An Act to amend the Income Tax Act (Canada-Barbados Income Tax Agreement)

Sponsor

Gabriel Ste-Marie  Bloc

Introduced as a private member’s bill. (These don’t often become law.)

Status

Introduced, as of Feb. 25, 2016

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Summary

This is from the published bill. The Library of Parliament often publishes better independent summaries.

This enactment amends the Income Tax Act in order to include, in the definition “taxable Canadian business”, any business that is entitled to a special tax benefit conferred by Barbados under the Canada-Barbados Income Tax Agreement Act, 1980.

Elsewhere

All sorts of information on this bill is available at LEGISinfo, provided by the Library of Parliament. You can also read the full text of the bill.

Income Tax ActPrivate Members' Business

February 25th, 2016 / 3:10 p.m.
See context

Liberal

The Speaker Liberal Geoff Regan

Before proceeding to the orders of the day, I wish to draw the House's attention to Bill C-222, An Act to amend the Income Tax Act (Canada-Barbados Income Tax Agreement), standing in the name of the member for Joliette.

The bill is intended to amend the Income Tax Act, by including in the definition “taxable Canadian business”, any business that is entitled to a special tax benefit conferred by Barbados under the Canada-Barbados Income Tax Act Agreement, 1980. The purpose of the bill is to put an end to the tax benefits that certain companies currently enjoy under the income tax regulations. If the bill were adopted, it would increase the tax payable by these companies. Essentially, it involves eliminating a tax exemption.

As members know full well, any measures of this type raise questions about the need for ways and means motions. As it states on page 900 of the House of Commons Procedure and Practice, Second Edition, the House must adopt a ways and means motion before it can introduce a bill that imposes a tax or other charge on the taxpayer. Historically, this was referred to as charges against the people and, like today, required the adoption of a ways and means motion.

As described in the 24th edition of Erskine May, at page 761:

...'charges upon the people' may be...summarized as: (a) imposition of taxation, including the increase in rate, or extension in incidence, of existing taxation; (b) the repeal or reduction of existing alleviations of taxation, such as exemptions or drawbacks;

Further, at page 763, it states:

The requirement for a Ways and Means resolution also applies to any proposal for a change in tax law or the administration of tax collection which may lead, albeit incidentally, to an increased or accelerated tax burden for any class of taxpayers. A Ways and Means resolution was accordingly needed to authorize the Treasury to vary the way in which certain taxes have effect in relation to a transfer of property, rights or liabilities.

The question before the Chair is whether this is the case with Bill C-222. It is clear that, by obliging certain entities to bear an additional tax or charge by eliminating an exemption, the bill standing in the name of the member for Joliette would mean that the entities would pay more tax. As a result, C-222 should have been preceded by a ways and means motion. The rules in this respect are clear; such a motion can only be introduced by a minister.

When confronted with a similar situation on November 4, 2011, my predecessor ruled that the legislative steps completed, namely introduction and first reading, had not respected the provisions of the Standing Orders and were therefore null and void.

The current circumstance is the same and, as a result, the Chair must order that the second reading of Bill C-222 be deemed null and void and that the bill be discharged from the Order Paper.

The hon. member is not without recourse. He may make use of a motion if he wants to ensure that the House debates this question. I therefore invite him to consider this option.

I thank hon. members for their attention.

(Order discharged and bill withdrawn)

Income Tax ActRoutine Proceedings

February 17th, 2016 / 3:15 p.m.
See context

Bloc

Gabriel Ste-Marie Bloc Joliette, QC

moved for leave to introduce Bill C-222, an act to amend the Income Tax Act (Canada-Barbados Income Tax Agreement).

Mr. Speaker, I am pleased to rise today to introduce a bill to amend the Income Tax Act in order to close tax loopholes that exist in Barbados, which is Canada's tax haven. Companies that generate profits there can repatriate those funds to Canada tax-free, even though that is not what is set out in the tax treaty.

The GDP of Barbados is roughly the same as that of my hometown, Joliette. On paper, however, Canadian companies invest three times more in Barbados than in France. For years now, the government has been saying that we need to wait for all countries around the world to take action before we tackle the problem. It says that nothing can be done through legislation. This bill proves that it is possible to take action through legislation. It sends a powerful message.

Finding the loophole in the maze made up of the act, the regulations, and the treaties was not easy. I want to thank everyone who helped me, including the experts I consulted and the groups that are calling for an end to tax havens. I also want to thank the legal officers of the House, who did a huge amount of work in very little time to draft this bill in impeccable legal form.

I am not suggesting that this bill solves everything. White collar criminals are very creative. However, by closing the loophole that exists in Barbados, this bill makes an important contribution to our efforts to create a fairer tax system.

(Motions deemed adopted, bill read the first time and printed)