Bill S-6 (Historical)

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

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.

Canada–Madagascar Tax Convention Implementation Act, 2018

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

Madam Speaker, I always find the member's perspective interesting.

As he know, the NDP government of Manitoba told the corporate sector that it had to pay its fair share of taxes. The NDP did not allow loopholes and it did not allow tax havens. That is the difference between the two parties. The member has given us a terrific resumé. When the NDP is in power in provinces, it manages money better than any other party.

This is not me speaking. As members from the Conservative Party know, for the last 20 years, the ministry of finance has been producing fiscal period returns, and over the last 20 years, NDP governments have consistently been the best at managing money and paying down debt. The Conservatives know this, and that is why they are heckling. The Liberals know this as well. The Conservatives are in second place and the Liberals are in last place.

When the NDP is in power, it tells the corporate sector that there will be no more loopholes, no more tax havens and that companies will have to pay their fair share of taxes. This then allows us to determine the best level of corporate taxation.

Right now we have a free-for-all. It is the wild west. In fact, companies that are paying their fair share of taxes, which do not rely on an intricate web of overseas tax havens and all kinds of tax loopholes, are being penalized because the Liberals allow for these tax loopholes. We would close them and put in place a fair rate that applies to all.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Madam Speaker, I would like the member to comment on the speech of the parliamentary secretary. He said that we did not have to worry about tax evasion with our tax agreements with other countries because the CRA was on it.

There is example after example where the CRA is not. For instance, a mining company from Canada had a big mine in Mongolia. It made billions of dollars in profits and owed $600 million in taxes in Canada and $200 million in Mongolia. It opened a post office box in Luxembourg and wrote the CRA to ask if it was okay. The CRA wrote back and told the company to fill its boots, saying that it was okay. Tax evasion is legal because that is how Canada works.

Could the member comment on that and tell us what is wrong with this picture?

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

Madam Speaker, the member for South Okanagan—West Kootenay has been a very strong advocate for fair taxation in this House over the last few years, which is why he is much beloved by his constituents. He is also one of the hardest-working members of Parliament I have ever seen in the House of Commons. He does a tremendous job.

The member points out what we all know to be true. What did the Liberals do about the Isle of Man scam? Millionaires can take their money overseas, get a little receipt for a charity and then get all the money back without having paid a cent in taxes. The Liberals have said that these people have lawyers and are too big to prosecute so they can do it. Under the Liberal government, people can do any scam they want on taxes if they are wealthy enough. The example my colleague cites is endemic now in the tax system.

The Liberals' response is that they have put a bit of money into CRA. What they do not tell the public, of course, is that the money they put into it is just replacing the positions of people who have left CRA. Why? The low morale in that institution is because under the Liberals the CRA is going after small business people. People with disabilities are having their disability tax credits denied. No wonder there is a problem in the tax system, when people with disabilities and seniors are being attacked for the least indiscretion but millionaires and billionaires get off scot-free.

That is unfair, and we will change that on October 21.

[Kevin Sorenson, Conservative, Battle River—Crowfoot, AB]

Madam Speaker, I am encouraged today that the NDP colleagues said that they would be supporting this legislation. Most parties in this House will be supporting it. We are getting quite used to seeing the New Democratic Party, in this Parliament and the last, oppose trade agreements. It is good to see that it understands the importance of tax treaties.

In the Conservative Party, we believe that if we are going to have a strong economy, we need to have good trade relationships around the world, fair trade relationships. We need to have tax treaties that provide confidence to investors in whichever country they may be investing, foreign investors here and our investors there. That is important.

Also, on the training side, Conservatives believe that for a strong economy we need to have innovation and trade here. Does the member have any suggestions? The tax treaty we are signing is very similar to a tax model put out by the OECD. What are the important parts of a treaty that would make him agree with me that these types of tax treaties that encourage investment are vital to our local national economy?

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

Madam Speaker, we are supporting Bill S-6 because we have read the bill and we know that the Madagascar taxation rate is roughly similar to Canada's. Other taxation agreements that the government has signed, or tax arrangements with overseas tax havens, we do not support. When the tax level is 0%, it is a tax haven. It is a way of legalizing tax evasion.

In the same way, it is why we often did not support Conservative trade agreements under the last Parliament. Conservative fair trade is an oxymoron. The Conservatives have never signed a fair trade agreement, ever.

What we would do is actually look at the trade agreement. We would do our due diligence. We would ask officials what kind of impact analysis was done on a trade agreement. Time after time, under the Harper government, they would say that no analysis was done. They wanted to do the ribbon-cutting but they had done no analysis.

That is why, systematically under the Harper government, trade agreement after trade agreement, our exports to those markets fell and the imports from those markets rose. That is why we had a record trade deficit under the Harper government. Conservatives did not read the fine print. They simply sold the farm every single time. Not once did they do an economic impact analysis. Not once did they have an understanding of how many jobs they would lose. On trade, Conservatives were absolutely irresponsible, and that is one of the reasons they are sitting in the opposition side of the House.

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

Madam Speaker, I have listened to the debate on Bill S-6 this morning and I must say there are plenty of things that one can draw upon in order to shed more light and to be a bit more forthright with respect to the bill.

The Government of Canada and the Liberal Party of Canada recognize the important role that trade plays in the development of our nation. Having observed the NDP for many years now, it is my experience that as a general rule that party does not support trade agreements.

There have been dozens of trade agreements. On one occasion, the vote was not a recorded vote, so NDP members claimed not to have voted against the bill. They might have voted in favour of one other bill. A couple of MPs have indicated they have voted in favour of trade, but as a general rule the NDP does not support trade agreements between Canada and other countries, and that is somewhat unfortunate.

Bill S-6 is about a tax treaty with Madagascar. Madagascar has wonderful opportunities for Canadians, and individuals from that country have opportunities here in Canada. We have many tax treaties with countries around the world, and tax treaties provide significant benefits to both countries.

That is why it is with pleasure that I rise today to address this legislation and to add my comments on a wide variety of issues, all stemming from our economy, social justice and the tax laws that we currently have. I have a fairly wide spectrum to work from based on the debate I have heard so far today. Let me attempt to do it in the best way I can.

The number that comes to my mind, which ultimately demonstrates what this government has been able to accomplish by working with Canadians, is one million, and that is a fairly recent number that has come out relating to employment.

It is worth mentioning that since we took office in October 2015, we have seen the generation of over one million new jobs. That is historic, in the sense of the last 40 or 50 years. It is an incredible number of jobs, and it is due in good part to the policies that this government has put in place, budgetary measures and legislative measures, all with the idea of supporting Canada's middle class and those aspiring to be a part of it.

Day after day, for weeks, months and years, our government has taken Canada's middle class seriously. We have developed progressive measures to assist middle-class Canadians, bringing forward policies that will support them, policies such as the Canada child benefit program and the guaranteed income supplement for our seniors, which have added great value to our economy.

We hear a lot about taxation. People expect to pay their fair share. From day one, our government has taken this very seriously.

Members will recall that during the last election, today's Prime Minister made a commitment to Canadians that there would be a tax cut for the middle class. If members look at Bill C-2, which was our first piece of legislation, they will see that we delivered on that tax cut, which put hundreds of millions of dollars into the pockets of Canadians. I would argue that the money going into the pockets of Canadians enabled them to increase their disposable income, allowing them to spend more into the economy, and it is one of the reasons for the one million-plus jobs that have been generated. Working with Canadians, investing in Canadians, allowing Canadians to have more disposable income has allowed Canada's economy to perform that much better.

Taxation policy matters. The NDP and the most recent speaker talked about tax fairness and said that the rich need to pay more. That was an important part of the very first budget we brought forward, in which Canada's wealthiest 1% had to pay more. The millions raised through that one initiative supported giving Canada's middle class a tax break. The issue of tax fairness, much like the tax break, has been of the utmost importance to this government. It was one of the very first actions taken when we assumed office in 2015, recognizing some of the comments made today, whether it was the NDP talking about tax fairness or the Conservatives talking about the tax on Canada's middle class.

When the member for Calgary Shepard asked who benefits from the tax break that we gave to the middle class and then said it is members of Parliament who benefit, I think of the tens of thousands of teachers, the tens of thousands of nurses, the tens of thousands of factory workers or the tens of thousands of people who work for our financial institutions. Those individuals also benefited from that tax break.

I indicated that when I had the opportunity, I would put some facts on the record, and there is no disputing what I have said, because it is all factually correct. The government has consistently gone out of its way to develop policy through legislation and budgetary measures that has had a positive impact on Canada's middle class.

The tax treaty that we are debating today is all about international relationships and ways for these treaties to further advance Canadian interests. This is not the only tax treaty legislation that we have put forward in the last three years. Bill S-4 also dealt with tax treaties. It is not the first time we have had to deal with tax treaties, because we understand and appreciate the true value of having these types of treaties with countries. It allows us to have a better sense of taxes flowing, both here in Canada and in the country in question. It provides additional security, if I can put it that way, for investments flowing to countries with which we have tax treaties.

We recognize, as we do on the broader picture, trade and international relations. No government in recent history has done more with respect to trade agreements than this government. The previous government likes to say that it had 30-plus trade agreements, but that is just not true. Through this administration, we have been able to sign more trade agreements than any other government in the last 40 to 50 years. Since trade agreements have been tied into tax agreements or tax treaties, I would challenge any member in the House to list a government that has been able to accomplish so much in such a short period of time on that file.

[An hon. member]

Oh, oh!

[The Assistant Deputy Speaker, Carol Hughes]

Order, please. I would remind the member for Selkirk—Interlake—Eastman that he will have an opportunity to ask questions or make comments at the proper time. I would ask him to be quiet until such time as the parliamentary secretary is finished his speech, which will be in about eight minutes.

The hon. parliamentary secretary.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Madam Speaker, with respect to treaties and trade, the approach this government has taken in regard to international relations has supported our economy. By supporting our economy in many different ways, it has had a profoundly positive impact on the generation of jobs.

We can look at the province of Manitoba and at an industry I have cited in the past, which is the pork industry. It provides thousands of jobs in the province. In any given year, we have more pigs than people in Manitoba. Plants out toward Neepawa export 95%-plus of their production to Asia. However, the industry provides hundreds of direct jobs on the factory floor and hundreds of additional jobs outside the factory.

Those jobs would not exist if we did not have the international relations we have today. Whether it is cattle or pork, members will see significant increases in the last few years. I like to believe it is because of the approach, in part, and working with Canadians and other stakeholders, encouraging the development of those industries and taking advantage of the agreements on which we have signed off.

At times, the Conservatives will say that they brought it close to the goal line. As we know, it is not bringing it to the post that matters as much as it is getting it over the post. We have been very successful at doing that.

The CETA agreement is a great example. It involved a couple of dozen countries. It was completely off the rails and had it not been for our current Minister of Foreign Affairs, that deal never would have gotten over the goal line. We are still hopeful the European Union will get behind it 100%, as its respective legislative bodies continue to deal with the issue.

Whether it is recognizing the value of our tax treaties or the benefits of getting engaged with the countries, and we are talking about dozens of countries, Canada has been successful in negotiating these treaties, which provide assurances in progressing on the trade file. In a relatively short period of time, the government has been able to accomplish a great deal on both accounts.

We hear a lot from the opposition benches about tax avoidance. Again, we have seen the government not only talk about it but invest in it. For two consecutive years, the government invested additional monies, almost $1 billion, hundreds of millions in each of two separate budgets, in the Canada Revenue Agency to go after individuals who try to avoid paying taxes.

We have taken this very seriously, along with tax evasion. In three years, the government has done more to go after individuals for tax evasion than the previous government did in 10 years. The same applies to tax avoidance. We have recognized the importance of doing the follow up, of looking at ways to ensure that those who are supposed to be paying their fair share are doing so.

We do not need to take lessons from the opposition, in particular the Conservative opposition, on this because it has virtually ignored the problem by not investing. If anything, it divested. It took money away from the CRA. Cuts were brought by the Conservative administration.

When I put forward a question for the member for New Westminster—Burnaby, he talked about taxation policy. He implied that we needed to go after corporations and make them pay more. I give the NDP an A-plus for consistency on it while it is in opposition, but that is it. I underline words, “while in opposition”.

I have witnessed first-hand an NDP government in my home province of Manitoba. What I hear from the NDP in opposition is in contrast to what I hear from the NDP in government. It is like night and day. When the NDP was in government in Manitoba, it cut corporate taxes seven times, as I pointed out in my question.

We can look at the record and the many comments today by my colleague and friend from the NDP. He has tried to shape the debate as if the NDP is the strong advocate for tax fairness. In the last three years, we have seen a national government not only come up with tax treaties to ensure there is a stronger sense of tax fairness at the international level, but also it has invested hundreds of millions of dollars in Revenue Canada to go after individuals who avoid or evade paying their taxes. Those are significant sums of money.

All of this together is what we have been able to do in the last three and a half years. I look forward to the next six months. There is a lot more we want to do to continue to support Canada's middle class, those aspiring to be a part of it and those who need to be ensured that there is a sense of social justice.

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

Madam Speaker, I listened very carefully to the member opposite who just spoke. He said that it is very important to him and his party to fight tax evasion. However, after signing 90 tax conventions with other countries, Canada still does not have legislation to fight tax evasion.

For several years, the NDP has been calling for legislation that will require the automatic disclosure and exchange of banking information. The Liberals have always refused to pass such laws, and we are losing billions of dollars every year. As we have said many times, this money could be invested in education and health. It could help us protect the environment.

A report released today called “The KidsRights Index 2019” ranks Canada 49th on protecting children's rights, even though Canada is a G7 country. The index is based on the following five criteria: right to life, right to health, right to education, right to protection, and enabling environment for child rights.

Young people across the country are taking to the streets to denounce the fact that Canada is not doing enough to protect the environment. Young people with ENvironnement JEUnesse have even taken legal action against Canada for violating their environmental rights. The government likes to pat itself on the back for investing $1 billion in the Canada Revenue Agency, but that investment has not led to any prosecutions. There is a shortage—

[The Assistant Deputy Speaker, Carol Hughes]

Order. I would ask hon. members to ask shorter questions. The last one was nearly two minutes long.

The hon. Parliamentary Secretary to the Leader of the Government in the House of Commons.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Madam Speaker, there are many aspects to the question that I would love to be able to address, but due to time constraints I will have to pick and choose.

The New Democrats want to believe that if we pass a law here in the House of Commons, there would not be a thing known as tax evasion. Businesses would just set up a bank account and deposit the monies into it and we would not have to worry about it. All we have to do is click our heels and pass the law and there would not be such a thing as tax evasion.

It does not work that way.

The member opposite made reference to the need to go after them and see prosecutions. Holding individuals accountable for attempting to avoid paying taxes and investing hundreds of millions of dollars into CRA does not necessarily mean that everything has to go to court. By having these discussions and bringing more people to the table, we are getting money back that is owed to Canada.

Is it enough? It is absolutely not. We can always do more. In my concluding remarks I indicated that we have accomplished a great deal in the last three and a half years, and I hope Canadians will see fit to return us so we can continue working for Canadians and continue to support our middle class and others.

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

Mr. Speaker, we have heard from my colleague from Burnaby and my friend from Quebec. I appreciate their bringing forward concerns around corporations using tax havens and tax loopholes to shovel buckets of money out of our country. We know that tens of billions of dollars have been moved offshore, where they are not paying their fair share of taxes. Small business people and middle-class working people are paying their fair share, building the roads and hospitals and all of the infrastructure across our country, while big corporations and the elite and the friends of the Liberals and Conservatives are able to shovel their money through these tax agreements.

The government had an opportunity to close loopholes for those tax agreements that are not working for Canadians, to keep that money in our country so that those who are not paying their fair share would pay their fair share. The member talked about governments and NDP governments provincially across this country. It is the solicitor general in the B.C. NDP government who is going after those tax evaders. In fact, it is through his investigative work that we learned that over $5 billion was washed in British Columbia in the real estate market. The B.C. Liberals, the previous provincial government, sat idle and did nothing about it.

What about the priorities? Why is the government not fixing these loopholes that are protecting the Liberals' friends, the elite, the rich and the big corporations that are not paying their share?

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, the New Democrats have super-fantastic lines to try to generate this public appeal and be seen as the great defenders of the taxpayer, saying that if we have a billion dollars, we could give it to the children or to the poor seniors.

However, when the tire hits the road, how do the New Democrats actually behave in the House? When we increased the Canada child benefit, they voted against it. That Canada child benefit took 300,000 children out of poverty here in Canada, yet the New Democrats voted against it. When we increased the guaranteed income supplement, the NDP voted against that too. That lifted tens of thousands of seniors out of poverty situations. Both initiatives had a profoundly positive impact in the riding of Winnipeg North, throughout Canada and in all regions of our country, yet the NDP voted against them. When we gave the tax break to Canada's middle class, the New Democrats voted against that too. At the same time, we put in place a special tax increase for Canada's wealthiest 1% of people, and they voted against that too.

The New Democrats are not consistent. They have spin lines that they use while they are in opposition, but when they hit government at the provincial level, those lines seem to go out the window. I say that because I have had far too many years of first-hand experience sitting in opposition and watching NDP governments. All I am asking from the NDP is to be consistent.

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

Mr. Speaker, we know that the B.C. premier and cabinet are meeting tomorrow to consider whether they are going to do an inquiry into money laundering. When the federal Liberal meets tomorrow, will they also agree to have an inquiry into the money laundering that has been happening in our country federally? That is a question Canadians want answered. They want to know that the government is going to take the situation seriously.

The government has not arrested anyone in the Panama papers, while other countries have taken action. The government announced a billion dollars to fight tax evasion in this country and is chasing small business, because clearly it is not getting action when it comes to the Panama papers.

Maybe the hon. parliamentary secretary can address that. Will the federal government follow the Province of British Columbia with a national inquiry into tax evasion if B.C. decides to move forward tomorrow?