Bill C-82 (Historical)

Multilateral Instrument in Respect of Tax Conventions Act

An Act to implement a multilateral convention to implement tax treaty related measures to prevent base erosion and profit shifting

This enactment implements a multilateral instrument in respect of conventions for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income.
The multilateral instrument is an international treaty developed as part of the G20 and OECD’s project to tackle base erosion and profit shifting (BEPS). The purpose of the multilateral instrument is to modify, in their application, tax conventions between two or more parties to the multilateral instrument so as to further the objectives of the tax convention. The multilateral instrument operates alongside tax conventions to modify them in their application; it does not directly modify the text of the tax conventions. The multilateral instrument will apply to a Canadian bilateral double tax convention only if both parties to the convention notify the depositary that the convention is intended to be covered by the multilateral instrument. The Secretary-General of the OECD is the depositary of the multilateral instrument. The implementation of the multilateral instrument requires the enactment of this Act.

Multilateral Instrument in Respect of Tax Conventions Act

[Lawrence MacAulay, Liberal, Cardigan, PE]

moved that Bill C-82, An Act to implement a multilateral convention to implement tax treaty related measures to prevent base erosion and profit shifting, be read the second time and referred to a committee.

[Jennifer O'Connell, Parliamentary Secretary to the Minister of Finance (Youth Economic Opportunity), Lib.]

Mr. Speaker, I am pleased to rise in the House to speak to this important piece of legislation, one that would help bring more fairness to the tax system and help our government continue its work to strengthen and grow the middle class. To have an economy that works for everyone, we need a tax system that is fair, and we need all Canadians to pay their fair share. After all, the taxes we pay as Canadians build the infrastructure that gets our goods to market, and help create good, well-paying jobs. They keep us healthy, support arts and culture, and help us build strong communities. However, the tax system only serves Canadians well when it is working fairly.

Canadians work hard, and they expect the government to do the same. Their hard-earned tax dollars must be used wisely and effectively to provide the services and supports that Canadians want and need. Delivering the programs and services that Canadians need while keeping taxes low for small businesses and middle-class families is important to our government, and to all Canadians.

When our government took office more than two years ago, we made a commitment to invest in growth while upholding the principle of fairness for all taxpayers. A fair tax system is key to ensuring that the benefits of a growing economy are felt by more and more people with good, well-paying jobs for the middle class and everyone working hard to join it. The government is taking action on multiple fronts to ensure that all Canadians are paying their fair share of tax.

Let me remind hon. members that one of the government's first actions was to cut taxes for the middle class and raise them on the top 1%. In total, more than nine million Canadians are benefiting from this tax cut. Then we moved to provide simpler, more generous and better targeted support to those Canadian families with children that need it most. We did that by replacing the previous child benefit system with the Canada child benefit. Compared to the old system of child benefits, the Canada child benefit, or CCB, is simpler, more generous and better targeted to those who need it most, and it is tax free. Nine out of 10 families are better off under the CCB, and the benefit has helped lift 521,000 individuals, including nearly 300,000 children, out of poverty. On average, families benefiting from the CCB are receiving $6,800 per year to help put healthy food on the table, pay for lessons and buy clothes and supplies for school. The CCB is especially helpful for those families led by single parents. These families are most often led by single mothers, who have lower total incomes on average, and so benefit more from an income-tested benefit like the CCB. In fact, close to 95% of CCB amounts paid to single parents with incomes below $30,000 are paid to single mothers.

We have also taken steps to help Canada's hard-working small businesses through a reduction of the federal small business tax rate. We reduced the small business tax rate to 10%, effective January 1, 2018, and will reduce it further, to just 9%, starting next January. For the average small business, this will mean an additional $1,600 per year. By this time next year, the combined federal-provincial-territorial average tax rate for small businesses will be just over 12%, by far the lowest in the G7, and among the lowest of all OECD countries.

Tax fairness continues to be a cornerstone of our government's promise to Canadians to grow a stronger middle class. In each of our three budgets, the government has taken steps to enhance the integrity of Canada's tax system and give greater confidence that the system is fair for everyone. An important focus of our efforts is cracking down on tax evasion and tax avoidance, which have serious financial costs for our government and all taxpayers.

Since our first budget in 2016, the government has continuously strengthened the Canada Revenue Agency's ability to successfully crack down on tax evasion and combat tax avoidance with increased funding. This funding has enabled far-reaching changes to the CRA's compliance programs, allowing them to better target those posing the highest risk of tax avoidance, including wealthy individuals with offshore accounts, and more effectively limit tax evasion and avoidance.

Those efforts are showing concrete results for Canadians. With our new systems, we are able to review all international electronic fund transfers of over $10,000 entering or leaving the country. This adds up to more than one million transactions each month.

Reviewing these transfers helps us do better risk assessments for unfair tax avoidance by individuals and businesses. Over the last two fiscal years, the government reviewed all large money transactions between Canada and eight countries of consent, with a total of 187,000 transactions worth a total of more than $177 billion.

Working closely with partners in Canada and around the world, there are now over 1,000 offshore audits and more than 40 criminal investigations with links to offshore transactions. The government is also aggressively pursuing those who promote tax avoidance schemes, and so far has imposed $44 million in penalties on these third parties.

This year, we are also gaining easier access to information on Canadians' overseas bank accounts with the implementation of the common reporting standard. With this new system, Canada and close to 100 other countries will begin exchanging financial account information. This information will help us connect the dots and identify instances where Canadians hide money in offshore accounts to avoid paying taxes.

We have expanded our specialist audit teams who focus on high-net-worth taxpayers. These teams are comprised of approximately 250 auditors responsible for scrutinizing more than 500 high-net-worth individuals and their webs of corporate structures.

In addition, in December 2017, the Minister of Finance and his provincial and territorial counterparts committed to ensuring that the appropriate Canadian authorities know who owns which corporations in Canada and to better harmonizing corporate ownership record requirements between jurisdictions. This information will help Canadian authorities take appropriate action against those engaging in international tax avoidance and criminal activities such as tax evasion, money laundering and other criminal activities perpetrated through the misuse of corporate vehicles.

While the actions the government has taken to date represent real progress, tax fairness is a complex goal requiring ongoing engagement and progress on many fronts. With this bill, the government is going even further to fight aggressive international tax avoidance. We are proposing rules to prevent taxpayers from inappropriately reducing or avoiding Canadian income tax through treaty shopping and other transactions or arrangements.

Canada is active in the efforts by the OECD and G20 to address tax planning strategies that exploit gaps or mismatches in existing tax rules to shift profits to locations where they are subject to little or no taxation. These groups are also working to counter strategies that shift profits away from jurisdictions where the underlying economic activity has taken place. This multilateral effort is known as the “base erosion and profit shifting” project.

The OECD's work on the base erosion and profit shifting project identified a number of instances in which the terms of current tax treaties could be modified to prevent potential abuse. However, given the large number of treaties in existence and the extended period of time the bilateral renegotiation of each of those agreements would entail, a new approach was developed to implement these modifications on an expedited basis. The result is the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting, also known as the multilateral instrument or MLI.

The MLI is the central focus of today's legislation. It will enable those jurisdictions that sign on to it to swiftly modify their bilateral tax treaties to incorporate the tax treaty related measures developed through the base erosion and profit shifting project.

The MLI was developed and negotiated by more than 100 countries and jurisdictions, including Canada. It is the first multilateral treaty of its kind allowing jurisdictions to incorporate the results of the BEPS project into their bilateral tax treaties and to work together more effectively in the fight against aggressive international tax avoidance.

At the same time, the MLI will provide greater certainty for taxpayers by including measures designed to improve dispute resolution under Canada's tax treaties.

Canada signed the MLI on June 7, 2017, and as we committed in budget 2018, we have tabled the legislation in the House to enact the MLI into Canadian law. The MLI will build on actions that the government has already taken to enhance the integrity of Canada's tax system at home and abroad, giving Canadians greater confidence that the system is fair for everyone.

Adoption of this legislation would modify the application of many of Canada's bilateral tax treaties, including the base erosion and profit shifting standards on treaty abuse, improving dispute resolution and certain other more specific anti-avoidance rules as well as mandatory binding arbitration in relation to tax treaty disputes.

With this legislation, the Government of Canada is taking the next step in the fight against aggressive international tax avoidance and safeguarding the government's ability to invest in the programs and services that help Canadians across this country.

From wherever we look today, there is no shortage of challenges facing the world economy and that means challenges for Canada as well. The good news is that we have strong economic fundamentals that allow us to seize opportunities in the global economy.

Our strong fiscal position is the envy of every G7 nation and gives us the flexibility to make strategic investments today that will help grow our economy tomorrow and for years to come.

The federal debt-to-GDP ratio remains firmly on a downward track. Canada's net debt-to-GDP ratio is the lowest among the G7 countries and our deficit-to-GDP ratio is projected to reach 0.5%.

Over the last three years, Canadians' hard work has expanded our economy, creating about 540,000 full-time jobs and driving down the unemployment rate to one of the lowest levels in nearly 40 years.

By cracking down on tax evasion at home and abroad, we are building on these tremendous advantages that Canada enjoys. We are ensuring that our government has the money needed to deliver programs that help Canadians and that Canada remains positioned as an excellent place to work, invest and do business.

As I have made it clear today, we have already made tremendous progress towards this stronger Canada, but as I have also noted, tax fairness is a complex goal requiring action on many fronts.

The government will therefore continue to identify and address tax evasion and aggressive tax avoidance schemes to ensure that the tax system operates as fairly and effectively as possible.

The legislation we are considering today is an important step towards this goal. I have every confidence that this will become increasingly evident as we proceed with our debate.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Mr. Speaker, let me first publicly congratulate the member opposite for her appointment to parliamentary secretary. That is a big achievement in this place.

I would like to go right to the subject of base erosion and profit sharing. The hon. Jim Flaherty put this in budget 2014, on consultations. It was a subject that the G20 looked at. I am happy to see the government pursue this strategy, because it is important for us to tackle.

The other part of this is, while we can worry about base erosion and profit sharing outside, what I am worried about is our tax base being eroded right now from a lack of investment, where we see the uncertainty that the government has allowed to continue by not being able to negotiate a successful NAFTA negotiation, when Mexico has. At the same time, it is introducing carbon taxes, extra payroll taxes, which ultimately would make us less competitive.

The member's portfolio specifically mentions youth employment. These things will harm the economic ability for young people to get employed in this country if this continues.

This legislation is welcome because it continues the great work of the previous government.

What is the parliamentary secretary going to do to ensure those young people have those opportunities and do not go down to the United States?

[Jennifer O'Connell]

Mr. Speaker, I thank my hon. colleague for mentioning my recent appointment. I am very excited to be in this role.

Let me start with the point about young people. What young people want as they graduate and get new jobs is stability and fairness in the tax system, just like anyone else. What businesses want is confidence in the tax system and the ability to compete globally and not be uncompetitive because of unfair profit shifting in other jurisdictions or base erosion through treaty shopping.

This legislation was introduced in 2014. Why did the previous government not enact it? It would be good news for Canadians, because it would ensure that our tax system was fair and ensure that we had the resources to spend on the programs that actually grow the economy.

In regard to competitiveness, the Minister of Finance pointed out yesterday that we have had 8% growth, over the last six consecutive quarters, in business investment. Our plan is working. This would ensure that our system remained fair and competitive for businesses.

[Gord Johns, NDP, Courtenay—Alberni, BC]

Mr. Speaker, my colleague talked about tax fairness. I think about my friend, Mike, who is working at the mill. He is paying taxes like everyone else. However, the government continues to hold up the tax loophole for CEO stock options. I have concerns and Mike has concerns.

Why would CEOs get a tax deduction of almost 50% when they are having a big win? We know who benefits from this tax deduction. Ninety-two percent of it goes to the 1%. This benefits the very wealthy. When people have success, they are winners. We want them to do well, but they need to pay their fair share of taxes. The government continues to support a tax structure that protects the privileged.

This is a step in the right direction, but it is far from what is needed. We need something with more teeth. We need them to follow through on their promise to close the CEO stock option loophole. Will the government take the next step and close that CEO stock option loophole so that CEOs and the 1% pay their fair share of taxes like everyone else in this country? That is tax fairness.

[Jennifer O'Connell]

Mr. Speaker, I agree that tax fairness needs to be at the core of our system so that all Canadians are paying their fair share. That is precisely why one of the first things we did was lower taxes for middle-class Canadians and actually raise them for the top 1%.

In addition, I want to be very clear that this legislation would not replace or amend. It would actually work in conjunction with other treaties or programs Canada signs on to, such as on information sharing. This would work in conjunction with strengthening our ability globally to fight aggressive tax evasion and tax avoidance. It would also provide us with additional tools in the future if we felt that the government needed to take additional steps on aggressive tax avoidance and tax evasion so that we were equipped to be globally competitive while creating a fair tax system here.

One of the best things for this is creating business confidence in the global economy. For example, the dispute resolution process gives businesses the opportunity to deal with challenges in a timely matter. It is something that is globally accepted, and as I said, it works in conjunction with other programs. It is an enhancement, and it should provide confidence to Canadians that we are working to create a fair tax system.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Mr. Speaker, I would like to commend my colleague on her speech.

I think that an agreement such as the one proposed by the G20 and the Organisation for Economic Co-operation and Development, the OECD, is a good initiative.

My colleague mentioned that this bill will help fight tax havens.

To her knowledge, if Bill C-82 is passed as it now stands and treaties are ratified between various parties, will it be possible to close the Barbados tax loopholes?

According to my colleague, will Bill C-82 ensure that Canadian financial firms that repatriate their taxes from subsidiaries in Barbados will be subject to Canadian taxes?

[Jennifer O'Connell]

Mr. Speaker, this would be good news for Canada. This would be good news for businesses and Canadians, because it would create a fair tax system. As I said in answer to the last question, this would work in conjunction with other measures this government has taken.

The hon. member mentioned Barbados. Barbados is actually one of the countries that is part of this agreement. The measures being taken would enhance our ability to avoid profit shifting and base erosion, which most people refer to as treaty shopping, to avoid paying one's fair share. This would be good news for Canadians. This would be good news for businesses that participate globally. It would keep them competitive while ensuring that our tax system was fair and able to deliver the programs Canadians need.

[Marilyn Gladu, Conservative, Sarnia—Lambton, ON]

Mr. Speaker, I know that this legislation seeks to prevent double taxation as well. The member talked about dispute resolution. I know there were issues with many residents across Canada who own Canadian corporations. When the U.S. changed its tax rules recently, people living in the U.S. who own Canadian corporations ended up paying hundreds of thousands of dollars of double tax, and dispute resolution was not present.

Could the member describe how that would work to bring a timely resolution for these people?

[Jennifer O'Connell]

Mr. Speaker, to clarify, this legislation does not include anything with regard to double taxation. This legislation is specifically with regard to the MLI, which relates to base erosion, profit shifting and treaty shopping. Double taxation or the sharing of information is not part of this legislation. This is simply about the MLI and the enactment of the MLI agreement. I wanted to make the point clear that what we are dealing with here is base erosion and profit shifting.

[Gord Johns, NDP, Courtenay—Alberni, BC]

Mr. Speaker, I asked the parliamentary secretary earlier why the Liberals have not closed the CEO stock option loophole, and I did not get an answer. We know that 92% of that stock option loophole goes to the 1%. All I am looking for is an explanation as to why they have not followed through with their promise.

[Jennifer O'Connell]

Mr. Speaker, I will reiterate once again that we actually lowered taxes for the middle class and increased them for the 1%, which I believe my hon. colleague voted against. This legislation is specific to profit shifting, base erosion and treaty shopping. This is what we are focused on. It is a piece in the puzzle to deal with tax avoidance and tax evasion, which I hope all members support.

[Jamie Schmale, Conservative, Haliburton—Kawartha Lakes—Brock, ON]

Mr. Speaker, I have the pleasure to rise today to speak to an important piece of legislation, Bill C-82, an act to implement a multilateral convention to implement tax treaty related measures to prevent base erosion and profit shifting. The bill would, upon royal assent, modify up to 75 of Canada's bilateral tax treaties, also known as covered tax agreements, or CTAs, in order to combat base erosion and profit sharing, or BEPS, as it is more commonly known in taxation vernacular, for those watching at home.

For those Canadians I just mentioned, and indeed for the members of the House who are not tax lawyers, including me, Bill C-82 is quite a mouthful, but basically, the bill purports to make it more difficult for corporations to hide money in offshore tax havens. At this early stage in debate, it is worth discussing a few of the concepts inherent in the bill so that we can have a more fulsome discussion moving forward.

First, the multilateral convention to implement tax treaty related measures to prevent base erosion and profit shifting is a multilateral instrument, or MLI, which is the product of the Organisation for Economic Co-operation and Development's G20 BEPS project, which began in 2013. Base erosion and profit shifting, or BEPS, refers to tax-planning strategies that exploit loopholes in tax rules to artificially shift profits to low- or no-tax jurisdictions where there is little or no economic activity, allowing little to no corporate tax to be paid. Moderate estimates indicate annual losses of anywhere from 4% to 10% of global corporate income tax revenues, or $177 billion to $425 billion annually. In Canada, we are looking at somewhere between $3 billion and $6 billion annually in taxes that could go to pay for any number of important programs or projects to benefit all Canadians. It might even buy us a pipeline or maybe pay off a third of the annual deficit, if the Liberals were so inclined.

Leaders of the OECD and G20 countries, as well as over 60 other countries, jointly developed 15 actions to tackle tax avoidance, improve the coherence of international tax rules and ensure more transparent tax regimes. The purpose of the MLI is to allow signatories to swiftly implement tax treaty related measures to prevent BEPS. The goal of implementing the measures in the MLI is to end treaty abuse and treaty shopping by transposing, in existing tax treaties, these jurisdictions' commitment to minimally include in their tax treaties tools to ensure that these treaties were used the way the signatories initially envisioned. Once implemented, the MLI would modify up to 75 existing bilateral tax treaties with, at minimum, the adoption of the OECD treaty-abuse and improved dispute-resolution standards.

It is important to note that there are scales on which Canada can adopt the 15 actions included in the MLI. Its treaty-abuse standard consists of two parts. First is an amended preamble, suggesting that covered tax treaties are intended to eliminate double taxation without creating opportunities for non-taxation or reduced taxation through tax evasion or avoidance. Second is a broad anti-avoidance rule, referred to as the principal purpose test, or PPT. Under the PPT, any tax benefit could be denied where it was reasonable to conclude that one of the main reasons for the transaction was to avoid paying taxes unless it was established that granting the benefit would be in accordance with the object and purposes of the relevant provisions within the treaty.

The other minimum standard is the adoption of mandatory binding arbitration to assist in resolving treaty-based disputes in a timely and efficient manner. Initially, Canada took a conservative approach toward the MLI, agreeing to implement the minimum standards. However, recently, the government has shifted that approach and has announced its intention to remove some of its initial reservations on optional MLI provisions, namely, those pertaining to dividends, article 8; capital gains, article 9; dual residency tie-breaker rules, article 4; and relief from double taxation, article 5.

I believe that this is an important factor to consider, because following ratification, Canada would be unable to add any reservations. However, signatories could withdraw or narrow a reservation following ratification.

The provisional MLI position of each country indicates the tax treaties it intends to cover, the options it has chosen and the reservations it has made. Signatories can amend their MLI positions until ratification. After ratification, countries choose to opt in with respect to optional provisions or to withdraw reservations. This makes the debate and analysis of Bill C-82 very important at committee stage.

Make no mistake, the Conservatives do support, in principle, Bill C-82. We want a full vetting at committee and we want to ensure the bill will meet the expectations of Canadians from coast to coast to coast. I think everyone in the House would agree we must get this right.

I would like to turn our attention now to the four additional provisions added to Bill C-82.

The first addition is to implement a one-year holding period to access treaty-based withholding tax reductions on dividends under a covered tax agreement. A covered tax agreement, or CTA, is an agreement for the avoidance of double taxation enforced between countries to the MLI and for which countries have made a notification that they wish to modify the agreement using the MLI. Double taxation is a taxation principle referring to income taxes paid twice on the same amount of earned income. It could occur when income is taxed at both the corporate level and the personal level.

Double taxation also occurs in international trade, when the same income is taxed in two different jurisdictions, and that is the area we are most concerned with here today. Income may be taxed in the jurisdiction where it is earned then taxed again when it is repatriated in the business's home country. To avoid these issues, countries sign treaties for the avoidance of double taxation. It is the abuse of that system which fosters the need for the bill we are discussing today.

The withholding tax reductions on dividends generally apply where the recipient of a dividend is a company that owns, holds or controls more than a certain amount of the shares or voting power of the dividend-paying company. However, article 8 of the MLI will deny access to the special relief if those ownership conditions are not met throughout a one-year period, including the day of the payment of the dividends.

The second optional provision would add an examination period of one year preceding alienation of the property in determining whether a CTA would exempt capital gains on the sale of equity interests that would not derive their value principally from immovable property.

According to Osler, Hoskin & Harcourt LLP's article, “Canada tables NWMM to ratify MLI; Updates MLI reservations”: It states:

Canada’s domestic “taxable Canadian property” rules impose a five-year lookback period for determining whether shares derive their value principally from certain types of Canadian properties (such as real property and resource properties). By contrast, many of Canada’s tax treaties exempt gains from being taxed in Canada where the shares sold by a resident of the other state do not derive their value principally from immovable property in Canada at the time of disposition. Article 9(1) of the MLI, which Canada proposes to adopt, will allow the source country to tax such gains if the relevant value threshold is met at any time during the 365 days preceding the disposition.

The new provision on capital gains will also extend the application of existing provisions in Covered Tax Agreements that do not already provide for such taxation to allow taxation of gains from both shares and other equity interests (such as interests in partnerships and trusts), in each case provided the relevant immovable property threshold is met during the 365-day testing period.

The third change [Article 4] is to adopt a provision for resolving dual resident entity cases...Article 4 of the MLI adds certain factors that the competent authorities should take into account when determining residency status: place of effective management, place where the entity is incorporated or otherwise constituted, “and any other relevant factors.”

The fourth and last addition is the adoption of a provision of the MLI that will allow certain treaty partners to move from an exemption system as their method of relieving double taxation, to a foreign tax credit system.

There are a number of considerations I would like to raise, considerations I hope will be addressed at committee.

On article 4, Osler, Hoskin & Harcourt LLP, in its analysis, warns:

The new article on dual resident entities does not provide for a clear result where the entity is a dual resident by virtue of a corporate continuance. Some such entities may be governed by the laws of both the jurisdiction under which they are created and the one to which they are continued. The U.S.-Canada treaty contains a tie-breaker rule that provides that such an entity would be resident only in the jurisdiction where the entity was created. By referring to the place where the entity is incorporated or otherwise constituted as a relevant factor, the new MLI provision may be signalling that a similar approach should be applied...

Whether there is a one-size-fits-all template that can be applied to address the concern or that this is best solved by an agreement between signatories is not clear. I again encourage the committee to look into this matter and provide some clarity on this.

Article 5 of the MLI allows countries to adopt one of three different options when removing such treaty-based guarantees. It is unclear at this moment which of the three options the government intends to implement. This may be a matter for the government to decide after ratification or it may not.

In any event, some time to consider witness testimony on the options available to eliminate the issues of double taxation will provide some guidance, I think, for the government when the time comes to implement an option.

The government did not announce an intention to remove its reservation on article 7(4), which would specifically allow treaty benefits that would otherwise be denied under the PPT to be granted in full or in part by the competent authorities in appropriate circumstances.

Osler, Hoskin & Harcourt LLP cautions that this is problem, illustrated with this example. It states:

...assume that an investor would be entitled to a 15% withholding tax rate on dividends had it made a direct investment into Canada, but instead invests into Canada through an intermediary that would have been entitled to a 10% withholding tax rate. A denial of treaty benefits under the PPT could lead to a 25% withholding tax rate on dividends to the investor.

Without the provisions in Article 7(4) the mechanism to allow for remedies will not exist.

According to Osler:

This is particularly important, for example, for private equity and other collective investors that may be resident in multiple jurisdictions. Canada has also not provided any additional guidance on when or how the PPT is intended to apply to private equity and other collective investment vehicles--despite many suggestions that further guidance is needed (either on a unilateral or bilateral basis).

I would strongly encourage the committee to examine this matter and pay particular attention to the very broadly worded PPT, which may be open to various interpretations.

Gowling WLG's partner, Laura Gheorghiu, in her article on the MLI tax treaty and what it means for taxpayers, brings to our attention concerns regarding article 8. She states that article 8:

...addresses the reduction of the 25% domestic dividend withholding rate under most CTAs to 5% where the dividend is paid to a corporation that, at the time of the payment, owns, holds or controls directly (and in certain CTAs, indirectly) at least 10% of votes (or in certain cases holds more than 10% of the shares) of the dividend payor. Article 8 will deny the reduced treaty withholding tax rate unless the applicable ownership conditions are met throughout a 365-day period that includes the day of the payment of the dividends. For this purpose, ownership changes resulting from corporate reorganizations (e.g. amalgamations) of the dividend payor or shareholder are ignored. This...holding period is meant to ensure that non-resident companies that engage in certain short-term share acquisitions will not benefit from the lower treaty dividend withholding tax rates.

The application of the hold period rule will be problematic in practice because the 365-day period can straddle the transaction date. Where the holding period test has not been met at the transaction time, the corporate dividend payor has a difficult choice to make. If it withholds at the lower rate, it exposes itself to the risk that the shareholder will not meet the holding period test and, therefore, the payor will be liable for the additional withholding tax and penalties. Alternatively, if it withholds on the dividend at the domestic rate, and the test is met, the shareholder will then need to apply for a refund of the excess withholding, which will engender additional costs and delays.

As of today, 84 countries have signed the MLI including Canada. Six more are interested in signing and 10 have ratified the convention.

It is interesting to me that the United States has chosen not to sign the MLI. Rather than pursuing legislation to recoup unpaid taxes in an investment like the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS, the U.S. has chosen a different approach.

When the OECD first announced its plan to go after tax planning and double taxation by multinationals, the U.S. had the highest statutory corporate tax rate in the OECD. Since then, the U.S. has passed historic corporate tax cuts as part of the tax cuts and jobs act, lowering its headline corporate tax rate from 35% to 21%, less than the OECD average.

The U.S. has also made significant changes to the international taxation of its U.S. multinationals.

The U.S. has taken steps to address BEPS and non-taxation of multilateral income by creating strong incentives for companies to relocate investment, economic activity and profits in the U.S. through a more competitive tax code..

To be clear, I am not advocating for the abandonment of Bill C-82 As I mentioned earlier, the Conservatives support the principles behind the bill, but we also support lower taxes for Canadians and businesses. Lower corporate taxes, reducing red tape and creating an investor-friendly climate is something we need to do in concert with Bill C-82. The more investment dollars we can attract and retain in Canada, the less taxes we need to spend in pursuit of those who exploit loopholes in tax rules.

In 2013, the previous Conservative government supported the effort to establish the OECD G20 BEPS working group to curtail profit shifting and tax avoidance.

The Conservatives support measures to crack down on tax evasion. Aggressive tax avoidance is a major source of lost tax revenue for high tax jurisdictions like Canada. However, let us remember that the vast majority of citizens, residents and businesses in Canada pay their taxes and follow the rules. Having a fair tax system for all Canadians and corporations that do business in Canada is fundamental to a healthy and equitable economy.

I want to quickly talk about what is happening when there is a lower-tax environment, something we do when we lower regulations and red tape and allow businesses to thrive in open and free markets. We are seeing that, as I mentioned, in the United States. The last number I saw was that there were 6.7 million unfilled jobs in the United States. Obviously, when that happens, wages go up, which we are seeing that all across the board, unemployment goes down, bonuses are given out and employees are better off than they were before. More money in more people's pockets gives them more options, more choices in their own lives to spend on projects and things they feel are important to them.

When we look at what is going on in Canada, we are almost doing the exact opposite: taxes are going up; red tape and regulations are grabbing onto businesses, they are strangling them; and businesses are looking for options elsewhere. We are already seeing it in the energy sector.

We have lost out on tens of billions of dollars worth of investment because of the government. Investment is fleeing; we are losing jobs, families are worse off than they were before; and we are going in the opposite direction in what most countries are doing, including one of our competitors, the United States. This is important to note because those of us on this side of the House believe that lowering taxes, allowing free markets to weed out bad actors, allowing people to have more choice and freedom in their daily lives is the best way to have a free and open society, like we do here.

With careful consideration of the bill and amendments at committee, these measures would prevent treaty abuse, improve dispute resolution and reduce the incidence of tax avoidance. However, I also laid out another case as well.

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

Mr. Speaker, I thank my colleague for his speech. Tax evasion and tax avoidance are extremely important issues. As he said when he referred to how most businesses and individuals pay their taxes, problems arise when we consider the amounts that are not making it to the government coffers. Some people who are already in a position of privilege and power are benefiting from a system that has clearly failed in achieving fairness, in this case tax fairness, within our society.

The multilateral instrument that we are talking about here today reminds me of the debate that we had in the House of Commons during the last Parliament about the free trade deal with Panama. Before ratifying a free trade agreement with that country, the United States made sure that Panama had made a firm, official commitment to combat tax evasion and that it was making an effort to ensure that the United States was getting the money it was entitled to. Canada did not do that. That was one of the reasons why we opposed the agreement signed by the previous government.

Does my colleague not believe that we should ensure that the countries with which we sign free trade deals do more to ensure that the money belonging to our own citizens comes back to us?

[Jamie Schmale, Conservative, Haliburton—Kawartha Lakes—Brock, ON]

Mr. Speaker, as I mentioned, I did lay out my concerns, and I think that addresses much of the question.

I also mentioned that there are ways, in addition to this piece of legislation, to allow money to be repatriated to our country. We continue to spend money to go after these bad actors. On the other side, we see the money that we are losing out on, which could pay for a number of programs that Canadians love and cherish. I do think there is an obligation to go after that, as I mentioned in my speech, in concert with the bill, and there are ways to do it.

We can see what is happening in the United States. Money is being repatriated to the United States in hundreds of billions of dollars, because the Americans were able to lower the tax rate and provide incentives for companies to bring that money back. We could go after them in a meaningful way through this legislation. We could also be a tax magnet as well. We could allow companies to repatriate the money they have, invest in their workers, invest in their companies, pay their taxes here domestically, and I think we would all win because of that.

This is not a situation with one solution only. I think the government needs to look at that avenue as well and ensure that we are being competitive on the world stage in terms of a friendly business environment.

[Kevin Lamoureux, Liberal, Parliamentary Secretary to the Leader of the Government in the House of Commons]

Mr. Speaker, here we have another piece of legislation that I believe would assist in setting the agenda which really started virtually on day one with this government when we brought in legislation to look at giving Canada's middle class a tax break, which is something I would remind my colleague across the way that he voted against. Also, we put a tax on Canada's wealthiest 1%. Today, we have legislation before us which looks at ways in which we can ensure there is a higher sense of tax fairness, which is something Canadians want to see. It has been a priority for this government. We have invested literally hundreds of millions of dollars to look for and prosecute tax evaders.

Would my colleague across the way not agree that in good government we take the measures such that we have taken virtually from day one? There may be a bit of remorse for not supporting some of the previous legislation, but I would hope that the Conservatives will be supporting this piece of legislation.

[Jamie Schmale, Conservative, Haliburton—Kawartha Lakes—Brock, ON]

Mr. Speaker, as I mentioned in my speech, we are supporting the bill. We do have our concerns, and I laid them out in my speech. I spoke for 20 minutes on what I thought could be ways we could improve this piece of legislation.

I would also point out that this project has been ongoing since 2013 under the previous Conservative government. We supported the effort to establish the working group to curtail profit sharing and tax avoidance. The agreement in 2013 has developed into the multilateral convention.

I should mention that the previous Conservative government began cracking down on tax avoidance measures. One example from January 2015 is that electronic measures of $10,000 or more must be reported to the Canada Revenue Agency by banks and financial institutions. The actions were already being taken on this side of the House when we were in power.

Again, on this piece of legislation, I laid out my concerns. I am hoping that through the committee process, the committee is a able to work on and iron out some of the concerns I mentioned. I am sure some issues will be raised by my colleagues at committee and through the testimony, and we will be able to improve the bill and hopefully make Canada a more competitive place on the world stage.

[Gord Johns, NDP, Courtenay—Alberni, BC]

Mr. Speaker, it is good to hear that the Conservative Party is going to support this step forward in terms of closing loopholes and tax avoidance. However, we do not believe that this bill goes far enough.

My colleague talked about tax fairness. The Conservatives do not believe that New Democrats support risk takers in our country doing well, but we do. However, we also support them paying their fair share of taxes.

With respect to the CEO stock option loophole, CEOs are getting a 50% discount. Risk takers who have done well, who have won because of their hard work, are getting a discount on their taxes, which is not fair.

My friend Maureen Fraser owns the Common Loaf Bake Shop in Tofino, B.C. She pays her fair share of taxes. When she has a good year, she pays a little more, and she is happy to do so. But she does not think it is fair that CEOs get a discount on their taxes when they have a big win. Ninety-two per cent of the CEO stock option loophole would go to the 1%. That is unfair.

Does my friend and colleague support closing the loophole for the CEO stock option?

We know it is not about competitiveness. I have talked to CEOs and not one of them has told me they are going to move their business out of the country or they are not going to work in Canada if they do not get a discount on their taxes and they are not paying their fair share like everybody else.

The Liberals promised to close the loophole. Would the Conservatives do the same? Does my colleague think that the CEO stock option loophole is unfair?

[Jamie Schmale, Conservative, Haliburton—Kawartha Lakes—Brock, ON]

Mr. Speaker, I know my friend is a supporter of the free market for the most part and I do appreciate that.

I would point out to him a couple of things. One way to fix that would be a flat tax, which would fix the problem of tax avoidance altogether. This is the place for debate and we can discuss that back and forth.

I would also point out that as investment is currently fleeing this country in tens of billions of dollars in the oil and gas sector, jobs are being lost and opportunities are going south of the border where the environment is more favourable to business.

We are already seeing that the money the Liberal government paid to nationalize the Trans Mountain pipeline, those taxpayer dollars went to the United States to build infrastructure in that country. We continue to fund projects in other countries rather than attract investment to ours. It is totally backward. Do not even get me started with the Asian infrastructure bank, where we are paying to build pipelines in other countries except ours. We did nationalize, which we did not have to do, but that is a discussion for another day.

[Todd Doherty, Conservative, Cariboo—Prince George, BC]

Mr. Speaker, I find it rich that our hon. colleague from Winnipeg North proudly stands and talks about his government from day one when the Prime Minister has openly admitted that Canadians know that most small businesses are just an opportunity for rich people to hide their money and the finance minister conveniently forgot that he had a French chalet.

We have talked about government not being there to create jobs but it is there to create an environment for business to invest. I wonder if our hon. colleague would share some of the stories he has heard from local business owners in his riding about their concerns.

[The Speaker, Liberal, Geoff Regan]

I am afraid the hon. member for Haliburton—Kawartha Lakes—Brock will only have about 10 seconds to share stories, so that will be a challenge.

[Jamie Schmale, Conservative, Haliburton—Kawartha Lakes—Brock, ON]

Mr. Speaker, because I come from an agriculture community, I will say this. Farmers are getting frustrated because in order for them to do business they continue to struggle with red tape and regulations which are strangling them. When it is more profitable to regulate the farm than be a farmer, we have a problem.

The House resumed consideration of the motion that Bill C-82, An Act to implement a multilateral convention to implement tax treaty related measures to prevent base erosion and profit shifting, be read the second time and referred to a committee.

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

Mr. Speaker, I thank my almost neighbour from Longueuil—Saint-Hubert for his warm welcome.

Today, we are debating Bill C-82, which does not exactly have the most exciting title in the world but does address an extremely important issue. I am referring to the Act to implement a multilateral convention to implement tax treaty related measures to prevent base erosion and profit shifting. There may be complicated bills that come before the House, but it is rare to have one with a title that takes up a significant amount of the time we have to debate it.

All joking aside, tax avoidance and tax evasion are key issues. The urgency of dealing with these issues is becoming increasingly evident, not just to us as legislators, but also to Canadians. This may seem like a subject that is not necessarily of interest to the average person. When we go door to door in our ridings, when we have an opportunity to speak with constituents at various events held in our ridings, the income tax act and the tax agreements signed with other countries may seem like issues that are not top of mind. Our constituents are focused on daily life, sending their children to school, looking after their health and managing their own budgets.

The thing that stands out to people is the fundamental inequity of this situation. People pay their taxes and the Canada Revenue Agency chooses to relentlessly go after single mothers who may have simply misunderstood a form or whose situation may have changed—maybe they separated from their child's father for example. I personally know individuals who have gone through shameful situations. I am not sure if my colleagues have had the chance to read the letters that the CRA sends those people. Even as members of the Standing Committee on Finance, I wonder if we would be able to understand the pages and pages of text and wording that is so complicated it has no meaning. We should not have to hire an accountant or, in some cases, a lawyer, because of the actions of an agency that is supposed to be a sound manager of taxpayers' money.

This situation is bad enough, but it is even worse when we consider that CEOs, the wealthiest individuals and unfortunately quite often friends of those in power, benefit from all these exemptions, all these poorly drafted laws, all these agreements that do not go far enough. Unlike the single mother, to continue with that example, they are able to take vacations in Barbados. Then they leave their money there while they are at it. It is unacceptable.

As a society, we cannot accept that. Our collective wealth, the social contract in which we are engaged as citizens of a society by paying taxes, and the work we call on the government to do on our behalf with our money, is one of the most fundamental aspects of our society. When we consider that some people do not want to fulfill this contract, do not want to meet this commitment, then we realize that we have failed somehow. Somewhere the government has failed in one of its basic duties.

These policies, these failures, are opening up a deep, dark gap of inequality between the rich and the not-so-rich. It is odd, because the Prime Minister loves talking about the middle class and those working hard to join it. In reality, when I am in my riding, I do not see a middle class and people working hard to join it. What I see is that certain citizens are honest and hard-working, and others do not need to lift a finger because they know full well that they will always enjoy the favour of the people in power. That is what is deplorable.

In my riding, there are some people who are relatively well off. They are the kind of people the Prime Minister loves to go after and brand as cheats. They are business owners running small and medium-sized companies, and to some people, they may appear to belong to a more privileged class. They have earned a good living and worked very hard on their businesses, but they are not the ones who should be targeted.

There are also people in my riding who struggle to put food on the table and can barely scrape together their rent or mortgage payments. In terms of means and lifestyle, these people could not be further apart. However, they have one thing in common, and it is what motivates me as an MP. They are all honest, and they all believe this:

“A rising tide raises all ships.”

The idea is that we live in a society where the wealth we share should benefit us all. They agree on that. The issue is the wealthiest 1%, which sometimes means literally 1% of the population but sometimes means Liberal Party donors who are friends with the Minister of Finance. They are the ones benefiting from a system that is totally broken.

Let us dig into the substance of the bill. Kudos to the member for Sherbrooke, who has been doing excellent work as our national revenue critic. He is doing amazing work on this extremely complex issue. Some people find this hard to believe, but he is Canada's youngest ever federal MP. His hard work got him re-elected, and he is so up on his issues that he can handle this extremely complicated file.

I also want to give a shout-out to the member for New Westminster—Burnaby, who is doing great work as the NDP's finance critic. That is our job, after all.

We moved a motion in the House in this regard and so did our colleague from Joliette. We are calling on the government to do more and to solve the various problems and failures related the system that I just talked about a few moments ago in my speech.

The bill before us seeks to implement multilateral instruments and to address the fact that some of our agreements with other countries are expiring. These instruments are an important step that will enable to make changes to our multilateral and bilateral agreements more easily.

People need to understand that agreements, accords and conventions that Canada has signed with other countries often exacerbate the problem. We are being told that all of these agreements are being signed to prevent double taxation. For example, a business or individual would have to pay taxes in Canada or another country. However, the legislation and other aspects of the legal framework need to be updated because they facilitate tax evasion and tax avoidance, even though ideally they should not.

We will support the bill because we think it contains good measures that are a step in the right direction. However, let us be clear. Our support for this bill at second reading is not a blank cheque. We are far from supporting the Liberal government's approach, which has failed to date. The fact that we are supporting this bill also does not excuse the fact that the government has not taken action on any of the other issues related to tax evasion and tax avoidance that are of concern to us.

Let us look at subsection 95(1) of the Income Tax Act and section 5907 of the Income Tax Regulations. Dividends from a foreign subsidiary are exempt from taxes in Canada. That means that there are companies that are making a lot of money and they are even doing business with Quebec and Canadian consumers. They are making their money here but inflating their profits because they are exempt from paying taxes in Canada.

Closing loopholes is just a matter of common sense. We are not talking here about companies that do 95% of their business in other countries and 5% in Canada. We are talking about companies that do the opposite. We are basically talking about companies that conduct most of their business in Canada or the United States but that have opened a bank account in another country where they do almost no business at all. That is a major shortcoming, and the government has still not updated the legislation, even though it would have been quite easy to do. The bill that we are debating contains elements related to tax evasion and tax avoidance, but it does nothing to address the relevant aspects of the law.

It is funny, because earlier today, I heard a Liberal member say this has been one of the government's priorities since its first day in office. The Liberals have been in power for three years now, and nothing has been done despite pressure from civil society, prominent members of society, and even some former Liberal Party candidates. So many Quebeckers have called for action on this. We and our colleagues from other parties have been proud to speak on their behalf. Échec aux paradis fiscaux and the non-partisan Réseau pour la justice fiscale Québec are just two great examples of groups that are standing up and speaking out.

Just as an aside, not to be mean, but that is what happens when the 41 Liberal members from Quebec remain silent. When so many groups and individuals in Quebec are speaking up, those MPs come off as being not only silent, but also deaf because they are not getting their constituents' message.

I find it deeply troubling that no party that has ever been in power is blameless in this matter. I have only to come back to the example I mentioned earlier in my question to a Conservative MP. In the last Parliament, during debate on the bill on the free trade agreement with Panama, which was negotiated and signed by the Conservatives, I raised an extremely important point demonstrating that the issue of tax evasion and tax avoidance is nothing new. For years we have been talking about it, and for years the federal government has failed to take the necessary steps that Canadians expect.

To come back to the agreement with Panama, that country is known to be complicit in tax evasion and tax avoidance. The United States can hardly be called progressive, especially in light of recent events, but even they realized that when making free trade deals and opening up their markets to countries like Panama, it was vital to include a formal requirement demanding the return of any government or taxpayer money that had been stashed away by individuals who refuse to meet their obligations to our society. Through that agreement and other measures, the United States managed to recover some of the money, although there is still a lot of work to be done.

However, what has Canada done about this? We only raised the issue without even discussing the problems associated with environmental protection or labour conditions in Panama. We ignored these crucial issues. Even if we focus on just this one element, the government did nothing when we raised the issue.

This is very worrisome because the government keeps telling us that its negotiations will be based on progressive values and that it will discuss reconciliation with indigenous peoples, gender equality and environmental protection. Naturally, I agree with that. After all, the NDP are proud to raise these issues every day in the House of Commons.

However, when we have a progressive agenda, we must also promote fairness. We must take action to eliminate the gap between the friends of those in power, the people who can afford to vacation in Barbados and take their wallets with them, and the honest people working hard in our communities, the rich and the not so rich, business people, single mothers and everyone else who is harassed by the Canada Revenue Agency. That has to stop. I am repeating myself, but I have to.

I can only hope that when the government negotiates these agreements, it will recognize that we must continue on this path and demand better conduct from certain rogue international stakeholders. I may be suffering from misplaced optimism because this government has a bad track record on this.

When the Liberals came to power, they boasted that Canada is back, but what is Canada doing? It is allowing Netflix, Facebook, Google, and American multinational corporations to get away with not paying their fair share of taxes. Then it allows Liberal Party billionaire donors and friends of the Minister of Finance to do the same thing and shirk their obligations to our country. Then it allows environmental delinquents to evade their obligations. We do not even respect our own obligations. In addition, Canada keeps exporting arms to countries like Saudi Arabia. On that, we might say that the Liberals are trying to redeem themselves, according to media reports.

All of this is relevant to the debate on Bill C-82 because the bill talks about a multilateral instrument. If Canada really is back, then it should be showing some leadership in helping countries that want to combat tax evasion, tax avoidance and all the other problems I just listed. Instead, Canada is sheltering delinquent players and prolonging a situation that has existed for far too long.

I would like to explain why all of this is so important in a way that the people at home can understand. I do not mean to be condescending—far from it. When I myself get letters from the Canada Revenue Agency, my first reaction is often to wonder what it is all about. When people get these letters, they sometimes ask their friends if they are going to jail, because they cannot understand them. That is how single mothers, sick people and people with disabilities are treated when they try to claim benefits they are entitled to.

The member for Sarnia—Lambton said that this is criminal. She herself rose in the House of Commons to talk about diabetic people being targeted by the Canada Revenue Agency, which is totally unacceptable. However, the Minister of National Revenue keeps bringing up this $1-billion figure. She keeps talking about money, but unless the law and agreements are changed, we are just throwing money out the window. That is a very apt phrase in this case, because, after all, that is what the rich in our society are doing, and it is all the more laughable because this money is landing well outside the federal government's coffers. That is unacceptable.

I would now like to say a few words to all of my constituents. It is all well and good to debate the fiscal code of conduct and the Income Tax Act, but it is important to recognize that the government has consistently failed when it comes to closing the gap between the rich and the poor. To accomplish that, the government must start with simple, practical measures.

By supporting Bill C-82 at second reading today, I am once again imploring the government to take action to put an end to tax evasion and tax avoidance, which it could have done by supporting the NDP's motion. The government needs to put an end to this injustice, which weighs heavily on the minds of honest Canadians who are trying to live their lives and benefit from a community and from an important social contract under which everyone must contribute their fair share.

[Marilyn Gladu, Conservative, Sarnia—Lambton, ON]

Mr. Speaker, we listen often to the Liberal government talking about how it is looking for all of these tax evaders and the $25 billion of tax it claims it is going to find. However, the Liberals have been very silent about the Panama papers and I have not heard any progress on that $25 billion.

Has the member heard anything about the Liberals' actual progress on closing these loopholes and getting the tax money back?

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

Mr. Speaker, I thank my colleague for her question.

When I hear the Liberals talking about tax evasion and tax avoidance, it is never because they have made progress. Rather, it is because someone who is close to their party was named in the documents in question, which were leaked. Fortunately, those leaks do occur. Fortunately, watchdogs have brought this to our attention. This is a shameful situation that needs to be remedied.

I want to say this. I think it is unacceptable, and even sexist in some cases, that women who are divorced or separated are targeted by the Canada Revenue Agency more often than the friends of the Liberals who are named in the Panama papers and other similar documents.

Perhaps I am an eternal optimist or possibly just naive, but I hope that the next time I see the words “Liberal Party” or the name of the Prime Minister in a news article about tax evasion and tax avoidance, it is because they have finally proposed concrete measures to put an end to this problem.

[Kevin Lamoureux, Liberal, Parliamentary Secretary to the Leader of the Government in the House of Commons]

Mr. Speaker, I listened to my colleague across the way. He commented about many of my Quebec colleagues, the 41 members of Parliament in the Liberal benches from Quebec. What I would like to emphasize to my friend across the way is that when he implies that they are not effective, when it comes down to fighting tax evasion and fair taxation of policies, the Quebec members of Parliament on this side of the House not only have been strong advocates for it, but they have also voted in favour of initiatives.

I would go to the 1%, for example, where we apply the tax on Canada's 1% wealthiest. Those Quebec MPs voted in favour of it. The Quebec MPs on the other side, and particularly in his party, voted against it. We also voted in favour of hundreds of millions of dollars in our budgets to go after tax evaders. The NDP voted against that.

My question to the member is this. Here we have yet another progressive piece of legislation. The Liberal members of this House, particularly the ones from Quebec, will be voting in favour of this legislation. Will the member be voting in favour of this legislation? If so, can he tell the House why it is he voted against those measures in two previous budgets to fight tax evaders, where hundreds of millions of dollars were allocated?

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

Mr. Speaker, perhaps my colleague did not listen as closely as he claims because I stated very clearly in my speech that we are going to vote in favour of this bill at second reading.

With respect to the Liberal Party members from Quebec, I would like to point out that if the government were really listening to Quebeckers, it would not have used taxpayer money, which belongs in part to Quebeckers, to buy a 60-year-old pipeline for $4.5 billion. We would have wanted our voices heard. We would not be supporting an NDP motion or a motion by the member for Joliette to put an end to this situation because we never bothered to do anything about it.

I gave some very concrete examples of parts of the act that need to change, but none of that was done.

I have something to add before wrapping up. Saying that one guy voted against this and another voted against that is as misleading as it gets.

Personally, I will always be very proud to vote against budgets that do not do enough, that go no farther than consultations, or that set up programs the government will not be spending much money on until after the next election. We can go back and forth about nitpicky details, but what really interests me is the government's budget policy. When we believe it is destined to fail, we speak out against it.

[Gord Johns, NDP, Courtenay—Alberni, BC]

Mr. Speaker, first, I want to thank my colleague for Beloeil—Chambly for always fighting for tax fairness for working Canadians.

As a former business owner and executive director of a chamber of commerce, and as the critic for the NDP on small business and tourism, I have had a chance to work with entrepreneurs, as well as be one. Entrepreneurs are often struggling just to make ends meet, just to make payroll or pay their suppliers or leases. They are under a tremendous amount of pressure.

When they are late paying their taxes, CRA does not take any time at all and is on top of the small business person. There is a collector assigned to them. CRA is aggressive in getting the taxes back. Despite the Prime Minister calling small business people tax cheats, I would say that most small business people are honest, hard-working people. They are the job creators and people who donate to our community organizations and build our communities. However, at the same time, as we saw with the KPMG scandal, if one has a good lawyer and a lot of money, the CRA will back off and make a deal, unlike its treatment of small business people.

I would like to ask my colleague about making sure that when we go ahead and make tax changes to fix these loopholes and gaps in these tax agreements, that CRA gets direction and prioritizes going after the heavy-hitters, the 1% who are trying to avoid paying taxes. Maybe it could shift those resources away from chasing the small person who is grinding it out day in, day out.

I would like to hear from my colleague if he thinks that CRA should be giving priority to those who are not paying their fair share off the backs of everyday working Canadians, shifting their money out of the country to avoid paying their fair share of taxes.

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

Mr. Speaker, I thank my colleague for the question and for the excellent work he does as the small business critic and as a former business owner.

I think that is an important distinction to make. The Prime Minister did indeed take aim at small and medium-sized businesses both through his comments during the election campaign and in some of the policies that have been brought in. As I said, when I go back to my riding, I talk to people who are having a very hard time paying their rent or paying for groceries. I also talk to chambers of commerce, business owners, and small and medium-sized enterprises who, compared to some who are struggling, seem to be better off because they have enjoyed some success. As my colleague knows, it is not always as black and white as all that.

The Canada Revenue Agency makes it their priority to go after people like that. If this were being handled fairly we would not be talking about it. That is the problem. The problem is that these policies have totally missed the mark.

As I said in response to another colleague, every time we hear the government talk about this issue in the media, more often than not it is talking about its association with bad players instead of what it is doing to tackle the issue. There are such simple things the government could do, things that it has had plenty of time to do since coming to power. I find it all so terribly disappointing.

I will come back to the last point my colleague raised. It is clear that the directives given to the CRA need to be reviewed, not just to avoid targeting businesses, but, as my colleague said earlier, to stop primarily targeting the sick or single mothers. The minister has the power to do that. This should be a priority.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Mr. Speaker, I would like to first commend my colleague from Beloeil—Chambly on his speech, which clearly supported progressive values. We definitely felt that.

In his speech, he reminded us that the Minister of National Revenue told the House that the government had spent $1 billion to recoup $25 billion lost to tax evasion and tax avoidance. However, according to the report signed by the minister, the government recovered hundreds of times less money than that.

Does my colleague believe that Bill C-82 will enable the minister to recoup the $25 billion she mentioned so many times in the House?

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

Mr. Speaker, I thank my colleague for his question and for all the work that he has done on this file.

The minister keeps repeating that, but the problem is that she did not actually recoup that money. She simply discovered it existed. The government needs to do a lot more. Obviously, Bill C-82 is a step in the right direction, but it just one step.

To come back to my colleague's question, I do not think that this bill is enough. The government needs to do more. By supporting this bill today, we are also making a plea to the government to make significant amendments to the act, and in doing so, finally implement our motion, which it supported a few short months ago, and actually collect that money.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Mr. Speaker, it is always an honour to stand on behalf of the citizens of Central Okanagan—Similkameen—Nicola. I will be sharing my time with the very capable member for Calgary Rocky Ridge, who in addition to his duties as member of Parliament, also stands as the shadow minister for national revenue. Even though this is a finance bill, ultimately it is the CRA and the Minister of National Revenue that will become accountable for this. I know he will have many things to say on that end of it.

The two are very important, because, for example, in 2013-14 and particularly in the 2014 budget, the former minister of finance, the hon. Jim Flaherty, had opened consultations on the subject of base erosion and profit sharing. He did this specifically so he could go to the G20 and be able to make proposals and participate fully in those discussions on base erosion and profit sharing, which we are the beneficiaries of today.

I must give the government a little credit for taking its ideological blinders off. It does not seem to say that this is a Harper initiative. It has not blamed the former prime minister yet. I certainly hope that as we go through my speech today it will recognize sometimes there is much need for a new government to carry on the very good work of a previous government. We should not always judge something simply because of who had started an initiative.

During my time as the parliamentary secretary to the president of the Treasury Board in the previous Parliament, we worked on some pretty technical legislation from time to time. I will admit to having a certain affection for regulatory related bills that could provide benefits to Canadians and Canadian industry, particularly if they are done in such a way that is harmonized to reduce red tape. We recognize that Canada is increasingly becoming a competitor on the world stage, and we are likely to see more international trade, not less.

We must also recognize that with that come challenges. As one example, we have a situation where over this past summer the Liberal government was forced to modify its national carbon policy. Basically, it provided more carbon tax relief to some of Canada's biggest polluters. This is not unlike what happened in my home province of British Columbia, where greenhouse growers and cement manufacturers, to name a few, have been given so much in subsidies, exemptions or other kinds of carbon tax relief there is actually a word for it. It is called “carbon leakage”. It is defined in the 2018 B.C. NDP provincial budget as “...industries that compete with industry in countries that may have low or no carbon price. If BC loses market share to more polluting competitors, known as carbon leakage, it affects our economy and does not reduce global greenhouse gas emissions.” This is the same reason this Liberal government provided increased carbon tax relief to big polluters, because, ultimately, they compete with industry in the United States and elsewhere that do not have a nationally imposed carbon tax.

We are not here to debate the carbon tax. I am using it as an example because it illustrates the importance of being competitive. As we all know, being competitive in the corporate world often comes down to the bottom line, and we know how much the bottom line bears on our businesses, at least on this side of the House, as the Conservative Party has a very strong understanding. This creates a situation where, ultimately through creative, and some would argue dubious accounting practices, some companies can find creative ways to transfer wealth created in one country into another country with a much lower tax regime. Some countries even make a point of creating a regulatory and financial environment that actively encourages this sort of behaviour.

How do we fix that? Obviously, one approach would be an attempt to lower taxes to a level on par with some of these countries to stop the outflow of revenue. Many refer to this as the “race to the bottom” approach.

There is possibly another solution, which brings us to Bill C-82, which we are debating here today. What if we could get as many countries as possible to sign on to a common regulatory fiscal taxation approach that would better protect countries from this problem? Having similar fiscal language with respect to taxation would help reduce the regulatory red tape burden more than if we went at it piecemeal.

Not to mention there are greater efficiencies in adopting the kind of universal standard with OECD countries which sign on as opposed to having the same individual countries try to collect and negotiate separate tax treaty agreements among themselves.

To be fair, this multilateral instrument allows for Canada to quickly and efficiently update its agreements so that both the CRA and the tax authority in the adjoining country will immediately start to proceed, as the multilateral instrument has said, through the existing tax treaty. It is a very efficient way.

This is called, obviously, the multilateral convention to implement tax treaty related measures to prevent base erosion and profit shifting. Because that is a mouthful, we will simply refer to it as the MLI agreement. This work was started with the former Conservative government and I am pleased that the current government is continuing to work on this to the point we are here today debating the ratification agreement. Again, the agreement covers 75 jurisdictions worldwide and it is expected in the near future it will be over 100. That is a good thing.

While there are many benefits to the agreement, I should say it is not without some criticism. Some have suggested adopting the OECD MLI would result in the loss of tax autonomy for the country in question; however, I would point out there are provisions in the MLI agreement that allow countries to opt out of certain parts of the MLI at their discretion. This, by extension, can allow countries to still enable a specific tax structure but ultimately might provide unique tax benefits in certain areas. While some may consider that to be a bad thing, I also believe having a framework that allows some competitive incentive that keeps overall taxation levels in check is an important tool for countries to have.

Ultimately, this agreement is more targeted toward those who transfer money between countries for the sole purpose of avoiding taxation. Some people might say that some of this might be borderline tax evasion and in certain cases there may be, but let us be clear that Canada already has existing laws on tax evasion. That is not legal and the CRA should pursue those people who push the envelope much too far and know they are past the envelope.

I believe this agreement is more targeted toward specially transferred money between countries for the sole purpose of evading. In balance, I believe that is positive. Some have said that these types of agreements have not been successfully implemented in Canada before, but I would disagree with that. In the previous Parliament, we passed Bill S-12, An Act to amend the Statutory Instruments Act and to make consequential amendments to the Statutory Instruments Regulations. That bill proposed the ability to import standardized regulations from other jurisdictions so we have parity here in Canada. That makes it much more convenient for Canadian manufacturers as it can be extremely costly in addition to meeting a plethora of different standards in other jurisdictions.

Getting back to the MLI, time will tell the overall effect of this. The challenge right now is that some of these tax avoidance schemes are entirely legal, so this agreement creates a taxation environment that would provide common tax measures that will help to eliminate abusive taxation policy.

Before I close, I would like to take a moment and relay one concern I do have. As we know, the United States is not a signatory partner to this agreement. Given the close relationship in industry between our two countries, with many companies having U.S.A. and Canadian ties, there could be long-term impacts down the road. Obviously we also see concern over NAFTA where we will need to be vigilant in monitoring our competitiveness with our neighbours to the south.

Overall, I believe the bill is an important one and moves Canada in the right direction in parity with the majority of our G20 partners. I will be voting for the bill and believe that added scrutiny at committee stage, particularly on some of these thorny points, will be beneficial. I appreciate the House hearing my thoughts on the bill today.

[Jennifer O'Connell, Parliamentary Secretary to the Minister of Finance (Youth Economic Opportunity), Lib.]

Mr. Speaker, I thank my hon. colleague for his support of this legislation.

Would the member opposite agree that this legislation is a piece of the puzzle to the larger issue of tax evasion and tax avoidance, and that it actually works in conjunction with other policies, treaties or legislation that the government will bring forward? The government is not only doing the minimum standards, but is opting into enhancement of the MLI. Would the member agree that this is good for Canadians on the issue of tax fairness?

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Mr. Speaker, I would say more generally that this is a multilateral instrument and that this is actually good for developed countries, particularly the OECD countries, which do have a problem of, basically, jurisdiction shopping for the best tax-related policies. Again, there is some shifting of profits to areas that we do not have tax agreements with. Again, this is part of the developed world's attempt to modernize language in an efficient way and to also counter where some companies will simply shift profits outside the developed world and take them to places that have very low or no tax areas. Particularly if those monies were made in the developed world and consumed in the developed world, there should be taxes paid on them.

However, there are only a few multinational companies that probably have the sophistication to be able to do this kind of forum shopping. Whether that happens completely in Canada, I would argue probably, considering we hear so many concerns in the United States that multinationals are seeing their monies shifted outside the United States.

I also would simply suggest for the member that if we look at the tax reform proposals put forward by the American administration, that is lighting the U.S. economy on fire. It is not BEPS that is bringing the money home; it is the fact that they are competing and they have changed their laws to reflect the fact that they must remain competitive. That is the most important thing, and I hope the member and the government keep that in mind.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

Mr. Speaker, it is always a pleasure to work with my colleague. I have previously worked with him on committees.

It is important that, as a member of the OECD , we take seriously the work that is done in that forum. For example, the OECD recently did a report on all the countries living up to their commitment to deliver 0.7% of their GNI on international assistance, and chastised Canada for delivering just a third of that. Also, there have been calls for Canada to make sure that our standards for controlling toxins are on par with other OECD nations.

Clearly, the work of the OECD is important, but I wonder if the member could speak to this issue. A number of concerns have been raised that, yes, it is good that we will be modernizing the mechanism whereby we enter into these agreements, but will it not also be important to be revisiting some of the tax treaties we have with some nations, which simply could end up with corporations in Canada not paying their fair share of taxes in Canada?

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Mr. Speaker, I would say that if the member has information about companies that are doing that, she should deliver that to the CRA personally. It is simply just saying that tax evasion happens. Yes, it does probably in many cases happen, but without specifics, it is very difficult for the CRA to track down. Therefore, if the member has information, that would be important to have.

I would just point out that it is easier for Canada as a country to renegotiate certain agreements with countries where there are concerns, but to do that, we need to have a partner that is willing and we also need to have the capacity and resources available to do that. By supporting this BEPS multilateral instrument, we will actually free up a lot of resources because we are dealing with like-minded economies, like-minded areas where we can quickly and efficiently modernize those agreements. That is a big part of this. This is just a faster way for us to keep our agreements up to do date to be able to keep up with the newest base erosion and profit shifting activities.

[Colin Carrie, Conservative, Oshawa, ON]

Mr. Speaker, I want to read the Minister of National Revenue's mandate letter, dated November 12, 2015. It says that the Prime Minister wants the minister to invest “additional resources to help the CRA crack down on tax evaders and work with international partners to adopt strategies to combat tax avoidance.” That was three years ago, and we are seeing this bill coming forward but the member knows that under our previous government, Mr. Flaherty really got this initiative going. Does the member think the Liberals are actually serious about doing anything?

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Mr. Speaker, I am sure if the member of Parliament for Oshawa could say what he really wants, he would probably want to direct that question to the member for Calgary Rocky Ridge because he is that capable of a member.

I would simply say results, results, results. Let us bear in mind that this particular multilateral instrument is about the use of highly sophisticated techniques to shift income so that, ultimately, states such as Canada will not receive full taxation, which is all done by Canadian law. It may be where it pushes the envelope, but that is because we have allowed these things when our regulatory environment and tax agreements are just not up to date. This would allow that to be sped up.

Making sure there are proper resources is important. I would also say that it is far easier for the CRA to go after existing businesses, and that is why I hear from so many small business owners who are continually audited for really little things. That needs to end. The focus needs to be on the big money.

[Pat Kelly, Conservative, Calgary Rocky Ridge, AB]

Mr. Speaker, I am pleased to rise today to speak to this legislation. It is my pleasure to follow my colleague from Central Okanagan—Similkameen—Nicola and his excellent discussion on a topic that he is interested in and knows a great deal about.

Bill C-82 is a welcome step forward. It is the natural conclusion to work that was first undertaken by the previous government in 2013. This is a good, positive step forward by two governments now to help address the serious problem of base erosion and profit shifting.

This legislation seeks to address a global problem that Canada is a part of, namely tax evasion, whereby corporations, through a corporate domicile or clever accounting, can shift profits between different jurisdictions or shop for the most desirable tax treatment from any of a variety of different jurisdictions.

For years we have heard in the news criticism of many global giants, including Starbucks, Apple and a number of other familiar global brands, that will seek to minimize their taxes by shopping for the most favourable jurisdiction. This is a problem that confronts western governments.

If the bill passes, Canada would be able to participate in a protocol that the OECD has in place.

We heard a bit about the scale and scope of this problem at the finance committee, and we welcome the bill.

The bill is an effective and efficient means by which we could deal with a wide variety of different tax jurisdictions through the same instrument. We would not have to separately renegotiate dozens of different existing tax treaties. As a result, we could co-operate much more efficiently with our global trading partners and combat what has been described by some as a “race to the bottom”.

Perhaps close to $25 billion in taxes is not being collected from economic activity that takes place in Canada. During its first two years in office, the Liberal government claimed it was going to recoup this $25 billion. The Prime Minister in late 2017 said in the House that the government looked forward to collecting this money.

While I do support the bill and acknowledge that it is an important step forward, it is certainly not a panacea or a solution to deal with all of the problems. I do hope colleagues from all parties will support it.

With respect to this $25 billion, the government has yet to really tackle the issue at all and it is now three years into its mandate. That number has been debunked. It would seem that most of the money the government planned to collect, money from tax evasion and tax avoidance, through the steps it would take, would be on the domestic side, the majority of which is believed, even by the department, to be uncollectible.

The CRA, almost three years into the government's mandate, has failed to make significant progress on foreign tax evasion, but during that time period it has floated a number of, in some cases, strange ideas on how it would plug its gaps in revenue. These ideas do not involve foreign tax evasion and do not involve corporate profit shifting.

They involve ideas that arose when the CRA first floated the idea of taxing employer benefits, like health and dental benefits; taxing retail discounts to service industry employees; and the war that was being waged this time last year on disabled Canadians, including the rejection of the disability tax credit for type 1 diabetics and a number of people who suffer from other health ailments.

In my riding, I have spoken to people who suffer from different types of chronic fatigue, who had been receiving the disability tax credit for years and suddenly were denied it. In one case, someone had been receiving it for 10 years and was suddenly denied it while her medical evidence had not changed. We have also heard the parents of autistic children losing their disability tax credit at the hands of the CRA under the Liberal government.

None of these seemingly small and petty attempts to raise additional revenues address the issue at hand and fulfill the promise of the government to crack down on foreign tax evasion and tax avoidance. These are nickel-and-dime measures targeting low-hanging fruit. The CBC reported again last night how the Liberal government makes it very difficult for single parents, with its onerous requirements on their proving they are indeed separated. We have seen quite a number of cases of this, and it has been raised in the House.

The other side of this and what this bill does not address is a different type of base erosion. Base erosion from profit shifting is an important global phenomenon that must be addressed. However, perhaps a bigger threat to the Canadian economy and a bigger drain on the tax revenue of the government than base erosion from profit shifting is base erosion from capital flight taking place right now.

Since the Liberal government took office, we have seen the imposition of a carbon tax. My colleague from Central Okanagan—Similkameen—Nicola spoke about carbon leakage, how chasing economic activity with emissions into a different jurisdiction does not change global emissions, but does change the tax revenue base of the Canada Revenue Agency and costs jobs. We have seen the carbon tax and have seen Bill C-69, which should be titled, “an act to ensure no pipeline is ever built in Canada again”. We have also seen tax increases, which the government had indeed promised to impose on the wealthiest Canadians, actually result in a reduction in tax revenues from the wealthiest Canadians. That is a different type of base erosion that would not be addressed by this bill.

We have seen the debacle over the Trans Mountain expansion. That will also result in an erosion of the tax base, as that economic activity is curtailed. We also all know what is happening with the NAFTA negotiations, and we know how many hundreds of thousands, perhaps millions, of Canadians who fear for their jobs as this unfolds.

To conclude, this bill is an excellent step forward to address a serious global problem that Canada must play a part in solving for our own tax base and in participation with our economic partners. I look forward to its coming to committee, where it may be improved and where I could address some of the issues that have been raised by my colleagues.

I will be supporting this bill, and I commend the government for moving ahead with this initiative.

[John Oliver, Parliamentary Secretary to the Minister of Health, Lib.]

Mr. Speaker, I know that residents of Oakville, particularly taxpayers there, want to make sure they have the same opportunities to succeed and benefit in a growing economy. That also means making sure that the tax system is fair to everyone, so I am delighted to see that we are taking steps in the fight against aggressive international tax avoidance and countering strategies that allow business and wealthy individuals to avoid paying their fair share.

It seems to me that this legislation would allow for a much quicker and more efficient updating of multilateral conventions and bilateral tax treaties. Could my colleague say a few words about his impression of that in this bill?

[Pat Kelly, Conservative, Calgary Rocky Ridge, AB]

Mr. Speaker, I hope I was clear in my remarks. That is exactly what the bill may accomplish in creating a more efficient and effective way to deal with the multitude of tax treaties that we have.

However, I will return to the broader point that an erosion of the tax base is happening as capital is fleeing Canada under the anti-business, anti-energy policies of the current government. That has to be addressed, but it cannot be dealt with solely by closing loopholes that allow sophisticated multinational businesses to avoid taxes.

[Wayne Stetski, NDP, Kootenay—Columbia, BC]

Mr. Speaker, the NDP will be supporting the bill. Of course, we want to make sure that we recover as much tax money as we possibly can. However, the bill does not go far enough. We really do think that tax havens need to be a part of this whole discussion and that a much better job needs to be done in closing loopholes.

Also, I do not know if other members have tried phoning CRA over the last couple of years, but I gave it a shot and got caught in its loop after about 10 minutes. At the end of it, a voice told me that there was really nothing they could do for me and to call again some other time. I had received a notice that I owed CRA some money, which was incorrect. In fact, it owed me money. We contacted the department, which said that I would continue to get threatening notices about owing money even though they knew I did not, and that it would be least six months before I would get my cheque.

The CRA is in a mess, and from the perspective of my constituents in Kootenay—Columbia, there is a lot of work that needs to be done in that regard. I have to say that I know the cuts started with the previous Conservative government, but would my colleague not agree that the government should be doing something about tax havens and the general state of the Canada Revenue Agency and its lack of responsiveness to Canadians?

[Pat Kelly, Conservative, Calgary Rocky Ridge, AB]

Mr. Speaker, I will deal with the first part of the member's question quickly by saying, yes, we support the bill and that it is important that the loopholes be closed.

To the second part of the question, the personal experience the member relayed is so familiar to people I have spoken to across Canada. Everything he addressed, from the inability to reach someone on the phone to being given incorrect and conflicting information when getting through to a person, to being told that it would take months to get a cheque even when there is no information in dispute, is so painfully typical of the experiences I have heard from taxpayers across Canada. I have heard tax preparers from across Canada say that the service and the level of competence have never been worse. Quite specifically, I have been told by tax professionals that even in the last couple of years, it has gotten worse. Therefore, it is certainly going to take more than the passage of the bill before us to address the comprehensive problems with tax collection in Canada.

[Pierre Poilievre, Conservative, Carleton, ON]

Mr. Speaker, today I rise to address the subject of tax fairness.

In the last federal election, the Prime Minister barnstormed across the country, promising billions of dollars of new spending. A chicken in every pot, he said. When Canadians inevitably asked how he would pay for it all, he said not to worry for a moment, that he would just raises taxes on the so-called wealthiest 1%, the rich guy living up on the hill.

Today, as we debate the subject of tax fairness, it is appropriate to ask if he has, in fact, kept his promise to fund his spending through those means. He certainly has kept the promise to spend vast new sums. Spending has grown, at around 7% per year, which is three times the combined rate of inflation and population growth. In other words, the government is spending three times faster than is the need among Canadians.

The result has been that the deficit this year is three times the size the Liberal Party promised in its most recent election platform and the budget will not be balanced next year, as the Prime Minister promised it would. According to Finance Canada, that will only happen in the year 2045, a quarter century from now, during which time Finance Canada admits the government will add a half a trillion dollars in additional debt. In other words, the budget will not balance itself.

What has become of the rich? The Prime Minister claimed he was going to raise taxes on those people. The results are in. CRA data released two weeks ago demonstrated that in the first year after the tax increase took effect, the government actually collected $4.6 billion less from the wealthiest 1%. Finance Canada released documents almost exactly a year ago today in its annual financial report, on September 19, 2017, in which it revealed almost exactly the same phenomenon. Revenues went down from the wealthiest 1%.

The government said that this was all due to one-time factors. People were playing games to avoid the higher taxes, said the government and that phenomenon would disappear in future years. The government is right. There were some wealthy individuals who moved money around to avoid paying their fair share.

One of them is the Minister of Finance. He announced a tax increase to take effect on January 1, 2016, and he sold his shares in his own company, Morneau Shepell, just 30 days before that in order to ensure his capital gain would be taxed at the lower earlier rate so he would not have to pay the same higher taxes he imposed on everyone else. Is that not nice? He knew the tax increases were coming, but being a multi-millionaire who had worked hard his entire life to avoid paying taxes, he was not going to pay a penny more on that capital gain. He was going to ensure he was taxed under a lower rate than everyone else.

He says, and his department has said, that many people did that. However, now that phenomenon is behind us, they say that in the future more revenue will come in. There is no question that in the 2017 tax year there will be probably be a one-time windfall of revenues from certain entrepreneurs and other Canadians as a result of reactions to government policies.

For example, the anecdotes by accounting firms and the reports in our business media are so common now that it is hard to be skeptical of their truth that people are moving money out of Canada. They are moving money out because the tax burden and the regulatory burden is so high that it is better for some people to do business outside of the country rather than keep their money here. Therefore, they will pay exit taxes. As that money goes out the door, it will be taxed one time.

The Prime Minister, who is only concerned about the here and now, who wants to spend more money today, might celebrate that one-time burst of cash as he shovels it out the door as quickly as possible.

What he forgets is that the problem with one-time cash is that a person only gets it one time and in the future it is gone. That money, once it leaves the country, will be taxed by other governments. When a wealthy CEO moves his fortune to London, England, the government today gets a one-time tax benefit for that as he pays an exit tax. However, in years subsequent, his tax burden in Canada is zero. He pays taxes to another government and funds services for another non-Canadian population. In 2017, I have no doubt that many people will pay one-time exit taxes as they took their money out of our country.

Furthermore, in the fall of 2017, the government announced small business tax changes that would have punished families for selling their businesses to their children. If a farmer sold his farm to his kids, he would pay a dividend tax rate of nearly 45% instead of a capital gains tax rate of 25%. If he sold that same farm to a foreign multinational, he could pay the lower tax rate.

In other words, there is a massive penalty for farmers selling their farms to their own kids, but a tax break for selling those same farms to a foreign multinational and having that multinational turn those children into tenants on their ancestral lands.

Because of the ferocious backlash led by the Conservatives and spontaneously ignited on the ground by Canadian taxpayers, the government has decided to put that change on hold until after the next election when it will surely be back. However, small businesses and farmers are not stupid. They know what bullet they dodged and are not going to risk having that change brought forward again.

What have many of them done? According to some of the most respected accounting firms in the country, many of them did their farm sales immediately upon learning that the government had put the change on ice. Therefore, those people will pay a one-time tax on that transaction in the 2017 year. After that year is gone, so too will future revenues, because those transactions will not repeat themselves every single year.

Finally, the government proposed to punish families that shared the work and earnings of a company. It calls that “sprinkling”. I can understand why it calls that sprinkling. The Minister of Finance and the Prime Minister did have their wealth sprinkled upon them as if by an angel from above. Would it not be wonderful if we could all have trust funds and if we could all be trust fund babies like those two trust fund twins? They did have money sprinkled upon them from above, so it is not surprising that they would use the term “sprinkling” to describe small family businesses that own a local restaurant and therefore share the earnings of that restaurant with the kids who show up everyday and help run it.

The change proposed by the government took effect on January 1. Businesses knew that so they had to pay out higher levels of dividends to their children and their family members in 2017 before the tax change took effect. There is no question that the government will tax those dividends in the 2017 year. In other words, the government will get a burst of revenue from that phenomenon of forcing businesses to pay out to their family members before the punitive new rules take effect. There is no question the government will get more money in the 2017 year as a result of that.

Any day now, though, we can expect that the Minister of Finance and the Prime Minister will march triumphantly into this room, as if they were Caesar at a Roman triumph, saying,“Aha! Look at all the money we took from all these people”. They will say that their high-tax plan actually worked in raising cash for them to spend. However, all of these phenomena I just described are one-time cash, in and out. Then it is no longer available to future governments to spend. For that reason the burden will inevitably fall upon the working and middle class that always suffer the most as the government gets big and expensive.

Why is that? Because higher earners and capital are far more mobile than lower earning people and workers. Labour has a harder time moving. Why? Because labour is carried out by a person and therefore he or she would have to move physically to another jurisdiction to have his or her labour tax at a lower rate. However, capital can flee or travel just like the air. Anyone can open their laptop computer and purchase equities, foreign stocks in companies around the world, literally in a matter of five minutes, moving their money out of the country just like that.

However, a working family who lives in Oshawa or Windsor on the assembly line floor cannot just get up and move because the government has hit it with a higher tax burden. That is why workers and labour cannot move around to avoid taxes the way capital and wealth can move around.

The end result is that when government gets big, capital flees and the burden gets more and more punitive on the working class Canadian. That is exactly what has happened. The average Canadian middle-class family is paying $800 higher income tax today than when the government took office. That is before the carbon tax and before payroll taxes that the government plans to institute the year after the next election. In other words, it is only going to get worse.

It is also before the increased cost of servicing our national debt, which is growing at a spectacular rate. In fact, last year, our government spent $23 billion on servicing the national debt. Within three years, the Parliamentary Budget Officer says that amount will rise to $40 billion, a two-thirds increase in just a few years, as debt rises and interest rates rise simultaneously to have a compounding effect of transferring more and more wealth, again, from the working class taxpayer to the wealthy bankers and bondholders who own our debt.

Here we are with these social justice warriors bringing in deficits and debts that have the effect of transferring wealth from low-income people who pay tax to wealthy bondholders and bankers who own the debt, in exchange for which we will get nothing. Interest on debt does not pave roads, does not build hospitals, does not hire nurses, does not pay soldiers, none of those things. It simply fattens the wallet of the wealthy people who have enough means to lend to the government.

If people ever wanted proof that these people are wealthy, the government cancelled the Canada savings bonds. It used to be that modest income people would buy Canada savings bonds and lend to the government. The government does not do that. It borrows all of its money from wealthy private equity fund managers, investment bankers and others of vast fortune.

Therefore, it always is that when the government gets big, the wealthy and well-connected and powerful are better off. It is ironic. Jeremy Corbyn, who calls himself a socialist, the socialist leader of the Labour Party in Great Britain, says that he wants to end greed is good capitalism. He is going to ban greed. The Prime Minister has made similar comments. The plan to end greed is to make the government so big that there is no room left for greed. It will be removed from human DNA. People will become altruistic and generous. No one will have more than anyone else, so they say. These socialists are actually going to transform human nature because they are so powerful they can do even that.

Can they really transform human nature? Apparently they did not read Macaulay, who wrote:

Where'er ye shed the honey, the buzzing flies will crowd;
Where'er ye fling the carrion, the raven's croak is loud;
Where'er down Tiber garbage floats, the greedy pike ye see;
And wheresoe'er such lord is found, such client still will be.

The point is that wherever there is money, there will be people trying to get it. If all the money is in the government, there will be greedy people trying to make money off the government. We see it all the time.

There are corporations coming to Ottawa saying they need a corporate handout, and they have had a very generous benefactor in the Liberal government, such as the $400 million for Bombardier, which went on to immediately give big bonuses to its executives. There is the infrastructure bank, for example, which will provide loan guarantees to powerful construction companies so that if ever their projects lose cash, the taxpayer and not the business owner will pay the price.

In Ontario, the Liberals brought in something called the Green Energy Act, which simply did not create any green energy, but it did put a lot of green in the pockets of the wealthy lobbyists who were able to get the so-called green energy contracts, double the cost of electricity and cause what the Ontario Association of Food Banks call “energy poverty”. People literally walked in with their power bills and said that they could not afford to keep their lights on and eat and asked for food so that they could pay their power bill. So, yes, it was great for the wealthy one percenters who got tens of billions of dollars in subsidies for their phony electricity, but it was not so great for the working-class people who could barely afford to turn the lights on and live a normal life.

So, yes, wherever we fling the honey, the buzzing flies will crowd. My colleague did not say “bees”. He said “flies”, and flies do not make honey but will happily consume it. They are parasitical. Bees create honey through the process of pollination, which is the free exchange between a vegetative life and a creature, which is the essence of the free market economy, right? That is the free market economy, the voluntary exchange of capital for interest, product for payment, work for wages.

Every single transaction in a free market economy happens through voluntary exchange. Do members know why? It is because every single transaction must improve the lives of both people or they would not engage in it. It is why we have something called the “double thank you”. We go to a coffee shop, buy a cup of coffee, pay for our coffee and say “thank you”. What do they say back? It is not “your welcome”, but “thank you”. Why? It is because our payment is worth more to them than their coffee, and their coffee is worth to us than our payment. In other words, we both have something worth more to us than we had before. If I have an apple and want an orange, and someone else has an orange and wants an apple, we trade. We still have an apple and orange between us, but we are both richer because we each have something worth more to us than we had before. That is the genius of voluntary exchange.

Why does no one write “thank you” on their tax forms? It is supposed to be a voluntary exchange. It is supposed to be an exchange. We are paying for something. We are supposed to get something in return. The answer is, because we have no choice. It is not a voluntary exchange. It is mandatory. We are forced to engage in it, and that is the rule of the government economy. Every single transaction in the government economy is done by force. Every single transaction in the free market is done by voluntary will of every single participant.

We on this side of the House of Commons believe in a bottom-up free market where businesses obsess over customers rather than over politicians. It is where one gets ahead not by having the best lobbyist but by having the best product. That is the free market economy. It is a bottom-up economy and not a trickle-down, government-directed economy, like the government on the other side of the aisle believes.

Therefore, we will continue to champion the free market system, a system based on meritocracy, not heiritocracy, where we do not have to have a trust fund to have hope for a better future. We just have to have big dreams and hard work. That is our plan for tax fairness.

[The Speaker, Liberal, Geoff Regan]

There will be 10 minutes for questions and comments following the member for Carleton's speech when the House next resumes debate on this topic.

It being 1:30 p.m., the House will now proceed to the consideration of Private Members' Business as listed on today's Order Paper.

The House resumed from September 28 consideration of the motion that Bill C-82, An Act to implement a multilateral convention to implement tax treaty related measures to prevent base erosion and profit shifting, be read the second time and referred to a committee.

[The Deputy Speaker, Conservative, Bruce Stanton]

When the House last took up debate on this question, the hon. member for Carleton was to have a full 10 minutes for questions and comments.

We will now go to questions and comments, the hon. member for Carleton.

[Tom Lukiwski, Conservative, Moose Jaw—Lake Centre—Lanigan, SK]

Mr. Speaker, I wonder if my colleague from Carleton could expand a little bit on his thoughts about tax evasion in general and what Canada should be doing but has not been doing in terms of trying to recover some of this lost revenue.

[Pierre Poilievre, Conservative, Carleton, ON]

Mr. Speaker, there is no question that the governing side has some expertise on this. We have a finance minister who, after increasing income taxes that took effect January 1, 2016, deliberately carried out a massive sale of shares just a month before that tax increase would take effect so that he would not have to pay higher taxes on his capital gain.

This is the same finance minister who registered his shares for a Toronto company in Alberta, even though he lives in Toronto, so that he could pay the lower corporate tax rate in Alberta, rather than paying the same tax rate as everyone else in the province in which he lived.

This is the same finance minister who set up a subsidiary for his family business, Morneau Shepell, in Barbados, which is a jurisdiction notorious for allowing corporations to avoid paying their fair share of taxes.

Then, of course, we have the Prime Minister, who despite being a multi-millionaire recipient of trust fund money from his family, has accepted hundreds of thousands of dollars of speaking fees and other benefits that other Canadians could not dream of receiving.

They are the trust fund twins, the finance minister and the Prime Minister, wanting to tell us that they are going to bring tax fairness to Canadians. It is just a little bit rich.

[Kevin Lamoureux, Liberal, Parliamentary Secretary to the Leader of the Government in the House of Commons]

Mr. Speaker, as the Conservatives and particularly the member across the way want to continue the personal attacks on members of this House, this government will continue to be focused on what really matters to Canada's middle class and those who aspire to be a part of it.

An interesting question about tax fairness is this. Exactly what did the Conservative Party do? The member in one sense is correct when he says that there was a special tax put on Canada's 1% wealthiest, something which the Conservative Party voted against. The members across the way need to be reminded of that. When it came time to have a decrease for Canada's middle class, the Conservative Party voted against that tax break.

I wonder if my friend from across the way can tell Canadians why he voted against the increase to the taxes for Canada's wealthiest 1% and the tax break for Canada's middle class.

[Pierre Poilievre, Conservative, Carleton, ON]

Mr. Speaker, I did no such thing. In fact, according to the CRA, the wealthiest 1% paid $4.5 billion less in the first year after the government's tax changes took effect. According to the renowned and objective Fraser Institute, the middle class paid $800 more as a result of the tax changes by the government. Therefore, as a result of the tax changes by the government, the wealthiest 1% are paying $4 billion less, while a middle-class family is paying $800 more. That is the sum total of their changes.

What did the Conservative Party do? That was my colleague's other question.

According to the Parliamentary Budget Officer, the previous Conservative government reduced taxes by $30 billion with a preponderance of that money going to low- and modest-income families. That is why poverty fell by almost one-third during the previous Conservative government and middle-class incomes were up by over 11% after tax and inflation, the largest increase of any government in the last 40 years. That is what the Conservative Party did.

[Mark Gerretsen, Liberal, Kingston and the Islands, ON]

Mr. Speaker, I want to give the member for Carleton an opportunity to answer this. I am going to make the question as simple as possible to follow up on the last one, because I know he is very good at doing that during question period. He wants a direct question so that he can get a direct answer. I am going to ask the direct question that he did not answer from the previous question.

Why did he and the Conservative Party vote against cutting taxes for the middle class and increasing taxes for the 1%? Why did they vote against it? I would like an answer to that question.

[Pierre Poilievre, Conservative, Carleton, ON]

Mr. Speaker, the answer is that we did not. The government introduced changes to the tax system that had the effect of lowering taxes on the wealthiest 1%. This is CRA data. If the government does not like the CRA, then it should talk to the officials there.

The CRA has reported that in the first year after these tax changes took effect, the wealthiest 1% paid $4.6 billion less in income taxes while middle-class Canadians paid $800 per family more. How did they pay more? They lost the children's fitness tax credit. They lost the transit tax credit. They lost the education tax credit. They lost the textbook tax credit, in addition to the overall tax burden. That does not even include the carbon tax and the increases in payroll taxes that are expected to take effect on January 1 of this coming year and in the year following that.

Even without those additional forthcoming tax increases, middle-class people are already paying more while wealthy people are paying less. That is what we voted against.

[Todd Doherty, Conservative, Cariboo—Prince George, BC]

Mr. Speaker, I wonder if our hon. colleague could expand on the comparison between the current Liberal government and the record of our previous Conservative government.

[Pierre Poilievre, Conservative, Carleton, ON]

Mr. Speaker, Conservatives were obsessed with lowering taxes for the people who needed it the most, the working poor, the struggling middle class.

We cut the GST from 7% to 6% to 5%. We brought in the working income tax benefit, which gives a 25% pay raise to people who earn between $3,000 and $11,000 a year. We raised the personal exemption so that one million of our poorest working people would no longer pay income tax at all. We lowered the payroll tax, which is one of the most regressive taxes that targets the working poor, our youth, and our disabled. The people who need the money the most were able to keep the most under our government.

According to the Parliamentary Budget Officer, under the Conservative government, tax reductions amounted to $30 billion and the preponderance of those savings went to low- and modest-income people. We allowed the working poor to springboard into the middle class and that is why poverty was down almost one-third while the Conservatives were in government.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, it is like looking over there and seeing Stephen Harper all over again. That has to scare a lot of Canadians.

The reality is that there was legislation and there were budgets. It is unbelievable that the Conservatives are trying to deny factual history. Do not let the facts get in the way of a good speech seems to be their motto.

The Conservatives voted against tax breaks for Canada's middle class. There is no two ways about it. The record will show that. The Conservatives voted against having a special tax on Canada's wealthiest. The member talked about poverty. Through the Canada child benefit, our government lifted hundreds of thousands of children out of poverty, not to mention what we did with the guaranteed income supplement, which lifted thousands of seniors out of poverty.

Where does the member get his facts from?

[Pierre Poilievre, Conservative, Carleton, ON]

Mr. Speaker, I am glad that the member asked that question. I get my facts from the Canada Revenue Agency, which says that the wealthiest 1% are paying $4.6 billion less under the Liberal government. Should we really be surprised, when we have the trust fund twins, the Prime Minister and the finance minister, making tax policy?

One of them received a multi-million dollar trust fund from his grandfather's petroleum empire, and I speak now of the Prime Minister, and yet he had the audacity to take money from charities for speaking fees that all members of Parliament typically give for free. He then forced middle-class and working poor Canadians to pay for his $30,000 worth of nanny services. This is someone who has lived in government-funded mansions for the better part of his life.

Then there is the finance minister, who registers his assets in Alberta even though he lives in Ontario, so that he can avoid paying the taxes that everyone else pays.

What else would we expect from the trust fund twins but more breaks for the wealthy, which is exactly what the Liberal government has delivered?

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Mr. Speaker, I will be splitting my time with my friend and colleague from the east coast from the riding of Sackville—Preston—Chezzetcook. It is great to see him in the House this morning.

It is great to be back in the House this morning and to hear some of the debate. It is not so great to hear the level of discourse coming from members on the other side, the opposition benches, where they will stay for a very long time if they continue as such. I say that through you, Mr. Speaker, to my friend from Carleton, who I sit on the finance committee with.

Bill C-82, an act to implement a multilateral convention to implement tax treaty-related measures to prevent base erosion and profit shifting, is one of those international accords we can all applaud. We can also applaud the tax cut for nine million Canadians, which brought about $20 billion in tax savings over a four-year period, or about $550 per year per couple. To a working couple benefiting from our tax cut for middle-class Canadians, $550 is a substantial amount of money. It helps pay for many activities for their kids. It helps put gas in their vehicle and to buy groceries and so forth. It is too bad the Conservatives voted against that, and I think they need to be held to account for that. It is too bad they also voted against the Canada child benefit, which benefits nine out of 10 Canadian families, representing an average of $2,300 more. In my riding of Vaughan—Woodbridge, I consistently hear about how the Canada child benefit is helping families fund their kids' day-to-day activities.

It was also noted about what is called “refundable” or “non-refundable” tax credits. A lot of the boutique tax credits the opposition party member referenced in his comments were ones working middle-class Canadians could not take advantage of because they did not have taxes payable, and only benefited wealthier working Canadians. It is a little fact that was missed.

Turning to Bill C-82, OECD Secretary-General Angel Gurría said the following:

The conclusion of this multilateral instrument marks a new turning point in tax treaty history. We are moving towards rapid implementation of the far-reaching reforms agreed under the BEPS Project in more than 1,200 tax treaties worldwide. In addition to saving the signatories form the burden of bilaterally renegotiating these treaties, the Convention will result in more certainty and predictability for businesses and a better functioning international tax system for the benefit of our citizens.

Bill C-82 basically follows our government agenda from budget 2016. In chapter 8, we talked about making our tax system fairer, simpler, more efficient and also ensuring all organizations, enterprises and high net worth individuals follow the tax rules that everyday businesses and people in my riding follow. It is great to see Bill C-82 come to the House for approval, and it is great to see our party is shepherding this as quickly as possible.

On a personal note, I sat on the Canadian Institute of Chartered Accountants user advisory council for a number of years. I understand full well the importance of working with our international partners at various accounting institutions in the world, and also with our partners for multilateral purposes, including the base erosion and profit shifting deal.

To give an indication of the annual losses that are occurring, the OECD estimates 10% of global corporate taxing income, or approximately $100 billion to $240 billion is lost, where little or no overall corporate tax is being paid. This agreement is far-reaching. Working together in the OECD G20 BEPS project, over 60 countries developed 15 actions to tackle tax avoidance, improve the coherence of international tax rules and ensure a more transparent tax environment. Leaders of OECD and G20 countries, as well as other leaders, urge the timely implementation of this comprehensive BEPS package.

That information comes right from the document I was reading over the weekend on the multilateral convention to implement tax treaty-related measures to prevent BEPS from OECD. I encourage my colleagues to read it because it is an interesting document.

It pertains to our economy and ensuring we have a strong middle class and that we continue to help those who are working hard to join the middle class. It pertains to ensuring that all corporations in Canada with operations in the world and vice versa, those foreign entities that operate in Canada domestically, pay their fair share, much like all our residents do in each of our ridings. With that, it is great to stand up and speak to Bill C-82.

Taxes paid by Canadians are what fund the programs and services that make our country thrive. When the wealthy use international tax avoidance schemes to avoid paying what they owe, it is the hard-working middle class, those folks in my riding of Vaughan—Woodbridge, who foot the bill. That is unacceptable.

Tax fairness continues to be a cornerstone of our government's promise to Canadians to grow a stronger middle class. In each of our three budgets, the government has passed laws on both the international and domestic fronts to enhance the integrity of Canada's tax system and give greater confidence that the system is fair for everyone. I encourage some of the opposition folks here this morning to look at our budgets. They are actually great documents that pertain to tax fairness for all Canadians, especially with respect to putting in resources. Over $1 billion was invested in the CRA, after those many years of cuts by the Conservatives. The Conservatives are synonymous with cuts to the system and the CRA. We want to ensure that all institutions in Canada are paying their fair share, because we know all hard-working Canadians go to work, pay their fair share of taxes, and want to make sure they create a better standard of living for their families and a better future for their children and for all Canadians.

Since our first budget in 2016, the government has continually strengthened the ability of the CRA to crack down on tax evasion and combat tax avoidance with increased funding. This funding has supported transformational changes to the CRA's compliance programs, allowing them to better target those posing the highest risk of tax avoidance, and more effectively fight tax evasion and aggressive tax avoidance.

Today we take another step toward levelling the playing field and ensuring all Canadians pay their fair share of taxes. With this legislation, the Government of Canada is upping the ante in the fight against aggressive international tax avoidance and safeguarding the government's ability to invest in the programs and services that help the middle class and people working hard to join it. Whether it is putting in place a 10% increase in the guaranteed income supplement for our most vulnerable seniors, increasing the Canada workers benefit for those hard-working Canadians at the lower end, giving them that bump up, that extra few hundred dollars a year to make a big difference in their lives, we are doing those things while ensuring that our tax system is sound, efficient and fair for all Canadians and all Canadian organizations.

Ensuring tax fairness is complex. I know that for a fact because I sat on the CICA user advisory council. Understanding tax and accounting language does require a certain amount of specialization. It requires that we work with a wide range of partners at home and around the world, which is what we have done with the legislation we are debating today.

Bill C-82 would implement treaty-related measures to counter base erosion and profit shifting, also known by its acronym BEPS. This term refers to tax avoidance strategies through which businesses and wealthy individuals can use gaps and loopholes in tax rules to shift profits inappropriately to low-tax or no-tax locations. It would also ensure that transfer pricing is done fairly.

My riding is blessed with entrepreneurs of all different stripes. The city of Vaughan has over 11,000 SMEs. We have some of the most successful entrepreneurs in the country. I applaud their efforts. I meet with them regularly. I like to listen to what is working to ensure they have the skills and resources for their workers and that they can invest in their Canadian operations, and they are doing that.

That is why our unemployment rate is at a 40-year low. That is why our growth rate is near 3%. That is why firms across the world are choosing Canada to invest in. I am proud of that. However, we also need to make sure that our social programs are funded, that investments are made in early learning, that we enhance the Canada pension plan, that we reduce taxes for nine million Canadians. Yes, we ask those who are very fortunate and privileged in our society, those who are doing well, to pay a bit more. I think that is fair. I wish my colleagues on the opposition benches would appreciate that as well.

With that, I would like to close by saying that Bill C-82 is a good piece of legislation. It concerns an instrument that has recently been ratified by our counterparts, by many European countries, by France, Australia, Singapore, and some of the South Asian countries which have also adopted it in the last few weeks.

It is something that moves the needle forward on combatting aggressive tax avoidance and tax evasion, which is something good for our society. It makes our society fairer but at the same time allows those companies and corporations that do the right thing day in and day out to make the right decisions for their employees and their employees' families. I will end with that.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Mr. Speaker, I will begin by telling the member about the so-called middle-income tax break. For Canadians earning $48,000, the tax break was $81.44. If we include an increase in the carbon tax and the increase in payroll taxes that people are paying at the end of the year, they are actually worse off under the current government than they were at any time between 2006 and 2015. That is just on domestic taxation.

The member crowed about how great CRA is doing, but I am hearing from small businesses in my riding and from many of my constituents about how aggressive CRA has become in its collection process, especially against single moms who are just trying to collect their child benefit, and from small business owners who are just trying to make ends meet. It is garnishing wages and getting straight into the bank accounts.

Is this the way the member imagines the CRA should be behaving with our small businesses, small entrepreneurs and single moms who are just trying to make ends meet? With the rising cost of living, at the end of the day, what matters is whether Canadians can make ends meet and whether businesses can actually pay their employees. CRA is making it much harder than at any point before 2015.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Mr. Speaker, it is great to see my hon. colleague from Alberta back in the House this morning. I was not here last week because I was travelling with the finance committee, but I welcome him back. It is really nice to see him, and I look forward to his getting back on the finance committee.

As an economist, as someone who follows the markets and looks at everything, and as someone who is also raising a family, I know the number of measures we have implemented, whether it is the Canada child benefit, the 10% increase in the GIS, or the tax cut. It is interesting that some of the research put out by reputed institutions is actually quite shameful as it ignores the Canada child benefit that is going to millions of families. It is literally a $5-billion increase to families from coast to coast to coast. It is shameful as the institution named earlier should have had that in its report. It would have made a big difference.

Yes, we have reduced taxes. The member will note that at a certain point taxes payable will become very low with the way the tax system works.

[Pierre Nantel, NDP, Longueuil—Saint-Hubert, QC]

Mr. Speaker, I would like to ask my colleague a question, particularly since he is a members of those committees.

Ordinary Canadians who work hard and pay their taxes find it unacceptable that the government is introducing bills that merely fiddle with minor details. Will the government review the tax system? The NDP has asked it to do so many times.

The government is encouraging cynicism among Canadians by failing to make major changes, such as establishing a public registry of those who benefit from the tax exemptions given to the wealthiest Canadians and big business. When people hear that a company did not pay taxes one year or that it was taxed at only 1% when they were taxed at 33% or 34%, it makes them very angry.

I am sorry, but I must remind the House that a Liberal prime minister registered his Great Lakes ships in Panama.

Would my colleague care to comment on that?

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Mr. Speaker, in the first three budgets that our government brought forward, we invested about $1 billion into CRA to ensure that we keep an eye on aggressive tax-planning techniques or programs and tax avoidance. We are fighting those things and Bill C-82 is another large step in that direction.

As the member knows, tax planning is complex and tax measures need to be looked at. We have looked at certain tax expenditures in our budgets. For example, the multiplication of the small business tax deduction was something we eliminated so that people would not take advantage of it in ways it was not meant for.

Our government has invested a serious amount of funds, over $1 billion, into CRA to combat tax avoidance and tax evasion. We have also looked at our tax code with the goal of simplifying it. I personally feel that we have done a terrific job. There is always much work to do on all files. That is what life is about working in government, and what we all do here on a daily basis, but we need to ensure that we continue on as such.

[Darrell Samson, Liberal, Sackville—Preston—Chezzetcook, NS]

Mr. Speaker, I am pleased to be back in the House this morning after our constituency week. Constituency weeks give us a chance to spend time with people in our communities, which is incredibly important work.

It is a pleasure for me to speak to Bill C-82 this morning. It is definitely another clear step by our government in moving forward on taxes and fairness. When I say fairness, it is extremely important to realize that the tax loopholes that exist need to be shut when it comes to international base erosion and profit shifting. We are seeing wealthy individuals or businesses moving their money to countries where low taxes are available to them, and Canadians lose out on those revenues. That is crucial. For example, many programs we offer to our people we will not be able to continue or improve if money keeps flowing outside the country.

For example, there was nothing better than this week when I went around and heard veterans indicating how happy they are that our government brought back the pension for life. That is something they were asking for over a number of years that is very important to them. I hear veterans talk about the $40,000 education investment or the $80,000 four-year education investment. Those are major investments for veterans.

I was chatting not so long ago with some youth about what our government has done thus far to help and work with them. We underlined, of course, that we doubled the Canada summer jobs for individuals. We also created the youth Canada program, where we hired 870 young people on the ground for competitive co-op programs or internships. We can talk about the 1,200 green jobs for young people under STEM, which is science, technology, engineering and math.

This is very good legislation. It would continue our philosophy of ensuring that we can continue to offer programs for Canadians.

This multilateral convention came about when the OECD and G20 countries worked together to look at base erosion and profit shifting. While they were doing that, they realized that many of the tax treaties that existed had many loopholes and some challenges. Trying to find solutions for each and every one in all the countries involved would be time consuming, very costly and probably not very efficient. Because of that, they brought forward this framework, this multilateral convention, which is a framework for countries to move forward quickly and effectively. Our government signed on to it on June 7, 2017, and then, of course, we tabled it in the House in January 2018.

It is not just Canada. Over 100 countries have already signed on to this, because they know that this is an area they need to streamline so they can continue to grow and prosper.

Talking about growth and prosperity, we need to talk about our country. Of course, we have created over half a million jobs in the last two and a half years. That is an enormous increase in jobs. We have the lowest unemployment rate in the last 40 years. That is again an indication of the strength of this country, and it puts us in a great position to continue to grow and prosper, and we are going to take advantage of it. This is an opportunity, not a challenge, in that way. We will crack down on these programs to ensure that the revenues due to Canadians are there so we can reinvest them for the middle class and for Canadians. That is our objective.

This important multilateral convention would deal with three major fronts. The first one would modify existing tax treaties. It is extremely important to look at the loopholes and see how we can find solutions and bring them forward. However, we have also added minimum standards for the abuse of tax treaties. There is lots of abuse, so how we deal with those abuses is key. First are the loopholes. Second is finding tools or rules to reduce those abuses. That is what countries will have to find solutions for.

I want to talk about the minimum standards that focus on dispute resolution and arbitration. We have to make sure that there is dispute resolution where the objective is to find a solution. Instead of being very costly and fighting in court, we need to find a way to work together to find solutions that are acceptable and that ensure that Canadians receive the funds they are supposed to and can reinvest those funds in social programs for the middle class and less fortunate Canadians.

Tax fairness is our objective, and this would move another step closer to what we have introduced throughout the two and a half years the Liberals have been in government. I have to talk about the fact that we cut taxes for the middle class and raised taxes for the wealthiest one per cent. There were two objectives. One was to reduce taxes for the middle class and to increase those for the most fortunate, which is extremely important.

When I speak to young families in my riding about the Canada child benefit program, they recognize how important that investment is in their families for their children. It is essential. It is very touching to hear young families share that information, and it is not just in my riding but right across the country. In the riding of Sackville—Preston—Chezzetcook, which I represent, $5.2 million per month—yes, everyone heard me correctly, $5.2 million per month—goes to young families. That represents $60 million a year. If we multiply that by 338 members, everyone can see how much investment our government is putting into this important area.

This is Small Business Week, so we should be talking about small businesses and what our government has done to continue to improve the environment for small businesses to prosper. When we came into power, the tax rate was 11%. We reduced it to 10.5%, then 10%, and in April, we will reduce it once again to 9%. What does 9% represent? That 9% means that with the federal, provincial and territorial taxes together, it will be only 12%, which is the lowest in the G7 and one of the lowest in the OECD as well.

In conclusion, the money we invested, over $1 billion, in budgets 2016, 2017 and 2018 was to enhance a new program that will allow us to track closely any transactions of $10,000 or more that move about monthly. How big is this? It is very big. A million transactions per month is 12 million transactions of $10,000. We work closely with other countries to make sure that we share the information about foreign banking.

I am extremely happy to be here today to speak to this bill that will continue to allow Canadians and our government to support the middle class and ensure that there are jobs and programs as we move forward in a strong country.

[Todd Doherty, Conservative, Cariboo—Prince George, BC]

Mr. Speaker, I find it interesting that the government chose the member for Sackville—Preston—Chezzetcook to stand up. I will remind those listening, and those in the House, that his family was on the receiving end of a lucrative surf clam quota given by the former fisheries minister. Subsequently, the Ethics Commissioner did an investigation on this.

If that is not enough, our hon. colleague is waxing on about how great the government is, when its own Minister of Finance registered a Toronto-based company in Alberta. Is that not a version of tax avoidance? Could our colleague explain, in his own words, why he feels the Minister of Finance did that?

[Darrell Samson, Liberal, Sackville—Preston—Chezzetcook, NS]

Mr. Speaker, first of all, I would like to set the record straight. I think it is extremely important.

On this side of the benches, we do not need permission to speak for the party. We are not chosen because it is time for us to speak. We request the right to speak on any bill, and we do so, and that is how we do business. On that side, if members have to play games to get access to speak on behalf of their residents, that is pretty bad. That is why I am on this side and not on that side, that is for sure. I guarantee you that.

I believe the member opposite should spend a lot more time focusing on bills being debated in the House so that he can bring forward the perspective of the people he represents on these very important bills.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Mr. Speaker, it is interesting that we are talking about tax avoidance. I will say, in fairness to the Liberal government, that it has made a massive effort to go after tax avoidance. However, what it is perpetuating in the House is a fraud in not being honest about the fact that who the Liberals are going after are single mothers. They are not going after offshore tax havens. Ask any member of Parliament who deals with child tax benefits, and they will point out that the government is targeting single mothers. I know families that have never gotten child tax benefits, because they cannot prove that they actually live in this country. They will make single mothers jump through every single hoop imaginable and will never ask the same of the Bronfmans or of any trust fund friends of the Prime Minister.

The idea that the government is serious about offshore tax havens is a joke, because we can see how it targets child tax benefits and targets single mothers. If the member had any dignity, he would stand up and say that what is happening against single mothers and young families across this country is unconscionable.

[Darrell Samson, Liberal, Sackville—Preston—Chezzetcook, NS]

Mr. Speaker, there is always lots of energy behind my colleague's questions, and I appreciate that very much. He must keep in mind that since the Liberals took power, we have invested $1 billion in the CRA to put systems in place to better track and identify the loopholes and the wealthy individuals or companies that are not paying their fair share of taxes and to make sure that they pay those taxes. We will continue to do that. We have hired 250 more auditors to make sure that CRA is doing the job it needs to do.

The member should keep in mind that the government is focused on tax fairness and investing in the middle class.

[Erin Weir, Independent, Regina—Lewvan, SK]

Mr. Speaker, this is a very esoteric topic, and I think it makes sense to talk about tangible examples.

I spent this past weekend in Saskatoon at the Saskatchewan NDP convention. One of the largest companies in that city is Cameco, which mines uranium in the northern part of the province. For many years, it had a contract with its own subsidiary, in Zug, Switzerland, to sell uranium for the rock-bottom price of only $10 per pound. The uranium was not being consumed in Switzerland. The whole point of this arrangement was to transfer profits from Canada to Switzerland, avoiding hundreds of millions of dollars in corporate tax both federally and in the Province of Saskatchewan.

Could the member for Sackville—Preston—Chezzetcook explain to us how Bill C-82 would help to stop companies from engaging in that type of tax avoidance?

[Darrell Samson, Liberal, Sackville—Preston—Chezzetcook, NS]

Mr. Speaker, I do not know if my colleague should share the bad news with the company or if he wants the CRA to do so, but if it is not paying its taxes, Bill C-82 would force it to pay them. The member may deliver the bad news if he wants to, or I will, but the company will pay.

The sharing of information between companies has increased, which is extremely important. As well, with the new tracking system that will be put in place, we will be able to ensure with regard to those who are moving money monthly, $10,000 or more, or $1 million a month or $12 million a year, that we can assess the risks and focus on them and find solutions. We will be able to see if a lot of activity is happening with one company or 10 companies.

Objectively, Bill C-82 would ensure that companies and individuals that need to pay their taxes will pay them so that the Canadian government can—

[The Deputy Speaker, Conservative, Bruce Stanton]

Resuming debate, the hon. member for Calgary Shepard.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Mr. Speaker, I am glad to be back this Monday to talk about what I think is a tax treaty for tax treaties. I can think of no drier subject to debate in the House other than maybe ways and means motions.

Bill C-82 looks at base erosion and profit shifting. It is a problem that tax regimes and tax administrators across different countries are increasingly starting to grasp as a result of the digital age now upon us and the ability of companies to create sub-companies and larger holding companies to shift around money quite easily, as well as IT, or intellectual property. They are able to shift the work of employees in a digital sense, not in a physical sense, to other countries to take advantage of lower taxes and tax loopholes and tax avoidance schemes that currently are legal in some ways, but in other ways go against the spirit of tax treaties that legislatures have introduced across different countries.

The Tax Justice Network has done some estimates and provided an aggregate of different statistics from the OECD, World Bank and IMF of how much money we are talking about in base erosion and profit shifting. It could be an excess of $200 billion that developing countries are losing out on from that money being shifted around. This is revenue that could be taxed and possibly provide social services that we all live off of. We need police forces and EMS. Also, this place does not run for free. We have to pay the clerks. We have to pay all of those who provide administration for this building. Some of the lowest estimates are as low as $100 billion while some of the higher one go up to about $300 billion. Large multinational corporations are typically best able to take advantage of different tax treaties and tax treatments for the type of work they do. This is happening mostly because the digital age is upon us and the ease with which companies can hire experts in this field.

Let us be honest. I am not a tax lawyer. Neither are the vast majority of the members in the House. I am humble enough to say this. Whenever I see a tax bill before the House, it takes me an extra long time to go through it. When I have to file my taxes every single year, it takes me the better part of an afternoon to do it. Dealing with tax treaties and their tax implications for multinational corporations and how these could be used is not my area of specialty. Those companies know that. Multinational companies are able to hire high-paid accountants, high-paid lawyers and high-paid lobbyists to ensure that they get the best possible tax treatment for their businesses. In some cases it may be justified to avoid a situation of being double taxed.

In Bill C-82, a lot of the provisions in this tax treaty for tax treaties will get rid of the double taxation of some companies. However, many simply abuse the rules. There are 78 jurisdictions that will be covered by this and 1,200-plus matching treaties that will be looked at. Countries are joining this process every day.

This was not started by the current Liberal government, let us be clear. It began under the previous Conservative government as a result of multinational bodies starting to look at this matter. I have heard several members on the government benches say this is part of the their initiative to improve tax collection somehow. They are taking credit for something that others started. The government repeatedly takes credit for things that others have done, either things that civic society has done or charities are doing on their own, or that a previous government has done or a provincial government is doing. The government takes these as its own, claiming victory that somehow these meet the campaign promises that the Liberals were elected upon.

I have an example that I found in a package that the OECD made available on its website. I want to read it into the record because it is an example of base erosion and profit shifting.

In the example set out in the video, company A, which resides in the Cayman Islands, wants to provide a licence for the use of intellectual property to company C in South Africa. South Africa, however, has not concluded a tax treaty with the Cayman Islands and would thus be entitled to apply its domestic withholding tax rate on outbound royalties. I hope that everyone is still with me on this. However, a European country has concluded a tax treaty with South Africa that reduced its withholding tax rates on royalties. Also, this country does not itself levy a source tax on royalties. Therefore, company A establishes a letterbox company in this European country and diverts the royalty payments through the letterbox company to reduce the tax withheld by South Africa. In this example, the principal purpose of establishing this arrangement, including the letterbox company, was to obtain the lower withholding tax rate available under the tax treaty between South Africa and the European country.

If everyone is still with me, that is what we call “base erosion profit shifting” in its simplest sense. Large international companies like Starbucks do this. Every time we go to Starbucks to get a triple spiced pumpkin latte, or whatever, that company engages in this type of behaviour. I am sure I am going to get a phone call from one of its lobbyists. Specifically, it is a popular thing to do with intellectual property and trademarks, particularly in the arts and cultural industries. At a certain size we are talking about large sums of money. In these cases, the trademarks and intellectual property have a very high value. A company's reputation and branding are how it differentiates itself from its competitors.

This matter is international. We also have it happening in a certain way domestically. We have a government that has been pursuing single moms, small business owners, and many residents in my riding who have been trying to make ends meet. The government wants to force them to provide documentation proving they are not engaging in tax avoidance or welfare fraud of some sort.

Other members have said that the Alberta registered corporation that the Minister of Finance uses is really a form of tax avoidance. It is not illegal in any way in Canada to go outside a jurisdiction where the work is being done in order to register in a lower tax jurisdiction, Alberta in this case, to avoid paying more taxes.

It is done domestically, which is why the Standing Committee on Finance has been doing a statutory review of the proceeds of crime and terrorist financing act. The reason I bring it up is that in the process of this study, the members of the committee would have had an amazing opportunity to learn from FINTRAC and other agencies of the government that are dedicated to tracking down illicit funds and suspicious transactions and activities.

What we do domestically has implications internationally. We know that business owners are engaging in aggressive tax planning, making use of tax firms and tax consultants, such as KPMG, PWC and all of the large firms out there. KPMG is notably the one that has made the news most often with its relationship with the Canada Revenue Agency. These companies are aggressively planning businesses' taxes to help them avoid paying their “fair share”. It is not a term I like to use, but it is one that has been used quite often in the House.

I wish we spent more time talking about how to get companies and Canadians to create more wealth. We spend an awful lot of time in the House trying to figure out ways to tax people and corporations in order to try to squeeze and get more water out of that stone in some way, but we do not really spend a whole lot of time talking about how to make sure that in the free market economy, where free people are working in their own best interests and figuring out how to make ends meet for their families, we can simplify and improve their lives. We are not doing that. We have been doing the opposite for the past three years. From this so-called middle-income tax cut, a Canadian who is earning $48,000 is saving $81.44 off their taxes. If we include carbon taxes, increased payroll taxes, depending on the provincial jurisdiction, where they are probably paying higher provincial taxes as well, costs are rising, including the costs of everyday essentials.

There are think tanks that say that the number one item on the average family's pay slip is taxes. They are paying more for taxes than for the essentials of life: rent, food, electricity or natural gas. For the first time ever, the average family is having to pay more in taxes than for anything else. We do not spend enough time talking about how to create more wealth and to broaden the base that has been a way of ensuring that more Canadians and corporations are at least paying a little bit into the system. When we pay into the system, it makes us part of it. There is a certain ownership in what the Government of Canada and what the Parliament of Canada do on our behalf. When we have to put a little money into it, we really do care what is being done with it.

The Liberals said in their campaign platform that a so-called tax hike on the top 1% would bring in $3 billion more. The Department of Finance then produced an estimate, saying it would bring in an extra $2 billion. The government actually lost money in its first year; $4.5 billion to $4.6 billion less money being brought in. Those are not my numbers. Those are Statistics Canada and CRA numbers, which say the government is bringing in less money than it did before.

The top 1% of income earners pay 20% of all taxes. The top 8% of income earners, including every member in the House, every cabinet minister, are paying half of all taxes right now. That is an incredible amount, just in the share of national revenue, that we are asking an increasingly smaller group of people to pay. It also speaks to the administration and the idea of taxing the rich, fleecing the rich, on a personal income side, which has been a total failure of the government.

Now we have Bill C-82, in which the Liberals want to go after multinational corporations and big business, and I am all for it. It is a fantastic idea. We have a tax treaty of tax treaties. It should be done right. I am glad we are at this point where we can talk about it.

However, where are we talking about the wealth creation to get small businesses and entrepreneurs to start creating more jobs, to want to invest? We had the aborted attempt by the Minister of Finance's department, and by him as well, to tax small businesses more because they were not paying their fair share. I heard loud and clear from general practitioners and small business owners in my riding who were just trying to make ends meet. They wondered how they could keep growing their small family businesses and eke out an existence to pay for the schooling for their kids and to continue living.

Calgary continues to have the highest unemployment rate in Canada. The reason for that is that the Government of Canada is in no way interested in ensuring that the energy industry of Alberta continues humming along. Most high-income earners come from Alberta. The Government of Canada has made changes to the tanker ban on the coast of British Columbia and the introduction of Bill C-69, which has passed through the House and is in another place. Every regulatory and legislative measure that the Government of Canada has been able to use to constrict and put the energy industry of Alberta into a pretzel, it has done it. The Liberals have succeeded in reducing our incomes. They have succeeded in undermining the ability of Albertans and Alberta families to make a living. They are not helping to create the wealth that they want to tax. We should be starting the conversation with how we can ensure people can create wealth for themselves and the Government of Canada can tax a reasonable amount from them to pay for common, public services that we all get to enjoy.

For multinational corporations, what we are talking about in this tax treaty is base erosion. They are using a digital economy to shift around so-called profits, and this is primarily used by big businesses. The ability of small businesses to do this is very limited because they need access to high-paid tax lawyers, lobbyists and accountants who know the details of these tax treaties, who can read the different tax treaties between different countries and take advantage of specific provisions in them.

After the paradise papers and the Panama papers, I think there is a general understanding among parliamentarians in both houses that something has to be done. It is not just in North America and in Canada that base erosion and profit-shifting for large multinationals is getting out of control. It is happening in European and developing countries as well. With the digital economy and the ability to cite their so-called work locations almost anywhere they wish, it has become profitable for companies to engage in this type of tax avoidance.

We also have to remember that they are trying to avoid taxes, sometimes punishing taxes, that limit their ability to continue working, to continue generating a profit for shareholders. If they are co-operatives, it limits their ability to provide a return to the members of the co-operatives. It goes back to the notion of whether we are creating an opportunity to create wealth. Instead, we usually talked about how we can tax more.

Another example is that during the whole cannabis decriminalization and legalization, the discussion primarily in the public was about how much taxes the Government of Canada would generate through the legalization provisions it had introduced. Oftentimes we did not talk about the potential for wealth creation through these businesses, through legalizing this one sector of the illegal economy, the black market that already exists.

The United States will not be a party to these international tax treaties that Canada and many other countries have, to this multinational effort on the base erosion of profit shifting, although it would be in its best interest to do so because it stands to gain quite a bit from it as well.

Canada's competitiveness is further eroding. We do not participate in measures such as this. The provisions in our federal corporate income taxes and the tax rates in comparison to those in the United States make us not competitive. In Canada, one of its champions for natural gas just cannot continue doing business in Canada at this pace. It costs it $100,000 in carbon taxes for every well drilled in British Columbia. That is a rig hand, an extra person on every rig who could be hired who did not need to be.

The Government of Canada crows about how great it is doing on the energy file, such as the LNG project that was approved. However, it does not talk about the $70 billion to $75 billion in projects that did not go ahead. It does not talk about the fact that this project, the LNG project, was approved in 2014. Businesses took until 2018 to decide to go ahead with it. They only went ahead when they got exempted from the carbon tax.

Large multinational corporations have been exempted from the domestic carbon tax that everyday Canadians will have to pay, every small business owner who owns a convenience store and every gentleman I meet who drives my Uber. Usually in Calgary it is a form of an oil and gas war. The drivers of my Ubers will pay higher carbon taxes, will pay a higher price on their gasoline, will pay a higher price on their natural gas to heat their homes. They will have to pay for that, but multinational corporations will not have to pay. That was the inducement, on top of other inducements, necessary to get them to invest in Canada.

I am all for Bill C-82, what I call the tax treaty of tax treaties, the driest subject we could possibly talk about. However, let us go back and talk about how we can get people to create more wealth. I do not mean the government-directed creation of wealth. I see this all the time in news releases, that the government created 100,000 jobs. It created no such thing. This place is not capable of creating jobs. People out there create jobs. They start businesses. They may start a family business. They go out and find a product or a service that somebody out there wants to buy. They fill a gap, a niche in the free market. That is popular capitalism. It is capitalism for the people. We do not talk about it enough in this place.

In this place what we often talk about is select industries that deserve a tax break or special treatment of some sort. I am glad we are going ahead and ensuring that base erosion and profit shifting stop happening as easily as they have been.

Let us go back to talking about how we can get junior oil and gas companies in Alberta to start drilling again, to start hiring again. Probably 10% to 15% of the people who live in my riding are either unemployed or underemployed. They are maybe working a day or two a week. This is years after the commodity prices, the so-called grand WTI went down. We do not even get that in Alberta. Last week, we were told that WCS, a standard Canadian mix of bitumen and dilbit, was selling at zero. Companies were paying others to take it for 8¢ to 18¢. They had to pay someone to take it because there was so much supply.

We rarely talk about all of these problems. We posture, which is pretty standard from that side of the benches. I do not hear us talk about wealth creation. How can we get people to create their own wealth? Then, at that time, the Government of Canada can come by and ask for a reasonable share of that amount.

However, for multinational corporations, I hope this treaty will be the starting point for reducing their ability to rob from the public purse, which should be justly paid to the Government of Canada for the provision of services that we all enjoy.

[Peter Fonseca, Liberal, Mississauga East—Cooksville, ON]

Mr. Speaker, after listening to the member across the way, I have to think he is living in a different time and in a different place. He should be well aware of the facts, those being 600,000 new jobs created and the lowest unemployment rate in the last 40 years at 5.9%.

We hear about companies opening and hiring people. Canadians are doing well. We just signed the USMCA with the United States and Mexico. We are moving forward in a positive way. There is the $40 billion project, the biggest infrastructure LNG agreement to be done in the history of our country. That member must be living in a different time and in a different place. We have the fundamentals in place.

I do not understand. The member's party was not able to get it done. His party took us into a technical recession, but we have come out of that and we are doing very well.

I would ask the member to get on board and see how things are progressing in a positive way for all Canadians, including the middle class.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Mr. Speaker, the member talked about the lowest unemployment rate in all of Canada. That is an aggregated number across all provinces. He did not talk about my home province of Alberta, which still has the highest unemployment rate and Calgary continues to have a high unemployment rate and an underemployment rate as well.

The LNG project that the member mentioned was approved under the previous Conservative government in 2014. Businesses took four years before deciding to go ahead because the price of doing business here was just too high. That deal comes from the exemption from the carbon tax, a carbon tax that people in British Columbia have to keep paying, while this multinational corporation, the conglomerate that will be a part of it, is exempted from it.

If things are going so well that they need to provide exemptions through the carbon tax, I guess that is the member's standard for the Liberals doing such a great job.

The member for Mississauga East—Cooksville also failed to mention the $100 billion-plus in new debt that has accumulated under the Liberal government's watch, which future generations will also have to pay.

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

Mr. Speaker, the Liberals consistently talk about how they are going to work hard for the middle class and those trying to join it.

I had a case in my office just last week involving a young mother with four children. She home schools the children and they have lived pretty healthy lives. She had to submit 143 pages of documents to get a child care tax benefit, and she still does not know if she will get it.

Rather than suggesting that they are working hard for the middle class, I suggest the Liberals are burying diabetics and people looking for child care benefits in red tape and paperwork. Would the member care to comment on that?

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Mr. Speaker, the member's question is the same question I raised with the member for Vaughan—Woodbridge about the CRA's behaviour toward taxpayers and the way it goes about reassessing and auditing Canadians.

The member mentioned a single mom who was trying to get certain benefits that were owed to her by the Government of Canada. I had the exact same situation in my riding. It involved a single mom who had great difficulty in proving to the CRA that she was living with her kids. No paperwork satisfied the individuals who she was dealing with at the Canada Revenue Agency.

I had a business owner who in 2016 had his entire business crushed because he made an accounting mistake involving all of the wages he owed. He admitted to the CRA that he made a mistake and he was trying to fix it. The CRA shut down his bank account and took all the money out of it. He could not pay his employees. This was a small business with 18 employees.

I have serious problems with the way the CRA is behaving.

The member mentioned diabetics. Last year the Canada Revenue Agency went after diabetics. It refused type 1 diabetics from being eligible for the disability tax credit. This was one of the reasons I introduced my private member's bill to look after them and make it impossible for the CRA to do it again.

We in the House have to get into the weeds of the administration of taxes by the CRA. There is a culture problem over there that needs to be resolved.

[Kevin Lamoureux, Liberal, Parliamentary Secretary to the Leader of the Government in the House of Commons]

Mr. Speaker, over the last three years, this government, in particular the Minister of National Revenue, has taken action on the issue of tax avoidance. For the first time in many years we have seen a serious commitment of close to $1 billion in total set aside to hire the auditors who are necessary to look at ways in which we can prevent tax avoidance. The member spends a lot of his time talking about ensuring that a sense of fairness applies.

This government put a special tax on Canada's wealthiest 1% and took many other tax initiatives in a relatively short time span.

All in all, even though we hear a lot of negativity from the Conservative side, as a government we have delivered in many tangible ways for Canada's middle class on the issue of tax reforms, including tax avoidance, tax breaks for the middle class and so much more.

The member might like to make a more general comment with respect to the many things that have been done by this government in a relatively short time span.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Mr. Speaker, there is a Yiddish proverb that goes, “A quarrel is like an itch; the more you scratch, the more it itches.” I am glad the member satisfied the itch I had, by bringing it back to just talking about more of the generalities rather than specifics of this tax treaty of tax treaties bill.

Yes, the government has done some things. Again, Bill C-82 is the government's attempt to go after multinational corporations that are taking advantage of base erosion and profit shifting, doing things bordering on aggressive tax planning.

What I am pointing out, though, is that in the CRA's drive to try to collect more taxes from overseas corporations, that same zest and zealotry is being applied to small business owners in Canada, to single moms simply trying to apply for child benefits, and to type 1 diabetics, whose only crime really is they wanted to apply for a disability tax credit. I went through this over the summer, when I was trying to figure out how to apply for the disability tax credit for my youngest daughter. It was a process where I was thankful I had spent a year drafting a private member's bill, because I am not sure I would have been able to do it all by myself. The complexity of complying with CRA rules and regulations at times makes it impossible for average Canadians to be able to file their taxes.

[Erin Weir, Independent, Regina—Lewvan, SK]

Mr. Speaker, I would like to thank the member for Calgary Shepard for bringing up the challenge posed by intellectual property, where it is very difficult for tax authorities to determine where it is located and how much it is worth. Now, there is a potential solution to that, which is called “formulary apportionment”, essentially allocating a company's profits based on the actual location of its sales and payrolls. We are familiar with the system in Canada because the Canada Revenue Agency does not allow companies to move their profits around between provinces based on transfer pricing. It actually requires them to allocate their Canadian profits based on where they actually employ people and sell their goods and services.

Since we are talking about an attempt at international co-operation through Bill C-82, does the member for Calgary Shepard see prospects to apply formulary apportionment at the international level?

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Mr. Speaker, I am not a tax lawyer, and this is one of those very technical questions I am not able to answer. Under the permanent establishment definitions that are part of this international initiative that Bill C-82 would implement, there might be an opportunity to ensure those types of definitions are included. Outside of that, it would have to be the hybrid mismatch arrangements and the anti-treaty abuse provisions, where I guess one would find these intellectual property rights and trademark provisions in order to ensure that type of behaviour is clamped down on.

[The Deputy Speaker, Conservative, Bruce Stanton]

We have time for one brief question or comment.

The hon. member for Jonquière.

[Karine Trudel, NDP, Jonquière, QC]

Mr. Speaker, I have a comment to make.

I would like to take a step back and remind my colleague that it was the Conservative government that started making massive cuts to the Canada Revenue Agency, or CRA, back in 2012. The consequences of those cuts are still being felt today, and Canadians are the ones suffering. The upshot is that in terms of taxation, the CRA is not as efficient as lawyers, accountants and consultants in the private sector. This shows that the cuts had a catastrophic effect.

I would like to hear my colleague's thoughts on the fact that it was his party, the Conservative Party, that made these cuts in 2012.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Mr. Speaker, I thank the member for her question.

I do not think the cuts made in 2012 or in any other year are directly linked to the culture of the organization in its current form. In the interim, the CRA has received several hundred million dollars to hire more staff to hassle moms who need support or information from the CRA, as well as entrepreneurs and people who are just trying to find out what information the CRA needs so that they can pay what they owe. I think the organizational culture bears no relation to the amount of funding it receives.

There are thousands of CRA employees today who are more than capable of administering the Government of Canada's tax system. The issue of culture and work practices is much more important.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Mr. Speaker, as the spokesperson for the people of Timmins—James Bay, I am very proud to be here today to take part in the debate on Bill C-82, which seeks to implement measures to prevent base erosion.

When I look at this bill, I have one simple question: where is this government's plan to close tax loopholes? Workers across Canada pay their fair share of taxes, but wealthy people, corporations and Liberal cronies can use tax havens. It is unacceptable. Tax havens have undermined our country's ability to develop a fair and equitable economy.

I want to talk about this conversation we have been having this morning where the Liberals talk about tax fairness and closing loopholes. I do not often agree with the Liberal Party, but I will say that the Liberals have been very committed to closing tax loopholes. However, they are not committed to closing them on the friends of the Liberal Party. They have been using the massive resources of the CRA to go after single moms, young families and small businesses.

We see one of the great and I think really disturbing political frauds in the last few years. The government says again and again it is committed to getting money to young families through the Canada child tax benefit, but what it does not say is that it is clawing that money back through a whole series of measures, which are actually cruel in their implementation, and targeting people who have no capacity to defend themselves.

I could give a few comparisons to show how unfair this system is in terms of how the Liberals look after the friends of the Liberal Party.

Let us talk about the need to deal with the tax avoidance system. The problem with the super rich not paying their part has a massive impact on the erosion of our economy, and our ability to make investments and to build an economy that is fair and just across this country. We are learning now that tax avoidance is upwards of $3 billion a year, but there may be $70 billion to $240 billion being held offshore and out of access to the Canada Revenue Agency.

What is the Canada Revenue Agency's response to such massive tax avoidance? Well, we saw how the government made a deal with KPMG after it was found out that KPMG was involved in establishing scams for those who had $5 million to blow. Now, not many people out there in television land probably have $5 million to spare, but if one is friends with the Liberal Party it is likely one may and could be set up in offshore tax havens, which is cheating.

When a small business in my region gets caught out not paying its taxes, the government brings the full weight of the law down on it. There is no mercy. I have never seen mercy from the CRA, ever. If one is not paying one's taxes, that is the way it has to be. However, why would the government make an agreement, why would the Prime Minister make an agreement, with KPMG, people who are tied to the Liberal Party and people who are tied to getting federal contacts, to give them an amnesty for avoiding taxes? That does not happen if one is a single mom with an overpayment on EI.

Let us talk about Stephen Bronfman, who is a very close friend of the Prime Minister. He is the Liberals' top fundraiser. In fact, he is so good at raising funds, he helped raise $250,000 in two hours for the Liberal Party. I mean, they just travel in different circles than the rest of us Canadians do. When Stephen Bronfman gets named in the Panama papers, one would think that would be a serious question for the legitimacy of the friends of the Prime Minister and the need to deal with tax loopholes and unfairness. However, the Prime Minister came out and said immediately that there was no investigation needed. He was a friend of his. Know what? No investigation happened.

My young daughter, who just starting working and makes minimum wage, is being audited for the second time. She was audited last year and is being audited a second time. I told her to get used to it. A young student trying to pay her rent might get audited by the CRA all manner of times, but I would never call the CRA to say she's my daughter and does not need to be audited. That would never happen. However, the Prime Minister went public, said Stephen Bronfman is a good guy and does not need to be audited, when he was named in the Paradise papers, and it never happened.

Who else was named in the Paradise papers? There was Leo Kolber. This was about the trust that was set up for the Kolber family. For those who do not know and are not part of the Laurentian class, Leo is a Liberal senator and a very well-placed Liberal bagman. He was named.

Paul Martin was named, but I guess that should not be surprising. Paul Martin made his name by keeping his ships offshore so he did not have to pay taxes. Paul Martin was named in the Paradise papers. Jean Chrétien was named in the Paradise papers.

Then, of course, there is the finance minister. Morneau Shepell had its Bahamas subsidiary. What would anyone be going to the Bahamas for, one of the notorious tax havens? Of course, there was lots of tax work to do there and Morneau Shepell had its subsidiary in the Bahamas. When the government says it is going to take special measures to deal with the Bahamas, set up with the finance minister, does anybody in any place in this country think it is going to be looking after the little guy? I do not think so.

It keeps going on and on. There is the Minister of Infrastructure. There was a report in Le Journal de Montréal about the Minister of Infrastructure and the transfer of payments to shareholders of a company in, wait for it, the Turks and Caicos. Folks back home who work at the mill, at the mine or at Tim Hortons might wonder why someone would have shares in the Turks and Caicos and wonder where it is. It is well known for offshore finance operations. Maybe we will be talking, if we have enough time, about the privatized infrastructure bank that was set up. I bet a lot of people from the Turks and Caicos will be very interested.

I am not being mean to just the Liberals. We can talk about the famous Nicole Eaton, a senator. When a bunch of documents were released from the notorious Bahamas, it turned out that she was a director of a corporation called Mount Bodun Limited and said she had no idea how she was named as a director of this corporation. That stuff happens to me all the time. I find out I am a director of a corporation in the Bahamas. Shrug, shrug, how did that happen? I guess it is the world that they are travelling in.

Let us go back to the illustrious upper chamber. Of course, we could not have this discussion about offshore tax havens without talking about Liberal Senator Pana Merchant. It was said that her husband “moved nearly $2 million to secretive financial havens while he was locked in battle with the Canada Revenue Agency”, and she gets paid until she is 75 by Canadian taxpayers to represent our interests.

What happens is really interesting. When rich people like these move assets around outside the hands of the CRA, what happens? Nothing happens. That speaks to the fundamental problem we are seeing, the unfairness, because ordinary Canadians pay their fair share of taxes. They work really hard, they are diligent and they pay their fair share. Therefore, when we see the super rich and the friends of Laurentian and Liberal class not paying their share, we have a problem, unless one thinks that the CRA is the most relaxed, laid-back organization and does not like making life difficult for anybody over taxes.

Let me give an example of what happens for people who are not super rich. Let us talk about what happens for the working poor and how they get treated. Let us also talk about the Canada child tax benefit, because again the great fraud that is being perpetrated by the government day in, day out is this great miracle of the child tax benefit that everyone gets and brings everyone out of poverty. What Liberals do not say after they make those announcements is that they use the resources of the Canada Revenue Agency to claw it back, and the vast majority of cases coming through my office right now—and I have talked to many members of Parliament—are single moms being denied the child tax benefit because of the loopholes that they are being forced to jump through. What are some of those loopholes?

A young father came into my office. His wife left town and left him with the kids. He did not know where she went. He had to quit his job to look after the little children. He was cut off from his child tax benefit because he could not prove where she was. At Christmastime the neighbours were putting together food hampers for the family because the family had nothing.

It is not just single moms. A young couple was told after getting the funds to go back and prove who they were, prove that they were married and where the children were, even though they had always had the children. Single moms are being told they are being cut off because they cannot prove they have their children. They say the children go to the local school, but the government will not accept report cards as proof anymore. It is not fair to make a single mom jump through those kinds of hoops when we would not make Stephen Bronfman do it.

I know a wonderful young Cree mother who has the most beautiful little girl and in six years that mother has never received any child tax benefit. Why? The government does not believe she actually lives in the country. She is not living in the Turks and Caicos. She is living in social housing. She is working and raising her child but she is not getting a single dime from the government. Officials tell her she has to go to the doctor or the dentist, but that is not good enough. Then she has to go to the landlord. They even told her to get the mailman to sign something confirming where she lives. She has paid her taxes every single year.

There are mothers who do not have proper housing, so they are couch surfing. When they are couch surfing, CRA says their address indicates that they are staying with their folks and it is cutting them off. CRA will make single moms jump through all kinds of hoops, but would not make anybody whose name is in the Panama papers go through that.

One of the other things the CRA has come up with is that for people to get the child tax benefit, they have to show proof of insurance on their residence and on their children. The people I represent such as single moms in poverty do not have insurance. I guess if someone is the finance minister and cannot remember he owns a chateau in the south of France, he probably thinks it is great: “We should just find out what people's insurance is.” What kind of idiotic loophole is it, telling a poor mother to prove she has insurance for her kids and maybe the CRA will give her the benefit? If she had insurance, she probably would not be so desperate to get the child tax benefit.

The government talks about the middle class and those wanting to join it. If it were a Liberal drinking game and the Prime Minister gave a speech, he would be bombed after the first five minutes if he had to respond every time he said the middle class and those wanting to join it. I do not want to be mean to the Prime Minister, but I think he and I grew up in different middle classes.

When I was young and starting out, my wife and I started a small business. We barely made ends meet, but we paid our taxes. We paid our employees. We worked really hard. I was really surprised when the Prime Minister talked about small business in the 2015 election. He worried they were being used as millionaire tax dodges.

For two terms I was on the Tri-Town and District Chamber of Commerce in northern Ontario. I did not know anyone sitting around that table who were there because they were establishing millionaire tax dodges. Small businesses are the backbone of the economy and people work really hard. It seemed to me such a disconnect that the Prime Minister said we would have to watch small businesses because they are millionaire tax dodges, but then of course, he would know because he set up three numbered companies to handle his income, his investments and also the money he was getting as a member of Parliament to do public speaking so it would lower his tax rate. From his perspective, everyone else must be doing it, but other people are not doing it.

What do we need to do? We need to start addressing tax fairness in a coherent manner. We need to review the overall tax system. The last time it was reviewed was in the 1960s. We are in a very different world now in terms of tax avoidance, in terms of corporations not paying their share. More and more the cost of social services is being downloaded onto municipalities. Single households and people in the middle class pay a very good chunk of taxes.

We need, number one, an overview of the tax system. We need a really clear sense of where tax avoidance is happening. I was really surprised to see that the government fought so hard against the Parliamentary Budget Officer over the simple question of identifying where the tax bleeding is happening. If we can see where the tax bleeding is happening, we can start to make changes.

Then we need a government that will spend more time going after the superbillionaires who are hiding their money in the Turks and Caicos than going after single moms. That should be a fundamental principle that all members in the House, regardless of their political ideology, agree with. Young people, single mothers and young families who are trying to get by should not have to bear the kinds of burdens CRA is putting on them, as though they were criminals for being entitled to this money.

We should be putting those resources into actually tracking and going after those who use tax havens. For those who use tax havens, like corporations, there has to be some kind of punishment. An example is KPMG. We have to start saying that if people are using international tax havens and are found guilty of not paying their fair share, they will be disallowed from getting federal contracts for a period of, say, five years. That would send a message that we are serious. Many companies in this country play by the rules and do everything that is asked of them and more to make sure they are compliant. The outliers that do not play by the rules should not be rewarded for shipping resources offshore to avoid their basic responsibility, which is to ensure we have a tax system that works so that we can make the investments needed to grow a more fair economy, a more just economy, an economy in which people can live the kinds of lives they deserve to live in this country. A coherent tax policy is important for this.

As much as I am okay with the fact that we are going to sign a bunch of tax agreements with a bunch of countries, which is all right, I want to know when we are going to start getting serious about going after these tax havens and the Canadians who use them.

[Adam Vaughan, Liberal, Parliamentary Secretary to the Minister of Families]

Mr. Speaker, I rise just to clarify a few points that were addressed to the House in the previous presentation.

When the member opposite spoke about requiring proof of insurance for people to qualify for the child benefit, he mentioned that the Canada Revenue Agency asks for proof of residency. The Ontario health card is the insurance they are talking about. It is not a private scheme; it is a public scheme. That health card, which provides a person's address and identity, is one thing that people can use to verify residency so that people can qualify for the Canada child benefit.

Additionally, I am disturbed, as I am sure every member of the House is, to hear of aggressive tactics by the Canada Revenue Agency that put, in particular, single moms into harm's way. We are committed to working with members of the House. If members are hearing about these sorts of situations, they should be resolved as quickly as possible, because the Canada child benefit, which is one of the best social policies to have evolved in this country in the last 40 years, is there for children and they should ensure that parents can get access.

There are complicated situations involving divorces where the two parents are in a dispute and both claim the child benefit. Those things have to be resolved. However, I give the assurance to the House and to Canadians listening that the government works very quickly to resolve those issues, and it would be happy to take inquiries from members of Parliament to ensure we resolve issues in the best interest of the children in this country.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Mr. Speaker, I appreciate that answer. I wonder why he is not the CRA minister, because we never get those kinds of answers from the present minister.

I would like to just clarify that if a health card were sufficient, the CRA would not be telling single moms to go find a doctor. They are. Many families in the north do not have doctors, so the CRA tells them to go to a dentist. If the health card is sufficient, they should not have to jump through those other hoops. They should not have to get proof from their landlord or the school. Children's report cards say where they go to school, but the CRA is not accepting those either.

What really concerns me is when there are issues of domestic abuse. I talked with my hon. colleague earlier about the situation where a man has skipped out of town after being abusive, and the woman is supposed to find out where he is living to prove he has left. She should not have anything to do with him.

These are serious questions, and I am hearing from my constituents and staff about this more and more across the board. To me, this is a structural problem at the CRA that needs to be addressed across party lines.

[Todd Doherty, Conservative, Cariboo—Prince George, BC]

Mr. Speaker, the intervention by our hon. colleague from Timmins—James Bay was well-thought-out and had a lot of key points.

I too find it very rich that we have, as has been said before, a trust fund duo with the Prime Minister and the finance minister, a finance minister who registered a Toronto-based company in Alberta. I am wondering why he would have done that.

I know of a number of incidents where the CRA has gone after single mothers and small businesses yet lets big business get away with things. One who comes to mind is Irvin Leroux in my riding, who actually took the CRA to the highest court in our country and won his case, showing that the CRA owed Canadians a duty of care. The process absolutely bankrupted him, but it was a case of the little man, just an everyday Canadian, winning.

I am wondering if our hon. colleague from Timmins—James Bay has more examples of where the CRA has been heavy-handed. Perhaps it should be turning its attention to the folks who are in big business, which this bill really looks to tackle. I wonder if our hon. colleague has more local examples from Timmins—James Bay.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Mr. Speaker, this is not something we should be putting on the front-line staff of the CRA as though they have vendettas, because we deal with them all the time and they want to work with us. The impediments are higher up. The impediment is the policy, and the policy is set by the government.

My hon. colleague has a really good example with respect to small business. We have dealt with small businesses in hard times, when things start to fall behind. An example would be the prices in the forestry sector, when the cashflow was not coming in and they were falling behind. However, these are long-term businesses, sometimes two and three generations, that need a deal. They are not trying to cheat the system. They are trying to stay afloat. If we do have issues where people are cheating, they end up paying the full amount. I tell them from the get-go that if they are cheating, they will pay the full amount.

On the issue of the child tax benefit, I have dealt with young mothers who have just given up. It seems to me the fundamental problem is that the CRA makes it so difficult. People have to leave work and get an appointment with their doctor. The doctors do not want to get involved in family matters, especially if there has been a divorce. People have to go to the school to get proof. There is this whole long list of things that the CRA is demanding when the parents already have the children.

I will end on this final note. There are people who were getting the benefit and then it was cancelled arbitrarily and they were told that they had to prove they have children. How could they have been getting the money for having children and then be told that there is no proof that they have children? This happened before Christmas. We were making Christmas hampers to help families actually have Christmas because the Liberal government cut off single moms and young single families at Christmastime. How is that possible in this country right now?

[Bob Bratina, Liberal, Hamilton East—Stoney Creek, ON]

Mr. Speaker, we are all familiar with our own statistics of the Canada child benefit. I am wondering if the statistics are correct for Timmins—James Bay, that 8,900 families receive benefits for a total amount in the 2016-17 year of $64 million. Would that be accurate? What percentage of that number does my friend think would be challenged?

[Charlie Angus, NDP, Timmins—James Bay, ON]

Mr. Speaker, I would like to ask my hon. colleague what he is saying. Is he saying that because money comes into Timmins—James Bay the parents who are not getting it should keep their mouths shut and be thankful to the government? To me, that is not acceptable. I do not care how much money comes into the riding, if people are entitled to this money and they are not getting it, then they are being ripped off by the government.

The government acts like the money is coming out of its own pockets. The government acts like it is the benevolent one. It has the gall to tell individual MPs that because this money has come into their ridings they should be happy. I am happy when single moms in my riding have what they are entitled to. This is not a gift from the Liberal Party. This is what they are entitled to. When the CRA is targeting, sometimes upwards of 60% of my cases, single moms to prove that they have children, and the member says that as all this money is coming in we should be happy, no, we will be happy when every mother gets what she deserves.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Mr. Speaker, the member for Timmins—James Bay makes a great act of standing up for people in his riding who are affected by CRA, so I had to look up how he voted on Motion No. 43 by my colleague from Calgary Rocky Ridge. That motion aimed to give the Canada Revenue Agency an enforceable duty of care. Had it passed and our colleague's initiative gone forward, the member's constituents would have had recourse, a greater ability and greater tools to demand that they be treated properly and fairly by the government. I do not know whether that member remembers the vote. It took place in September 2016. He voted against that motion by my colleague from Calgary Rocky Ridge.

Could the member explain to the House why, after so passionately defending the situation of single mothers who are being attacked by the CRA, he voted against Motion No. 43 by my colleague from Calgary Rocky Ridge?

[Charlie Angus, NDP, Timmins—James Bay, ON]

Mr. Speaker, it is fascinating that the party that has never stood up for the working class in this country had a motion that was going to fix everything. No, it is the party that has undermined tax fairness in this country from the get-go. The Liberals and Conservatives have done this back and forth because they are representing each other. What we need to do is to start going after fiscal parity, the issue of offshore tax havens. We have never seen, and will never see, the Conservative Party stand up on that. It will never happen, but we will continue to fight for that.

[The Deputy Speaker, Conservative, Bruce Stanton]

Before we resume debate and go to the hon. member for Sherwood Park—Fort Saskatchewan, I will let him know that we will need to interrupt at about the 15-minute mark, of the 20 minutes that he would usually have for his remarks, for the usual statements by members followed by question period. He will have, of course, his remaining time when the House next gets back to debate on the question.

Resuming debate, the hon. member for Sherwood Park—Fort Saskatchewan.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Mr. Speaker, before I get to my prepared remarks, I just cannot let this moment with my colleague from Timmins—James Bay pass. It really is incredible to see the other parties, the Liberals and New Democrats, stand up as if they are champions of the underdog, yet when they have an opportunity to pass real, substantive measures that would hold government accountable, that would require government to treat people consistently with fairness and respect, every time they have a chance to put their votes where their mouths are, they are found wanting. Given the passion of that member today, I could not believe that he would have voted against the motion I referred to, so I had to look it up and confirm that it was only Conservatives who voted in favour of imposing a duty of care on the Canada Revenue Agency.

If people at home believe that the Canada Revenue Agency in its interactions with taxpayers should have a duty of care, there is only one party in the House that has stood up for that. It was the Conservative Party. There is only one party that said that single moms who are being attacked by the CRA and small businesses being pursued by the CRA for money they do not owe deserve to have a duty of care imposed on the CRA for their protection. This was a great initiative put forward by my colleague from Calgary Rocky Ridge. He said that a study should be done at committee to ensure there was an enforceable duty of care between the Canada Revenue Agency and individual taxpayers, which seems pretty reasonable, and that necessary steps be taken to make the provisions of the Taxpayer Bill of Rights legally enforceable, such as by amending the Canada Revenue Agency Act to establish a duty of care.

It was a motion, not legislation, so it would have set the terms for a study to begin this process. Therefore, crucially, my colleagues across the way had no excuse to vote against it on a technicality. It was to set out direction for a study by committee to move forward with bringing about this duty of care. However, they voted against it. They had a responsibility to put their votes where their mouths were, and they did not.

The holier-than-thou member for Timmins—James Bay says that he is standing up for his constituents in the House while voting against their interests. When I asked him about his vote on Motion No. 43, he had to talk about something completely unrelated, saying that the Conservative Party does not stand up for this, that, and the other thing. That is exactly the response we would expect from someone who realizes his votes in the past do not match the comments he has made.

Mr. Speaker, I am very pleased to rise in the House to speak to Bill C-82. This is a good opportunity to clarify international tax rules, more specifically those concerning base erosion and profit shifting.

It is no secret that many multinational corporations use a multitude of strategies to avoid paying higher taxes. They shift their profits to a territory with a lower tax rate in order to avoid paying taxes. This strategy of shifting profits from one territory to another, as well as other tax evasion strategies, costs the Government of Canada billions of dollars.

This multilateral convention seeks to mitigate this problem by clarifying in which territories profits must be declared and taxed. The hope is that with these new rules, multinational corporations will no longer be able to shift their profits from Canada to another territory to lower their tax burden.

It is important to note that this convention will not affect the small businesses that this Liberal government has often attacked. This bill will have more of an impact on multinational corporations. The Liberals may have realized that they cannot keep attacking small businesses if they want to win the next election, but I am not holding my breath.

In the past, the Liberals called small business owners tax cheats. They said they were wealthy people who set up businesses to avoid paying their fair share of taxes. The Liberals created new regulations that increased the tax burden on small businesses, and they justified these measures by saying that they wanted the system to be fairer.

I do not understand how making small business owners pay more taxes will make the system fairer. Perhaps the Liberals can justify these attacks by saying that small business owners are tax cheats. I believe that the Liberals are not going to change their minds about small businesses.

The multilateral convention will also eliminate double taxation. It will clarify which territory has the right to impose a tax on which profit. The Conservative Party has always been in favour of simplifying the tax system. We believe that this convention is a good first step. Of course, we have a lot more work to do to simplify our tax system, but if we can start with the international tax regime, that is a good first step.

Since attaining the objectives of the convention requires the exchange of information with the competent authorities of other territories, this convention also includes a provision on that.

There will be strict rules on how this information can be used and when it must be protected. This information is crucial to the fair enforcement of Canada's tax laws and the enforcement of this convention and the tax laws of the signatory countries.

These reforms are also important because simplifying the international tax system will strengthen relations between Canada and the other signatories. Clearer international tax rules and laws will facilitate trade between countries. When countries trade, they prosper and are more likely to maintain peace.

I am pleased to see that for now, the Liberals have decided to stop going after small business owners and ordinary Canadians to pay for the Liberals' reckless spending. I am pleased to see that they have decided to go after national corporations' taxes instead. Unfortunately, this is not usually the case. Usually, the Liberals go after small business owners, the middle class and those who are working hard to join it.

First, they increased taxes on small businesses, claiming their owners were wealthy people who were trying to avoid paying their fair share. Now, they want to impose a carbon tax, and it is not because they want to protect the environment. This tax will do nothing for the environment. It is because they have to find some way to pay for their reckless spending. The Liberals keep going after average Canadians so that they can pay for their irresponsible deficit. The Liberals do not seem to understand that they should not be going after Canadian workers and small businesses that are already paying their fair share.

Having explained some of the particulars of the bill, in the remaining time I have before question period I want to make a few other observations about how the philosophy of this bill relates to other actions of the government.

We are discussing the issue of tax avoidance. One observation that should come out of this is that those who have greater wealth and a greater capacity to hire lawyers to study the rules often have a greater capacity to engage in activities that involve tax avoidance. When we have a more complicated tax system, it generally advantages those who are well off, because they have the capacity to develop mechanisms for avoiding those taxes. However, in this party, we advocate simple, clear, low taxes that ensure that the benefits of low taxes are accrued equally, and in particular that we deliver tax relief to those who need tax relief the most. That has always been the record of Conservatives.

When we were in government, we lowered the lowest marginal rate of tax. We lowered the GST. We raised the base personal exemption. We increased the amount of money that a Canadian could earn before they pay any income tax. All of our tax measures were targeted on the income tax side and were targeted at those who needed the relief the most. We are very proud of that record. However, what has the current government done? It raised taxes in the name of helping the middle class. In reality, it never closed the tax loopholes that are advantageous for themselves and their friends.

When it comes to the capacity for tax avoidance, let us talk about the carbon tax. A single mother who is barely getting by cannot afford the home retrofits that might be required if she were to make a substantial change in the carbon tax she was paying. How about giving people the capacity to make decisions that are good for themselves and the environment rather than punishing people who actually do not have the capacity to make those kinds of investments?

There are some Canadians who have the wealth and resources to take advantage of things like the programs that the previous Ontario Liberal government put in place that really directed resources towards the wealthy, towards those who could take advantage of those opportunities. When we think that a climate policy is hitting people with a stick instead of giving them a carrot, if those are people who cannot actually change their situation because they do not have the capacity to participate in tax avoidance types of activities by changing aspects of their lifestyle, then they are stuck paying higher taxes.

We see consistently with the government, through aggressive tax policies, increases in taxes that perversely target those who can accept those increases the least. Meanwhile, when Conservatives were in government, we cut taxes and we have always targeted tax relief to those who need the tax relief the most.

[The Deputy Speaker, Conservative, Bruce Stanton]

The hon. member for Sherwood Park—Fort Saskatchewan will have seven minutes remaining for his remarks when the House next gets back to debate on the question and, of course, the usual 10 minutes for questions and comments.

The House resumed consideration of the motion that Bill C-82, An Act to implement a multilateral convention to implement tax treaty related measures to prevent base erosion and profit shifting, be read the second time and referred to a committee.

[The Speaker, Liberal, Geoff Regan]

The hon. member for Sherwood Park—Fort Saskatchewan has seven minutes remaining in his speech.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Mr. Speaker, we are continuing the discussion on Bill C-82, which is a bill dealing with implementing certain provisions of an international agreement with respect to tax avoidance. In my remarks prior to question period, I discussed the particulars of the bill. I discussed our support for the bill. I also touched on a number of other issues that have been important in the debate on this bill and relate to its provision. I want to come back to those likely areas of disagreement among the different parties.

This bill deals with, in substantial part, the activities and operations of the Canada Revenue Agency. It has been interesting throughout this debate to hear various members of different parties talk about how the CRA interacts with different people, how it should treat people. All of us as members of Parliament hear these stories when people come into our offices. We hear of people who have just had terrible disruption occur in their lives as a result of actions of the Canada Revenue Agency, people who are treated unfairly, who may actually have been in the right but are put through a long, disruptive process and are ultimately not compensated for the disruption that is caused to them as a result of CRA activities.

Very early in this Parliament, a member of the Conservative caucus, the member for Calgary Rocky Ridge, decided to do something about this. My colleague from Calgary Shepard seconded that motion and was very active in this initiative as well. Motion No. 43 was put forward. It created the opportunity for progress toward establishing a duty of care, which should not be that revolutionary, that in interacting with individual taxpayers, the tax authority has a duty of care, that it ought to be fair to them and accord them certain rights and the taxpayers bill of rights ought to have some concrete enforceability. I think if any members asked their constituents whether CRA should have a duty of care, they would say yes. If they asked constituents whether the taxpayers bill of rights should be enforceable, they would say yes.

This motion is very reflective of a Conservative philosophy toward government, which is, in this case, that government ought to be formally constrained in a way that protects the fundamental rights of individuals and that restraint requires us to constructively pass motions and initiatives that ensure government is bound to behave in a way that is proper toward citizens and that respects their rights as individuals and as taxpayers. However, when the motion came up for a vote, every member of every other party who was present chose to vote against it.

Today, when these different issues of challenges that individuals face in their interactions with CRA come up, my colleagues in other parties, the NDP and the Liberal Party, are keen to tell us about the actions they are taking and about the impact on individuals, yet they were unwilling to take the clear, obvious action which would have constrained forever the CRA from engaging in abuses of power in their interactions with individual taxpayers. Maybe I will hear from them during questions and comments. Maybe we will hear from some of the different members who have spoken already today about why they voted against providing taxpayers with that basic protection to ensure they are treated fairly.

I made the point as well that when it comes to issues of tax avoidance, a complicated tax code that limits the manoeuverability of those who cannot hire expensive tax lawyers is particularly regressive. The government has sought to implement tax changes that have always protected the most well connected and well off, while imposing new higher taxes on individuals.

I want to highlight specifically the issue of income splitting, because this is quite revealing about the approach the government took. Under the previous government, we had a policy of allowing everybody to split his or her income, recognizing that two families making the same amount of money should be able to split their incomes such that two families with the same income pay the same amount of tax. The Liberals opposed income splitting and repealed it. They repealed income splitting for the wage earner, and then they said it was a problem to have income sprinkling that potentially allows income splitting for people in the small business world, that somehow that is an inequality, an unfairness that exists in the system. There are a lot of things that argument totally misunderstands.

One could also point out that to the extent there might have been an inconsistency in terms of the ability of some people to do that and others not, it was an inconsistency created by a policy decision of the Liberal government, which was to raise taxes on families by undoing what had been the previous Conservative tax cut for families, which was to bring in income splitting.

We see all these different ways in which Liberals are increasing taxes: the carbon tax, getting rid of income splitting and refusing to pass concrete measures holding CRA accountable. It is important to note these measures target those who actually need tax relief the most. It was Conservatives who targeted tax relief to middle-income and low-income Canadians. We raised the base personal exemption. We lowered the GST. We lowered the lowest marginal tax rate. We did not make any changes to higher income brackets. That is our record: standing up for those who need the help most by cutting their taxes and giving them more power over their own lives.

[Kevin Lamoureux, Liberal, Parliamentary Secretary to the Leader of the Government in the House of Commons]

Madam Speaker, I have had the opportunity to listen to a lot of the debate today. We often hear about issues surrounding why it is the government is not doing more in terms of providing support for the single parent.

I need to emphasize that there was a significant change with the Canada child benefit program when this government took office, which literally saw millions of dollars added to it. Thousands of children have been lifted out of poverty as a direct result. It has also seen some tax changes so that those who need it the most will, in fact, get the most compared to, let us say, the millionaire family.

Even though my colleague across the way seems to want to focus on that CRA issue, I am wondering if he can provide his thoughts on how important it is that when we take a look at the whole issue of tax it is an issue of tax fairness, and sometimes recognize, such as with the Canada child benefit, that it was a movement in the right direction.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Madam Speaker, the government is very proud of its efforts to reorganize and repackage the universal child care benefit which was brought in by the Conservatives. I remember a time when the Liberals actively opposed direct payments to parents. They said that people would just use that for beer and popcorn, and that instead the money should be given to provincial bureaucrats. However, our policy of a universal child care benefit was so popular that eventually the Liberals saw the light. It took them a while, but eventually they came around.

I should make a couple of points about the universal child care benefit in comparison. One, it was universal. The other thing is it was a taxable benefit. The members would have to agree that taxable benefits are structurally more progressive because they are taxable based on one's level of income.

The government should be careful about patting itself on the back too quickly for simply not undoing Conservative policy in one case, because unfortunately, it has undone good Conservative policy in many other areas. It has tried to bring in a carbon tax. It got rid of income splitting. It got rid of many tax deductions targeted at making life easier for families and everyday people who do not have the kind of connections that some in the government do.

[Pierre Nantel, NDP, Longueuil—Saint-Hubert, QC]

Madam Speaker, it is rare for us to all agree in the House because we have views unique to our own very different parties. Although we often see the same problem from different angles, it is quite clear that each party has its own stereotypes and ways of doing things. We are used to Liberal spin, as they want to manipulate what we think.

We in the NDP have not had the chance to form government, so of course we cannot be blamed for the serious problems that have been affecting Canadians for a long time. The blame lies more with the Liberals or the Conservatives.

I hold my colleague in high regard, but I am sorry to hear him constantly saying that we did not vote for this or that bill they brought before us. I am not a tax expert, but that is disappointing. I do not see what your point is. The point here is to show that these people are not really doing the work necessary to fight tax avoidance and tax havens. That is clearly the point. So why are you coming after us? I do not understand.

[The Assistant Deputy Speaker, NDP, Carol Hughes]

I would remind the member to address his remarks to the Chair and not to individual members.

The hon. member for Sherwood Park—Fort Saskatchewan.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Madam Speaker, I thank my colleague for his question. I spoke about my colleague's motion because I wanted to respond to the discussions that took place in the House regarding the CRA's actions and their implications for individuals.

His colleague spoke a lot about how vulnerable some people are to the CRA, and I thought it was important to respond to that. We had the opportunity to address that problem, but unfortunately the House decided not to.

It is certainly important to talk about the specifics of his bill, and I think that, in general, all of the parties support it, but we also need to talk about the major shortcomings in the government's approach to taxing the middle class.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Madam Speaker, the member mentioned all of the opportunities the government and all members have had in the House to further simplify things for Canadians, both in applying for and receiving benefits from the Canada Revenue Agency and also avoiding four tax measures that would have drastically improved the lives of everyday Canadian families who are trying to make ends meet. It is a juxtaposition with Bill C-82. In this bill, the bill that I reference as the tax treaty for tax treaties, the government is proposing to make sure that large multinational corporations that are able to afford the best-paid lawyers and accountants are taken to task when they engage in aggressive tax planning.

There is also a cultural issue that has been mentioned before about the behaviour of the CRA when it comes to large corporations. We have seen it make deals with KPMG so its clients do not suffer, but the same type of willingness for the culture of settlement does not seem to exist for everyday Canadian families or single moms who are trying to get the child benefit.

Can the member comment more about his experience in his riding for families trying to comply with CRA regulations?

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Madam Speaker, I thank my colleague for his excellent question and important work on all of these issues at the finance committee and here in the chamber. I think he is exactly right that when it comes to the activities of the CRA, we often do not see the same opportunities available to people who are not in that category of well connected and able to hire lawyers. Unfortunately, this often happens when people do not have the same sort of fiscal capacity to fight back against injustices that are affecting them and are necessarily more vulnerable to the actions of government, of regulators in government departments, and so forth.

It is sometimes presumed by my colleagues in other parties that bigger, more powerful government is somehow good for those in the middle and those who are struggling. I think the opposite is very often the case, that when we have bigger government, it becomes accessible to and aligned with the interests of those who are well connected. That is precisely the reason why I think we need limited government, a constrained government. A government that is constrained by an understanding of the rights of citizens ensures that those who do not have the connections, the lawyers, the lobbyists can have their rights and interests protected. That is what Motion No. 43, seconded by my colleague, would have achieved.

Bill C-82 certainly makes progress. However, there is so much more to do that could have been done. Hopefully, after the next election and the next parliament we will have an opportunity to finally move forward with some of the measures that Conservatives have been proposing for a long time to fix the CRA and ensure that people are treated fairly.

[Tom Lukiwski, Conservative, Moose Jaw—Lake Centre—Lanigan, SK]

Madam Speaker, I am very pleased to participate in this debate. I was thinking just the other day that one of the most offensive words in the English vocabulary, and perhaps the vocabulary of others throughout the world, has to be “taxes”. People hate taxes. More specifically, people hate paying taxes. This should come as no surprise to anyone. I do not like paying taxes. I do not think anyone does, but there is a huge difference between paying taxes as required by law and individuals or sometimes companies and multinational corporations deliberately finding ways to avoid paying taxes.

There are many old sayings that I could bring to the floor today and I will invoke a couple of them. One, of course, is that the only inevitable things in life are death and taxes. That just shows a predisposition by people to accept the fact that we are taxed, and perhaps over-taxed, unnecessarily. People have accepted it, but they do not have to do so willingly.

I recall many years ago a media broadcaster and commentator in the United States by the name of Arthur Godfrey, who once said, “I am proud to pay taxes in America”—because he understood understand that the taxes paid for all of the benefits, programs and services he received—“but I could be just as proud for half the money.” That is the reality that we face today in our everyday lives. We understand that we need to pay taxes to be able to pay for the programs and services that we receive, but do we really have to be paying as much as we currently do?

That debate we can have, but what is non-debatable is the fact that everyone needs to pay their fair share, and I emphasize the word “fair”. What we have seen over the last number of years is the proliferation of multinational companies that are not paying their fair share of taxes. That is the genesis of Bill C-82 that we are debating today.

In fact, we have seen, and there has been empirical evidence provided, that many multinational corporations are not just attempting to reduce their tax obligations and tax burden, but are actively trying to avoid paying taxes. That is where I have to disagree, and disagree vehemently, with those who would try to take advantage of what is undoubtedly a complicated tax code and tax system and deliberately try to undermine that tax system that affects all of us by deliberately avoiding their fair share of taxes.

Over the last number of years, certain articles have come to light, most specifically the Panama papers, which contain the names of Canadians who have been avoiding paying their fair share. I have been a firm believer all my life that every single person understands, from the first moment they are able to achieve cognition, the difference between right and wrong. I have no issue and take no issue whatsoever with individuals, corporations or companies that do everything they can to legally reduce their tax burden, which is fair game, but I do take issue with multinational corporations that have sometimes deliberately used illegal methods to avoid paying taxes.

I support Bill C-82. It is a step in the right direction. Quite frankly, I have criticized the current government for not going far enough. It has talked a good talk, but I have not seen it walk the walk yet in terms of recovering lost money that should have been paid into government coffers to provide the very programs and services we all enjoy. However, I at least applaud and agree with the initiative to bring forward Bill C-82. I certainly will be supporting it, because I hope that over time this and perhaps future governments will be able to more effectively collect the monies duly owed this country through lost taxes.

I also believe that Bill C-82, while admirable in its intent, does not go far enough. In fact, I would suggest that what we need to engage in now is to talk about tax policy in general, because one is connects to the other. Indeed, we are losing money to tax avoiders and tax cheats. Moreover, we also need to have a conversation about the level of taxation in this country and how it affects this country's competitiveness.

I have been alarmed over the last number of years to discover the amount of money, the amount of investment, that is leaving this country to go south of the border primarily because of the reduction in taxes by the new U.S. administration. The United States has drastically reduced its corporate taxes to a point where Canadians and Canadian businesses are moving south of the border because they find it a more attractive tax environment than here in Canada. I find that truly alarming.

We have implored the current government to try to come to grips with that, to try to reduce the tax burden here in Canada both on the corporate side and the individual side. However, so far, we have not had a very receptive audience. We find time and again that whenever we get financial updates from very reputable organizations and financial observers, not just in Canada but throughout the world, they say that Canada is losing investment capital to the United States because of our failed tax policy. I believe that has to be addressed. I would again implore the current government to deal with this quickly.

I have seen over time that tax policies certainly vary from jurisdiction to jurisdiction. However, one thing that is undoubtedly true is that excessive taxation is a problem for the citizens of every jurisdiction. It creates a system where both individuals and companies, but primarily large companies, aggressively try to avoid taxes because they believe they are overtaxed to begin with. In fact, I believe that this regressive tax policy and taxation in general, and high taxes in particular, cause individuals and corporations to try to avoid paying their taxes. As a matter of fact, I recall a statement by an old Republican warhorse by the name of Barry Goldwater, who once opined many years ago that the taxation has created more criminals than any other single act of government. That is true. Excessive taxation creates criminals, because individuals will do whatever they can to avoid paying what they believe to be excessive or unfair taxes. Once again, that is a debate that perhaps we can have at another time.

Currently, the level of taxation, both corporate and individual, in this country is proving to be uncompetitive. I do not want to see a situation where months or years from now we have to tell our children that the best thing they can do is to move out of this country to a place that has a more favourable tax regime to start a business, because here in Canada it is uncompetitive and they will simply be unable to compete.

It does not have to be that way. If we put our minds to it, and if there is the political will, we can do something about this unfair tax regime and the uncompetitive environment we find ourselves in today.

Let me conclude simply by saying that while I agree with, and will certainly support, Bill C-82, much more work needs to be done. I have not yet seen the government prove that it is willing to take the steps necessary to improve the competitive situation in this country, and once again, I implore it to do so.

[Marwan Tabbara, Liberal, Kitchener South—Hespeler, ON]

Madam Speaker, the member mentioned something about reducing corporate taxes in the United States. When we first came into government, we reduced the small business tax rate from 11% to 10.5%. We have continued to reduce that tax rate, and it is now down to 10%. In 2019, that will be reduced to 9%.

He also talked about competitiveness in the market and Canada not being competitive. I would have to disagree, because we just signed the USMCA, we signed CETA and we also signed the CPTPP, which gives us access to a market of 1.5 billion individuals.

Does the member not agree that our tax rate has been lowered for business and that we are competitive in world trade with these agreements?

[Tom Lukiwski, Conservative, Moose Jaw—Lake Centre—Lanigan, SK]

Madam Speaker, I want to point out a couple of things to my colleague.

First, with respect to the trade agreements he referenced, CETA was negotiated by our former Conservative government. TPP negotiations were initiated by our former government. I would also go further and point out to my colleague that under CETA, as one particular example, any trade agreement we signed benefits Canada as well as the European Union. That is certainly not the case with the USMCA.

Let us talk about one particular sector with respect to CETA: supply management. We allowed the European Union to gain access to the Canadian dairy market, primarily in Quebec, in the range of 2.5% to 3%. However, two things also accompanied that concession. We compensated our dairy producers to the tune of $4.3 billion, and most importantly, the reciprocal agreement provided that our dairy farmers had access to 18 countries in the European Union.

Contrast that with the recently signed USMCA, by which the United States gained access to the Canadian dairy market in Quebec while Canada got no access whatsoever to its market. That is not fair trade. That is not equal trade. That is capitulation. That is a concession outright.

That is why we continue to point out to Canadians that the USMCA, while a relief to most Canadians that an agreement was reached, is a bad deal, and that bad deal falls on the shoulders of the Liberal government.

[Pierre Nantel, NDP, Longueuil—Saint-Hubert, QC]

Madam Speaker, I would like to thank my colleague for his speech. I think that his input is important. He seems to have a lot of experience in business and finance. I found his explanations of the issues interesting, particularly what he just said about the free trade agreement with the United States, which was clearly signed at the expense of Quebec and Ontario dairy farmers.

I would like to ask him a question. I think he is very articulate. He was saying earlier that it is problematic when businesses break the law. However, he did not find it problematic that our laws establish certain tax havens. It may be a bit candid of me to say this, since I have no training in that regard, but I cannot understand why big business is allowed to get away with so much.

When it comes to free trade, is it possible that the Conservatives' approach is depleting the skills in our revenue collection agencies, while the private sector is busy snapping up the best and brightest, those who know the most about tax evasion?

[Tom Lukiwski, Conservative, Moose Jaw—Lake Centre—Lanigan, SK]

Madam Speaker, let us just try to simplify this as much as possible.

I firmly believe that a low-tax, high-productivity environment is the best environment for everyone. I do not think there could be any argument on that. What we see today in Canada is almost the reverse, where we have a high-tax, low-productivity environment.

The Liberal government has proven time and time again that it seems to favour the Keynesian approach to fiscal policy. That has never proven to be effective in anyone's lifetime, and it certainly will not be effective if the government keeps pursuing that road.

In addition to its inability and unwillingness to at least engage in meaningful consultation about tax reform and the reduction of taxes, it has also continuously increased the debt load of Canadians. From promising a modest $10-billion annual deficit, the Liberals have gone far beyond that to the point now that officials in their own finance department have suggested that we will not see a balanced budget until 2045.

We have a situation where we have increasing debt in this country and uncompetitive and higher than necessary taxes. That is a recipe for fiscal disaster and economic ruin, and the Liberals know it. They simply need the political will to do something about it.

[Kevin Lamoureux, Liberal, Parliamentary Secretary to the Leader of the Government in the House of Commons]

Madam Speaker, there are many aspects of the member's speech that I would love to address, and I look forward to what will no doubt be a great debate on trade in the coming days and weeks. The USMCA deal is an incredible deal that is going to create all sorts of opportunities for Canadians. We fundamentally disagree with the opposition on its position. We recognize the true value and benefits for Canada's middle class.

My question is related specifically to the issue of tax fairness. What we have seen under the Prime Minister and this government over the last three years is a great deal of effort on that file. We could talk about the special tax on Canada's wealthiest one per cent. We could talk about the tax break for Canada's middle class. We could talk about the close to $1 billion put in by this government to go after individuals who are avoiding taxes. Now we have a legislative response to try to ensure that Canadians are taxed in a fairer way. It is budgetary. It is legislative. It is a progressive government moving forward on what is an important issue for Canada's middle class.

When the member reflects on the bill itself, would he not say that the bill itself is worthy of supporting?

[Tom Lukiwski, Conservative, Moose Jaw—Lake Centre—Lanigan, SK]

The answer is yes, Madam Speaker. I said it in my remarks earlier, and I say it again here. I will be supporting Bill C-82, because I agree with the intent of the bill. However, as I pointed out in my remarks, the government has failed in its ability to follow through on that intent.

I have not seen any meaningful recovery of tax dollars yet by the government. There has been some minor recovery, but certainly not to the extent the government should be attacking the problem.

The problem is that currently between $20 and $60 billion a year is leaving this country through tax avoidance measures by multinational corporations. Think of what that $20 to $60 billion could do for our country. Think of the benefits for our country in terms of health care, as one example.

The government has shown decidedly no desire whatsoever to go after some of these multinational companies that continuously flout the tax system by avoiding taxes. Instead, and I have to point this out, since my hon. colleague raised the question, all the government has done over the past couple of years is try to label small business people as tax cheats. If there are tax cheats out there, they are on the large multinational scale.

The government has done absolutely nothing to try to recover that money but instead tries to turn hard-working, small business people in Canada into tax cheats themselves with its own legislation, and that is shameful.

[The Assistant Deputy Speaker, NDP, Carol Hughes]

Is the House ready for the question?

[Some hon. members]

Question.

[The Assistant Deputy Speaker, NDP, Carol Hughes]

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

[Some hon. members]

Agreed.

[The Assistant Deputy Speaker, NDP, Carol Hughes]

I declare the motion carried. Accordingly, the bill stands referred to the Standing Committee on Finance.

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