House of Commons Hansard #46 of the 40th Parliament, 3rd Session. (The original version is on Parliament's site.) The word of the day was tax.

Topics

Tax Conventions Implementation Act, 2010
Government Orders

4:40 p.m.

NDP

The Acting Speaker Denise Savoie

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

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

Tax Conventions Implementation Act, 2010
Government Orders

4:40 p.m.

NDP

Jim Maloway Elmwood—Transcona, MB

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

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

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

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

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

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

Tax Conventions Implementation Act, 2010
Government Orders

4:45 p.m.

NDP

Irene Mathyssen London—Fanshawe, ON

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

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

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

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

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

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

Tax Conventions Implementation Act, 2010
Government Orders

4:50 p.m.

Bloc

Meili Faille Vaudreuil-Soulanges, QC

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

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

Tax Conventions Implementation Act, 2010
Government Orders

4:50 p.m.

NDP

Irene Mathyssen London—Fanshawe, ON

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

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

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

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

Tax Conventions Implementation Act, 2010
Government Orders

4:50 p.m.

NDP

The Acting Speaker Denise Savoie

Resuming debate. Is the House ready for the question?

Tax Conventions Implementation Act, 2010
Government Orders

4:50 p.m.

Some hon. members

Question.

Tax Conventions Implementation Act, 2010
Government Orders

4:50 p.m.

NDP

The Acting Speaker Denise Savoie

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

Tax Conventions Implementation Act, 2010
Government Orders

4:50 p.m.

Some hon. members

Agreed.

On division.

Tax Conventions Implementation Act, 2010
Government Orders

4:50 p.m.

NDP

The Acting Speaker Denise Savoie

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

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

Nuclear Liability and Compensation Act
Government Orders

May 13th, 2010 / 4:55 p.m.

Conservative

Diane Finley Haldimand—Norfolk, ON

moved that Bill C-15, An Act respecting civil liability and compensation for damage in case of a nuclear incident, be read the second time and referred to a committee.

Nuclear Liability and Compensation Act
Government Orders

4:55 p.m.

Cypress Hills—Grasslands
Saskatchewan

Conservative

David Anderson Parliamentary Secretary to the Minister of Natural Resources and for the Canadian Wheat Board

Madam Speaker, it is my pleasure to be back discussing this bill one more time. It is the first time in this session of Parliament, but I know some of my colleagues who have been on the natural resources committee over the last couple of years, or even the last five years, are very familiar with it.

It is my pleasure today to rise in the House to present Bill C-15, the nuclear liability and compensation act. This legislation would replace the 1976 Nuclear Liability Act. Its purpose is to update the insurance framework that governs the nuclear industry and protects the interests of Canadians in the unlikely case of a nuclear incident.

Bill C-15, as I mentioned, will not be new to the members of the House. Indeed many individuals on both sides of the House and, in particular, members of the present and past House Standing Committee on Natural Resources have worked together and actively contributed to its improvement. Amendments proposed at committee were incorporated into the legislation that is being reintroduced. I would like to thank the members of the committee for their helpful contributions.

Canada's nuclear safety record is second to none. We have a robust technology, a well-trained workforce and stringent regulatory requirements. There are now two pieces of legislation that provide a framework for the regulation of the nuclear industry: the Nuclear Safety and Control Act and the Nuclear Fuel Waste Act. Nevertheless, we must be prepared for the possibility of a nuclear incident that could result in civil damages and have specific legislation that prepares us for such an event if it were to happen. The responsibility of doing so falls under federal jurisdiction.

However, traditional insurance is not appropriate for dealing with this kind of liability. It is difficult, for example, to determine the levels of risk involved. Canada, like virtually all other nuclear countries, first addressed this void with the enactment of special legislation. In the 1970s, we in Canada put in place the Nuclear Liability Act.

What this means is that Canada's existing act reflects the thinking of an earlier period. In the interim, the evolution of jurisprudence has contributed to substantial increases in the potential liability for nuclear incidents, and our approaches to dealing with industrial accidents have evolved. Accordingly, our liability legislation must be upgraded.

Bill C-15 would modernize the older Nuclear Liability Act. It would do so by bringing victim compensation into line with internationally accepted compensation levels. It would do so by expanding categories of compensable damage, improving compensation procedures and increasing the financial liability of nuclear operators.

Up-to-date liability rules are needed to encourage investment in nuclear facilities. They are needed to provide certainty regarding insurance and legal liability for suppliers and for operators. Without this certainty, insurers would not extend coverage to nuclear facilities and nuclear development in this country would be severely curtailed.

The Government of Canada has taken action to assist Canada's nuclear industry remain at the forefront of a highly competitive field. It is investing $300 million in the operations of Atomic Energy of Canada Limited to try to help strengthen Canada's nuclear advantage.

Global nuclear needs are expanding. Nuclear energy is an important emission-free source of power and it is key to achieving Canada's objective of being a clean energy superpower. However, without certainty regarding insurance and liability, Canada would not be able to advance or attract leading international suppliers and technology firms in the development of our nuclear industry. Having a proper liability regime in place is mandatory if Canada's nuclear industry is to remain competitive.

Of course, it could be argued that Canada's current legislation more or less accomplishes these objectives. Why do we need new legislation when we have a serviceable act in place already? The simple answer is that the current act is outdated. The Nuclear Liability Act was passed in 1970. In terms of today's nuclear technology, that is the Middle Ages. Several lifetimes of nuclear and related technologies have come and gone since then.

In short, as I said before, Canada's existing Nuclear Liability Act reflects the thinking of an earlier period. Our liability legislation must be upgraded.

Nevertheless, there are certain fundamental principles of the 1970 act that must be retained. These are the principles of absolute liability, exclusive liability and mandatory insurance.

Absolute liability means that the operator would be held liable for compensating victims in the rare case of a nuclear incident. This means that victims would not have to negotiate a highly complex industry to determine who was at fault. There would be no question of where to take a claim for compensation.

A second and related principle, exclusive liability, means that no party other than the operator, for example, no supplier or subcontractor, would be held liable.

This removes a risk that would deter secondary enterprises from becoming involved in a nuclear project. Nevertheless to modernize our liability scheme we must have legislation that goes further, while retaining those fundamental principles. This is what Bill C-15 would do.

I would like to talk for a minute about the proposed changes. The proposed legislation would increase the limit of liability for nuclear operators. The current act sets the maximum at $75 million, an amount that now stands as one of the lowest limits among the G8 group of nations.

The proposed legislation would reflect the conditions of today by raising that limit to $650 million. This would allow operators to provide adequate compensation without burdening them with huge ongoing costs for unrealistic insurance amounts, amounts for events highly unlikely to occur in this country. Moreover this increase would put Canada on a par with most western nuclear countries.

Bill C-15 would also increase the mandatory insurance that operators must carry by almost ninefold. It would permit operators to cover half of their liability with forms of financial security other than insurance. For example, this could be letters of credit, self-insurance and provincial or, in the case of AECL, federal guarantees. All operators would be required to conform to strict guidelines in this area.

Bill C-15 would make Canada's legislation more consistent with international conventions. It would do so not only with respect to financial matters; it would also do so with clear definitions of nuclear damage reflecting today's jurisprudence and more closely aligned with international nuclear civil liability conventions.

These definitions include crucial matters such as what constitutes a nuclear accident, what damages do or do not qualify for compensation and so on. These enhancements will place Canadian nuclear firms on a level playing field with competitors in other countries.

Both the current liability framework and Bill C-15 contain limitation periods restricting the time period for making claims. Under the act passed in 1970, claims must be brought within 10 years of the incident. However since the passage of that earlier liability legislation, we have come to understand that some radiation-related injuries have long latency periods.

Accordingly, the proposed legislation would raise the time limit on compensation for claims related to injury or death from 10 to 30 years. Both the earlier Nuclear Liability Act and Bill C-15 provide for an administrative process that would operate faster than the courts in the adjudication of claims arising from a large nuclear incident.

However, the proposed legislation would clarify the procedural arrangements for a quasi-judicial tribunal that would hear these claims. This new process would ensure claims were handled both equitably and efficiently.

There has been previous debate about some of Bill C-15's proposed measures. For example, there has been discussion about how and why the government arrived at the $650 million amount. Questions have been asked about the adequacy of $650 million for compensation of victims: why the civil liability of a nuclear operator should be limited in amount when the civil liability of other industries is unlimited, why the civil liability of Canadian nuclear operators should be limited at $650 million when operators in some other countries have unlimited liability and why the civil liability of Canadian nuclear operators should be limited at $650 million when we are told U.S. operators have a liability in the order of $10 billion Canadian.

The government's position is that the $650 million liability would adequately address the public's need for compensation in the event of any foreseeable incident at a Canadian nuclear plant. Although the U.S. operator liability limit is cited as $10 billion Canadian, in practice individual U.S. operators effectively carry $300 million Canadian in insurance coverage.

A few countries, like Germany, Switzerland and Japan, do incorporate unlimited liability of the operator under the provisions of their nuclear civil liability legislation. However in practice their liability is always limited to the amount of coverage provided by existing insurance plus the net worth of the operator that is liable.

Questions have also been raised as to how victims would be compensated if damages from a nuclear incident exceeded the operator's $650 million liability limit. Bill C-15 makes it clear that the minister would be required to assess the need for additional funds and report this information to Parliament. Parliament would then make the appropriate decision on providing funds for compensation.

There has been discussion on the provision in Bill C-15 that limits the ability of operators to carry more than 50% of the required financial security in forms other than insurance to cover their liability.

This provision was introduced in the bill to address operators' concerns regarding, first, the substantial increase in insurance premiums that they may face and, second, their perception of the monopoly held by nuclear insurers in providing the required financial security.

However, certain operators have said they would like more flexibility in negotiating the percentage of alternative securities which they could hold to cover their liability. This 50% limit may be changed by regulation.

Worldwide nuclear insurers have been providing nuclear civil liability insurance to operators for more than 50 years. They provide secure capacity. They are knowledgeable when it comes to assessing and pricing nuclear risks. They have experience handling claims.

Generally, a first tier compensation under national legislation or international conventions governing civil liability requires operators to cover their liability with private insurance or other forms of financial security. Worldwide private insurance continues to be the choice for nuclear operators over other forms of financial security.

The challenge the government faced in developing its legislation was to be fair to all stakeholders and to strike an effective balance in the public interest.

In developing Bill C-15, we consulted with nuclear operators, suppliers, insurance companies and provinces with nuclear installations. They generally support the changes I have described.

I should mention that this bill has also been the subject of a lot of consultation at committee. I think this will be maybe the fourth time that it has been before committee, and we have had extensive hearings each time. There has been widespread consultation on the bill.

While some nuclear operators may be concerned about cost implications for higher insurance premiums, they also recognize they have been sheltered from these costs for some time.

Suppliers welcome the changes as they provide more certainty for the industry. Nuclear insurers appreciate the clarity provided in the new legislation and the resolution of some long-standing issues. Provinces with nuclear facilities have been supportive of the proposed revisions to the current legislation. Municipalities that host nuclear facilities have been advocating revisions to the Nuclear Liability Act for some time. They are supportive of the increased levels of operator liability and the improved approaches to victim compensation.

In short, Bill C-15 was not developed in isolation. The evolution of policy was guided by consultation with the key stakeholders, with Canadians, and by experienced gained in other countries.

The reality is that we have the general support of the nuclear industry and Canadians at large for Bill C-15. I would urge members of this House to join in that consensus.

To conclude, Bill C-15 would establish the compensation and civil liability regime to address damages resulting in the unlikely event of a radioactive release from a Canadian nuclear installation. It would ensure that a compensation scheme is in place for victims and would promote nuclear development by channelling civil liability to operators, effectively indemnifying contractors and suppliers.

The introduction of Bill C-15 adds to the government's track record of making responsible decisions on the safe, long-term future of nuclear power in Canada. It adds to the government's record of promoting a safer, more secure and cleaner world through the responsible development of nuclear energy for peaceful purposes.

Nuclear Liability and Compensation Act
Government Orders

5:05 p.m.

Liberal

Geoff Regan Halifax West, NS

Madam Speaker, I had occasion to work with colleagues on the natural resources committee last fall on this bill and I am pleased that the government has adopted the amendments that were made at that time.

There is one thing I am curious about. The bill is basically the same, with a few small amendments, as it was when it came forward the first time four years ago. Over that time we have certainly seen inflation, but the government has not moved from $650 million up to even a slightly higher number over that period. That, to me, is a bit surprising.

I would like my hon. colleague to comment on that.

Nuclear Liability and Compensation Act
Government Orders

5:10 p.m.

Conservative

David Anderson Cypress Hills—Grasslands, SK

Madam Speaker, there has been a lot of discussion at committee as the member opposite knows. Actually, the committee agreed to the amount of $650 million as well, as recently as toward the end of the last session of Parliament. There are a number of reasons for this.

As I mentioned in my speech, one of the reasons is that this seems to be an adequate number to provide compensation that would be sufficient in the event of a nuclear incident or accident.

There has to be a balance between providing the compensation and being realistic in the compensation and the insurance limits that can be provided to the operators. The balance is there. What is best for Canadians? What do we need to have in place in order to protect Canadians? On the other side, what can we do that is realistic? There is no point in making unlimited liability where the operators cannot possibly get the insurance.

The amount of $650 million has been accepted by the industry, by Canadians, and it was accepted by the committee as well, as a reasonable amount that would be appropriate for an insurance level for operators in Canada.

Nuclear Liability and Compensation Act
Government Orders

5:10 p.m.

NDP

Chris Charlton Hamilton Mountain, ON

Madam Speaker, I listened with great interest to the member speak to the bill. I have had the privilege of speaking before in the House of Commons to that bill. I have also paid attention to the testimony that we got before committee on the bill.

I would like to start into a long speech, but let me just limit my comments today about what I think are false claims the member is making with respect to the liability standards that exist in other countries.

The government claims that the $650 million limit is based on international standards, the capacity of the insurance industry and the likely cost of an accident. I think it is wrong on all three fronts.

Let me just remind members what we heard at committee with respect to international standards. Most countries of similar GDP have much higher limits. Germany has unlimited liability and a $3.3 billion financial security requirement. The U.S. has $10 billion in pooled insurance. Japan has $1,300 million. Sweden, Austria and others are moving to unlimited liability. The limit of $650 million is at the bottom of reasonable international standards.

When we talk about the insurance industry capacity, the Nuclear Insurance Association of Canada testified at the committee that it has increased its capacity and can now offer more than $1 billion in coverage. If the coverage is available, our law should require it.

Last, with respect to the likely cost of an accident, the department based its cost estimate on a risk study that was restricted to a minor accident at a small plant far away from population centres. The report author recommended repeating the analysis for serious accidents for larger plants near population centres, like Pickering and Darlington where, of course, we have a nuclear plant. The government failed to respond to this one simple and significant recommendation. As a result, the estimate of the cost of a nuclear accident is far too low, and I think undermines the $650 million limit.

I would like the member to respond to those concerns, because they are not just concerns raised by us on this side of the House. As I said, those concerns arise out of the testimony that we heard at committee about this very bill the last time it was introduced, and I do not think in this new version the government has done its homework. I do not think it has addressed any of those issues.