Canada–Madagascar Tax Convention Implementation Act, 2018

An Act to implement the Convention between Canada and the Republic of Madagascar for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income

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 the Convention between Canada and the Republic of Madagascar for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and a related protocol.

The convention is 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 has two main objectives: the avoidance of double taxation and the prevention of fiscal evasion. Once implemented, it will provide relief from taxation rules set out in, or related to, the Income Tax Act. That 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.

Canada–Madagascar Tax Convention Implementation Act, 2018Government Orders

May 14th, 2019 / 10:15 a.m.
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Louis-Hébert Québec

Liberal

Joël Lightbound LiberalParliamentary Secretary to the Minister of Finance

Mr. Speaker, it is a pleasure for me to rise in the House to speak to Bill S-6, an act to implement the convention between Canada and the Republic of Madagascar for the avoidance of double taxation, which is another important step forward in our government's continued commitment to Canadians to strengthen tax fairness.

The measures proposed in this bill strengthen our efforts to build a fair and equitable tax regime that will benefit all Canadians. Bill S-6 is a tax convention that complements other tax treaties we already have with many other international partners.

To ensure that our economy is really working for everyone, we must have a fair tax system, and all Canadians must pay their fair share.

After all, through the taxes we pay as Canadians, we can provide greater support to the middle class, reduce inequality and build modern infrastructure that will get our products to new markets and help create good jobs all across the country.

For nearly four years now, we have been committed to taking action to foster growth and inclusive prosperity, while maintaining fairness for all taxpayers.

A fair tax system is crucial to ensuring that more and more people benefit from a growing economy. When Canadians have more money to invest, save and grow the economy, everyone benefits. Our government began taking steps in that direction from the very beginning.

In fact, one of our first legislative actions was to raise taxes on the wealthiest Canadians in order to cut taxes for the middle class. Over nine million Canadians are benefiting from our middle-class tax cut. Single individuals who benefit from the middle-class tax cut are saving on average $330 each year, and couples that benefit are saving an average of $540 each year.

We also took action to provide simpler, more generous and better targeted support to those Canadian families that needed it the most. We did so in 2016 by replacing the old child benefit system with the Canada child benefit. Across Canada, the CCB payments are worth about $24 billion and benefit 3.4 million Canadian families every year. As a result of the Canada child benefit, nine out of 10 Canadian families are better off. I am very proud to mention to the House that the Canada child benefit has helped lift over 300,000 kids out of poverty.

To ensure that the Canada child benefit continues to play a vital role in helping Canadian families, our government strengthened the benefit by indexing it to the cost of living, as of July 2018, which is two full years ahead of schedule.

Thanks to the middle-class tax cut and the CCB, a typical middle-class family of four receives on average about $2,000 more each year to help with the costs of raising their children, which is $2,000 more than they received in 2015. Those numbers are not according to me, they are according to the OECD, which published a study last summer, highlighting how big a difference those two measures had made in the lives of so many Canadian families.

We are not stopping there. Small businesses are one of the key drivers of the Canadian economy. They represent 70% of all private sector jobs, and that is why our government also lowered the small business tax rate. We did that because, when small businesses succeed, all of Canada benefits. We lowered the small business tax rate not once, but twice. As members know, we first lowered it from 10.5% to 10% in 2018 and then we lowered it to 9% in January of this year. For a medium-sized SME, that represents an additional $1,600 a year compared to 2017. That money can be used to create jobs, invest and buy new equipment. With those two consecutive reductions in the small business tax rate, the combined federal-provincial-territorial average tax rate for SMEs is now 12.2%. That is by far the lowest in the G7 and the fourth-lowest among the Organisation for Economic Cooperation and Development, or OECD, countries.

Thanks to these measures that have helped boost Canadians' confidence and stimulate economic growth, over a million jobs have been created in Canada since 2015. These new jobs brought Canada's unemployment rate down to the lowest it has been in 40 years and fostered economic growth, making Canada one of the strongest economies in the G7. Our goal is to maintain that growth in the long term.

Our long-term plan is working, and Canadians can feel confident their government is working hard to ensure they can keep more of their hard-earned dollars.

Tax fairness is an important step in this process. Tax fairness has been, and will continue to be, a cornerstone of the government's promise to Canadians to strengthen and grow the middle class and grow the economy now and over the long term. In each of our budgets, we have taken legislative action on both international and domestic fronts to enhance the integrity of Canada's tax system and give Canadians greater confidence that the system is fair for everyone.

Our government has also boosted the capacity of the Canada Revenue Agency, or the CRA, to crack down on tax fraud and tax avoidance. Investments made over the past two years have enabled the CRA to better target persons who pose the highest risk of tax avoidance and evasion. The CRA now has better access to information on Canadians' overseas bank accounts as we have put in place the common reporting standard. With this new system, Canada and more than 100 other countries now exchange financial account information to help us identify when Canadians are avoiding taxes by hiding money in offshore accounts.

The CRA needs other types of information from foreign countries to ensure that all taxpayers pay their fair share of taxes. That is why the tax convention to be implemented by Bill S-6 establishes a system for the exchange of tax information between Canada and Madagascar. Our efforts have focused mainly on fighting tax evasion and fraud because these practices result in heavy financial losses for the government and, by extension, for all Canadian taxpayers.

Recently, we passed important legislation through the House to introduce a multilateral convention to allow Canada and many of its treaty partners to implement tax treaty-related measures to counter a practice known as base erosion and profit shifting, BEPS. BEPS refers to the international planning used by some corporations and wealthy individuals to inappropriately avoid paying taxes by shifting profits earned in Canada to other offshore jurisdictions.

Just last month, budget 2019 proposed to invest an additional $150 million over five years, starting in 2019-20, to step up our efforts on tax evasion. This new investment would allow the CRA to fund new initiatives and extend existing programs. This includes taking action to enhance tax compliance in the real estate sector by investing in the creation of four new dedicated real estate audit teams at the CRA that focus on high-risk areas, notably in Vancouver and Toronto.

Budget 2019 also takes action so the CRA can stay ahead of non-compliance schemes driven by the use of new advanced technologies. Budget 2019 proposes to invest $65.8 million over five years to improve the CRA's information technology system. This would replace legacy systems and modernize the infrastructure used to fight tax evasion.

A modern tax system will help provide more opportunities to Canadians. It will also help create a trading environment in which business owners and entrepreneurs will have the means to invest. They will be able to develop their businesses and create more well-paying jobs for the middle class. That is why, in a world of challenges and constant change, it is so important for Canada to continue developing and updating its network of tax treaties.

The bill we are looking at is part of those efforts. Because Canada is and always will be a trading nation, our tax system has to be designed in such a way to help Canadians seize the incredible opportunities that international trade and investment have to offer. Tax treaties with our trading partners are absolutely fundamental to creating those opportunities.

Canada's 93 tax treaties make up one of the broadest networks in the world. The tax treaty being considered with Madagascar in Bill S-6 is part of our countless efforts to strengthen Canada's ties and international co-operation.

Canada and Madagascar have had diplomatic relations since 1965 and share a common French-language heritage. Both Canada and Madagascar are members of the International Organisation of La Francophonie.

Enhancing our competitiveness depends on opening up more markets and ensuring those markets are available to Canadian businesses. Tax treaties provide the certainty needed to support trade and investment between two countries. They also permit the exchange of information needed to help prevent international tax evasion.

Bilateral double tax conventions are used to eliminate tax barriers to trade and investment between two countries. They achieve this in a number of ways.

Tax treaties also provide a mechanism for jurisdictions to resolve tax disputes. The Canada-Madagascar tax convention will promote certainty, stability and a better business climate for taxpayers and businesses in both Canada and Madagascar.

These are all important goals.

In closing, four years ago, we committed to investing in growth while maintaining tax fairness for all taxpayers. A fair tax system is essential to giving as many people as possible the opportunity to reap the benefits of economic growth.

As I said, tax fairness has been and will continue to be a cornerstone of our efforts ensure that Canadian prosperity is inclusive.

We are working with international partners and we are investing to give the Canada Revenue Agency the tools it needs to do its work and ensure that everyone pays their fair share.

We will also ensure that the government continues to provide programs that help all Canadians and that Canada remains positioned as an attractive country for those seeking to work, to invest and to do business.

The benefits of Bill S-6 are clear. The tax convention between Canada and Madagascar will promote fiscal certainty and a better business climate for taxpayers and businesses in both Canada and Madagascar. Furthermore, the convention will help solidify Canada's position in a world that thrives on competition to attract foreign business and investments. By increasing its number of convention partners, our government is helping to create the ideal conditions for the long-term economic growth needed to strengthen the middle class.

Our government is committed to growing the economy by helping all Canadians. We maintain that a strong economy is a result of a strong middle class, and our policies and our results reflect this.

Over the past three years, the government has invested in Canadians and in the things that matter most to them and we will continue to do so. Bill S-6 is part of that plan for inclusive and long-term prosperity in this country.

I urge all hon. members to vote yes on this important legislation.

Canada–Madagascar Tax Convention Implementation Act, 2018Government Orders

May 14th, 2019 / 10:30 a.m.
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Conservative

Cathay Wagantall Conservative Yorkton—Melville, SK

Madam Speaker, near the beginning of the member's speech he talked about the child tax benefit. The Conservatives brought this in initially, making funds available to parents to use in the way they felt was best for their children. However, I am having trouble squaring his comments.

I am aware of one example of a family of five living above the poverty line, but definitely not within that middle-class framework. It also has a child with special needs. The family's total funding, including that CDB within their child tax credit, is barely over the $1,000 mark.

I would appreciate it if the member would repeat exactly what he said in regard to the average for a family of four.

Canada–Madagascar Tax Convention Implementation Act, 2018Government Orders

May 14th, 2019 / 10:30 a.m.
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Liberal

Joël Lightbound Liberal Louis-Hébert, QC

Madam Speaker, I would be happy to provide the member with the OECD study conducted last summer. It clearly affirms that when we take into account the Canada child benefit and the middle-class tax cut, a typical average family of four with two children is $2,000 better off at the end of the year than they were in 2015 for various reasons.

Notably, with the Canada child benefit, we have made it a lot more progressive than it used to be under the Conservatives' scheme, where cheques would be sent to families of millionaires that did not necessarily need it as much as lower-income Canadian families. We decided to send more to families that needed it most and we stopped sending cheques to families of millionaires.

As a result, and it has been largely confirmed by academia and by Statistics Canada, we have reduced poverty considerably in the last three years. In fact, Statistics Canada published a report in the last month, saying that Canada had reduced poverty by 20% in three years and child poverty by 40%. That is so much more than the Conservatives were ever able to achieve in the decade they were in power. Why? Because reducing inequalities was never a priority for their government.

Canada–Madagascar Tax Convention Implementation Act, 2018Government Orders

May 14th, 2019 / 10:30 a.m.
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NDP

Peter Julian NDP New Westminster—Burnaby, BC

Madam Speaker, we are supporting Bill S-6 because Madagascar is not a tax haven. As well, a double taxation avoidance agreement means that companies have to pay their fair share of taxes either in Canada or Madagascar.

Unfortunately and tragically, the government's record has been absolutely deplorable. In the one case, the Liberals are presenting one bill that may help in one jurisdiction. At the same time, they have been multiplying their efforts to make special arrangements with overseas tax havens. It is even worse than the Conservatives. They picked the Conservatives as their example, but when we look at the Cook Islands, Antigua and Barbuda, and Grenada, notorious tax havens, what the government has done is set up special arrangements so companies can get off scot-free in paying their fair share of taxes.

How does this look to a single mother who is working full-time and paying her fair share of taxes? The government is allowing the corporate sector to get off scot-free and, at the same time, it is multiplying the number of arrangements with tax havens, refusing to allow some of the largest corporations on the planet, the web giants, to pay their fair share of taxes. As we have seen now in special reports that have come out in the last week, an acceleration of money laundering in our country is up to $50 billion annually. The government's record is deplorable.

Could the member comment on why the government has been so bad at tackling tax evasion?

Canada–Madagascar Tax Convention Implementation Act, 2018Government Orders

May 14th, 2019 / 10:30 a.m.
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Liberal

Joël Lightbound Liberal Louis-Hébert, QC

Madam Speaker, I want to start by thanking the NDP for supporting Bill S-6. I think that shows how important this bill is for preventing double taxation and giving the Canada Revenue Agency the tools it needs to obtain information from foreign countries so it can better fight tax evasion and tax avoidance.

That being said, I would answer that, on the contrary, our approach is vastly different from that of the previous government. Just think of the measures this government has taken regarding beneficial ownership and the multilateral instrument, the work we are doing with OECD countries, the BEPS initiative that Canada is actively involved in, and the resources we have provided to the CRA to enforce our laws and go after tax cheats and anyone who attempts to avoid paying their fair share of taxes. I should also point out that the former Conservative minister, Mr. Blackburn, said that tax evasion was not a priority for them.

We have invested over $1 billion in the CRA to make sure it has the resources it needs. Of course, this work cannot be done unilaterally. It requires concerted action with our international allies, with the OECD. It will not happen overnight, but the initiatives are in place. We would have liked to see more support from the NDP for our fiscal reform to increase fairness.

Canada–Madagascar Tax Convention Implementation Act, 2018Government Orders

May 14th, 2019 / 10:35 a.m.
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NDP

Richard Cannings NDP South Okanagan—West Kootenay, BC

Madam Speaker, I would like to follow up on the question my colleague just asked the parliamentary secretary. If we are creating these taxation agreements with other countries, would it not be simple to put a section into these agreements that links the agreement?

We all want to avoid double taxation, and we all want to be fair in that sense, but we want to stop this tax evasion. Therefore, would it not be simple to put a section in there that links the tax record of the other jurisdiction with Canada's? That way, we would not get countries that have a 1% tax rate allowing companies to avoid taxes by putting all of their investments in those countries instead of in Canada, where we would get the taxes from them.

Canada–Madagascar Tax Convention Implementation Act, 2018Government Orders

May 14th, 2019 / 10:35 a.m.
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Liberal

Joël Lightbound Liberal Louis-Hébert, QC

Madam Speaker, if I understand my opposition colleague's question correctly, he was talking about the importance of a good information sharing arrangement. That is the purpose of Bill S-6. That is also what we are trying to do with OECD member countries so we can really tackle tax evasion.

The NDP has had very little to say about one of the key elements. Let us not forget that the NDP wanted to run a Stephen Harper-style campaign on budget cuts and austerity. We are giving the Canada Revenue Agency the resources to do its job. That is important too.

Laws are one thing, but making sure the resources are available to enforce those laws is another. Our investments in 2016, 2017, 2018 and 2019 gave the Canada Revenue Agency the resources to catch people who think they can get away with not paying their fair share of taxes in Canada.

As I said, that has always been a priority for our government, starting back when we raised taxes on the wealthiest 1% so we could cut taxes for the middle class. We are staying the course by giving the Canada Revenue Agency the resources to go after would-be tax cheats.

Canada–Madagascar Tax Convention Implementation Act, 2018Government Orders

May 14th, 2019 / 10:35 a.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, there has been a great deal of effort by this government to talk about tax agreements and to deal with trade agreements and their impact on Canada's middle class, which has been overwhelmingly positive. I wonder if the member could provide his thoughts regarding the international approach we have taken as a government with moving forward on things such as tax treaties and trade agreements.

Canada–Madagascar Tax Convention Implementation Act, 2018Government Orders

May 14th, 2019 / 10:35 a.m.
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Liberal

Joël Lightbound Liberal Louis-Hébert, QC

Madam Speaker, that is a very important question. Our world is so interconnected that the simple solutions that some are presenting, which involve Canada acting unilaterally and ignoring our trade partners, are rarely as straightforward as they seem.

Obviously, we need to work with our partners to come up with collaborative approaches to tax treaties, just as we do when it comes to trade. The trade agreements that were signed are another issue, I know, but they have helped and continue to help many Canadian businesses to develop, prosper and grow. A number of examples come to mind. For instance, under CETA, some businesses saw their sales explode overnight because they had access to the European market.

While I am on my feet, I would like to commend the efforts of the Minister of Foreign Affairs and all members of the House who took the time to speak to European parliamentarians to get this agreement in place. Canada is now the only G7 country that has trade agreements with every other G7 country. Access to those markets is an incredible advantage that helps Canadian businesses succeed.

The goal of our government's ongoing efforts is to increase prosperity. However, as I mentioned in my speech, unlike the Conservatives, we feel that, in order to be sustainable, all prosperity must be inclusive.

Canada–Madagascar Tax Convention Implementation Act, 2018Government Orders

May 14th, 2019 / 10:40 a.m.
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Conservative

Tom Kmiec Conservative Calgary Shepard, AB

Madam Speaker, I am glad to be joining this debate on the most exciting of subjects, tax and a tax treaty. For those constituents of ours who are tuning in on CPAC this early morning, or who have come to watch in the gallery, this is as exciting as this place is going to get, I think, until question period. I see the parliamentary secretary nodding his head, because he knows this too.

I am also glad his intervention covered so much subject matter beyond Bill S-6, because that now allows me to delve into the government's record on taxes, its management of different public policy issues like the Asian Infrastructure Investment Bank, consumer confidence in Canada and business confidence in Canada, as well as how the government has approached Bill S-6.

I will start with an observation about this tax treaty and some of the comments made by the parliamentary secretary. He seemed to be placing Bill S-6 within the confines of trying to achieve greater tax fairness and doing other great things with the Government of Madagascar. He said the bill would make sure that Canadian companies and Canadian taxpayers who may be doing business in Madagascar would not be double taxed, and that it would increase trade and do all of these wonderful things.

However, when I asked officials a question at the Standing Committee on Finance, we heard there was such a small number of tax filers with tax filings in Madagascar that each instance raises confidentiality concerns. Officials from Finance Canada responded to me that these concerns are such that, “consistent with the taxpayer confidentiality protections in the Income Tax Act, the department is precluded from releasing these data”.

This may be why Bill S-6 comes from the other place, the Senate side. The department told me in this official letter to the Standing Committee on Finance that there are so few tax filers impacted by this that the department would not be able to release the data. I had asked which sectors of the Canadian economy and which sectors of the Madagascar economy would be affected, and whether there were any good examples. I did a quick Google and DuckDuckGo search, and I was able to find that Sherritt International was one of the companies in question. It is mostly a mining consortium. There was very little else that I could find.

To the credit of the Department of Finance, it did a pretty thorough review. It reviewed sources including the T1134 information return on foreign affiliates of Canadian taxpayers, the T1135 information return that collects data on specified foreign property holdings, the T106 information return on non-arm's length transactions with related non-residents, and Schedule 21 to the T2 corporate tax return on foreign income tax credits. The department examined all of the years to 2011 and then the subsequent years.

For those still able to follow, either in the public gallery or at home, Finance Canada did a thorough search to double-check how many of these filings would include Madagascar in some way, and they are actually very, very few. Perhaps the tax treaty will enable more business to be conducted by Canadians in that particular country, and there are opportunities yet to be found for this tax treaty and the consolidation of some of the rules to make it simpler for individuals to do business in both. I was unable to find an instance through any international organization or online that showed that Madagascar was behaving like a tax haven. I think that assuages some of the concerns individuals may have had.

I am sure the government knows that I will be supporting this piece of legislation as well. There was no concern about curbing tax evasion through Bill S-6, or about a potential increase in tax evasion. In fact, this is a very small piece of legislation that does not do what the Parliamentary Secretary to the Minister of Finance said. It is not part of a broader approach. If there are so few tax filers that the information cannot be released, then the impact is negligible. Therefore, it cannot be counted as part of the government's broader plan.

I am pouring out my heart here on what I believe about Bill S-6 and its contents, having spent several meetings at committee looking at this particular piece of legislation. I am feeling lighter. As the Yiddish proverb goes, when one pours out one's heart, one feels lighter, so now that the parliamentary secretary has poured out his heart about the government and what he believes its achievements are, I am going to do the opposite. I am going to poke holes in a couple of things he said. I am going to poke holes in some of the Liberal government's achievements, including in some of the statistics it likes to use.

At committee we asked both Global Affairs and Finance Canada for information on the specifics of Bill S-6 and who it would impact. We were told the bill would impact the mining sector. We were also told that detailed information could not be released because it would compromise the privacy of certain tax filers.

That is unusual. In prior cases, when we have done these tax consolidation treaties or signed up to multilateral international instruments with respect to taxes, such as Bill C-82, which was the tax treaty of tax treaties, it was always tens or hundreds of thousands of Canadians who would be impacted. That included Canadian-controlled private corporations in Canada. There would be many of them, so it was easier for us to estimate the impact.

The parliamentary secretary mentioned base erosion and profit sharing, which is not a fixed section in this particular piece of legislation. We have already had legislation to cover that off.

When I mentioned to my kids, who are very young, with my oldest being 10, that I debated an obscure bill called the Canada-Madagascar tax treaty, the first thing they wanted to talk about was King Julien and Skipper, Kowalski, Rico and Private, the famed characters from Penguins of Madagascar and the other movies in the Madagascar series. My kids were thrilled to watch that series when they were younger, and they are still thrilled to watch it today.

However, this piece of legislation is not about that. I am sorry to burst their bubble but this, unfortunately, is not about King Julien or those four little penguins.

The parliamentary secretary went off on a tangent at one point. He mentioned that the tax treaty in Bill S-6 would increase consumer confidence, and that it was part of a slew of policy decisions the government has been making to increase both consumer and business confidence. If he had bothered to check the latest statistics posted by different economic analysis bodies online, or if he had bothered to check the Conference Board of Canada, he would have seen that consumer confidence is just as low as it was in 2015. It has not improved since then. We can see that in our communities. I can see it in cities and towns all over Alberta.

However, there is more consumer confidence in Alberta now that we have Premier Jason Kenney and the United Conservative Party in charge. A new cabinet has been sworn in, and on Tuesday of next week the members of the legislative assembly will be sworn in. I hope we will know the new plan for the province on Wednesday.

Some of that plan has already come out. The government of Alberta has already announced that it will get rid of the punishing provincial NDP carbon tax, which was far more punishing on Albertans and Alberta businesses than the federal backstop. That does not mean the backstop is any good. It does not mean the federal carbon tax is any better.

The Alberta government is basically proposing to return to the old system, which was working. It was the first system to put a price on carbon for the largest emitters, not directly on consumers. The system worked. It was lauded all across North America at the time. It did not punish consumers directly for their behaviour, but was specifically aimed at the largest emitters, who were making it part of their business plans. That is the difference. May 31 is the last day of the Alberta carbon tax.

We can really see consumer confidence returning in Alberta. People are more confident now that they have a government that is on their side and will back up the decisions of private businesses, everyday Albertans, the mom-and-pop convenience stores, the local dry cleaner and the small oil and gas servicing company that has somehow managed to just get by over the last few years.

Albertans are on the cusp. They know that prosperity might return with the right decisions being made by their government to get involved, not to make decisions for them but to support them in the decisions that will create new jobs, create more business investment and lead to higher returns in terms of corporate and personal income taxes.

That is how consumer confidence returns, not by having what we have seen from the federal Liberal government over the past four years. The Liberals created a situation here in Canada that made it impossible to build a pipeline. Energy east was cancelled because of regulatory red tape. Northern gateway was cancelled by cabinet order. There already is a functioning Trans Mountain pipeline, but the Liberals caused a situation in which Kinder Morgan saw no real means to get the expansion built. It was losing construction seasons to it, so the government expropriated it. The government bought it for $4.5 billion.

Now we know from the Parliamentary Budget Officer that the government not only overpaid for the pipeline project by $1 billion but will also need to extract another $8 billion to $9 billion from the taxpayer to build this pipeline.

There has been talk of legislation and there has been talk of an expedited process, but we are waiting until later in June to find out whether this pipeline will get perhaps half a construction season. We know that construction seasons in Canada are short. Basically, there is a construction season and then there is winter. These are essentially the two seasons we have in Canada. Most people who live in big cities know this, as they have experienced it. We are going to lose a second construction season, and this does nothing but reduce business confidence and reduce consumer confidence.

How can Canadians have faith in a government that purchases a pipeline, overpays for it, and loses money every single month operating it? When the interest being paid on the debt is subtracted from the tolls charged on the pipeline, Liberals are losing money every single month operating in the most profitable part of the energy sector, which is shipping.

I hear constantly from the Minister of Natural Resources, who is from Edmonton and should know better, as once the oil gets to the west coast, 99.95% of the product shipped out of the port of Vancouver goes to California. Those are not my statistics; I am not making them up. I asked the Library of Parliament to confirm them for me. This is from the Greater Vancouver Board of Trade. The port itself has said that 99.95% of the product goes to California to feed the refineries there.

Therefore, this is not about reaching new markets on the current pipeline, and perhaps not even on the future pipeline. A series of public policy decisions led to a situation such that a private company felt unable to build a pipeline because of obstruction at the federal and provincial levels. Those obstructions are not gone; they have just become purely governmental. All the decision-making is on the government side.

When I knocked on doors in my communities and for my provincial counterparts, which I did during this past election in Alberta, I heard time and time again that people have no faith whatsoever in the Liberal government's ability to deliver on the construction of a pipeline and no faith in the government's ability to manage public finances.

The parliamentary secretary mentioned the Liberals' great plan to increase affordability for the middle class and that Liberals reduced the tax bracket from 22% to 20.5%. I remind the parliamentary secretary and all members of the House that the biggest tax break from those tax changes went to every single member of Parliament in this chamber. Those who were earning $45,000 or less got zero. They received no benefit whatsoever from that tax cut, but because of the way the progressive tax system works, every single member of Parliament in this chamber got over $800 off their taxes at the end of the day.

That is what the Liberal government did. Those of us in this chamber are not the middle class, but the Liberals did this and claimed it was for the benefit of the middle class. They gave themselves a bigger tax cut than they gave not so much to the working poor, but to people trying to get by and get ahead, people who are taking jobs that many people do not want to take. They work hard for the wages and salaries they earn.

Instead, they received higher payroll taxes. There has been a CPP increase as well, which is taking away from their income at the end of the day and taking away their ability to choose how they want to save.

The second part is that they have a carbon tax to pay. We heard the Parliamentary Secretary to the Minister of Finance speak to this, and in the scenarios he noted, he gave OECD numbers. A colleague of mine mentioned that a family on the lower income scale with two kids would not be getting back all of that money. The parliamentary secretary's numbers only make sense if we include the child benefit, which is just a re-badging of the old universal child care benefit. It is the original Conservative policy that was introduced when the government wanted to introduce a universal, one-size-fits-all, cradle-to-old-age welfare system. Whereas the government would take care of our children directly under this system, the UCCB was meant to empower parents, and that is how we should be looking at it.

The government claims that if we look at all government policy together, the carbon tax is not so bad. However, that does not help the kind of family my colleague mentioned, which is not seeing these rebates.

As well, if we look more closely at the GGPPA, which is the acronym for the government's carbon tax bill that is over 200 pages long, and then if we look at this latest budget document and some of the implementation portions of it, including the algebra formula that implements the rebate program for the federal carbon tax, we see that there is a provision that would allow the minister of finance to exclude any money he or she wishes from the rebate. A finance minister could give it to any other minister he or she wants, for any program, infrastructure or purpose. It is right there in the formula. There is no guarantee in the legislation that Canadians would receive any sort of rebate on the carbon tax, and it will never replace the full amount.

It is absolutely illogical and irrational to say that 100% of the collected tax will be returned to those who pay it. There always is and there always will be an administrative cost in collecting a tax, unless people think that public servants work for free and they think the lights and the heating in this place come for free, and they do not. It has to cost a certain amount of money, which is why we say the government is misleading them. The way the government presents the facts around the carbon rebate and the carbon tax is ingenious, but it is not an environmental plan; it is a tax plan. It is as simple as that.

To return to the point of consumer confidence and how we have not seen it return, some of the facts on LNG speak for themselves. In the case of LNG, $78 billion worth of projects in Canada have been cancelled since 2015. Those are LNG projects that have been completely abandoned by the companies that were proposing them. Tens of thousands of potential well-paying construction jobs, many of them unionized, are gone. They will not be created, because that $78 billion to put people to work has been removed from the private sector. That is an important fact to remember.

The only large-scale project that I am aware of that is going ahead is LNG Canada's project. LNG Canada is a consortium. Mitsubishi is involved and Petronas is involved. The only reason that the consortium went ahead with the project is that it has an exclusion and an exemption from the carbon tax. Of course a company will go ahead and build a large-scale industrial project, as LNG Canada is proposing to do, when it gets an exemption to a tax.

I cannot imagine any regular, everyday, hard-working taxpayers being told by the Liberal government that CRA is going to give them an exemption this year so that they do not have to pay taxes because they are doing so well in producing jobs and growing their business or are earning a higher salary because they work hard. Nobody gets that type of exclusion or exemption.

I will spend my last two minutes on my favourite subject, the Asian Infrastructure Investment Bank, because Madagascar, this country that we are signing a tax treaty with, is a member of this bank. As I said, the parliamentary secretary, by going on a tangent, has allowed me to go on a tangent here. Madagascar is a member of the Asian Infrastructure Investment Bank. As far as I know, it has not received any project yet. It has only spent $15 million to $20 million, which is a paltry sum compared to the nearly half a billion dollars that Canada has set aside. That same money is being used to build pipelines all over Asia, including in Azerbaijan, Bangladesh and the suburbs of Beijing.

I am pouring my heart out here. As my Yiddish proverb said, I am feeling lighter from being able to speak about the Asian Infrastructure Investment Bank. If we in Canada are unable to build pipelines, which are the safest way to move energy, it seems absolutely wrong to be giving a half a billion dollars to governments in Asia and to the China-controlled, Beijing-based Asian Infrastructure Investment Bank.

I support Bill S-6, a small piece of legislation coming to us from the Senate, but I do not support the government's agenda and its repeated failures to get large-scale energy infrastructure built in Canada. I do not support the government's policies that have undermined business confidence and the confidence of Canadians. October cannot come soon enough. The current Liberal government is not as advertised.

Canada–Madagascar Tax Convention Implementation Act, 2018Government Orders

May 14th, 2019 / 11 a.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, there are many things that the member opposite has put on the record that I hope to be able to respond to when I have the opportunity to speak to the legislation.

The member, maybe through a guilty conscience, seems to have some remorse or regret in terms of voting against Bill C-2. Bill C-2 gave millions of Canadians a tax cut. The member opposite perhaps tried to justify his vote by saying that MPs were the beneficiaries of this tax cut. To try to sum it up in that fashion does a disservice to Canada's middle class.

When I think of Canada's middle class, I often think of our teachers, our nurses, our individual factory workers and those people who are working in financial institutions, all of whom are a part of Canada's growing middle class and all of whom were given a substantial tax decrease. Can the member explain to those individuals why he and the Conservative Party voted against that portion of our middle class?

Canada–Madagascar Tax Convention Implementation Act, 2018Government Orders

May 14th, 2019 / 11 a.m.
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Conservative

Tom Kmiec Conservative Calgary Shepard, AB

Madam Speaker, I am pleased to enlighten the member a little on how the tax system works.

Based on a 2015 assessment, a Canadian who earned $44,000 received zero dollars back from this so-called middle-income tax cut. A Canadian who earned around $60,000—for example, teachers, who earned an average of $65,000 a year—would have received $261.44 from this tax cut. However, a member of Parliament who earned $180,000, let us say, and is in an upper tax bracket, would have received $820.43.

That is wrong. I bring up this issue over and over because the Liberals do not understand how the progressive tax system works. It is debt-financed, and it is wrong to keep pretending that middle-class Canadians received something out of this when every single member of Parliament received a bigger tax cut.

Canada–Madagascar Tax Convention Implementation Act, 2018Government Orders

May 14th, 2019 / 11 a.m.
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NDP

Gord Johns NDP Courtenay—Alberni, BC

Madam Speaker, although my friend from Calgary Shepard and I have very different political perspectives, I value his friendship and I commend him on doing his homework.

He talked a lot about the carbon tax. As a British Columbian, we have had a carbon tax in place that has been very effective. We have had the fastest-growing economy in Canada. That money has been returned to our communities, and we have done really good work on lowering our impact on climate change.

To put things in perspective, in the last three years we have had the worst forest fires on record. For the last two years, British Columbia has literally been on fire in the summers. People with respiratory illnesses have had to wear face masks. For two weeks last summer, the skies were grey and we had had record floods. Here in Ottawa, there was a flood that caused a state of emergency until recently.

I do not know what it is going to take for the Conservative Party to see that a climate emergency is taking place. What is his proposition to deal with this climate emergency? Does he not recognize that there is a climate emergency happening right now on this planet and that we need to do our part?

Canada–Madagascar Tax Convention Implementation Act, 2018Government Orders

May 14th, 2019 / 11 a.m.
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Conservative

Tom Kmiec Conservative Calgary Shepard, AB

Madam Speaker, the member and I work together on a group I co-founded called Parliamentary Friends of the Kurds, and he serves as the co-chair of the group.

To his point about the carbon tax in British Columbia, my understanding is that emissions have actually gone up and that the tax is no longer revenue neutral. It is used to raise revenue on the backs of British Columbians.

As well, we see pictures on social media, Google and DuckDuckGo that consistently show sky-high gasoline prices. That is not sustainable in the long term.

Going back to a point a parliamentary secretary made, consumer confidence is back to where it was in 2015 and business confidence is very low as well. If the government keeps raising the input costs for businesses to ship and deliver goods to people, we cannot help but expect that their confidence will go down. If at the end of the day and the end of the year they are paying far more in input costs just to conduct the regular business they did before, we really cannot expect anything else.

A carbon tax is a tax policy; it is not an environmental policy.

Canada–Madagascar Tax Convention Implementation Act, 2018Government Orders

May 14th, 2019 / 11 a.m.
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Conservative

Kevin Sorenson Conservative Battle River—Crowfoot, AB

Madam Speaker, one of the advantages of 20-minute speeches is that they allow us to go into other areas. In introducing this bill, the member talked about what was happening in my province of Alberta, which is also his province. I agree with him that we have high hopes and that people are starting to realize that we are putting in place a foundation that will bring back investment but would also make sure we do what we can to clean up our environment.

The member talked about carbon pricing on large emitters. This is the way Premier Kenney suggested we would go forward. It has been done before, when the penalty large emitters pay went back into a research and development fund. Out of that, we have seen innovation in new and renewable types of energy. Whether it was clean coal, wind, solar or some of the others, we have seen money poured in to ensure that they are cleaner.

The government's plan right now is that every consumer, senior and single mom will be clobbered at the pumps or in heating their homes. The money invested back will make a difference. Could he talk a bit about how a tax regime helps grow an economy? We are seeing in this bill, the Madagascar—