Bill S-3 (Historical)

Tax Conventions Implementation Act, 2010

An Act to implement conventions and protocols concluded between Canada and Colombia, Greece and Turkey for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income

This enactment implements the most recent tax treaties that Canada has concluded with Colombia, Greece and Turkey.
The treaties implemented reflect efforts to expand Canada’s tax treaty network. Those treaties are generally patterned on the Model Double Taxation Convention prepared by the Organisation for Economic Co-operation and Development.
Tax treaties have two main objectives: the avoidance of double taxation and the prevention of fiscal evasion. Since a tax treaty contains taxation rules that are different from the provisions of the Income Tax Act, it becomes effective only after being given precedence over domestic legislation by an Act of Parliament such as this one. Finally, for each of those tax treaties to become effective, it must be ratified after the enactment of this Act.

Tax Conventions Implementation Act, 2010

[Paul Calandra, Conservative, Oak Ridges—Markham, ON]

Mr. Speaker, I do know that the Liberal Party would get along with the Politburo politics because it clearly has identified that it wants to raise taxes for all Canadians.

However, I did not get an answer to my original question. Will the Liberal Party actually be supporting this bill and, in turn, support the free trade agreements that we are negotiating with the European Union and a whole host of other countries to the benefit of the Canadian people?

[Scott Brison, Liberal, Kings—Hants, NS]

Mr. Speaker, I am certain the hon. member listens intently to every word I say and I would assume that he heard in my speech that we will be supporting Bill S-3.

In terms of the EU, I would draw the hon. member's attention to the remarkable leadership that the Premier of Quebec, Jean Charest, has played on the Canada-EU free trade agreement. In fact, it is an unprecedented role for a provincial premier to be leading the charge on the international stage in terms of a free trade agreement. Pierre-Marc Johnson, a former premier of Quebec, is playing an active role as one of the lead negotiators on the Canada-EU free trade agreement.

The principles behind deepening our trade relations with the EU, protecting our interests, but at the same time taking down barriers between our economies, is very attractive to us. We commend the Quebec government for its leadership role in helping to make that happen.

In terms of Canada-Colombia, under that current minister the Canada-Colombia free trade agreement was dead. It took some Liberal leadership on this side of the House to actually ensure that Canadians and Colombians could work together to not only have a free trade agreement, but to have the first human rights treaty based on a free trade agreement between any two countries anywhere in the world.

[Daniel Paillé, Bloc, Hochelaga, QC]

Mr. Speaker, there are days like this when we must promote the interests of the Bloc and Quebeckers. We have before us a bill with a title that is a bit long and a bit grand-sounding, namely, An Act to implement conventions and protocols concluded between Canada and Colombia, Greece and Turkey for the avoidance of double taxation—the first objective—and the prevention of fiscal evasion with respect to taxes on income—the second objective. Are these objectives being met?

Everyone, particularly those who have done business abroad based out of Quebec or Canada, knows that taxation is a very complex area that only becomes more complicated with each budget speech. Sometimes people ask us why taxation is so complicated. It is because, every year, we have finance ministers who go into all of Canada's legislatures or national assemblies to announce what they plan to do. Since 1867, I do not think that Canada has ever seen a single finance minister stand up to give a budget speech and simply say that the taxation, treaties, taxes and fees are fine as they are and that no changes are needed, and then sit back down. This is the ideal, but it has never actually happened. Instead, each year, more and more layers are added to the giant fiscal onion making it harder and harder to digest.

This type of bill emulates treaties that prevent a source of income from being taxed twice for the same purpose. I am using this term because personal income, in Quebec for example, is taxed once by the Government of Quebec and then a second time by the Government of Canada or vice versa. Thus, it is not unusual for income to be taxed twice in Quebec, Ontario, Nova Scotia and elsewhere. That is an everyday occurrence.

Under this legislation, at the international level, income would be taxed by the country where it is earned or by the country where the taxpayer is a resident. There are thousands of treaties. The OECD has a model tax convention that has been used thousands of times over. Canada has about one hundred such treaties.

Which tax jurisdiction will apply? In the case of remuneration, a person's income will be taxed based on their residency, no matter where they earned the income. Thus, the parliamentary secretary from Calgary will be taxed by Alberta. Or, if I am from Hochelaga, my income will be taxed by Quebec under the treaty because I am a resident of that province. The residency rules are considered next. For example, to be considered a Quebec citizen with income taxable by Quebec, one must have lived there for at least six months plus one day.

Under international agreements, capital gains will also be taxed by the country where the asset that gave rise to the gain was sold.

The earnings of a company should be taxed based on its residency, or if the company is established—with a subsidiary—in a foreign country, local taxation laws apply. And that is where a number of problems arise.

For dividends, interest and royalties, each country basically gets its share. In the agreements we have before us with Colombia, Greece and Turkey, this varies between 5% and 15% for dividends. It is 10% for interest and 10% for royalties. That tax is payable to the foreign country and is deductible from taxes paid in Canada. So we essentially have an agreement. Why? To encourage free trade. Quebec has always been in favour of free trade. Everyone in Quebec and Canada knows that Quebec was the driving force behind the Canada-U.S. and Canada-U.S.-Mexico agreements. It goes without saying that Quebeckers support it.

But the tax systems must be comparable. We must ensure that the Canadian and Quebec tax systems are comparable to that of the country with which we are signing a tax agreement.

We have three countries here. For example, Quebec exports to Greece, Colombia and Turkey represented $550 million in 2009. So we cannot say that these three countries will change anything for Canada or Quebec with respect to international trade. With all due respect, that is rather minimal. For example, among these three countries, we do the most trade with Greece, and that represents only 0.64%, or one-third of 1%, of our imports.

In principle, we agree with it. We need to know the difference in the application, since we want to avoid double taxation, but we do not want this arrangement to encourage tax evasion or tax avoidance in the countries in question.

We apply section 26, as suggested by the OECD. Section 26 is often mentioned in these agreements. In Canada, we used it once with the Canada-Netherlands agreement on the Dutch Antilles in 2009. We applied the OECD principles to the letter. That is one country out of 87. As for the rest, it seems as though either the Canadian political system or the negotiators are in a hurry to go slow.

For example, there are 14 countries. And I remember that these negotiations were mentioned at second reading. They have been negotiating since that time. What are they negotiating? What are they discussing? Are they exchanging documents? Are they just chatting and visiting? We do not know. There is Anguilla, Aruba, the Bahamas, Bahrain, Bermuda, Gibraltar, Guernsey, and all kinds of islands, such as the Cayman Islands, the Isle of Man, Turks and Caicos, the British Virgin Islands, Jersey, Saint Kitts and Saint Lucia.

They are negotiating. But what has been happening in the meantime? We are beginning to wonder if Parliament can have a say in it and not just be asked to pass a bill and its schedules.

We think that we should have some say. What has been happening while they have been in talks with the 14 countries I just mentioned, which are not exactly large industrialized, trading or manufacturing countries? In 2008, Canadian direct investment in Barbados, Bermuda and the Cayman Islands totalled $86 billion. Canada is in talks with these three countries, but does not have agreements with them. They represent 14% of Canada's direct investments. That is a lot.

In 2000, direct investments totalled $33 billion, compared to $86 billion in 2008. After eight years, investments were 2.6 times higher. Using a cumulative interest rate, this equals an annual increase of 12.7%. How could we, from 2000 to 2008—remember 2009 and 2010 are not included—have gone from $33 billion to $86 billion of direct foreign investment in countries that are considered to be tax havens? All that time, there have been so-called talks.

We want the negotiations to produce results. We want them to sign agreements following negotiations with these countries. We want them to come to the House to report on all of these agreements.

The former revenue minister, who is responsible for these agreements, said at one time that tax agreements between countries should be as unrestricted as possible. I would love them to be as unrestricted as possible, but there have to be some restrictions. That is why we think parliamentarians need to get the information directly. It is good to have information, but that information needs to be accurate and complete.

The OECD has defined tax havens. What does the OECD say about tax havens? They are countries with little or no taxation. I was saying earlier that we agree that Canada and Quebec should enter into international agreements with countries that have similar tax rates. When tax rates on dividends, corporation income and individuals are similar to those of a tax haven with very low tax rates, we need to ask some questions.

Furthermore, since the bill very clearly says that the goal is to prevent tax evasion, we need clear, transparent information.

Just a couple of hours ago, I spoke to another bill, the bill concerning information the PBO was requesting from the government. As we said, the danger is that the government would ostracize the PBO and prevent him from getting accurate information.

Once again, for the second time in less than two hours and regarding another bill, we are saying that the information we get from countries with which we want to negotiate must be accurate and clear, not like pea soup. Clear information is needed.

We also need to avoid all legal and administrative barriers. We are coming up against more and more administrative barriers when trying to get this information. Requesting information is all well and good, but we need to obtain the information.

Again, I am referring to the Parliamentary Budget Officer's statement in fall 2010 that he still had not received the information requested from the government in June 2009. That is an administrative barrier. Is the government becoming a tax haven for information? It is not far off the OECD definition of one.

According to the OECD, to determine whether a country is a tax haven, you have to ask yourself whether the country advertises or invites other countries or businesses to invest in it because of its rather lax tax system. Quebec might invite countries to invest in it for its technologies, aerospace sector and people who understand hydroelectric energy. In this country we truly have the information, technology and resources. However, when a country invites us to invest in it because it has a rather lax tax system, that is the definition of a tax haven. It is a very good definition because it is easy to understand.

On April 1, 2010, the OECD came up with a grey list of 17 countries that are making efforts to move from the black list to the white list by signing a few treaties. However, we have to be careful.

I am all for signing tax treaties with countries such as Belize, the Cook Islands, Dominica, Grenada, Liberia, the Marshall Islands, Montserrat, Nauru, Niue, Panama, Saint Lucia, Vanuatu, Brunei, Costa Rica, Guatemala, the Philippines and Uruguay, but let us be careful.

A tax treaty has to include five conditions: exchange of relevant information, no restrictions, the possibility of accessing information, respect for rights and complete respect of confidentiality. Our electors and taxpayers are sometimes sick of the agreements reached with that type of country. They get the impression that rich people or people who work for companies that have the means to go elsewhere take advantage of the situation to benefit from the tax rate that simply cannot be compared to the tax rate here. They are fed up and they wonder why they are paying so much tax when others who are much wealthier pay far less in tax.

In closing, all these treaties should respect the commitments already made by the Conservative Party. The House should take part in the process and the government should also respect the jurisdiction of the provinces and Quebec.

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

Mr. Speaker, I rise to speak to Bill S-3 from several vantage points.

Bill S-3 is a fairly conventional taxation bill with regard to establishing international relations with the countries as described in this bill. In this case, the countries are Colombia, Greece and Turkey.

My party always has concerns over a bill that does not emanate originally from this House, as opposed to the other House. That is particularly true given the gross abuse of democracy we saw flowing from that other House last week, as it killed a bill that had substantial democratic support from this House, the elected House. We always have a concern when we see this, but I have to say that when we look at the purpose of this bill, as opposed to the one the other place voted down last week, it is so typical of that House that the bill would be coming through it, because this bill is really about establishing favourable tax arrangements to avoid double taxation. It is the type of elitism we see in that House that permeates the background of this bill.

We are saying to the government that its approach of using the other place the way it has, both to defeat bills that this House has passed and to initiate bills into this House, is a practice that really should stop. From a democracy standpoint, that House has no credibility. To use that House in the process of passing legislation and laws in this country is a fundamentally flawed approach to democracy.

The second concern we have with this bill will come as no surprise to this House or people who have followed our relationship with Colombia and the gross abuse of human rights that has occurred in that country and our opposition to the free trade agreement that has passed this House, which is giving it favourable arrangements with our country that it has no entitlement to, from the perspective of human rights as practised, or abused, in that country.

There is no possible way we can see extending a positive relationship between ourselves and Colombia until such time as it ceases those kinds of practices. The number of deaths, both in the aboriginal community and within organized labour and among workers generally in that country in the last few years, is so offensive to the values of this country, of Canada, that we should not be having any arrangements of this kind with it.

With regard to the other two countries, it is quite clear that the bill is doing what it has conventionally done, which is to try to avoid double taxation. We sort of have this image that the concept behind this bill and these conventions that we are entering into with these other countries is to avoid double taxation. This image is probably not the most common one that should be applied here, as members will see with some of the points I am going to make with regard to what is in the convention.

My colleague from Outremont used the example of the couple who are spending part of their working year in Canada and part in one of the other countries and making sure that they are not double taxed in both countries. This agreement obviously addresses itself to that.

It goes way beyond that, and I want to just go quickly through the areas it does address. It deals with the issue of residency. The type of revenue one is generating will define whether the taxation is going to occur here in Canada or in the other country. It deals with that fairly extensively at the beginning of the convention that we are now entering into if this bill goes forward, which it appears it will, given that it has support from the official opposition.

It then goes on to list the various types of incomes that one can have. It is important to note these because the approach as to how we will tax those incomes will vary by the nature of the income. I am not going to go into that detail because it just becomes too complex, but we deal separately with income from immovable property, from business profits and from the shipping and air transport sector of the economy. It then goes into a general category of associated enterprises.

It then goes on to other types of income with regard to dividends, interest from investments, royalties. It deals specifically with the capital gains area, which is always a problem between states as to how that will be taxed. It deals with general income from employment and for directors fees. It deals specifically with artists and sportspersons, which has become more of a problem in both those areas. It deals specifically as to how their incomes will be taxed. It finishes off with pension and annuities both in terms of how it will tax those and how they will be received, and there are some agreements in that regard.

It then goes on, under a separate category, to deal more specifically with the taxation of capital gains and capital loses, setting out criteria the countries we agree to follow.

It deals with one final area that is important to note because of some of the scandals we have had. I think members in the House agree we have taxation so the government generates revenue so it can provide for the needs of our society. Whether that is creating a military and supplying the resources it needs, to providing government pensions for those who are in retirement or disabled, assisting the provinces with health care, we can go down the list as to why we tax.

There is of some concern with this convention. Although it begins to address the abuse that we see regularly of corporations in particular, but wealthy people more generally, moving their assets offshore, both in terms of assets that continue to generate revenue but otherwise capital assets offshore to avoid taxation in the country, it does not address it very well. We have seen that any number of times.

We have seen it with some of the scandals that have flowed out of Switzerland, Liechtenstein and a couple of banks in Belgium that have facilitated this abuse. What it is really about is fair taxation, that everyone, individuals and corporations, pay their fair share so the needs of society are met. If one segment of society is intentionally and regularly avoiding its responsibilities by moving assets offshore, we should be doing whatever we can do to bring that in line and seeing that those assets are taxed appropriately and fairly to society as a whole.

We cannot do that without co-operation from the international community. It is just impossible to do it as a sovereign country by oneself. We need to have co-operation with the state to where the assets flow.

We have seen the kind of abuse particularly with Switzerland. Because of its banking system, it has been able to shield abusers over the last 100 or better years who have abused their responsibilities to pay a fair share of their taxes. We are beginning to break through that in many ways.

We saw horrendous abuse in that regard with protection that it gave to organized crime and to the Nazis and fascists both during and after the second world war. We are breaking this down in that country, but it is occurring elsewhere. The bill would not address that to any significant degree. The only point it goes to in that regard is it requires both countries at either end of this relationship to share information if that data is compellable in the country of origin.

Beyond that, the bill would do nothing to increase our ability to, in effect, enforce our tax laws in our country or to ensure that the tax laws in the country with which we have entered into this convention are enforced, oftentimes with assets that may have flowed from our country, whether it is income or capital assets.

It is obviously a flaw in these conventions. I come back to Colombia. Given the high level of corruption in that country, it is going to be a particular problem and it is not going to help us at all. Quite frankly, I seriously doubt the ability of the government of Colombia to enforce those parts of the agreement and to see that taxation is done fairly. If assets are being secreted in that country from Canada, I doubt it will share information with us so we can deal with it in an appropriate way. That is clearly a flaw in the agreement. I do not think we are in any position, as a party, to support that part of it.

With regard to Greece and Turkey, we would generally be supportive. Our relationship with both those countries is well established and well founded. They are countries that overall have a strong reputation of co-operation with Canada. It is appropriate that we enter into these types of arrangements them, whether it is with regard to how we deal with retirement pensions. We see pension moneys flowing between the two countries in some substantial amounts, so it is appropriate we deal with that. It is appropriate they are there to assist us if there is abuse of the taxation process in their countries, of assets flowing into Canada or out of Canada into Greece or Turkey. We have no problem supporting that, but we have very serious problems with regard to Colombia.

This is one of those bills, because of where it has come from, that we cannot support. Because of the arrangements with Colombia, we cannot support it. Support from our party would flow with regard to Greece and Turkey. It is a step in the right direction when we enter into conventions with those countries. They are countries we can deal with in a honest and trusting manner.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, everyone knows when the member speaks, we should listen. There are some very subtle points that come up in every piece of legislation. We often have young people come to this place to listen. They just heard a few things about the bill, notwithstanding the generic attraction or benefits of having a bilateral treaty for taxation to deal with the matters it addresses.

The question is whether a particular country will be a receptive country from which we could expect a good solid information sharing agreement, which is part of the process. Also is there any progress with regard, for instance, on the evasion issues to report? We enter these agreements. The parliamentary secretary had no answer whatsoever as to how these agreements with over 90 countries have helped us. What are the consequences? What are the benefits? What are the dimensions? These are important aspects and I find it concerning, and maybe the member does too, that government members have not risen to speak so they do not have to take questions, which are some of the more important questions on the legislation.

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

Mr. Speaker, the member is very right. We have entered into that many agreements or conventions now with over 90 countries. We just saw the spectacle a couple of weeks ago with regard to Switzerland and the whole Crédit Suisse difficulties we had.

The Prime Minister went to Switzerland, with lots of photo ops, announcements and touting of resolution of problems in co-operation with Switzerland. Over the weekend, we found out that it was all smoke and mirrors. We found out that the Swiss government, Crédit Suisse specifically, was not agreeing to share information and in fact was challenging it through the courts.

I am sure if we went through the list of 90-plus countries, in spite of the fact that we have these types of agreements, we would find a number of them where it is smoke and mirrors. I believe in the vast majority of cases Canada is doing it honestly, that we are enforcing the convention in our home country, but there are any number of other countries not doing that . The government does not know. It has not done any type of ongoing monitoring of whether the country with which we have entered into the convention is being as honest and trustworthy as Canada.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, the member referred to the situation in the Senate with regard to the climate change protocol. It is a very unfortunate situation, but it says one thing, which is the Conservative government has no interest whatsoever in climate change, that it is still back at Kyoto and it being a socialist plot. There is no question that the decision of the Senate came straight from the Prime Minister's office.

With regard to Bill S-3, it is designated with the letter “S” because it was initiated in the Senate. However, if we look at the debate in the Senate, we will have a hard time reading it because it does not exist. The bill just appeared and was referred to the House.

It is an insult to Parliament for a chamber simply to take responsibility for a bill and then to pass it off. If we come up with anything, I wonder how the Conservatives will deal with it after it is passed in the House. It has already passed in the other place.

I am curious about whether the member wants to muse about why the bill came through the Senate and that the Senate had absolutely nothing to say about the importance of it.

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

Mr. Speaker, I knew the bill had been paid very little attention before it came out of the Senate, where it was rubber stamped.

As I made my comments earlier about the elitism that resides in the vast majority of the members of the Senate, it is not surprising they see it as a tax avoidance bill. They see it as the avoidance of double taxation and rubber stamped it. Why do we need sober second thought for something like that? That would be the attitude of the vast majority of senators.

Again, it was a very elitist concept behind our Constitution when we set the Senate up in the first place. We could not trust that rabble in the House of Commons, so we had to have this other group of sober second thought people. I am not sure where they are supposed to come from, other than from the elitist of society, whether it was in 1867 or 2010.

It is very offensive. I find senators personally offensive when I hear them say that the have some kind of democratic role to play in our society. I was elected. I am accountable to the people of Windsor—Tecumseh. Senators are not accountable to anybody, not even to the Prime Minister when we look at it, even though he appointed them.

It really epitomizes the fact, since my friend shared the information with us, that they did not even have any debate on it, and it will go back to the Senate for royal assent if it gets through the House. It is not a valid legislative democratic process. It is offensive to the democratic process in our country or in any of the western democracies.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, I am pleased to speak to Bill S-3.

I took the time to read the debate from May 13 on this bill, at which time it was sent to the Standing Committee on Finance. I currently serve on the finance committee but did not when the bill was sent to the committee back then.

I had an opportunity to read the debate from May to see some of the substantive points and I was not surprised to see that the Parliamentary Secretary to the Minister of Finance, who spoke to lead off this debate at third reading, made the same points that he raised at second reading. That is not surprising and it indicates to me that really nothing has changed since the last time we dealt with this legislation. In fact, I believe this particular bill was up even in the last session of Parliament.

For those who are following the debate, Bill S-3 was introduced in the Senate. It is a bill that would implement conventions and protocols concluded between Canada and Colombia, Greece and Turkey for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income. It is fairly long.

The summary ostensibly repeats the title of the act, but there is some more information in the summary. It says:

The treaties implemented reflect [our] efforts to expand Canada’s tax treaty network. Those treaties are generally patterned on the Model Double Taxation Convention prepared by the Organisation for Economic Co-operation and Development.

The summary repeats the two objectives: the avoidance of double taxation and the prevention of fiscal evasion.

The summary indicates that since a tax treaty contains tax rules different from the provisions in the Income Tax Act, it becomes effective only after being given precedence over domestic legislation by an act of Parliament such as this one. For each of those tax treaties to become effective, it must be ratified after the enactment of this bill.

Interestingly enough, the bill has a short title. There has been a lot of discussion about short titles in this place. People have given whole speeches about how short titles tend to represent that a bill does something that it in fact does not but it is pretty good politics to have the language out there.

As the short title, this bill may be cited as the Tax Conventions Implementation Act, 2010. It makes some sense, because we have these tax conventions with over 90 countries already and every one of them is identical in terms of their clauses.

The bill contains six clauses and the only thing different would be the name of the country. They are each included under parts to the bill. Part 1 is the Canada-Colombia convention, part 2 is Canada-Greece, and part 3 is the Canada-Turkey convention.

The bill is not long at all, and in fact, the first of the six clauses under each part is just to have another short title. For Colombia, for example, it states:

This Act may be cited as the Canada– Colombia Tax Convention Act, 2010.

Clause 2 says this act is a convention, etc.

Clause 3 says that the convention is approved and has the force of law in Canada during the period that the convention, by its terms, is in force.

Clause 4 basically says that, in terms of the provisions of this act or the convention and the provisions of any other law, the provisions of this act and the convention prevail to the extent of the inconsistency. It basically means that if there is an inconsistency between any legislation and this bill, the bill is in force to the extent that there is the inconsistency, and that is handled depending on the nature of it.

Clause 5 allows the Minister of National Revenue to make any regulations that he or she feels are necessary to carry out the convention and for giving effect to any of its provisions.

This gives me a chance to give my standard statement that when parliamentarians look at legislation, often they will find, in some of the clauses, “subject to” the regulations. I should indicate that as parliamentarians debate this at second reading, in committee, at report stage and at third reading, they still have not seen what the regulations are.

The regulations are supposed to be the details. For instance, it would say that, under the Income Tax Act, tools are deductible at a rate of 20% a year. In the regulations it would say that tools include hammers, saws, screwdrivers, et cetera. So the regulations are the details, and the provision in the bill for “tools” gives the generic.

During the debates, as I have said, we do not know what the details are. It is important to know details because we have a committee, a joint Commons-Senate committee called the Standing Joint Committee on Scrutiny of Regulations, which I chaired for a couple of years and served on for five or six years, whose whole purpose is to review the regulations that are ultimately made and then make sure that they are enabled in the legislation that was passed.

Sometimes, and quite frankly it happens far too often, governments try to put in the regulations things that are not contemplated in the bill itself and would in fact change it. It is called “back-door legislation”. It is where the purpose, scope or intent of the bill is changed without having it disclosed to parliamentarians.

I often say that when a bill is important enough, the House should ask the minister sponsoring the bill to present draft regulations to the committee responsible for reviewing the legislation, so that they can review it, not necessarily to change the regulations but simply to ensure that the regulations are properly enabled in the legislation and that the committee has an opportunity to make some comments with regard to whether there are any provisos that should be included in the regulations to make it better fit a specific case as opposed to simply the generic case.

If we have regulations that will apply to all three of these countries, there are some cases, as the previous speaker indicated, where a specific country, depending on its reputation or our circumstances with them, may require a more rigorous or more stringent approach to the regulations guiding legislation for that particular country. I wanted to raise that.

The final clause is that:

The Minister...shall cause a notice of the day on which the Convention enters into force

It just basically says that even if we pass this bill, even if it gets royal assent, et cetera, it is not actually going to become law until there is an order in council and a promulgation of the bill. Nobody knows when this is going to become law, if it will ever become law, but that is where that is.

Those same six clauses are in the bill three times, once for each of the three countries. As the parliamentary secretary noted in leading off this debate, there are four particular points that we should take into account.

First, with regard to reducing withholding taxes, I think there has been enough description about the fact that when people do business and earn income outside Canada, there is a withholding. For people who are not Canadians but are working in Canada, there may be withholding when it is paid to them outside.

Tax will follow people. If there is no treaty, one thing we could find is that people may be charged income taxes on the money by their country of residence and also by the country in which they did the work. This applies to people who have residency in one country and are doing work in another country. Both countries would claim that they needed to collect taxes or that there would be a liability for taxes. So the second point is the double taxation.

The reason we want to address the withholding tax is because we are not going to know whether there is double taxation until somebody files a tax return. But if the withholding tax rates are too high, all of a sudden an awful lot of taxes will be collected by two different government from people's earnings and they will not be able to reconcile them until some period later when they have figured out what income is attributed to which jurisdiction, what the tax rates are and how much they actually owe, and to claim refunds from one or the other or both jurisdictions.

So it is pretty important to deal with double taxation, and certainly one reason is that it is a barrier to trade.

If we do not have a tax treaty with another country with which Canada does business, or Canadians do a lot business there or that country does business in Canada, if they were going to be subject to taxation in both jurisdictions, obviously the value of the work done would have to be grossed up to take into account the fact that we cannot do work for nothing, if it is all going to be taxed back by the total taxes in two jurisdictions.

This issue of double taxation is very important. It would be a barrier to trade or to doing business or doing work between two countries, simply because there may be taxes collected in both jurisdictions that would leave a net income much lower than they could get by doing business in another country. There are some countries, obviously, that would be desirable for us to be able to do business in, and some maybe not, and we have heard a bit about that this morning.

The last point has to do with tax evasion and tax avoidance.

Interestingly enough, this morning the parliamentary secretary spent quite a bit of time talking about the fact that we need to deal with this whole issue of tax evasion and tax avoidance. There is a statement, if I could remember it, being a chartered accountant, that went something like this: tax evasion is illegal; tax avoidance is necessary.

The difference is that tax evasion is contrary to the laws and obviously illegal; but tax avoidance means that if the taxing authorities and the regulations of various countries let things slip through even if we have bilaterals, people may decide that they can do the same business, but if they do it through a particular country, with the amount of income they could earn or the reduction of taxes as a consequence of streaming business through a subsidiary in another country or something like that, they might be better off to do that. Of course, the consequence may be that the tax revenue to Canada would be reduced simply by the shaping of the characteristics of a business organization or corporate structure.

So dealing with the issue of tax avoidance is also an objective, even though tax avoidance is not in fact illegal.

That said, one of the speakers mentioned the recent stories about tax havens. That is a matter of tax avoidance, some would say, but actually it is tax evasion. I think the examples of Switzerland, Belgium, Liechtenstein, et cetera, have shown that there are circumstances out there where in fact countries with which we now have bilateral tax agreements happen to be tax havens and happen to be places where Canadians have been able to take advantage of the situation.

That list would get a lot worse if all of a sudden we started to do business with, I believe, Panama, Uruguay, Costa Rica, or Liberia, the whole list of countries that some people have thought we could be better off having business with and tax treaties.

However, it raises the question about whether one needs to look at the character or the country, its reputation and its track record. We want to do trade but trade at what cost? What does it mean if we have trade with 90 different countries and it is supposed to help deal with double taxation and tax avoidance? What good is that legislation if it has no results and no benefits have been achieved?

This concerns me because this morning, when the parliamentary secretary spoke to the House and there were questions and comments following his speech, I asked him a question. I said that we had tax conventions with 90 countries and I wanted to know what benefits we had achieve. I also asked him what loopholes we were able to close. I wanted to know what we had learned from this. If something is learned from one jurisdiction, it may be applicable to others.

In conjunction with these conventions we enter into, the member said that we also enter into information-sharing agreements. We have this exchange of information but what has that achieved? We need to ask whether we are just passing legislation for the sake of legislation or whether the legislation has some benefits to it, other than being pretty sure that if we lower the withholding tax more people will find it more attractive to do business with those countries. Bilateral trade is always a good thing. It is a good thing for this country because we are in an economic depression of sorts. Canada has much to offer and we want to do trade but if we get it in the front door but are losing it out the back door, what is the purpose?

I asked the parliamentary secretary to give us some examples. When he spoke to this on May 13 and again today, both of his speeches were much the same but there was not one iota of evidence that there was any benefit whatsoever to Canada. There was not one case where a tax evasion scheme was identified. There was not one case where all of a sudden there were avoidance mechanisms that we could deal with.

Legislation needs to have a purpose that is seamless in terms of all the impacts, all the pluses and minuses. No legislation will be perfect but we cannot come here and argue that we need this because it will improve trade. I hope that, as almost side deals with information agreements, we will somehow be able to share information and all of a sudden have some benefits coming out of that. It has never been reported to this place.

I challenge the government today to look at what has happened over the history of these tax conventions with 90 countries and tell us whether there has been anything substantive come out of them, whether we have learned anything that we can apply to other countries and whether there are filters we can put on in terms of the agreements that we will enter into with other countries like Greece, Turkey, Panama and whatever other countries.

I will support the bill because this is a boiler plate approach to doing things. My question is whether it is satisfactory simply to keep doing what we have always been doing if there are no discernable benefits to those deals.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

Mr. Speaker, it is a pleasure to speak today to Bill S-3, an act to implement tax treaties between Canada and Colombia, Greece and Turkey. The objectives of this bill are twofold: first, the avoidance of double taxation; and second, the prevention of tax evasion.

The Organisation for Economic Co-operation and Development, the OECD, has long been an advocate of these treaties to ensure equitable treatment of taxpayers who work and invest in countries outside their own.

Canadian businesses have a long tradition of trading internationally. As well, we have many Canadian workers who work for longer periods abroad, for example, engineers in the oil industry, et cetera. The implementation of these treaties will ensure that those doing business and accepting employment in those countries covered will not face the prospect of having their income taxed unfairly by both their country of residence and the country in which they are working. This double taxation is be very unfair to the people.

The stated goals for entering into a treaty are often included in the reduction of double taxation, eliminating tax evasion and encouraging cross-border trade efficiency. It is generally accepted that tax treaties improve certainty for taxpayers and tax authorities in their international dealings.

As we continue to sign tax treaties such as these with other countries, Canadians will see a benefit through increased tax revenues generated from some individuals who probably try to hide their foreign income and investments.

Taxpayers may have relocated themselves and their assets in the past to avoid paying taxes, so some of the treaties that we are signing thus require each treaty country to assist the other in the collection of taxes and in other enforcement of their tax rules. These treaties include a requirement that the countries exchange information needed to foster enforcement. The requirements in these treaties would ensure that the information on individual and corporate taxpayers would only be shared by the competent legal entities in either country.

While I support the government in continuing to sign treaties such as these, which have been an ongoing process for the past few decades, I cannot and do not support some of the policies of the government in regard to taxes. For example, the Conservatives' plan to cut $6 billion in corporate taxes to the wealthiest corporations will do nothing to help small businesses.

The Liberal Party wants to do things differently. Our policies will help small businesses, create jobs, enhance competitiveness and build cutting edge industries.

As I have been canvassing small and medium sized enterprises, they are asking these questions. What is wrong with the Conservative government? Why does it not have its priorities in place? Why does it not understand that the corporate tax cuts given to large corporations will not create jobs? It is the small and medium sized enterprises that are the engines of growth and it is the small and medium sized enterprises that need the investment.

It is all about choice, choice for Canadians; the Liberals' choice or track record of fiscal responsibility, a plan to make strategic investment in lasting economic legacies versus the borrow and spend Conservatives who spent Canada into deficit even before the recession began, the Conservatives who are wasting billions more on prisons, untendered stealth fighters and tax breaks for large corporations.

The Liberal plan is to invest in people. It is important to invest in people. It is important to use taxpayer dollars wisely. The Liberals have had a track record. They eliminated the deficit and the debt that the Mulroney Conservatives created.

The Conservatives made a mess of the economy. There was record unemployment, mortgages were at 21% and people were losing their jobs. I remember because I was working in receivership. I had the unfortunate task of taking over people's businesses or homes. People were in a bad state. They were losing their shirts, so to speak. The IMF called Canada the basket case of the developed world.

When the Liberals took over, they reined in expenses, brought fiscal prudence and, after the hard efforts of the Liberal government with the help of the Canadian people, Canada was back in business. It was the envy of the G8, thanks to the efforts of Prime Ministers Jean Chrétien and Paul Martin. The Liberal government invested in people, gave Canadians the biggest tax break to the tune of $100 billion and invested in cities and health care. Canada has been the beneficiary of Liberal fiscal competence.

Now that we have a Conservative government, what does it do? It takes the $13 billion surplus and savings, which was meant to help Canada face economic hardship, and it blew it away even before the recession came.

What do the Conservatives have to show for that fiscal incompetence? They have a $56 billion deficit and climbing, cuts to programs, cuts to funding for organizations that serve people, and cuts to organizations that do not meet its ideology. It is going down the same slippery slope as the Mulroney government.

The current finance minister has been called the “architect of deficit” for good reason. It is because of his previous stint in Ontario. That is the same finance minister who wanted to imitate the subprime mortgage initiatives, and we know what would have happened.

On the current economic front, the Conservatives have been a poor fiscal managers and it is not surprising as it has never balanced a budget. The last time that happened was when the Titanic sank, and that is telling.

The Liberals believe that Canadians must live within their means, so too must the government. The questions Canadians are asking are: How can the government, which has a record deficit of $56 billion and counting, borrow money, $6 billion for example, to give cuts to large corporations, many whose head offices are not here? How can they justify this? Why are they not instead investing in Canadian SMBs which are the engines of growth?

Canadians are also asking why the government is borrowing an additional $10 billion to create super jails for unreported crimes when the money should be invested in literacy, mental health, educational institutions, social housing, et cetera, which are the determinants of crime. Why is the government so foolish in its choices?

Would a family be foolish enough to borrow money for unnecessary toys when given a choice between food on the table or frivolous expenses? No family would have the luxury to do such foolish things. Therefore, Canadians want their government to ensure it is not spending their hard-earned tax dollars foolishly.

While speaking of tax treaties with other nations, it must be noted that those treaties do not address the problems of unscrupulous individuals who hide earned income in offshore bank accounts to avoid paying Canadians taxes. The government has been very slow off the mark in pursuing the potential billions of dollars hidden in Swiss and other bank accounts.

To have an efficient tax system, it is desirable to have an efficient government that collects and spends tax revenues in a logical, fair and transparent manner. As I mentioned, unfortunately the government fails on all three of these requirements. For example, spending $16 billion on an untendered contract for stealth fighter jets at a time when many Canadians are unemployed and in danger of losing their homes is not logical.

Spending millions of dollars in the industry minister's riding on such things as sidewalk replacement miles away from the meeting site and pretending it to be related to the G8 is not fair. Spending $6 billion on unneeded tax breaks to big business while threatening to increase EI premiums is showing how transparent the government's disregard for the average Canadian worker really is.

Canada's federal government now faces a $56 billion deficit, and its expenditures are simply not under control as examples of waste continue to add up.

Even before the recession, the government has spent more than any other in the history of Canada, increasing government spending at three times the rate of inflation in its first three years.

Now the government is pushing the accelerator pedal with plans that will cost $10 billion more for new prisons when crime rates are falling and $16 billion more on a sole-source stealth fighter contract when Canada's military requirements have yet to be defined. This is after it has already spent $1.3 billion on a 72-hour G8 and G20 summit when South Korea is expected to do the same for less than $25 million.

People are worried about their jobs and their ability to pay down a level of household debt that has soared. Middle class families in Canada are being squeezed like never before, more severely in fact than anywhere else in the western world.

The average Canadian family is about $96,000 in debt. We owe almost $1.50 for every single $1 of disposable income and our cost of living keeps rising. Credit card balances are high, mortgages have been borrowed against and lines of credit are full.

Canadian families face serious economic challenges as they confront rising household debt, which is mounting. Educational costs are mounting. The challenge of saving for retirement and the cost of caring for sick or aging family members is mounting.

As I was canvassing, seniors came up to me and asked, “How can the government justify spending $1.2 billion on the G8-G20 for a 72-hour photo op and not invest in seniors? Seniors who have worked hard, who have invested in their country, who have put in whatever they have, now risk losing their house and their income because the government refuses to reform pensions”.

[The Deputy Speaker, Andrew Scheer]

The hon. member will have seven minutes left to finish her speech after question period.

The House resumed consideration of the motion that Bill S-3, An Act to implement conventions and protocols concluded between Canada and Colombia, Greece and Turkey for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, be read the third time and passed.

[The Deputy Speaker, Andrew Scheer]

When we started statements by members, the hon. member for Don Valley East had seven minutes remaining in her speech.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

Mr. Speaker, Canadians need their government to be fiscally prudent and so far Canadians are worried. They have not seen anything from the government that would give them comfort. When they look at the choices the government has made, they see that, instead of investing in them, their families and their future, the government has done just the opposite.

For example, Canadians are worried about the serious challenge in their future of an aging population. Why is the government not taking the Liberal lead and investing in senior care and in home care so that seniors can live in dignity and provide relief for families as well?

Canadians also want to know what strategy the government has to get out of the deficit. They do not want to go down the slippery slope of the past Conservative governments where the balance of trade was to the disadvantage of Canada, where investment was unattainable due to the huge deficit and where the IMF called Canada the basket case of the G8.

Canada was not the place to invest. Canada was not the place where anybody wanted to do anything. Therefore, Canadians want to know what the plan is. Where is the economic plan? Does the finance minister really have a plan?

Canadians are not very comfortable. History shows to the contrary. The same finance minister is the one who created huge deficits in Ontario and who left Ontario in such bad shape. He shut down hospitals, put 16,000 nurses out of work and left a mess.

Canadians want to know where the jobs are. The Conservatives keep repeating over and over again In the House that jobs are being created but Canadians want to know where those jobs are because they do not have them. They also want to know where they can get the jobs, as the government seems to spout so many numbers.

In fact, Canadians with education and experience cannot find jobs. Canadians want the government to tell them the truth about how, within the changing global environment, the Canadian economy will be competitive. How will Canadians remain competitive? How will their businesses remain competitive when the government does just the opposite? The government does not believe in science and has cut funding to research and development.

Canadians also want to know why the government is not giving the small and medium sized enterprises incentives. They are the ones that create jobs. They are the engines of jobs. Corporations already have the lowest tax rate. Twenty-five per cent is the current corporate tax rate, which is better than any of the G8 countries, thanks to the previous Liberal government's fiscal management. Canadians want to know why the government wants to increase their taxes but give tax breaks to large corporations that do not create jobs and do not need the tax breaks.

Canadians want to work and want a fair system of taxation. They understand the balance between fiscal prudence and social justice, a balance that Liberal governments of the past have been able to provide them. Canadians are fair-minded people. They want fairness across the board. Tax fairness across borders is a laudable goal. Tax fairness here in Canada is something the government does not have a single clue about.

I support this bill on tax treaties because I understand how important tax treaties are. I also understand how it will bring fairness but it is important that the record show that I disagree with so much more of what the government is doing to the Canadian people and to this great country.

[Jim Maloway, NDP, Elmwood—Transcona, MB]

Mr. Speaker, I am pleased to speak to Bill S-3 this afternoon. A number of very important parts in this bill do require more debate before it passes on in the House.

The bill originates in the Senate and a considerable number of bills have come to us from the Senate this year. This is an act to implement conventions and protocols concluded between Canada and Colombia, Greece and Turkey for the avoidance of double taxation and prevention of fiscal evasion with respect to taxes on income. The bill relates to Canada's continuing efforts to update and modernize its income tax treaties with other countries. At present, Canada has tax treaties in place with 87 countries, a figure that has been mentioned before. The bill would implement three new treaties that Canada has signed with Colombia, Greece and Turkey.

At this point, I want to get into the double-taxation agreement situation as it relates to Panama and the free trade agreement with Panama that was being discussed in this House and approved and implemented by the government.

As members know, the OECD has a grey list of tax havens but France has a black list of tax havens. Countries on those lists, in many cases, try to do what they can to get off the list. They do that by negotiating these agreements.

In February of this year, the Government of France got tough with Panama and took proactive measures. It put a tax on French corporations and individuals dealing in Panama. Only a few months after it took that ambitious and courageous stance against its own companies, Panama said that it was willing to sign a tax-sharing agreement with France. I do not have the full list with me today but I have spoken on this before.

The rule is that the country must sign, I believe, a dozen of these treaties before it can get itself off the black list. I believe the same rule applies for the OECD grey list. In just six short months after it was put on the French black list and the French government took action against its companies by bringing in huge withholding taxes on companies doing business there, Panama managed to scurry around and get, I believe, eight treaties in place. I believe Italy was one of the countries and there were other countries.

Interestingly enough, on the very day that we were debating the Panama free trade deal here in the House of Commons, the Prime Minister was meeting with the President of Switzerland and was broaching with her the issue of the taxation agreements. However, this was at a time when his own government was debating the Panama free trade deal and yet Canada was not one of the eight countries that Panama had a deal with. It just seems that there is a credibility gap here with the government.

On the one hand, it is negotiating a trade deal with Panama but one would think that it is known by the government that Panama is a tax haven of note, that it is a country that has a problem with the Colombian drug cartels and Mexican drug cartels that launder money through Panama. According to an American source in the American Congress, there are 350,000 companies or perhaps more doing business in Panama.

All this information is well documented. It is a tax haven. It is on the blacklist. It is on the OECD grey list. It is noted by the United States Congress that it is 350,000 companies that are using Panama as a tax shelter and a drug laundering place.

President Obama's group in Congress is using this information as a reason for not proceeding with the free trade agreement with Panama at the current moment.

Canada should be aware that Panama is trying to get itself off the list by signing agreements, and it has not got an agreement with Canada, one of the countries that it is trying to get a free trade agreement with. It is unbelievable that this would happen.

Another reason the Americans are reluctant to pass the free trade deal with Panama is that one of the companies, I believe it is AIG, and the member for Sudbury may know the amount of money involved, but the fact of the matter is that AIG, which got a multibillion dollar bailout compliments of the American people and the American government just two years ago, is now in the process of suing the very government that gave it all these billions of dollars to bail it out. It is suing the American government, trying to recover monies, back taxes, that the Americans say it owes and trying to reclaim this money by virtue of its investments in the tax haven of Panama. These are unbelievable stories that we encounter.

The Americans have good reason for holding back in approving the Panama free trade deal for all the reasons I have outlined, because of these tax treaties that we are talking about.

Clearly governments have to get proactive and force these tax havens, which are a moving target, we must be aware. A country that is a tax haven today may get off the tax haven list, and yet another country will take its place. It will be and is a constant battle that the governments have to deal with.

However, I think we have seen more activity and more proactive intervention than ever before as far as tax havens are concerned since the 9/11 experience.

The Swiss banking system has been rock solid for many years, and it does not give out information on its customers. That is one of the reasons it has so many customers. It has drug dealers, arms dealers and all sorts of shady people who deal with the Swiss banks, and some not so shady too but who put their money in Swiss banks for the purposes of hiding the money.

Their concern is not interest. As a matter of fact, if we ever wonder why the Swiss banks are able to lend their money out at such a low interest rate, it is because they are not paying much in terms of deposits. As a matter of fact, I believe there are some depositors in Swiss banks who actually pay the bank to store the money. Not only do they not get interest on their deposits but they actually pay the bank. They are paying for that shield of secrecy.

For example, in 1987 when GICs in Canada were yielding 18% to 20% for 30-day treasury bills, it was possible to get money in Switzerland for perhaps 6%.

One might ask: How could that be? If the banking system is shrouded in secrecy and clients are being protected by the banks and by the state, then a lot of shady things can happen over there and they can lend that money out and make huge profits at much lower rates. The system stayed intact for many years.

Canadians have been putting money in these tax shelters as well. The 9/11 experience changed things. The Americans finally got tough with the Swiss and some of the other countries because they know that a number of terrorist organizations are funnelling money through these avenues.

That is why the facade is starting to crumble. It is starting to crumble more because of the fear of terrorism and the Americans' putting pressure on the Swiss system. They are now starting to force more of these tax treaties to be signed and more information to be made available.

In the last couple of years there have been at least two high-profile cases, one in Liechtenstein and one in Switzerland. Bank employees were not happy with their employers so they took computer disks. In the case of the Liechtenstein bank, the employee sold the computer list to the German government, which was happy to get it. The German government chased down the people on the list and has collected a substantial amount of money in back taxes and penalties from these tax evaders. I am not aware of any jail terms but they were hit with penalties and back taxes. They collected a huge amount of money from these people.

The experience of the Canadian government is totally different. The German government gave the Canadian government a list of 100 people, most of whom were from B.C. How have these 100 Canadians been treated? First of all, Canada Revenue Agency approached them offering an amnesty. All they had to do was walk to the nearest Canada Revenue Agency office, admit making a mistake by investing in a tax shelter in Liechtenstein, provide the office with the information and volunteer to pay the back taxes and a penalty, and everything would be square. There would be no jail time, no other consequences, and this after the Canadian government was given the information upfront by the German government. Even then, it took the Canadian government forever to get some results.

The member for Souris—Moose Mountain might know how much money the Canadian government has collected. We suggested that nothing had been collected in the way of penalties or back taxes, but a government member did recently stand up in the House and say that some money has been collected from the people in that particular case.

There was a more recent case involving a computer person in a Swiss bank who escaped to France with the records and turned them over to the French government. That has now given us a bigger pool. About 1,600 Canadians invested money in that tax shelter. I believe the number of Americans, with ten times the population of Canada, which is 30 million, is much less than the number of Canadians.

Our tax people have all this information. Guess what? Even with this information, they are still negotiating with these people. They are still offering amnesty to these people. It is little wonder that Canada is viewed as a soft touch and not very aggressive in trying to collect and chase down people who invest in tax shelters. That undermines the public's confidence in the system when they see these things happen.

They see that all sorts of rich people are able to take their money and invest in these tax shelters, and guess what? They get an amnesty, if they get caught. If they are caught, all they do is walk into the nearest Canada Revenue Agency office, make their declaration and they are off the hook. That is almost an invitation to keep doing it.

For the average taxpayers, the working people who get a T4 at the end of the year, when they see that, they lose faith in the system, and well they should. We should be much tougher.

I have asked the government to give us a list of arrears in other areas of taxation. How do we know that the government is not going soft on the collection of arrears in GST, income tax and any other taxes that the federal government is collecting?

For example, in Manitoba a number of years ago we did get a list of arrears. Not only that, but we got some brown-bag information put under our doors that provided a list of some well-known people in the province of Manitoba, the province of the member for Souris and Killarney. Some well-known people were getting money from his former department. It was not when he was the minister, but it was the industry department. They were getting grants from the industry department; meanwhile they were in arrears with their provincial sales tax. The government was rewarding them for this. Thanks to a new computer system that was introduced when the member was in power in Manitoba a number of years ago, we were able to connect the dots and stop that from happening.

I wonder what the situation is with this government. Is it soft on collecting corporate tax, GST and income tax from people in this country? We certainly know that the government has had a very questionable experience on tax shelters.

It surfaces every so often that Canadians get caught in tax shelter situations. In future, perhaps the government should make a very strict announcement to put a time limit on the amnesty. Perhaps the government could announce a program that would give people 90 days to come clean. After that, if people are caught investing in a tax shelter, they should not simply get off the hook by taking advantage of the amnesty, paying the back taxes and some penalties, but they should face prosecution and jail terms. I think it would be interesting to see how many people would actually come forward.

The current amnesty is not working, and it will never work as long as people know that they never have to come forward until they are caught and, when they are caught, they just make the declaration. That policy is in fact encouraging tax evasion and not trying to stop it.

However, this government had poor examples to follow. It was following the Liberals. The Liberals are anything but tough on tax shelters. The former Liberal Prime Minister himself, I believe, was in fact flagging his trans-Canada steamship lines in Barbados. It is hardly an example for people to pay their taxes and be honest with the government.

It is time for the government to break with tradition and the sorry record of the previous Liberal governments in doing nothing on this issue of tax evasion. It is time for the government to get tough with the people who involve themselves in the tax shelters.

We should be pushing with the Americans and other countries. We should be getting together and co-operating with the French government to make it tougher on these tax havens so that we can take them out of business as quickly as possible.