Tax Convention and Arrangement Implementation Act, 2016

An Act to implement a Convention and an Arrangement for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and to amend an Act in respect of a similar Agreement

Status

This bill has received Royal Assent and is, or will soon become, law.

Summary

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

This enactment implements a convention between the Government of Canada and the Government of the State of Israel for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and an arrangement between the Canadian Trade Office in Taipei and the Taipei Economic and Cultural Office in Canada for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income. It also amends the Canada–Hong Kong Tax Agreement Act, 2013 to add to it, for greater certainty, an interpretation provision.

The convention and arrangement are generally patterned on the Model Tax Convention on Income and on Capital developed by the Organisation for Economic Co-operation and Development (OECD).

The convention and arrangement have two main objectives: the avoidance of double taxation and the prevention of fiscal evasion. Once implemented, they will provide relief from taxation rules in, or related to, the Income Tax Act. Their implementation requires the enactment of this Act.

Elsewhere

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

Tax Convention and Arrangement Implementation Act, 2016Government Orders

December 8th, 2016 / 4:15 p.m.
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Liberal

Ken Hardie Liberal Fleetwood—Port Kells, BC

Madam Speaker, the issue of tax treaties is interesting and actually hits close to home for me, because my wife gets an income from another country, with which we have a tax treaty.

One of the issues that comes up, though, is the difference between employment income and pension income. I wonder if the bill accurately reflects the situation where in some countries they tax one's employment income but not one's pension income. The alternate takes place here. We do not tax income, because it is being taxed in another location, but if pension income is not being taxed in the home country, it can be taxed here.

Does the member know which way we are going on this particular treaty?

Tax Convention and Arrangement Implementation Act, 2016Government Orders

December 8th, 2016 / 4:15 p.m.
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Liberal

David Graham Liberal Laurentides—Labelle, QC

Madam Speaker, I do not know the answer to that question. I read through what I could, and I know that pensions were specifically addressed, but I do not know the specific details and cannot answer in a helpful way.

However, I know that Bill S-4 will be a positive bill for us in working with these other countries.

Tax Convention and Arrangement Implementation Act, 2016Government Orders

December 8th, 2016 / 4:15 p.m.
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Conservative

Gérard Deltell Conservative Louis-Saint-Laurent, QC

Madam Speaker, I am very pleased to speak at this stage of the debate on Bill S-4. Before I get into the meat of the matter, I would like to thank the people of the provincial riding of Chauveau for honouring me with their trust and launching my wonderful career eight years ago to this day. I thank the people of Chauveau, whom I now represent to the best of my ability here in the House of Commons as the member for Louis-Saint-Laurent.

We are at second reading of Bill S-4, which, as the title suggests, is a Senate bill. This is basically a technical, not to say mechanical, bill about the application of certain trade agreements with Taiwan and Israel. To be precise, it is about a convention and an arrangement for the avoidance of double taxation and the prevention of fiscal evasion for people who do business in Canada and Israel or Canada and Taiwan.

As people keep saying during this debate, no one wants to pay taxes twice on the same income. Once is enough and sometimes even more than enough. A second time is unnecessary and can even make investors less keen. International trade and free trade agreements between our country and other parts of the world contribute to growing our country's economy. It is therefore important to have agreements that facilitate these exchanges. This bill seeks to facilitate the process for the two partner jurisdictions. I will come back to the benefits of free trade between different countries.

Let us look more specifically at what is going on in this bill with regard to Israel. Bill S-4 seeks to update an agreement that was concluded many years ago in 1975. A lot has happened since then. That was more than 40 years ago. In any international dealings, especially international trade, it is appropriate to comb through the previous piece of legislation to ensure that it meets modern standards and is adapted to the new realities that investors face in Canada and abroad.

For Israel the agreement dates back to 1975; for Taiwan, it is an entirely different story. A tax convention was drawn up by the previous government, but it had to be updated by Bill S-4, which has already been passed by the Senate. It is important to know that if the House of Commons does not pass the bill before the end of the fiscal year, December 31, the process will be delayed by one year. This could negatively impact our economy and trade between Canada and Israel and between Canada and Taiwan next year. That would mean one less year to stimulate our economy, which is not a good thing.

Furthermore, I would like to state that the Canada-Hong Kong Tax Agreement Act, 2013 is also affected by Bill S-4, which we are studying today.

As I was saying earlier, this bill is extremely technical. I read a little of it to ensure that it made sense, and I noted that all aspects were examined in great detail. To be honest it is rather well written. This kind of agreement is often a bunch of gibberish and can be difficult to deal with.

About ten years ago, when I was a journalist, I did a story on the Hon. Lawrence Bergman, who was the Quebec minister of revenue at the time, and who drafted laws concerning income. Those laws are really something. They are very thick documents that are technical in the extreme, so much so, that you cannot follow them. However, the Hon. Lawrence Bergman, who was a notary, took great pleasure in reading every word of the bills he introduced. Some would say that it was his work and that it was his duty to do a good job.

We understand that when it comes to more general laws. However, the details of trade agreements or agreements affecting income tax returns can be a very sensitive subject. That is why we need experts to draft these laws. That is exactly what happened with Bill S-4.

A few days ago, a parliamentary committee examined the issue. We were able to speak to experts, to those who helped draft the bill. We did our best to leave no stone unturned. We are not perfect, but we did the best we could. There were concerns on this side of the House.

Yes, these are direct agreements to avoid double taxation for those involved in trade between Canada and Israel and Canada and Taiwan. Taiwan is a territory that is central to the potential economic development that could occur under the trans-Pacific partnership agreement, if somehow everything goes well and this government supports the agreement that we signed a year and a half ago. It is at the heart of the economic development resulting from Canada's trade with its partners and hundreds of millions of customers.

We asked questions about the consequences this could have on Japan and China, two major trading nations in the Asian economy. The officials we spoke with assured us that everything would be done properly, that Bill S-4 would have no negative consequences on potential trade with Japan and China. That is a good thing.

However, I did not get an answer to one of my questions. That is unfortunate, but that will not stop me from supporting the bill. It is always a good idea to examine the potential and the economic impact of every piece of legislation we are voting on. My question was quite simple. I asked if they had measured the economic impact that these new agreements could have on Canadian production.

The agreements were considered from a legal and political standpoint to make sure that diplomatic relations between the three countries—Canada, Taiwan and Israel—would carry on. The economic impact, however, was not assessed. Still, let us be confident that our investors and our business people will better be able to take part in rich and dynamic economic activity abroad, which is good for Canada's economy. That is very important for us.

We need to consider these things when examining a bill. We need to understand the real impact this will have on the economy, on businesspeople, and on those who will be directly affected, in other words, people who do international trade between Canada, Israel, and Taiwan.

Let us now look more carefully at what is really involved with these two jurisdictions. As the members know, Taiwan is a major economic player. It is known as one of the four Asian tigers. Yes, it is important that our country have strong economic relationships with all of them, and it does. Obviously, and as everyone knows, Taiwan exports a great deal and has limited natural resources compared to our magnificent and huge country, but it is doing well globally. In fact, it is nothing short of spectacular and impressive, economically speaking.

Imagine how many thousands of items we have held in our hands in our lifetimes that say, “Made in Taiwan”. Yes, we trade with Taiwan, but trade has to be a two-way street. There may have been some flaws in the previous agreements that might have led to double taxation. That is what we call a spoke in the wheels. That is the case for Taiwan.

For Israel, look at the deep, sincere, productive, and globally inspiring ties that exist between Canada and Israel. We know that this state was born in controversy after the second world war. Everyone knows it. The day after its creation, Israel was already at war. That is why I say it was created in controversy. I am not saying it was right or wrong, but obviously when a state is created one day and invaded the next, one might call that a rocky start. However, without rewriting history, everyone knows that today, Israel is the democratic state in the Middle East that can inspire all the other countries. Israel is our friend and ally. Canada is a friend and ally to Israel.

We know that Israel's population is eight million. It is the 38th-largest economy in the world, second only to the United States in terms of start-ups, brand-new companies with big potential and definite risk.

People go on and on about Israel's outstanding economic performance. Despite being the perpetual target of neighbouring enemies' hostile ambitions, Israel continues its extraordinary advance on all fronts and in all economic sectors.

I had the privilege of visiting this magnificent country in 2009 at the invitation of a charity very familiar to the member for Mount Royal, CJPAC. I would like to thank the group for inviting me. I went with my former colleagues from the National Assembly, and I learned so much about this magnificent democracy, an eternally optimistic country that is an inspiration to us all.

Like everyone else, I was impressed because anyone who visits Israel is impressed by its vitality and surprising agricultural capacity. Let us not forget that things can be hard to grow in that part of the world. It takes a lot of hard work because it is basically a desert. However, thanks to hard work and engineering together with Israeli ingenuity, a country that many thought of as basically a pile of sand is a place that creates jobs, wealth and remarkable agricultural output.

It seems, and I see my colleagues nodding, that dairy production is impressive. It is even said, and this may be a bit of folklore, that Israeli cows produce the most milk in the world. I know this because I have spoken with local farmers who told me that if the cows do not produce they are sent out into the desert. Members believe I am kidding. In some way, this illustrates the extraordinary will of the Israelis to develop the full potential of their country, which should inspire all of us here, in Canada, to develop our full potential in an orderly way.

In some areas, such as the environment, they do not have to take lessons from anyone. They are leaders in solar energy. Some will say that is obvious because it is always sunny in that country. Naturally, that does help. Nevertheless, they do not have a lot of water in Israel.

Israel is a world leader in water conservation, water desalinization, and water recycling. All that potential is extraordinary. We could talk at length about the economic vitality of this fascinating country.

Israel is a leading nation in research and development, in terms of the R and D-to-GDP ratio. Of course, there are bigger economies. We need only think of our American friends, who invest a lot more money than Israel in R and D. Still, a country like Israel, with a population of 8 million people, has the best R and D-to-GDP ratio in the world. That is inspiring.

I will digress a little bit while we are on the subject of to-GDP ratios. I remind members that Canada had the best debt-to-GDP ratio in the G7 when our government left office, and that allowed the current government to make a few foolish economic decisions. Still, the fact of the matter is that we left the house in order.

Let us return to the subject of Israel, a country where high technology is front and centre. Beyond the capacity to take advantage of its natural resources, when a country puts its most brilliant minds to work, then that country really shines because it is generating pure wealth. Israel is such a country, a high-tech hub where what does not yet exist is being invented and created. Microsoft, Intel, Appel, Google and all the other high-tech communications corporations have highly specialized and developed research facilities. That is where the action is, where things happen.

In closing, what is happening in Israel is inspiring and must be acknowledged. We especially need to recognize that these people are able to fully realize their potential, particularly when it comes to natural resources. They managed to draw from their arid land a tremendous amount of potential, and the potential they are drawing from their minds—which are anything but arid—is just as amazing. That is why Canada needs to be friends with Israel.

Here is one last interesting figure: Israel has the best ratio of scientists to workers in the entire world. In Israel, there are 140 scientists for every 10,000 workers. That is the best record on the planet, and it explains why these people are such great leaders in research.

Israel is our friend, and we should do everything we can to make sure that trade with that country goes well. Bill S-4 will help with that.

Let us now talk about the importance of free trade. I think that it is important to talk about free trade when it comes to international relations and international trade. The government and the official opposition agree on the principle of free trade. We sometimes disagree, are divided, or have different views on some aspects of it, but overall, we agree that free trade is the future and will drive economic development.

We cannot talk about free trade without remembering the epic battle that took place in the House of Commons and across Canada about 30 years ago in 1986, 1987, and 1988 under the leadership of the Right Hon. Brian Mulroney. At the time, Canada had entered into negations that were difficult at first but that produced an extraordinarily successful result, and that is the Canada-U.S. Free Trade Agreement.

The facts are the facts. We must remember that, in 1983, the man who gave us the free trade deal, Brian Mulroney, was against free trade. During the 1983 Conservative Party leadership race, John Crosbie, a Newfoundland MP running for the leadership, said that he was in favour of free trade. Mr. Mulroney, a Montreal businessman originally from Baie-Comeau, said it was not a good idea because it would be like an elephant sleeping with a mouse. Guess which one would crush the other. That was Brian Mulroney's analogy. I feel like I am channelling him here.

Mr. Mulroney, an intelligent man capable of recognizing when his opponent landed a good blow, was inspired by John Crosbie and said that Canada would do free trade. France even recognized his extraordinary leadership just a couple of days ago by inducting him into the Legion of Honour. I had the privilege of attending the event. What a great moment. The current Prime Minister, the member for Papineau, toasted him graciously.

This goes to show that Canadians have no political stripes. When great Canadians are honoured, we all win.

Sorry, I went from Quebec City to Ottawa via Sept-Îles. I went on a little detour. Since we were talking about Brian Mulroney, I could be even nicer and say that I went from Quebec City to Ottawa via Baie-Comeau.

On September 13, Brian Mulroney delivered a wonderful and very interesting speech at the University of Calgary. In his speech, he talked about free trade's track record over the past 30 years. I will quote from that speech:

“The statistics alone speak to the success of the FTA. Trade volumes more than tripled in less than 20 years – from $235-billion...[to $800 billion today]...Trade exploded into the largest bilateral exchanges between any two countries in the history of the world”.

We are more than just good friends with the Americans. We are also the Americans' best trading partner. We are also their biggest competition. We should be proud of that.

In the two hours or so, $250 million in goods and services will be exchanged by Canada and the U.S. This is more than $1 million every minute of every hour of every day, more than $2 billion in total each and every day of every week of every month of every year.

All that to say how important trade is between our two countries. That is why we need to support and promote free trade. We also know that we signed the trans-Pacific partnership just a year and half ago, and that agreement will also help create wealth. We should also support that. Other negotiations are under way, and we should encourage them because Canada is an export country.

I went to Vancouver for the Special Committee on Electoral Reform. To make a long story short, I was on the 27th floor of the hotel I stayed at. I had a magnificent view of the Vancouver harbour, and I counted no less than 12 container ships bound for Asia stacked full of merchandise. That is what it means to create wealth. When our goods and services can be exported overseas and other countries buy them, that means money coming into Canada. Let us hope that Bill S-4 will help create jobs and wealth.

Tax Convention and Arrangement Implementation Act, 2016Government Orders

December 8th, 2016 / 4:35 p.m.
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Liberal

Anthony Housefather Liberal Mount Royal, QC

Madam Speaker, I commend my friend from Louis-Saint-Laurent on his excellent speech.

He mentioned my former MNA for D'Arcy-McGee, Lawrence Bergman, his former colleague. I just want to say that I completely agree with the hon. member for Louis-Saint-Laurent. Mr. Bergman is a man of great honesty and integrity, and intellect.

I liked what my colleague said about Israel, the Silicon Valley of the Middle East. My colleague from Louis-Saint-Laurent surely knows that the mayor of Montreal, Denis Coderre, and the mayor of Toronto, John Tory, just got back from a mission in Israel. Some Israeli companies are setting up their head offices in Montreal and Toronto.

How does my colleague think we might contribute to increasing trade with Israel?

Tax Convention and Arrangement Implementation Act, 2016Government Orders

December 8th, 2016 / 4:35 p.m.
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Conservative

Gérard Deltell Conservative Louis-Saint-Laurent, QC

Madam Speaker, the best way to boost trade between Canada and Israel is to continue being Israel's best friend and ensuring that the relationship is mutual, but also to allow individual interactions. When we travel, visit places and meet people, we are able to improve our interaction.

These fine speeches in the House are nice. It is nice to allow our businesses to export and to welcome scientists and Israelis here in Canada, but it is much better when we can have direct interactions.

Speaking of Montreal mayor Denis Coderre's meeting in Tel Aviv, without getting too personal, I will just say that the mayor of Montreal and Mayor Tory attended Cirque Éloize, a Quebec-Canada production. Mayor Coderre took the time to say hello to my son, Jean-Philippe, who is an artist and circus performer for Cirque Éloize.

Tax Convention and Arrangement Implementation Act, 2016Government Orders

December 8th, 2016 / 4:35 p.m.
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NDP

Brigitte Sansoucy NDP Saint-Hyacinthe—Bagot, QC

Madam Speaker, I thank my colleague for his speech.

We too believe that it is a good idea to support this bill and to have this sort of agreement with Israel and Taiwan. However, when it comes to the fight against tax evasion and tax havens, it is important to include automatic tax information exchange provisions in agreements signed by Canada.

Does my colleague not believe that it is a good idea to include automatic tax information exchange provisions in the 92 existing agreements and in future agreements so that this sort of exchange does not just occur by request only, as is currently the case?

Tax Convention and Arrangement Implementation Act, 2016Government Orders

December 8th, 2016 / 4:40 p.m.
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Conservative

Gérard Deltell Conservative Louis-Saint-Laurent, QC

Madam Speaker, I had the pleasure of working with the member for Saint-Hyacinthe—Bagot on the issue of physician-assisted dying, as well as other issues, and her comments are always very relevant, particularly in this case.

Right now, in article 25, on page 52, there are five paragraphs describing the types of information that will be exchanged to prevent tax evasion. Canada cannot resolve the problem of tax evasion on its own. Every country in the world must work together.

Tax Convention and Arrangement Implementation Act, 2016Government Orders

December 8th, 2016 / 4:40 p.m.
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Bloc

Monique Pauzé Bloc Repentigny, QC

Madam Speaker, I listened to my colleague with interest, and I can see how knowledgeable he is on this topic.

In his speech, he talked about the things that need to be taken into account in a treaty. I have two questions for him.

First, do we need to take into account Israel's borders? Are those living in the Israeli settlements part of Israel or not? I did not get a clear answer to that question earlier.

Second, my colleague talked about how urgent this treaty is. However, in 2009, when the Conservative government entered into treaties with 22 tax havens, it did so via regulation, never by means of a bill such as Bill S-4, so in my opinion, there is no urgency here.

Tax Convention and Arrangement Implementation Act, 2016Government Orders

December 8th, 2016 / 4:40 p.m.
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Conservative

Gérard Deltell Conservative Louis-Saint-Laurent, QC

Madam Speaker, I am not an expert in that field, but I will do my best to answer these pointed questions.

Who can do business with Israel and Canada? According to Bill S-4, those with an Israeli passport, and that is it.

As for the fact that we are proceeding with a piece of legislation instead of making a regulation or an order in council, the experts we heard in committee told us that with this specific kind of treaty, since it dated back to 1975 in Israel's case and there had been a few agreements with Taiwan over the last few years, we needed to take a legislative approach.

I am not a legal expert, so I will not go into too much detail, otherwise I might start talking nonsense and make a fool of myself. Some would say it is a bit too late for such concerns, but that would be a lie, a misrepresentation of the truth. I will simply reassure this House that we asked that question in committee, and the legal experts told us that in this specific case an order in council would not suffice, that a bill was necessary.

As I said earlier, Canada cannot resolve the problem of tax evasion on its own. All 162 countries of this beautiful earth must work together.

Tax Convention and Arrangement Implementation Act, 2016Government Orders

December 8th, 2016 / 4:40 p.m.
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Liberal

Anthony Housefather Liberal Mount Royal, QC

Madam Speaker, I am certain that my colleague from Louis-Saint-Laurent will say that the treaty is available. It clearly states that a resident of the State of Israel can use the treaty. There is a definition in the treaty. Since 1976, it has generally been the practice of governments to present this to the House of Commons.

My question is on free trade. My colleague was correct in saying that, in the beginning, Brian Mulroney was against it, but that he supported it later. The same thing happened with our party. First, we were against it, then we supported it. We agree with the official opposition that it is very important to have free trade agreements with as many countries as possible.

Does my colleague believe that the other members of the House who do not share this opinion today will change their minds?

Tax Convention and Arrangement Implementation Act, 2016Government Orders

December 8th, 2016 / 4:40 p.m.
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Conservative

Gérard Deltell Conservative Louis-Saint-Laurent, QC

Madam Speaker, under the Conservative government, Canada went from 14 to 43 free trade partners, including the European Union, which has 28 states, $500 million people, and $12 billion in trade. With respect to South Korea, we reached an agreement that gave us access to 50 million people and $1.7 billion in trade. That creates wealth for Canada. We have not talked about the trans-Pacific partnership, which includes 10 new countries.

Yes, we must support free trade. Canada, with its modest population of 35 million people, and by extension clients, falls short. Modern technologies make it possible to trade with countries around the world. We must profit from our ingenuity, natural resources, and our work ethic so we can sell our goods around the world. A lot of money comes here from abroad and creates wealth, which we must all manage in a serious and rigorous manner, contrary to what the current government is doing.

Tax Convention and Arrangement Implementation Act, 2016Government Orders

December 8th, 2016 / 4:45 p.m.
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Conservative

Garnett Genuis Conservative Sherwood Park—Fort Saskatchewan, AB

Madam Speaker, I particularly appreciated hearing my colleague share some of the background in terms of our party and the whole free trade issue. I do not remember the 1988 election perhaps quite as well as he does.

Because the member has been aware of and involved in this debate for a long time, I want to ask him about the global trends in terms of debates around protectionism and maybe a rising anti-trade sentiment in certain quarters. Canada is a nation that has benefited significantly from trade. Our previous prime minister was a strong leader, not only domestically, but internationally, speaking out about the importance of economic liberalization and free trade.

What role could Canada play now in this emerging climate? What role should our government be playing in terms of trying to counter some of this emerging protectionist sentiment that we see around the world?

Tax Convention and Arrangement Implementation Act, 2016Government Orders

December 8th, 2016 / 4:45 p.m.
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Conservative

Gérard Deltell Conservative Louis-Saint-Laurent, QC

Madam Speaker, l appreciate the comments of my colleague. Maybe he was very young when this occurred in 1988, but I can assure the House that now this young man is very bright, articulate, and very good. I appreciate that every time he rises in the House he has something to say that is very well documented.

We talked about the rise of protectionism. He is right and we must be aware. As an exporting country, Canada must be very aware of what is happening all around the world, in the U.S., or in Europe. This is why we have to be careful. We have to have good relationships with the U.S., with European countries, but also let me remind everyone that in election years every political party is against free trade. It is a trademark.

Let me remind the House that President Obama before getting elected as president, talked about NAFTA saying, “I'm the one that's driving, I'm the one that's driving the car and those two others are in the backseat”. The two others he is talking about are the president of Mexico and about “Obama, president of Canada”. He talked about us as a president of Canada.

This is just to say that during an election year, people talk tough. After that, they talk about business.

Tax Convention and Arrangement Implementation Act, 2016Government Orders

December 8th, 2016 / 4:45 p.m.
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Winnipeg North Manitoba

Liberal

Kevin Lamoureux LiberalParliamentary Secretary to the Leader of the Government in the House of Commons

Madam Speaker, I would like to give a different twist to the debate that I have been listening to all afternoon and try to relate it in part to my constituency.

Companies in Winnipeg manufacture all sort of wonderful things. Two of the things that come to my mind are windows and buses. Some of the best windows are manufactured in the city of Winnipeg. Some of the best buses in the world are manufactured in the city of Winnipeg. Many of the employees who produce those windows and buses are my constituents.

Canada is very dependent on exports. We export all sorts of products that are manufactured in communities throughout our country. In virtually all regions of this country some form of manufacturing is taking place. When I think of how important the trade file is to Canadians, I get a better understanding when it is brought down to the level of the people who work in factories throughout our country.

The Minister of Finance held round tables throughout the country and I was able to participate in one of them. At one of the discussions the issue of the Canadian dollar came up and whether it was better for our manufacturing industry if the dollar is high or low. I would suggest that depends on the manufacturer. For example, window manufacturers in Winnipeg gave me the distinct impression that it was better for them if the dollar is low because of where the material comes from, which is Canada. The company that manufactures the very best buses in the world as far as I am concerned is called New Flyer Industries Inc. and its employees are my constituents. The parts for the buses quite often come from all around the world, which is not unique. For New Flyer, a low dollar is not a positive thing because it has to buy the parts it needs from countries around the world.

Why am I using these companies as examples? It is because policies and price factors need to be taken into consideration, the importance of taxation for example, in what we are debating today, and trying to level the playing field. There are other things that need to be taken into consideration beyond that, however.

It is important that we recognize the value of trade but in many ways we also need to recognize the very real nuances that impact the bottom line. That is really what Bill S-4 is about.

We have great trade links today with Taiwan, Hong Kong, and Israel. We do a great deal of trade with these three countries but today illustrates that there is always room for improvement. If Bill S-4 gets passed, Canadian industries will benefit from it.

This should come as no surprise. This government has been more aggressive on the trade file than the Conservative government before us and I will demonstrate that shortly.

To indicate how important trade is, I would say that Canada is a trading nation, and we are very much dependent on world trade. I expect that it will continue to be a priority for this government for a number of good reasons, but there is one that comes to mind. If we look at the last budget that we presented, we see the focus of that budget, in good part, was on Canada's middle class and those aspiring to be a part of the middle class. Good solid trade and a foundation that allows us to expand upon that will build upon Canada's middle class. Many of the jobs, both direct and indirect, that can be generated would assist Canada's middle class and provide those jobs into the future. Therefore, it is really important that we get this right, because if we have a healthy middle class we will have a healthier economy. By having a healthier economy, we will continue to move forward overall as a society. It would be difficult to do so if we did not have trade.

The specifics of the bill we are debating today can be broken down into three parts. The main purpose of this enactment is to implement a previously publicly announced convention concluded with the state of Israel, and an arrangement concluded with the jurisdiction of Taiwan. It also would amend the Canada-Hong Kong Tax Agreement Act of 2013 to add greater certainty and interpretation provisions.

The sheer number of trade and investment agreements we have entered into over the years is a fairly impressive list. One of the things that I truly appreciate about the Library of Parliament is its research capability and the manner in which it is able to present such high-calibre and high-quality documents. Let me extend a compliment to those individuals who work for our parliamentary library. I posed a question to it with respect to how many trade and investment agreements we have, where they are, and when they were entered into. In looking at it, I did a quick count. We are talking about a dozen trade agreements with a number of countries, many of which have been highlighted during the debate.

I look at this as a positive. Whenever we can get into trade arrangements, it helps us build a relationship with those countries. There are a couple that have been signed but not implemented, and they will not be implemented until we have the opportunity to have that debate and that vote. The two that I am referring to are the Canada-European Union comprehensive economic and trade agreement, better known as CETA, and the Canada-Ukraine trade agreement. I am very proud of the efforts of this government with respect to both those. Although they may have been started years ago, the CETA agreement in particular, it was this Minister of International Trade who was able to pick up that file. To give the impression that it was a foregone conclusion, that it was something that would just happen, is not truthful, because we as a government have had to invest a great deal of resources, ministerial time, and dependence on our bureaucracy, those highly qualified individuals in particular, to assist us in negotiating on behalf of all Canadians. I am pleased that we were able to get that signature in place on October 30 of this year.

It was not that long ago that the newly elected president of Ukraine delivered a speech to the House of Commons, and he talked about how he wanted to further the relationship with Canada in regard to trade with Ukraine. He put a challenge out to us to attempt to get a special Ukraine trade agreement. That was only a few years ago. When we look at what we have today, we see that it was back on July 11, 2016, that we actually had that deal signed. Again, we appreciate the efforts put in by the Conservative government at the time. I am so grateful that we had the opportunity to sign it, and we are anticipating debate to come, and hopefully, passage. How wonderful that would be.

There are some agreements still being debated; at least, discussed with Canadians. I am thinking of the trans-Pacific partnership, best known as the TPP. We understand where both the opposition parties stand on that issue. We have taken a position that we want to continue to work with Canadians and other stakeholders to see where we are going on that particular vote. I anticipate that in due course we will see more direction coming from the government, after thorough consultations to allow Canadians to have the opportunity to provide some input. The reason we are being so thorough, specifically on the TPP, is that we made a commitment to Canadians that we would be very thorough.

I listed three trade deals, two that are very close, and we are not too sure what is going to happen with the third one. We also have another dozen trade deals that have actually been implemented.

Then, if we look at the investment agreements, this is where we would find it very interesting. I found it interesting, just reading through. There is an investment agreement between Canada and Hong Kong. The bill we are debating today deals, at least in part, with that through the taxation issues. If we continue to go through it, we see there is a Canada-Israel agreement that was signed also. I am trying to quickly find it.

I know there is the Thailand one. It was signed on January 17, 1997. The Hong Kong agreement was signed on February 10, 2016. The Canada-Israel agreement was not actually an investment agreement. It was a trade agreement, and there is a difference, and that is why I had trouble finding it. That trade agreement with Israel was signed in July 1996.

I am not going to remind members who was in government and who was not. We have a very good sense that there have been political parties on both sides of the House that have recognized the value of trade. However, I want to emphasize that this government, specifically, has seen the value of trade, and we have acted accordingly. We have been exceptionally aggressive at pursuing all sorts and forms of trade with our counterpart countries. That is best illustrated by the two trade agreements I referenced.

We have also had investment agreements signed in the last 12 months. I could make reference to either the Hong Kong one or the one with Mongolia.

It was not that long ago that we had other legislation brought into the House. Many members might recall the world trade agreement, the Agreement on Trade Facilitation, that was introduced to the House through Bill C-13, and I was pleased to see that passed. Remember, that particular agreement from the World Trade Organization represents well over 100 countries around the world. Again, this is an agreement that this government brought forward. There is a certain number of countries that have to sign on to have it implemented, and we saw that as a high priority, brought it to the House of Commons, and passed it through.

It does not stop there. We also have an agreement on internal trade, which again is something that has been debated in this chamber. We have seen this government take a very positive approach, not only to say that it is important that we further trade opportunities abroad, but it is also important that we look at ways to take down trade barriers between provinces. This is something that we constantly hear about. There is room for improvement to make the system better, and if we talk to the Minister of International Trade or other ministers related to internal trade here in Canada, we will learn it is an important issue. Again, we recognize how important it is for Canada as a whole.

I started off by talking about the constituents I represent in Winnipeg North, and I want to emphasize that I represent a mostly working-class riding. Often I have been invited over the years to take tours of different facilities. I made reference to, for example, New Flyer Industries as one of those companies. I have been afforded the opportunity to meet with many of my constituents who, with their amazing skills and hard work, manufacture all sorts of products out of the city.

I have stood in this chamber and talked about the importance of the hog industry, which is of critical importance to the province of Manitoba. It has derived many benefits through trade agreements.

All of these jobs that I referenced are direct jobs, but there are many thousands more indirect jobs that are a direct result of having and developing industries that actually export.

It does not have to be a manufactured product. Many colleagues of mine, particularly from the Ontario caucus, boast about how technology is being developed and ideas are being developed. I know that there is a fairly significant industry of ideas being generated in the province of Ontario and other provinces that also reach out beyond Canadian borders and provide good-quality jobs. I say all of this because I truly believe that, if we collectively recognize the value of trade, we will do that much more.

I am very proud of the fact that we have a Prime Minister who is very well received in virtually all countries around the world where there is an expectation that, as a relatively new government, we are going to be able to bring Canada back on the international scene. There are many ways that people will pull for attention. For me personally, I am hoping we will see the government continue to push on the trade file, because it is so very important.

I understand that my time has expired. I might be able to expand on that in the question and answer period.

Tax Convention and Arrangement Implementation Act, 2016Government Orders

December 8th, 2016 / 5:05 p.m.
See context

NDP

Gord Johns NDP Courtenay—Alberni, BC

Madam Speaker, we in the NDP support the harmonization and simplification of tax legislation. We do not want to see companies paying double tax.

When I heard the member say that they were supporting this bill, it was going great until I heard him starting to talk about the middle-class tax break and how they are helping the middle class, because two-thirds of Canadians are not getting the benefit from that. In fact, people earning $45,000 or less get nothing. That made me nervous, actually. We were fine with this until we heard that.

In 1980 there was a tax agreement with Spain, Korea, Austria, Italy, and the tiny island of Barbados. It profoundly changed Canada. We have the biggest economic leakage in Canadian history happening right now through that tax haven.

The member for Winnipeg North, I know, comes from a riding where the median income is close to what it is in my riding, which is about $25,000 a year, and it may be lower. A lot of those people do not get anything from their middle-class tax break. Way more than two-thirds of Canadians, and about three-quarters of the people in his riding, get nothing from the middle-class tax break.

Does my colleague think that the government should propose amendments to the Canadian tax code to prevent tax cheats from using our lenient laws to avoid paying their fair share of Canadian income taxes?

As I said, we know that $5 billion to $7 billion are being lost through this treaty with Barbados that is supposed to be fair.

We know that we are entering into an agreement with Taiwan and Israel, and it should be a great agreement, but we thought that in 1980, when we signed a similar deal with Barbados.

How are we going to make sure that this is not going to be history repeating itself? We know that $5 billion to—