Bill S-17 (Historical)

Tax Conventions Implementation Act, 2013

An Act to implement conventions, protocols, agreements and a supplementary convention, concluded between Canada and Namibia, Serbia, Poland, Hong Kong, Luxembourg and Switzerland, for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes

This enactment implements four recent tax treaties that Canada has concluded with Namibia, Serbia, Poland and Hong Kong. This enactment also implements amendments to provisions for the exchange of tax information found in the tax treaties that Canada has concluded with Luxembourg and Switzerland.
The tax treaties with Namibia, Serbia, Poland and Hong Kong are generally patterned on the Model Tax Convention on Income and on Capital developed by the Organisation for Economic Co-operation and Development (OECD). The amendments to the treaties with Luxembourg and Switzerland ensure that their provisions for the exchange of tax information reflect the current OECD standard on this matter.
Tax treaties have two main objectives: the avoidance of double taxation and the prevention of fiscal evasion. Since a tax treaty provides relief from taxation rules in the Income Tax Act, it becomes effective only after being given precedence over domestic legislation by an Act of Parliament such as this one. Finally, for each instrument implemented by this Act to become effective, it must be ratified after the enactment of this Act.

Tax Conventions Implementation Act, 2013

[Peter Van Loan, Conservative, York—Simcoe, ON]

moved that Bill S-17, An Act to implement conventions, protocols, agreements and a supplementary convention, concluded between Canada and Namibia, Serbia, Poland, Hong Kong, Luxembourg and Switzerland, for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes, be read the second time and referred to a committee.

[Corneliu Chisu, Conservative, Pickering—Scarborough East, ON]

Mr. Speaker, I am delighted and pleased to rise in the House to kick off the debate on a rather technical and routine piece of legislation, Bill S-17, the tax conventions implementation act, 2013.

Before I begin, I would like to take this opportunity to thank the Senate for its initial work on this bill. I especially want to thank the members of the Senate banking, trade and commerce committee for its thorough review of Bill S-17 earlier this year. I would also like to extend thanks to all the witnesses who appeared at that Senate committee, for their appearance and their high-quality testimony on a subject that can often be technical. For those wondering why this bill started in the Senate first, I should note that, going back to 1976, the convention has been to bring tax convention legislation to the Senate first. In fact, there have been 30 different pieces of tax convention legislation in front of Parliament since 1976.

As members are aware, Bill S-17 proposes to implement tax conventions or tax treaties, either new or updated, with Canada and the following countries: Namibia, Serbia, Poland, Hong Kong, Luxembourg and Switzerland. These new and updated treaties would augment Canada's strong network of tax treaties. Indeed, currently Canada has comprehensive tax treaties in place with 90 countries, one of the world's largest networks of bilateral tax treaties. This is an important feature of Canada's international tax system, a feature that is key to promoting our ability to compete.

What is more, we continue to work on agreements with other jurisdictions, as demonstrated in today's legislation. As part of Canada's ongoing effort to update and modernize our network of income tax treaties, Bill S-17 would achieve two important objectives. First, it would help combat tax evasion by ensuring Canada works with other countries to stop tax cheats. Second, it would help encourage global trade by preventing double taxation. Clearly, I would hope that all parliamentarians and all Canadians would agree that everyone should pay their fair share of taxes.

I think we are all agreed that it is not appropriate that some corporations would take advantage of Canada's tax rules to avoid paying their fair share, or that some wealthy individuals would use an offshore account to hide income tax or evade tax. We are against tax cheats because those tax cheats are essentially hiking taxes on honest Canadians. Honest, hard-working Canadians and small-business owners are left having to pay more taxes when cheats do not pay their fair share, and that is simply not fair.

However, to detect and deter those tax cheats, the Canada Revenue Agency needs to work with and share information with foreign tax agencies around the world. To this end, Canada supports the international consensus to work through the Organisation for Economic Co-operation and Development, or OECD, to set an international tax information exchange standard. That standard is implemented under bilateral tax treaties and tax information exchange agreements like those new and updated treaties included in Bill S-17.

The second objective I mentioned referenced encouraging global trade by preventing double taxation. Here at home, our government has worked hard to cut taxes. In fact, we have done it 150 times, in every way government collects taxes, from the GST to personal tax to business tax and much more. We firmly believe that a more competitive tax system helps create an environment that enables Canada's entrepreneurs to excel, not a tax system that punishes entrepreneurs and stands in the way of their success, both here in Canada and abroad.

After all, if we want higher wages, more jobs and a higher standard of living, we need entrepreneurs to succeed and grow. That creates investment, jobs and helps make our communities stronger.

[The Acting Speaker, Bruce Stanton]

Order, please. The hon. member for Pickering will have 15 minutes remaining.

The House resumed from June 3 consideration of the motion that S-17, An Act to implement conventions, protocols, agreements and a supplementary convention, concluded between Canada and Namibia, Serbia, Poland, Hong Kong, Luxembourg and Switzerland, for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes be read the second time and referred to a committee.

[Murray Rankin, NDP, Victoria, BC]

Mr. Speaker, I rise today to speak to Bill S-17, which is a lengthy statute to deal with certain double taxation conventions between Canada and Namibia, Serbia, Poland, Hong Kong, Luxembourg and Switzerland. This is second reading debate. I want to say at the outset that the official opposition supports the bill.

I would like to divide my comments into four parts: first, the process that led us here; second, the issue of time allocation; third, just what double taxations are designed to achieve; and fourth, comments about international tax avoidance and tax evasion and why the bill is such a baby step in that direction.

Bill S-17 is 103 pages long. The bill started in the Senate, and lest anyone say this represents a great illustration of the utility of the other place, the government itself has acknowledged that this is routine legislation, and I note that since 1976, there is a convention that bills of this sort, dealing with tax convention legislation, originate in the Senate. In fact, there have been 30 different pieces of tax convention legislation in front of Parliament since 1976.

The bill is designed to bring into effect certain bilateral income tax conventions with the countries I mentioned. It is not a bill that represents significant, staggering, revolutionary change. On the contrary, I think the Parliamentary Secretary to the Minister of Finance accurately characterized the bill as a routine housekeeping type of statute. That was confirmed by the member for Pickering—Scarborough East who said in this place on second reading, “I am delighted and pleased to rise...to kick off the debate on a rather technical and routine piece of legislation”, to which I say that is entirely accurate.

Let me set the stage by saying the New Democratic Party supports harmonization and greater clarity for taxation laws and likes to bring into force these kinds of tax treaties, which as I will describe, are based upon a model tax treaty convention that the OECD generated many years ago and renewed quite recently.

The parliamentary secretary, while in the other place, referred to this as somehow a major step forward in the fight against international tax evasion. For reasons I will describe, that is entirely not accurate.

Let me speak to the second point I wanted to raise, which is the issue of time allocation. The government today, in a rather embarrassing stunt, decided that 43 times it would use what is in effect a closure motion, time allocation, to deny the House the opportunity to scrutinize a bill. It is embarrassing for democracy and shameful. When asked to justify it during the debate on time allocation, the Parliamentary Secretary to the Minister of Finance asked why we do not just pass it, since we support it. He said something about how this is a very important bill dealing with tax havens.

The bill is important. It is routine. However, it takes baby steps to deal with the crisis in tax havens and international tax avoidance, a matter I would like to speak about later in my remarks.

I presume the government is anxious to tell its base that the New Democratic Party, the official opposition, is somehow made up of unreasonable people who refuse to co-operate, and that is why it has to allocate time to debate the matter. We support the bill, and I guess I am just too new here to understand why it needs time allocation when we support this measure. He also said that there had been 100 days of debate on this measure. Surely that is not accurate. Surely he means that maybe it has been before the Senate for 100 days. If that is what he means, I wish to say that the official opposition has no members in that place and I hope it never does.

What is this legislation about? Canadians might not be familiar with double taxation conventions of this sort, so let me say a few things about the nature of this important legislation.

There are perhaps 90 tax conventions Canada has entered into since the 1920s. They have been a routine feature of international law since then. What are they for? The taxation treaties are designed to avoid imposing double taxation in both what is called the source country and the country of the taxpayer's residence. This is distinct from what the government is trumpeting as a great success, which is what are called TIEAs, tax information exchange agreements.

The Conservative government just did one in March, to great fanfare, with Panama. That was said to be a great step forward in the fight against tax evasion and international tax havens. I have news for the government. Panama is a notorious tax haven made up of many banks with lots of drug money, and Canada thinks that by entering into a tax information exchange agreement with that country, it is a great step forward.

One has to know what to ask for under these tax information exchange agreements. That is the basis of some of the provisions of the bill before us, which we are debating today. Many speakers before the finance committee said that they were essentially useless.

Yes, there are some good reasons for these tax conventions, such as the need to promote investment in various countries where the non-resident invests or works, and in fairness, to prevent Canadians and others from paying tax on the same income in two different countries. The concept is very simple. The concept is to avoid paying taxes twice and to set certain standards as to how income from those things will be treated. Dividends are treated differently than interest. Royalties are treated differently than capital gains.

The OECD, of which Canada has long been a member, has entered into a tax convention treaty that sets down these types of standards with fairly, by now, routine amounts of tax for different kinds of income. That is precisely what this double taxation treaty has done. That, as I said, is by now commonplace.

A country like Canada enters into these solemn conventions, and it is very hard, and should be very hard, to get out of them. One can enter into a protocol that has to be negotiated if it is to be modified. Indeed, there are a couple of protocols in this bill dealing with changes to the long-standing arrangements with Switzerland and Luxembourg. Frankly, the protocols can be changed, but there is still a solemnity. It takes some time. People intend at the international level to enter these for long periods of time, and they should be, and are, difficult to change.

The treatment of different kinds of income I have already described, and the OECD has made that very clear. The details I can confirm in this statute are entirely consistent with what other tax conventions of this kind have done for these different kinds of income. However, there are many other ways and progressive things going on in the world that the bill has nothing to do with. Let me give an example.

There was a recent agreement between the United Kingdom and Switzerland such that British nationals who have money in a Swiss account are subject to the Swiss government determining if they are British nationals, and if so, remitting to the U.K. tax authorities 30% in taxes of the amount in that Swiss account. It is much like a withholding tax. The British person could agree to self-identify and say, yes, he or she is a British citizen, and pay a lower amount of 5% or 10%. Thus, it is an incentive to self-identify if someone has money in a tax haven. Why does Canada not do something like our allies are doing? Nothing like this exists in this fairly routine statute.

What is the bill not about? The parliamentary secretary has told us that it is about international tax evasion and tax havens. I do not think so. It is not about international tax avoidance.

Next week, the G8 is meeting in Northern Ireland. The leader of the United Kingdom, Prime Minister David Cameron, has made it one of his three key priorities to address this crisis in tax havens. It is estimated that we are talking about between $10 trillion and $30 trillion in tax havens abroad.

It is estimated that the Canadian treasury is losing perhaps $7.8 billion every year to tax havens. Canadians need to understand that this is not arcane tax law. It is money that could be in our treasury to pay for goods and services for Canadians. Other Canadians are not paying their fair share, therefore requiring us to do more.

People are outraged by these abuses. Fortunately, the press has done a great job in recent months to show the enormity of this problem. The figures are staggering, the cost is enormous and people are demanding action. I salute the Prime Minister of the United Kingdom for his leadership. I regret that the Canadian government is very much the caboose on that train.

New Democrats will continue to push the Conservatives to take real action on tax havens. We did a supplemental report to the finance committee's study on tax havens and brought out a dozen or so recommendations for meaningful change, not radical change, which, of course, the government resisted. They were the kinds of changes our allies are bringing forward to address this crisis.

While we support the routine negotiating and updating of tax treaties such as this, we will continue to push harder against Conservative policies that have failed to protect the integrity of our tax system and that are furthering the erosion of our tax base.

Let us talk about the priorities of the government in going after tax havens. As I said, the parliamentary secretary would have us believe that there is real action going on in Canada and that we are really serious about this. That may be so, except for the fact that the statistics speak for themselves.

I quote an order paper question, Q-1174, of February 14 of this year, because there has been a lot of misinformation about whether there are cuts at Canada Revenue Agency. The minister reported that after the budget, which we dealt with today, Bill C-60, 2,568 full-time equivalents will be lost to the Canada Revenue Agency. They trumpet two areas: the international audit program and the aggressive tax planning program of the Canada Revenue Agency. In the last four or five years, the government confirmed, in the order paper question I just mentioned, there have been cuts in those as well.

Therefore, the notion that somehow we are serious about tax cheats, that we are out there with both feet and doing our thing like our allies is demonstrably not so. If they could characterize this as an investment, perhaps they could understand the enormous amount of money that could be made if they got serious, just as our allies have. I will provide examples of that in a moment.

Joseph Stiglitz, the Nobel Prize winning economist, wrote in The Guardian on May 27, 2013:

Our multinationals have learned how to exploit globalisation in every sense of the term—including exploiting the tax loopholes that allow them to evade their global social responsibilities.

He talks about transfer payments, whereby, as he says firms "make up" the prices of goods of services that they charge each affiliated entity and so forth to avoid paying their fair share of taxes. We have seen that. We have seen that the Cirque du Soleil uses a subsidiary in Luxembourg, a low-tax jurisdiction, to not pay its fair share of taxes in Canada. The Irving family is notorious for this. Of course, there is Apple, Starbucks and Google, and the list goes on. People are outraged.

Canadian firms are just as involved in the creative use of tax havens to avoid paying their fair share. It is the kind of thing that finally seems to be getting attention, albeit not from the Conservative government.

What can be done? What have the French done? They have published a black list of tax havens with bank-secrecy laws. They are simply saying that their French development agency will not operate in the 17 countries that are on the list. Is there any such list in Canada? I do not think so.

They have signed the multilateral Convention on Mutual Administrative Assistance in Tax Matters and have agreed to share information, on request, from other countries—and here is the punchline—with the optional provision for automatic tax information exchange. What does that mean? Luxembourg, Singapore and Austria, all sensitive, traditional bank-secrecy jurisdictions, are among the 50-some countries that have agreed to automatically exchange tax information to help foreign nations clamp down on tax debtors and allow countries to conduct wide-ranging, multi-party tax investigations.

The Globe and Mail reported yesterday, as did the Financial Post today, that Canada is opposing the automatic tax information exchange agreements. To use my analogy again, if there is a train, we barely make the caboose on that train.

Let me talk about what the OECD Secretary-General, Ángel Gurría of Mexico, has recently said about the kind of things this convention deals with:

The [international tax] rules which we have built since the 1920s were meant to avoid double taxation....The problem is we've moved from double taxation to double non-taxation.

I will continue the quote:

Now we don't tax anybody because we've built a set of codes and regulations and law...and culture...where we facilitate the fact that co-operations, through transfer pricing practises, put their profits in low-tax jurisdictions and therefore do not pay what would be considered to be their fair share.

He also said that taxing IT companies such as Google and Amazon had become especially difficult, as they are apparently based in the “ether”.

You can move anywhere and it doesn't matter where you originate the information or where you register the company, basically the consistency is that they [the companies] want to pay less tax.

This is hurting developing countries a great deal as well, as their wealth is taken to tax havens, and Canada has not been aggressive on that score either.

I said I would talk about what other countries are doing. I have given some examples.

The Swiss government and the Americans have been involved in serious negotiations involving their bank secrecy and enablers that come to that country to get Americans to not pay their fair taxes. In 2009, UBS, the largest Swiss bank, agreed to enter into a deferred prosecution agreement with the United States. The bank eventually turned over 4,450 client names. It paid a $780-million fine after admitting criminal wrongdoing and selling tax evasion services to wealthy Americans.

Do we think Canadians are not part of that? We know that they are. Do we think the Canadian government is putting in the energy to deal with this crisis it should? Of course it is not.

That is why the NDP's supplementary report to the finance committee lists a number of things we think need to be done. The government refuses to measure this problem, as our allies have done. The measurement of the tax gap and the like they scoff at as being irrelevant.

I wish it could finally follow the practice of the French, the Australians and the British in doing the right thing, but it does not seem to want to. It cut services. CRA does not have the warm bodies to do the job that is required, and we are supposed to believe that this is different.

We support the bill. We think it is a bill that is in line with modern tax practice in avoiding double taxation. It makes sense at one level. However, when it is sold as something it is not, we have to stand and tell the government that the emperor has no clothes.

It is a great housekeeping bill. I am glad we have a deal with Serbia. I am glad we have a deal with Namibia. I am glad we have a deal with countries that are our allies. However, why can we not see the need to really get serious about tax evasion?

I note that the government has been given information recently, that it had the information from the international consortium that was doing the tax evasion studies and that it had the opportunity to move forward, and it did not. It said in this House that it will take all measures to do so. It did not.

I am hoping, when our government is in the G8, that it shows a tiny bit of leadership on this issue and gets on board with Mr. Cameron, gets on board with the Americans, gets on board, indeed, with all of the G8 and says, “Canada is here to play as well. We're not simply going to take a back seat or ride in the back of the train, in the caboose, on such an important issue”.

[Julian Fantino, Conservative, Minister of International Cooperation]

Mr. Speaker, I am a bit confused listening to the hon. member going back and forth on the issue of supporting the bill, but, but, but.

I wonder if the hon. member is aware, and he should be aware, that Canada has entered into similar negotiations and has achieved similar results with some 90 countries, which means that, obviously, Canada and these other countries are on the same wavelength on these issues. There are a number under consideration presently.

I wonder if the hon. member could get a bit more specific about what his problem really is when he is speaking in favour of a bill but then proceeds to criticize it. I cannot get it. Maybe other people can.

When he criticizes Canada, at the very same time, the hon. member is also criticizing these other countries with which Canada has these agreements in place and with which it is also negotiating for more as we speak.

[Murray Rankin, NDP, Victoria, BC]

Mr. Speaker, I said on two occasions during my remarks that there were 90 such conventions, so I do not think I can be corrected on that matter. I also said that these types of arrangements had been around since 1920 and that the OECD, of which Canada is a proud part, had done a lot to provide uniformity on these measures. He seems to be confused about my position, so maybe I can say it again.

We support the bill. It is just too bad it is 20th century legislation when we are now in the 21st century and our allies are charging ahead to do real things with automatic tax information exchange agreements. Looking at the provisions of this bill, the government used the old-fashioned exchange agreements.

The point is that this legislation is going nowhere near as far as is required to address this crisis.

[Jasbir Sandhu, NDP, Surrey North, BC]

Mr. Speaker, when there are tax evaders out there, everyday Canadians end up paying those taxes.

I listened to my hon. colleague's speech. It is very clear that other governments, whether it is the UK or the Australian governments or other G8 nations, have taken steps to reign in these tax evaders. It would seem to me that the Canadian government is just doing this piecemeal deal now that it is going to the G8. Would the member comment on that please?

[Murray Rankin, NDP, Victoria, BC]

Mr. Speaker, I would agree entirely with my colleague's thoughtful intervention.

It is a matter of some sadness to me that the government's rhetoric is all about going after tax evaders, all about a crisis and tax havens and so forth. The government announced a while ago that it was going to put $30 million over five years, having already cut 2,000 people from the job and $250 million. We are now supposed to believe this serious action.

What Canada is doing is an embarrassment at the international level. The Globe and Mail reported on it recently. The Financial Post has reported on it. It is not me that is saying it.

Canada has to get on board with automatic tax information exchange agreements, measuring the problem, doing the kind of things that Mr. Cameron, a Conservative prime minister, wants to do, not just talk and do so little.

[Philip Toone, NDP, Gaspésie—Îles-de-la-Madeleine, QC]

Mr. Speaker, I would like to thank the member for Victoria.

I know that he works very hard in his riding, and I am sure that his constituents greatly appreciate the fine job he does representing them in the House of Commons. His comments on fiscal issues are second to none.

Today being Tax Freedom Day, the member has made it very clear that when it comes to overseas tax evaders everyday is Tax Freedom Day. The government has a lot to be reproached about for making it possible for Canadians to celebrate Tax Freedom Day today, but it is not talking about everyone else who is evading paying their taxes. This day could actually come much more quickly than what the government leads us to believe.

We need to work a lot harder at this. The member's speech made it clear that there were a lot of things we could do that could lead to much better tax fairness in the country.

Just today, Canadians for Tax Fairness indicated that Statistics Canada surveys have indicated that overseas Canadians are putting away in the 12 biggest tax havens in the world over $170 billion worth of revenue that the government could be taxing. I wonder if the member could speak more to the fact that perhaps the government is unaware that all of this money is available.

What makes the Conservative government so slow at reacting to this when we know this money should be taxed in order to pay for the services Canadians deserve?

[Murray Rankin, NDP, Victoria, BC]

Mr. Speaker, the amount of money that the same organization, Canadians for Tax Fairness, has indicated every year is lost bears repeating. Its study shows it is $7.8 billion. The Tax Justice Network, of which it is a part, has done enormously good work around the globe in trying to come up with a figure. As I said, the Conservative government refuses to even try to measure that tax gap.

I think the reason the government does not see this as a problem is that it does not see it through the lens of investment. If it characterized this as making an investment of a few billion dollars in return, maybe that would get through to it, maybe then it would see that this could be an investment well worth making.

It is an issue of fairness all right because that $7.8 billion would, as my hon. friend said, allow us to reach Tax Freedom Day months earlier, because that $7.8 billion would now be available, even some portion of it, so we would have more money so Canadians would achieve tax fairness a few weeks or months earlier.

There are fairness issues and there are equity issues, but there are simple bottom line issues. If the government saw it as an investment, maybe then it would get it.

[Anne Minh-Thu Quach, NDP, Beauharnois—Salaberry, QC]

Mr. Speaker, I would like to thank the member for Victoria for yet another informative speech. He always provides statistics and specific examples. It is clear that he does his homework before sharing his point of view.

Something he said earlier really struck me. A total of 3,000 full-time positions will be cut at the Canada Revenue Agency. The people being cut will not be able to investigate the money being lost to tax havens. Billions of dollars are lost and are not being reinvested into the fight against climate change, for example. It would mean more money in our economy.

The Conservatives made $29 million in cuts to Parks Canada when we are trying to attract visitors. Our parks create ecotourism jobs, for example, which means jobs for the regions. The Conservatives are slashing family farms. They are cutting everywhere; meanwhile, the money from uncollected taxes could be reinvested in my area's economy, ensuring sustainable, high-quality positions.

Can the member again explain how all these job cuts—and the fact that we are losing money that should be coming back to us from companies—are negatively affecting our economy?

[Murray Rankin, NDP, Victoria, BC]

Mr. Speaker, I appreciate that the hon. member has put these cuts in the personnel of the Canada Revenue Agency in a very interesting context and much broader context. She talked about parks, climate change, family farm regulation and so forth.

The cuts the government has made to public services to Canadians are having real impact. I know the Conservatives like to say that these are back office jobs that have been cut and we should not worry, that it will not affect their fight against tax havens. That is what they say in the context of CRA.

In my community of Victoria, I keep getting seniors telling me that they do not have telefile anymore. There is no front counter service. That has all been cut. It is as if we are supposed to believe, with the millions and millions of dollars that have been cut and, if I use the government's figures, 2,568 more people will be cut after the budget goes through, that this has no consequence in the real world.

What do the Conservatives think we are? Of course there will be consequences and the examples the hon. member has given on climate change and parks are just examples that we could replicate throughout Canada Revenue Agency's experience just as much.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, it is a pleasure to rise to speak to Bill S-17. Taxation and taxes is always a hot topic. No matter what day of the year it is people always want to talk about taxes. One thing that they like to tie to taxes is the idea that it is an absolute necessity. Government has to generate revenues and part of those revenues is taxes. I will make reference to a multitude of different types of taxes shortly.

I will first start off from the whole aspect of what I made reference to earlier today. There are some bills that I believe are fairly straightforward, standard and receive a considerable amount of support. When we look at Bill S-17, we find there is substantial support of all entities in the House to see the bill ultimately pass. The objections are reasonable in what it wants to accomplish. I do not think we have too many advocates suggesting that we should be creating tax havens. We might hear some differences in whether the government is doing enough. Again, I will provide some further comment on that point shortly.

First and foremost, what I want to start off with is why we have Bill S-17 before us today and the manner in which the government has brought it forward. It concerns me because even though the bill we have before us is relatively non-controversial, the government has made it more controversial. The reason why we might want to speak to it that much more is because of the manner in which the government has chosen to bring in the legislation.

I have been a parliamentarian for a number of years and have had the opportunity to negotiate session wind-ups, albeit at the provincial level, but it is a parliamentary system very similar to the type of procedures that happen in the House of Commons. As we look to our days winding down here, in my beloved home province of Manitoba the legislature is winding down its session. However, it looks as though its session will go on well into July if we believe some of the reports. What is interesting about that with respect to the relevancy of that bill is that it is all about taxes.

In Manitoba, the NDP government of the day is increasing the provincial sales tax from 7% to 8%. There is an issue surrounding the balanced budget legislation. There was supposed to be a referendum, but that was not held. I suspect the reason being is that the government would likely lose the referendum because there is no appetite to see the provincial sales tax increased, especially when the province next door is decreasing its sales tax and that gap continues to grow. The bottom line is there is a bit of a stalemate happening there.

As much as I might not necessarily be a strong advocate for the New Democrats in the province of Manitoba, I do respect the fact that they are going through a process and are not yet putting in limits in the form of closures, from what I understand. This is with respect to a bill that is exceptionally controversial and no doubt will receive hours of debate and go into committee, which is a different system. I believe there are close to 200 Manitobans who have expressed an interest in wanting to talk about taxes in that legislation. Therefore, there is what I classify as due process. There they have controversial legislation where there is no unanimity within the legislative chamber.

Contrast that to Ottawa, where we have a bill, subject matter, taxes, tax evasion and tax havens. We seem to have wide support for the bill and its passage, yet we have a government that has brought in time allocation. This is not the first time it has brought in time allocation. I believe this is already the 40th, 41st or 42nd time that the government has brought in time allocation. I have had the opportunity on numerous occasions, probably 30 times or even more than that, to stand in my place to talk about the serious nature of time allocation. It is serious, when we have a majority government making a decision before the House to define the amount of time to be allocated for debating Bill S-17.

When I listened to the Minister of State for Finance, he indicated that we have had a piece of legislation before the House for 100 days, trying to give people who may be following the debate the impression that for 100 days, we have actually been debating Bill S-17, and that the government is doing us a huge favour by bringing in time allocation.

Nothing could be further from the truth. We might have had a few hours, not even a full day of real debate inside the House of Commons on this issue, yet it is the perception. The government has made the decision that it will limit the amount of opportunities for members of Parliament to address the issue of taxes.

When I had the opportunity to review Bill S-17, I had the opportunity to talk about taxes in general and the whole issue of fair taxation, spending smarter and so forth. I believe that is what the constituents of Winnipeg North would want me to do, to express concerns I might have on the legislation and to talk about taxation policies.

We have 300-plus members of Parliament, and the government has said that it wants a very limited number of MPs allowed to speak to this legislation. I am grateful to my party. It made sure I was afforded the opportunity to express my concerns. On this bill, I suspect that if there was any goodwill coming from the government House leader, maybe even working with the Minister of Finance and approaching opposition parties, negotiating, talking about what kind of legislation it is, how many hours would we like, then respective caucuses could work with their colleagues to get a sense of how long the debate could or should be.

We have all sorts of ways to enable legitimate, full, wholesome debate on bills that are deemed important, where members of Parliament want to stand up and address their concerns. The government, through this whole time allocation addiction it has, is preventing that.

The unfortunate things is that in principle we support Bill S-17 because of its objectives and what it hopes to accomplish. I suspect it may not even have required five hours of debate. I do not know, because we had no sense of interest within our own caucus or whether it was brought to our caucus; I have no idea how many New Democrats would have chosen to speak to it.

Even though in principle I support the bill we are talking about, what upsets me is the fact that the government continues to use time allocation in order to get through its legislative agenda.

I want to emphasize how important it is that we recognize that we have seen a significant change in attitude in the Prime Minister ever since he received his majority Conservative/reform government. It has been a significant shift in attitude. He has been very disrespectful toward individual members when it comes to their participation in debate.

The government has invoked time allocation, another form of closure, on legislation that definitely should have had a lot more debate. As a result of the government's inability to negotiate in good faith, now we find that every time it introduces a bill, either one day later or even sometimes on the same day, a time allocation motion is invoked. We are seeing that again today on Bill S-17. That lack of respect for proper procedure inside the House of Commons is going to hurt the government. Conservative members may not realize that today, but at the end of the day, it will have an impact.

Canadians respect our democratic system. They appreciate the fact that there is a proper process to be followed. The degree of the Conservative government's lack of respect for due process will become better known. It is an issue I plan to raise significantly going forward, because the frequency is the greatest insult to the House.

I will conclude my remarks on the issue of the process by saying very clearly that no government in the history of Canada has used time allocation in the fashion the Conservative government has, and we are only two years in to a majority government. I want to emphasize that particular point.

Let me get to taxation.

When we look at what the bill would ultimately do, we think of achieving bilateral agreements. What we are attempting to do is ratify them through this legislation. We can have as many of these bilateral agreements as ultimately can be developed and passed through the House, but that will not really address the issue to its fullest degree. If we want to deal with the issue of tax avoidance or people hiding money or not paying their fair share, then we have to look at resources and to what degree we are allocating resources to those authorities, such as the Canada Revenue Agency, and its ability to go after those individuals who feel they do not have to pay their fair share of taxes.

Former prime minister Paul Martin allocated $150 million to combat international tax evasion. We took the issue of tax evasion very seriously, so $150 million was put in the Liberal Party's last budget in order to combat tax evasion. If we follow that through, in 2009 we could ultimately argue that $150 million had a fiscal impact of about $2.5 billion. When we think of how effective that $150 million was in terms of being able to return $2.5 billion to the coffers in some fashion or another, that shows very clearly and decisively just how effective it would be to allocate the appropriate resources in order to avoid tax evasion. That is very important.

The other issue is with respect to bilateral information. At the end of the day, bilateral information or establishing some sort of an exchange framework is one way to deal with this. Those who participate in tax evasion are very creative: they come up with different ways to avoid having to pay taxes. Working toward the larger, multilateral information exchange framework is ultimately the next best way, I would argue, to clamp down on those companies that are participating in tax evasion.

I want to very briefly comment on the issue of taxation, in general.

We all know that governments need to have revenue in order to function. What I would like to see, and I believe what most Canadians want to see, is that the money collected is in fact being spent smart. As a taxpayer, I want, number one, to pay my fair share. I do not want to have to pay more, but I am prepared to pay my fair share. I think a vast majority of Canadians have that attitude. The other concern is that they want the sense that those tax dollars are being spent wisely.

On both of those fronts, there is a wide belief that this is not taking place today. It does not matter what level of governance, there is this suspicion that the government is just not doing enough. I think what we need is the Prime Minister and his government to take the issue of tax evasion more seriously and look at how we can have multilateral agreements to ensure that those who try to avoid paying taxes are held accountable. The government, the Canada Revenue Agency, must be empowered to do what is necessary to ensure that people pay their fair share. I believe that is quite reasonable.

When I look at Bill S-17, it is a step forward. However, I do not believe that the government is doing enough. All we need to do is look at the last Paul Martin budget where there was a huge investment of tax dollars to deal with the issue of tax evasion. The return for that $150-million investment was overwhelmingly positive.

If the government had its priorities right, I think that there is so much more out there that we could benefit from. A more aggressive government would ensure that all Canadians paid their fair share.

I will save my comments in terms of spending that money in a better fashion for another debate on another bill. For now, suffice it to say, there needs to be a lot more improvement.

I will conclude my remarks by saying when we talk about taxes, it is important that we recognize that taxes come in many different forms, whether it is hiking up tariffs, the PST, income tax and many others. I look forward to this bill passing. If there are any questions, I am more than happy to answer.

[Philip Toone, NDP, Gaspésie—Îles-de-la-Madeleine, QC]

Mr. Speaker, I thank my hon. colleague for his interesting remarks. However, they were sometimes difficult to follow. It is hard to know whether the information was 100% reliable.

For instance, he said:

Those who participate in tax evasion are very creative.

I would like to point out that Paul Martin himself was perhaps a little too creative when it came to tax evasion. Representatives of his family business, Canada Steamship Lines, were repeatedly criticized for failing to pay their fair share when they created subsidiaries in Barbados, for example. Barbados is a known tax haven.

Frankly, it is pretty hard for us to understand how the Liberal Party can tell us that, on the one hand, it spent up to $150 million to fight tax evasion, while on the other hand, the prime minister of the day owned a business that seemed to be evading taxes. I am having a very hard time understanding my Liberal colleague's logic.

If Canada Steamship Lines, which has subsidiaries in Barbados, did not pay its fair share in either Canada or Barbados, how is it that the Government of Canada spent $161 million on contracts with Canada Steamship Lines and its subsidiaries until 2004, the last year for which I have statistics, yet Canada Steamship Lines did not pay its fair share of taxes?

I am having a very hard time understanding my Liberal colleague's point. I would like him to explain Paul Martin's tax evasion.