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--

[The Acting Speaker, Conservative, Bruce Stanton]

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

Bill S-17—Time Allocation Motion

[Ted Menzies, Conservative, Minister of State (Finance)]

moved:

That, in relation to 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, not more than five further hours shall be allotted to the consideration of the second reading stage of the Bill; and that, at the expiry of the five hours provided for the consideration of the second reading stage of the said Bill, any proceedings before the House shall be interrupted, if required for the purpose of this Order, and, in turn, every question necessary for the disposal of the said stage of the Bill shall be put forthwith and successively, without further debate or amendment.

[The Acting Speaker, Conservative, Barry Devolin]

Before I proceed with this, I also wish to inform the House that because of the deferred recorded divisions, government orders will be extended by 30 minutes this evening, or tomorrow morning as the case may be.

Pursuant to Standing Order 67.1, there will now be a 30-minute question period. I now invite hon. members who wish to ask questions to rise in their places so the Chair has some idea of how many members wish to participate in this debate. As there is a significant number, in the questions and comments we will follow a similar procedure to that during debate. The members will have about a minute and 15 seconds to put their questions and a similar amount of time for response.

The hon. House Leader of the Opposition.

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

Mr. Speaker, I will put my question to my friend across the way. We are engaged now in another shutting off of debate. The Conservatives have broken every record known to Canadian parliaments by a long shot now, where we have so many that we start to lose count.

The curiosity for us is that, without breaking any confidentiality, we engaged in good faith negotiations about this bill and some others that have since been shut down by the Conservative government. We were working out a way for the House to be productive because, in the thrust, we support the legislation.

For the government to move time allocation, it may in fact actually cost the House more time using the process that it is, as opposed to doing what parliaments are meant to do, which is try to work together to make good things happen for the country. We are in the process and not so much the substance of this particular bill.

On the process, I have to ask my friend, what is going on over there? We try to reach out and make things work, and assign a little bit of certainty to the way the debate will progress so that we can move legislation forward and make it better, perhaps. The government slams open an open door.

What about time allocation and shutting down debate does the Conservative government love so much? Why is it addicted to cutting off the conversation that is our Parliament and allowing MPs to do their work?

[Ted Menzies, Conservative, Macleod, AB]

Mr. Speaker, I think anyone watching this debate will recognize that my friend across the way and I actually get along quite well on many things. I do want to share with him that what I am addicted to is actually getting things done for Canadians.

When we see a piece of legislation that the hon. member just said opposition members support, I would suggest that we should probably get on with it as quickly as we can. This process is necessary to make sure that we get these pieces of legislation. We have repeatedly had to do this, because we have heard speeches time and time again in debate where we could almost hit replay on some of the speeches. I have even sat in my office sometimes when I am not on duty and watched.

That is not an expeditious use of those members' time, our time or the time of the House. It is very important. Canadians have listened to this. To Canadians who are listening to this debate, I would encourage them to understand the principles behind what it is that we are passing.

There have been 100 days of discussion and debate on this. I think it is time to move on.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, my view differs quite substantially from what the minister has just stated. In fact, the government's attitude toward due process is quite shameful.

Ever since we have had the Conservative reform majority government, there has been a negative change in attitude that comes right from the Prime Minister's Office. It is disrespectful to the proper procedures here inside the House of Commons. Every member of this chamber should be very much aware of the degree to which the Conservative government is preventing legitimate, due diligent debate on a wide variety of bills.

We have done this now over 40 times. That is over 20 hours absolutely wasted because of the government's need to bring in time allocation. It is shameful. The Leader of the Government in the House of Commons and the Prime Minister are doing a great disservice to Canadians and to our democratic system.

My question is not for the minister, but rather for the Leader of the Government in the House of Commons, who has a responsibility in good faith to negotiate with opposition parties. The question is very simple. Why is he refusing to negotiate in good faith with all opposition parties in the House, so that bills can be dealt with in a more timely fashion and in the best interests of all Canadians?

[Ted Menzies, Conservative, Macleod, AB]

Mr. Speaker, I do not want to speak for other ministers. They are quite capable of speaking for themselves.

However, in answer to that, the urgency we feel is in getting this piece of legislation passed, which is very much a housekeeping piece of legislation that has received more than 100 days of parliamentary debate. Folks back home watching this would say that should be enough for all witnesses who would like to comment on this to appear and for all parliamentarians who would wish to comment on it to have ample opportunity to do that.

However, I sense a bit of sensitivity coming from the Liberal Party perhaps because we are working on stopping international tax havens. I am sure there is some sensitivity on behalf of the Liberals. They do not want to see this happen because one of their caucus members actually has $1.7 million in a tax haven, as my understanding would have it.

I think we should get on with fixing this as fast as we can.

[Murray Rankin, NDP, Victoria, BC]

Mr. Speaker, I have the honour of being the official opposition's revenue critic and do not know of the 100 days of which my friend speaks. If he is referring to the other place, there are no representatives from the official opposition there.

I understand we offered an arrangement to get what the parliamentary secretary properly calls a housekeeping bill to the floor for debate, but there are things that need to be talked about. Canadians want to see some debate on this matter.

Is the parliamentary secretary using time allocation to show Canadians that the Conservatives do not trust the parliamentary process? Is that why time allocation is being applied when we are in favour of this bill? Could he explain that?

[Ted Menzies, Conservative, Macleod, AB]

Mr. Speaker, forgive me if I am not understanding the reasoning here, but if the opposition members are indeed in favour of it then why should we not move forward with this piece of legislation and actually accomplish what it very definitively sets out?

This is a double taxation agreement with countries such as Namibia, Serbia, Poland, Luxembourg, Switzerland and Hong Kong. These are important trading partners. They are not just trading partners but very important financial sectors, especially Hong Kong. We do a lot of financial transactions back and forth with Hong Kong. A lot of our financial institutions are doing an incredible amount of work. At last count we have three-quarters of a million Canadians living in Hong Kong.

We think this is very important. If the hon. members on both sides of the House are in support of it, let us move on to another piece of legislation about which we can have some reasonable debate. If everyone is in favour of it, let us vote for it.

[Anne-Marie Day, NDP, Charlesbourg—Haute-Saint-Charles, QC]

Mr. Speaker, we should all have counters on our social media screens to watch the numbers go up: 38, 39, 40, 41, 42, 43.

Every time there is an obstacle and we lose time in the House because of a time allocation motion, we should see the number go up. Perhaps if we all had that on our television screens, then this government might understand that we are entitled to speak in the House. This is the only way to inform our constituents about what is happening with bills if they do not attend the committee hearings.

[Ted Menzies, Conservative, Macleod, AB]

Mr. Speaker, indeed there has been an opportunity, which is all recorded, that being the debates that happened within the Senate, within the Senate committees. I would encourage hon. members to go back to that.

Once again, if all hon. members support this piece of legislation, then we should make the best use of our time and get on with the substantive discussions. I am sure the Speaker would encourage us to do that. We are offering the time to actually debate this piece of legislation, to talk about the benefits of it.

I might share with this House that I just had meetings with the OECD, and one of the primary roles it is playing right now is on base erosion and profit shifting. It is doing a consultation paper for the G20 leaders when they meet later on. Every country is concerned, but specifically the OECD members, with this profit shifting, a term we are not used to using here but I think pretty much explains itself, that being the shifting of profits to lower tax jurisdictions.

That is part of what we are doing here. Since the Liberals started this process of these tax treaties, there have been 30 of them that have been set out in legislation in this government and previous governments. It is nothing new. Hon. members could have done their homework to see exactly what we are doing and why we are doing it. There was ample time for that.

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

Mr. Speaker, the truth is that this is the 43rd time the Conservatives have imposed closure.

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

Forty-four.

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

It is the forty-fourth, the member for Algoma—Manitoulin—Kapuskasing is reminding me.

Mr. Speaker, the government has even lost track of the number of closure motions it has brought in. Every single time, it has another excuse, something else it rolls out to say it should not be debated in Parliament for this reason or it should not be debated in Parliament for that reason.

The reality is that the debate that should be held on this issue is around the Conservatives' failure on tax evasion. They slashed a quarter of a billion dollars from CRA. They have killed 3,000 positions for people who are supposed to be looking out and doing the follow-up through CRA. Of course, the Conservatives do not want that to come out in public, so they want to shut down debate. They want to ensure that in Parliament we are not debating the reality of the current government's complete and utter failure on tax evasion.

Now, the other reality is that the government gets it wrong when it rushes through legislation, as members know. There are a number of pieces of legislation before the courts, and there are others that have had to be redrafted because the Conservatives botched the drafting in the first place. That is another important role for Parliament, to ensure we can identify where the Conservatives have screwed up this time.

My question for my hon. colleague is simply this. Why do Conservatives constantly try to shut down debate when we all know it is their record that is the problem?

[Ted Menzies, Conservative, Macleod, AB]

Mr. Speaker, to answer the question on records, today we reached another record milestone. We moved tax freedom day two weeks ahead. That is because of this government's policies of not just sitting in the House and debating issues but actually getting it done. If we waited for the NDP to support us on everything it opposes, we would probably not have a million more Canadians working today than were working in the depths of the recession in 2009. Every successive budget, every successive policy change that we put forward, to not only help Canadians get back to work but to help those who could not find a job have access to EI, the NDP voted against. It would have us in the position of some of the countries we look at in Europe that are in recession.

Canada has an incredible record. When he talks about records, I do not mind repeating the fact that last month 54,000 young people got a job. Youth employment has been a challenge for us all. We have had many questions in this House, and rightfully so. We are concerned about our youth. If we were to travel to Europe, we would see 60% youth unemployment. We do not have that here. Ours is still too high, but there are 54,000 more of them working this month than last month. We think that is a pretty good record.

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

Mr. Speaker, as we mentioned a while ago, this is the 44th time the government is limiting debate on important bills. If they were that important, why did it not bring them forward before? That is the question of the day, really. Also, if they were that important, why were those bills not actually tabled here in the House, as opposed to in that other house of unelected senators?

The member across talked about the fact that we actually voted against certain bills and that this is why the government is moving time allocation. It is talking about the EI bills. Let me tell members that we voted against the EI changes in the budget because they do not respond to the needs of Canadians and the government is going in the wrong direction.

He also talked about the concerns for youth. Yet, here is a government that has cut back on that.

I spoke to a gentleman just this past weekend who used to work for the federal government, in the industry part, in skills training. He said we are not going forward; we are actually going backward.

My question for the member is this. Why does the government continue to not allow proper debate to take place where it should be taking place, right here in the House, and what was the urgency on this?

[Ted Menzies, Conservative, Macleod, AB]

Mr. Speaker, there certainly is urgency to most of these pieces of legislation that we are putting forward. There was certainly urgency with respect to the budget bill that was passed just a few moments ago in the House.

Talking about urgency, if these tax treaties are not passed in this spring session of Parliament, they will not come into force on January 1. They need to be passed in the spring session in order to be enacted with all the countries with which we are working. There is urgency to this legislation. We need to get it done.

We were not sure if the opposition wanted to debate these. The NDP is sensitive on this. That party has individuals in its caucus, apparently, who do not believe in paying taxes. We are concerned about the Liberals because they are protecting a senator who has pretty much taken her money offshore and hidden it in a tax haven. We are a little concerned about how serious those parties are about protecting taxpayers' money.

We have put in place 75 different changes to tighten up tax loopholes. That is the right direction to go in, and we will continue moving to protect taxpayers.

[Bernard Trottier, Conservative, Etobicoke—Lakeshore, ON]

Mr. Speaker, I would like to thank the minister for clarifying the importance of getting these tax treaties passed. He mentioned that if this legislation is not passed within this calendar year, we might not be able to implement things by January 1, 2014. It might have to be postponed until January 1, 2015.

Could the minister perhaps explain the importance of tax treaties when it comes to overall trade with certain countries? If tax treaties are not in place, what would be some of the impediments to our trade with various countries, and what would that mean ultimately for jobs and economic growth in Canada?

[Ted Menzies, Conservative, Macleod, AB]

Mr. Speaker, we cannot reiterate that enough, and I thank my hon. colleague for raising that.

The fundamental purpose of the bill is to prevent double taxation. People do not like paying their taxes but they understand that if we want social programs, if we want to fund education or health care, then we all have to pay our taxes, but we should only pay our fair share of taxes.

International companies can move their money around. We want to make sure that, if taxes are not paid in this country, then they are indeed paid in the country where that company is making its profits. That is one important issue, especially the more international companies become. Allocating taxing rights between Canada and its treaty partners over different categories of income is very important. This gets very complex. I will leave it up to the accountants to perhaps explain it in detail.

Prescribing the method of relief for double taxation for different types is important. We need to describe that, and it is in the legislation. I would encourage all hon. members to read that.

The fundamental principle behind this legislation is preventing the avoidance and evasion of taxation. We have willing partners who are going to sign on to this agreement. It is time to move on to protect tax integrity in this country.

[Romeo Saganash, NDP, Abitibi—Baie-James—Nunavik—Eeyou, QC]

Mr. Speaker, one of the things that strikes me in this debate on a time allocation motion is that the government seems to forget that Canadians elected us not just to represent them in this august chamber, but also to provide good governance for all Canadians. We must work for all Canadians in the House of Commons and the committees, the institutions that are here on Parliament Hill.

In the current context, it is very difficult to convince the majority government that it is not necessarily taking the best approach. This time allocation process prevents us from making adjustments to certain bills, which should not be discussed at this time and are not in the interest of Canadians. That is why this process is being used.

I get the impression that we are again being prevented from debating a bill that has some serious flaws. We were supposed to debate Bill S-2 earlier, but the agenda is being changed again today. This is one of many examples that illustrate that there are flaws. The government just seems to want to leave as soon as possible and not correct the flaws that exist in a number of bills.

[Ted Menzies, Conservative, Macleod, AB]

Mr. Speaker, I would remind the hon. member that the motion says that there are five hours more of debate. I would think that if the discussions are precise, pointed and accurate, without members elaborating as the preceding member did, we could perhaps hear those comments. I would encourage the hon. member to come prepared to have a very specific debate.

There was a question before about the introduction of these pieces of legislation. Traditionally, these treaties are introduced in the Senate. There is time in the Senate for those proceedings. The House is a very busy place. The Senate has time to review them and to provide the background information. It came from the Senate, and it is time we moved it forward.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, I am sure that the minister is aware of a gentleman by the name of Dimitri Soudas. He should know of him. He was chief of staff for the Prime Minister's Office. He is no longer there. He had serious tax issues. He was not paying his taxes for a number of years. We are looking at the current scandal in the PMO with regard to the Senate. He likes to talk about individuals who do not pay taxes. This is yet another example, right in the Prime Minister's Office.

I am wondering if he could comment on Mr. Soudas and what he feels Mr. Soudas should be doing or why it is he did not pay his taxes to Revenue Canada. Does he have any thoughts on that?

[The Acting Speaker, Conservative, Barry Devolin]

Before I go to the minister, I would again remind all hon. members that questions and comments should be related to the bill before the House. I understand that in the course of discussions, examples are used and the debate wanders at times, but I would ask all hon. members to do their best to focus on the matter before the House.

The hon. Minister of State (Finance).

[Ted Menzies, Conservative, Macleod, AB]

Mr. Speaker, I try not to interfere in individuals' lives, as other individuals in the House might want to do. My advice to Mr. Soudas would be to go back and get the raise due to him, because he never was chief of staff to the Prime Minister.

What we are talking about are international agreements in which Canada and other countries agree to protect their tax bases. I referred earlier to base erosion and profit shifting. That is the erosion of a tax base. The opposition may not understand that concept. Basically, it is making sure that people and corporations pay their fair share of taxes either in this country or in other countries where they may be doing business. It is no more complex than that.

There are about 30 pieces of legislation. We have many of these agreements in place, and we continue to put them together to protect our tax base. Not only that, but some of the countries we are dealing with today I would suggest are still developing countries, so we want to help them protect their tax bases. It is very important, not just for us but for them, that we move forward on something these countries have both agreed to for the benefit of their taxpayers and ours.

[Robert Chisholm, NDP, Dartmouth—Cole Harbour, NS]

Mr. Speaker, we are not actually talking about Bill S-17 at the moment. We are talking about the government's motion to limit debate so that we cannot talk about Bill S-17.

Over the last number of weeks, what we have heard from the government is that if we disagree with it, we are anti-Canadian and traitors. If members do not speak properly, then the Conservatives are going to move time allocation on these various bills.

It is not up to the member to determine how I am going to present myself in the House. It is up to my constituents. I am here because the people of Dartmouth—Cole Harbour who voted for me decided that they wanted me to come here to speak to bills, such as Bill S-17.

With its tendency to bring in time allocation, the government is suggesting that it is going to decide how much time I am going to have to speak on it, regardless of what I want to say. The member opposite now suggests that if he decides that I am not articulate enough or am not getting to the point quickly enough, as he would identify it, the government is going to bring in time allocation on that basis. I have wondered why it is that it will not agree to abolish the Senate, but now I understand that it wants to abolish this chamber. It wants to eliminate all free speech for the commoners, for the people of Canada.

[Ted Menzies, Conservative, Macleod, AB]

Mr. Speaker, that was a rather mythological sort of question, I would suggest. I am not presuming that my hon. friend across the way would not be precise and concise in his presentation. I have listened to him on many occasions. I listened to him in the leadership debate for his party, and he was very articulate. We encourage him to continue with that. He will have time during this debate to actually bring the concerns of his constituents forward.

Forgive me if I repeat myself, but we have listened to many speeches in this House that are basically a mirror image of the speech that was just presented. I do not think that is a good use of those hon. members' time or of members' time on this side. We actually want to move forward with the protection of the tax system in this country and in the countries we are dealing with in Bill S-17.

[Hélène Laverdière, NDP, Laurier—Sainte-Marie, QC]

Mr. Speaker, I have two basic questions about this specific bill.

If it was so urgent, how come the Conservatives were not able to arrange for us to have the time we needed to thoroughly debate this bill? This is in itself an example of their incompetence, and it shows why it is important to take time to study bills thoroughly. We cannot trust the bills they give us. That is the first thing.

The second thing is more general and has to do with the number of time allocation motions we have had under this government. This has to be a Guinness world record. My question is very simple. The Conservatives are preventing us from thoroughly discussing bills in committee and are moving time allocation motions here in the House. What are they afraid of? Can they not back these bills up?

[Ted Menzies, Conservative, Macleod, AB]

Mr. Speaker, with 100 days of debate, I would repeat what I said earlier, for anyone listening to this debate at home.

We have very limited time to actually sit in this House or in the other chamber and debate substantive issues. One hundred days is a big chunk of our parliamentary calendar. We think it is appropriate that we now move forward and get this bill to the next stage. It is very important and critical for those countries and for fairness to the taxpayers in all the countries involved.

[The Acting Speaker, Conservative, Barry Devolin]

It is my duty to interrupt the proceedings and put forthwith the question necessary to dispose of the motion now before the House.

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

[Some hon. members]

Agreed.

No.

[The Acting Speaker, Conservative, Barry Devolin]

All those in favour of the motion will please say yea.

[Some hon. members]

Yea.

[The Acting Speaker, Conservative, Barry Devolin]

All those opposed will please say nay.

[Some hon. members]

Nay.

[The Acting Speaker, Conservative, Barry Devolin]

In my opinion the yeas have it.

And five or more members having risen:

Call in the members.

(The House divided on the motion, which was agreed to on the following division:)

Vote #745

Tax Conventions Implementation Act, 2013

[The Acting Speaker, Conservative, Barry Devolin]

I declare the motion carried.

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 longstanding 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.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, the important word the member used was “seemed”. He said it seemed as if there was tax evasion. If the member genuinely believed what he is trying to give the impression of to those who might be watching, then he should feel comfortable enough to go outside of the House of Commons chamber and say that the former prime minister did some sort of illegal activity and make the accusation he just made here outside the House. I suspect his comments would be greatly watered down.

If we want to talk about individuals, we have to be very careful. If I were to bring up individuals, much as we have seen the Conservative caucus do during S. O. 31s, where they constantly cite not one but two NDP, and I underline “NDP”, members of Parliament who are not paying their taxes. The member needs to be very careful. I would argue that there is an equally strong case to be made, if not a stronger case to be made, with regard to his two colleagues, members of Parliament who sit with him today, than there is with former prime minister Paul Martin. If he believes that Paul Martin did something illegal, then I would challenge him to have the courage to say outside the House that there was illegal activity and let Canada Revenue Agency know about it. However, I suspect he would not do that. I suspect that because he used the word “seemed”.

Let there be no doubt that there are many Canadians across the country who, when they process their tax returns, look at ways to minimize the amount of tax they have to pay, and there is nothing wrong with doing that. The problem is when individuals choose not to pay their taxes, as are the allegations with two of his colleagues, which is a problem, or when people conduct themselves in an illegal way to avoid paying taxes.

I do not think the Liberal Party has to make apology any more than the New Democratic Party, especially if we apply the relevance of time. As of today, there are two members of his own caucus whose behaviour is being questioned on the issue of paying their fair share of taxes.

[Jasbir Sandhu, NDP, Surrey North, BC]

Mr. Speaker, I heard the question from my hon. colleague, and I think he was talking about closing the loopholes that currently exist in our system. The newspaper this morning said that Canadians for Tax Fairness cited recent statistics from Statistics Canada that show that in the top 12 tax havens around the world, Canadians have stocked away $170 billion. If we taxed those $170 billion, we could have $7.8 billion in additional revenue. Where is that additional revenue going now? It is going on the backs of Canadians.

I googled “tax evasion” just now, and the top four or five news articles say that France is expanding its inquiry of tax evasion, India is also going after tax evaders, the U.S. is cracking down on virtual currency tax fraud and the headline in the Ottawa Citizen says, “Canada slammed for lagging behind in fighting tax evasion...”. This is from just punching it into Google. This is just today's news.

I know the G8 summit is taking place. It would appear that Canada has been dragging its feet and we can do more to collect that $7.8 billion. I would like the member to comment on that, please.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Absolutely, Mr. Speaker. I applaud the member for the question. At the end of the day, we lose billions of dollars in annual revenues that should be coming into our coffers. Can anyone imagine what we could do with those billions of dollars? It could go to deficit reduction, reducing other forms of taxes for the middle class and others, or not having to increase other forms of revenue. If only we had a government that was prepared to do more.

Canada is lagging behind, and that is the reason I used the example of the $150 million that was put into fighting tax evasion back in 2005 under the last Liberal administration. That $150 million is ultimately responsible for generating close to $2 billion. That is a whole lot of money that I would argue assisted in preventing us from having to increase other taxes.

Again, I want to emphasize that Canadians as a whole believe that taxation is something in which people have to participate. People have to pay taxes, but we ask that taxes are fair and that we do not allow individuals to get away with things such as tax evasion. This upsets people, and justifiably so. People who put in 40-hour work weeks making $20 or $25 an hour, or whatever it might be, are paying hard taxes. They want to ensure that the guy who is making $3 million a year or $500,000 a year is also paying his taxes. They have a right to feel comfortable in knowing their government truly cares, to the degree in which it is going to fight to ensure that everyone is paying their fair share.

We need to invest more time, energy and resources, and work toward international multilateral agreements on information sharing.

[Wladyslaw Lizon, Conservative, Mississauga East—Cooksville, ON]

Mr. Speaker, I appreciate the opportunity to speak today to the second reading of Bill S-17, the tax conventions implementation act, 2013.

Over the years, our government has worked hard at signing many tax treaties to help improve our system of international taxation. Bill S-17 would add to Canada's ongoing measures to update and modernize its network of income tax treaties with other countries, which is one of the most extensive in the entire world. Canada has tax treaties in place with a whopping 90 countries, including most of our major trading partners, and is working on agreements with other jurisdictions. Bilateral income tax treaties like the one before us today help us to prevent double taxation, thus creating tax fairness for all Canadians, and ensure everyone pays their fair share, something we know we must do.

Tax treaties also eliminate tax barriers to trade and investment. As we noted in the economic action plan 2013, deeper trade and investment relationships in more overseas markets help support jobs and growth in Canada. In this respect, Bill S-17 would provide benefits to both taxpayers and governments by setting out clear rules that would govern tax matters relating to cross-border trade and investments. The treaties covered in Bill S-17 would promote certainty, stability and a better tax climate for taxpayers and businesses in Canada and these treaty countries. While these treaties would help to secure Canada's position in the increasingly competitive world of international trade and investment, they would also help combat tax evasion.

While Bill S-17 is a relatively standard, routine and innocuous piece of legislation, these new and updated treaties would strengthen Canada's already-strong network of tax treaties. Bill S-17 proposes to implement tax conventions, either new or updated, with Canada and Namibia, Serbia, Poland, Hong Kong, Luxembourg and Switzerland. With these six new and updated treaties adding to the 90 tax treaties already in existence, we could be proud that Canada boasts one of the largest networks of bilateral tax treaties, ensuring a fair and competitive international tax system.

I mentioned previously why the legislation before us today is a standard fare, but it is nonetheless very important in achieving the above goals. Bill S-17 would help to stop tax cheats and help to combat tax evasion. It would create tax fairness and prevent double taxation. Finally, it would help improve international trade and investment.

Cyndee Todgham Cherniak of LexSage Professional Corporation said this recently to the Senate banking committee:

Tax treaties facilitate trade. Tax treaties are symbols of cooperation, trust and friendship between nations. Tax treaties prevent double taxation.... They improve stability, transparency, fairness, procedural fairness and tax certainty relating to international trade and transactions. Tax treaties are good for Canadian businesses with activities abroad through branches, subsidiaries and other business enterprises. Tax treaties are good for individuals, employers, directors of corporations, students, shareholders, et cetera.

We can all agree on the importance of working with other countries to provide tax fairness for Canadians, and the bill before us today would do just that.

Tax treaties like those in Bill S-17 complement our Conservative government's overall commitment to a more competitive tax system, one that improves the standard of living of all Canadians. Tax treaties like those in Bill S-17 directly support and encourage cross-border trade in goods and services, which in turn helps Canada's domestic economic performance.

Moreover, Canada's wealth as a proud trading nation depends on a strong global marketplace where information, investment and technology flow with ease.

In fact, during the Senate committee's examination, Nick Pantaleo, a well-respected tax expert with PricewaterhouseCoopers LLP, remarked that:

...a key objective of the Canadian government is to pursue new and deeper international trade and investment relationships. This is not surprising given that more than 60 per cent of the Canadian economy and one in five jobs in Canada are generated by trade. In my view, tax treaties contribute towards the success of such global trading arrangements.

Accordingly, the tax treaties contained in Bill S-17 are a critical tool in strengthening Canada's trade and investment relationships, creating jobs for Canadians here at home.

How does Bill S-17 do that? I would like to take a moment and discuss one particular issue dealt with in this legislation and tax convention implementation through the years, preventing something called double taxation.

Double taxation in the international sense arises as a result of the imposition of taxes in two or more countries on the same taxable income for the same period of time. The treaties in Bill S-17, through bilateral rules, would help avoid double taxation and ensure that taxpayers pay tax on the same income only once.

The Canadian income tax system generally taxes residents on their worldwide income. However, in recognition of the fact that a foreign country may also have a right to tax income earned in that country by a Canadian resident, Canada will provide a credit for foreign income taxes paid, and vice versa. Indeed, if this rule did not exist, there would be unfair consequences for taxpayers, who would be punished for trying to grow or expand their Canadian businesses internationally.

Simply put, nobody should have their income taxed twice—at least, this is what we think on this side of the House. The exception may be the high-tax NDP. Unfortunately, without a tax treaty like those contained in Bill S-17, that is exactly what would happen, and I am happy this legislation will address that problem.

In the time I have left today, I would like to single out how Bill S-17 would be beneficial to Canada's relationship with its dear friend, Poland.

Canada and Poland enjoy a close relationship, including growth in trade and investments as well as increasing military co-operation and academic relations programs. Canada is home to a vibrant community of nearly one million Polish-Canadians, and since 2008, Poles can travel to Canada visa-free with their e-passports, further expanding people-to-people ties among our citizens.

In February 1998, Canada was the first North Atlantic Treaty Organization country to ratify Polish accession to the organization. Since then, Canada has become a leader among NATO countries in language and peacekeeping training in Poland, with hundreds of Polish officers and senior general staff having received training in Canada and Poland.

Further, Canada and Poland co-operate closely through multilateral initiatives as valuable partners in NATO, in Canada-EU relations and across a wide range of United Nations organizations and initiatives, including the International Security Assistance Force in Afghanistan.

With regard to academic relations, there are seven Canadian studies programs in Polish universities that conduct research, offer courses and organize conferences on Canada. Some have extensive library holdings and are a rich source of information for Polish students, researchers, academics and the general public.

Finally, Canada and Poland are also seeing rapid growth in our cultural relations. Canadian artists frequently entertain audiences in Polish cities.

Given our two countries' close ties, in 2009 two important agreements between Canada and Poland came into force: the social security agreement, which coordinates pension benefits between the two countries, and the youth mobility agreement, which allows youth from Canada and Poland to travel and work in the other country for up to one year.

In May 2012, during Polish Prime Minister Donald Tusk's visit to Canada, a new tax convention that will reduce tax barriers and encourage increased trade and investment between the two countries was signed.

This convention is a significant element of Bill S-17, which will further develop and facilitate Canada and Poland's mutual economic relationships and will eliminate double taxation with respect to taxes on income and on capital.

The impetus for the new convention with Poland, which was signed on May 14, 2012, was the need to replace the existing tax convention signed in 1987 in order to reflect current Canadian tax treaty policies.

The new convention will continue to contribute to the elimination of tax barriers to trade and investment between Canada and Poland and will help further solidify the economic links between us.

This convention remains consistent with the government's long-standing commitment to seek out new trade and investment opportunities for Canadians and to promote economic prosperity.

In addition to the close relationship Poland and Canada share, we also enjoy excellent trade relations. Poland is Canada's largest merchandise trading partner in central and eastern Europe. In 2011, the value of bilateral trade was $1.69 billion.

Canadian exports to Poland amounted to $251 million and included primarily machinery, electrical and electronic equipment, mineral ores, scientific and precision instruments and vehicles.

Canadian imports from Poland were valued at $1,439 million in 2011, with top sectors being machinery, furniture and bedding, aircraft and spacecraft products and electrical machinery.

EU membership, coupled with Poland's resilience during the recent global economic slowdown, makes it an attractive investment destination for Canadian companies.

Canadian cumulative direct investment in Poland totalled $411 million in 2011. Major Canadian investors in Poland include such companies as Pratt and Whitney Canada and Bombardier Transportation.

Hon. members, this convention also modernizes the income tax system between our two nations. Most countries, including Canada and Poland, tax their residents on their worldwide income. Moreover, when a resident of a particular country derives income from sources in another country, it is not uncommon for that other country to subject that income to tax.

The convention recognizes this international taxation dynamic and sets out under what circumstances and to what extent Canada and Poland may tax the earnings of one another's residents.

The convention also provides that when income, profits or gains may be taxed in both countries, the country of residence is to allow double tax relief against its own tax for the tax imposed by the country of source.

Specifically, the convention sets a maximum withholding tax rate of 5% for dividends paid to a company that holds directly at least 10% of the capital in the company that pays the dividends, and a maximum rate of 15% in all other cases.

The convention also generally limits to 10% the maximum withholding tax rate on interest and royalties. As well, the convention limits to 15% the maximum withholding tax rate on payments of pension income.

It includes a provision that limits the potential for double taxation arising from the application of Canada's taxpayer migration rules without restricting Canada's ability to tax its departing residents under pre-departure gains.

Finally, it includes the latest standard of the Organisation for Economic Co-operation and Development on exchange of tax information in order to assist Canadian tax authorities in the administration of Canadian tax laws.

In conclusion, trade and foreign investment are major engines of economic growth. Canada relies on open markets as a source of opportunity and a stimulus to efficiency, which in turn contributes to economic growth and rising incomes. Openness to trade, investment and global economic engagement are thus critical to Canada's long-term prosperity.

Bill S-17 is another step forward in ensuring the reduction of trade and investment barriers with our close ally, Poland. Considering the close relationship Canada and Poland have, it is only fitting that we ensure that our tax policies reflect the same mutual advantages. Further, Bill S-17 adds to Canada's low-tax commitment, ultimately allowing Canadians to keep more of their hard-earned money.

Since 2006, we have introduced more than 150 tax relief measures for Canadian families, individuals and businesses. The overall federal tax burden is the lowest it has been in 50 years. As a result, the average family of four now receives over $3,200 in extra tax savings. Going forward, we will continue to open markets and keep taxes low in pursuit of our main objective of increasing jobs, growth and long-term prosperity.

With that, I urge all members to vote yes on Bill S-17 and yes to closer Canada-Poland relations, stronger international trade relations and tax fairness.

[Matthew Dubé, NDP, Chambly—Borduas, QC]

Mr. Speaker, I thank my colleague for his speech.

He spoke at length about what Canada is doing abroad to combat tax evasion. We support this bill. It is important to note that this is an administrative bill, the kind that comes up intermittently to update various conventions signed with various countries.

The morning papers reported that Canada is not working with other countries to fight tax evasion. Many initiatives are in the works to do just that.

The member talked about the economic power of countries working together, free trade, information exchange and so on.

If those things truly matter to the government, can the member explain why it will not be participating in the efforts of the rest of the international community and why it will not be going beyond the administrative measures we support in this bill?

[Wladyslaw Lizon, Conservative, Mississauga East—Cooksville, ON]

Mr. Speaker, I think the hon. member's question goes way beyond the scope of the bill that we are debating here today. Actually, one of the aims of the bill and those tax treaties is to make sure that people cannot avoid taxes.

I suppose the hon. member understands that all these treaties were negotiated by teams from the respective countries over the years. They came to certain agreements. With the ratification of those treaties, we will move forward to make sure that there are no tax havens, that the information on taxation is exchanged and that residents of our countries would not be double-taxed and would not be subject to unfair taxation.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, one of the things I made reference to when I had the opportunity to address the legislation was the fact that government needed to do more than just bring in the legislation, which is almost a given. One would expect the legislation that we have today.

Does the member not see the value or merit in giving additional resources to the Canada Revenue Agency so it can have the resources necessary to get tough with tax evaders? Does he not agree that would be a good step forward?

[Wladyslaw Lizon, Conservative, Mississauga East—Cooksville, ON]

Mr. Speaker, it is hard not to agree with the member and there is always a way to improve. We should all work together to ensure that everybody pays his or her fair share of taxes. That would include the members of the NDP caucus who chose not to participate and pay their fair share of taxes.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

Mr. Speaker, before I speak, I would like to reply to my colleague's inappropriate statement.

Any Canadian has the opportunity to approach Revenue Canada and negotiate a payment of taxes over time, which is the situation here. It is time the Conservatives stop slurring hon. members of the House.

However, the issue here is the rising loss of revenue to the country by people who evade taxation. The member raised something very interesting. My colleague asked why the government did not go a step further, for example, along the lines of what the U.K. did with Switzerland. It reached an agreement where the U.K. could recoup up to 30% of the taxes that should have been paid to it.

When the government entertained these agreements, why did it not take a harder line in what should be included in the agreement? Do the Conservatives have a shopping list such that they have agreements with 999 countries, or are they actually seeking to improve the system of taxation so we can recover taxes and not have tax evasion in our country?

[Wladyslaw Lizon, Conservative, Mississauga East—Cooksville, ON]

Mr. Speaker, Bill S-17 includes tax treaties with certain countries because some are renegotiated treaties, which is a step forward.

I was speaking about the Canada-Poland treaty, which is an improvement from the previous treaty that was negotiated in 1987. It reflects the new worldwide situation and new regulations in both countries. When the previous agreement was signed, Poland did not have personal income tax. It adopted personal income tax in 1991, which was four years after the previous treaty was signed. Of course this had to be reflected.

Therefore, for all those treaties, when they are renegotiated and up for improvements, we move forward and improve the situation.

[Pierre Jacob, NDP, Brome—Missisquoi, QC]

Mr. Speaker, I thank my colleague for his speech.

I would like to ask him why the Conservatives keep refusing to estimate how much money Canada is losing to tax havens and tax evasion. The United Kingdom, the United States and even Australia have all produced estimates of their tax gap.

[Wladyslaw Lizon, Conservative, Mississauga East—Cooksville, ON]

Mr. Speaker, I indicated in my previous answer that the work did not end. There is always improvement that has to be made. We all work toward ensuring that everybody pays their fair share of taxes in our country.

[Jasbir Sandhu, NDP, Surrey North, BC]

Mr. Speaker, it is very clear from the speeches that we all agree everyone needs to pay his or her fair share of taxes. Conservative members say one thing and do another. If we look at their record, they have cut $250 million to the CRA, which is equivalent to 3,000 full-time employees. If we are not going to make investments in people to go after tax cheaters, how will we collect that?

Would my hon. colleague not agree that we need to make an investment in CRA and hire people to go after tax evaders instead of making cuts to the Canada Revenue Agency?

[Wladyslaw Lizon, Conservative, Mississauga East—Cooksville, ON]

Mr. Speaker, I am surprised anybody would suggest that the efficiency of any organization should be measured by the number of people employed. Many changes have been implemented. There was a lot of investment made in Canada Revenue Agency. There are technological innovations that will help us with the workforce that exists.

Therefore, I do not know why we should say that if there are less employees, we will be less efficient. That is absolutely not true. We are in the 21st century. We do not need 100 million people employed in one agency to be efficient.

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

Mr. Speaker, I am pleased to rise to speak to Bill S-17. I would have been much happier if this did not come on the heels of another time allocation motion moved by the government.

The government does not want us to debate the principles of this bill. That is what I want to focus my comments on during the 20 minutes I have been given, because this aspect is extremely important. Today, by presenting Bill S-17, the government is telling us that it has everything all worked out.

The Senate had the chance to debate the bill, but I will not get into the credibility of senators for now. The Conservatives think that by introducing this bill, they are accomplishing something. The sad thing is that the opposite is true.

First, let us start off with the issue of what we are talking about here. We have had a number of Conservatives who have tried to raise the issue of tax debt. It is true that on any given occasion, in fact, in every one of the ridings of the Conservatives who are here today, about 6% of Canadians fall behind on their tax debt. As they are Canadians, they endeavour to catch up and pay their taxes. There are those who fall behind and they are Conservatives, Liberals and New Democrats. The important thing is that those individuals eventually catch up. That is part of the $29 billion in uncollected tax debt that is being paid back.

I would like to speak to a broader issue which is the issue of the uncollected tax debt that Revenue Canada is seemingly unable to follow-up on. My colleague from Surrey North mentioned a few minutes ago the issue of the government saying that it was going to take on tax havens and that it was getting that uncollected tax debt. However, at the same time it would be cutting cut one-quarter of a billion dollars out of Revenue Canada's overall expenditures, cut 3,000 employees and somehow this time, even though Conservatives have screwed up pretty well everything else they had over the last seven years, they would get it right.

The Auditor General had something to say about that in the report that came out this spring. It is important to note, when we talk about what the Auditor General referenced, that he has seen his department cut back severely under the government. The government does not seem to like independent thought around issues of financial accountability and fiscal transparency. Even though the Auditor General's department has been cut back, here is what he said:

The level of tax debt is driven by the economic climate, tax policy, taxpayer behaviour, and the Agency’s efforts to collect taxes in a timely manner. In Canada, 94 percent of individuals...pay their taxes to the Agency on time. However...there is always a balance of unpaid taxes...

Those taxes get paid later on. As I mentioned earlier, in every one of our ridings, about 6% of our constituents have fallen behind. For Conservatives to denigrate those people who are endeavouring to catch up is something that is quite disrespectful. However, the reality is in each and every riding we are looking at about 6% of Canadians who work to catch up.

However, the Auditor General found on the corporate sector it was actually 90% where the taxes that were owed were paid on time. Therefore, there is a much bigger problem in the corporate sector.

It gets worse when we talk about large tax debts. This is obviously why the Conservatives wanted to shut down debate on this. As we bring forward the pathetic Conservative record in terms of tax debt in the corporate sector, Conservatives are understandably embarrassed by their inability to put in place a tax sector that functions.

This is what the Auditor General said about the Canada Revenue Agency, and we are talking about the mega accounts of tax debt. He said:

When we reviewed the additional criteria for accounts over $10 million, we found that the Agency did not meet its targets for danger of loss reviews; they were either missing or not adequately documented in [about half]...the...accounts that required them. A danger of loss review is important, since it will allow the Agency to act quickly where the taxpayer may be disposing of assets instead of paying a tax debt.

That is very interesting. Among ordinary Canadian families, there is a fall of about 6%, but when we are talking about the large accounts, the $10 million accounts, Conservatives failed about half the time. That is fascinating. Half the time they failed. This is interesting, because when we talk about the overall issue of uncollected tax debt, it should be no surprise to any of us that the Conservatives' failure on this is one reason there has been a substantial increase in uncollected tax debt. You will recall, Mr. Speaker, that they have now slashed 3,000 of the positions of hard-working public servants in the Canada Revenue Agency, so it is going to get even worse.

In other words, in 2006, the Conservatives came into power, and there was about $18 billion in uncollected tax debt. What is it after seven years of the Conservatives mismanaging pretty well everything they touch? I would say that they cannot even run a peanut stand, but that actually would be doing a disservice to people who run peanut stands. We saw how they incredibly botched the F-35 debacle, with $8 billion moving up to somewhere around $40 billion, and apparently that was without engines. When we see that kind of fiscal mismanagement, we have to just shake our heads.

On uncollected tax debt, it is the same kind of thing. The Conservatives started with $18 billion, and after seven years of Conservative mismanagement, we are now up to $29 billion. That is an increase of 57% in uncollected tax debt. If people say they are surprised and cannot believe that the Conservative government would be this awful and ineffectual, and they ask why it is that there is that substantial increase, they would have to come back to the Auditor General's report. In the Auditor General's report, we see that even in the case of danger of loss reviews for accounts over $10 million, the Conservatives are simply incapable of getting the job done.

A very wealthy man owing $10 million, according to these Conservatives, will get off scot-free. It is not a problem if people owe millions of dollars. The Conservatives just say that it is fine, that they will slash the jobs of the people who are supposed to collect that money, because the Conservatives do not really care. That is why they have had a 57% increase in uncollected tax debt over the course of just a few years. My goodness. Since Conservative governments cost all Canadians so much in terms of quality of life and the fiscal mismanagement they are showing, we simply cannot afford too many more years of Conservatives. Fortunately, in 2015, Canadians will put an end to this, and they will be putting in place an NDP government that actually knows how to manage the tax system.

What do we mean when we talk about going beyond the uncollected tax debt? We have seen Conservative failure there. That is why the Conservatives prudently say, since the New Democrats would be talking about this for the next few days, that they will just invoke closure and shut down the debate so that hopefully, Canadians will not find out how badly they have botched the issue of uncollected tax and how much worse it will be because of the slashing and the cuts to the Canada Revenue Agency.

We have to ask about the money that has been put in tax havens. That has not even been calculated. We understand that. They have gone from $18 billion to $29 billion, an increase of 57%. That is the uncollected tax debt we know about. However, let us look at tax havens and the level of investment being pumped into tax havens. In 2011, about 24% of Canadian investment overseas went into tax havens. Going back a few years, it was in the single digits, but under the Conservatives, we have now moved to a situation where about a quarter of overseas investment goes into tax havens.

Given how badly the Conservatives have botched the issue of uncollected tax debt, one can imagine that the issue of tax havens is of major concern. However, what we have is a Conservative government that seems to be unwilling to deal with this fundamental issue. We are talking about tens of billions of dollars invested in tax havens overseas. The Conservatives just do not seem to care very much about that.

I have just a little aside. My grandmother was orphan. She came from England. She came to Canada to start a new life in her 20s. It was quite brave at the time. She had to take a ship across the Atlantic Ocean and take a train all the way across Canada. This was a young woman who decided that she wanted to start her new life in Canada.

She had an expression she loved to use. She would say that somebody who is not thinking very far ahead is being penny wise and pound foolish. Of course, that is a reference to English currency. Penny wise and pound foolish is what applies to this Conservative government.

It cut back and slashed $250 million from Revenue Canada. It slashed 3,000 positions and says that it is being penny wise. Yet it is being pound foolish when we see the billions of dollars of uncollected tax debt that has accumulated under the Conservative government and the tens of billions of dollars that are now flowing freely offshore into tax havens.

Members will recall that the NDP raised this a few years ago, even before the lightning breakthrough in 2011 that gave the NDP official opposition status, with 100 strong NDP members of Parliament, who come from all walks of life and really reflect the diversity of this country in a way that has never been reflected on the floor of the House of Commons. Even before that, we were raising this issue of tax havens on the floor of the House of Commons.

Members will recall the famous Canada-Panama trade agreement the Conservatives brought forward. We raised concerns at committee, and not only the NDP but also a number of other people who were concerned about Panama's status as a tax haven. It was not just me speaking. The Internal Revenue Service in the United States said very clearly that Panama does not have the transparency that is required. It is a tax haven.

At the time, we had Todd Tucker, of the Public Citizen's Global Trade Watch, come forward and say that Panama was one of the world's worst tax havens and that the Panamanian government had deliberately allowed Panama to become one of the worst tax havens in the world.

The Conservatives got it in their heads to actually put in place the Canada-Panama free trade agreement that would worsen that issue of tax haven status. Members will recall that the Liberals were just going along for the ride, as they usually did. They were the accomplices pushing along with the Conservatives saying that it was a great idea. Only the NDP caucus stood up and said that we could not sign a trade deal until we had an official tax treaty with Panama, because otherwise, we would be worsening the situation and would be making even worse the possibility of money transferred from Canada to Panama simply going into a tax haven, one of the worst tax havens in the entire world.

That was in January 2011. I dare say, two years later, yet again, the NDP has been proven right. We were right to say that it was the wrong thing to do.

I think, implicitly, the Conservatives are trying, through their Prime Minister's Office talking points, to say that they now want to somehow take action against tax havens. I think what the Conservatives are really saying is that the NDP members were right and that the Conservatives were wrong and are sorry. We accept the apology from the Conservatives, but that is not good enough. What they actually have to do is make things right, and that means not signing these types of free trade deals when what they actually do is enhance the tax haven status of these countries they are signing deals with.

Here is the real problem. We have a situation whereby hundreds of Canadians are now sending their money offshore. Again, those are estimates that come from a variety of sources. This is an increasing problem that is more and more manifest right across Canada. We are seeing tens of billions of dollars flowing offshore now. A quarter of our investment in this country is going offshore to tax havens.

We are seeing an additional $170 billion, it is estimated by the Canadians for Tax Fairness, going into 12 global tax havens. That means a difference of about $8 billion a year in tax income. Yet we are seeing the Conservative government do nothing except offer Bill S-17. It has signed a few agreements, yes. That is good. We support that on this side of the House, but that does not resolve the problem in any way, shape or form.

What it does, in this case, is allow a bit of cover for the Conservative government. It may have messed up with the Canada Revenue Agency. It may have messed up by cutting thousands of positions that would have allowed it to go after tax evaders in the corporate sector that are taking money offshore with impunity. Having messed up on the uncollected tax debt, having messed up, as well, on the whole issue of money going into tax havens, the government now presents Bill S-17. It is saying that it resolves all the various problems that exist on the issue of tax havens and uncollected tax debt.

New Democrats actually have a different and smarter idea about the kinds of things needed to resolve this issue. As is our normal practice, Mr. Speaker, having been a member of Parliament with long experience, you know that what the NDP always does is bring forward a wide variety of solutions to resolve issues, because we get the job done. I wanted to get in another plug, because I know it particularly embarrasses my Conservative friends. It is not meant unkindly.

This morning we had the debate on the parliamentary budget officer that was proposed by the member for Outremont and the leader of the official opposition. We had a chance, yet again, to talk about the fiscal period returns issued by the ministry of finance that have shown, for 20 years running, that NDP governments are by far the best at managing money, balancing budgets and paying down debt.

That is not me speaking. That is the federal ministry of finance, which is surely not a hotbed of social democrats yet, but it will be. It will be a hotbed of social democrats in a couple of years, and that means that we will have even better financial management than we have shown at the provincial level. We are number one provincially. Just imagine an NDP federal government, with all those social democrats with all that great experience of being number one at balancing budgets and paying down debt, then being able to change the priorities of the federal government so that Canadian families actually benefit. We would have the housing we need, the kind of health care system we need, high-paying jobs for Canadians rather than low-paying jobs for temporary foreign workers, which is where the government seems to love to put the emphasis, and perhaps, more importantly, a transparent, accountable government that actually honours and respects Canadian taxpayers.

At the finance committee level, New Democrats offered a whole range of amendments. We talked about the federal government studying and measuring, to the greatest accuracy possible, Canadian tax losses to international tax havens and tax evasion to determine the Canadian federal tax gap. Australia has done that. The United Kingdom has done that. The U.S. has done that. It is time for Canada to actually measure the tax gap.

We talked about greater transparency and telling Canadian corporations that they have to disclose all taxes paid in other jurisdictions. We also said that the Auditor General should evaluate the success of the Canada Revenue Agency in prosecuting and settling cases of tax evasion. We put all those forward, and the Conservatives rejected every single one.

New Democrats are going to vote for Bill S-17. The reality is that if we really want an effective income tax system, in which everybody pays according to what they earn, and there are not these tax havens and growing tax debt, then Canadians have to elect an NDP government in 2015, and that is what they are going to do. I have no doubt about that.

[Wayne Marston, NDP, Hamilton East—Stoney Creek, ON]

Mr. Speaker, I want to thank the member for Burnaby—New Westminster for his speech and his passion, which he always shows.

One thing he highlighted in his speech was the $29 billion purported to be offshore now. Here is some news that came out recently. Heinrich Kieber, the whistleblower who brought this forward in 2007, offered the information to the Conservative government. The information is now being used by the British and the Americans. They paid a fee to Mr. Kieber to get that information. That could have been used in 2007-08 and going forward to prevent that $29 billion growing to what it is today, which is a national embarrassment.

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

Mr. Speaker, the member has a lot of wisdom and experience in the House of Commons and is always the one asking the right questions at the right time in the House of Commons. I just wanted to compliment him on his great work here.

It is amazing. The Conservatives like to talk a big game about how they are willing to take on these tax havens, but every single action that they have taken, every decision they have made over the last seven years, has actually proven the contrary. The uncollected tax debt has grown exponentially, nearly 60% on the Conservative watch. The number of tax havens, of course, has grown. The amount of money estimated by Canadians for Tax Fairness is $170 billion in 12 of these special tax havens that the Conservatives seem to want to show a green light to. Then, as the member mentioned, when there is an opportunity to actually crack down on these tax havens and get these corporations to pay their fair share of taxes, the Conservatives say no. That is why they do not have much credibility on this issue.

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

Mr. Speaker, Bill S-17 deals with tax treaties, as we know, with a number of countries. It is an interesting collection: Namibia, Serbia, Poland, Hong Kong, Luxembourg and Switzerland.

However, relative to collecting on tax debt, I was prompted by the member's comments about cutting back on staff at CRA. I am wondering if he is familiar with the train of reports we have had since 2006 from the auditor general pointing out that the CRA seemed to have a very poor understanding of where the tax debt was and why it was rising. It was failing to use its risk assessment models properly. The auditor general, for years, has found that CRA staff tends to go after smaller debts, harassing what I think of as regular folks, and leaving aside the millionaires. The large, low-hanging fruit is with the millionaires. Does the hon. member have any comments on the pattern of CRA tax collection?

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

Mr. Speaker, that is really one of the major points I hoped to bring forward tonight. That is why the Conservatives have wanted to shut down debate. This is the 44th time now they have invoked closure. They always have another excuse. Tonight it was because people support the bill itself. I guess beyond that, what they are actually saying is they hope that no one brings forward their shoddy record on uncollected tax debt and allowing these tax havens. Of course, even though we are operating under closure, we have no hesitation in bringing forward the shoddy record of the Conservatives.

The reality is, as I pointed out and as was pointed out in the auditor general's report, the $10 million debts are the ones the Conservatives just seem to let go by, but they go after individual taxpayers to pay their fair share and catch up on monies they owe to Revenue Canada.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

Mr. Speaker, I would like to thank the hon. member for the enthusiasm that he puts to what is described as a pretty straightforward, not terribly exciting bill. He can turn any topic into a subject everyone wants to pay attention to.

Those watching the proceedings today would have to be a little appalled. What the government members of the day were celebrating earlier on, before we got into debating this bill, which is supposed to be all about collecting taxes, was tax freedom day. Therefore, I would like to ask the member how he feels about how seriously taxpayers in Canada are going to take the government on how serious it is about collecting taxes?

Conservatives like to stand up every day and if they do not say it once they say it a dozen times that they are going to lower everyone's taxes. One of the things that troubles me is the amount of money not paid in taxes. That is free use of our resources. The excuse always is we will keep the royalties low on resources because we get the revenue in taxes. Then we find out that not all those taxes are being paid. I wonder if the member could speak to that.

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

Mr. Speaker, the member for Edmonton—Strathcona is a very courageous voice in the House of Commons. She stands up for Albertan families and is the best member for Alberta bar none. There is no doubt about that. She is an amazing member of Parliament, one of the best in Canada, as well.

She makes a very important point that for many in the corporate sector, with tens of billions of dollars flowing offshore, tax freedom day is actually December 31st. They do not pay any taxes and the Conservatives are saying that is okay and if they owe a lot of money, they do not have to worry. The Conservatives will just let them get by. If they want to spend tens of billions of dollars in tax havens, they do not have to worry, because the Conservatives will let them get by. However, if a single mother in Burnaby—New Westminster gets behind on her taxes, not only will she have to pay her taxes, which would be fine for anybody across the country, she will have the Conservatives denigrating, attacking and disrespecting her.

They are the two-faced Conservatives. On the one hand, for ordinary families, the Conservatives going to make sure that they pay. On the other hand, if they are in the corporate sector and they want to send tens of billions of dollars offshore, the Conservatives say that is just fine and dandy. That is why they will be defeated in 2015. Canadians see that hypocrisy.

[Jasbir Sandhu, NDP, Surrey North, BC]

Mr. Speaker, the member for Burnaby—New Westminster is one of the strong voices from British Columbia.

I am multi-tasking here, and I was googling “tax evasion” in the news of the day. From what I see on the news here, the first headline is France Expands Inquiry of Tax Evasion at UBS. The second headline I see is about Italy going after tax evaders. I see that the U.S. is cracking down on virtual currency tax evasion. This was posted in the news within four or five hours. I see India doing it, France is again doing it. The headline I see from Canada here, and this is actually from the Ottawa Citizen this morning, says, “Canada slammed for lagging behind in fighting tax evasion as G8 summit looms”.

The G8 countries are partners. They are taking proactive steps to collect funds from these tax evaders. I do not see the Conservatives coming up with a concrete plan so that we can collect unpaid taxes.

Could the member comment on the trends that we are seeing across Europe and other parts of the world, and what the Conservatives are not doing?

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

Mr. Speaker, the member for Surrey North is one of the bright new members of Parliament here. He brings a wealth of business experience and his experience in public safety from the justice institute in New Westminster. He brings all of that before the House of Commons and does a terrific job as a member of Parliament, representing his constituents in Surrey North.

He is absolutely right about this embarrassment of a government that we have. We have the Prime Minister of the United Kingdom, a whole host of European leaders and the United States wanting to take action. Canada is the international laggard. They want to have a corporate tax registry and the Conservative government says no. Why? I do not know why.

I mentioned earlier all of the recommendations the NDP brought forward to the finance committee. We have international links and we know what other governments are doing, so we brought forward the same suggestions that are going to be discussed in the United Kingdom and the Conservatives said no. That is why the Conservative government has the reputation of being a laggard when it comes to tax havens and of being a laggard in uncollected tax debt. It simply does not have credibility internationally.

That is why we need an NDP government to re-establish our credibility internationally. That is what—

[The Acting Speaker, Conservative, Barry Devolin]

Order, please. Resuming debate, the hon. member for Don Valley East.

[Joe Daniel, Conservative, Don Valley East, ON]

Mr. Speaker, hopefully we can bring this discussion back to the bill that we are looking at.

I appreciate this opportunity to discuss 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.

Before I begin, I would like to take this opportunity to thank all the members of the banking, trade and commerce committee in the Senate for their thorough and timely review of this piece of legislation recently. I would also like to extend my thanks to the Minister of State for Finance for his appearance at the Senate committee as well as the other officials and witnesses for their attendance. Their insightful testimony on this subject, which can often be technical, was greatly appreciated.

I think I am speaking for all in saying that the information they provided was invaluable in helping Canadians obtain a clear understanding of how Canada's network of taxes, treaties and information exchange agreements functions. As Cyndee Cherniak of LexSage Professional Corporation, a leading international trade firm in Canada, told the Senate banking, trade and commerce committee earlier this year, and I quote:

Bill S-17 is a good law and should be supported....Tax treaties facilitate trade. Tax treaties are symbols of cooperation, trust and friendship between nations. Tax treaties prevent double taxation.... They improve stability, transparency, fairness, procedural fairness and tax certainty relating to international trade and transactions. Tax treaties are good for Canadian businesses with activities abroad through branches, subsidiaries and other business enterprises. Tax treaties are good for individuals, employers, directors of corporations, students, shareholders, et cetera.

I could not agree more. Tax treaties are a vital part of a government's overall approach to improve the tax system.

Currently, Canada has comprehensive tax treaties in place with 90 countries and continues to work on agreements with their jurisdictions. Bill S-17 is part of Canada's ongoing effort to update and modernize our network of income tax treaties, which helps prevent double taxation and tax evasion. In the past, Parliament adopted many similar tax treaties. In fact, beginning in 1976, governments, both Liberal and Conservative, brought forward 30 such pieces of legislation, and most recently, those concerning Colombia, Greece and Turkey. I should note that Canada maintains 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.

At the same time, the system must ensure that everyone pays their fair share of taxes. It is not appropriate that some corporations, both foreign-owned and Canadian, take advantage of Canada's tax rules to avoid taxes and that some wealthy individuals use offshore jurisdictions to help them hide income and evade taxes. In all of these cases, working Canadians and small businesses, among others, are left having to pay more taxes than they otherwise should. This is simply not fair.

To detect and deter the concealment of income, the Canada Revenue Agency needs information from foreign governments. To this end, Canada supports the international consensus to encourage jurisdictions to meet and implement the Organisation for Economic Co-operation and Development standards for international tax information exchange. That standard is implemented under the bilateral tax treaties and tax information exchange agreements, like those being discussed today.

Here at home, our Conservative government continues to work hard to keep our tax system up to date and competitive so that Canada can remain a leading player in the global economy. Action in support of a more competitive tax system is essential to create an environment that enables Canada's visionary entrepreneurs and industries to excel and that does not stand in the way of their success. Moreover, tax treaties are an integral element of our plan to improve the standard of living of all Canadians.

Tax treaties, like those in Bill S-17, directly affect cross-border trade in goods and services with our tax treaty partners, which in turn impacts Canada's domestic economic performance.

Over 40% of Canada's annual gross domestic product can be attributed to exports. Moreover, Canada's economic wealth each year also depends on foreign direct investment as well as the inflows of information, capital and technology.

In other words, the tax treaties contained in Bill S-17 would benefit Canadian businesses and individuals with operations and investments in countries covered by this legislation. Tax treaties foster an atmosphere of certainty and stability for investors and traders that can substantially enhance Canada's economic relationship with each country.

Another important facet of these treaties is that they include a mechanism to settle problems encountered by taxpayers, in particular where double taxation arises. Under this mechanism, taxpayers can bring to the attention of taxation authorities issues that arise from the interaction of our tax system with that of other treaty partners and seek a resolution on the issue.

In short, tax treaties provide individuals and businesses in Canada and other treaty partner countries with predictable and equitable tax results in their cross-border dealings. This can only have a favourable effect on the Canadian economy.

Likewise, the tax treaties in the bill have been designed with three goals in mind: first, to facilitate international trade and investment; second, to prevent double taxation and provide a level of certainty about the tax rules that apply to particular international transactions; and third, to prevent avoidance and evasion of taxes on various forms of income flows between the treaty partners.

Today's legislation is part of Canada's ongoing effort to update and modernize its network of income tax treaties, which will help prevent taxation and tax evasion.

Let me go on to the issue of double taxation for a moment. Double taxation in an international sense arises as a result of imposition of taxes in two or more states on the same taxable income for the same period of time. This overlap between taxation by the country where the income is generated and taxation by the country where the taxpayer resides can have obvious adverse and unfair consequences for the taxpayer. Nobody wants to have their income taxed twice, nor should it be, but without a tax treaty such as those contained in today's bill, this is exactly what could happen.

Tax treaties ensure that double taxation relief is provided where both countries claim taxes on the same income. Tax treaties also allocate tax rights between two countries as a means of protecting taxpayers against potential double taxation. In some cases, the exclusive right to tax particular income is granted to the country where the taxpayer resides. This precludes taxation in the state of source and, therefore, double taxation.

For example, if a Canadian resident employed by a Canadian company were sent on a short-term assignment for, say, three months to any one of the treaty countries covered by the bill, Canada would have the exclusive right to tax that person's employment income. On the other hand, if the same person were employed abroad for a longer period of time, say one year, then the country where the person works could also tax the employment income. However, in this case under the terms of the tax treaty, through the foreign tax credit mechanism, Canada must credit that tax paid in the other country against the Canadian tax otherwise payable on the income. This is an example of how the allocation of taxing rights between countries and between bilateral tax treaties would ensure that individuals and businesses are taxed fairly.

One way to reduce the potential of 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 earned in that country and paid to the residents of the other country. The types of income normally subjected to withholding taxes would include, for example, interest, dividends and royalties.

Withholding taxes are levied on the gross amount paid to the non-resident and represent the final obligation with respect to Canadian income tax. Without tax treaties, Canada usually taxes this income at the rate of 25%, which is a set rate under our own legislation for income tax.

Withholding tax rates in other countries are often as high or even higher. Tax treaties reduce rates for withholding taxes. For example, the treaties with Namibia, Serbia, Poland and Hong Kong in Bill S-17 would provide for a maximum withholding tax rate on dividends between affiliated companies at 5%. In respect to other dividends, those treaties would provide for a rate of withholding taxes set at 15%.

Reductions would also apply in respect of interest and royalties. Again, the treaties covered in this proposed legislation would promote certainty, stability and a better business climate for taxpayers and businesses in Canada and in the treaty countries.

Moreover, these treaties would help to secure Canada's position in an increasingly competitive world of international trade and investment. Clearly, having modern international tax conventions, such as these contained in Bill S-17, is a key component of that goal.

Canada remains committed to maintaining a tax system that will continue to help Canadian businesses in their drive to be world leaders. Tax treaties like those in Bill S-17 would directly support cross-border trade in goods and services, which in turn helps Canada's domestic economic performance.

Moreover, Canada's economic wealth each year also depends on foreign direct investment, as well as inflows of information, capital and technology. In fact, during the committee's examination of this legislation, well-respected tax professional Nick Pantaleo, of PricewaterhouseCoopers, remarked that:

...a key objective of the Canadian government is to pursue new and deeper international trade and investment relationships.... In my view, tax treaties contribute toward the success of such global trading arrangements.

This is not surprising given that more than 60% of the Canadian economy and 1 in 5 jobs in Canada are generated by trade. It would seem clear that the tax treaties contained in Bill S-17 are a critical tool in strengthening Canada's trade and investment relationships and in creating jobs for Canadians here at home. That is especially the case with the agreement with Hong Kong.

Our government considers Hong Kong a priority in Canada's global trade efforts. Hong Kong is our third largest financial market in Asia and an important source of direct investment. It is Canada's 10th largest export market, including everything from telecommunications devices to train signalling systems to educational and financial services.

An example of the importance of Hong Kong in our trade efforts is an agreement between Canada and Hong Kong for the avoidance of double taxation, which the Prime Minister announced when he was in Hong Kong last November.

Of course the region itself is a key market for us, which is why Canada is at the negotiating table for the trans-Pacific partnership, which would open up new markets and increase Canadian exports to fast-growing markets throughout the Asia-Pacific region.

Our government is also working hard to forge stronger links through such multilateral organizations such as the Asia-Pacific Economic Cooperation and the World Trade Organization to which Canada, China and Hong Kong all belong.

The Canada-Hong Kong tax treaty would truly foster an atmosphere of certainty and stability that would enhance Canada's economic relationship with Hong Kong.

As the Canadian Manufacturers and Exporters noted of the Hong Kong tax treaty included in Bill S-17:

Hong Kong holds tremendous potential for Canadian businesses looking to establish a strong presence in China and...across all of Asia, and this Agreement will help fulfill this potential....

(It) reduces barriers to two-way trade and investment between Canada and Hong Kong.

Listen to the words of the Investment Industry Association of Canada, again in reference to the Hong Kong tax treaty included in Bill S-17, who said it would expand:

....savings and capital flows between our two markets....

Moreover, the attraction of Canadian equities would benefit Canadian financial firms expanding their wealth management business in Hong Kong and, through Hong Kong, to a market of over one billion Chinese.

To conclude, the treaties covered in this proposed legislation would promote certainty, stability and a better business climate for taxpayers and businesses in Canada and in these treaty countries.

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

[Pierre Jacob, NDP, Brome—Missisquoi, QC]

Mr. Speaker, I thank my colleague for his speech.

How can the government explain the $29 billion in uncollected tax debt reported by the Auditor General?

In other words, how can the government reconcile this tax mismanagement on one hand with its inaction on tax evasion on the other, as 24% of foreign investments are lost to offshore tax havens?

[Joe Daniel, Conservative, Don Valley East, ON]

Mr. Speaker, clearly Bill S-17 is looking to improve on the situation we currently have and looks forward to dealing with the various tax situations between the countries to capture more of the taxes and return them to Canada.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, it would be more encouraging if the government would do more than just bring in legislation. Legislation is an important part of it. All of us recognize that. That is the reason the government is ultimately getting the support of all members of the House. We all recognize the importance of doing what we can, and legislation is a part of that.

However, the Conservatives have continuously refused to publish some sort of an official estimate of Canada's tax gap. How can we take the government seriously in terms of a strategy to deal with the tax evasion issue if it is not prepared to publish official information such as the tax gap, which would go a long way in not only identifying it and following through with it but dealing with such issues as increasing resources to Canada Revenue Agency, so we have the proper resources to go after those individuals who are evading our tax system?

[Joe Daniel, Conservative, Don Valley East, ON]

Mr. Speaker, just because it is not being published does not mean that we do not keep track of it or are looking at that.

What we would do with this bill is enhance what we can do with other countries and make sure we can maximize the transfer of business, which would generate more revenue for Canada.

[Bernard Trottier, Conservative, Etobicoke—Lakeshore, ON]

Mr. Speaker, I thank the member for Don Valley East for his eloquent speech in which he hit all of the key points.

We are here to talk about tax treaties, but obviously there are other areas that are affected. He discussed the importance of foreign direct investment in both directions in his speech: Canada and Canadian companies investing in companies overseas, which would like to have some tax treaties in place, as well as trade.

I would ask the member to talk about the impact of having tax treaties in place and how that facilitates increased foreign direct investment in both directions, and also increased trade in both directions.

[Joe Daniel, Conservative, Don Valley East, ON]

Mr. Speaker, when we make life easier and reduce the bureaucracy between countries, there is much better opportunity for trade. By having these agreements, we would protect both Canadian companies doing business with the treaty countries and the treaty countries being able to work closely with us.

Clearly, an exchange of the phenomenal resources we have in this country in terms of providing services to countries like Namibia and Hong Kong and access to the Asian markets is a great opportunity. We need to stay with it and compete globally. That is why this bill is so appropriate.

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

Mr. Speaker, this bill will be passed, but I would like to know what my colleague thinks of the fact that it is woefully short on content. Indeed, a closer look will show that instead of solving problems, it will create others.

Under this bill, 3,000 Canada Revenue Agency employees will be laid off as a result of $250 million in budget cuts, I believe. There will be fewer people available to investigate and make businesses pay their taxes as they should. As a result, more money will be diverted to tax havens. This file is a losing proposition for Canada.

Given that that billions of dollars, 57% more money, is going to tax havens, how can this be considered a serious bill that actually targets the root causes of tax evasion? On top of not providing additional resources to the Canada Revenue Agency, the government is cutting the resources the agency already has.

[Joe Daniel, Conservative, Don Valley East, ON]

Mr. Speaker, it would have been appropriate if the member had read the bill in detail, because one of the key aspects of it is the double taxation, which would actually increase our business with the countries we have these treaties with, thus helping us in that sense.

There are also opportunities to invest both ways and make sure that works well for us and increases our competitiveness on a global scale.

That is what is contained in Bill S-17.

[Alain Giguère, NDP, Marc-Aurèle-Fortin, QC]

Mr. Speaker, we are talking about a very interesting agreement with Hong Kong and with countries such as Switzerland. The problem is that the agreement with Switzerland, in particular, does not solve the problem of Swiss banks and their bank secrecy. Switzerland is now, and will continue to be, a tax haven.

Can my esteemed colleague explain how it is that this legislation will mean that people who pay their taxes will not be penalized, but it will not prevent those who do not want to pay their taxes from continuing to do so, thanks to Switzerland's bank secrecy?

[Joe Daniel, Conservative, Don Valley East, ON]

Mr. Speaker, the bill does not look at avoiding the issues with Switzerland specifically on taxes. It is designed to improve businesses and make our position as Canadians competitive globally. The bill would allow more business to take place, which in itself would generate a lot more taxes.

[Mike Sullivan, NDP, York South—Weston, ON]

Mr. Speaker, some of what we have been talking about tonight has been about trying to catch tax cheats and the $29 billion that sits outside of Canada's reach at the moment because it has effectively been hidden from our tax collectors.

However, at the same time that we are trying to find that money, we are cutting staff and funding from the Canada Revenue Agency, which means that there will be fewer people there to catch these cheats. Can we deal with that, effectively?

[Joe Daniel, Conservative, Don Valley East, ON]

Mr. Speaker, technology has moved on from some of the days when my esteemed colleague was around. We can obviously do a lot better with the technologies we have, and I am sure there will be a lot of detail worked into how we can use those technologies to actually catch tax cheats.

That aside, this legislation is focused mainly on improving our position globally and on making sure that Canada stays competitive in the global picture.

[Matthew Dubé, NDP, Chambly—Borduas, QC]

Mr. Speaker, I am honoured to share my time with my colleague from York South—Weston, who, based on what we just heard, is not up on the latest technology. However, I know that he is young at heart, so I am very happy to share my time with him.

In all seriousness, the bill before us today is very important. It is rare to see a bill that deals with such a topical issue. Just today there were a number of newspaper articles about tax evasion.

Before I talk about that, I want to clarify that the government seems to have a habit of mismanaging things. It talks about this bill as though it offered a tangible solution to the issue of tax evasion. In reality, although we support the bill, it simply contains routine measures to update different agreements with other countries.

It is important to update these agreements, maintain good relations with these countries and move forward with the process. However, at the end of the day, these routine measures, although important, are no substitute for resources, the staff and money allocated, in this case, to the Canada Revenue Agency, whose mandate includes trying to resolve this issue.

There are two things I want to talk about that have been in the news. The first is that the Canada Revenue Agency did not want to pay for a list of people who are evading taxes.

That is interesting, because on my way back to Ottawa, I listened to an interview with my party leader on 98.5. The NDP leader explained what he found so shameful about the whole process. Unlike countries such as the United States, which seized the opportunity to obtain the information, punish people and collect the money, the CRA did nothing.

These people are very wealthy. They have lots of money. They are millionaires. They have millions and billions of dollars that they can hide elsewhere.

The NDP leader focused on those two points, and I think he was right to do so. This issue is a big deal not only to people in my riding but also to all Quebeckers. We are debating this issue at the federal level here in Ottawa, but Quebec's National Assembly is debating this too. MNAs are talking about how they can put the brakes on tax evasion and collect that money.

The fact that all politicians are starting to work on this is a signal that people are saying enough is enough. They really want to see action on this issue.

Unfortunately, as I said at the beginning of my speech, that is not what we are seeing today. This is just a routine procedure to update various agreements.

The other relevant point is the one I find more interesting as I listen to my Conservative colleagues this evening. They have a different perspective on the issue. They talk about the potential benefits for free trade. The NDP understands the importance of that.

During the debate on the free trade agreement with Panama, for example, tax evasion was one of the main issues. People talked about how there was not a good system in place for exchanging financial information and how that might lead to even more tax evasion. People raised those concerns.

Government members are right when they say that fighting tax evasion and having a good information exchange system contributes to a relationship of trust that facilitates trade between countries. That is a fact. However, we have to look at other issues too, such as what is really going on right now.

The government talks about wanting to create an environment that fosters good relations with other countries, about eliminating tax evasion and facilitating free trade.

This morning a newspaper article talked about the G8 summit. There will be discussions about this, including with the Prime Minister of Great Britain. The countries that truly want to work together on fighting tax evasion will be involved in the discussions. After all, this is a matter that requires a great deal of collaboration because it is not limited to one country. We are talking about a number of countries. This collaboration is important.

This evening, we have heard Conservative members talk about the apparent willingness to create conditions that are conducive to eliminating tax evasion. Despite that, the article says that Canada will not be participating in these talks. It seems to be very reluctant, even absent, and it just does not want to work with the other countries on measures that might be put in place. We find that extremely disappointing. This goes against the message that the NDP wants to convey this evening.

If we really want to fight tax evasion and there are agreements or multilateral discussions with a view to implementing multilateral agreements, then we have a duty on an international level to take part in those discussions. This is a very significant way for us to be able to recover this money and establish good faith relationships that will also allow other countries to do the same thing. Accordingly, we hope to create an international environment that will be much more honest about tax evasion. This is a growing trend. Many of the cases we are dealing with these days require international negotiations and good faith relationships. The government is increasingly withdrawing from these processes. This trend is starting to take hold.

The Conservatives may well introduce yet another bill that is very routine. I cannot stress this word enough. We support this bill, although they are using it as an excuse to wax poetic about all their achievements on the international stage. However, the facts do not lie. This is what was in the news this morning. Among other things, the government is completely absent from the conversations taking place among countries with which Canada supposedly has good relations. These are countries like Great Britain, countries that are our allies and could easily help us create conditions that would lead to a solution.

To conclude, I would like to say that we support this bill and I am very pleased to have the opportunity to speak on this issue. Indeed, as I indicated, this issue is of great concern to my constituents. This evening I was able to answer some of the letters they have written me in recent months. The most common issues they raised related to equity between the middle class—the workers, the 98%, to use the popular term—and the very affluent people, those who have a lot of money and obviously benefit from tax evasion. This is a reminder that recovering this money can help people who work hard pay their taxes and benefit from the systems we put in place, the various democratic, social and other institutions established to help them. We recognize how important this is.

The first question has to do with fiscal fairness, but the other question the people of Chambly—Borduas often ask me has to do with Canada's actions on the international stage. That is why I focused so much on what we are seeing here this evening and in general. The government likes to talk about the grand gestures it is making internationally to fight the various negative situations, such as tax evasion, but unfortunately, it just cannot walk the talk. The people of my riding and from across Canada, I am sure, would like to see a lot more good faith on the part of the government, relationships that are much more multilateral and much more positive and constructive on the international scene. That would be good for everyone. This would largely solve the tax evasion problem and many other problems, I am sure.

I look forward to questions and comments from my colleagues.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, it is fair to say that Canadians want to see tangible results. It was not that long ago when former prime minister Paul Martin brought forward in a budget a commitment of $150 million to deal with tax evasion. That $150 million ultimately led to an impact of somewhere in the neighbourhood of $2.5 billion, which is a great deal of money.

The member makes reference to the legislation and, yes, we all support it. However, could he contrast the investment in providing financial resources to draw out more of that money that is being taken away from the tax base and what the government is doing in cutting back on resources to Canada Revenue Agency today?

[Matthew Dubé, NDP, Chambly—Borduas, QC]

Mr. Speaker, although this is rare, I must admit that I agree with my Liberal Party colleague on the issue of resources.

However, I would not dare to comment on any potential impact, because we have not had a chance to see any concrete results. It is still a problem. I do not know what this means for the long term. However, one thing is certain: the point he raises regarding the lack of resources is the other problem.

He talked about the fact that all parties support the bill. As I have already said and I will say again and again, the bill does not represent a real gesture or a new gesture on this issue. The government must continue making updates.

The Conservatives need to stop trying to convince us that the bill is a new measure that will suddenly produce the financial and human resources needed to fight tax evasion, because that is completely false.

[Pierre Jacob, NDP, Brome—Missisquoi, QC]

Mr. Speaker, I would like to thank the member for Chambly—Borduas for his energetic and fiery speech.

I would like to ask him a question. In addition to the social justice it would create, why is it important that everyone pay their fair share and why is it important that the money not be invested in far-off tax havens? I would like the member to explain how that works, whether in relation to the social safety net or infrastructure.

[Matthew Dubé, NDP, Chambly—Borduas, QC]

Mr. Speaker, I would like to thank the member for his question. I am happy to know that he thinks I am energetic, even at this hour. That is a good sign.

His question is very relevant, and I will repeat the response given by the leader of the official opposition, the NDP, this morning on the radio during the interview that I mentioned during my speech. He spoke about people who make millions of dollars, billions even, in Canada and who put that money in tax havens. What is interesting is that in the majority of cases, these people have made their money and earned a living by benefiting from existing systems in society. Those systems are there to serve them, thanks to the government and taxpayers.

When someone lives in a society, a community or a country and makes money or earns a living because of those systems, that person has a responsibility to invest in that same society, in that same community. However, the exact opposite happens with tax evasion. It is extremely alarming, and it poses a problem. I would go so far as to say that it shows a certain amount of contempt for the public.

[Mike Sullivan, NDP, York South—Weston, ON]

Mr. Speaker, one of the things our friends in the third party suggested was that there had been some money spent on collecting from tax cheats. However, the Auditor General in fact said that at the end of 10 years of Conservative rule until 1994 and then again at the end of 13 years of Liberal rule in 2006, the amount of money being escaped from taxes was actually growing and growing significantly.

Could he comment on this?

[Matthew Dubé, NDP, Chambly—Borduas, QC]

Mr. Speaker, that is precisely the problem. The situation gets worse every year. It is a downward spiral. There is no light at the end of the tunnel. Every year, the government seems to make more and more cuts and does nothing concrete.

I will now come back to what I was saying in my speech. Not only is the government not making the necessary investment and giving CRA the resources it needs to fight tax evasion, but it passes up the opportunity to take part in multilateral discussions at the international level. This has been going on for years. Everyone seems to have the answer, but no one seems to know the results.

[Mike Sullivan, NDP, York South—Weston, ON]

Mr. Speaker, we are dealing again with another closure motion. The most important thing we could ever face in the government right now is that we sign six fairly routine international tax treaties with six different countries.

Canada's international reputation with treaties is not good. Canada's international reputation with treaties is that we sign them and then we break them, or we sign them and we do not keep them up, or we sign them and ignore them. An example is the tax treaty we have now with the United States. If people are American citizens or people that the United States deems to be American citizens, because even people who are born here are deemed by the United States to be American citizens, if they come to Canada after the age of 14 and have children in Canada, those children are now American citizens.

A woman in Calgary wrote to me because she was experiencing some serious financial pressures as a result of the lack of updating of the tax treaty with the United States.

She had a disabled son who the U.S. determined was a U.S. citizen because she came from the United States when she was 15. That U.S. citizen son had taken advantage in Canada of the disability tax credit. She had taken advantage of it and he had taken advantage of it. As a result, they had some tax savings in Canada.

However, when they filed their U.S. taxes, they discovered that the U.S. government did not recognize Canada's disability tax credit and did not recognize the disability caregiver tax credit. As a result, any savings that they had were lost. Plus, they had to pay accountants $2,000 each time to file these taxes with the U.S.

Canada has not taken any action on that. We are by far the furthest behind when it comes to these treaties with the U.S., our biggest trading partner. By far, the greatest number of Canadians who are of American descent and who are accidental Americans, as it turns out, are affected by that. Yet here we are under closure dealing with these treaties which are routine. They are not, as the government has suggested, going to provide wealths of money to the Canadian government.

Therefore, this is part of a series, I think, of treaties that the Canadian government has signed that are not necessarily being kept up by the government.

I wonder whether these treaties actually go far enough and whether they will be kept up by the Canadian government, whether we will go after people who are trying to cheat on taxes in any systematic or realistic way.

We also have the examples of the Kyoto accord, which was an international treaty that was signed and then abandoned.

We have the UN Convention on the Rights of Persons with Disabilities, which was signed in 2010 and the government promised the UN that it would provide a report card in March 2012. We are still waiting and the UN is still waiting. This is another example of an treaty that was signed internationally and that was abandoned.

It is bad for Canada's reputation, a country that wants to sign tax treaties with other nations, that wants to be a progressive part of the tax system in the world, not just for tax purposes but for all kinds of purposes, for trade purposes, for environmental purposes, to have the ability to convince the United States to run a pipeline down through the U.S.

That is just a smattering of the examples of ways that Canada's reputation, internationally, has been suffering under the Conservative government.

Switzerland is one of the countries that is part of this bill. Right now, Geneva is hosting the United Nations Human Rights Council as we speak, which is looking into the issue of violence against women. We understand that Canada is reported to be disregarding recommendations on taking action against sexual violence against women and to be opposing sexuality education programs

Those reported actions are part of a trend of the government that I have noticed, which is leaving women out of economic action plan ads, leaving women out of suggesting that women's training should be equal to men, that women should be only trained as hairdressers and nail salon people. That is another example of the kind of attitude the government brings to these kinds of things. Women pay taxes, too. Women deserve the same kind of rights as men. Women should not be left out of the equation.

The government suggested that today was Tax Freedom Day, whatever the heck that means. I went on the Fraser Institute website to see what Tax Freedom Day means and, in fact, in 2009 Tax Freedom Day was last Friday. Therefore, we are going backward. We are paying more tax now under the current government. How did that happen? It was earlier in the year in 2009. Is it a mistake maybe? It is all lies, damned lies and statistics when it comes to facts and figures.

The government has also suggested that Canadians, on average, are paying $3,200 less in tax. Again, the Fraser Institute says that the average Canadian is paying $3,100 more in tax now than in 2006. Where does the Conservative government get these unabashed statistics about taxes? It is part of the government's responsibility to deal with these tax treaties with other countries and this is a fairly routine thing that we support, although we do not want the government to try to take credit for this bill doing more than it would actually do. This bill would not find a way to solve a tax cheat problem.

If $29 billion of money is waiting to be collected by the government, why is it not collecting it? More than signing this treaty, why is it not doing something about finding that money and putting it back in the coffers of the government? Can anyone imagine what the tax savings would be for ordinary Canadians if the government could find that $29 billion? Can anyone imagine the amount of good that could come from it? We could almost afford the Senate—no, we could not.

[An hon. member]

Not that much.

[Mike Sullivan, NDP, York South—Weston, ON]

Not that much, no.

Under the Conservative government, the uber-rich in Canada actually pay less as a percentage of the overall tax pie than they did in 2006. The people in the 1% are getting hit less and less and the rest of us, the 99%, the ordinary Canadians, the ordinary working people of our country, are paying more.

[An hon. member]

That's unfair.

[Mike Sullivan, NDP, York South—Weston, ON]

That is completely unfair. This legislation does not actually deal with that, but it does deal with the notion of taxes, taxes that should be fair and should be treated fairly. People should not be doubled taxed. Yet the woman and her son in Calgary are being double taxed because they will pay tax in the U.S. that they did not have to pay in Canada, which is not fair.

There is also spectre of the government now deciding that it is going to use technology, as the member for Don Valley East suggested, to go after the tax cheats. I had a phone call from a constituent just last week when he heard about the great tax cheats out there who made the mistake, he thinks, of writing to the Prime Minister because shortly after that he was audited. This is a senior on a fixed income.

That audit determined he owed $80 from three years ago. He got a letter from Revenue Canada saying that if he did not pay that $80, he could go to jail for five years. If he agreed with the CRA, he could pay the $80, he would be fined and maybe not have to go to jail, but if he disagreed, he certainly would go to jail. That is what he thought was going to happen. He ended up paying the $80 and a $150 fine. Why are we going after this little fish in this big fish pond? There are so many more people who are evading taxes by so much more than that. By spending the resources to go after a poor senior who apparently did not pay $80 three years ago is doing ourselves a disservice.

[Phil McColeman, Conservative, Brant, ON]

Mr. Speaker, listening to the member's speech and knowing the party he represents is quite interesting. He talks about the notion of tax cheats, people who do not pay their taxes. The NDP knows that full well because there are members of its caucus, one being the critic for this very file, who have not paid their taxes. When he puts those people in that category, he is putting his own colleagues in that category. They are members of the House of Commons who have not fessed up and the Leader of the Opposition has not taken any action at all to ask those people to pay their taxes back and remove themselves from the party while they do that. We have heard nothing.

What is the member's opinion of that cheat situation?

[Mike Sullivan, NDP, York South—Weston, ON]

Mr. Speaker, it is one thing to park money offshore and avoid taxes, but it is quite another situation for individuals such as those the member referred to, who are in fact paying their taxes.

There was a dispute, and they are paying the taxes. There is no question that the money is getting paid.

Ordinary working Canadians are paying taxes. These people are paying taxes, as any ordinary working Canadian could and should. The issue is not that; it is that the $29 billion that is not being paid to our treasury would go a long way toward alleviating some of the difficulties the government is in after losing track of $3.1 billion.

[Jim Karygiannis, Liberal, Scarborough—Agincourt, ON]

Mr. Speaker, I wonder if my colleague would share his views on the taxes that should have been paid by former Conservative prime minister Brian Mulroney when he took the $300,000 and put it in the safe.

I wonder if he would also like to comment on whether Senator Mike Duffy should also be paying taxes on the $90,000 present that he got from the Prime Minister's Office.

[Mike Sullivan, NDP, York South—Weston, ON]

Mr. Speaker, there are always good questions from that corner.

When a former prime minister admits to pocketing $300,000 in cash and not paying taxes on it until many years later, it calls into question some of what our tax system is all about.

The people being complained about are apparently not avoiding taxes, because eventually they paid it. The same is true of Mr. Duffy. If Mr. Duffy has received money in the form of a gift that he has not reported to the tax department, there are serious consequences.

[Niki Ashton, NDP, Churchill, MB]

Mr. Speaker, my colleague referred in his speech to the government's general doublespeak on issues, including tax fairness, and I would like to read into the record something that connects to the points he raised. It was said by Dennis Howlett, from the Canadians for Tax Fairness organization:

...the capacity of the CRA to go after tax cheats using tax havens needs to be increased significantly. While tax havens will require a concerted international effort, there is much more that Canada could be doing itself. The CRA internal audit document revealed that tax practitioners believe the CRA is not doing enough to catch or prosecute tax evaders.

Here we have a government that claims to be tough on tax fairness, when in fact we are hearing about significant cuts to the CRA and an inability to deal with the real issue of tax evasion and taxes being directed toward tax havens.

Could my colleague speak to that?

[Mike Sullivan, NDP, York South—Weston, ON]

Mr. Speaker, cutting CRA at a time when the Auditor General says there is $29 billion out there that needs to be collected is a very strange move indeed.

If a government finds that there is money to be collected, it should increase the size of the tax-collecting agency and actually go after the very people who are hiding this tax.

The money in offshore bank accounts is not the money of ordinary working Canadians. It is not from the person running a mom-and-pop store on the corner of a street in Winnipeg or from people who are working for a living by putting in plumbing; it is from those with the ability and the wherewithal to hide money offshore.

Those are people much richer than you or I. Those are the people who are able to hide money, and we are allowing it to happen. The government ought to be spending a whole lot more money on the CRA to make sure those kinds of things stop happening.

[Ed Komarnicki, Conservative, Souris—Moose Mountain, SK]

Mr. Speaker, it gives me pleasure to rise today in the House to speak to Bill S-17 the tax conventions implementation act, 2013, at second reading. This is technical legislation that would implement Canada's recently concluded tax treaties with Namibia, Serbia, Poland and Hong Kong, as well as tax agreements with Luxembourg and Switzerland.

The conversation has gone far and wide and far beyond the extent of the treaties and what we are discussing today with respect to the legislation itself.

Bill S-17 is part of Canada's ongoing efforts to update and modernize its network of income tax treaties with other countries, which is one of the most extensive of any country in the world.

Canada has comprehensive tax treaties in place with 90 countries, and our government is hard at work on agreements with other jurisdictions in connection with tax evasion, if we want to call it that. The double taxation that we spoke of relates to occurrences between countries and to movements of income, capital and properties between countries.

I want to make it clear that Bill S-17 does not represent any new or significant change in policy and should be considered standard and routine, but very important, legislation. In fact, tax treaties covered by this bill, like their predecessors, are patterned on the OECD model tax convention, which is accepted by most countries around the world. The pattern has been set, and these treaties are negotiated along that line.

As respected international tax commentator Jeffrey Owens, current senior policy adviser at Ernst & Young and former director for tax policy at the OECD, has noted, “Quite simply, the OECD model has established itself as the means of settling the most common problems that arise in the field of international taxation”.

Once again I would remind members we are talking about international taxation and not taxation within the country and the residents of that country itself. Therefore, it goes without saying that the provisions in these particular treaties comply with international norms and are based on standards that are generally acceptable.

The tax treaties in this bill have been designed with three goals in mind.

The first is to prevent double taxation and provide a level of certainty about tax rules that will apply to particular international transactions. That is important. Every business wants to know what the rules are. Businesses want to have a measure of certainty and know what to expect, and of course we want to do away with double taxation to ensure that appropriate investments take place.

The second goal is to prevent avoidance and evasion of taxes in various forms of income flows between the treaty partners. If the income flow is simply done to avoid tax, it needs to be dealt with.

The third goal is to facilitate international trade and investment, both incoming and outgoing.

These goals are consistent with the findings of the 2008 report of the advisory panel on Canada's system of international taxation, convened by our government to make recommendations to enhance Canada's international tax advantage. Not only is Bill S-17 consistent with the findings of that report, but the panel's observations helped clarify the importance of today's legislation for the Canadian economy. This allows for investment to take place, it allows for jobs to be created, and it allows for the long-term prosperity of Canada.

According to the report:

Canada's system of international taxation is important to our country's competitiveness. At the global level, competitiveness is crucial to attracting high-value activities, spurring innovation, and creating skilled jobs. ... Improving the international tax system will enhance Canada's advantage to the benefit of all Canadians.

I will speak further about this legislation's specific objectives, but first I would like to highlight how the tax treaties help contribute to a competitive tax system in Canada.

As members will know, our government is committed to expanding Canada's network of tax agreements with other countries. Better transparency and information exchange for tax purposes are critical to ensuring that Canadian taxpayers report their income earned from all sources and pay the right amount of tax in Canada.

We are serious about combatting tax evasion through the negotiation of tax treaties and tax information exchange agreements, sometimes known as TIEAs.

Since 2007, our government has brought into force 16 such agreements, signed three others and is actively negotiating with 11 other jurisdictions, including negotiations launched last year with Panama. Not only that, but we have provided the Canada Revenue Agency with even more tools to conduct international tax audits and enforcement.

As a direct result of action taken by our government, Canada continues to contribute actively to the efforts of both the OECD global forum on transparency and exchange of information and the G20, in order to further support the effective implementation of the OECD standard by all jurisdictions.

Our government understands the importance of open markets and full participation in the global economy and has shown continued leadership on the world stage by opposing protectionism and trade-restrictive measures. Canada believes open markets create jobs and economic growth for people around the world.

Indeed, the advisory panel identified the importance of trade as a key driver in improving Canada's system of international taxation. As the report noted:

Cross-border business investment has become central to the world economy. Global two-way trade is important to Canada’s prosperity, as it is to that of other countries. New competitors are emerging, notably from developing economies. ... Canadian businesses need to be able to compete with them for investment on both the outbound and inbound fronts.

To support Canadian business investment abroad, attract foreign business investment at home, and strengthen our open economy, tax policy must keep pace with global trends.

Our government strongly supports cross-border trade and investment, but we must ensure that cross-border investment is not used to avoid taxes with complicated tax schemes. In this spirit, the advisory panel identified a type of cross-border transaction, generally referred to as “foreign affiliate dumping”, as being abusive. These kinds of transactions reduce the Canadian tax base without providing any significant economic benefit to Canadians and need to be dealt with by legislation.

The panel recommended that a targeted measure be introduced to curtail these transactions while ensuring that legitimate transactions are not affected.

Foreign affiliate dumping transactions often involve a Canadian subsidiary using borrowed funds to acquire shares of a foreign affiliate from its foreign parent company.

Consistent with the advisory panel's recommendation, economic action plan 2012 announced rules to curtail foreign affiliate dumping transactions while at the same time preserving the ability of Canadian subsidiaries of foreign parents to undertake legitimate expansions of the Canadian-based businesses.

What we are trying to do is set the rules to ensure that people pay the tax they ought to pay and are not double-taxed, but also that they are not using means or mechanisms to create expenses or obviate income so that they do not have to pay taxes.

The new foreign affiliate dumping rules, where certain conditions are met, deal with deemed dividends to be paid by a Canadian subsidiary to its foreign parent to the extent of any debt funding incurred by the Canadian subsidiary, or other non-share consideration given by the Canadian subsidiary, for the acquisition of the shares of a foreign affiliate. Any dividend that is deemed a dividend in that fashion would be subject to non-resident withholding tax, which would generally be reduced to 5% of the gross amount of a dividend by an applicable tax treaty.

Going forward, our government will continue to monitor developments in this area to determine whether further action is required.

Now I will return to the measures contained in the legislation before us today and speak further to the importance of tax treaties, a vital part of the government's overall approach to improving the tax system. Indeed, they are an integral element of our economic action plan to bring jobs, growth and long-term prosperity to all Canadians.

Tax treaties like those in Bill S-17 directly affect cross-border trade in goods and services with our tax treaty partners, which in turn impacts Canada's domestic economy. In fact, over 40% of Canada's annual GDP can be attributed to exports. Moreover, Canada's economic wealth each year also depends on foreign direct investment as well as inflows of information, capital and technology.

In other words, the tax treaties contained in Bill S-17 would benefit Canadian businesses and individuals with operations and investment in the countries covered by this legislation, not only for their investments abroad but also for those investments that come into our country and bring all of what I mentioned with them.

Not only that, but tax treaties foster an atmosphere of certainty and stability for investors and traders that can only serve to enhance Canada's economic relationship with each country.

Another important aspect of these treaties is that they include a mechanism to settle problems encountered by taxpayers, in particular when double taxation arises. It is very important that if there is a dispute, there is a way to settle it, and there is provision in these agreements as to how that might happen, not only with respect to the taxpayer but also with the two countries involved as well. Under this mechanism, taxpayers can bring to the attention of taxing authorities issues that arise from the interaction of our tax system with that of the other treaty partner and seek a resolution to the issue.

Eliminating administrative difficulties and unnecessary tax impediments is an important priority for the Government of Canada and an important component of international tax treaties. In short, these treaties will provide individuals and businesses in Canada and other treaty partner countries with predictable and equitable tax results in their cross-border dealings, which can bring only positive outcomes for the Canadian economy.

As is common for tax treaties legislation, Bill S-17 would address double taxation issues, which occur internationally when two or more countries impose taxes on the same income for the exact same time period. Obviously that can happen, given the tax regimes of each country, and when it does, it needs to be dealt with. This would obviously be extremely unfair. Double taxation is not something that anyone would like and no parliamentarian would endorse, except, perhaps, the NDP, which is interested in spending and taxing on just about everything, not to mention the $26-billion carbon tax.

Addressing this issue, it is an non-partisan one. It is very common for tax treaty legislation. I want to underline that by reading verbatim from a speech given by the current member for Scarborough—Guildwood, who was the parliamentary secretary to the minister of finance under the former Liberal government in 2004. I will quote at some length, because I think he establishes the premises of why these treaties are as important as they are. He said:

The first, and probably the most important, objective of tax treaties is to avoid double taxation and provide a level of certainty about the tax rules that apply to international transactions.

Again, I want to re-emphasize that we are talking about international transactions. The member continued:

Relief from double taxation is so very necessary and deserves to be discussed in some detail. The potential arises when a taxpayer lives in one country and earns income in another. Without a tax treaty, both countries could claim tax on the income without providing the taxpayer with any measures of relief for the tax paid in the other country. This is simply unfair.

To alleviate the potential for this happening, a tax treaty between the two countries allocates taxing authority with respect to a given item of income in one of three ways: first, the income may be taxed exclusively in the country in which it arises; second, it may be taxed in the country in which the taxpayer resides; or, it may be taxable in both the source country and the residence country, with relief from double taxation provided in some form, usually the country of residence.

The member was saying that there are a lot of factors at play and we want to establish that these are the rules of the game. If a person earns income, he or she will be taxed only once, in one place, by one country and if that does not happen, here is the mechanism that can correct that.

I also want to speak about withholding taxes, because a lot of this deals not only with earning income, but with dividends, the disposition of shares, the disposition of capital property and so on. Another way to ensure that double taxation does not exist is to lower or reduce something called "withholding taxes". This is another common feature of tax treaty legislation. Obviously, it can be burdensome, with a lot of red tape and hassle, not to mention tying up huge sums of money by virtue of withholding.

These taxes are levied in one country on a certain income earned in that country and are paid to residents in another country. Again, I am quoting from the member for Scarborough—Guildwood from when he was the parliamentary secretary to the minister of finance under the formal Liberal government, who said:

Withholding taxes are a common feature of the international taxation system. In Canada's case, they are levied on certain payments that Canadian residents make to non-residents. These payments include interest, dividends and royalties, for example. Withholding taxes are often levied by a country on the gross amount of certain types of income paid to non-residents and such taxes normally represent the non-resident's final obligation with respect to income tax payable in that country with respect to that particular income.

There are obligations in the other country, there is withholding tax here, usually equally to what might be paid over there, when there are fairly large amounts of money being held. Tax treaties are important because they reduce the rates of withholding taxes and help to avoid double taxation.

Specifically with regard to Bill S-17, the treaties with Namibia, Serbia, Poland and Hong Kong provide for a maximum withholding tax on dividends between the affiliated companies at 5%. In respect to all other dividends, the treaties in Bill S-17 provide for a rate of withholding tax set at 15%. I should note that reductions also apply in respect of interest and royalties.

Our government is working with other countries to address the problem of double taxation. Another problem it is working on is to address tax evasion and avoidance, both tremendously unfair and steps that are harmful to our economy. The loss of revenue resulting from tax avoidance and evasion has the potential to adversely affect the efforts of governments in reaching important policy objectives.

Of course there will be certain sharing of information between the countries with respect to tax evasion, and that will help. Not only that, but tax evasion obviously places a disproportionate share of tax burden on honest taxpayers as has been mentioned in the House here earlier today. The government recognizes that one key component of the defence against international tax avoidance and evasion is through improved and expanded mechanisms for international co-operation and information sharing.

To facilitate that goal, treaties like those found in Bill S-17 permit the exchange of tax information between revenue authorities in accordance with standards developed by the OECD, and in doing so help them to identify cases of tax avoidance and evasion, and to act on them.

In conclusion, I would like to remind all members that Bill S-17 is not controversial, nor does it contain any surprises or contentious issues. There is little doubt that its benefits are clear. The treaties covered in this proposed legislation will promote certainty, stability and a better business climate for taxpayers and businesses in Canada and in these 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. They will help ensure our goal of tax fairness for Canadians.

They provide the rules of the road for foreign investment, for foreign movement of capital and income. This is something that investors and business would expect Parliament to deal with. It is important that Parliament deals with it at this stage, because the take-effect date is someplace down the road. We would like to see this particular legislation passed into law before the summer break.

I would ask all members to support this legislation.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, the idea behind the legislation is positive. I have made comment on that. It has the support of the Liberal Party.

However, one of the things that we need to acknowledge right up front is that times are changing rapidly. There is so much more that the government could and should be doing to combat tax evasion. One of the things is to look at more of a multilateral approach based on information and the sharing of information. This would go a long way in dealing with the issue, more so than bilateral agreements that have been more of the norm but which I believe are nowhere near as effective.

My question to the member is, what does he feel the government should be doing in regard to the whole multilateral approach, and the issue of providing financial resources so that CRA has the ability to actually enforce this legislation?

[Ed Komarnicki, Conservative, Souris—Moose Mountain, SK]

Mr. Speaker, there is always the opportunity to do more. Obviously we need more legislation. However, it is important to pass the legislation that is before us that specifically deals with the countries outlined in it. As I mentioned before, these tax agreements have been signed with over 90 countries. The OECD has set sort of a pattern of what these tax treaties should look like, and the kind of rules of the road that should be incorporated and that most countries have started to adopt.

Obviously there will be an increase in the number of treaties that are being signed, and I think we need to continue pursuing them and pursuing them actively. More could always be done, but for now this is the treaty that is before the House. It has been negotiated. It is a positive thing that business would like to see passed. It is important that this particular government does that.

Additionally, and contrary to what has been said here, there have been significant investments targeted with respect to the enforcement provisions and the seeking out provisions that CRA may have with respect to international investments.

[Mike Sullivan, NDP, York South—Weston, ON]

Mr. Speaker, my colleague did not deal with the issue of the failure of some of the existing tax treaties to deal with the changes in Canadian tax law. For example, the tax-free savings account is not part of what is reciprocated in the U.S. so people who have to pay U.S. taxes have to pay on any money that they invest in a tax-free savings account in Canada.

However, of more concern to me as the deputy critic for persons with disabilities is the disability tax credit, which is not available to those people who file taxes in both Canada and the U.S., who live in Canada, whose children live in Canada but who, by reasons of the U.S. government, are deemed to be U.S. citizens. As a result, those individuals are paying tax twice. I would think that the Conservative government would be working hard to try to resolve the issue of double taxation with our biggest trading partner, the United States.

I would ask the hon. member what the government intends to do about that.

[Ed Komarnicki, Conservative, Souris—Moose Mountain, SK]

Mr. Speaker, I would remind the member that this tax treaty deals with Namibia, Serbia, Poland, Hong Kong, Luxembourg and Switzerland. That is the legislation we are discussing. That is the legislation that needs to be passed. The member should look at it and read the bill as it applies to all these countries to see if there is are improvements, changes or amendments to make. If he supports it, he should support it.

With respect to the United States, it is nowhere in this document. It has nothing to do with this bill. I agree that there are probably a lot of issues that need to be dealt with between the two countries that I am sure are being looked at by the various levels and will be dealt with. However, that is not what we are talking about today, which is this particular legislation and ensuring that the rules of the road are understood by the parties of both countries.

I might also add that the OECD has set out what it thinks it should be. Basically, this ties into that. There should be more of these happening, notwithstanding there are other issues that need to be addressed as well.

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

Mr. Speaker, my question for the member for Souris—Moose Mountain is this.

I am well aware that we are here tonight to debate Bill S-17 and that it deals with tax treaties. I have not heard a single member of this place suggest that they do not want to vote for it. I find it strange that on a treaty and a bill of no consequence, which everyone supports, we have time for debate and we have committee hearings, but on something that threatens the sovereignty of Canada, such as the Canada-China investment treaty, we have neither had hearings nor adequate time for debate.

Would my hon. friend from Souris—Moose Mountain like to join me in urging that we still have time for debate before that treaty is ratified?

[Ed Komarnicki, Conservative, Souris—Moose Mountain, SK]

Mr. Speaker, I might remind the member that soon we will be off on summer break so time will be short.

To say that this treaty is of no consequence surely must mean the member has not read the legislation or has not listened to business, because business is quite clear. It wants this agreement. It wants to know what the rules of investment are. Billions of dollars are transferred that create jobs and long-term prosperity in both countries. Therefore, it is important that we deal with the legislation here today and that members are given the opportunity to debate this.

If we had said that members do not have the opportunity to debate this particular tax treaty, I cannot imagine what the member might have said. Perhaps, “We must have the time to debate it.” We have provided the time to debate it and the member talks about something else.

I know there are a lot of other issues and a lot of other pieces of legislation. However, today we are dealing with this legislation. If the member wants to debate she should debate this legislation, not something else.

So far what I have heard from the opposition is a debate on all kinds of other issues that may be of some significance but nothing to do with the tax treaties. If you want time to debate, when time to debate is given, debate the issues before you and not something else.

[The Acting Speaker, Conservative, Bruce Stanton]

I would just remind hon. members to direct their commentary to the Chair and not directly to hon. members.

Questions and comments, the hon. member for Scarborough—Agincourt.

[Jim Karygiannis, Liberal, Scarborough—Agincourt, ON]

Mr. Speaker, it is indeed important that the member said that we should be debating issues that are important and this issue is certainly not less important than others.

Can the member can stand on his feet and say how many bills that are very important to this country the government has brought closure to and has tried to asphyxiate the rest of this chamber from talking about?

[Ed Komarnicki, Conservative, Souris—Moose Mountain, SK]

Mr. Speaker, I do not know where the question is coming from with respect to this legislation. However, there is an opportunity for the member to debate this legislation, and it is important because it deals with the rules of the road for investment.

Notwithstanding what the member and other members have said, there has been specific funding allocated to ensure that appropriate investigation takes place and that CRA has the finances to increase the size of the national audit program, in fact, by 40%. There is a $30-million investment to target international tax evasion and aggressive tax avoidance. That is what we are talking about and this legislation would provide for that. The government has taken some very concrete steps.

With respect to the member's question, which is not related to this legislation, when a particular piece of legislation does come before the House, he will have the opportunity to ask questions on that and he will get an answer. However, what he is talking about here has absolutely nothing to do with the legislation at hand and it does not matter how much he would—

[The Acting Speaker, Conservative, Bruce Stanton]

Order, please. Questions and comments, the hon. member for Burnaby—New Westminster.

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

Mr. Speaker, we are speaking about Bill S-17. The reality is, as the member full well knows, that it is also a question of how the Conservative government implements these tax treaties. That is why we want to have a full discussion.

As well, the reality is that the government has been a colossal failure both in terms of uncollected tax debt and tax havens. We have seen a skyrocketing. Over the seven years of the Conservative government's watch, we have seen a 57% increase in uncollected tax debt because the government is fumbling the whole file. We have seen a doubling, almost $170 billion, of money that is invested in 12 global tax havens.

Given the government's massive failure on both files, the question is very simple. In terms of Bill S-17, how can we trust the Conservative government to implement it properly when it has failed every other time?

[Ed Komarnicki, Conservative, Souris—Moose Mountain, SK]

Mr. Speaker, this agreement will be implemented and it will save a lot of dollars. However, I will address the question the member asked, which is not related to this bill.

Last year alone, over $40 billion in tax debt was recovered and $100 million collected in fines from 1,182 people who were convicted of tax violations. As well, in closing tax loopholes, the New Democratic Party opposed that legislation.

We are setting a culture that is taking place at several levels. Tax enforcement ensures that people are obligated to not only indicate what their income is so they can be taxed, but also that they pay their taxes when they are obligated to pay them. It is a culture of saying that not only should we get rid of tax avoidance, not only should we get rid of aggressive tax planning that tends to avoidance, but when we owe taxes, we also ought to pay them. It is a culture that says it is important to follow the rules and to pay when people ought to pay tax and not try to avoid that by putting money in an offshore account. I should have asked the other member about—

[The Acting Speaker, Conservative, Bruce Stanton]

Order, please. We are out of the time allocated for questions and comments.

Resuming debate, the hon. member for Marc-Aurèle-Fortin.

[Alain Giguère, NDP, Marc-Aurèle-Fortin, QC]

Mr. Speaker, from the outset, I wish to inform you that I will be sharing my time with my colleague from Brome—Missisquoi.

The NDP is in favour of this bill. For once, the Conservatives cannot accuse us of always being against the government. We are in favour of this bill, essentially because it is purely technical. It implements bilateral tax treaties with a certain number of countries, including Namibia, Serbia, Poland and Hong Kong, and makes amendments to treaties with Luxembourg and Switzerland.

This bill is worthwhile. It will make things easier for people who want to pay their taxes, who are not trying to defraud the government. Why would we be against virtue? We are pro-virtue. We are totally in favour of making it as easy as possible for people to pay taxes. However, I want to mention something important. Under Canadian tax law, any taxes paid in a foreign country are deducted from our nation's revenue. So much for savings.

This new rule makes it easier to pay taxes. Nothing more. If the government suddenly decided to harmonize tax regulations to make it easier for people filling out their tax returns, we would very much support that.

We disagree when the Minister of National Revenue and the Minister of State for Finance tell us that the bill is an important step in the fight against tax evasion. Nothing could be further from the truth, and that is dangerous. The head of our country's finances is telling us that this bill offers a way to combat tax evasion. That is not true. All this bill does is make it easier for people who want to pay taxes to file their tax returns.

I want to point out to the House that Luxemburg and Switzerland are tax havens. These countries allow financial institutions to have numbered accounts and to be protected by banking secrecy. This enables people to hide money and do so secretly. This will continue to be allowed. Switzerland will co-operate if we present a warrant and proof of criminal charges. However, it will not tell us whether the main people involved in trafficking cocaine in Canada have bank accounts there. Let us be realistic: we cannot expect any co-operation from them. It is quite sad.

The Auditor General already indicated that Canada's tax debt has significantly increased. It has jumped from $18 billion to $29 billion. These are people who openly declare that they owe money. Quite often, if they do not pay it is not because they are dangerous criminals but because they simply cannot.

When you are stretched to the limit because you have to pay your mortgage and car and grocery bills, and maybe buy clothes for your children from time to time, you might not be in a position to pay taxes. Self-employed workers are a good example of that. When they get a cheque, they do not set part of it aside to pay taxes. When they get that cheque, it is already spent on everything they owe. They do not want to cut their electricity or telephone. So that is what they pay. That is what accounts for the $29 billion. That amount is absolutely not owed by people who have made use of tax havens. These are our neighbours, our friends and our parents who had a hard time paying taxes because they had too many other bills to pay. Paying taxes is an expense, just like groceries or the electricity bill.

This is a problem. When people cannot pay taxes, they are not able to pay all their other bills either. The $29 billion represent a lot of people who will file for personal bankruptcy. That is quite often the problem.

The second problem with the $29 billion is that the greater the debt, the less likely it is to be repaid. This bill does not solve this problem, and that is truly unfortunate. The bill is being presented as a significant piece of legislation that will get results. In fact, I do not deny its positive effects for people who are willing to pay taxes. Rather, the problem I see concerns those people who are unable to pay taxes either because they do not earn income or because they have too many bills to pay. The household debt ratio is now at 163%. The bill will not mitigate this problem.

There are huge numbers of tax havens, and Canadians have put their money in well-known tax shelters. Indeed, $53 billion has been invested in Barbados, $25 billion in the Cayman Islands and $23 billion in Ireland. A total of $13.8 billion has been invested in Luxembourg, a country with which we have treaties. Bermuda has received $13.2 billion in Canadian investments. This represents 51% of Canada's foreign bank investments. This figure has doubled since 1987.

What was the government's response? It decided to cut the Canada Revenue Agency's budget by $250 million. Europe, Spain, Italy, Portugal and Greece are in a deep economic slump, largely because they did not collect the taxes owed to the government. Not paying taxes is a national sport in those countries.

The level of debt in those countries shows that these people are particularly adept at tax evasion. Why do they do it? Simply put, it is because tax equality is non-existent. Why ask someone to work 40 or 60 hours a week to make ends meet and pay taxes when he knows full well that a mafia member in Sicily, a crooked politician in Greece or a flashy real estate developer in Spain will not pay taxes?

Why ask someone to keep paying taxes for services when the rich are not paying those same taxes? The poor man is paying the rich man's share. That lack of tax fairness is the main reason people in certain European countries avoid taxes and shirk their responsibilities. This government is leading us down exactly the same path.

Instead of saying that they will do things differently since Spain's and Italy's economies have tanked, the Conservatives are following the worst examples. Then they say that they are doing well, that they are among the best. They should not be following the worst examples then. This problem will not go away overnight. Tax evasion requires two things. First, it requires the means to do it without getting caught. Second, it requires motivation, which exists when tax fairness does not.

The NDP has proven its good faith by supporting technical measures such as this bill. However, do not try to tell us that this law will solve the problem of tax evasion. That is untrue.

[Pierre Jacob, NDP, Brome—Missisquoi, QC]

Mr. Speaker, I thank my colleague, the member for Marc-Aurèle-Fortin, for his very persuasive speech. Clearly the numbers are no longer a mystery to him.

Speaking of numbers, there is one that grabbed my attention. According to Statistics Canada, $146 billion—one-quarter of our direct foreign investment—is hidden away in tax havens. That is money the government should be collecting, money that is not being spent here on infrastructure and services to improve our social safety net.

I would like my colleague to comment on the following two observations: people who do not have the means to use tax havens are the ones footing the bill, and people who are not paying their fair share are often the very same ones telling us that we have to cut spending.

[Alain Giguère, NDP, Marc-Aurèle-Fortin, QC]

Mr. Speaker, a similar observation was made in the United States.

For example, multi-billionaire Warren Buffett said it does not make sense for him to make millions while being taxed at a significantly lower rate than his secretary. That man pays his taxes. He does not try to evade taxes. When the government tries to get people to pay their taxes, it does not have much credibility.

Those who pay their taxes are the very ones whose services are being cut. That is a problem. The government is constantly asking people to pay. They are not getting the services they need, but they still have to foot the bill. If the Auditor General proved anything, it is that they, not the very rich, are the ones targeted by the CRA.

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

Mr. Speaker, I want to congratulate the hon. member for Marc-Aurèle-Fortin on his excellent speech. As usual, he brings a wealth of experience as a lawyer and financial expert every time he speaks in the House.

Outstanding taxes are a real problem. As we know, the Conservatives have been completely incompetent when it comes to this issue. When they came to power in 2006, there was $18 billion in outstanding taxes. Now there is $29 billion, because they are not even capable of managing the issue of outstanding taxes.

What does my colleague think of the Conservative government's competence when it comes to managing issues such as outstanding tax accounts, which should be pretty easy to manage?

[Alain Giguère, NDP, Marc-Aurèle-Fortin, QC]

Mr. Speaker, this is particularly interesting, and I thank the hon. member for his question. This shows that he read the Auditor General's report carefully.

The Auditor General made an observation. He said that the CRA is targeting individuals and has put a system in place to collect taxes. However, this system does not apply to businesses. Oops.

The other problem has to do with people who have a lot of taxes to pay. I am talking about tax bills over $10 million. The government's batting average is practically a big, fat zero. As for the little old lady who owes $800, I guarantee she will be taken to the cleaners. The government has the resources to collect from her and it has no problem doing so.

The Conservatives call this double standard, which is an integral part of their economic policies, tax fairness. However, this is not tax fairness. The Conservatives are betraying the people who elected them. That is serious.

[Pierre Jacob, NDP, Brome—Missisquoi, QC]

Mr. Speaker, I will use Bill S-17 to talk about tax evasion.

People take advantage of our excellent economy, our extraordinary education system and our infrastructure to make money, but some refuse to pay their fair share. They keep their profits in offshore bank accounts in order to avoid paying taxes in Canada. According to the OECD, an estimated $10 trillion is hidden in tax havens around the world.

Every year, this scourge deprives Canada of $5 billion to $8 billion in revenues. According to Statistics Canada, between 2003 and 2008, Canadian investment in tax havens went from $94 billion to $146 billion. This is a quarter of our direct foreign investment.

As I already said, this is money that is owed to Canada. It is money that is not being spent here to renovate infrastructure or pay for services that would allow Canada to have a better social safety net. In the meantime, those who do not have the means to use tax havens are the only ones paying the bills. That is what my colleague calls tax fairness. Those who do not pay their fair share are often those who say we need to reduce spending. It is a great injustice that undermines the very foundation of our society. Tax evasion is one of the greatest challenges the federal government must face. Bill S-17 is a step in the right direction, but the step is far too small. Even though we will vote in favour of the bill, it is woefully inadequate.

Bill S-17 implements four tax treaties with Namibia, Serbia, Poland and Hong Kong. It also implements amendments to the treaties between Canada and Luxembourg and Canada and Switzerland. The purpose of the tax treaties is to avoid double taxation and prevent tax evasion. We support harmonizing tax laws and complying with OECD standards, and that is why we will support the bill. However, the government could do more.

Bill S-17 does not make any changes to Canada's policy. It is considered standard legislation of a routine nature.

To hear the Minister of Finance tell it, this bill is a major step forward in the fight against tax evasion. While it does contain provisions that will be useful to the government, it does not make up for the government's failure to take the major tax haven problem seriously.

The last budget was proof that the government is not taking the problem seriously. On March 20, 2013, 900 Canada Revenue Agency employees, including 400 tax auditors, received notices that they were in danger of losing their jobs because of budget cuts.

The Canada Revenue Agency's budget will be cut by about $460 million by 2015. How is the agency supposed to fight tax evasion with fewer employees and resources?

My NDP colleagues on the Standing Committee on Finance proposed several recommendations to combat tax evasion. I would like to share some of those recommendations.

First, the Canada Revenue Agency should require Canadian corporations and all of their subsidiaries to disclose all taxes paid in other countries. This measure would result in greater transparency concerning their activities in offshore tax shelters.

Second, the auditor general should evaluate, on a regular basis, the success of the Canada Revenue Agency in prosecuting and settling cases of tax evasion.

Third, the federal government should create an efficient system to identify tax evasion enablers including accountants, lawyers and other professionals.

Last, the federal government should to move towards a system of automatic tax information exchange with other countries. This would be a much more effective way to fight tax havens than the bilateral agreements covered in this bill.

We made clear recommendations to ensure tax fairness for all Canadians. They deserve to know how much tax evasion is going on.

Despite our repeated requests, the Conservatives are refusing to measure how much tax fraud costs us. The Conservatives' failure to collect lost revenue means that Canadians who do pay their taxes are on the hook for a larger share of the cost of government programs.

Why do the Conservatives insist on doing the bare minimum with respect to the serious problem of tax evasion and tax havens?

We hope that the government will introduce major changes to solve this serious problem instead of giving us routine measures like Bill S-17. This bill will not solve the problem. As I illustrated earlier, tax evasion is serious. The government must act now. I urge the government to consider our recommendations.

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

Mr. Speaker, I really liked my colleague from Brome—Missisquoi's speech. He takes a very smart approach to this file, and it is always interesting to hear him speak in the House.

Under the Conservatives, Canadian investments in tax havens have nearly tripled. This is another Conservative failure. Before the Conservatives came to power, very few Canadians parked their money in tax havens. Now, under the Conservatives, these types of investments have soared. The Conservatives seem to want to encourage investments in tax havens.

Does my colleague from Brome—Missisquoi think that this is intentional on the part of the Conservatives or is it simply a result of their incompetence in managing this file?

[Pierre Jacob, NDP, Brome—Missisquoi, QC]

Mr. Speaker, I thank my hon. colleague for his question, which is excellent, as always.

I would not go so far as to say that this situation is a result of the Conservatives' incompetence, but it is a result of their interference and gross mismanagement. They are protecting their interests, big oil companies and big banks, as usual. The working poor are left out in the cold, as always. That is why we are standing up for workers.

[Alain Giguère, NDP, Marc-Aurèle-Fortin, QC]

Mr. Speaker, I cannot help but notice government members' enthusiasm for talking and asking questions about a bill that will clearly not get the results that they want and that they promised to Canadians.

I could very well be reading out a muffin recipe and they would not even notice. That is how much they care about listening when we are talking about the tax and economic issues that affect our constituents.

My constituents are honest. They pay their taxes. When people do not pay, it is often because they are bankrupt, they are unable to pay or they are unemployed and so poor that they do not owe any taxes.

My question for my colleague is about the exact nature of bank transfers and how Canadian institutions are complicit but nothing ever happens to them.

Could he expand on that and tell us what an NDP government would do to prevent Canadian financial institutions from being complicit in making our country poorer?

[Pierre Jacob, NDP, Brome—Missisquoi, QC]

Mr. Speaker, I thank my colleague from Marc-Aurèle-Fortin for his excellent question.

The NDP wants everyone to pay their fair share, whether we are talking about big or medium-sized companies, but especially the big companies that have the means. The big oil companies must pay their fair share and contribute to Canada's growth. We want SMEs and employees to pay their fair share. We want everyone to do their part. That is the only way we can achieve social justice and equity within our current economic system.

[John Carmichael, Conservative, Don Valley West, ON]

Mr. Speaker, I am honoured to add my voice in support of today's important debate on the 2013 income tax convention implementation bill, Bill S-17, another step toward lower taxes for all Canadians.

Today, on tax freedom day, I would like to place Bill S-17 into the larger context. Over the years, our Conservative government has really devoted considerable effort to keeping taxes low for Canadian families and small business. Indeed, since 2006, we have cut taxes over 150 times, reducing the overall tax burden to its lowest level in 50 years. We have cut taxes in every way government collects them—personal taxes, consumption taxes, business taxes, excise taxes and much more. We cut the lowest personal income tax rate to 15%, increased the amount Canadians can earn without paying tax, introduced pension income splitting for seniors, which was certainly well received by seniors in this country, and reduced the GST from 7% to 6% to 5%, putting an estimated $1,000 back in the pockets of an average family.

Clearly, we believe that Canadian families should keep their hard-earned money. They know better what to do with it than does government.

We introduced and enhanced the working income tax benefit. We introduced the tax-free savings account, the most important personal savings vehicle since RRSPs. We increased the age credit amount by $2,000. We doubled the pension income credit to $2,000. We increased the amount recipients of the guaranteed income supplement, the GIS, can earn through employment, without any reduction in GIS benefits, from $500 to $3,500. Finally, we increased the age limit for RRSP to RRIF conversion to 71 years of age from 69.

Our strong record of tax relief has meant savings for a typical family of four of over $3,200 annually. Not only that, but this action has resulted in over one million low-income Canadians being removed from the tax rolls.

However, the good news does not end there. Our government has introduced a number of tax relieving measures for small business. After all, our Conservative government recognizes the vital role small business plays in the economy and job creation. That is why we are committed to helping them grow and succeed. Over 90% of business in Canada is small business.

Indeed, since 2006, our government has taken significant action to support small businesses, including reducing the small business tax rate from 12% to 11%; increasing the small business limit to $500,000; and eliminating the corporate surtax for all corporations in 2008, which was particularly beneficial to small business corporations, as the surtax represented a larger portion of their overall payable tax. There was much more.

Overall, our Conservative government low tax plan has resulted in savings of $28,600 for a typical small business since 2006. That is about a 34% cut in their total tax bills.

There is another part of this low tax plan, and that includes establishing tax treaties to help improve our system of international taxation, and this is precisely what Bill S-17 will do.

Bilateral income tax treaties, such as the one before us today, are utilized to eliminate tax barriers to trade and investment. Such treaties achieve that purpose in a number of ways. Allow me to explain how. First, they provide greater certainty to taxpayers regarding their potential liability to tax in foreign jurisdictions. Second, they allocate taxing rights between the two jurisdictions so that the taxpayer is not subject to double taxation. Third, they reduce the risk of burdensome taxation that may arise because of high withholding taxes. Finally, they ensure that taxpayers are not subject to discriminatory taxation in the foreign jurisdiction.

These are the great benefits Bill S-17 would bring to the market. It would provide benefits to both taxpayers and governments by setting out clear rules that would govern tax matters relating to cross-border trade and investment.

This is extremely technical legislation, and I apologize in advance. Nevertheless, it is important for the flow of predictable global commerce. For instance, tax treaties permit a multinational business based in one country to be taxed in another country if that business has a substantial presence in that other country. In general terms, if the branch operations in a foreign country are well established and significant, the country where those activities occur will, in most cases, have primary jurisdiction for that taxation. In other cases, where the operations in the foreign country are relatively minor, tax treaties provide that the home country retains the exclusive right to tax its residents. Tax treaties also allocate taxing rights between the two countries as a means of protecting taxpayers from potential double taxation.

This takes several forms, and again, this is all very technical. First, treaties generally include a mechanism for resolving the issue of dual residency of an individual or company, where the individual or company would otherwise be considered to be a resident of both countries. Second, treaties assign the primary right to tax to one country, usually the country in which the income arises, and the residual right to tax to the other country, usually the country of residence of the taxpayer. Third, treaties provide rules for determining which country will be treated as the source country for each category of income. Fourth, and finally, treaties provide rules limiting the rate of tax the source country can impose on each category of income and establishes the obligation of the residence country to eliminate double taxation that otherwise would arise from the exercise of concurrent taxing jurisdiction by the two countries.

In addition to these substantive rules regarding allocation of taxing rights, tax treaties also provide a mechanism for dealing with disputes or questions of application that arise after the treaty enters into force. In such cases, designated tax authorities of the two governments consult with a view to reaching a satisfactory solution under which the taxpayer's income is allocated between the two taxing jurisdictions on a consistent basis, thereby preventing the double taxation that might otherwise result.

In addition to reducing potential double taxation, treaties also reduce burdensome taxation by reducing withholding taxes that are imposed at source. Under Canadian domestic law, payments to non-resident persons of certain passive forms of income, such as dividends, interest and royalties, are subject to withholding tax equal to 25% of the gross amount paid. Many of Canada's trading partners also impose, under their domestic tax laws, similar levels of withholding tax on these types of income. Because the withholding tax does not take into account expenses incurred in generating the income, a taxpayer frequently will be subject to an effective rate of tax that is significantly higher than the rate that would be applicable to net income in either the source or residence country. The taxpayer may be viewed, therefore, as having suffered burdensome taxation. Tax treaties alleviate this burden by setting maximum levels for the withholding tax the treaty partners may impose on these types of income or by providing for exclusive residence-country taxation of such income through the elimination of source-country withholding tax.

Our government's goal is simple, to establish tax treaties that substantially reduce or, in the case of certain types of income, eliminate withholding taxes by the source country. In addition, we must include provisions that ensure that cross-border investors do not suffer discrimination in the application of the tax laws of the other country.

By delivering a favourable tax environment for Canadian businesses, we help them to compete and win internationally, increase investment and create jobs for Canadians.

Tax treaties like those in Bill S-17 would directly support cross-border global trade in both goods and services, which in turn would help Canada's domestic economic performance. The more foreign direct investment that flows into our country, the more investment in capital and in technology. This, in turn, results in more high-quality jobs for Canadians.

In fact, during the committee's examination, Nick Pantaleo, of PricewaterhouseCoopers LLP, remarked that:

...a key objective of the Canadian government is to pursue new and deeper international trade and investment relationships. This is not surprising given that more than 60 per cent of the Canadian economy and one in five jobs in Canada are generated by trade. In my view, tax treaties contribute toward the success of such global trading agreements.

He went on to add that:

It is important that Canadian businesses be provided with greater unfettered access to foreign markets, foreign investment protection and fair tax treatments in foreign nations.... These factors are critical to Canadian business decision making and competitiveness. Access to more and bigger markets will help Canadian companies simply to be more productive.

It would seem clear that the tax treaties contained in Bill S-17 are a critical tool in strengthening Canada's trade and investment relationships and in helping Canadian businesses stay competitive and successful.

However, there is another critical part to these tax treaties. I have already mentioned that keeping taxes low is an important objective for our government and an important part of these tax treaties. However, keeping taxes low also means that all taxpayers should pay their fair share of taxes owing and not be able to hide their income offshore.

Better transparency and the effective exchange of information for tax purposes between taxation authorities are key to ensuring that Canadian taxpayers report their foreign income and pay the right amount of tax in Canada.

We are absolutely committed to combatting tax evasion through the negotiation of tax treaties, as well as tax information exchange agreements or TIEAs. Under the tax treaties and the TIEAs, the competent authority of one country may request from the competent authority of the other country such information as may be necessary for the proper administration of the country's tax laws.

The requested information will be provided, subject to strict protections on the confidentiality of taxpayer information. Because access to information from other countries is critically important to the full and fair enforcement of Canada's tax laws in order to combat tax evasion, the inclusion of an information exchange provision that is consistent with the standards set out in the Organisation for Economic Co-operation and Development, OECD, is an important component of Canada's tax treaty policy.

While TIEAs and tax treaties are critical tools in combatting tax evasion, our government has a number of other tools in its arsenal and a proven record. Overall, since 2006, and including the measures announced in economic action plan 2013, our government will have introduced more than 75 measures to improve the integrity of the tax system.

These measures will help close tax loopholes, address aggressive tax planning, clarify tax rules and combat international tax evasion. In fact, this action will result in closing $2.5 billion in tax loopholes.

Additionally, economic action plan 2013 announced the stop international tax evasion program. This new program would allow the CRA to pay individuals with knowledge of major international tax non-compliance a percentage of the tax collected as a result of information provided. Other measures include, one, requiring Canadian taxpayers with foreign income or properties to report more information and extending the amount of time the CRA has to reassess those who have not properly reported this income; two, streamlining the process for the CRA to obtain information concerning unnamed persons from third parties, such as banks; and third, requiring certain financial intermediaries, including banks, to report their clients' international electronic funds transfers of $10,000 or more to the CRA.

It is measures like these that would help to maintain the integrity of Canada's income tax system. This is important because, when everyone pays their fair share, Canada's tax rates can remain competitive and low. This means that Canadian families and businesses would pay less tax overall, keeping more of their hard-earned money.

To conclude, in an increasingly globalized economy where investment capital is highly mobile, a competitive business tax system is crucial. While Canada has performed relatively well in today's uncertain global economy, we cannot afford to become complacent. The treaties covered in this proposed legislation would promote certainty, stability and a better business climate for taxpayers and businesses in Canada and in the treaty countries. More importantly, these treaties would help to secure Canada's position in today's increasingly competitive world of international trade and investment.

For the reasons I have highlighted today and many others, Bill S-17 would increase our ability to compete and harness the opportunities of a vibrant modern economy. For these reasons, I urge hon. members opposite to support this bill.

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

Mr. Speaker, I rise on a point of order. When I rise in this House to give notice of a motion under Standing Order 78(3), I have to advise that an agreement could not be otherwise reached. These are not empty words. This reflects the state of discussions among the parties on a given bill.

At least twice in recent days, there have general agreements among the parties about proceeding with a piece of legislation in a particular way. When we have tried to convert those agreements into a form the House could endorse so that the House may govern itself accordingly, the NDP balks. It says we should simply trust the NDP.

I know that many members across the way are former union negotiators or union leaders. I would never imagine that they would go back to their membership and recommend approval of a deal when all management says is “trust us”.

With that in mind, and in the interest of securing agreement, I put forward the following motion before the House. There have been consultations with the parties, so it is my hope that there would be unanimous consent that on Tuesday, June 11, the House shall, during government orders, consider the third reading stage of Bill S-2, an act respecting family homes situated on First Nation reserves and matrimonial interests or rights in or to structures and lands situated on those reserves, followed by the second reading stage of Bill S-6, an act respecting the election and term of office of chiefs and councillors of certain First Nations and the composition of council of those First Nations, and followed, in turn, by the second reading stage of Bill S-10, an act to implement the Convention on Cluster Munitions; (b) during the consideration at the third reading stage of Bill S-2 when no member rises to speak or at the expiry of the time provided for debate pursuant to order made Tuesday, June 4, under the provisions of Standing Order 78(3), whichever is earlier, every question necessary to dispose of the said stage of the bill shall be put forthwith; and successively without further debate or amendment during the consideration at the second reading stage of Bill S-6 when no member rises to speak or at 5:30 p.m., whichever is earlier, every question necessary to dispose of the said stage of the said bill shall be put forthwith and successively without further debate or amendment; (d) during consideration of the second reading stage of Bill S-10 when no member rises to speak or at 10 p.m., whichever is earlier, every question necessary to dispose of the stage of the said bill shall be put forthwith and successively without further debate or amendment; (e) when a recorded division is demanded it shall be deemed deferred in accordance with the manner provided in paragraph (b) of the special order adopted Wednesday, May 22; (f) upon the chair of the Standing Committee on Foreign Affairs and International Development or a member of the committee acting for the chair indicating on a point of order that the committee has ready a report respecting Bill S-14, an act to amend the Corruption of Foreign Public Officials Act, the House shall immediately revert to presenting reports from committees for the purpose of receiving the said report; and (g) upon the conclusion of proceedings on Bill S-10, the House shall take up adjournment proceedings pursuant to Standing Order 38.

[The Acting Speaker, Conservative, Bruce Stanton]

Does the hon. government House leader have unanimous consent to propose the motion?

[Some hon. members]

No.

The House resumed consideration of the motion 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.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

Mr. Speaker, I listened to the speech with great interest. We have been criticized on this side for raising matters other than those in the bill. We heard a great deal about matters other than those in the bill and matters that probably should be in the bill.

I have taken the time to go through some of these treaties, with which the quite short statute deals. It raises a number of questions for me. For example, if we look at the treaty with Poland, article 24(3), it says:

In no case shall the provisions of paragraphs 1 and 2 be construed... to carry out administrative measures at variance with the laws and the administrative practice of that...Contracting State...to supply information which is not obtainable under the laws or...to supply information which would disclose any trade, business, industrial...secret or trade process... information...disclosure...contrary to public policy...

I see the same kind of provisions in the Luxembourg treaty.

It raises the question for me as to what mechanism does the government use to go about enforcing this statute against these countries and what has its experience been in trying to enforce these provisions with the other countries, for example, China? Does it have such an agreement with China?

[John Carmichael, Conservative, Don Valley West, ON]

Mr. Speaker, we have six agreements in place at this time, with Namibia, Serbia, Poland, Hong Kong, Luxembourg and Switzerland. Each of these is a bilateral agreement that has been established for multilateralists, as some of our colleagues opposite have referred to this evening. The goal is to enhance the quality of business in Canada for small businesses and to ensure that we grow our economy and investments.

The member opposite asked about China. Clearly the FIPA is designed to protect the parties on both sides of that agreement, in Canada and in China, and protect Canadian businesspeople doing business in China. It is new. We are hoping to have it completed shortly, but the reality is that it is designed to provide protection by Canadians for Canadians in their dealings overseas.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, I will reserve my comments until tomorrow regarding the government House leader's attempt to get unanimous consent of the House with regard to forewarning us about time allocation.

The member is fully aware that all political entities in the House of Commons will support the bill for the vote coming up. However, the larger issue is ensuring that we get the necessary additional financial resources or other resources to the Canada Revenue Agency to ensure we can avoid tax evasion. I used the example of $150 million under the Paul Martin government a number of years ago and the positive impact it had in dealing with tax evasion.

Why would the Conservatives, at this point, be cutting back on the resources going to the CRA?

[John Carmichael, Conservative, Don Valley West, ON]

Mr. Speaker, tax evasion is something that we all abhor and would fight against. Clearly, as a government, it is something on which we are cracking down. My understanding is that the CRA is well within its resources to meet the demands and will meet the objectives of cracking down on tax evaders in our country.

[Mark Adler, Conservative, York Centre, ON]

Mr. Speaker, I would like to begin by thanking my colleague from Don Valley West, who gave a very technical approach to this very complicated issue of tax treaties.

As my friend knows, Canada has been very aggressive in terms of negotiating tax treaties with other countries around the world. In fact, we have 90 tax treaties and 16 TIEAs that we have negotiated with other countries around the world. TIEAs, of course, are done in the absence of a tax treaty.

I would like to just raise a couple of ironies here and I would like to get the member to comment on them.

First, I would like the member to comment on the importance of individual Canadians paying taxes. I say that for two reasons. One reason is that I sit on the finance committee and we had the revenue critic for the NDP come before the finance committee and ask us to do a study on tax evasion. It turns out the member has not been paying his taxes.

Second, I would like the member to comment on the second NDP member who also has not been paying his taxes. He put forward a private member's bill to serve his own advantage in terms of averaging his income out over a number of years, claiming that he worked in the cultural industry and that it would be fairer to people who worked in the cultural industry to do that. In fact, he was doing it to benefit himself.

I would like to ask my friend if he could comment on the importance of what the NDP is claiming to be huge tax evaders, when the NDP has tax evaders within its own caucus. Could he comment on the importance of all Canadians paying their fair share of tax?

[John Carmichael, Conservative, Don Valley West, ON]

Mr. Speaker, clearly, our government is focused on balancing the budget, on meeting the obligations of the country, growing our economy and creating jobs for Canadians. In order to achieve all our goals, every Canadian has to do their fair share in meeting their tax obligations.

On my friend's comments, tax evasion is an offence. It is something to which we should take strong exception. I support his comment that whoever in the country is not paying their fair share of taxes should be held accountable and should be forced to meet their obligations. That is how we will meet our obligations as a nation.

I should add that over the period, Canada has had the strongest job creation record in the entire G7. We are recognized by the OECD as a leader in global economies. That is because we are doing things right, economically. Our banking system is solid and we are meeting our obligations in collecting our taxes. Therefore, absolutely, all Canadians have an obligation.

[Alain Giguère, NDP, Marc-Aurèle-Fortin, QC]

Mr. Speaker, my distinguished colleague from Ontario has given me the perfect opportunity to talk about fraudsters. Perhaps the member could tell us more about the following question. When someone uses $90,000 of taxpayers' money to pay back money stolen from the Senate, is that $90,000 taxable? When someone invoices $300,000 for personal expenses, that is income. Will senators also be taxed on that income? Will they declare that money on their tax returns?

We live in a glass house, and people who live in glass houses should not throw stones.

[The Acting Speaker, Conservative, Barry Devolin]

Before I go to the hon. member for Don Valley West, just a reminder to all hon. members to try to keep their questions, comments and answers related to the matter before the House.

The hon. member for Don Valley West.

[John Carmichael, Conservative, Don Valley West, ON]

Mr. Speaker, I have to reject the premise on which my hon. colleague placed his question. First, he talked about $90,000 of taxpayer money. The understanding of the House, to the best of our knowledge and the information we have, is that was paid by a private individual. It is being addressed through audits and through various sources, including the ethics commissioner, and those issues will be addressed.

I hear him on living in glass houses. The only problem is that tonight we are living in a glass House of Bill S-17 and talking about tax treaties. Quite frankly, his question has no bearing whatsoever on that.

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

Mr. Speaker, it was unfair for the member for York Centre to attack the member for Jeanne-Le Ber. We all know that tax avoidance is not the same as tax evasion. During this debate, I have googled McCarthy Tétrault. It is already advising its well-heeled clients how to avoid the implications of various tax measures, whereas the artistic community, many of whom survive on less than $12,000 a year, but one year might have good earnings, has been working as a group for many years as a matter of good public policy to fix this by allowing averaging out for people in that community.

It is unfair and it is not just the member for York Centre. There is a continual effort to beat up on one member of the House who was very active in the ACTRA community before being elected. I just feel it is egregious.

[John Carmichael, Conservative, Don Valley West, ON]

Mr. Speaker, I did not hear a question per se, but within any tax system, there are provisions that allow and provide a road map for taxpayers to pay their taxes, in specific instances, within economic action plan 2013. The member mentioned McCarthy Tétrault as one example of a company that provides advice to its clients. Every auditing firm and legal firm across the county does, similarly, in helping their clients to meet their tax obligations in a fair and legal way.

[Chungsen Leung, Conservative, Parliamentary Secretary for Multiculturalism]

Mr. Speaker, I am thankful for this opportunity to speak at second reading of Bill S-17.

As members know, this bill would implement Canada's recently concluded tax treaties with Namibia, Serbia, Poland, Hong Kong, Luxembourg and Switzerland. These new and updated fees 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 network of bilateral tax treaties. This is an important feature to Canada's international tax system, a feature that is key to our ability to compete.

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. Clearly, I would hope that all parliamentarians and Canadians would agree that everyone should pay their fair share of taxes.

Second, it would help encourage global trade by preventing double taxation.

In my time today, I would like to focus specifically and in greater detail on what the tax treaties with Namibia, Serbia, Poland, Hong Kong mean.

First I will speak about Namibia.

Canada's proud and active engagement with Namibia dates from 1977 to 1982 negotiations on the United Nation settlement plan. Canada actively supported Namibia's independence in 1989-90 and provided military peacekeepers, police monitors, election supervisors and technical experts.

On the global stage, there are a number of areas in which Canada and Namibia actively co-operate. These include the Kimberley process, to control the trade in conflict diamonds, initiatives to control high seas overfishing and the commercial seal harvest.

Bilateral merchandise trade between Canada and Namibia was $238.2 million in 2011, with Canadian imports from Namibia accounting for $230.3 million of that, largely uranium oxides and Canadian exports to Namibia include cereals and machinery.

There are significant opportunities for investment in Namibia. Currently, the major focus for Canadian investors is mining, particularly diamonds and uranium. Cumulatively, Canada's foreign direct investment in Namibia reached $20 million at the end of 2010, most of which was in the mining sector.

The impetus for the convention with Namibia, signed on March 25, 2010, the official term for tax treaty, was to contribute to the elimination of tax barriers to trade and investment between Canada and Namibia and to help solidify the existing economic and financial dealings between the two countries.

It is consistent with the government's commitment, as announced in the 2008 Speech from the Throne, to seek out new investment and trade opportunities for Canadians and to promote greater global prosperity.

The convention generally follows the pattern of other tax treaties already concluded by Canada. Accordingly, it generally follows the format and language of the Model Tax Convention on Income and on Capital of the Organisation for Economic Co-operation and Development, OECD.

Most countries, including Canada and Namibia, tax their residents on their worldwide income. Moreover, where a resident of a particular country, known as the “country of residence”, derives income from sources in another country, for example, from a business located there, it is not uncommon for that other country, known as the “country of source”, to subject that income to tax.

The convention recognizes this international taxation dynamic and sets out under what circumstances and to what extent Canada and Namibia may tax the earnings of one another's residents.

The convention also provides that where income, profit or gains may be taxed in both countries, the country of residence, if it taxes, is to allow relief from double taxation against its own tax for the tax imposed by the country of source.

In the case of Canada, effect is given to the relief obligations arising under the convention by application of the general foreign tax credit system provisions of Canada's domestic law or relevant exemption provisions of the law where applicable.

Again, let me recap and expand the highlights of the convention.

The convention sets a maximum withholding tax rate of 5% for dividends paid to a company that holds directly at least 25% of the share capital of, or controls directly or indirectly at least 25% of the voting power in the company that pays the dividend and a maximum rate of 15% in all other cases.

The convention also limits to 10% the maximum withholding rate on interest and royalties, except that no tax may be withheld on interest paid to the government or a pension fund or in respect of debt finance by Export Development Canada or a debt of a government.

It also includes a provision that limits the potential for double taxation arising from the application of Canada's taxpayer migration rule without restricting Canada's ability to tax its departing residents on their pre-departure gains. It also includes the latest standard of the OECD on exchanges of tax information in order to assist Canadian tax authorities in the administration of the Canadian tax law.

Let me talk about Serbia. Relations between Canada and Serbia, formerly with Montenegro, part of the Federal Republic of Yugoslavia, and the state union of Serbia and Montenegro, redeveloped quickly following the overthrow of Slobodan Milosevic's regime in October 2000. In 2006, Canada welcomed Serbia's admission into NATO's partnership for peace program and to La Francophonie as an observer.

Canada is encouraged by the democratic and economic transformation of Serbia and its commitment to achieving greater integration and co-operation with the European Union and its institutions. The international community, including Canada, is helping Serbia make a successful transition to a free market democracy, develop strong regional co-operation with its neighbours and maintain its own citizens' security. Canada and Serbia enjoy strong people-to-people relationships and benefit from cultural and academic exchanges. In 2006, Canada and Serbia signed a readmission agreement and later that year an air transport agreement, which allowed for the resumption of direct flights between the two countries in June 2007.

In 2010, the two countries signed a memorandum of understanding on the prosecution of war crimes, crimes against humanity and genocide.

Canada-Serbia trade has increased almost tenfold over the past five years. In 2009, bilateral trade in goods totalled just under $60 million. In addition, Canada's investment commitments in the region, including Montenegro, reached more than US$500 million in 2007 and have been increasing steadily. Important Canadian investments have recently been made or committed in the areas of real estate and construction, tourism, agriculture, informatics, and energy and mining, among others. Opportunities for further Canadian investment include road, rail and urban transportation infrastructure upgrading and construction.

As such, the impetus for the convention with Serbia signed on April 27, 2012, which is the official term for the tax treaty, was to contribute to the elimination of tax barriers to trade and investment between Canada and Serbia and to help solidify the economic links between the two countries. It is also consistent with the Canadian government's commitment, as outlined in the 2008 Speech from the Throne, to seek out new investment and trade opportunities for Canadians and to promote global prosperity.

Like Namibia, the convention generally follows the pattern of other tax treaties already concluded by Canada. Accordingly, it generally follows the format and language of the model tax convention on income and on capital of the Organisation for Economic Co-operation and Development.

Also like Namibia, most countries, including Canada and Serbia, tax their residents on their worldwide income. Moreover, as I described earlier, where a resident of a particular country derives income from sources in another country it is not uncommon for that other country to subject that income to tax. The convention recognizes this international taxation dynamic and sets out under what circumstances and to what extent Canada and Serbia may tax the earnings of one another's residents.

Let me recap the highlights from the convention: it sets the maximum withholding tax rate of 5% on dividends paid to a company that controls directly at least 25% of the voting power of the company that pays the dividends and a maximum withholding tax rate of 15% will apply to dividends paid in all other cases.

The convention also limits to 10% the maximum withholding tax rate on interest and royalties, except that no tax may be withheld on interest paid to the government or the central bank. The convention also limits to 15% the maximum withholding tax rate on payments of pension income.

Clearly, members will notice that the provisions for both Namibia and Serbia were very similar, if not identical, and this is an extremely important point as it demonstrates how routine and standard this legislation and its provisions are and what they represent.

However, I would like now to conclude by talking about Hong Kong and here we will notice some minor variations on what I have laid out for Serbia and Namibia. Let me first talk about Canada's special relationship with Hong Kong. Our bilateral relationship with Hong Kong reflects long-standing and comprehensive political, commercial and people-to-people ties.

I should also note that even though Hong Kong is a special administrative region of the People's Republic of China, it is governed under the “one country, two systems” approach set out in the Basic Law, a document often referred to as the Hong Kong mini-constitution. Under this approach, Hong Kong is guaranteed its own legislature, legal and judicial systems and economic autonomy under a capitalist system and a way of life for at least 50 years.

Overall, the Basic Law provides Hong Kong with a degree of autonomy. Indeed article 151 of the Basic Law provides that Hong Kong may on its own conclude and implement an agreement with foreign states in fields such as economic, trade and financial fields, including tax treaties.

Canada and Hong Kong enjoy good co-operation on a large range of topics including public health, legal matters, and trade and investment. Relations are further bolstered by formal agreement initiatives on issues such as mutual legal assistance in criminal matters, air services, film and television co-operation and Internet learning. Canada and Hong Kong also enjoy productive co-operation in the context of multilateral organizations to which they are both members such as the Asia-Pacific Economic Co-operation forum, APEC, and the World Trade Organization.

In terms of trade with Canada, Hong Kong is the third largest financial market in Asia and an important source of foreign direct investment to Canada. As of 2011, Hong Kong was the second largest destination in Asia after Japan for Canadian foreign direct investment, larger than both China and India. Hong Kong is Canada's tenth largest export market and is also Canada's third largest export market in the world for beef and fourth largest market for fish and seafood.

In addition to natural resources and agricultural products, Canadian exports to Hong Kong include everything from telecommunications devices to train signalling systems, to educational and financial services. I should also note that the Canadian Chamber of Commerce in Hong Kong is one of the largest Canadian chambers outside Canada with over 1,200 members. There are over 180 Canadian companies in Hong Kong, 15 of which have established their regional headquarters in the city with a further 33 maintaining regional offices and 44 more with local offices.

Like Serbia and Namibia, the impetus for the agreement with Hong Kong signed on November 11, 2012, was to contribute to the elimination of tax barriers to trade and investment between Canada and Hong Kong and to help solidify the economic links between the two jurisdictions.

The new agreement also generally follows the pattern of other tax treaties already concluded by Canada and the OECD model, like Serbia and Namibia. The agreement also provides that where income, profits or gains may be taxed in both countries, the country of residence is to allow double tax relief against its own tax for the tax imposed by the country of source like Serbia and Namibia. The one variation is on resident taxation.

Unlike most jurisdictions, which tax their residents on their worldwide income, Hong Kong administers a territorial tax system under which residents and non-residents are taxed only on income arising in, or derived from, Hong Kong. Consequently, the residence articles of the treaty as regards Hong Kong reflects this state of affairs.

Capital gains are generally not taxable in Hong Kong, unless they are derived from a transaction in the nature of trade, in which case they are taxed as ordinary income at the regular applicable corporate or personal income tax rate. Moreover, there is no withholding tax imposed in Hong Kong on interest payments or dividend distributions made to non-residents.

Royalty payments made to non-residents are deemed to be taxable in Hong Kong if such payments are for the use of, or a right to use intangibles in Hong Kong or outside Hong Kong and where such royalty payments are deductible for income tax purposes in Hong Kong. In such cases, a withholding tax of 17.5% is imposed on 30% to 100% of the gross amount of the royalty payment.

For these reasons that I have highlighted today related to the three countries I have mentioned and many others, Bill S-17 will increase our ability to compete and to harness the opportunities of a vibrant, modern global economy. I urge the House to support this bill.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

Mr. Speaker, I thank the member for trying to make this topic interesting. As he spoke, I appreciate that he gave a lot of detail about why these particular nations have been chosen for Canada to enter into agreements with. I think the obvious question that arises is why these particular nations? Is it Canadian corporations interested in shale gas activity in Poland and the mining in Namibia? Why have these particular nations been singled out and are similar agreements being sought with nations where we also send aid workers to ensure that their revenues are similarly protected?

[Chungsen Leung, Conservative, Willowdale, ON]

Mr. Speaker, the member opposite is quite right in what she mentioned. When we negotiate tax treaties for our country, it is like two business partners. We have to arrive at an understanding of how we are prepared to do it. There may be a lot of conditions that lead up to the reason why we would negotiate a tax treaty. One of them, in the case of Namibia, had to do with Canadian companies mining there for diamonds and uranium oxide. In another case, there are Canadian aid workers in those areas to help better the country after natural disasters or human conflicts.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, I have had the opportunity to express this thought to other members of the Conservative Party. Yes, the legislation is good and Liberals want all members to vote in favour of it. At the end of the day, we can set up a legislative framework, but we have to have the financial resources to ensure that we can get the tax evaders. It is important to recognize that a vast majority of Canadian businesses or individuals around the world are quite straightforward and honest, and pay their taxes. A relatively small percentage go out of their way to participate in tax evasion.

The issue is this. Does the government recognize that cutting financial resources to the CRA is not going to result in more prosecutions of individuals or companies that participate in tax evasion?

[Chungsen Leung, Conservative, Willowdale, ON]

Mr. Speaker, I disagree with the premise of the member, that in order to solve this problem, we simply need to dedicate more resources. As business partners, it is far more intelligent to share information with the countries we are dealing with by dedicating resources to electronic detection and getting the co-operation of the other countries to assist us with tax information. It is a far more efficient way of identifying where the sources of income are and taxing them accordingly.

[Bernard Trottier, Conservative, Etobicoke—Lakeshore, ON]

Mr. Speaker, I liked what the parliamentary secretary described as a business partnership between countries. Obviously, Canada likes to have a lot of trade with various countries. There are 90 other countries in the world with which we have tax treaties and these are six more. In fact, these are four new ones and amendments to our tax treaties with Luxembourg and Switzerland.

My question for the hon. member is to ask him to describe the importance of having tax treaties like this when it comes to investment, trade, business development, new business opportunities and direct foreign investment. This is one of the foundational elements. There are other things, of course, such as mobility agreements, bilateral agreements on social security, and so forth. I would ask him to tell us why this is an important cornerstone to establishing a better relationship between Canada and other countries.

[Chungsen Leung, Conservative, Willowdale, ON]

Mr. Speaker, prior to entering politics, I spent 40 years doing business with 35 or 36 countries around the world. Before entering a country to do business, it is absolutely vital to have a clear understanding of the road map of the local business culture, the legislative framework, import-export regulations, permits and taxation. It is also important that in our international global economy, we need to understand both sides of the trading countries. Therefore, it is absolutely important that these regulations are set forth as we negotiate our business relations with foreign corporations.

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

Mr. Speaker, any tax agreement is only as good as the enforcement provisions that are contained within it, as members know. Now we have a situation in which it appears that the Minister of National Revenue actually refused data on hundreds of Canadians who were hiding money overseas. The information was offered to the current government on a silver platter. The information was being provided to the government, and the government, unlike other, deeper-thinking governments, refused to take that information.

Given how lamentably bad the Conservative government's record is on the level of tax debt climbing by 57%, the doubling of the amount, the tens of billions of dollars invested in tax havens overseas with the government basically rubber-stamping that, and then the Minister of National Revenue refusing to take information on the hundreds of Canadians hiding money overseas, how does the member think the current government has any credibility whatsoever when it comes to the issue of tax fairness?

[Chungsen Leung, Conservative, Willowdale, ON]

Mr. Speaker, again I totally disagree with the member's line of thinking.

First, there is no crime in having money overseas. Any international businessperson will say that we need to have international accounts, and that is precisely why we are negotiating with countries such as Switzerland and Luxembourg, which have in the past been tax havens in not disclosing the holders of their bank accounts. This information is now exchanged among the various taxing authorities around the world, and there is a way of tracking the source of that income.

Also, as I remember from my public accounting days, the Canadian tax system is probably one of the fairest systems in the way that it is administered, and we certainly have the co-operation of the five countries that concur with us on this aspect.

[The Acting Speaker, Conservative, Barry Devolin]

In accordance with an order made earlier related to this piece of legislation, there are 16 minutes remaining.

Resuming debate, the hon. member for Surrey North.

[Jasbir Sandhu, NDP, Surrey North, BC]

Mr. Speaker, I will try to sum up my thoughts for my constituency in the 16 minutes I have. It is an honour to speak to Bill S-17 on behalf of my constituents of Surrey North.

Basically the bill would bring into being bilateral income tax treaties with a number of countries in accordance with the OECD tax treaty standards. Basically we support harmonization and greater clarity of taxation laws, as well as bringing tax treaties into line with OECD standards, and therefore we will support the bill at this stage.

The Conservatives would have us believe that somehow the bill would address the elephant hiding here. The elephant is tax evasion, and the bill does not address tax evasion at all.

Before I get to the big elephant in the House, the one the Conservatives do not want to talk about, let me tell a story. My daughter was here about a month ago during her recess, and she had a chance to spend about three days with me.

She asked me what time allocation was. A 16-year-old was asking me what time allocation was, and I tried to explain it to her by telling her that time allocation was basically shutting down debate. It is a word I learned when I got here from my friends the Conservatives. They have now used it about 43 or 44 times.

I explained to my daughter that it was used when the Conservatives wanted to shut down debate and did not want to debate the bill before them. They do not want MPs who represent their constituents to give their views, so they basically shut down debate.

My daughter said, “That is not democracy. You should be able to represent our constituents and speak freely in this House”.

A 16-year-old understands that it is important to have the views of constituents and what they want in their constituency represented by their members of Parliament. A 16-year-old understands it.

We have seen time allocation after time allocation used by Conservatives in shutting down debate. That is not right whether we support the bill or not, and of course we support the bill. We want to highlight how we can improve the bill, and we would encourage the Conservatives to take some of those ideas to make the bills better and improve them.

One of the elephants that has not been addressed in the bill is tax evasion. We have heard reports. I have listened to very informative debate by my NDP colleagues highlighting what needs to be done and what is being done around the world, yet we have the Conservatives dragging their feet on addressing the big elephant in the room, which is tax evasion.

I had a chance to cruise through a number of headlines while listening to speaker after speaker this evening. I looked up tax evasion in Google News, and the first seven articles were about France taking on tax evaders, Italy taking on tax evaders. A headline from India said that the Indian government is going after tax evaders. I saw a headline from the United States to the effect that they are going after virtual tax evaders. These are headlines within the last six or seven hours.

Then I saw a Canadian headline about tax evasion. The headline from the Ottawa Citizen was basically that the Conservatives are dragging their feet in tackling tax evasion.

Our partners around the world, the G7 countries, our closest allies—Japan, the United States, Italy, Germany and the United Kingdom—have taken a leadership role in tackling tax evaders and getting additional revenue for the government.

My friend from Burnaby—New Westminster asked a very valid question. The Canadian government was offered information on hundreds of tax evaders, as my friend from Burnaby—New Westminster said. The Conservative government was being handed this information on a platter so that it could look at these tax invaders and go after them. What did the Conservative government do? Nothing. It did nothing.

There is another report, and we can look at some of the facts and figures. I know my Conservative friends do not believe in facts and figures, but $170 billion is being invested by Canadians in 12 of the largest tax haven countries, so there is a lot of money being invested in tax havens offshore by Canadians. It used to be a figure in the single digits back in the 1980s and 1990s, but under the Conservative government it has gone up to double digits. In fact, it is about 24%.

There is $170 billion going offshore, and the tax that we could collect from this, estimated by Canadians for Tax Fairness, is calculated at about $7.8 billion. That is what the Canadian government is losing because it is not going after the tax billionaires.

In this House, I have heard member after member talk about tax fairness and paying our fair share. I can assure members that hard-working people, people such as plumbers, electricians, taxi drivers, truck drivers and the professionals in my community, pay their fair share of taxes.

It is time for the millionaires to pay their fair share. The average person does not have the ability, or enough money, to put money offshore. Average working Canadians pay their fair share of taxes, but those with resources, those with tens of millions of dollars, are able to put this money offshore. That is $7.8 billion that we could have collected this year alone.

Why are my Conservative colleagues not going after this revenue? In fact, the money we could collect from offshore, the $7.8 billion, is being put on the backs of Canadians. We could use that money to reduce the largest deficit ever, a deficit that has occurred under the current government.

Let us talk about that. It is under the current government that we have had the largest deficit. It is not only a large deficit; we have also increased our debt by $200 billion under the Conservative government.

A few weeks ago I had a chance to stand up and ask a question. It was a very simple question. I asked who was going to pay for that $200 billion, the debt that Conservatives have accumulated over the last number of years. I did not get an answer. I would still like to get an answer on who is going to pay for that.

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

Where is the $3 billion?

[Jasbir Sandhu, NDP, Surrey North, BC]

That is still missing. We do not even know about the $3.1 billion. We have asked, and we will keep asking. Hopefully in a few weeks, we will hear. The Conservatives have the whole summer to figure out where that $3.1 billion is. We are going to give them the summer to figure out if they can find that $3.1 billion.

The facts are that we could use this tax money to reduce our deficit, which is the largest under the Conservative government. However, the Conservatives have put no proposals forward. They are laggards in the G7 in coming up with progressive policies to go after these cheats so that we can recoup the money that has been lost by Canadians.

At the end of the day, it is Canadians who will end up paying for the mismanagement by the government.

I know that the Conservatives do not answer, but I asked them who was going to pay for the debt they have accumulated over the last six or seven years. In fact, they have not had a surplus budget. They call themselves fiscal conservatives. They have not had even one surplus budget. Who is going to pay for this? It will be my children, their children, their grandchildren and my grandchildren. It is unfair to leave the largest debt to our children.

We have ways we can collect this. Again, Conservatives have a chance to recoup some of the money being siphoned off to offshore accounts.

We talked about fiscal conservatives and their ability to manage budgets. They have not had a surplus.

Let me talk about their trade deficit. When the Conservatives came in, they had a $26-billion trade surplus. That means that we sold $26 billion more than we bought from other countries. That is good for Canada. It creates jobs. If we sell more of our products overseas, we create local jobs here. That is good. However, under the Conservative government, we have had a trade deficit of over $50 billion. That means that we are buying $50 billion more in goods coming into Canada than we are selling to other countries.

Not only that, under the Conservative government, our merchandise trade deficit is the largest ever. I mention that because that is how we create secondary well-paying jobs. However, under this government, we have had failure.

That is the Conservatives' record, whether it is on deficits or on trade. These are the two things they often talk about, but they do not tell us about the other side. They tell us that they have signed this or that trade deal, but the trade deficit just keeps growing. We asked on the trade committee to look at why we have a large trade deficit. They did not want to study that.

Not only that, getting back to Bill S-17, my hon. colleagues, the NDP finance committee members, offered a number of suggestions as to how we could go after these tax evaders. One of the suggestions we offered was the following:

That the federal government study and measure, to the greatest accuracy possible, Canadian tax losses to international tax havens and tax evasion, in order to the determine the Canadian federal “tax gap”.

They do not even want to go there. They do not even want to look at the deficit.

[Mark Adler, Conservative, York Centre, ON]

We did that.

[Jasbir Sandhu, NDP, Surrey North, BC]

I know that the member across the aisle is interrupting, but these are the facts.

I will read another one for him. Maybe he will comment on this one. Here was another suggestion:

That the Auditor General evaluate, on a regular basis, the success of the Canada Revenue Agency in prosecuting and settling cases of tax evasion.

Here is a practical way to find out how well our system is working, yet the Conservatives do not want to do that. If we do not know how much we could collect and how much we are losing in revenue through tax evasion and tax havens, how are we going to know how much is out there?

I know, going back to the same premise I talked about before, that if the Conservatives do not like the facts, they will change them or make them up. We have seen that over and over again. That seems to be a regular occurrence with the government.

There are many other suggestions we made, which make practical sense, to bring in more revenue and catch those cheaters and evaders so that we can reduce our deficit and offer the programs Canadians need. All we have seen are cuts from the current government.

It does not make sense to me. If they were going to go after tax cheats, one would think there would be a need for more inspectors and workers to go after those people. The Conservatives have actually cut CRA people in the last number of years.

Again, we will support this bill, but the elephant in the room is still not being addressed by the current government, and that is tax evasion.

[The Acting Speaker, Conservative, Barry Devolin]

It being 11:10 p.m., pursuant to order made earlier today, it is my duty to interrupt the proceedings and put forthwith every question necessary to dispose of the second reading stage of the bill now before the House.

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

[Some hon. members]

Yes.

[The Acting Speaker, Conservative, Barry Devolin]

Accordingly, the bill stands referred to the Standing Committee on Finance.

(Motion agreed to, bill read the second time and referred to a committee)