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

[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 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 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.

[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.

[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.

Business of the House

[Jay Hill, Conservative, Leader of the Government in the House of Commons]

Mr. Speaker, it is my pleasure to respond to the Thursday question from the hon. House leader of the official opposition.

We will continue with the debate today and tomorrow on Bill C-13, fairness for military families, followed by Bill C-10, Senate term limits.

Next week we will continue with Bill C-13 , if we do not complete it this week, followed by Bill C-14, fairness at the pumps act; Bill C-15, nuclear liability; and Bill S-3, tax conventions.

I will give consideration to any bills also, as usual, that are reported back from committee to the House.

My hon. colleague asked about allotted days. Next Tuesday, May 11, shall be the next allotted day.

I am pleased to report that following extensive consultations between all parties, pursuant to Standing Order 53(1) I choose to designate Wednesday, May 12 for a take note debate on the importance of the Atlantic shellfish industry.

In conclusion, there have been additional consultations between all parties and I believe Mr. Speaker, you would find unanimous consent of the House for the following motion. I move:

That, notwithstanding any Standing Order or usual practice of the House, the hours of sitting and the order of business of the House on Thursday, May 27, 2010, shall be that of a Wednesday; that the address of the President of Mexico, to be delivered in the chamber of the House of Commons at 10 a.m. on Thursday, May 27, 2010, before members of the Senate and the House of Commons, together with all introductory and related remarks, be printed as an appendix to the House of Commons Debates for that day and form part of the records of this House; and that the media recording and transmission of such address, introductory and related remarks be authorized pursuant to established guidelines for such occasions.

Message from the Senate

[The Speaker, Liberal, Peter Milliken]

I have the honour to inform the House that a message has been received from the Senate informing the House that the Senate has passed the following public bill to which the concurrence of the House is desired: 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.

Bill C-304—An Act to ensure adequate, accessible and affordable housing

[Libby Davies, NDP, Vancouver East, BC]

Mr. Speaker, I would like to address some of the points raised by the Parliamentary Secretary to the Leader of the Government in the House of Commons relating to an amendment made in the Standing Committee on Human Resources, Skills and Social Development and the Status of Persons with Disabilities to Bill C-304, An Act to ensure secure, adequate, accessible and affordable housing for Canadians.

Mr. Speaker, I will refer to a ruling that you made on January 29, 2008, referring to a committee amendment to the Immigration and Refugee Protection Act then before the House. In that ruling, you said:

In essence, what we are dealing with is the distinction between the principle of the bill and its scope. The principle refers to the purpose or objective of a bill, while the scope refers to its legislative scheme or the mechanisms that will give effect to the principle, purpose or objective of a bill.

In Bill C-304, the parliamentary secretary himself stated in his argument on April 1 that the purpose of this bill was to “require the development of a national housing strategy” by having the minister “consult all provincial and territorial ministers on the development of such a strategy”. He then said that the rules explain that amendments cannot be outside the scope or principle of the bill as passed at second reading, a rule with which we are all familiar.

I would submit that while the parliamentary secretary did give an accurate description of the principle and the scope of this bill, the principle is to develop a strategy and the scope or the mechanism is to do that through consultations. The key to the government's argument seems to prejudge what the results of these consultations will be.

The amendment in question is a permissive, not mandatory, amendment. It would give the minister an ability to achieve the principle of the bill, a national housing strategy, by refining the scope in terms of consultation to include an option that has been in place in other social policy strategies throughout Canadian history. Therefore, I would submit that the amendment does not change the scope or purpose of the bill but rather seeks to clarify it.

I believe that the committee chair's opinion on the principle of this bill may have been well-intentioned but the committee members were also correct when they decided that the amendment to allow the minister an option to respond to consultations, up to and including an opt-out for Quebec, was within the scope of possible consultations that are required to allow the minister to meet the principle of the bill, which is to develop a national housing strategy.

This option provided in the amendment is a reasonable one and one which is as old as Canada, the option to treat different parts of our country as different and unique.

The House recently passed a motion to define Quebec as a nation within our nation. We have the Canada pension plan and the national child benefit, two well-functioning national programs that Quebec has chosen not to participate in but instead to provide similar services. Quebec has opted out of the Canada student loans program since 1964 and recently received its transfer of approximately $125 million from the federal government in support of student financial assistance programs for the most recent academic year.

To go back further, the Liberal government's 2004 action plan on health exempted Quebec from the criteria and accountability set up for all other provinces and territories while guaranteeing full health transfer payments.

A further example is Canada's Social Union Framework Agreement of 2002, which was a pan-Canadian approach to the reform of Canada's health and social policy systems to which all provinces were signatories except Quebec. The Canada-Quebec accord on immigration allows Quebec to establish its own immigration requirements, distinct from the rest of Canada.

Governments for years, as former prime minister Paul Martin noted, have recognized “Quebec's unique place within the Federation”. It is reasonable that members of Parliament understand that any national strategy must reflect Quebec's right to protect its unique nature through the delivery of certain programs.

The amendment in question today does not alter the nature of the bill but clarifies this right. The government argued that, because an amendment to exclude Quebec from Bill S-3 was inadmissible, this amendment on Bill C-304 should also be inadmissible.

However, these two bills are not comparable. Providing the option for Quebec to opt out of a consultation process as outlined in Bill C-304 does not have the same effect on the act as the exclusion of Quebec does from Bill S-3, which was an act affecting the duties of every federal institution in Canada by enhancing the enforceability of the Government of Canada's obligations and of part 7 of the Official Languages Act.

It is also relevant that the 2005 ruling was not challenged by the majority of the committee members as necessary to the bill, as was the case of the amendment to Bill C-304. The aim of Bill C-304 is to ensure the delivery of the right to adequate housing.

Quebec is in the unique circumstance of having ratified the International Covenant on Economic, Social and Cultural Rights, recognizing the right to adequate housing, and currently meets many of the objectives outlined in Bill C-304.

Therefore, as this House stated when it defined Quebec as a nation within a nation, the principle of this bill being a national housing strategy should naturally reflect Parliament's definition of our nation, which is that it can include an asymmetrical form of federalism without changing the principle of being a united Canada.

Quebec has an existing agreement in place with the federal government giving Quebec jurisdiction over the development and delivery of its housing programs, clarifying that Quebec may participate in the process of establishing a national housing strategy, as was the case before the adoption of the amendment. It will only serve to enhance Quebec's potential willingness to participate in the process set out in Bill C-304.

Therefore in closing, I submit that the amendment made in committee is permissive and not mandatory. It only clarifies in nature an acknowledgement of our understanding of a nation within the scope and consistent with the principle of Bill C-304.

I further submit that this is a rare case when the chair's decision on the scope is misplaced and the members of the committee were correct in allowing this amendment to stand.

Mr. Speaker, I hope you will take this into consideration and support the committee members who agree that this amendment does have its rightful place in Bill C-304.