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

[Peter Kent, Conservative, Thornhill, ON]

moved 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 second time and referred to a committee.

[Ted Menzies, Conservative, Parliamentary Secretary to the Minister of Finance]

Mr. Speaker, I appreciate the opportunity to start debate on Bill S-3.

However, before I get into my prepared remarks, as this legislation involves Greece, perhaps it is a very relevant time to bring the members of the House up to speed on the latest issues in Greece. It has been very much in the media and I think it is appropriate to comment on the current situation.

First and foremost, Canada is concerned about the situation in that country and other threats to the global economy. That is why we have been taking a leadership role within the G7 and the G20 on global financial reform, including Greece.

Over the weekend, the finance minister chaired conference calls, and I emphasize “calls”, with G7 finance ministers on that matter. Canada, through the IMF and through our IMF partners, is providing key support to help ensure the situation is contained.

The Bank of Canada, working with the central banks around the world, is also helping provide key liquidity to markets.

While we are satisfied that the IMF and the EU actions to date will help address recent market volatility, we remain concerned about the fiscal situation in some countries. Hopefully, in a small way, the passage of Bill S-3 and the Greece-Canada tax treaty within it will help the turnaround in Greece by reducing tax barriers to trade and investment between our two countries. The strong ties between our two countries, bolstered by the large and active Greek Canadian community, will further be strengthened by this legislation as we create better conditions for Greek companies to do business in Canada and for Canadian companies to operate in Greece.

As Hellenic Canadian Association president, Theodoros Aslanidis, and I thank my hon. colleague from Scarborough Centre for helping me with the pronunciation of that name and I still may have it wrong, noted, “the agreement is very positive”.

The legislation would implement Canada's recently concluded tax treaties with Greece and Turkey as well as Colombia, tax treaties that would help both prevent unfair double taxation and tax evasion.

Bill S-3 is part of Canada's ongoing effort to update and modernize its network of income tax treaties, which represents one of the most extensive in the world. In fact, Canada has tax treaties in place with nearly 90 countries. Moreover, Canada is continually working on agreements with other jurisdictions.

Before I continue, let me be clear. While Bill S-3 is important legislation, it is largely routine. Indeed, in the 39th Parliament, the House adopted similar legislation related to tax treaties with Finland, Mexico and Korea. In the 38th Parliament, under the former Liberal government, legislation concerning tax treaties with Gabon, Ireland, Armenia, Oman and Azerbaijan were also adopted.

Bill S-3 and all the aforementioned similar legislation related to tax treaties are in fact patterned after the OECD model tax convention. This OECD framework is widely accepted in the international community.

As Peter Barnes, the noted former deputy international tax counsel at the U.S. Treasury Department, noted in the OECD Observer magazine:

—the OECD model has achieved a consensus position as the benchmark against which essentially all tax treaty negotiations take place....the OECD Model Tax Convention is a tremendously important tool for smoothing the way of international business and global trade.

Rest assured, the provisions in the three treaties in Bill S-3 comply with the international norms that apply to such treaties. They are exactly like the legislation from the 38th and the 39th Parliaments. Accordingly the tax treaties with Greece, Turkey and Colombia have all been designed with two goals in mind: avoiding double taxation and preventing international tax avoidance or evasion.

Before elaborating further on the importance of these two objectives, there are a couple of general points to discuss regarding tax treaties and their role in contributing to a competitive tax system in Canada.

Our Conservative government is always working to expand its network of tax agreements with other countries. In order to combat offshore tax evasion, we unveiled a policy in budget 2007 that introduced incentives that have non-treaty countries enter into OECD-modelled tax information exchange agreements with Canada. It also required that all new tax treaties and revisions to existing tax treaties include that standard for tax information exchange.

I am happy to report that negotiations on tax information exchange agreements have commenced with more than a dozen jurisdictions. What is more, in August 2009, Canada signed its first tax information exchange agreement with the Netherlands Antilles. That agreement, along with those between Canada and Colombia, Greece and Turkey, all include the OECD standard on international tax information exchange.

We have built on that record in recent years as well. For instance, we have given the Canada Revenue Agency additional resources for international tax audit and enforcement. I believe all members realize and understand that tax treaties are an important tool for improving our system of international taxation.

As I mentioned, the tax treaties with Greece, Turkey and Colombia are designed with two key objectives in mind. The first objective is to remove barriers to cross-border trade and investment, most notably the double taxation of income. The second objective is to prevent tax evasion by encouraging cooperation between Canada's tax authorities and those in other countries.

First, we all recognize that removing barriers to trade and investment are paramount in today's global economy. Investors, traders and others with international dealings need to know that the tax implications associated with their activities, both in Canada and abroad, are protected.

Canadians also want to be treated fairly, with consistent tax treatment that is set out from the start. In other words, they want to know the rules of the game and they want to know the rules will not change in the middle of the game.

Bill S-3 will remove uncertainty about the tax implications associated with doing business, working or visiting abroad in Greece, Turkey and Colombia.

These tax treaties will establish a mutual understanding of how those tax regimes will interface with those in Canada. This can only promote certainty and stability, and help produce a better business climate, especially with respect to eliminating double taxation. Nobody wants to have their income taxed twice, nor should it be, but without a tax treaty, that is exactly what could happen. Both countries could claim tax on income without providing the taxpayer with any measure of relief for the tax paid in the other country.

To alleviate the potential for double taxation, tax treaties use two general methods, depending on their particular circumstances. In some cases the exclusive right to tax particular income is granted to the country where the taxpayer resides. In other cases, the taxing right is shared. For example, if a Canadian resident employed by a Canadian company is sent on a short-term assignment, perhaps for three months, to any one of the three treaty countries noted in Bill S-3, Canada has the exclusive right to tax that person's employment income. If, on the other hand, that same person is employed abroad for a longer period of time, say for one year, then the host country can also tax the employment income.

Under the terms of the tax treaty, this individual will be treated fairly. When the individual files his or her taxes, a credit will be provided on the tax that has been paid in that other country, thus avoiding double taxation and keeping the tax system fair.

It has been noted that one way to reduce the potential for double taxation is to reduce withholding taxes. These taxes are a common feature in international taxation. They are levied by a country on certain items of income arising in that country and paid to residents of another country.

The types of income normally subjected to withholding tax would include, for example, interest, dividends and royalties. Withholding taxes are levied on the gross amounts paid to non-residents and represent their final obligations with respect to Canadian income tax.

Without tax treaties, Canada usually taxes this income at a rate of 25%, which is the rate set out under own legislation, the Income Tax Act. Accordingly, Bill S-3, as with all tax treaties, addresses this issue with numerous withholding rate reductions. Specifically, Bill S-3 will provide for a maximum withholding tax on portfolio dividends paid to non-residents of 15% in the case of Colombia and Greece, and 20% in the case of Turkey.

For dividends paid by subsidiaries to their parent companies, the maximum withholding rate is reduced to 5% in the case of Colombia and Greece, and 15% in the case of Turkey. Withholding rate reductions also apply to royalty, interest and pension payments.

The treaties in Bill S-3 cap the maximum withholding tax rate on interest at 10% in the case of Colombia and Greece, and 15% in the case of Turkey. Each treaty in this bill caps the maximum withholding tax rate of a royalty payment at 10% and on periodic pension payments at 15%.

I mentioned the tax treaties have two objectives. I have spoken at length about the first objective of removing barriers to cross-border trade and investment by eliminating double taxation. While double taxation is clearly problematic, tax evasion and avoidance are also unfair and economically damaging. The loss of revenue resulting from tax avoidance and evasion obviously negatively affect the efforts of governments to function.

Not only that, tax evasion is blatantly unfair as it places an uneven share of the tax burden on honest taxpayers. That is why the second objective of tax treaties is to encourage co-operation between Canadian tax authorities and those in other countries.

We all appreciate that the best defence against international tax avoidance and evasion is through improved and expanded mechanisms for international co-operation and information sharing. By increasing co-operation between Canada and other countries, in this instance Colombia, Greece and Turkey, we are able to better prevent tax evasion.

Tax treaties are an important tool in protecting Canada's tax base by allowing consultations and information to be exchanged between our two governments. This means that we can better catch those trying to avoid taxes, ensure the integrity of our tax system, and that everyone is taxed equally.

Indeed, our Conservative government firmly believes that Canadians should be confident that all taxpayers contribute their fair share. We demonstrated that commitment in budget 2010 through a number of initiatives intended to protect the integrity of Canada's taxation system, initiatives that will help ensure that all taxpayers pay their fair share of tax on income earned in Canada and abroad.

For instance, in budget 2010 we proposed to address tax planning practices that have developed, which have allowed under particular circumstances a portion of stock-based employment benefits to escape taxation at both personal and corporate levels, by: preventing tax arbitrage opportunities involving leases with government entities, other tax exempt entities or non-residents who are not subject to Canadian taxation; consulting regarding a proposal to require taxpayers to identify aggressive tax planning, which will provide the Canada Revenue Agency with early notice of new and emerging aggressive tax-avoidance schemes; consulting on revised proposals to prevent tax avoidance through the use of offshore trusts or other foreign investment entities; and ensuring that businesses cannot inappropriately capitalize on the differences between the tax systems of Canada and other countries to artificially increase foreign tax credits related to cross-border transactions and, thus, pay less tax.

We also propose to prevent aggressive tax planning by ensuring that income trust conversions into corporations are subject to the same loss utilization rules that currently apply to similar transactions involving only corporations, and finally, to ensure the provisions of the Criminal Code that apply to serious crimes related to money laundering and terrorist financing can be invoked in cases of tax evasion and prosecuted under Canada's tax statutes.

Taken together, such initiatives are consistent with our Conservative government's ongoing commitment to tax fairness.

In conclusion, as I mentioned at the outset, Bill S-3, while standard legislation at heart, is nevertheless very important. There is little doubt that its benefits are clear. The tax treaties covered in this proposed legislation will promote certainty, stability and better business climate for taxpayers and businesses in Canada and in these three treaty countries.

Moreover, these treaties will help to secure Canada's position in the increasingly competitive world of international trade and investment. They comply with international OECD standards and will help ensure a stronger tax system for Canadians. It will help ensure our goal of tax fairness for Canadians.

[John Cannis, Liberal, Scarborough Centre, ON]

Mr. Speaker, I enjoyed listening to the parliamentary secretary and I must say I am pleased. He touched on income trusts and we know that the government made a commitment. It reneged on it. With income trusts, I think there is a provision in there where it seems that Canadian companies are at a disadvantage. Foreign companies can borrow money to expand and acquire companies, invest, et cetera, and write off those borrowing costs. Canadian companies have lost that advantage.

Could he please talk about that? Are there any provisions in here that address that? We are trying to bring tax fairness and I see that. Can we bring some fairness to our corporate world as well?

[Ted Menzies, Conservative, Macleod, AB]

Mr. Speaker, I thank my hon. colleague not only for his question, but for his assistance in pronouncing the Greek gentleman's name. I did have trouble with that.

Certainly, as I mentioned in my speech, this is about tax fairness. He likes to keep bringing up in this House the fact that we actually implemented tax fairness with the income trust issue that the Liberals were either scared to address or just buried their heads in the sand and did not deal with.

This Conservative government has dealt with some very difficult issues, but we have dealt with them head-on, such as the environment. Canada is a leader with our environmental record because we met it head-on. We listened to the fact that other countries were not meeting their commitments and frankly, we were a little ashamed that we were not meeting the commitments that the Liberals had challenged us with. They had never followed up, so we went to Copenhagen and we were sponsors of a commitment to an accord that many countries have now signed on to. We take the tough decisions.

Getting back to Bill S-3, this is very important for his home country, for Colombians, for Canadians operating in Greece, Turkey and Colombia. They need to be assured that when they send employees of a Canadian company to those countries, they are not going to be overtaxed or double taxed.

It is a part of our pattern of expanding trade. We continue with our very strong and very bold trade agenda in putting forward new trade initiatives and agreements. This is just part of a treaty that will protect our Canadian companies to help protect their employers as well as those countries.

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

Mr. Speaker, I want to thank the member for his speech on Bill S-3. I have several questions for him, but the main one that I am interested in is the fact that even though we have 90 or so of these treaties in existence right now, and they do deal with the whole issue of tax evasion and tax avoidance, I would like to ask him whether he could tell us how much money has actually been recovered under the existing treaties that have been signed?

He talks about how we can co-operate between our tax department and the tax departments in other countries. I presume that there are some provisions to get our hands on bank records. I am just not sure how that works.

Under the existing 80 to 90 agreements that are in force and have been in force for a number of years, how much money has actually been recovered by the Canadian government in terms of tax avoidance or evasion?

[Ted Menzies, Conservative, Macleod, AB]

Mr. Speaker, I will certainly see if I can get that information, but we are dealing with the Canada Revenue Agency and I am not sure that those numbers would even be available to me. If that is possible, I would certainly like to fulfill that commitment.

That is a major part of these treaties. We are always concerned with those who are less than honest. No one likes paying taxes, and I am sure that the Speaker would be at the head of the campaign to reduce Canadians' taxes. No one likes paying taxes, but everyone likes to have the advantages that this country provides through some of the social programs. The only way that those social programs are paid for is through taxation.

I am sure my colleague in the NDP will be supporting this bill wholeheartedly to make sure it is fair for all Canadians and for all members of the three countries that we are trying to help.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Mr. Speaker, I want to thank my colleague for his hard work on the finance file and for his speech today.

On these tax treaties, could the member talk specifically about some of the efficiencies to businesses and individuals that are received from these tax treaties? Could the member also comment on some of the challenges around some of the privacy issues that are associated with the exchange of information?

[Ted Menzies, Conservative, Macleod, AB]

Mr. Speaker, I think the member, in having a strong business background, understands the complexities of tax compliance.

If we do not have such treaties in place, these tax compliance issues are duplicated. Then we are back and forth, and an employee of a company is taxed twice. The employee will come back to his or her member of Parliament and ask the member to try to get the taxes back from one country or the other.

The reporting mechanisms that Canadian companies have to deal with would be extremely simplified in this process. It is an assurance when we have a treaty in place. Things will go wrong. Mistakes will be made, and I am not suggesting just by accountants, but mistakes will be made, and if we have a treaty in place with secure legislation that requires compliance, it makes it much safer for employers and employees.

[Joe Volpe, Liberal, Eglinton—Lawrence, ON]

Mr. Speaker, I have a couple of questions that arose out of comments a few moments ago.

Of course, one is that with such a valuable piece of legislation, especially with all of its tax implications, one might have thought it would have been addressed by the government here in this House first. I would like to ask the member why the government chose the route of the Senate in order to get this kind of legislation here.

The second question is around his statement that his government has made courageous decisions. I am just wondering about the definition of courage that sees the government making a promise during an election regarding income trusts, then reversing itself because there was about a $300 million tax leakage. That correction caused an overnight collapse of $35 billion in the assets of all of those people who had put money into those income trusts. By the way, 85% of those companies that had turned themselves into income trusts are now owned by Americans, so they pay no taxes here.

I am just wondering whether the member thought that the tax treaties we had arranged in respect of the income trusts worked to Canadians' advantage. Canadians lost $35 billion as opposed to giving up $300 million in taxation. Did he think that was a good exchange to reduce taxes by $300 million so that taxpayers could lose $35 billion in assets?

[Ted Menzies, Conservative, Macleod, AB]

Mr. Speaker, my how memories lapse. Those are wonderful numbers. They are totally irrelevant to today. They are totally irrelevant to anything we are talking about.

We have some new senators in the other place who are looking to help further the work of this government. We had a senator who was very interested in putting forward some legislation. We gave Senator Stephen Greene the opportunity to bring this legislation forward. I see nothing wrong with that. It is great that members in the other place have the opportunity to recognize all the benefits that are in here. We look to them for guidance, but many businessmen in the other place understand that this needs to move quickly. They have sent it here. Let us move it forward and get this done so that we can protect Canadians.

[Joe Volpe, Liberal, Eglinton—Lawrence, ON]

Mr. Speaker, I am delighted to speak to this bill today.

Those of us in the Liberal Party are into what is called nation-building. Nation-building is a bit different from what the parliamentary secretary said a moment ago is the primary function of parliamentarians, that is, to make sure they conduct things the way a businessman would run his corner shop. That is not to diminish the fact there always needs to be economic probity, financial probity in everything that we do, but there is a different action.

In this place, all members of Parliament, whether their background is in business, law, academic teaching, small business, or worker, are interested in building this nation. They do it through the economic stimuli available to a Parliament like our own to ensure that all men, women and children have the opportunity to fashion out a future for themselves in this country, to avail themselves of all of the natural resources that are here and the human resources that come with the interaction of people who live in a collective, and all of the entrepreneurial skills that are developed either through some of the institutions that are funded by government in part on the one hand and stimulated by those who see the value in research and development on the other.

Bill S-3 addresses one component of that social economic development that comes with nation-building. One would expect that I as a Liberal and those of us in the Liberal caucus would be supportive of any initiative that would render the free flow of capital for investment to allow enterprise to capitalize on its ingenuity and create wealth as a result, and to do it not just here in our country but elsewhere. It is called the exporting of our intellectual property, of our entrepreneurial skills, indeed of our culture.

Those of us who are nation-builders, those of us who are members of the Liberal Party, understand that government is not only about operating a balance sheet. We understand that balance sheet has to include the ambition and the dreams of all Canadians in whatever fashion they are developed around the country.

The reason taxation treaties are important and why Liberal governments in the past have sought them in the context of the OECD and the model tax convention that has driven it is that we believe in fairness, the fairness that comes with making an investment and recovering revenue from that investment, but not an investment or return that would be double taxed. In other words, we do not have to make a contribution twice to the infrastructure of a culture, economy and society that may be thousands of kilometres away.

That does not mean our corporate culture would go in and ransack and pillage and walk away without any responsibilities. We believe in a mutual co-operation with legitimate authorities in other locations that welcome our entrepreneurs, our investors and co-operate with them in developing the local economy while allowing ours to come back with the merited profits without being taxed there and here.

When we have to tax here and we have to tax back, the first casualty is probity, i.e., it is replaced by corruption. The second of course is people look for ways to avoid tax and that obviously leads to tax evasion.

That does not work well for the development of any country, because the underlying weakness is one that says the individuals, or the corporate individuals who make an investment, who garner wealth from the activity in whatever place that activity is resident, no longer have a responsibility to their community.

In the Liberal Party we believe in a collective responsibility. We believe there should be profit and capitalization of all intervention and investment that is made in a territory or a collective, but we believe that something must be left behind: growth. Growth is what we leave behind, and a respect for the individuals that allowed us to move along.

We have developed a series of treaties with many countries. I am glad to see that we are now moving ahead with Greece, Turkey and Colombia. I understand that we are already in negotiations with other countries like Cuba. The idea is that those countries and their legitimate authorities help our own investors to secure a proper investment environment and at the same time leave behind an additional investment through taxation that is not so onerous as to generate avoidance, evasion and corruption.

Legislation like this seeks to impress upon the international stage that one can be a responsible and active democracy and still be very dynamic economically. One can be socially oriented, i.e., have a sense of responsibility to the collective and at the same time pursue a very dynamic and rewarding bottom line. We wonder why legislation like this, which purports to do that, would not have been presented earlier and would not have been initiated in the House of Commons, where all money bills, tax initiatives and fiscal responsibilities are developed, debated and promulgated.

We would have thought that. Not to be light on this, but it seems to me that it did happen in the past, but prorogation came along and killed it. Now it has returned again through the Senate. It has come back here. Maybe there will be another prorogation. I must think about it a moment. Why? Because the parliamentary secretary talked with such great earnestness about the government's commitment to all of these bottom lines and fiscal responsibility issues and about how this is almost indispensable to everything in the world.

I agree, but I am not sure that the issue of commitment can be attached to that speech. The legislation was presented, debated, prorogued and killed. Now it has been raised in the other place and brought here. We will make a few interventions. There is no indication that things are going to be moving with any speed. It is important for our businesses to understand that the government is actually in a position where it wants to help and prepare the road so that foreign governments are at least as sensitive to the dynamics of the marketplace as our own might be.

It struck me as well that the parliamentary secretary talked about the greatness of the Canadian financial system and the basis upon which it is founded, how solid it might be, how much of a beacon it is for the rest of the world, how the marketplace is solid and how there is an appropriate balance between business and government, between society and business and between what must be invested and what must be taxed. In other words, how do we make a contribution to renewal and growth?

The parliamentary secretary said that all of these things are part of the Canadian culture. In saying that, he is paying a compliment to the governments of former prime minister Jean Chrétien and former prime minister Paul Martin, who were able to establish a system of balanced budgets.

Someone is going to say, “Oh yes, but somebody had to pay for it”. Canada had balanced budgets and surpluses, in the western world, so that we had the most solid financial system, financial administration, anywhere among the G8. In the OECD countries, Canada was seen as a country that reduced taxes. Of course we had a reduction in the national debt from roughly $600 billion to about $500 billion and an elimination of the deficit, from $43 billion to zero. No, I am sorry, it did not go to zero; it actually went to a $12 billion surplus, at last count, which was then reinvested in our collective, our community, Canada. It was invested in the taxpayers. It was invested in those Canadians who wanted to make this country grow.

Every country lusted at our model. They asked how it could be that Canadian administrators, Canadian legislators, could make investments in research, in human resources, in universities and colleges, could produce a federal system that allowed for two levels of government to be able to make investments in their young people, in the infrastructure to take care of the old, in the hospitals and medical systems that are required to give a quality of life that is the envy of the world? How can this be? What do they do?

Well, they took a look at the tax system. The two governments of Jean Chrétien and Paul Martin, over a 15 year period, produced the kinds of results I mention. They were able to initiate all these treaties that were reciprocal arrangements with countries, with the business environment in other places and the expectations of our business community.

The Government of Canada and the governments of the provinces were able to go into countries around the world in support of their businesses and receive the red carpet treatment. Why? Because when they struck those deals, those reciprocal arrangements, like those proposed by Bill S-3 right now where two countries are talking about recognizing which of the two has the residual authority to tax an activity, to tax an income, they do it on the basis of fairness. The Canadian government has demonstrated a culture of probity, a culture of continuity, a culture of respect for those who contribute the earning and those who withdraw from that earning to reinvest with their partner.

That is why countries around the world approached us and asked “Can we get an arrangement with you, because you can be trusted?”. People do business with those whom they know, with those who have established a record of continuity, those who have established a record of trust.

That is why I mentioned a moment ago the issue of income trusts. The justification for it was that there was tax leakage here. We needed to get a little bit more. We could not lose that $300 million. The parliamentary secretary said, “That's old hat”, three years ago. But it is not old hat to refer to the environmental standards that were set, perhaps not met, by previous governments of 10 to 15 years ago and replaced by no standards. Therefore, there is no judgment.

The issue of income trusts is extremely important because it goes to the heart of internal tax treaties. Those are the arrangements the Government of Canada, i.e. the people, the collective, makes with those who engage in economic activity to produce wealth and to share it, to fund programs.

When the Conservative Government of Canada made a big deal of saying, “We are making the tough decision; we are going to cancel these income trusts because that is $300 million”, it said that these guys through a legal tax loophole were avoiding paying $300 million. That is going to be replaced by a circumstance that sees 85% of those activities bought by American and foreign-owned enterprises. As my colleague from Scarborough Centre mentioned a moment or two ago, what happens is they get all the benefits and advantages out of the Canadian tax system and ours do not.

Of those companies that became the target of that $300 million tax leakage, 85% are now in the hands of foreigners. By the way, they are not paying taxes here. They are paying taxes there.

What is worse is that those Canadians who had made an investment in their own future and in their own retirement lost $35 billion overnight. They saw their savings melted away like rare snow on a hot June day. They just melted away because the Minister of Finance and the Prime Minister, both Conservatives, said “We need to make a tough decision. You pay for it. You have got $35 billion to burn. You pay for it so that we can save $300 million”. We save $300 million and we are losing whatever is the balance to all those Americans who took the 85% of the income trusts that still exist. That is great.

Let us go back to these tax treaties. Foreign countries are looking at us; now it is tougher to negotiate with them. We are negotiating with them and happily there are people who still want to sit at the table with us, but they are wondering about our right-wing government, I am sorry, an extreme right-wing government. It does not pay attention to that dynamic I mentioned a few moments ago, the dynamic with the individual citizen, the individual taxpayer, engaged either as a worker, a subcontractor, an entrepreneur, an administrator in a large enterprise, or indeed, an administrator in one of those social institutions that make us the great country we are. That relationship of trust and mutual service is being eroded, if not snapped. They look at us and say, “If they have a country whose government has so little respect for all of the elements that go toward wealth creation, that go toward the development of a society that is an economic model for the world, what can we expect? If the Government of Canada has little regard for its own citizens, if the Government of Canada is busy in the process of eroding all of those programs and institutions that have got it to this place of such elevation, what can we expect in any agreement we sign with them?” We should think about that.

Sometimes we listen to people like the parliamentary secretary, who say to us that this is good, that is good and this is good, then take a look at each item of the puzzle and go out and say, “Look at how many pieces we have in the puzzle”. Put it together and see what it looks like.

We want to support a system, and we will support Bill S-3. We find that those initiatives are a logical outflow of those initiatives we had as a Liberal government. They have to flow from the logic of nation-building that we established in this place and that we still adhere to very proudly, despite the mudslinging that is thrown at us for all of the achievements we made through all those years. Those achievements no longer belong to the Liberal Party. They belong to the country of Canada. They belong to every province. They belong to every municipality. They belong to every citizen.

We have a responsibility in this place to ensure that all the interests of all Canadians, be they workers, small entrepreneurs, administrators or large corporate citizens, are always weighed in an equilibrium, a balance that sees them first as members of Canada, and Canada always.

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

Mr. Speaker, I am not aware of any government briefing. Normally there are some sort of government briefings on bills, where critics could be briefed on the provisions of the bill. In this particular case, one would have to brief the parliamentary secretary, because after he made his speech I asked him how much money has been recovered in terms of tax avoidance and tax evasion issues. Given that these treaties have been enforced for many years, and there are 80 of them in place, one would think he would be able to tell us right away how much money had been recovered in terms of tax avoidance and tax evasion issues.

For many years in Manitoba, I was able to get in estimates, on an annual basis, the amount of arrears on PST, on provincial tax arrears. In estimates it was an open book. I find it really surprising that the member would not have that information at his fingertips.

Another question I want to ask him is: To how many people does this apply? Surely the government has some idea of how many citizens this particular new initiative, the new Bill S-3, would apply to in terms of citizens from Greece, Colombia and Turkey who we are dealing with here.

Clearly the government should be a little more prepared and have more information when it brings in bills such as this. I ask the member if he would like to make some comments about those points.

[Joe Volpe, Liberal, Eglinton—Lawrence, ON]

Mr. Speaker, the hon. member for Elmwood—Transcona addressed the main issue to which I had already spoken, which is what the objective is of this bill. What do we want to do when we engage in tax treaties with countries like Turkey, Greece and Colombia? We need to have an objective. What is our strategy?

I hear the minister for war and peace in the Middle East saying that we need to have a strategy. I do not know what the strategy of the government is. When our government engaged in a tax treaty like this, it had very specific objectives and tactics in place, which were to stimulate increased activity, to attract companies to those places and to invite companies from those countries to the Canadian environment. We tabulated specifically over a five and ten year period the amount of increased economic activity that would be governed by this kind of legislation.

I, too, am as surprised as the member for Elmwood—Transcona is that the parliamentary secretary could not give him an indication or even a ballpark number. If the member looks at the estimates and the budget, he will find the line that indicates other sources of income from the Government of Canada and he will see that it goes into the hundreds of millions of dollars as opposed to the $250 billion that is part of the budget.

The member can then divide those three countries by 80 and come up with his own figures because I am not sure the government knows, which is why it did not write them down. Not only that, it does not care.

[John Cannis, Liberal, Scarborough Centre, ON]

Mr. Speaker, I listened very carefully to my colleague from Eglinton—Lawrence. The area that touched me was when he referred to income trusts and tied it together in terms of economic development, sustainability, competitiveness and future investments. I was very moved when he said that some $30 billion were wiped out.

I know how much he has spoken about seniors in the past. I want him to take the opportunity to talk about the impact that decision on income trusts had on seniors. In essence, the Conservatives misled Canadians during the election when they promised they would not touch income trusts and then did the opposite. I would like the member to focus on the impact that it had on seniors.

[Joe Volpe, Liberal, Eglinton—Lawrence, ON]

Mr. Speaker, my colleague from Scarborough Centre will know that one of the significant demographic developments over the course of the last generation and going forward is that we cannot talk about seniors as people we put on display in a museum. We are talking about 15% of the population. These are people who have already made great contributions to the country and took seriously the government's recommendation that they begin to save for this period in their life by making investments in companies that would structure themselves in a fashion that they would provide a reliable source of income for seniors in their later years.

Over the course of this last generation, not only has the percentage of seniors in our society increased, but the number of people making contributions to the growth of the GDP has, by reflection, diminished. They now find themselves in a situation where the Government of Canada made specific promises to provide them with certain stability in their later years and then, with one wretched, sneaky move, took $35 billion out from under them.

Can anyone imagine being in one's 70s or 80s and watching one's life-savings snatched away, dismissed by the Minister of Finance and the Conservative Prime Minister who said that his government was doing this because it had to make a tough decision? It was too bad for seniors who were at the most vulnerable period of their life. It was more important for the government to spin the message that it could make the tough decisions, although stupid, but it demonstrated its toughness, although heartless. The government was absolutely disinterested in the future of the Canadian collective.

Welcome to the Conservative world that erodes away the values that make us a cohesive society, that erodes away all of the values that make us a thriving economic unit and that thumbs its nose at the mock parliamentary process that permitted people to get to where they are.

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

Madam Speaker, I want to follow up with another question for the member.

I was watching the committee hearings on television last night regarding Mr. Jaffer and the whole argument about whether he did or did not look to Belize as a tax haven. When I look at the list that I have here of all of the 80-some countries with which we have agreements, I do not see any of the tax havens on the list. I do not see the Cayman Islands or Belize on the list. I do not see any of these other countries.

Why would the government not be looking at establishing these sorts of treaties to avoid double taxation and tax evasion? Why would we not be working with some of these countries that are known tax havens to rein these countries in a little more and also demand that they have proper bank rules set up in those countries?

I know the United States is putting a lot of pressure right now on Switzerland to make its banking system more transparent in light of some of the computer tapes that have been sold over the last year that have ended up in the German government's hands and it is chasing the German tax evaders who are hiding money in Switzerland.

It seems to me that if we are going to get at the problem of tax evasion, we should be getting some tax agreements perhaps with some of these tax havens so that we can start chasing some of this money that is evading us.

What does the member think of those observations?

[Joe Volpe, Liberal, Eglinton—Lawrence, ON]

Madam Speaker, my colleague from Elmwood—Transcona speaks to the essence of the government's presentation. Is it believable or is it just going for low-hanging fruit on tax treaties and economic activities? I think it is going for the low-hanging fruit.

Of course it is difficult, but the government is not about to make difficult decisions. The difficult decisions require work. The government must be able to go to the large corporate investors in many of these offshore accounts that are free of taxation and tell them that they can make all the money in the world in our country but that some of it must stay here. It must tell them that they cannot hide the money, that they cannot take it with them when they go to the other world and, therefore, they should not take it with them when they go across the ocean.

What he wants, of course, is something that the government is not prepared to do, which is to face up to the big boys and say that we should build this country together and that no one should just come, take, pillage and then leave. That sounds a little socialist but it is a question of responsibility and community involvement, and the Conservative government opposite does not understand what that means.

[Daniel Paillé, Bloc, Hochelaga, QC]

Madam Speaker, earlier, I heard our Liberal colleagues talking about broken election promises. As members will recall, during the last election campaign, the Conservatives promised two things: they promised to put international treaties before the House prior to ratification and to give the provinces a role in concluding treaties pertaining to their jurisdictions. But as we can see, and as the hon. member mentioned earlier in response to one of his Liberal colleagues, the Conservative Party made promises during the election campaign, but as soon as it took power, it forgot all about them.

We are not comfortable with this bill because it comes from the Senate, and we have to wonder what the Senate has to do with any of this. Earlier, the Parliamentary Secretary to the Minister of Finance said that we look to some senators for guidance. I realize that many of them have had successful careers and are knowledgeable, but what good is this knowledge in the upper chamber if it wastes away from lack of use?

Bill S-3 would implement tax treaties between Colombia and Canada, Greece and Canada as well as Turkey and Canada. One interesting aspect is that this seems to be a pure, unadulterated bill, unlike Bill C-9, which is a mishmash of things, odds and ends, that the government sent to us in parliamentary committee. We will be studying those 888 pages clause by clause this afternoon. I do not know what time we will finish. But this bill is focused strictly on avoiding double taxation and exchanging information. That is very important.

We in the Bloc Québécois will take our roles as parliamentarians seriously, and we will be diligent in our work. We have studied this bill and, because we encourage diligent and serious examination of issues, when it comes time to vote, we will do our jobs as parliamentarians. We want to see this bill further studied in committee. This is very important to us because we often hear that the Bloc is systemically opposed to everything, that we are here just to stonewall, as some token Quebeckers in the Conservative Party seem to enjoy saying or erroneously suggesting. I am obviously not insulting anyone here in the House by saying that because they are not here. The Bloc Québécois will vote in favour of this bill because we believe in looking at things carefully.

Trade between Canada, Colombia, Greece and Turkey affects the revenues of the Government of Canada, but it also affects the revenues of provincial governments and of Quebec. There was no consultation about that. We do not even know how much this will cost. It will cost something, obviously, but we have no idea what it will cost the government.

Of course, for Quebeckers with companies that do business abroad—and I used to work in companies that did business abroad—tax conventions are attractive. I will always remember when I made my first foray into politics in 1994 in the Government of Quebec. At the time, my employer and immediate superior was Pierre Péladeau, who was president of Quebecor Inc. I was his executive vice-president of acquisitions.

He told me that if I went into politics in the Government of Quebec—I became Minister of Industry, Trade, Science and Technology—I should try to do as little harm as possible. That was how he liked to talk. Pierre Péladeau was a believer in the popular KISS principle, which recommends keeping things simple. To keep things simple, I will try to remember this man I loved working with.

This bill opens loopholes and revolving doors, and we will want to ask questions in committee or here in the House. For example, how is it that Canadian companies can register elsewhere to avoid paying their fair share here? We are concerned that there may be loopholes.

This bill is also supposed to fight tax evasion. Earlier, an NDP colleague wondered whether the current government really wanted to fight tax evasion. That is disturbing. We have to wonder which countries are tax havens and whether they have agreements with the Government of Canada. This is something that needs to be looked at. I still believe that we are being presented with a done deal, but we still need to examine a number of provisions in the bill.

For example, in subclause 1(d) of the General Definitions in Schedule 1, which pertains to the agreement between Canada and Colombia, the term “person” is defined as including “an individual, a trust, a company, a partnership...”.

On page 29, in subclause 1(c) of the General Definitions in Schedule 2, which pertains to the agreement between Canada and Greece, the term “person” includes an individual, a trust and a company. There is no mention of a partnership. This is the sort of question we could ask, but the agreement is a done deal. We have to take it or leave it.

Moving on with general definitions. In that same paragraph of the agreement with Turkey, the term “person” is defined as an individual, a trust, a company and an estate. As a parliamentarian, I would like to ask a question before signing this kind of agreement. Why are estates not mentioned in the agreements with Greece and Colombia, but they are mentioned in the agreement with Turkey? What does that mean? It is our job as parliamentarians to know what that means. There may be good answers out there, but I have not had a chance to get any. The parliamentary committee will try to get those answers.

There are currently 87 conventions between Canada and other countries, but only one contains the ideal standard of information exchange recommended by the OECD: the Canada-Netherlands convention. It is all a bit vague when it comes to other countries, and that raises a question.

Canada is apparently in talks with 14 other countries: Anguilla, Aruba, the Bahamas, Bahrain, Bermuda, Gibraltar, Guernsey, the Cayman Islands, the Isle of Man, Turks and Caicos, the British Virgin Islands, Jersey, Saint Kitts and Nevis and Saint Lucia. But there have been delays. Until these agreements are signed, people will continue to take full advantage of tax havens. That is the important thing here.

Let us look at three random cases: Bermuda, the Cayman Islands and Barbados. There are no conventions with these countries. They say negotiations are ongoing, but between 2000 and 2008, Canadian investment in those countries rose from $30 billion to $90 billion.

Can anyone tell me what it is about those three countries that caused investment to triple in the absence of tax conventions? Some might suggest that 300% divided by eight is 37% growth per year. As a financier and former university and HEC professor, I would say that that is not how it works. We have to consider compound interest. That is still 15% growth per year. Investment rose from $30 billion to $90 billion. Can anyone tell me what it is about those countries that supports that volume of international trade?

There are other countries as well. We remember the enthusiasm of President Sarkozy, who had the political will to act quickly, to sign and to condemn tax havens. He condemned what is known as the grey list. Who is currently on this list? Belize. My NDP colleague spoke about Belize earlier. In fact, it seems that some Conservatives do business in Belize. It would seem so. It is still on the list along with the Cook Islands, Dominica, Grenada, Liberia, the Marshall Islands, Montserrat, Nauru, Niue, Panama, Saint Lucia, Vanuatu, Brunei, Costa Rica, Guatemala, the Philippines and Uruguay. They are all on the grey list. What are they waiting for? Canada does not have agreements with these countries and therefore why not take full advantage.

What is a tax haven? The OECD has established criteria for identifying them. We have agreed on 0.08 as the legal alcohol limit for driving a car. I can say that the taxation rate is 0.0 when looking for tax havens. That means that there is no or nominal taxation. When you go to a country and ask about the corporate tax rate or the tax rate on capital gains, and you are asked in turn what tax rate and told 0.0, that should be a sign.

A lack of transparency is the second sign. It is like opening files and there is no system of record-keeping. Organizations specialize in not keeping records.

Lack of diligence is the third sign. It is expressed by administrative, legal or bureaucratic barriers or evasive answers when responding to our questions.

There is no transparency, no diligence and no taxation.

I find the fourth sign interesting: a total absence of economic activity associated with the investment.

I would like to go back to the three examples cited earlier. Canada's foreign investment in three countries went from $30 billion to $90 billion and we wonder what is in those countries.

There is nothing. Well, there are beautiful beaches, beautiful people and beautiful places, but in terms of industrial activity, there is nothing.

When a company that does metal and chemical processing invests in Barbados, we have to wonder what that country has to accommodate that. If there is nothing, along with a 0% tax rate, no transparency and no diligence, that is the perfect example of a tax haven.

In the 1950s, there was a sign on the way into Montreal meant to attract American investments in Quebec where, supposedly, labour was cheap and docile. Older people may remember it. Mr. Duplessis boasted about it. In a tax haven, you would see a sign that says that taxation is very cheap and very flexible. It is very docile. That is what a tax haven is all about.

Consider Barbados as an example. It is said that the tax laws in that country include a specific section for international business corporations. An international business corporation is a corporation that is registered in Barbados, but that conducts most of its business outside of Barbados.

Very few conditions have to be met to be there. The business has to be registered in Barbados, have its head office there, hold one annual meeting there—which can be a teleconference—keep records of a board of directors there and employ a local resident as the manager. How interesting: a job is created. However, the manager does not have to have any power. Accordingly, the board of directors recruits a manager from Barbados and tells that person they have no power and that is just fine.

How are the companies taxed? The maximum tax rate is 2.5% and the minimum tax rate is less than 1%, which is not much more than zero. They are exempt from capital gains tax, exempt from exchange controls and they can import anything they like duty free. One small detail: the average salary of a manager of a foreign subsidiary in Barbados is $1,500 a year. That same Barbados branch manager simply has to find 1,000 jobs at $1,500 each and he or she is the manger of 1,000 companies. It is a great way to earn a very good living.

I will close by talking about the road to healthy co-operation. We are told, of course, that things are improving and that this occurs less and less. Attempts are made to have tax agreements with countries, but under what conditions? We are told a country will be removed from the list if we can have access to real, valid information, if there is no banking secrecy, if access to information is relatively easy and if taxpayers' rights are protected. What happens if there are a dozen agreements? The trick is to have a dozen agreements with lenient countries and then continue to operate as a tax haven.

We are voting in favour of the bill. I know that my colleague from Alfred-Pellan will address some of the Bloc's other concerns, but we are voting in favour of the bill in order to be able to go over it with a fine-toothed comb.

With all due respect, it would have been better if the agreements had been submitted to the House beforehand and with input from the Government of Quebec.

[Joe Volpe, Liberal, Eglinton—Lawrence, ON]

Madam Speaker, I listened carefully to my hon. colleague's speech. I know that he is very familiar with parliamentary procedure, because in a case like this, we would usually hear from the government representatives in charge of care of finance or international trade. He said that this is the procedure today.

I would like to know whether he has any advice for the members and ministers who will be examining this Senate bill. Since senators cannot sit in this House, the ministers or members who currently take care of financial and trade matters will probably be able to explain to us how Bill S-3 will close the loopholes he mentioned in his speech.

[Daniel Paillé, Bloc, Hochelaga, QC]

Madam Speaker, that is what is disappointing. I know we cannot name members who are absent, and the list would be too long in any case. The Parliamentary Secretary to the Minister of Finance, a man I respect a lot and who I am getting to know, made a speech, but we must move forward and carefully examine the issues. They cannot simply introduce a bill and say that everything is fixed.

We signed an accord with Liechtenstein, but tax evasion is still tolerated. In 2009, the Minister of Veterans Affairs, the former revenue minister, made a big deal of saying that he had a list of 106 Canadian taxpayers who were using Liechtenstein as a tax haven, but this list was criticized by someone at a German bank.

When it comes down to a witch hunt like that, I would say that we need to take things seriously. We need to thoroughly examine the issues and the accords we are presented with, to ensure that they are complete and detailed, and that there are no loopholes.

That is obviously what we will look at in parliamentary committee. We will probably see that this type of bill has some loopholes. I will be happy to use my experience to help them find these loopholes.

[Robert Carrier, Bloc, Alfred-Pellan, QC]

Madam Speaker, I would like to congratulate my colleague from Hochelaga on his speech. He managed to make this normally dry subject interesting. Thanks to his extensive experience in economics, he was able to broaden the point of view we might have regarding such a bill.

He mentioned that this bill originated in the Senate. One senator said that the purpose of the bill was to lower taxes, not only for individual Canadians, but also for businesses. The bill's aim is rather clear.

This tax conventions bill relates to three countries whose economies are weaker and taxation lower than Canada's. Accordingly, this will have an impact on government revenues, as the member for Hochelaga mentioned. Regarding these three countries, I wonder if the member could elaborate on the economic losses that this bill could cause.

[Daniel Paillé, Bloc, Hochelaga, QC]

Madam Speaker, I would like to thank my colleague, whom I work with on the Standing Committee on Finance, for having made such a dry file interesting. It is true that taxation and finances can seem dry when we delve into these kinds of details.

As I sometimes jokingly say, no one is coming to blows over bills like this on Holchega's buses. However, these issues are very important, and I have a passion for making dry topics interesting.

My colleague's comment is very interesting because the three countries we are talking about have sizable economies, but they are in no way comparable to Canada. They will not be the ones losing out, but the Government of Canada will probably lose even more, as will we, while we are still here.

These are the kinds of evaluations we would like to have before the agreement is signed and not afterwards; otherwise, the only thing we can do is say yes or no. We do not have an opportunity to improve the agreement. And I am sure that we could improve it.

The only thing we can do is say no. But saying no means that there would be no agreement and no exchange of information. It also means that these loopholes in the law and these tax havens will continue to be used.

We are between a rock and a hard place, but it is the government that has put us there and we will study this project honestly and rigorously in committee. I am sure that the opposition parties will work with us and I hope that the people of the Conservative Party, the members in power, will become interested in this topic, which, I know, is dry but very interesting.

[Thomas Mulcair, NDP, Outremont, QC]

Madam Speaker, I am pleased to speak to 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.

The first thing I want to say is that the bill's alphanumeric designation is a clear indication that it comes from the Senate of Canada. We have to say that the Conservatives talk out of both sides of their mouths when it comes to the Senate's status as an undemocratic and unrepresentative institution.

In the House and at rallies in Alberta, they rail against the Senate, but when it comes to signing treaties, which are the most important expression of our international diplomacy, they do not hesitate to introduce bills like this one in the Senate rather than the House. This is another fine example of the Conservative government's hypocrisy.

What is more, as the bill's title indicates, this bill is supposed to avoid double taxation and tax avoidance or fiscal evasion, as the bill title states.

I will start by talking about double taxation. Because there are many countries in the world and we live in a world in transition that is increasingly open to trade in goods and services, many people spend part of their professional lives in different countries. This sort of treaty is valuable in that it prevents people from being penalized and having difficulty working and crossing borders. We do wonder, though, whether it will really do anything to prevent tax evasion.

My colleague, the member for Hochelaga, just gave several examples, including Liechtenstein, which is very high on the list of opaque countries, to say the least.

According to the OECD, there is $6 trillion in opaque countries, that is, $6,000 billion. This is not far off the estimate of $10 trillion to $12 trillion that the Tax Justice Network, an extraordinary English organization, came up with. These figures are very close.

Madam Speaker, I must ask your consent to share my time with my friend and colleague, the member for Sault Ste. Marie. I was asked to remind you.

[The Acting Speaker, NDP, Denise Savoie]

Order.

Does the hon. member have unanimous consent to share his time with the member for Sault Ste. Marie?

[Some hon. members]

Agreed.

[Thomas Mulcair, NDP, Outremont, QC]

Madam Speaker, I would like to thank all of my colleagues, especially those who are kind enough to remind the members that they are supposed to ask for that at the beginning of their remarks.

As I said, the numbers are breathtaking. These are sums of money earned by individuals and companies—both real people and corporations—in jurisdictions like our own where there are institutions that guarantee the rule of law, competent courts untainted by corruption, police forces, educational institutions and so on. All of that costs our society money to ensure the peace, order and good government we have enjoyed here in Canada for 150 years. Then, once they have earned money thanks to these institutions that cost all taxpayers money, they are rich enough and organized enough to get their money out of this country and stash it away in opaque—non-transparent—jurisdictions. In other words, they do not pay their fair share of the cost of the social institutions that helped them get rich.

This is not just about cheating on taxes. This is about swindling the society that helped them get rich. That is what we need to tackle, and it is hogwash to suggest that such a treaty will curb tax evasion. That is not true. All we have to do is review the list of jurisdictions that have signed similar conventions with Canada to see that we are still signing agreements with problematic countries.

That brings me to another major concern about Bill S-3. This bill covers three countries. The issue I am about to raise has nothing to do with Greece or Turkey, but it does have to do with Colombia, and we believe that including that country in this treaty is a poison pill. The government knew exactly what it was doing when it included Colombia in a bill that also covers two countries that are not problematic in this regard.

All members are aware of our fierce opposition to the Canada-Colombia free trade agreement. There is a reason for it and it is not difficult to understand. If Canada is prepared to sign a free trade agreement with another country because it says that how we do business, deal with people, train our professionals, our way of being and our values are fairly similar, the other party must respect our basic values such as the respect for human rights. Unfortunately, this is not the case with the current government in Colombia.

That is at the root of our fierce opposition to the free trade agreement with Colombia, proposed by the Conservative government. We will vote in favour of the principle of Bill S-3. This bill could make it possible, for example, for a young Greek couple, working one half of the year in Canada and the other in Greece, to avoid double taxation. That is reasonable. However, we want to make it clear right now that although we are voting to send Bill S-3 to a parliamentary committee, once it gets there, we will do everything possible in terms of House procedure to split the bill, to amend it and to use every means available to remove the part concerning Colombia. That is understandable because we have to be consistent.

Therefore, while recognizing that there may be a young Colombian couple in the same situation, we will continue to work with the authorities in that country and with groups trying to raise the bar for human rights. Let us be clear, we cannot, on the one hand, express our fierce opposition to a free trade agreement with Colombia and, on the other, agree to the signing of this type of treaty. Consequently, it can be expected that the NDP will do everything possible, at the parliamentary committee, to split the bill and remove the part concerning Colombia or, once again, to amend it.

[John Cannis, Liberal, Scarborough Centre, ON]

Madam Speaker, I listened very carefully to the hon. member's comments. He referred to Colombia, Greece and Turkey and his resistance with Colombia because of human rights. One-third of island of Cyprus is illegally occupied by Turkish forces. There are 1,600 Greek and Turkish Cypriots still unaccounted for with regard to laws, properties, et cetera.

If that is not a violation of human rights on behalf of Turkey, what would he say to his Greek Canadian and Greek Cypriot constituents?

[Thomas Mulcair, NDP, Outremont, QC]

Madam Speaker, I would tell my many Greek Canadian friends that Canada has a very proud history on Cyprus as a peacekeeper and a peacemaker. I find it sad to hear a member of the Canadian Parliament simply affirm that one side is right and the other is wrong.

Canada has always done all in its power to ensure that peace is maintained on Cyprus, which is the case today. Unfortunately, the belligerent words he has just spoken, affirming in the House that one-third is illegally occupied, shows that he is incapable of understanding that, in these historical questions, there are always two sides to a story.

[John Cannis, Liberal, Scarborough Centre, ON]

Madam Speaker, the incapability and ignorance is on that member's side. If he understood what I was trying to tell him, he would ask himself, “If I am singling out Colombia on human rights, why am I not singling out Turkey for doing exactly the same thing?”

With Bill S-3, we are trying to show these nations the way forward by moving them toward tax avoidance and tax evasion so they can produce and input into their economies to make for a better tomorrow. I am sad that he does not have much knowledge on the Cyprus issue. I will ensure his constituents know about it.

[Thomas Mulcair, NDP, Outremont, QC]

Madam Speaker, one of the more interesting lessons from Canadian history involves Thomas D'Arcy McGee, who was being pushed to take a side with the Fenians. He stood up and said that when we arrived in this country, we would assert our values and do the best that we could to share those values with the rest of the world.

His belligerent tone, his threatening manner and the fact that he ended with a threat to me simply shows he is incapable of any perspective with regard to the situation in another country. I would much rather use the experience and the expertise that Canada has on the world stage to continue to bring peace to areas like Cyprus than stand in the House and argue with another member who says that he will attack me in my riding for not sharing his view that only one side is right and the other side is completely wrong on an issue as complex as Cyprus.

I am so proud to be a Canadian. I am so proud that we have used our expertise and experience on the world stage to help in a place as troubled as Cyprus. I am also very pleased, as a citizen of the world, that Cyprus now knows peace. Unfortunately, there will always be those who maintain a belligerent attitude, who try to stir the pot and do not understand that our top priority in the world has to be to work for peace.

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

Madam Speaker, I thought we were talking about Bill S-3, so I will ask the member a question about the bill. I asked the parliamentary secretary whether he could tell me how much money had been recovered by Revenue Canada from tax havens and he was unable to tell me.

That just speaks to the fact that the government has not provided a briefing session, which it should have with this bill. It should have been able to tell us the number of people who are involved in this measure and how much has been recovered in abated taxes.

[Thomas Mulcair, NDP, Outremont, QC]

Madam Speaker, it is precisely because Canada has not done enough homework on the issue of tax avoidance and tax shelters that this type of bill is so incomplete. That work has to be done because a lot of companies report their overall situation. A lot of companies operating in Canada making huge profits here are using all sorts of techniques to never pay a cent in taxes. That is why we have to work on that as well. Otherwise it falls on the backs of ordinary working Canadians.

That is why, since the signature of the North American Free Trade Agreement, the wealth and productivity of Canada has gone up and the income of the middle class has gone down.

[Tony Martin, NDP, Sault Ste. Marie, ON]

Madam Speaker, I appreciate the chance this morning to follow the comments of my colleague from Outremont and to challenge the government on some of the initiatives we find ourselves having to deal with these days in the House, particularly at a time when hundreds of thousands of people across the country still do not feel the recession is over.

The finance minister stands regularly in this place, particularly in response to questions from some of us who are concerned that the impact of this recession is not only not stopping, but continues to grow in both breadth and depth. We continue to discuss and move forward on trade agreements with other countries when we have not righted our own domestic economy. If we, at the end of the day, decide that it is in the best interests of Canada to do those trade agreements, we can negotiate from a position of understanding what is best for us and from a position of strength.

A number of reports done in the last week or two have given me cause to pause with regard to where we need to go in light of our economy. The recession has created situations and conditions for people in the country that we have not seen for a long. It is important, in the context and in light of some of the discussions we are having on free trade agreements, taxation and trading with Colombia, that people know what is going on.

Hundreds of thousands of people across the country have lost their jobs. Around 50% have been able to qualify for employment insurance, but that 50%, now that the recession continues to roll on, are either falling off EI or are at a point where they will no longer qualify for EI. The jobs are not out there to give them back the income they had before the recession started. Some of them are finding jobs, but they primarily tend to be jobs in the service sector. Those jobs pay minimum wage or maybe a couple of dollars above that. It is simply not enough to pay the mortgage, to continue to pay for the cost of education for their children, to feed themselves in a way that speaks to good nutrition and health and to participate in a fulsome way, in a healthy way, in their communities.

For example, the Citizens for Public Justice released a study that it did over the last couple of months called “Bearing the Brunt”. I am talking exactly about this reality. People who do not qualify for EI cannot find jobs or take on jobs that do not pay them enough to reach the cost of living. People have fallen off EI and cannot find jobs. People who never qualified for EI in the first place and those who were poor before the recession every began find themselves relying on the good graces of their municipalities or provinces under the social assistance programs. More and more they are losing hope in being able to cope. The Citizens for Public Justice was very clear about some of the facts and statistics. We should look to that group and consider it in the light of anything that we do these days where the economy is concerned.

The poverty rate, for example, was 11.7% in 2009, an increase of over 900,000 Canadians from 3 million in 2007. That is 3.9 million Canadians living in poverty, while we discuss trade agreements and the ramifications for us in terms of taxation in our country.

The child poverty rate likely increased to 12% in 2009, an increase of 160,000 children compared to 2007. The number of poor children has thus risen from 637,000 children in 2007 to at least 797,000 children in 2009.

The unemployment rate rose from 6.3% in October 2008 to 8.6% in October 2009, and 153,600 jobs were lost by parents of small children during the recession.

This report goes on to say, in its analysis, that after the last recession, it took eight years to get us back to the unemployment rate that was present before the recession started, and that it took us 12 years to get the poverty rate back down to the rate that it was before the recession started.

The question that we have to ask, how long is it going to take us to get to a place where some of our fellow citizens, our neighbours and family members who are out there looking for jobs, who want to do nothing else but simply take care of themselves and their families, can comfortably do that again? Why is it that we are not focusing on that here as we discuss this with each other in this House?

The report also goes on to give a very alarming statistic, particularly when we consider the impact that it will have, not only on individual persons and families but on the financial system as a whole. Consumer bankruptcies increased by 36.4% between the end of the third quarter of 2008 and the end of the third quarter of 2009.

A few months ago, as the recession was in full swing, I listened to an economist in my own community talk about trade and the economy. He said that the recession would come at us in waves and that the last wave would be when those people who have lost their jobs, who fall off EI or no longer qualify for EI, find themselves on welfare and begin to use all of the credit available to them, if they have not already used it up, maxing out their credit cards and lines of credit, and selling off all their assets, because that is the only way to qualify for social assistance in this country, and then they begin to default on those loans.

That will have a big impact on the families themselves, as their credit ratings disappear, as they no longer have access to any discretionary money that might be available to them, even if they have to borrow it, as they no longer are able to even rely upon the good graces of their families because they find themselves in the same situation. When we put that together with the impact that it will have on the financial system, as these hundreds of thousands of people begin to struggle and to default on their loans, it will also have an impact on the economy of this country.

Again, I put this to the House. The government brings forward pieces of legislation into this House that talk about further trade with other countries that we are probably, according to the treasurer, in better shape than, but who are struggling with the same kinds of issues in their own jurisdictions. Why we are so aggressively chasing free trade agreements and all that goes with them at a time when we should actually be circling the wagons, taking a look at what has gone wrong with our own economy, and trying to do something about that?

Anybody who thinks that there is not something wrong with our own economy is not listening to some of those who are reporting these days on the impact that it is having on those among us who are most at risk and most marginalized.

[John Cannis, Liberal, Scarborough Centre, ON]

Madam Speaker, I listened very carefully to my hon. colleague and I agree with everything he said.

I want to put a question to him with respect to trade that he was referring to and he made a valid point.

However, the other day we heard testimony in the international trade committee how, for example, there is one province in Colombia which is a coal producing province, employs over 10,000 people, and it just purchased from Canada, I believe it was last year, about $60 million worth of equipment that it needs to do its work.

We also heard that one of Colombia's largest industries, the flour industry, employs approximately 200,000 people, of which 60%, meaning about 120,000, are women. They have found decent work to support their families and move out of the misery that has been talked about.

If we stay away as Canadians and do not help them, do not show them how to prevent tax avoidance and tax evasion as Bill S-3 is outlining, are we really doing them any good or should we step in and say, like other countries in the past, with their problems we are going to teach them the Canadian way? What does the member have to say about that?

[Tony Martin, NDP, Sault Ste. Marie, ON]

Madam Speaker, I would say to the member respectfully, just as I believe wholeheartedly that we as Canadians have the answers to our own challenges and problems, that the people of Colombia should be allowed that opportunity as well.

I do not think anyone can deny it, there are some very real concerns with Colombia and any kind of free trade agreement with Canada. I am talking regularly with steelworkers in my own community who tell me about colleagues and other steelworkers in Colombia trying to negotiate agreements with companies who are being actually shot and killed probably as we speak.

In speaking to human rights workers, Jesuits, church people who are in the Colombia area and working with groups of workers and civil society there, they are saying that there is no freedom to organize and to demand an economy that serves the local populace first. Then, if there is anything left over and any real good argument for entering into trade agreements with other countries, then Colombia should actually perhaps do that.

I suggest that we send a message to Colombia that it get its act in order, that it take care of the very grievous human rights situations and realities that are happening there, that we know are happening down there which we are hearing about every day. We ourselves should spend some time and energy reorganizing and restructuring our own economy so that everyone continues to benefit from it again. Then perhaps we can begin to look at what we can do in relationship to the rest of the world.

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

Madam Speaker, I want to thank the member for his presentation today on Bill S-3.

Clearly, the government could have helped itself out a lot if it had had a briefing session for interested MPs in advance of introducing the bill or in advance of it being debated today.

For example, I asked the minister, what was the amount of money that has avoided taxes that has been collected as a result of all the existing 80-plus treaties that have been in effect for a number of years? We would think that he would be able to provide that answer. We do not introduce bills into the House, or we should not in any event, without costing them in advance.

I also wanted to know how many people this applied to. How many people will be affected by each one of these treaties in the affected countries? I do not believe he has that information either.

Would the member agree that the government has dropped the ball once again in the legislative process and should have had a more conciliatory approach?

[Tony Martin, NDP, Sault Ste. Marie, ON]

Madam Speaker, of course I agree that all parties should be brought into discussions about new initiatives that are brought to the House. However, the government has a track record of not respecting that way of doing business.

I suggest to the member, to take it even further, that we should all be engaged, led by the government, in a discussion about our own domestic economy and how it is that we are going to right it so that once again, as it did years ago, it serves all of the people who are Canadian citizens, who call Canada home, who come here perhaps to make a new living for themselves, and reflects the real wealth that is being generated every day.

[John Cannis, Liberal, Scarborough Centre, ON]

Madam Speaker, before I discuss Bill S-3, I feel it is my obligation to clarify something. The member for Outremont used the word “threat”. Let me put it on the record that it was not a threat. What I was saying to the member, because he refused to answer the question, was that in all fairness the taxpayers of his constituency deserve to know what happens in this honourable chamber because members, myself included, cannot say one thing here and then go back to their ridings and say another, not in the 21st century.

I refuse to engage with the member for Outremont with the vocabulary he used. I will use one word, “belligerent”. I use it only to outline to the audience and Canadians that I will not engage in that vocabulary. I say he lowered himself today because I did not attack him. I simply tried to tie the two together with Bill S-3 when he kept referring to Colombian human rights violations.

I will repeat it for the record. I asked if the NDP was going to base its support for Bill S-3 on human rights violations? The countries today that are moving forward, and I will be supporting this bill, include Turkey along with Colombia and Greece. I simply asked him the question. Today, a member of the European community, Cyprus, is occupied illegally, 30% of its territory, by Turkish forces. There are 1,600 people who still cannot be traced and are unaccounted for. Refugees, both Greek Cypriots and Turkish Cypriots, want their properties back. I simply asked the member, if we compare that, what does he think about that? Instead of responding, he simply attacked me. I wanted to clarify that for the record.

I was saddened when he talked about not bringing our ways here. I too am proud of the Canadian record on peacemaking and peacekeeping. My father is a veteran of the second world war and I believe very much in what Canada has done. I have supported it over the years and, yes, even the Afghanistan issue and its problems, as a former chair of the defence committee. That is what we are doing here, trying to solve these problems.

I was saddened when he said that. To quote him, he said he was a proud Canadian. I do not know what he was referring to, but I do not know what it is going to take. Is it going to take my grandfather, John Cannis, who arrived on these shores 105 years ago? Is it going to take my father's generation that came after the war? Is it going to take my generation? Is it going to take my kids' generation? Is it going to take my three grandchildren's generation before I belong or anybody else? I ask the member to reflect on the words.

Now, to the issue today, Bill S-3. I proudly say that I am of the race of Solon. I am of the race of Pericles, Socrates, Hippocrates, Alexander the Great of Macedonia in Greece, but I also am the product of Sir John A. Macdonald, Cartier, Laurier, Pearson and Trudeau. That is why I have the privilege of standing in this honourable House. I say to the members of the Bloc that I believe in a strong and united country, unlike them.

Today we are here to discuss Bill S-3. The member for Eglinton—Lawrence described it when he talked about nation building. The issues of double taxation, tax avoidance and tax evasion are issues that have been on the table for as long as I have been a parliamentarian, which is since October 1993.

I will refer to my former colleague from Ahuntsic, Eleni Bakopanos, and myself. Every time we found ourselves with Greek representatives, we brought this issue to the table. It was not that Canada was not willing. It was the other side more so. There were obstacles but we were moving forward. We were ready in or around 2003 to finally put this agreement in place with Greece in terms of double taxation so that seniors who may choose to move back to Greece or other people could be fairly treated on the tax side.

Then, of course, there was the election of 2004. I am pleased that this government, and I cannot say “this government” because the bill was introduced in the Senate.

I am just wondering why the bill was not introduced in this hon. chamber, the House of Commons. I am glad that it was introduced.

For the record, the bill states that it is:

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.

That is what it is all about. That is what the member for Eglinton—Lawrence talked about. That is what we are trying to do.

In his speech, Senator Wilfred Moore said:

As the global economy grew more integrated, a treaty on international taxation was sought to deal with the problems of double taxation and tax evasion.

The OECD began to address these issues in the 1950s, eventually creating the model tax convention. Since then, more than 3,000 tax treaties have been put in place worldwide.

This is yet another step in trying to find some continuity, some consistency and more so some fairness. We as citizens, and I include myself, demand that the system offer us certain services, whether that be health care, education, pensions, et cetera.

In order for those systems to be sustained, there has to be infusion of money into the system. That is why it has been said that too much tax relief is not good. Where would the money come from to address the infrastructure needs, to address climate change, to put money into post-secondary education and the health system? I ask each and every Canadian, how would we sustain that?

I agree with Senator Moore's proposal in the way he describes it. I want to put more of his speech on the record of this hon. chamber and for Canadians to hear. He also said the following:

It is important to remind honourable senators that while we have been impacted by a global recession, Canada has weathered the recession better than any other countries and we are well placed going into a recovery. Our fiscal standing is the healthiest in the G7; our housing markets avoided the problems seen in other countries; and our banks and financial system are the strongest in the world.

He is absolutely correct. He went on to say:

I would like to inform the chamber that I have passed on these compliments to the Right Honourable Jean Chrétien, the man responsible for protecting the economy and Canadians from this recession.

In all fairness, the facts and the truth must be told. In 1993 when the Liberals assumed government, we inherited, unofficially, a bankrupt country. The debt was out of control. The deficit was just over $43 billion. There was over 12% unemployment. Students were disillusioned. They did not know if there would be any jobs for them after they graduated.

The International Monetary Fund was ready to step in. The bond market was ready in our country. What did we do? We said to Canadians that we would have to do a program review. Today they call it an austerity program, which is fairly true. We had to make adjustments. We had to make cuts, simply put.

Today when the government stands up and says we had to make cuts, let me remind the government members that their people at the time, Ray Speaker for example, stood up in this hon. House and said, “You did not cut enough.” When they stand up today and say, “Look at what you guys did”, let me remind them that it was Conservative provincial governments that were cutting first before the federal government did. Nevertheless, we have to move beyond that.

We implemented an austerity program. We started trimming the fat, as they say, in terms of laying off civil servants or terminating their employment, and adjusting how things were done. We tried to streamline with one-stop shopping concepts, so that services were not duplicated. In a short four and a half years, we balanced the books without raising taxes. Then surpluses came. Those are facts that nobody can deny.

We asked Canadians where they would like us to invest the surpluses. They said there were three areas--

[An hon. member]

Corruption.

[John Cannis, Liberal, Scarborough Centre, ON]

Madam Speaker, I am disappointed that my friend said “corruption”.

They paid Jimmy Hart $50,000 to get rid of him. I do not want to get into this gutter talk, but I can if the member chooses to. He is a new member today. He is a former reporter, and I would like to believe that he was a good reporter, but maybe he was not a fair reporter and he should have reported both sides of the story. I would like to challenge him, for example, on the gun registry. Every time those members stand up they say it is $1 billion or $2 billion. They cannot even make up their minds how much it is, but truth be told that is not the amount. Why do they not ask the various police associations?

I would be more than happy to take on my colleague, the Minister of International Trade. I am very disappointed actually because he knows that I have stood to support the government's initiatives, especially on Colombia. I was not going in the direction today of trying to distort or defame in any way. I was simply pointing out the facts. I must say to the hon. gentleman, for whom I have great respect, that I am hurt. Nevertheless, I am going to move on.

We overcame that difficulty. We did it in a balanced way. Those are words that the Conservative government is using today. We put one-third into the programs that Canadians wanted, health care, pensions, and post-secondary education. We put one-third into personal and corporate tax reduction. We put one-third--

[James Bezan, Conservative, Selkirk—Interlake, MB]

Madam Speaker, on a point of order, I was quite enjoying the hon. member's intervention, but I must say that he is not relevant to the bill.

I want to quote O'Brien and Bosc, chapter 16, page 744, where it states:

Central to the second reading stage is a general debate on the principle of a bill. Although the Standing Orders make no specific reference to this practice, it is deeply rooted in the procedural tradition of this House. Accordingly, debate must focus on the principle of the bill and not on its individual provisions.

The relevance here is the other thing I am really concerned about. Regarding the rule of relevance, I quote from O'Brien and Bosc, page 623, chapter 13:

A just regard to the privileges and dignity of Parliament demands that its time should not be wasted in idle and fruitless discussion; and consequently every member, who addresses the house, should endeavour to confine himself [or herself] as closely as possible to the question under consideration.

Madam Speaker, I have heard a number of speeches today that were not at all relevant to Bill S-3. I would ask that you ask the member to make sure that his comments are specific to the bill that is before us.

[The Acting Speaker, NDP, Denise Savoie]

I thank the hon. member for reminding the House of the purpose of second reading debate. It is to examine the principles of the bill. I urge all members to come back to the point.

However, as the hon. member probably knows, the Speaker allows a fair amount of latitude at second reading to get to that point, and I am sure the hon. member will make his way there.

[John Cannis, Liberal, Scarborough Centre, ON]

Madam Speaker, you can be assured that I will. I do not know if the member was here earlier, but I have been referring to nothing but Bill S-3. I have talked about how we promoted the issue of double taxation specifically with Greece given my Greek background. I am moving into various examples to draw a parallel, but maybe what has happened is I hit a soft spot because the Reform Party, now known as the Conservative Party, is trying to fool Canadians again by not allowing me to put the facts on the table. If the Conservatives believe in the democratic process, I ask the member not to interrupt again.

Of course tax avoidance and tax evasion create problems within any society. We look at the United Kingdom which just formed a coalition government, something which the Conservative Party condemned not too long ago. The first thing that coalition government is doing is it is looking at austerity programs simply because adjustments are needed. Obviously the tax revenue is not there to sustain the standard of living or programs.

Bill S-3 addresses this to make us competitive so there is more revenue coming into the treasury. It means people no matter whether they work inside or outside Canada will be treated fairly from a tax point of view. Canadian citizens, should they decide to move to Turkey, Greece or Colombia or other countries we have agreements with, or buy a summer home in Trinidad or wherever, will be treated fairly. In Florida there are a lot of Canadian snowbirds. Why should they not be treated fairly? That is what part of Bill S-3 is doing.

If I am off topic, Madam Speaker, please let me know. I believe I am trying to explain the whole process. Maybe my Conservative friends do not like to hear about it, but unfortunately the truth must be told.

The rules as set out by the OECD's model tax convention is a process where there is fairness, more so continuity in this model. What I was saying to my counterparts in Greece is they have to treat it fairly both here in Canada and in Greece.

For the last little while, Madam Speaker, Greece has gone through some unfortunate problems. The newspapers are reporting that Greece has a problem. Greece finds itself in the same position today that Canada found itself in 1992-93 where we were unofficially a bankrupt country. The IMF was going to step in. This is what is being talked about in Greece. We were not asked to sell the CN Tower, Niagara Falls, or some of the Thousand Islands in the St. Lawrence near Kingston. I do not know why anyone is asking these idiotic, silly and stupid things of Greece that the media suggested.

I believe in co-operation. The message I sent to the people in Greece is that everybody has to participate in this unfortunate economic situation in which they find themselves. I was saddened by the demonstrations and loss of lives.

Back to tax avoidance and tax evasion. The government in the last election promised that it would not touch income trusts and the government put it in writing. What did it do right after the election? It reneged on its written agreement. All of a sudden, Conservatives said there was a leakage and they needed the revenue of about $300 million. As the member for Eglinton—Lawrence pointed out earlier, it cost Canadians over $30 billion. There were two areas that primarily concerned me. One was the downward adjustment of seniors who had planned for their retirement years and then all of sudden x amount of money was taken out of their monthly revenue. That was unfair. The Prime Minister and his party misled Canadians before the election. People supported him because he told them he was not going to touch income trusts.

There is something else which also concerns me on the taxing side.

There is a provision in that area that gave Canadian companies and all other companies the opportunity to borrow money, should they wish to expand and acquire other companies, et cetera, and they could deduct the cost of that borrowing.

All of a sudden the government has put Canadian companies at a disadvantage. Canadian companies can no longer do that, but other companies around the world can. That is why there is an increase in foreign companies buying Canadian companies, thereby weakening the Canadian economy and Canadian sovereignty. That is what I cannot stand. I brought in a specific motion to have the government change that, but the government voted it down.

When we talk about sustainability for what we love here about Canada, the government has weakened that sustainability. Corporations that need to generate revenue, so they can pay taxes, so we can put money into the health system, have been weakened.

[Lynne Yelich, Conservative, Minister of State (Western Economic Diversification)]

Madam Speaker, I want to go back to one of the comments the member made. He stated that the Liberals did not raise any taxes and when they took office they had a huge deficit. The Liberals were elected on their promise to get rid of the GST. They also said that they were going to tear up the free trade deal with the United States. Those two things alone are probably why they got out of deficit. They also took $25 billion from the provinces, and that is how they balanced the budget.

When the member goes on about his government not really raising taxes, I just want to correct the record. In a way they did because they were going to get rid of the GST. That was a promise they were elected on. They also were elected on a red book that said they were going to have a child care program, which they never did have.

I am just wondering if the member recalls any of that.

[John Cannis, Liberal, Scarborough Centre, ON]

Madam Speaker, I am so pleased the minister asked me that question. I would be more than happy to put the red book before the public with respect to the GST and other issues.

If she had listened to my speech, she would have heard me talk about a nation needing revenue to carry out its responsibilities, and part of that revenue would come from the GST. The red book said that we would scrap the GST and replace it with an equal revenue-generating tax. A house, a business and a country cannot be run without revenue.

I challenge the member publicly. If I am wrong, I will resign. If I am right, she will resign. Will she take me up on the challenge?

[Robert Carrier, Bloc, Alfred-Pellan, QC]

Madam Speaker, I am pleased to rise here today to speak to Bill S-3, which passed third reading in the other place on May 4, 2010.

The Bloc Québécois supports the bill because we believe that it is important to implement the tax conventions negotiated with Colombia, Greece and Turkey. The goal of these conventions is to avoid double taxation and promote the exchange of information.

Any time economic relations are established with another country, the individuals or businesses in question likely enjoy revenues in both countries. Accordingly, tax conventions are crucial in order to ensure the exchange of information so as to avoid double taxation.

Nevertheless, the Bloc Québécois does have some serious reservations about the bill that must examined in committee once it passes second reading.

First of all, we do not know how it will affect public finances. We heard a little bit about this earlier in other speeches, because Bill S-3 is 74 pages long and includes provisions that will have a direct impact on government revenues. The terms and conditions need to be thoroughly examined for a final assessment of this bill.

This type of review becomes even more necessary when the government is opening loopholes in the Income Tax Act to allow corporations that are not registered in Canada to avoid paying their fair share of taxes. Just look at Bill C-9 currently under review in committee. I will come back to that later on in my presentation.

The government must make a real commitment to fight tax evasion. The Conservative government, which waited until 2009 before signing its first agreement on information sharing, is showing blatant unwillingness to do anything about tax havens.

Signing bilateral agreements on information sharing is just the first step in fighting tax evasion since businesses have an incentive to declare their income: to avoid being taxed twice.

The government can do a number of things to truly fight tax evasion and simply sharing information is not enough. It has to stop concluding tax treaties with tax havens. It has to submit every international treaty it negotiates to the House of Commons and allow the representatives of the people to have their say.

In order to respect jurisdictions, it has to consult the provinces and Quebec before negotiating a treaty that affects their jurisdictions. I will come back to that later.

Earlier I spoke about the impact on the government's finances. Bill S-3 falls into line with the Conservative government's moves to cut corporate taxes. What impact will it have on the government's finances?

What impact will limiting the rate of income tax withheld at source have on the government's finances in the case of dividends from affiliates and the cases involving other dividends, interest and royalties?

This type of review becomes even more necessary when we consider that Bill C-9 to implement certain provisions of the budget confirms the Conservative government's desire to protect rich taxpayers at all costs, and among them we find the banks and big corporations.

With regard to tax loopholes, the government is talking out of both sides of its mouth. On one side, it says that it wants to go after tax havens and, on the other side, it is opening loopholes in the Income Tax Act to allow corporations that are not registered in Canada to avoid paying their fair share of taxes.

I would like to shed some light on the budget implementation measures in Bill C-9. This bill changes the definition of “taxable Canadian property” to exclude shares from certain private companies. This will have a number of implications.

Non-residents—which can include companies that are owned by Canadians but were incorporated abroad—that sell shares of Canadian companies are currently exempt from paying taxes under the Canadian Income Tax Act, without having to apply the tax relief measures provided for in the different tax conventions Canada has signed.

I want to put this into context. Before, when a non-resident sold a Canadian company in part or in full, Canadian tax authorities required the purchaser to hold back 10% to 25% of the total amount of the transaction, while they did their usual checks of the conventions between Canada and the country of the non-resident. Once these checks were complete, if there was a convention in force, the non-resident would pay taxes in their own country and would avoid double taxation.

With Bill C-9, the government will stop enforcing this holdback, whether or not there is a convention with the country in question. For example, a company in the Bahamas, which does not have a tax convention with Canada, could sell shares of a Canadian company without paying taxes in Canada. A number of these companies are owned by Canadians, who would therefore avoid paying taxes.

Furthermore, the non-resident is no longer required to wait for authorization from the tax authorities when selling a Canadian investment, pursuant to clause 116, and is therefore no longer required to produce a Canadian income tax return.

The government is opening the door wide to foreign investors, and this includes the technology sector. Companies registered in countries where the tax rate is low or non-existent will be able to purchase and resell Canadian companies and pay little or no taxes.

Regarding tax havens, the Bloc Québécois urges the government to stop talking and start acting, instead of proposing pseudo-solutions made up of empty words. The Bloc Québécois has been proposing concrete solutions since 2005 to do away with access to tax havens like Barbados and to eliminate the double deduction of interest.

Why would a company not pay taxes on profits brought back to Canada after having declared them in a tax haven like Barbados, for example? This type of special treatment does not have a place in our society. Companies, like citizens, must pay their share of the tax burden. That is why we must prevent companies from using tax havens by abolishing the section in the Income Tax Act that makes this possible.

In order to truly fight tax evasion, the government could take action on a number of fronts. It must stop signing tax treaties with tax havens.

On four occasions the Bloc Québécois has introduced a treaty bill to modernize the entire process for concluding international treaties. Our treaty bill was designed to build transparency and democracy into the process of negotiating and concluding international treaties.

Moreover, the bill required that the federal government respect the provinces' jurisdictions, including Quebec's. The bill provided for five important changes: all treaties were to be put before the House of Commons, the House was to approve important treaties, a parliamentary committee was to consult civil society before Parliament voted on important treaties, treaties were to be published in the Canada Gazette and on the Department of Foreign Affairs website and the government was to consult with the provinces before negotiating a treaty in an area of provincial jurisdiction.

The treaty bill came to a vote only once, on September 28, 2005. I would like to point out that all the federalist parties in the House voted against it.

The clause on consulting Quebec and the provinces was nothing revolutionary. When the federal government, in an international forum, discusses a treaty that would impact the provinces, it consults the provinces beforehand.

The Bloc Québécois will still support the bill despite our reservations. As for respecting the Quebec nation, which was recognized here in the House, the Conservative government has yet to deliver the goods.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Madam Speaker, I find the Conservatives' strategy of cramming several bills into one very curious. They did the same thing with Bill C-9. They put all sorts of things in that bill, but of course it was inappropriate and showed a complete lack of respect for Parliament.

Bill S-3 has to do with Greece and Turkey, two countries that have rather advanced tax systems, and Colombia, where the drug industry rakes in about $90 billion a year in revenues. We know that that industry has close ties to the government.

Does the member believe that it is inappropriate to combine two countries that have relatively advanced tax systems with a country whose government is linked not only to paramilitary groups, of course, but also to the drug industry, which rakes in tens of billions of dollars?

[Robert Carrier, Bloc, Alfred-Pellan, QC]

Mr. Speaker, I thank my hon. NDP colleague for his question. Clearly Colombia is a country that poses a problem. In fact, we firmly oppose the free trade bill that was introduced in the House. The bill we are currently debating has to do with tax arrangements, which have a less significant social impact on the countries in question.

The purpose of the bill is to avoid double taxation, which is commendable. However, the potential loss of government revenues must be confirmed. Bill S-3 merely aims to correct tax revenues, which is why we agree with it in principle, since it will clarify the corporate tax situation.

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

Madam Speaker, I would like to congratulate my colleague from Alfred-Pellan. His speech about Bill S-3 was very clear.

Still, I would like to ask him if the government was motivated to propose this bill by an old-fashioned notion of globalization. Going back 20 or 25 years, everyone thought that neo-liberalism would bring prosperity to the whole world. Now we know that it is bringing prosperity only to very rich countries like the United States. Other countries are trying to act as though they are as rich as the Americans, but the fact is that it will benefit others, not us.

We seem to be just keeping our heads above water in a system that is alien to us. In many countries, people are abandoning neo-liberalism and that style of capitalism in favour of a more traditional kind of globalization.

Would we not be better off working toward a form of capitalism that puts people first, that values cooperation, that gives people around the world an opportunity to be happy and equal? This bill promotes inequality. I think that my colleague from Alfred-Pellan was touching on this in his speech, but I would like him to comment further.

[Robert Carrier, Bloc, Alfred-Pellan, QC]

Madam Speaker, I thank my colleague for that vast question, which encompasses the responsibilities of all humanity.

In terms of globalization, we could all aim for a healthy balance for all peoples. But the bill that is before us addresses only a small part of the overall problem.

We have to think about the end result of the bill, because taxation in the three countries in question is lower than in Canada. In fact, Bill C-9, which I see as related, allows companies registered in foreign countries to pay tax only in the country where they are registered. That is why I talked earlier about Canada's potential loss of revenue, which needs to be assessed.

If we look at the end result of this bill, I think we will see that these countries may ultimately achieve a net gain. Because taxation is lower there, many companies registered there will benefit in terms of their domestic revenue.

These countries will have to manage this revenue well if they really want to improve their people's welfare.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Madam Speaker, I commend my colleague, whom I am very fond of and who makes a solid contribution here in Parliament. I believe that what he is saying here today is important.

The principle behind tax treaties with other countries is that we have the highest possible standards for taxation information. Yet we know very well that Colombia, where the drug industry has ties with the government, cannot have the same standards.

Does the member find it contradictory and hypocritical that the government, which claims to be implementing these tax treaties with countries that have the highest possible standards, is trying to sign a treaty with a regime linked to drug traffickers?

[Robert Carrier, Bloc, Alfred-Pellan, QC]

Madam Speaker, I would once again like to thank my colleague. He always asks good questions. By carefully examining the issue, we can improve our understanding of the bill being studied.

It seems obvious to me that this bill amounts to de facto recognition of that country. Therefore, we do not have a choice. Colombia, which is one of the three countries in question, is part of the agreement and could benefit from clarification in terms of revenues.

However, this will not prevent us from strongly criticizing the lack of respect for human rights that prevails in Colombia. It is exactly for that reason that there were many discussions during examination of the bill on free trade with that country. We would like to impose stricter rules on that country in order to ensure greater respect for human rights.

[The Acting Speaker, NDP, Denise Savoie]

The hon. member for Burnaby—New Westminster has time for just one quick question because there is less than a minute left.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Madam Speaker, would my colleague be willing to split this bill into two parts? One part would deal with Greece and Turkey, which do not pose a problem in terms of taxation and human rights, and the other would deal with Colombia which, naturally—

[The Acting Speaker, NDP, Denise Savoie]

Order, please. I must allow the hon. member to answer the question.

[Robert Carrier, Bloc, Alfred-Pellan, QC]

Madam Speaker, very quickly, with respect to the agreements already covered by Bill S-3, they are tax treaties that have already been negotiated and Parliament does not have the authority to amend the bill or even to split it. I believe we must accept it as is or reject it.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Madam Speaker, I rise to speak to Bill S-3.

As my colleague from Outremont mentioned earlier in the House, we have great difficulties with the way the government is approaching legislation generally.

There are principles in this place that have been well established for generations and have been respected generally by all parties. What we have seen over the last few years, but particularly in the last few months, is a throwing out of those conventions of appreciation for democratic debate and respect for this place, respect for Parliament itself. We are seeing this illustrated once again by Bill S-3.

The first issue is the fact that the bill comes from the Senate. We must remember that the Conservatives, prior to the last election, promised that it would bring democracy to the Senate but they have appointed Conservative associates to the Senate. The Senate is now a legislative place with largely Conservative appointees.

Canadians do not want to see the perpetuation of a fundamentally anti-democratic system imposed on Canadian democracy and yet we are now seeing bills pushed through the Senate, where there are a bunch of Conservative Party appointees, who are responsible to nobody but the Prime Minister himself, creating this legislation and bringing it into the House of Commons. If that is not a fundamental rejection of the democratic principles on which this country is founded, I do not know what is.

When we couple that with prorogation, a refusal to table in this Parliament documents that should be, as the Speaker has ruled in the past, tabled in Parliament, we see a systematic obstruction of the democratic principles in Canada that have served Canada so very well. We now have a bill referred from the Senate.

The second principle that is being violated by the bill is the fact that the government has cleverly tried to insert a poison pill. The bill itself is a rather anodyne bill, a tax treaty bill that deals with Greece and Turkey.

Although concerns were raised earlier today in the House by a Liberal member, I do not think anyone in this place would have any strong differences with Greek fiscal policy or Turkish fiscal policy. We understand that their democracies are relatively advanced systems. Instead of submitting Greece and Turkey to a parliamentary vote, the government deliberately inserted the poison pill of the Colombian regime into the bill. Rather than respecting parliamentary debate and have two separate bills, the government deliberately tried to muddy the water and insert a poison pill. It is absolutely ridiculous and it shows the complete lack of respect that the Conservative government has for democracy.

Although we have no objections to the Greek and Turkish treaties on fiscal management, the tax treaties themselves, we will have to move in committee to split the bill so we can consider the case of Colombia. It is pretty appalling that the Conservatives would do this, but I do not think Canadians are surprised by anything the Conservative government does any more. It simply has no respect for democratic traditions, period.

The backgrounder for Bill S-3 put out by the Minister of Finance is very clear. I will quote it because it is a pretty strong illustration of how the government proceeds. What it says in the backgrounder, which is supposed to speak to all of these tax bills that are brought forward, is that Canada “will conclude no new tax treaty, or update an existing tax treaty, unless the treaty partner country agrees to abide by the highest international standards of tax information exchange”.

Anyone who knows anything about Colombia and the Colombian industry would know that Columbia is the producer of about 90% of the world's illicit cocaine industry. We are talking about a $90 billion a year industry, produced by drug lords, produced by paramilitary gangs connected to the government, produced by guerillas, produced by all sectors. There is no taxation system around this massive industry in Colombia. Therefore, the highest possible standards of fiscal probity cannot be maintained in what is a narco-economy.

The Conservatives and Liberals have admitted to this in the past. They have said that this trade agreement has been condemned by every major human rights organization around the world, particularly in Canada, every major civil society group, every major labour union in Canada and almost all of the Colombian trade unions except those directly affiliated with the Colombian government or under the thumb of the Colombian government. The Conservatives say that we need this treaty because it will eliminate the narco-economy. They know this is significantly the largest industry in Colombia and is not part of the tax foundation, the so-called prudent fiscal management of the Colombian government.

Therefore, getting back to the backgrounder which says “agreeing to abide by the highest international standards”, Colombia has already failed those standards even before the treaty was signed. Even before it was brought to the House, it had manifestly failed with a $90 billion a year narco-economy, not subject to taxation laws. Yet the Conservatives have the nerve to throw in this failed narco-economy, failed fiscal framework into a bill that affects Greece and Turkey.

We have to hand it to the Conservatives. The Colombia regime has been described as Hell's Angels with a public relations firm. Nowhere is it clearer than that when we look at the Conservative government trying to endorse Colombian fiscal policy with a $90 billion a year cocaine industry, an illicit industry outside if that fiscal framework.

Conservatives will say that this has nothing to do with the government. Anyone who is actually following the debate around why the United States Congress has refused to ratify a free trade agreement with Colombia, why the European Union is refusing to ratify a free trade agreement with Colombia, why EFTA is refusing to ratify an agreement with Colombia, anyone who does the due diligence, does the homework as a member of Parliament, and certainly the 37 members of the NDP have done their homework, their research and have actually found out what goes on in Colombia, would know that the Defense Intelligence Agency in the United States very clearly identified the Colombian president as being affiliated with drug lords.

In fact, in its document, which was released under access to information just a few years ago, it stated very clearly that President Uribe had risen to power through his connections to the Medellin drug cartel and was a close personal friend of Pablo Escobar. They are a notorious drug lord and a notorious drug cartel and the president is in their pocket.

Why would the Conservatives want to cozy up to a regime like that? Perhaps someone might say, that this was before, that he rose to power with the drug lords and the drug cartels, but now he is a nice guy. They might say that he has a good public relations firm, that we should treat him royally, that we should sign privileged trade agreements with him and that we should pretend the fiscal framework he runs is of the highest international standards.

However, we know the story does not end there. We know his connections with those murderous paramilitary thugs who kill dozens of people every year, who kill aboriginal Colombians or chase them off their land, with more forced violence displacements than anywhere else on the planet, who kill more labour activists than anywhere else on the planet. We see the forced displacement of Afro-Colombians, more than anywhere else. The Colombian Association of Jurists talks about the repeated and ongoing sexual torture, sexual assault and killing of Colombian women.

These are all present day circumstances that Conservatives tell us to disregard. They tell us that he is a nice guy, that he shook their hands so he must be great. They want us to forget about the past, forget about the drug cartels, forget about Pablo Escobar, forget about the killings and brutal rapes of children and women in Colombia. They want us to endorse his regime. They want us to think that he has excellent international standards on tax information and fiscal exchange, even when he does not.

The Conservatives are trying to make that argument, but this corner of the House has done its due diligence. We have done the work to find out what is going on behind this bloody, murderous regime, the secret police, the murderous paramilitary thugs and the Colombian military. They kill hundreds of innocent people every year under this horrifying rubric of false positives.

We know full well what is involved in this. That is why we will move to separate out Greece and Turkey, which meet those excellent standards, those standards that do not exist in Colombia. We should not say that this treaty-partner country agrees to abide by the highest international standards of tax information when it clearly does not, with a $90 billion illicit cocaine industry. At the same time, we should not allow the government to make another promise that it will break. It promised to clean up human rights abuses and it did not.

We will look to break the bill into two halves: one to deal with Greece and Turkey, the other with Colombia.

[The Acting Speaker, NDP, Denise Savoie]

I regret to interrupt the hon. member. He will have approximately seven minutes when the debate resumes.

We will now move on to statements by members. The hon. member for Newmarket—Aurora.

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 second time and referred to a committee.

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

Mr. Speaker, I am pleased to speak today to Bill S-3, which originates in the Senate. Interestingly enough, there are a considerable number of bills that are coming 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 the 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 was mentioned by one of the speakers earlier today. The bill would implement three new treaties that Canada has signed with Colombia, Greece and Turkey.

It has been pointed out by several speakers today that we are in a reactive position in this House. We are not in a position to amend these agreements. These agreements have been negotiated like a trade agreement would be negotiated between the two countries. The agreements are signed, and then put into legislation and brought before the House.

At this point I would like to make the observation that I believe the government, had it been smart in this situation, would have split these treaties into three separate bills rather than putting all three treaties into one bill. Bill S-3 should really have been written as relating to only one of the treaties. We then would have had three bills to deal with and that would have made matters easier for all of the members here in the House, but that is not the case so we will have some difficulties with the bill once we send it to committee.

I would also like to mention that the bill, as well as many others, is going around the block for the second time. It had already made it through the Senate last year, before the Prime Minister prorogued the House, and we are back doing it again only a year later.

Another point is that the bill does not represent any new or significant change in policy. The tax treaties covered by the bill are patterned on the OECD Model Tax Convention, which is accepted by most countries around the world. As a matter of fact, I believe I read that there are several hundred of these treaties in existence. Because it is an OECD model, other countries adopt the model and simply negotiate with their group of partners.

What the agreement does is avoid double taxation, which we can all agree is an admirable goal. It also is designed to prevent international tax avoidance and evasion, and that is another extremely important area, although I have to question just how effective these agreements are in terms of dealing with tax avoidance and evasion.

For example, given that we have had 87 of these treaties going back now for a good number of years, since I believe the 1970s, one would think that someone would have done an audit of the treaties and could at least present us with some facts and figures as to how effective they are. It does not make any sense to me that we would have signed 87 treaties, and we are proposing another dozen to be signed and more to be negotiated, when we cannot quantify and qualify how effective the previous 87 have been.

Clearly, the government must have some sort of information as to how effective these treaties are because it keeps signing them. That is why I asked the parliamentary secretary, when he introduced and spoke to the bill in the House earlier today, if he could present information as to how much tax has been recovered through Revenue Canada based on evasion and avoidance in other countries covered by these agreements.

He admitted that he did not have that information. I believe that he has undertaken to try to get the information, but once again I cannot guarantee that that will ever happen.

A lot of this could have been avoided if the government had set up briefings, as the ministers of the Manitoba government did, under Conservative governments and under the NDP government. To be fair not all ministers were good at it. I should not say good at it, but not all ministers actually did it. I can recall several Conservative ministers, as well as NDP ministers, who were just excellent at calling together the opposition members, or any members who wanted to attend a briefing, to explain the bill to them.

It has worked. I think that almost every minister who has done this will claim that it is money in the bank and is a very smart way to proceed. If the adversarial process is cut out and any interested members of Parliament are brought into a briefing so that they can find out about a bill, it would save a lot of time in debate. At least the information we are dealing with would be consistent and everyone would have accurate information.

I would really like to ask those questions. I would also like to ask, how many people take advantage of these treaties? How many people are affected by the treaties? Are we negotiating an international treaty for one or two cases a year, or are we negotiating an international treaty for hundreds and hundreds of cases in a year? Unless we can do an audit of the process to prove that we are actually gaining something, then why would we be negotiating these treaties?

Another question I would have is, are these treaties consistent? The argument is that they are based on the OECD wording, but they are negotiated between two countries. I have checked two of the treaties, and I do not believe they are entirely consistent with one another. Yes, they follow an OECD model and pattern, but it seems to me that there may be differences between the treaties.

We are being given this bill and are expected to deal with it as summarily as possible, but we are missing information. We do not have the government putting up any speakers, as with quite a number of bills right now, so we do not get to ask the government members any questions about the issues.

It is little wonder that we end up being very reluctant to send these bills forward. We end up being very suspicious about the intent of the bills, even though there may not be any sinister movement or ideas behind the bills. We have to question them, and it slows up getting them to committee in the first place. Then it slows them up in committee once they get there.

I think the government could streamline its processes better and would get more results by having briefings in advance of bills like this, especially bills that may, in fact, have a number of serious questions attached to them.

In 1971 the federal government undertook a review and overhaul of Canada's taxation system. That would be during the first Liberal government of Pierre Trudeau, I believe. The Liberals reviewed and overhauled Canada's tax system. Among other initiatives the review involved the expansion of the network of tax treaties with other countries.

Interestingly enough, we were looking at tax avoidance way back in the 1970s. I believe one of the earlier speakers talked about $6 billion, and that is probably a conservative figure, in tax havens around the world. Clearly, there is a lot of work that has to be done, cracking open these tax havens.

I know the Bloc members are extremely interested in the tax haven issue and they have talked about it, certainly in relation to the throne speech and other pieces of information. My time is not unlimited and I have a lot to talk about.

We have all these governments over many years making declarations that they will cut down on tax havens and close the loopholes. How many times have we heard governments say they will do this? They have the entire power of the state behind them to do it, and they are spectacularly unsuccessful. Just to show how important a single person can be in this world, in the last year an employee of a bank in Switzerland, a little guy, took a backup tape containing the names of thousands of people, German citizens, Canadian citizens, citizens from other countries, who were avoiding taxes on undeclared income in these banks. I do not know what his motives were exactly, but whatever they were, he sold the tape, and the German government bought the records that dealt with their own citizens. He may have sold it to other countries too. The ripple effect was that Canadian taxpayers were rushing for the exits to take advantage of the tax amnesty offered by this government to voluntarily declare their undeclared income.

The moral of the story is that Canadian citizens are free to seek out and invest in tax havens in other parts of the world, not pay taxes on their capital gains, on the interest they get on this money, and the worst that happens to them is that they can simply walk into the nearest Canada Revenue Agency office and make a voluntary declaration. It is called an amnesty. If they do that, they do not even get a slap on the wrist. They simply pay the taxes and I suppose they are told to behave themselves in the future. If they do not voluntarily declare, they would be in trouble if they get caught, which is why so many of them have been voluntarily declaring.

This is an example of one little guy, one worker in a bank, stealing a tape for whatever reason and selling it to the government and essentially setting off a firestorm of activity. I believe there are also movements afoot now under the Obama administration, predicated more on the terrorism issue than the whole idea of trying to collect taxes from tax evaders. The reason the Americans are putting pressure on the Swiss banking system and other banks that hide information and keep it private is that they want to uncover moneys that are being stored in these facilities by terrorists. That is the motivation.

However, the Americans were happy to avoid doing that all these years. The Swiss system got rich over the years by taking money from drug cartels, arms dealers and all sorts of unsavoury organizations and people. In fact, drugs dealers and arms dealers who put millions and probably billions of dollars into Swiss banks over the years in many cases were actually getting zero interest on their money. That is the explanation why Swiss banks are able to lend out the money. Back in 1987 when Canada's interest rates were in the 18% range and we could buy GICs at the Royal Bank, or treasury bills, at 18% or 20% for a month, we could get money from Switzerland for 6% from Swiss banks.

I am told that many of the people involved in dirty money essentially put that money there and expect nothing. They are just happy to have the money protected and to have the veil of secrecy and privacy at their disposal.

They will put millions and millions of dollars in a Swiss bank with no interest, none whatsoever. Of course that is why the bank can turn around and lend it out at low rates.

This system lasted for many years but it is about time we, as a group of countries, started to crack down on people who try to avoid paying taxes.

I turned on CPAC last night and saw Mr. Snowdy talking about Rahim Jaffer, former MP, and how he was alleged to be setting up accounts in a bank in Belize. Belize is not on our list of countries that have treaties like this, but the question I would have is this. Are people like that, who are trying to plan out their careers in tax evasion, looking at our list? Are they looking at the list of countries where we have these tax treaties and trying to avoid the tax treaties?

Of the 80-plus countries we have on the list, where we have tax treaties, we have Algeria, Argentina, Armenia, Australia, Austria and then we have Barbados. I looked through the list of countries and I do not see any that come across as tax shelters until I get to Barbados under the Bs.

There we have a case where we have one of these tax treaties in place. We had the Bloc critic speaking this morning, and by the way he apologized for Lichtenstein. He and I checked it because it was not on my list. He admitted that it in fact is not on the list.

He explained in very good detail about the tax haven situation with regard to Barbados, I believe. He was explaining that the OECD has a tool to detect tax havens. He said there are four criteria that it uses to be able to tell whether a country is a tax haven: the taxes of a country were either low or zero, there was no transparency, there were no filings to be made, there was no due diligence and there was no economic activity. I believe he was describing a situation where we had an increase in Canadian investment in Bermuda, Barbados and the Cayman Islands from $30 billion up to $90 billion, and these are countries where we do not have these tax agreements.

There is a grey list and I believe Belize is on the grey list.

I have no idea why Mr. Jaffer would have chosen Belize, because Belize is not necessarily even one of the countries on the best-tax-haven list, but still we certainly do not have a treaty with it.

Grenada is on the list. Just several weeks ago there was a report in the press about Grenada and how in the last two or three years there was a spectacular tax evasion scheme going on using a Grenadian bank. I believe an American or Canadian citizen went to Grenada and set up the bank, and it was just a front. It was a rented office. There was no real bank there at all. Millions and millions of dollars were being bilked from North Americans.

So there is obviously more at play here than what is involved in these tax treaties. Before we go around signing another 80 of these treaties, we should find out just what we have gained by signing the 80 we have right now.

[Irene Mathyssen, NDP, London—Fanshawe, ON]

Madam Speaker, I want to touch on something I heard in a speech by the member for Burnaby—New Westminster. He talked about the fact that, in signing this treaty, the government of the day would say that even if there are indiscretions in places like Colombia, that does not mean we should not go ahead with signing an agreement. Yet we have been very reticent about signing a free trade agreement with Colombia because of the crimes against labour leaders, workers and indigenous people of that country. The United States and certainly the European Union felt similar concerns.

In light of the behaviour of Colombia in regard to its environment, its people and trade unionists, should we not stand back and say, no, we are not going ahead and signing a tax treaty because that legitimizes the kinds of behaviours we are seeing in Colombia?

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

Madam Speaker, that is a very good question from the member. I would like to see what these 87 tax treaties have accomplished in the first place. I asked the government that question this morning. Members were not able to give me even one example of their being able to collect some money owed to the government because of tax evasion or tax avoidance. Why would they promulgate more of these agreements when they do not even have results to show for the first 80?

I already suggested that the government should split them off, if it wanted these bills to pass. There are three treaties here. The Conservatives should have introduced one bill for the treaty for Greece, a second bill for the treaty for Turkey and a third bill for the treaty for Colombia. But they introduced all three together under this bill. One wonders why they would do that, given that they should have known there would be questions about this. Clearly they do not want their legislation to go through as smoothly as it could have if they had simply split it up.

Having said that, we would still want to know what sort of results we have obtained from all the other treaties we have signed. Why are we signing treaties if we cannot show any results from the first 80?

The next question is about the treaties themselves. I checked over two separate treaties and they are not the same. Are the Conservatives taking the OECD model and basically adjusting it based on how good the negotiators are with the other countries? I am really at a loss to explain that one.

We have said that, when the bill goes to committee, we will try to make some amendments to it and separate and divide it, but we are not happy with what the government has done and we think members knew in advance the trouble they were going to get into on this bill.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Madam Speaker, I enjoy listening to my friend. We all know we have the opportunity to do it often, much to the chagrin of the Liberal member for Mississauga South who is losing out on the count and contributions.

My question actually came from a member of the Liberal Party. Underlying these conversations about an increase in treaties and an increase in fair trade agreements from the government, in previous governments there has been a philosophy and a notion that by signing these agreements, human rights will improve in our trading countries, the environmental regulations will get better and workers' rights will improve. There is sort of this litany of other consequences from signing these trade deals.

My hon. colleague just talked about how the government has not proffered any evidence, one way or the other. Was this trade deal a good trade deal? Did this one not work as effectively? It is partly because the government does not use any measurements of success, other than the signature on the deal. It says that once the deal is inked and signed, that is successful.

That does not make any sense. There would not be a business in this world that would have a contract with another business with the only measurement of success being the contract itself. Of course deals are signed in order to get something done. However, when we ask the government what has been done, it does not offer any evidence and says that it needs to sign more.

I wonder if my friend could comment on this issue because there seem to be concerns coming from the Liberals as well. This is from a previous question by the member for Scarborough Centre who referred to Colombia, Greece and Turkey and resistance with Colombia because of human rights. He said, “Today we have an island called Cyprus. One-third of it is illegally occupied by Turkish forces. There are 1,600 Greek and Turkish Cypriots still unaccounted for with regard to laws, properties, et cetera. If that is not a violation of human rights on behalf of Turkey, what would he say to his Greek Canadian and Greek Cypriot constituents?”

Here we have even Liberal members, which is defying description, raising concerns about these other elements, elements of human rights and elements related to the environment. I wonder if my hon. colleague could comment on the evidence, or lack of evidence, about whether these treaties actually accomplish any of these other benefits.

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

Madam Speaker, 87 treaties have been signed and, from what I can see, only one of them was signed with a country that would be seen as a tax haven, and that is the country of Barbados. Having signed the agreement with Barbados, one would think we would be able to determine, with some degree of accuracy, how much progress we have made in turning around the tax haven status of the island of Barbados.

As the Bloc member pointed out, Bermuda, Barbados and the Cayman Islands had an increase in investment from $30 billion to $90 billion. We do not have tax conventions with Bermuda or the Cayman Islands. If the intention here is to cut off the tax havens, then why do we not go out and try to sign tax treaties with the worst offenders of the tax havens? However, we are not doing that. We are signing them with countries that evidently we do not have a problem with them being tax havens. The minister, if this whole idea was working, presumably in his speech would have singled Barbados out.

He would have said, as the member for Kings—Hants would say, “Well, we signed this agreement with Barbados, and look at the huge improvement we have had in their tax haven status. They have gone from being a tax haven to a non-tax haven”.

That is not what the Bloc member described this morning. The way he described the companies operating in Barbados, they clearly are still operating in a tax avoidance environment, which is not something the government should be trying to emulate.

I think that the government is operating on the basis that this whole agreement structure facilitates trade. If members read the speeches from the senators in the Senate, that is what they would notice in their speeches. It is all about trade and this is just one little piece in that whole idea that we are open for business and let us trade with one another.

It is just lip service being paid to shutting down tax havens. If that were the intention here, there would a different picture being presented in this situation.

[Carol Hughes, NDP, Algoma—Manitoulin—Kapuskasing, ON]

Madam Speaker, my colleague is exactly right. We see a government that keeps throwing stuff into bills and budgets that does not make sense. It put in the Navigable Waters Act. It attacked pay equity in the budget. Now it is putting forward a bill that should be two separate bills.

Maybe my colleague could reiterate why it is important to have a bill that would specifically address the issues with regard to Colombia.

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

Madam Speaker, the simple answer is that if the government had a specific bill that dealt only with Colombia, another one that dealt only with Greece and another one that dealt with Turkey, it would get two of the three moved through the House in an expeditious way. That would be the bottom line on it.

Just for a moment I want to deal with the situation in Barbados, which is a tax haven that has an agreement. The Bloc member indicated that to register, people had to have their headquarters there, had to have one meeting a year, had to keep minutes and had to have one director who was a resident and they could pay the director as little as $1,500 a year. This is the way it is set up. There is also banking secrecy.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Madam Speaker, it is encouraging to hear my colleague from Winnipeg talk about the implications of tax policy, with having done so much research on it, because those implications affect so much of what we do in this place, primarily the government's ability and willingness to collect taxes fairly across the country. Are there special understandings within the political class here, the cabinet, and those families that can even afford to even consider things like tax havens?

I suspect that most Canadians watching this have not contemplated with their families around the dinner table what to do with their tax haven structures this year. Most Canadians are struggling to make ends meet and pay their fair share of taxes, and are willing to do so, but it is when they hear stories of the excessively rich families in Canada making a certain amount of money, wanting to avoid taxes and then skipping town, essentially.

Some of these same folks end up getting a little pin on their lapels or the Order of Canada from prime ministers for their great and dutiful work for Canadians. The irony and the hypocrisy in that alone smacks so hard against Canadian values.

Bill S-3 is a bill that has come forward from the Senate. It is great to know that every once in a while the senators rouse themselves from their afternoon naps and produce something. However, it is a bill that does not necessarily mean a lot in its particulars but, in general, has implications for all of us.

In Bill S-3, as my friend from Winnipeg said, the government quite intentionally included a country that may cause problems, because it is trying to do a free trade deal with Colombia right now and now it is slipping it into this taxation bill. It is striking to me and to others why these three particular countries are locked together and why it is of interest to the government to include such diverse economies together into one piece, but the government has chosen to do that so we must work with that.

The issue that is in front of us is how to deal with this bill. The NDP has suggested, quite rightly, that the bill should be split, that it should be broken up into its contingent parts so we can deal with each reality on its own. The government at this point has refused that, but let us look at the pattern of how the government operates when it comes to making legislation and the role of the government.

Right now at the finance committee, members are dealing with Bill C-9, which, by all measures and accounts, is a Trojan Horse bill. It is supposed to be a budget bill but it is an omnibus bill, which means that it includes a whole bunch of different pieces. The government has included things like raising airport taxes and the selling off of Atomic Energy of Canada Limited, the largest crown corporation in this country. It is the nuclear industry. It has also included a watering down of environmental regulations on, of all things, the oil and gas industry, which is quite ironic to think about doing that right now. All of these things are embedded into a piece of legislation that is meant to be a budget bill, a finance bill. That is a cynical form of politics. It is a form of politics that says that it does not want to debate these things on their merits.

Let us just take one of those pieces as an example, the selling of AECL. Canadians, over the 50 years of this crown corporation existing, have put somewhere north of $21 billion into it to develop the nuclear industry here in Canada, both on the energy side and creating isotopes. That is a lot of money. What else could have been done with $21 billion? However, here we are and the money has been put in.

It actually says in legislation that was crafted in this place that in order to sell or break up AECL, the government must bring a bill before the House for debate. That makes sense. That is reasonable. That is what every other country around the world does. However, rather than debate the sale of AECL or how to break it up, or any of these other things, the government instead has slipped it into a budget bill and has said that it is a matter of confidence.

It also tacked in this thing about raising taxes at airports. This is from a government that is constantly claiming that it is cutting taxes. It is becoming laughable because at the same time it is raising them, like the HST.

I am a member from British Columbia and I was just at our first farmers' market in Terrace, B.C. this weekend. I manned the HST booth for a couple of hours and heard from constituents in British Columbia how frustrated they are that when they flick on the evening news they hear Conservative minister after minister talk about their glorious tax cuts, when they know in British Columbia and in Ontario that they are moving the HST onto the backs of hard-working families who will pay more taxes.

It was a tax that was brought in by a British Columbia premier who promised not to do it. The Conservatives pretend they had nothing to do with it, forgetting that their fingerprints are all over a $1.6 billion bribe that they sent to Ontario. The government took $1.5 billion from taxpayers to bribe another level of government to raise taxes on those same taxpayers. This is the way the Conservative government cuts taxes.

It is unbelievable that those guys can still walk upright and claim the high moral ground on taxation when they took $1.5 billion and slipped it into a budget bill to raise taxes in British Columbia and another $3.5 billion or so to Ontario. That is remarkable.

What is remarkable is that the folks who were coming up to us at this farmers market were from all political persuasions. Folks from across the political spectrum were saying that whether it was this type of tax or another type of tax, the process stunk. They were signing a petition so a free and fair vote could be held in British Columbia to decide things.

Bill S-3 is another effort at talking about things without actually doing anything. We have asked for evidence from the government about the effect of these treaties. The government has signed, I believe, 87 agreements. The Conservatives think they are great free traders because they have signed these agreements. They say that they are fantastic, thereby implying that something actually has changed in the world.

It must have cost a lot of money to print 87 treaties, never mind sending negotiators all over the world to make these things happen. These things are not free. We have invested in these things. We are asking for a return on our investment.

We want to know what has changed in tax policy. Have we caught those folks who take their money offshore to a tax haven? Have we recovered any funds from the people who have earned their money from investments by Canadians and then skipped town before the bill is due? The government has not provided any evidence.

This leads one to some suspicions. This is again the portrayal of action without anything actually changing. This is a level of government of which people are growing increasingly tired. If the government is going to do something, then it should do it.

I come from a remote rural part of northern British Columbia. When somebody says he or she is going to do something, often it is a handshake and the agreement is made. Then we go forth and do it.

To set up all these agreements with no evidence as to whether they work or not, or which kind work better for which situation, is governance by a certain ideology rather than governance by any kind of thoughtfulness and debate.

With this bill, the government is lumping three countries together so it can get the numbers up. It is signing more treaties, all the while refusing a fundamental principle of trade, which has been evolving, growing and maturing around the world for the last 50 years.

That is the counter to the free trade ideology. We can trade with other partner countries but we have to do it fairly. Everybody knows that nothing is free in this world. Even the terminology free trade must sound good, it must mean good things. However, when we ask about fair trade, when we ask about trade that is on good terms with our trading partners, that would improve working standards, that would take care of the environment, that would ensure we do not support regimes that we would never tolerate here, the government is silent. It is not interested in those types of trade agreements, and we see that with Colombia.

Our member for Burnaby—New Westminster has been pushing hard to get some sort of review of the human rights situation in Colombia. He has made some progress with members after a massive campaign involving thousands of Canadians. They would like to know that their trading partners are living up to some sort of standards, some sort of requirement, for the privilege of trading.

That is how trade works. It is a privileged status. It is not a right. Countries do not trade with each other based on any fundamental rights. Countries trade as a privilege. It is the same with operating a business. It is not a right to operate a business in Canada. It is a privilege. One has to follow certain rules and those rules cannot be broken.

If someone ducks out on taxes, the government comes after that individual, and rightly so, except for a particular class of Canadians. When we get into the billions of dollars, suddenly a whole new set of rules apply. People go to what is called a tax haven, and tax havens, as has been described earlier today, are set up by countries that have a skeleton of a banking sector. They are often islands. They are often very small countries, sometimes democratic, sometimes not. The list of prestigious Canadian families who have their money socked away in these tax havens is astounding.

We see it time and time again, whether it is Liberal or Conservative governments. A little private meeting goes on and Revenue Canada says that is all right. We saw it with a former prime minister, for goodness sake, who got caught evading taxes. It was Brian Mulroney, a Conservative. Those folks used to know him, then they pretended they did not him and now they know him again, I think. What did he do once he got caught. He cut a deal with Revenue Canada. If he paid back a portion of those taxes, it would be satisfied.

I wonder if the government offers that same deal to the average hard-working Canadian taxpayers. If they are having a hard time this year or last year paying their taxes, Revenue Canada will cut them a deal and they will only pay 50%. Of course not. The system would not work that way.

However, when we move up into this upper echelon, if it is a Brian Mulroney, or a Bronfman, or somebody who has some connections to this place, they can cut deals with the government to pay half of the taxes they actually owe. How does that make any sense? How can those guys call themselves fiscally conservative if, at the same time, they allow tax avoidance to go on? How can they be running deficits while, at the same time, taxes owed to the good people of Canada are not paid. The only reason is because there are connections, there is the familiarity, there is a need to have some sort of comfort with certain Canadians who are of a certain wealth.

On the agreements with countries, we hope, as Canadians, that our presence in the world, our ability to connect with other countries is for a betterment of the world. We do not go forth, whether it is through military or diplomacy or trade, hoping to make the world a worse place. Part of our underlying belief as Canadians is that we have accomplished something in our country that is, as some have said, a country that works well in practice but not in theory. We want to be a symbol and an example on certain issues, particularly, for other countries struggling to establish a democratic rule of law, struggling to establish women's rights and rights for minorities, rights for the gay-lesbian community. Canadians feel okay with promoting those things overseas. We hope we do that through our diplomatic core and our military, from time to time.

However, when we look at the free trade ideology coming from the government, all these other issues get short shrift. One wonders if the government even believes that trade is a mechanism and a vehicle for promoting human rights and environmental standards around the world. Conversely, and I think this is much closer to the reality for those guys. The very nature and vision of the role of Canada, the very vision of Canada promoted by the Conservative government is not one that supports human rights. It is not one that supports environmental protection or the rights of first nations people. The reason I can make that strong statement is there is so much proof that the government does not mind cutting access to women's programs. The government does not seem to mind cutting back funding for certain groups that it does not like if their ideology is not right. It does not mind watering down environmental regulations on the oil and gas industry. In fact, the government suggests the oil and gas industry can regulate itself, which might be better.

In committee this morning we heard that our national regulator that governs oil and gas for most of the country, with the exception of Newfoundland and Labrador, had said that it was no good to have these regulations any more, that we should just be goal-oriented in our rules. Let us not have rules, in fact. Let us just have guidelines. Would it be a good idea to just have goal-oriented guidelines for driving regulations or for the safety of our homes and our streets? Of course not. We put regulations in place.

As my father-in-law, who works for a compensation board in British Columbia, says that a lot of the rules and regulations that govern industry for workers' safety are written blood. What he means is those rules were not invented out of nowhere. They were often invented after there had been an accident. In his case, workers' safety, somebody died, or somebody was hurt seriously. They realized they had to change the rules guiding construction, or a certain industry. The had to make them stronger so people could go to work knowing they would come home at the end of the day. That is the principle from where regulations and rules come. There is not a little office of people sitting around Ottawa, not that I am aware of, who make up rules for the sake of it. We make up rules and regulations so they enable good practice to flourish, so they give people a fair opportunity earn a decent buck to be social citizens. There is a social licence to operate that is buried within it.

However, when it comes to the regulations, the government promotes a Canada that does not necessarily belive in this, that industry can self-regulate. If we look to the Gulf of Mexico right now, we see what happens when an industry is given more self-regulation.

This does not always happen in one shot. It happens over time. There is a creep, they call it. It creeps edge by edge. We saw it in the stock market in the U.S. and in Canada. We put rules and guidelines in place to try to contain some of the greed that would be rampant in any stock market, because it is a profitable place to make money. We put those in place because not everybody was very ethical. Some traders want to bend and break rules and rip off their investors. In American, it was the Glass-Steagall act. In Canada, we had a bunch of other stuff, but the creep happened.

Bit by bit, the Americans eroded some of their guidelines. They eroded the rules and decided to do outcome-based guidelines. The outcome-based guideline for the stock market is to make money. If people keep making money, that is all right, but they will not be guided. The invisible hand of the free market will save them at the end of the day.

The marketplace is a magical thing. It can bring billions of dollars into new technology, ideas that spur innovation and that ambition can be allowed to flourish. However, it needs to have some rules and some sort of containment so people who try to do the right thing are rewarded and those who are crooks are thrown in jail. We take away all those regulations and they make guidelines. We make goal-oriented objectives and we get what we get, which is the worst of the worst are able to manipulate the system to their best abilities and make money in unethical ways.

Now we move to trade in Bill S-3, the bill from the Senate. We need to have these tax deals so people are not double taxed. That is a very fine principle. It is something we can support. Then we look at all the existing tax haven countries. Has the government signed any treaties with those countries, the places where people actually set up tax havens?

I have not known Turkey to be a great and rampant source of tax havens for the wealthy and rich around the globe, because it is not. We have the list of the places that are. Transparency International runs a list of the most corrupt regimes every year. Some of those are also the regimes where these tax havens exist. All one has to do is pay somebody off to not pay any taxes in the country, to never have to declare it and to have one board member.

Former Prime Minister Martin ran his whole shipping company under different flags of convenience. Why are they convenient? Because if people have shipping companies like the former Prime Minister of Canada did and they do not want to follow Canadian, American or European law, they fly them under the flags of some backwater African country, which has no rules or regulations for shipping. Therefore, they do not have to stand by any labour or environmental laws because they have this convenient flag flying over their ships.

The problem with the government's ideology on this is it also applies a flag of convenience to its trade policy. It uses trade in a convenient way to accomplish only a very narrow band of things. There are those of us who believe strongly that trade with a country can be an opening of a conversation about improving the conditions for people on both sides of the deal, both Canada and the country with which we are trading.

There is some evidence that this has happened around the world. In the last 25 years, we have seen steady improvements for the lowest-income people across the globe in some regions. However, it is false to think that this just happens naturally and that it is some byproduct that will happen no matter what we do. Very strong evidence exists to show this is the case.

We traded with Iraq during the entire Saddam Hussein regime. We bought its oil. The Americans bought its oil. We did not put a single stipulation in place. We had to drive furiously at a previous Conservative government to get a proper regime set up against South Africa when apartheid existed. We had to make the moral implication. The argument against any trade sanctions against South Africa was that free trade had to reign. That was the most fundamental principle. If we just traded with South Africa, it would eventually let apartheid dissipate.

Of course that was never going to happen. It would still be there today if the world did not get together and say that, as part of human trade, we would insist on human rights. As part of our trade with South Africa, to buy its resources and products, we would insist that it also treated all its citizens with some level of dignity. It was a good moment for the world when we finally decided that. Conservative ideological thinkers were against it. They opposed every step of the way.

We see it again here today. We need good trade policy in Canada. We are a trading nation. We need to shut down tax havens around the world and have people, whatever their social standing, pay their fair share of taxes. It is the right thing to do.

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

Madam Speaker, it has been rightly pointed out that when we go through the list of the 87 countries that have signed these tax treaties, there is only one that looks as though it qualifies as a tax haven.

If the member for Kings—Hants is correct, that the way to get these rogue countries in line is to sign tax treaties and free trade treaties with them, which would somehow alter the way they do business, then Barbados should be a perfect example of a country that is totally reformed, yet we have lots of evidence to the contrary. It is still as big a tax haven as it was before.

Then we look at the real tax havens and we find that we have tax treaties with none of them. If we are trying to stop Canadians from putting their money in tax havens, then one would think we should be sending our negotiators off to sign treaties that will turn these practices around with those countries that are known tax havens.

How do we treat Canadians who engage in investing in tax havens? We give them an amnesty. When the Swiss bank employee gave out all the information from the computer disk last year and we uncovered all of the Canadians' undeclared income, thousands of Canadians rushed into the nearest Canada Revenue Agency office and took advantage of the amnesty. What sort of message are we sending to Canadian high rollers? We are telling them to go ahead and invest in tax havens, because what is the worst that will happen? When they get caught, all they have to do is go to the nearest Canada Revenue Agency office and the amnesty applies. They declare that they have been bad, they declare the income, pay the tax and they are scot-free.

That is not the way to run the system. We should not be giving tax amnesties. We should be shutting the door on these tax havens and saying that if people take a chance and send their money to a tax haven, then when they are caught they will do time in jail. That would be tough on crime, but the government is not tough on crime.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Madam Speaker, shutting down tax havens is not an easy thing to do for two reasons.

The first would be the political connections of those who use tax havens. It is not the average citizen who is flying around the world in a Lear jet looking for the best tax haven available. These are folks who have means and resources and sometimes strong political connections. We have seen that here in Canada.

Second, even though it is difficult, it is necessary, and if the government were sincere about the effort to shut these things down, it would do something very particular that is not actually in the bill. It would include some way to measure its effectiveness. It would include some way to say that after six years or after 10 years, it would look back and measure the effectiveness of closing down these tax havens.

Again, the number of tax havens in Turkey escapes me right now, but I suspect it is not that many. The question is, does the government have the courage, if I can use that word, to actually go after real tax havens? If it does that, will it do that with the full support of the House? Madam Speaker, you had better believe it. Would it do that with the full support of Canadians? Absolutely. Canadians pay their taxes because they know it is that money that pays for roads, schools and hospitals, but they get properly cheesed off when they find out the richest of the rich do not pay a nickel.

[Pat Martin, NDP, Winnipeg Centre, MB]

Madam Speaker, I want to thank my colleague from Skeena for his passionate speech on this subject which really makes Canadians' blood boil the more they think about it.

I have looked on the websites of a lot of chartered accountants and they advertise tax-motivated expatriation. That is the code. Those are the buzz words for sleazy tax-cheating loopholes. That is what it is.

Perhaps my colleague would like to comment on something I read in an article by Diane Francis, a right-wing journalist, in the National Post. She was calling the public's and Parliament's attention to one of these sleazy tax-cheating loopholes, her words I believe, involving family trusts. A wealthy family can expatriate its entire fortune for a one-time payment of 25% tax. From thereon after, all the money earned out of country by that block of money, even if it is repatriated into Canada, is tax free.

The children of that wealthy family, and there might be dozens of them, could all be getting an income from that offshore pool of money and never pay taxes again on that money expatriated from Canada.

The United States does not allow it. I do not believe there is a western country in the world that allows it. I wonder if my colleague has heard of that and thinks we should address that as well.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Madam Speaker, one of my colleagues from the Conservatives said, “Was that not the Paul Martin scheme?” No. He had set up an entirely different scheme to avoid paying taxes and avoid rules. He orchestrated multiple tax havens.

It is somewhat ironic but I remember asking him at one point that as the finance minister of the country, the person in charge of tax policy, how did he feel about avoiding taxes while imposing taxes on Canadians. He had his own company which was doing quite well. This was not a company that was on the ropes or dying and he needed to do something about it. The company was doing quite well. He just wanted it to do a fair shake better. He was avoiding taxes while he was imposing taxes on Canadians.

We can remember that the 1990s, and this was raised during oral questions today, was a time when we were making very difficult decisions in this country about cutting back on folks. The hypocrisy of that moment, which was not felt by the then finance minister, someone hoping obviously to become the leader of the country, is so discouraging to Canadians.

The idea of having tax-motivated expatriation, the idea that one can make a whole whack of money, move it out of the country and pay a one-time small penalty on it and then slowly move it back in for generations to come is tax avoidance. Tax avoidance in most places is against the law because if one person does it, everybody does it and the whole system starts to fall apart.

The impression is that it is the wild west down on Wall Street and that Canada is the land of bliss and tight rules and serious governance. The OECD, a group of the most developed countries in the world, came out with a report citing all of the different barriers to trade and investment of each of its member countries. This is an exhaustive report. The number one reason that it cited not to invest in Canada was the lack of fair rules and regulations. Our markets were seen as too risky because we did not apply the rules consistently to companies. Investors were shy about putting their money into the country.

It was not high labour rates. It was not high environmental standards. Lord knows those are all being watered down. It was the simple fact that our market was not being governed properly. With Bear Stearns in the United States, the folks got caught and they did what is called the perp walk. We have seen this. The CEO is put in handcuffs and is walked down Wall Street in front of the cameras. They do it for a reason. It is to send a signal to the other guys to say, “Try this and we will do the same thing to you. We will humiliate you. We will put you in jail. No more golf memberships for you”.

In Canada, what do we do? We have a self-governing, self-regulating body. I cannot remember seeing any CEO, and there have been a few, who have completely ripped off--

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

Conrad Black went to the States to go to jail.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Conrad Black would have never been caught here.

At the end of the day, if the government is really interested in getting at the tax haven issue, we encourage it. These folks should be paying money. No more of this tax-motivated expatriation. It should be illegal. Any accountant that promotes it should be thrown in jail and his or her licence taken away.

[Pat Martin, NDP, Winnipeg Centre, MB]

Madam Speaker, while I have the floor I would like to put forward a motion to make the leader of the New Democratic Party, the member for Toronto—Danforth, the Leader of the Official Opposition for a period of one week.

[The Acting Speaker, NDP, Denise Savoie]

Members have heard the motion. Is there unanimous consent?

[Some hon. members]

Agreed.

No.

[The Acting Speaker, NDP, Denise Savoie]

There is no unanimous consent.

On a point of order, the hon. member for Peace River.

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 second time and referred to a committee.

[Irene Mathyssen, NDP, London—Fanshawe, ON]

Madam Speaker, I would like to thank the members of this House who have taken a principled stand against, first, the Canada-Colombia free trade agreement and now this treaty that we see before us, Bill S-3, an act to implement the most recent tax treaties with Greece, Colombia and Turkey.

I did wish to note that there is nothing exceptional in tax treaties. Canada enters into such treaties to help individuals and corporations to work in both Canada and the home country without double taxation, and to prevent tax evasion.

However, in the context of the Canada-Colombia free trade agreement, I am convinced that in order for Bill S-3 to be successful, it is essential to divide the bill. We can then vote for the treaties with Greece and Turkey, and set aside the treaty with Colombia.

The reason for avoiding the treaty with Colombia is related to our concerns with the Canada-Colombia free trade agreement. Our concern rises from the fact that we in the NDP caucus challenge the ethics of that free trade agreement between Canada and Colombia. We need to examine the situation in Colombia and look at it carefully so that we can understand why I am making this statement. Why kind of partner is Colombia, in terms of any kind of treaty?

I have been aware of the circumstances in Colombia for a number of years. I have actually had the privilege of speaking directly to Colombians from all walks of life in regard to the situation that they face in their homeland under the Uribe government. In fact, I have many constituents who fled to Canada because they no longer felt safe in their home country of Colombia.

In the last session of Parliament, I spoke about the CCFTA and undertook to talk about the lack of environmental protection and labour rights in the agreement.

Violations of labour rights and violence committed against unionized workers are among Colombia's foremost human rights challenges. Colombia is the most dangerous place in the world to be a trade unionist. A deep-seated anti-trade union culture exists in that country, both within the government and among entrepreneurs. These entrepreneurs and the government see autonomous organizations of workers as a threat.

There were 2,690 trade unionists murdered in Colombia since 1986, with 46 deaths in 2008 and 27 murders in 2009. Impunity rates for these violations are unchanged. There is only a 3% conviction rate for those who murder. Tragically, these crimes are tolerated by the Colombian government.

Canadians must not be party to this tolerance for violence. It goes against everything we believe about ourselves. It goes against our sense of justice. So, in signing Bill S-3 or in approving a tax treaty with Colombia, I think we are betraying our values as Canadians.

The Uribe government continues to inaccurately denounce union members as guerrillas, statements considered by the unions to give carte blanche to paramilitaries to act, putting workers in extreme jeopardy. Substantive labour rights protections remain in a side agreement of the Canada-Colombia free trade agreement, rather than in the body of that agreement. Enforcement of these rights is entirely at the discretion of the signatory government.

It is not a matter of discretion. It is a matter of life. It is a matter of justice. That life and justice is denied because the complaint process in the CCFTA does not investigate nor evaluate the complaints. There are no independent judicial or even quasi-judicial bodies that could lead to real remedies, that could look at the complaints and expect a change.

As I said, only a matter of discretion in the FTA governs these labour agreements. Unlike the provisions for investors' rights, the agreement offers no trading sanctions, no countervailing duties or abrogation of preferential trade status in the event that a party fails to adhere to labour rights provisions.

What it does institute, though, are fines. Fines for murder. That is just beyond belief.

Investors have rights, very clear and substantive rights. Workers do not. It defies logic. It defies understanding, and it is basically a matter of kill a trade unionist, pay a fine.

This is hardly acceptable or effective. Fines neither address the causes of the violence nor generate substantive incentives or political will in the Colombian administration to address the crisis and bring an end to the violence against trade unionists. Quite simply, there is no justice.

Given the scale and the depth of labour rights violations in Colombia, neither the Canada-Colombia free trade deal, its side labour deal or this tax treaty should be implemented. The fact is that it is more likely that agreement provisions for market liberalization and investors' rights, which are substantive, will exacerbate conflict and violations of workers' rights.

How on earth can we be party to this? How can we do it? How can we talk about tax treaties and trade agreements with a country where people's lives are in danger simply because they stand up for their rights?

Once Canadians understand what the proposed Canada-Colombia free trade agreement contains and what it means to sign a tax treaty with such a regime, they will simply reject it and they will ask this Parliament to reject it.

I would like to also speak about the crimes currently committed by the Uribe government against indigenous Colombians.

In a new report released February 23 of this year, Amnesty International called for immediate international action to ensure the survival of indigenous peoples in Colombia. It stated:

The organization says guerrilla groups, state security forces and paramilitaries are responsible for grave human rights abuses against Indigenous Peoples. These abuses include killings, enforced disappearances and kidnappings, sexual abuse of women, recruitment of child soldiers, persecution of Indigenous leaders and forced displacement of communities from land that is rich in economic potential.

People are quite literally forced from their land because they live in areas that are valued for their natural resources, including oil and minerals. Amnesty has stated that the situation of indigenous people in Colombia is nothing short of an emergency. Until countries like Canada recognize the gravity of this situation and exert much needed pressure on the Colombian government, there is a real risk that entire indigenous cultures may be eradicated. Signing tax treaties is not exerting pressure. It is simply going along with what is happening there.

According to the National Indigenous Organization of Colombia, ONIC, the survival of 32 different indigenous people in Colombia is at risk as a result of the armed conflict, the impacts of large-scale economic projects and a lack of state support. According to ONIC, at least 114 indigenous men, women and children were killed, many others threatened, and thousands driven from their land in 2009 alone, in one year alone.

In its latest report, Amnesty International says the threats facing indigenous people are intensifying and is calling on guerrilla groups and state security forces to respect the rights of indigenous people not to be dragged into hostilities, and equally importantly, to respect the rights of indigenous people to own and control the land on which they depend for their cultures and livelihoods. Tragically, indigenous leaders in communities that try to defend their land rights commonly experience threats, killings and mass displacement.

Colombia's ongoing armed conflict has affected millions across the country and left tens of thousands dead, tortured and forcibly disappeared. The vast majority of victims are civilians. In the last seven years, more than 1,595 indigenous people were forcibly killed or disappeared as a result of the armed conflict, and in 4,700 collective reports, threats were reported. In the vast majority of cases, these crimes have not been properly investigated, nor have the perpetrators ever been brought to justice.

Just as with trade unionists, the death toll is rising and still the Conservative government is determined to pursue trade agreements that are highly questionable and to enact a tax treaty that is equally questionable.

As Amnesty International testified at the House of Commons Standing Committee on International Trade in November 2009, one of the most worrying trends is a dramatic increase in the number of Colombians forced to flee from their homes, as many as 380,000 in 2008, and there are more every day. That brings the total number of internally displaced people in Colombia to between three million and four million, among the highest in the world, and it is growing.

Forced displacement has paved the way for misappropriation of lands, mostly by paramilitaries but also by guerrilla groups. It is estimated that more than four million hectares of land have been stolen by paramilitaries in this way. Displacement is one of the greatest threats facing indigenous communities, as in the case of Colombia.

I do not believe it is a coincidence that this happens in oil and rich minerals, and remarkable biodiversity. International mining, agribusiness and those who extract oil have a vested interest in these territories, all at the expense of people who have a right to live on these lands. We know that multinationals, including Canadian businesses, are interested in Colombia and are participating in the exploitation of resources.

According to the director of the United Nations High Commission for Human Rights in Colombia, when this displacement to urban centres occurs, it becomes very complicated. Since most of the indigenous women do not speak Spanish very well, the immensity of the city frightens them with its anonymity and lack of solidarity among residents. The women face new problems in raising their children and relating to their partners because the city is not a customary environment.

In addition to this uncomfortable environment is the anguish of leaving their homes and running with whatever little they had or could carry in order to outrun death and desolation. Accepting new, unfamiliar realities and activities not traditional in indigenous cultures results in culture shock and disorientation. People experience a way of life and language radically different from their own.

This fracturing can result in a breakdown of cultural continuity, as young people find themselves in alien environments and deprived of the social and cultural networks and practices necessary for the survival of their communities. Displaced people are at heightened risk of destitution, sexual violence, exploitation by criminal gangs, armed groups and discrimination. Even in the places in which they seek refuge, they may face further intimidation or violence and have to flee once again.

The inadequate state response by the Colombian government to the needs of internally displaced communities means that some people return to the dangerous situations that they fled. Without support or safeguards that should be provided by the state, the right to traditional lands is crucial to these indigenous people and the right to support is equally crucial. It is vital as an element in terms of their sense of identity, livelihood, way of life, and it is crucial for their future.

This brings me to the bill that is before us. This bill, as I said before, is of profound concern because it enables the government. It enables Colombia to abrogate its responsibilities. It is completely inadequate for any country to say that this is just a tax treaty, that the government of that country should be allowed to do whatever that government wishes. When one considers murder, torture and the displacement of people, we are treading on very dangerous ground here in our association, both through the Canada-Colombia free trade agreement and this tax treaty legislation.

It is clear that the members of the Liberal Party and the Conservative Party want nothing more than for Canada to move ahead with the CCFTA despite all the human, environmental and ethical costs. I think that we have to answer the ethical questions that are put forward by this discussion. I wonder what Canadians would say if they knew that, in last month's legislative elections in Colombia, independent foreign observers reported vote buying and fraud that allowed narco-paramilitary candidates to maintain influence over the Colombian congress.

I wonder what they would think about the plea to the Canadian Council for International Co-operation from Methodist Church of Colombia Bishop Juan Alberto Cardona during his visit to Canada in November 2007, when the bishop said:

--but we know from other places like Mexico that these agreements might create more wealth for wealthy people, but they make inequalities worse. Whatever new wealth is created does not reach the poor people.

The Canada-Colombia free trade agreement was signed behind the backs of the Colombian people, without any real participation from civil society and without any study on the impacts. Now we are proposing to move ahead with a tax treaty, again, I would say, against the wishes of the people of Colombia.

This is something that must be made very clear to this Parliament and to the people of Canada.

The stage is set for further and increased human rights violations in Colombia. We know that the Uribe government is looking for re-election. We know that this will give it carte blanche. Colombians have asked Canadian society, this Parliament, to demonstrate solidarity with Colombian people by mobilizing against the CCFTA. We did not listen to them. We are moving ahead with that. I think that is a great travesty.

Likewise, I think we should be very careful about moving ahead with this tax treaty.

When I began my remarks, I said that the fight against the CCFTA was principled. I have not changed my mind. How can our country contemplate any treaty that legitimizes such a corrupt government as the Uribe government? I believe Bill S-3 would exacerbate this. Therefore, I believe we need to split Bill S-3 so we can go ahead with treaties with Greece and Turkey.

We should not be accessories to the crimes committed against Colombia workers, the Colombian environment, Colombians of African descent and indigenous Colombians by signing a treaty with any government that sanctions murder, rape, the dispossession of people and that sanctions drug dealing and crimes against the human community. Let us rather say in one voice that no treaty, be it a trade treaty or a tax treaty, is something on which Canada is prepared to embark when there are such risks to human dignity.

Because we value human rights, human life and the legitimate aspirations of the Colombian people, let us refuse to engage in anything that might give credibility to the Uribe government and to the things that it represents in terms of its behaviour. Let us stand here together and divide the bill to ensure that Greece and Turkey's tax treaties are respected, but let us not proceed with anything with the Colombian government.

[The Acting Speaker, NDP, 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.

[Jim Maloway, NDP, 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.

[Irene Mathyssen, NDP, 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.

[Meili Faille, Bloc, 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.

[Irene Mathyssen, NDP, 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.

[The Acting Speaker, NDP, Denise Savoie]

Resuming debate. Is the House ready for the question?

[Some hon. members]

Question.

[The Acting Speaker, NDP, Denise Savoie]

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

[Some hon. members]

Agreed.

On division.

[The Acting Speaker, NDP, 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)