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.

The House proceeded to the consideration of 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, as reported (without amendment) from the committee.

Tax Conventions Implementation Act, 2010

[The Acting Speaker, Barry Devolin]

There being no motions at report stage, the House will now proceed, without debate, to the putting of the question on the motion to concur in the bill at report stage.

[Gail Shea, Conservative, Egmont, PE]

moved that the bill be concurred in.

[The Acting Speaker, Barry Devolin]

Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

[The Acting Speaker, Barry Devolin]

(Motion agreed to)

When shall the bill be read a third time? By leave, now?

[Some hon. members]

Agreed.

[Gail Shea, Conservative, Egmont, PE]

moved that the bill be read the third time and passed.

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

Mr. Speaker, I appreciate the great support I am getting from across the way. As a matter of fact, I will refer to the hon. member's support.

I thank the House for the opportunity to start the third and final reading on Bill S-3, and before continuing, let me quickly thank all fellow members of the House of Commons finance committee for their swift consideration of this legislation and their unanimous support of its passage.

This important legislation will implement Canada's tax treaties with Colombia, Greece and Turkey. Tax treaties like these are important for Canadians, as they protect taxpayers both by helping to prevent unfair double taxation as well as in the matter of tax evasion. Canada has nearly 90 tax treaties already in place with other countries, and Bill S-3 is simply part of our Conservative government's ongoing effort to update and modernize the already extensive network of tax treaties.

Before continuing, let me again emphasize that although Bill S-3 is important legislation, it follows closely in form to previous similar tax treaties adopted by this Parliament. For instance, in the 39th Parliament, tax treaties with Finland, Mexico and Korea were adopted. Additionally, in both the 38th and 37th Parliaments, under the previous Liberal government, numerous tax treaties with countries such as Gabon, Armenia, Mongolia, Moldova and Norway were also adopted.

Furthermore, let me again underline that Bill S-3, like the legislation related to tax treaties from previous Parliaments, is based on the commonly accepted international standard for such treaties, and that is the OECD model tax convention. This OECD framework has long been established throughout the world as the standard for tax treaties. Indeed, as the OECD itself points out:

Most bilateral tax treaties follow both the principles and the detailed provisions of the OECD Model. There are close to 350 treaties between OECD Member countries and over 1500 world-wide which are based on the Model, and it has had considerable influence on the bilateral treaties between non-member countries.

Likewise, Peter Barnes, the noted former U.S. Treasury Department tax counsel, has remarked, in a recent edition of the OECD Observer magazine:

the OECD model has achieved a consensus position as the benchmark against which essentially all tax treaty negotiations take place. [...] But make no mistake: the OECD is a vitally important organisation and the OECD Model Tax Convention is a tremendously important tool for smoothing the way of international business and global trade.

Canada maintains one of the world's largest networks of bilateral tax treaties, serving as a key feature in both our ability to compete and to ensure everyone pays their fair share of taxes. Without a doubt, parliamentarians and Canadians are strongly opposed to tax evasion. We all know that tax evasion by some only punishes honest, hard-working Canadians and job-creating businesses. This is simply not fair. To detect and deter tax evasion, we need to work with and share information with our international partners. That is why Canada participates in international tax information exchange agreements and encourages countries to do so, as demonstrated in Bill S-3 here today.

Indeed, our Conservative government has been very aggressive and proactive in that regard. For example, in 2007, we unveiled a policy that introduced incentives to have non-treaty countries enter into OECD-model tax information exchange agreements with Canada. It also requires that all new tax treaties and revisions to existing tax treaties include the OECD standard for tax information exchange.

I am happy to report that negotiations on tax information exchange agreements are all well under way with over a dozen jurisdictions. Indeed, Canada signed its landmark first tax information exchange agreement with the Netherlands Antilles last August.

Canada also contributes actively to the efforts of the OECD's Global Forum on Transparency and Exchange of Information, as well as in the G20, in order to push for further implementation of the previously mentioned OECD standard.

What is more, according to the director of the Centre for Tax Policy and Administration of the OECD, Jeffrey Owens, during his tenure as chair of the G7 and G20, Canada's Minister of Finance has, “shown leadership in getting G20 members to crack down on tax havens with new sanctions.”

Clearly Canada is serious about combatting tax evasion and is committed to advancing this effort internationally.

While tax treaties help guard against tax evasion, they also provide individuals and businesses in Canada and the other signatory countries with predictable and equitable tax results in their cross-border dealings.

I would now like to talk in a little greater detail about how these tax treaties will improve a number of areas, namely: reducing withholding taxes, avoiding double taxation, preventing tax evasion, and removing barriers to trade and investment.

First, let me briefly look at the withholding taxes. Withholding taxes are a common feature in international taxation. They are taxes imposed by a country on income arising in that country and paid to residents of another country. Indeed, Canada with respect to non-tax treaty countries usually taxes this income at a rate of 25%. Given that one of the principle functions of a tax treaty is to fairly allocate taxation powers between the respective treaty partners, tax treaties include provisions to properly determine the level of withholding tax that can be applied by the jurisdiction in which certain payments arise.

The withholding tax rates vary from one tax treaty to the next as they reflect the result of negotiations with Canada's tax treaty partners, as is the case in Bill S-3. Indeed, Bill S-3 provides 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 at 15% in the case of Turkey.

Each treaty in Bill S-3 also caps the maximum withholding tax rate on royalty payments at 10% and on periodic pension payments at 15%.

Tax treaties like this one help ensure fairness for taxpayers, both domestic and international, and help ensure that they are not essentially overtaxed due to withholding taxes.

As the Liberal member for Scarborough—Guildwood, a former colleague on the finance committee and a former parliamentary secretary to a finance minister, has pointed out:

withholding taxes do not provide for the deductability of expenses incurred in generating income and are imposed on the gross amount of the payment. The taxpayer will therefore be subject to an effective rate that is significantly higher than the tax rate that applies to net income in either the source or the residence country. To remedy this, Canada's network of tax treaties limits the rate of withholding tax that can be withheld by the source country on various types of income so as to more accurately reflect the level of taxes that would be payable on a net income basis.

The second area that I would like to address is somewhat similar, that being double taxation. Double taxation in an international sense arises when two or more states tax the same income for the same period of time. Obviously, nobody should have to pay their income tax twice.

Tax treaties like in Bill S-3 help avoid double taxation and ensure that taxpayers pay tax on the same income only once. Again, in the words of the member for Scarborough—Guildwood, “Without a tax treaty in place to set out the tax rules, the same income can be taxed in both countries without consequential relief. This situation can have a negative impact on the expansion of trade, and the movement of capital and labour between countries”.

Tax treaties utilize numerous methods to address the potential for double taxation. This happens in one of three ways. First, the income may be taxable exclusively in the country in which it arises, that is the source country. Second, it may be taxable only in the country in which the taxpayer is resident, that is the resident country.

Third, it may be taxable by both the source country and the residence country, with double taxation relief provided in some form.

The treaties in Bill S-3 grant exclusive taxing rights to a number of items, meaning the other treaty partner cannot tax those items, thus avoiding double taxation.

For example, if a Canadian resident employed by a Canadian company is sent on a short-term assignment such as two to three months to any one of the three treaty countries contained in Bill S-3, Canada has the exclusive right to tax that person's employment income. Also, from an administrative point of view, this greatly reduces the paperwork and red-tape burden associated with multiple jurisdiction tax filing. However, in the case of most items, taxing rights are shared.

The third area I would like to elaborate on is tax evasion. Tax evasion and avoidance are also unfair and economically damaging. One of the most important benefits of increased co-operation between Canada and the other countries is preventing tax evasion.

Indeed, tax treaties are an important tool in protecting Canada's tax base in that they allow consultations and information to be exchanged between Canada and the countries with which we have tax treaties. What this means is that these treaties help ensure fairness and equity in our tax system by helping to ensure that taxes owed are indeed paid.

Equally important, as I mentioned earlier, international tax treaties help ensure that taxpayers do not pay more tax than they should. Treaties such as those found in Bill S-3 permit the exchange of tax information between revenue authorities, and in so doing, help them identify cases of tax avoidance and evasion and act on them.

Indeed, our Conservative government firmly believes all Canadians should pay their fair share of taxes and has aggressively targeted tax loopholes. We again confirmed that fact in budget 2010 when we rolled back nearly 10 tax loopholes in order to protect Canada's tax system. This included, for instance, better targeting tax incentives for stock options, as well as ensuring that businesses cannot inappropriately capitalize on differences between the tax systems of Canada and the other countries to artificially increase foreign tax credits in order to pay less tax.

Noted public policy commentator and co-founder of the Dominion Institute, Rudyard Griffiths, writing in the March 10 National Post in response to budget 2010's aggressive initiatives to close tax loopholes, said:

the Conservative’s snipping of a raft of erroneous tax loopholes met with near universal applause, and rightly so.

...it defies logic, in an era of fiscal restraint, to allow corporate mucky-mucks to use generous stock options to take gobs of cash out of their companies tax free.

The final area that I would like to discuss is how tax treaties help remove barriers to trade and investment. Investors, traders and others involved in the global marketplace want to know the tax implications associated with their activities both in Canada and abroad. Equally important, Canadians with business interests or investments abroad want to be sure that they also will receive fair and consistent tax treatment.

Tax treaties boost international trade in goods and services by providing individuals and businesses in Canada and the other signatory countries with predictable and equitable tax results in their cross-border dealings. This in turn helps Canada's economic performance at home by encouraging our exporters. Indeed, over 40% of Canada's annual GDP can be attributed to exports alone. Moreover, it helps attract new investments into Canada as well.

In short, the tax treaties contained in Bill S-3 will serve as a key step in solidifying Canada's economic links with Turkey, Colombia and Greece by eliminating tax barriers to bilateral trade and investment.

In the words of the Hellenic Canadian Association president, Theodoros Aslanidis, “The agreement is very positive”.

To summarize, the tax treaties covered in Bill S-3 comply with the international OECD standards. They would promote certainty, combat tax evasion, and promote a better business climate for taxpayers and businesses in Canada and in these treaty countries.

Additionally, these treaties would help to secure Canada's position in the increasingly competitive world of international trade and investment.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, I think the member has outlined in the bill very well the importance of dealing with double taxation, and of course, probably the more interesting one is the anti-avoidance and tax evasion issues.

We have tax treaties with over 90 different countries. This bill has been described as stating that here are three more countries that we are putting on.

However, I think Canadians would like to know, if we are entering into these trade agreements and there will be supplementary tax treaties to deal with this, whether there have been any results as a consequence of entering into these bilateral treaties on tax, especially having to do with evasion.

I wonder if the member, being the Parliamentary Secretary to the Minister of Finance, would advise the House as to whether he has any examples of where any progress has been made in terms of dealing with tax havens, avoidance provisions, or in fact, tax evasion. Also, how much money has the Government of Canada recovered from these actions?

[Ted Menzies, Conservative, Macleod, AB]

Mr. Speaker, I thank my colleague, who also sits on the finance committee. Those are pretty specific questions. I will certainly attempt to get back to that hon. member with answers to those specific questions.

However, having had the opportunity in Berlin, about a year and a half ago, to sit in on an anti-tax haven discussion, I was frankly surprised by the countries that were pushing back against movements such as the tax treaties that we are dealing with here today. For what reason, I guess we will leave that up to everyone's imagination.

With regard to the initiative that Canada has taken to push this forward, I have long list and it would take time and many answers to list off. We have been successful. That is why we are repeating this in one more. We plan to continue to do so, because as much as we welcome investment in this country, we want to ensure that our companies that are investing in other countries are protected as well.

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

Mr. Speaker, I am speaking today, of course, on 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 Liberal Party of Canada recognizes that Canada is a country whose prosperity is based on trade. We have a small, open economy, and as such, we depend disproportionately on external trade for our wealth and prosperity and our standard of living.

The fact is that when the Canadian economy is healthy it is because we are producing and exporting more than we are consuming or importing. The sale of Canadian goods and services to foreign markets is the source of Canadian jobs and prosperity, and securing access for Canadian exports to foreign markets is essential to the Canadian economy and to creating the jobs of today and the jobs of tomorrow.

With this in mind, we understand and support the principle of free trade and the principle behind Canada's tax treaties with our trading partners, and as such, we support the goals of Bill S-3. But we are very concerned about the state of Canada's economy and we are very concerned about Canada falling behind in terms of our share of the global economy. We are concerned about the Conservatives' mismanagement of Canada's finances and their mismanagement of our important and vital trade relations.

The Conservative record on international trade has been troubling. The Conservatives have given us, for the first time in 30 years, a trade deficit, in fact a $4.5 billion trade deficit. That is the largest trade deficit in Canadian history and it is the first annual trade deficit that Canada has had since 1975.

What is troubling about this is that, for a small, open economy such as Canada's, when we are actually buying more from the world than we are selling to the world it is an ominous sign in terms of our ability to strengthen and continue to build our standard of living and quality of life. That is an ominous sign in terms of our ability to protect the jobs of today or create the jobs of tomorrow.

In the first nine months of 2010, Canada has accumulated a trade deficit of $7.6 billion. This puts us on pace now for an even more massive trade deficit this year than the record trade deficit that we had last year.

The Conservatives have to take responsibility for these massive trade deficits. It was their misguided trade policy that has failed to defend Canadian interests in the world. Under the Conservatives we have been far too dependent on the U.S. market. We have seen how vulnerable we are to U.S. protectionism, whether it is Buy American provisions or other protectionist measures in the U.S. Congress.

The Conservatives have not only failed to defend Canadian jobs against U.S. protectionism, but they have failed to effectively defend Canadian jobs in the world by building the kinds of important trade relations that would enable Canadian companies to diversify their trade relations.

The Conservatives spent their first three years in office chiding China and ignoring India. The Conservatives turned their back on a remarkable and profoundly important 40-year relationship with China, a relationship starting 40 years ago when Prime Minister Pierre Trudeau had the vision and foresight to lead the first western developed country to establish diplomatic relations with post-revolution China, building a profound social, cultural and foreign trade relationship with China. The Conservatives turned their backs on that relationship for ideological reasons in their first three years of office and set the relationship back decades.

We have seen the Conservatives' clumsy foreign and trade policy with the treatment of important trading partners like China, Mexico, the Czech Republic, at a time when it held the presidency of the EU. More recently, I do not have to remind Canadians or this Parliament as to how embarrassing it has been to watch the Conservatives' bungling of our vital relationship with the United Arab Emirates, and the internal cabinet squabbles that have come to light between ministers on this issue. The fact that we have squandered a vital trade investment and defence alliance with the UAE demonstrates a Prime Minister, a cabinet and a government that are not really ready for prime time when it comes to the world stage, that really are unsafe at any speed, as Ralph Nader would say. This is part of the cost Canadians have paid for having a Prime Minister who really has never been outside North America without a government jet and a motorcade.

It is important that we have prime ministers and governments with foreign experience and an understanding of the world. Canadians benefit from prime ministers and governments that have that kind of understanding of Canada's place in the world.

The Prime Minister does not do multilateralism well. In fact, that is because he does not really believe in multilateralism. The Prime Minister was critical of the G20 when Paul Martin, as the Liberal finance minister, was leading the charge and in fact building the G20. The G20 has emerged as the principal and most important voice of financial reform today, during and after the financial crisis.

Canadians should take some pride in the fact that it was a Canadian finance minister, Paul Martin, a Liberal finance minister, who looked ahead and saw the need to expand the G8, to build a G20 that would welcome in some of the emerging economies and be ready for whatever turbulence emerged on the global stage, but also to deepen relations and governance among our countries as we deal with what are no longer issues that are faced by individual countries but increasingly by the entire world.

Again, when we talk about emerging economies, we have talked in the last few years about the BRIC countries. We could say today perhaps it is more the BIC countries because it is Brazil, India and China; Russia has had some challenges. There is the next wave of emerging economies, the CIVETS countries, Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa. It has never been more important for Canada to diversify and deepen its trade relations with some of these economies. Canada has a natural advantage to do that, and that is our multiculturalism.

Over the weekend, I met with a group of Chinese Canadian business people in Winnipeg. I also met with a group of Indo-Canadian business people in Winnipeg. Winnepeg, like a lot of Canadian cities and towns, has emerged as a very multicultural community. What is really quite remarkable is that we look at multiculturalism as a successful Canadian social policy, and it is. Increasingly, it is not just a successful social policy, but it is a source of immense economic advantage because our multicultural communities are among the most entrepreneurial communities we have in Canada. They also represent natural bridges to some of the fastest growing economies in the world, which leads me to what a Liberal approach would be on trade and foreign policy.

We would build a global network strategy that leverages on the rich connections that Canadians have around the world, connections that derive from our multicultural communities, and our universities which are educating citizens from around the world today. We recognize the importance of partnering with Canadian businesses, universities, civil society and private citizens to better identify and capitalize on trading opportunities and foreign trade relations and influence around the world.

We would return to the very successful team Canada missions. We would focus them on sectoral areas where we have a comparative advantage, such as education, clean technology and clean energy technology. We would focus on creating the jobs of tomorrow by building bridges and deepening our ties with the markets of tomorrow in areas where Canada really has something to offer: clean conventional energy, water treatment, education.

Canada has some of the best universities anywhere. I come from Nova Scotia, a cradle of higher education in Canada. I am immensely proud of Nova Scotian universities and the role that Nova Scotian universities play in educating people from across Canada and around the world. I think we can do more to attract students from around the world to study in Canada. That would be a really good and important thing to do for the future of Canada.

If we look at the CVs of cabinet ministers from India, China and Brazil, over half of them have some educational experience either in the U.K. or the U.S. That educational experience gives the United States and the United Kingdom a lifetime of relations and influence on those countries through those individuals. Educational experiences are critically important in terms of trade and foreign relations.

A Liberal government would introduce a Canada global scholarship program which would enable young Canadians to study abroad at universities around the world, to learn the cultures and the languages to become citizens of the world. It would enable young citizens of the world, particularly from the emerging economies, to study here in Canada, to exchange students between our countries, to attract students to Canada and to encourage Canadian students to study abroad.

We would be building a global network advantage where Canada and the next generation of Canadian graduates could be the most networked and connected citizens anywhere in the world. Canada would be seen as the best place in the world to get an education, to start a career, perhaps to return to one's country of origin, but to represent a natural bridge to a country with which the person has a great fondness and respect.

Education is an industry that can benefit from more foreign trade. When we attract students from other countries to study at Canadian universities, that is a form of trade. It is a form of trade that not only helps create jobs and prosperity today, but for decades to come will strengthen and augment our influence in the world through trade relations, foreign relations and the creation of jobs.

We would take a very different approach as a Liberal government to deepening and diversifying our trade relations. We would ensure that Canada was not trying to escape the world, but was once again shaping the world. Whether it is on the environment, defence or security policy, the Canadian voice would be heard again and it would be an effective voice.

I want to speak about the fiscal mismanagement of the Conservative government. A Liberal government would clean up the fiscal mess created by the borrow and spend Conservative government. I would remind the House that the Conservatives inherited a $13 billion surplus from the Liberals, which was the best fiscal situation of any incoming government in the history of Canada.

The Conservatives increased government spending by an astonishing 18% in their first three years in office. That is three times the rate of inflation. They combined these massive spending increases with reckless tax policy to actually give Canada a structural deficit even before the downturn began. Now the Conservative legacy is a $56 billion deficit, the biggest deficit in Canadian history.

While Canadians are watching the Conservatives plunge Canada deeper into debt, they are asking themselves what they are getting in return. Let us compare the stimulus package of this Conservative government to the stimulus packages of other governments.

Other governments invested in long-term competitiveness, modernizing their energy systems, energy production and energy transmission, helping households and companies cut their energy consumption so that when the recession was over, ultimately companies would become more profitable and at the end of the month households would have a little more money in their back pockets.

The Conservative government was more interested in buying votes than in building competitiveness. It was more interested in counting signs than counting jobs. The stimulus package was a hodgepodge of spending measures aimed at short-term politics, not on long-term prosperity.

We often hear the Conservatives talk about Canada's debt and deficit numbers compared to those in other countries of the world in a favourable way, as if Canada is a lot better off than many other countries. However, when we combine federal and provincial debt numbers in Canada, we get a startlingly different picture.

If we combine federal and provincial numbers for something called gross debt, our gross debt to GDP ratio is actually at 82.5%. To put this in perspective, the U.S. is around 83%, so we are almost as bad off as the U.S. in terms of gross government debt in Canada. That figure is worse than those in Germany and the U.K. The fact is that provincial and federal debts impose a burden on all Canadian taxpayers. There is only one taxpayer.

In the coming years, as we now enter the negotiation around the health and social transfer culminating in 2014 with the new agreement, these issues are going to come home to roost. We are going to see increased pressures on Canadian provinces to deal with an aging demographic. Fewer Canadians will be working. More Canadians will be relying on retirement income and depending on an increasingly challenged health care system.

How have the Conservatives been preparing for this? Has there been any discussion on how to prepare for that demographic shift? How have they been saving for a rainy day in the future? Let us look at what the Conservatives have been doing.

They have proposed spending $16 billion on untendered fighter jets, and $10 billion to $13 billion on U.S.-style mega prisons during a time when crime rates are on their way down. They spent $1.3 billion for a 72-hour photo op for the G20 and G8 summits. Spending on the G8 and G20 summits included $1 million for fake lakes, $300,000 for a gazebo and bathrooms that were 20 kilometres away from the summit site, $400,000 for bug spray, $300,000 for luxury furniture, $14,000 for glow sticks and, of course, millions on high-end hotels.

The last finance minister to cut government spending in Canada, not just to hold government spending but actually to cut government spending, was the hon. member for Wascana. It was a Liberal government, and under the leadership of finance minister Paul Martin, that implemented the biggest tax cuts in Canadian history after having paid down the biggest deficit to date in Canadian history.

We will once again cut corporate taxes in the future but only after we pay off the Conservative's deficit and get Canada back in the black responsibly, not on borrowed money. We will also invest in the priorities of Canadians, in Canadian families, in learning, in jobs, in pensions and in family care. We will not invest in the these wasteful priorities of the Conservatives.

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

Mr. Speaker, it speaks to the Liberal tradition. The member spent the first five minutes personally insulting the Prime Minister. He spent the middle of his speech talking about nothing. He spent the end of his speech criticizing the very successful G20 that was hosted in my region, the GTA, Toronto.

The member knows full well that when he was a Conservative he fought against the previous government's unilateral cuts to health and education of $25 billion. The Liberals did not ask for permission, they just did it.

The member also knows that the Liberals fought against free trade with the United States. They fought against North America free trade. He knows that this government has brought in free trade with Colombia and we are negotiating with India after years of failure by the Liberal government. We have seen an extraordinary new relationship with China. We are entering negotiations with the European Union.

The reality is that this government has gotten things done very quickly to the benefit of the people of this country. We put $40 billion toward paying down the debt before the economic crisis started. We cut taxes for Canadians. We have done everything the people of Canada needed us to do to ensure this country comes through the global downturn prosperous. Ultimately--

[The Acting Speaker, Barry Devolin]

Order, please. I would like to remind all hon. members that the matter before the House today is Bill S-3. The member for Oak Ridges—Markham has asked a question. I will give the floor to the member for Kings—Hants to reply.

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

Mr. Speaker, the hon. member said that I insulted the Prime Minister. I was just stating a fact. I was simply laying out the record of the Prime Minister on the world stage. If he finds it insulting, it is probably because it is a disappointing record on the world stage.

The Liberal Party has been the party of free trade a lot longer than the Conservative Party.

The member also said that I was a Conservative. I was never a Conservative. I was Progressive Conservative and that was a very different party from the one that he is a member of.

In terms of the initiative with China, I have been to China three times in the last year and I was there with my leader in July. In our meetings with some of the most senior officials in the Chinese government, members of the Politburo standing committee, they spoke of the Liberal Party of Canada and its legacy in terms of helping shape relations with post-revolution China. They spoke positively of Pierre Trudeau, Jean Chrétien and Paul Martin. I will not share with the House exactly what they said about the Conservative Prime Minister but it was not in the same light.