human rights Act to add social condition to the prohibited grounds of discrimination. It is pretty incredible that all the provinces are subject to that prohibition, but not the federal government.

My hon. colleague is right also to be concerned about the bill not being appropriate because it is not respectful of the provinces' demands, and those from Quebec in particular.

I would like her to share with us her views on an eventual anti-poverty strategy. What should such a strategy contain? I imagine that she will not be able to stop herself from referring to the wealth of experience in Quebec, where anti-poverty legislation was passed under Bernard Landry's PQ government.

[Ruby Dhalla, Liberal, Brampton—Springdale, ON]

Mr. Speaker, I thank the hon. member for his great question and also for his concern in regard to fighting poverty in this country.

We have had a chance to see the extensive number of poverty levels. In a country such as ours which is probably one of the leading nations in the world in terms of our economic surplus and our economic prosperity, a million children continue to live in poverty.

Research has shown that those children who are living in poverty are perhaps in some way, shape or form going to commit some of the crimes that we are talking about in this very bill.

We need a poverty strategy that talks about targets, which has benchmarks and ultimately has a vision and a plan. That is why it was a great honour for me that the leader of the Liberal Party introduced his poverty plan, the 30:50 plan. This plan would ensure that over a period of five years poverty would be reduced by 30% for Canadian families, and children living in poverty would be reduced by 50%. We need action and we need a game plan. In that regard, Quebec is to be commended for its great policy in regard to early learning and child care which is going to ensure that we not only prevent poverty, but provide the tools and mechanisms for families to succeed.

[Peter MacKay, Conservative, Minister of National Defence and Minister of the Atlantic Canada Opportunities Agency]

Mr. Speaker, I listened to the hon. member's very thoughtful speech with respect to this bill. I could not agree more with some of her commentary with respect to the need to focus on some of the root causes and some of the programming that has to accompany our youth criminal justice system. That is exactly the essence of what we are trying to accomplish here.

One of the fundamental underpinnings of our justice system is an element of denunciation. The need to send a message of general and specific deterrence is implicit in our justice system. It is used by judges, prosecutors, aid workers and lawyers throughout the justice system.

To that point, I would ask the member whether she acknowledges that the element of deterrence and denunciation which is encompassed in this bill is a necessary part of the approach to reforming and bringing about better behaviour on the part of young people. That, coupled with the necessary programs envisioned, the necessity to help young persons along when it comes to anger management, when it comes to rehabilitations for drugs and alcohol, all of these things are part of a total package, but denunciation has to be at least part of that overall approach. Would she agree with that?

[Ruby Dhalla, Liberal, Brampton—Springdale, ON]

Mr. Speaker, the experts across this country have stated that reintroducing deterrence would be a mistake. That is why we on this side of the House are recommending that the bill go to committee and that we ask the experts and the witnesses to put forward solutions which are actually going to achieve results to reduce crimes committed by young people in Canada.

[Réal Ménard, Bloc, Hochelaga, QC]

Mr. Speaker, in the history of the Bloc Québécois, the question of young offenders has been extremely important. Those who have sat in this House since 1993 or 1997 will recall that we had a colleague by the name of Michel Bellehumeur, who today has been raised to the bench. He was the member for Berthier—Montcalm and was our critic on justice and matters relating to the Attorney General. In 1999 he fought a fine battle on behalf of Bloc Québécois members. The minister at that time was Ms. McLellan, from Alberta. I am not sure whether I am recalling good or bad memories for the House, but she was the justice minister. She was succeeded by Allan Rock and, after that, Martin Cauchon.

At the time, we were examining a bill that was extremely negative concerning practices of the Government of Quebec. The National Assembly had unanimously passed a motion demanding that the bill be withdrawn. The Quebec Minister of Justice at the time was a Quebec City lawyer. We all know how the Quebec City area has always appreciated wisdom in the field of justice. The Quebec City lawyer, now minister, Linda Goupil, formally wrote to the Government of Canada asking for withdrawal of the bill.

What were the issues involved? The Government of Quebec was very resistant to pretrial detention and any kind of measure that had the consequence of prematurely incarcerating people, especially young people. Let us remember that the Liberal bill wanted to refer young people of 14 and 15 to adult courts.

The philosophy of the National Assembly, regardless of government, whether Parti Québécois or Liberal, was to use the right measure at the right time. In some circumstances it could be appropriate to send a youth to a youth centre, while in other cases, the young person should be kept in the community under the guidance of a responsible adult.

There are actually few cases where early incarceration is the appropriate avenue. Of course, it cannot be totally excluded. We can understand that there may be cases of very violent youth, with psychotic behaviour, who have difficulty in controlling their sex drive. Obviously, no one in this House would want that kind of young person to go free in the community. However, that is the exception, rather than the rule.

Minister McLellan’s bill nevertheless had one merit. Although it was a badly defined bill that, in far too many cases, would send young people into adult courts, it did address the issue of pretrial detention.

We made the following observation. The federal and provincial ministers and those who analyzed the issue of young people in the justice system recognized that instead of providing meaningful interventions or offering measures of support, they were opting for the most repressive measures by allowing pretrial detention.

The bill that is now before us not only re-opens that debate over pre-trial detention but it would also deal with an extremely unsettling principle, that of including the principle of deterrence among the very objectives of the Youth Criminal Justice Act.

We are well acquainted with the principle of deterrence. It is common knowledge that my colleague from Abitibi—Témiscamingue is a renowned jurist, a progressive spirit in all circumstances. In any case, that is my wish. I believe that my colleague from Quebec City will join me in paying tribute to the member from Abitibi-Témiscamingue and acknowledging his wisdom in the area of law.

Even though we know that the goal of deterrence is found in section 718 of the Criminal Code and that it may be appropriate to resort to it, the fact remains that there is a very specific reason why Parliament did not include it in section 2 of the Youth Criminal Justice Act . In terms of youth criminal justice, deterrence must not be the priority. Naturally, when someone is kept in prison, in detention, the judge will bear these considerations in mind when handing down a sentence; however, this must not be our priority.

I would like to read an excerpt from Supreme Court decision R. v. B.W.P.; R. v. B.V.N. It deals simultaneously with two appeals. It makes it very clear why it is undesirable for deterrence to be included in the stated objectives in the Youth Criminal Justice Act. It says:

Unlike some other factors in sentencing, general deterrence has a unilateral effect on the sentence. When it is applied as a factor in sentencing, it will always serve to increase the penalty or make it harsher; its effect is never mitigating. The application of general deterrence as a sentencing principle, of course, does not always result in a custodial sentence; however, it can only contribute to the increased use of incarceration, not its reduction. Hence, the exclusion of general deterrence from the new regime is consistent with Parliament’s express intention to reduce the over-reliance of incarceration for non-violent young persons. I am not persuaded by the Crown’s argument—

Those are the words of Justice Charron who wrote the decision. She continues:

I am not persuaded by the Crown’s argument that the words of the preamble referring to the public availability of information indicate that Parliament somehow intended by those words to include general deterrence as part of the new regime. The reference in the preamble to the desirability that certain information be available to the public, in and of itself and in context, cannot reasonably support such an interpretation.

So we can see in which direction the government wants to take us. I know that all the Bloc Québécois members will oppose this bill and will ask that it be withdrawn. Furthermore, this bill is not what the National Assembly wants. Again, focusing on deterrence, an objective of criminal law or penology, is not the way to address the issue of youth justice. The exemplary nature of sentences is the deterrent, and that can only be achieved by longer sentences.

I know that other Bloc Québécois members will expand on this, but I am calling on the government to be very careful about the precedents it could set. It would be very irresponsible for members elected by the people of Quebec to support a bill like this one. That does not mean we should not look at the issue of youth crime, but I must remind everyone that youth crime is going down, as is crime in general.

Since my time has expired, I will stop here, but I would like to say that the Bloc Québécois will not support this ill-advised bill, which is legally unsound and does not respect the wishes of the National Assembly.

[Peggy Nash, NDP, Parkdale—High Park, ON]

Mr. Speaker, I rise today to address the bill on youth crime. While we believe the bill falls short in many ways, we believe it should be debated and amended in committee.

As previous speakers have said, the bill contains two specific sections, one dealing with youth and pre-trial custody and the other dealing with sentencing provisions. We support the notion that judges should be allowed the discretion to impose pre-trial restrictions on those who pose a serious threat to society. The section dealing with pre-trial detention maintains judicial discretion and simply entrenches principles that are already being practised by most courts, so it is not a huge change.

The sections in the bill dealing with sentencing principles are more problematic. There is no evidence to suggest that the adult principles of deterrence and denunciation will have any positive outcome for public safety. Blurring the differences between adults and youth is something that the courts and surely society does not sanction. Therefore, we believe this part needs to be amended and improved on.

I will take a step back and speak a bit about some of the challenges that youth face today.

I come from the city of Toronto. I was there today when the United Way of greater Toronto released its report called “Losing Ground: The Persistent Growth of Family Poverty in Canada’s Largest City”. I want to share with the House some of the findings of this very serious report, which I believe ought to ring alarm bells with the government if it is serious about crime prevention and the need for greater safety in our communities.

Let me cite some of the findings from the United Way study.

The study found that the median income of Toronto families with children under 17 had fallen well behind the median income of families throughout the rest of Canada. It found that one in five two-parent families lived in poverty. That is twice the rate of families in the rest of Canada.

The study found that over 50% of single parent families lived in poverty compared with one in three at the beginning of the last decade, in 1990. One in four Toronto families struggled with poverty. Our poverty rate in Toronto is at 28.8% compared with 19.5% in the rest of Canada. Therefore, we are 10 percentage points higher in the city of Toronto for family poverty.

A lot of people are taking on high debt and we are finding bankruptcies. Insolvency rates in Toronto were up 52.3%, between 2000 and 2005, compared with a 16.8% increase nationally. Eviction applications have increased by 26% over the last seven years. Debt management caseloads have increased 50%, between 2001 and 2007. Payday loan and cheque cashing outlets have increased from 39 in 1995 to over 317 in 2007, with most concentrated in high poverty neighbourhoods.

I believe these statistics are even more pressing and compelling than even these numbers show because Toronto is the most expensive city in the country. Therefore, people who are experiencing these greater levels of poverty are trying to live in the most expensive city in the country.

Behind all these statistics, as devastating as they are, are individuals, families and children trying to survive in extremely stressful and hostile circumstances.

How did we get here? We have seen a massive de-industrialization in the city of Toronto. We have lost over 125,000 manufacturing jobs over the last few years. These were jobs in which people made a decent wage with benefits, with some security and stability of hours of work. They were able to support themselves and their families.

The government will say that jobs have been created. Where are those jobs? They are increasingly in the low wage, precarious, part time, contract jobs. Many people working in these jobs, even if they manage to get 40 hours a week, or the equivalent of a full time job, are living below the poverty level. More than one million people working in the city of Toronto make less than the poverty level; that is they make less than $10 an hour, which is disgraceful. We have these precarious jobs.

Then the previous Liberal government abolished our national minimum wage. We have no national minimum standard that would protect these workers from falling below the poverty line, which is why I introduced a bill to re-establish a national minimum wage and set it at $10 an hour. This would help workers get out of poverty.

One of the major challenges for families in the city of Toronto is to find affordable housing. The previous government got out of providing affordable housing. We have no national housing strategy. The real estate market in Toronto is sky-high. People trying to pay rent or maintain a mortgage are finding the costs really unsustainable.

I hear from many people in my community who tell me, especially single parents trying to pay $1,000 a month in rent when they are working in a fairly low wage job, that it is simply untenable.

What does it mean for children growing up in this environment? It means their parents are working longer hours. The parents are often away from home. The children do not have supervision when they need it, or the guidance and the resources that are needed.

If we truly want to prevent crime among young people, if we truly want to make alternatives to negative activity in society, if we want to make those more attractive, then we have to invest in families. The government has to invest in a city such as Toronto, which ought to be the engine of our national economy.

A situation that I find quite shocking is the rise of payday loan companies. They charge outrageous and exorbitant levels of interest. These companies are blossoming in poor neighbourhoods. People become locked into debt perhaps to get an advance on a paycheque. Suddenly they are into these spiralling loans that can charge hundreds of percentage points on a very small loan and suck people in.

Another problem that people in Toronto face and that affects young people is when a parent loses a job or they are between jobs. They cannot access employment insurance. Almost 80% of unemployed workers in the city of Toronto do not receive benefits from employment insurance. Therefore, they are denied the benefits they pay into.

The challenges are huge. I believe the best way to deal with youth crime is to invest in prevention. We need to invest in affordable housing. We need to get the loan sharks and the payday loan people out of the communities. We need to provide clear banking alternatives for people. We need to invest in good paying jobs that allow people to support themselves and their families. We ought to invest in programs for young people that help them succeed in school, develop leadership qualities and prepare them for the world of further education or the world of work.

Clearly, we are failing our young people and our families. I believe the report today from the United Way is a national shame. Every Canadian ought to hear an alarm bell. We ought to take action on this report immediately.

[Christian Ouellet, Bloc, Brome—Missisquoi, QC]

Mr. Speaker, I wish to commend the hon. member on her clear presentation on poverty issues.

I would like her to get into the problems in connection with housing in particular, because we very recently received a new report from the Co-operative Housing Federation of Canada on the number of households in difficulty. If I am not mistaken, 1.85 million Canadian households, or more than 3 million people, are in core housing need.

The hon. member talked about the situation in Toronto. In this report, I notice that the situation is pretty much the same across Canada and very poorly addressed.

I would like the hon. member to explain how important housing is in connection with the poverty of households, particularly single parent ones.

[Peggy Nash, NDP, Parkdale—High Park, ON]

Mr. Speaker, I thank my hon. colleague for his question.

Affordable housing does play an important part in the rise in poverty. In Toronto, housing is expensive, especially for single parent families. These families cannot afford the housing they need. The problem is that the federal government has abandoned Canadian families, as we can still see in Toronto, and in Quebec as well.

This is a matter of real urgency because we live in a northern country. Living and surviving on the streets is not an option. To promote successful families and prevent crime, we must invest in families and affordable housing. This is an urgent matter across the country.

In light of this report today, and the one released last week about affordable housing, this is indeed an urgent matter. It is truly a national disgrace that no immediate action was taken. It is a disgrace that the federal government is not acting.

[Marc Lemay, Bloc, Abitibi—Témiscamingue, QC]

Mr. Speaker, I listened carefully to what my colleague had to say. I have a specific question for her. There is talk of repression and deterrence with young offenders.

I would like my colleague to explain something. I heard her say that she was from the greater Toronto area. Our Conservative friends tell us that Toronto has a street gang problem, and I would like to understand. Has my colleague experienced this problem? Does she think Bill C-25 could solve the problem of street gangs in the Toronto area?

[Peggy Nash, NDP, Parkdale—High Park, ON]

Mr. Speaker, I thank my colleague for his question.

Yes, there are problems related to street gangs in Toronto, as there are in other cities in this country. However, I do not see anything in this bill that would prevent young people from joining street gangs.

I already spoke about the issues of poverty in Toronto, but much could be done in terms of training young people and investing in youth leadership programs. We must invest in youth so that they can have a secure future and can aspire to success, instead of seeing street gangs as the only alternative.

[Rodger Cuzner, Liberal, Cape Breton—Canso, NS]

Mr. Speaker, it is a pleasure to rise today and take part in this debate on Bill C-25. Some excellent points have been brought up through the course of this debate. I hope to add to them.

I bring to the debate 25 years of experience in coaching and working with young people through recreational activities as a former recreation professional. I am comfortable in speaking to the fact that the vast majority of the young people I had an opportunity to work with were very good young individuals. They were fairly focused. They understood the difference between right and wrong. For the most part, they just wanted to make their way in this world and find their own place and in some way try to contribute to whatever they were involved in at the time.

Unfortunately, a lot of these average young Canadians might make a bad decision on occasion. They could be with the wrong group on a particular night or in the wrong place at the wrong time, or whatever the circumstances might be, and sometimes the results are not great. However, I have known a number who have benefited from the current approach to dealing with youth crime.

The Young Offenders Act was improved upon by the legislation brought forward through the Youth Criminal Justice Act, but again we stand here tonight to try to improve it. I am comfortable in saying that the Youth Criminal Justice Act was an improvement over the Young Offenders Act, but there are gaps. There are aspects that certainly deserve to be looked at again and improved upon so we can better deal with these particular issues.

I think crime changes from community to community. Some of my colleagues from urban areas have spoken about their experiences. There is not as much gang related crime in rural areas, not that this is a youth crime, but we do see our share.

We have been very active in my own community in Cape Breton--Canso. The Cape Breton Regional Municipality and the police services board, under the direction of Dave Wilson and Myles Burke, have done an excellent job.

The past chief, Edgar MacLeod, just recently stepped down. He was a leading advocate in this country for community based policing. He did a tremendous amount of work in community based policing and had a very solid line in with the youth of our community. I know that went a long way toward finding out the needs, the wants and the concerns of the youth in our community. I think that is at least the beginning of communication with young people at risk. It is a positive step.

These individuals are to be commended for their efforts.

Our justice critic, the member for Notre-Dame-de-Grâce—Lachine, joined us in Cape Breton, where we sat down with a number of different stakeholders to talk about some of the issues around youth criminal justice and other justice activities. What we heard from most of the stakeholders is that when we are talking about youth, the Nunn report, which has been referred to during the course of the debate, has very significant measures that can go a long way toward ratifying some of the gaps in the Youth Criminal Justice Act.

All of us here in the House know of the terrible tragedy of Theresa McEvoy, a 52 year old mother who lost her life when a 16 year old offender drove his car into hers. It was a terrible tragedy and it was significant because just two days before it happened he had been released from custody.

The young offender had 36 charges against him at the time, but the courts could not hold him. There was miscommunication on the part of those doing the administering, but nonetheless, the officials did not believe they had the power to keep this young person incarcerated, so he was on the streets and that terrible tragedy occurred.

In June 2005 the Nunn commission was struck. Eighteen months later, it delivered its report. I want to read from the report for members. As I have said, the Youth Criminal Justice Act does serve the vast majority of young people in this country very well. Those young people who come in contact with our legal system are very well served by the act. Mr. Justice Nunn said in the report that the act:

--has been highly successful in the manner in which the vast majority of youth is handled....

The challenge is whether the [Youth Criminal Justice Act] in its present form is adequate to deal with that smaller number of repeat offenders that the justice system is concerned with on a regular basis.

Much credence was given to this report. It was an excellent report as it was tabled, but also, there was input from those who deal with those issues on a day to day basis. I want to put this on the record as well. This is a comment from Mr. Justice Nunn's report:

--I must make it absolutely clear and not open to question that all the witnesses I heard--police, prosecutors, defence counsel, and experts--agree with and support the aims and the intent of the act. They accept it as a vast improvement over the previous legislation. All are convinced it is working well for the vast majority of young offenders, though it needs to be fine-tuned to provide effective means to handle the smaller, but regular number of repeat young offenders.

The two issues that are identified more specifically and which we hear about the majority of time when we speak with stakeholders are violent offences and of course repeat offences.

With regard to the violent offences, Justice Nunn boiled it down. His concern was pretrial detention. His concern was that the Youth Criminal Justice Act went too far in restricting any pretrial detention. In order to strike a balance between the rights of young offenders and public safety, he recommended that the definition of “violent offence” be changed to include “endangerment to the public”. That is significant. I am sure that we on this side can support that. His recommendation was the change in that context.

The other issue was repeat offenders. I want to talk about repeat offenders because again we go back to the classic adage that a few apples spoil the whole bunch. I do not think that is uncommon, but the recommendation that came from Justice Nunn, and I know that we on this side can support it, is:

--that the federal government should amend the Youth Criminal Justice Act so that the requirement for a demonstrated “pattern of findings of guilt” is changed to “a pattern of offences”....

In this case, I believe the young man who was involved in the McEvoy tragedy probably would not have been out had that change already been made to the legislation. I hope we will see that as this goes forward.

I believe this legislation as put forward today should go to the justice committee. We should hear expert witness testimony and then it should be brought to the House for a vote. We certainly support the movement of the legislation to committee.