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

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

Mr. Speaker, your reminder is timely, but it does not hit its mark because the member for Sherwood Park—Fort Saskatchewan raised some other issues.

Because it has come up in the House so often and I have rarely had an opportunity to explain the background, I want to talk about the transit credit. It has been referred to as a credit that helped lower-income Canadians and was of great benefit. Former prime minister Stephen Harper introduced that credit, claiming it was a climate measure.

Because it did not put any additional buses on the road, because it assisted people who were already taking buses, and I appreciated that as someone who was taking buses, the net effect of it in terms of its stated purpose, which was reducing greenhouse gases, was that it was the single most expensive, least useful measure of many expensive and useless measures from previous governments. It amounted to $2,000 a tonne; $2,000 a tonne for climate reduction was what it accomplished for its stated purpose.

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

We're not wealthy like your Green Party friends.

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

I know that the hon. member for Timmins—James Bay would like to have tax credits for—

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

Yes, for working-class people who take transit. My daughter has to walk. I can't believe—

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

Excuse me, hon. member for Timmins—James Bay. I don't believe it is appropriate for you to be heckling me while I explain this.

[The Assistant Deputy Speaker, Liberal, Anthony Rota]

Order. There seems to a conversation or interference directly between members.

I understand the hon. member for Timmins—James Bay has a point of order.

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

Yes, Mr. Speaker, I want to be really clear on this point of order. To hear this ridiculous attack on working-class people—

[The Assistant Deputy Speaker, Liberal, Anthony Rota]

I am afraid that is debate.

The hon. member for Saanich—Gulf Islands.

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

Mr. Speaker, it is the Green Party policy that public transit should be free. The point of the boutique tax credit that the Conservatives brought in, they claimed, was that it was a climate change measure, and it was at a cost of $2,000 a tonne. When the NDP decides to make public transit free, perhaps the member for Timmins—James Bay will have some additional points to raise.

At this point, I just want to clarify that this tax credit was rightfully removed, because it only helped people who could already afford to have transit passes.

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

Mr. Speaker, I understand that the member for Timmins—James Bay is upset at the Green Party leader because he really wishes she had run a candidate in Burnaby South. That probably would have been better for his political plans.

In terms of the comments made by my friend from Saanich—Gulf Islands, a policy measure can be both good for the environment and helpful to low-income Canadians. Some across the way think we have to make a choice. They think the choice is either impose a carbon tax on low-income Canadians and punish them as their desired climate measure, or not do that and let them off on the tax front, but punish them otherwise. Conservatives believe there can be measures like the transit tax credit that are good for the environment and lower the taxes of low-income Canadians. We believe on this side of the House, in this party, that both of those things can be done at the same time.

To further respond, the member said the tax credit did not put new buses on the road. However, it made it easier for people to choose the option of using public transit, and it increased the volume on those buses. Of course, when there is greater demand for public transit, that creates more opportunities and more logic around further investments in the development of public transit.

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

Mr. Speaker, it is interesting, to say the very least, to hear the comments from my colleague across the way. At times there needs to be a reality check.

The Conservatives like to talk as if they are the ones who give the tax breaks. The reality is that Bill C-2 has defied everything the Conservatives have tried to convince Canadians they do. Bill C-2 created a tax cut for Canada's middle class. That member and his caucus voted against that tax cut. They can say whatever they want, but they voted against hundreds of millions of dollars going into the pockets of Canadians. That is true. That is a fact. Look it up in Hansard. Look it up in the votes. There is no denying reality.

My question is related to this bill. We have talked about tax avoidance. We have invested hundreds of millions of dollars in two budgets to deal with the issue of international and national tax avoidance. That investment is making a huge difference. Again, the Conservative Party voted against the budget that went after tax evasion and tax avoidance.

Maybe the member can answer that as the second part of the first question regarding how he will explain to his constituents that the Conservative Party voted against tax breaks to Canada's middle class.

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

Mr. Speaker, the member badly mischaracterizes Bill C-2. I am happy to remind him that Bill C-2 was in fact an omnibus measure that had multiple different elements to it. I proudly voted against it because it reduced the amount Canadians could put into tax-free savings accounts. The government attacked middle-income Canadians by reducing the amount they could save.

My friends across the way have clearly not looked at the data about who uses tax-free savings accounts. Tax-free savings accounts are demonstrably the preferred savings vehicle for middle-income Canadians, not the ultra rich, because of their tax treatment relative to RRSPs. Generally, for middle-income Canadians, TFSAs have relatively more advantageous tax implications compared to RRSPs. That is why those who open them and put money into them tend to disproportionately be middle-income Canadians.

The government's fundamental opposition and attack on the tax-free savings account was worth voting against. I will vote against the government's tax increases every step of the way.

[The Assistant Deputy Speaker, Liberal, Anthony Rota]

Before resuming debate, I will again remind the hon. members, on all sides, that the bill at hand today is Bill S-6, not Bill C-2.

The hon. member for Central—Okanagan—Similkameen—Nicola.

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

Mr. Speaker, it is always an honour to rise in this place to speak on behalf of the good people of Central Okanagan—Similkameen—Nicola, as well as to bring forward some of my concerns.

Obviously these tax treaties have existed for a long time. In fact, two of the tax treaties I looked at earlier were dated back before I was born in the late 1970s. These tax treaties have existed for a long time. They have developed over the years. It is important to note that double taxation should be addressed.

Canada, as an open economy where we try to attract foreign direct investment, should do all it can to provide certainty so that monies from other countries can come here to make many of the important projects go forward in places like Central Okanagan—Similkameen—Nicola. In my riding of Princeton, we have the Copper Mountain mine development. It is a very popular mine because it is one of the larger private employers in the area. That mine was the beneficiary of foreign direct investment.

When I did door-knocking in the 2015 election and introduced myself to the good people of Princeton, because the riding had changed, people pointed out that when the mine had originally closed for an extended period of time, the economy in Princeton had suffered greatly. The people benefited greatly from that mine both in terms of taxation, because now the community gets a share of the taxes that go to the provincial government, and from the employment and the services that the community is now able to have.

The same goes for the Highland Valley Copper mine just outside of the great town of Logan Lake. On a per capita level, Logan Lake and Princeton are some of the largest contributors to the net GDP of the area.

Before I go any further, I plan on sharing my time with the hon. member for Calgary Nose Hill and l am sure she will be giving a much more informed view on things.

However, when we talk about foreign direct investment building certainty through international tax agreements, it is important we talk about the benefits we have.

A new flotation facility was put in Highland Valley Copper about four or five years ago, easily half a billion dollars worth of investment. Those kinds of investments do not happen in countries unless there is a stable framework and the rule of law, including tax treaties. Again, the Nicola Valley has prospered as has the Similkameen Valley prospered because of these large developments. The amount of capital it takes is not always possible to be raised here.

Sometimes Canadians ask me why we have foreign direct investment, why can Canadians not simply invest in our own projects. The answer is that there is so much opportunity in the country that we cannot on our own resources alone expect reasonably to see many of these projects go forward. Having that foreign direct investment, having that stable presence in terms of the rule of law is incredibly important.

Bill S-6 is an 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. To be very clear, these are not new. Under the previous government, led by former prime minister Stephen Harper, we saw the renewal of the New Zealand agreement and also the agreement between Canada and France was updated.

Consecutive governments of different political stripes have sought to put these things in place. Not only does it relate to double taxation, it also makes life a little easier. For example, students are covered and it defines what a student is. If those students are drawing income from the other country that is part of the agreement, they will not have to pay taxes in the country where they are studying. These things are important and they eliminate a lot of red tape for individuals. I think we can find some common ground on that.

I have talked about two things: first, the importance of certainty, because business, development and investment cannot happen without that certainty; and second, opportunity, meaning people have to feel if they put a dollar in, they can expect that money to come back with even a return on that investment.

I am fearful that while the framework of Bill S-6 is here, the government has eroded some of those areas of certainty and opportunity.

For example, we had an opportunity today. We had Kim Moody talk about the changes the government had made to the Income Tax Act, specifically around small businesses and Canadian controlled private corporations. I asked the Canadian Federation of Independent Business about this. The government likes to talk about lowering taxes for small business, but when I spoke to the CFIB, when I heard some of the testimony of Mr. Moody today, I found that the government had made it so difficult for many families to utilize a legitimate tax regime that was available to them in previous years. Because there is such a grey zone by the layering of rules, they do not have any certainty.

If we ask Canadians or people from other countries to invest in this country and if they find there is not the same certainty or opportunity they once had, they may choose not to invest. They may choose to not grow their business because they do not see the opportunity there.

Bill S-6 does add a little more certainty for people to come from Madagascar to invest in Canada, knowing the rules that would be applied to them under law. There would be a tax treaty to share information between jurisdictions to ensure they would not double taxed. However, when someone sees the absolute mess the government has placed our country in on responsible resource development, there is no certainty.

Look at the visiting convoy we had the other day. Those people want certainty. They want opportunity. They do not want bills like Bill C-69. They do not want to see foreign investment chased away.

While we are talking about chasing away investment, the government, through its failure to create a stable regulatory state, has allowed the Trans Mountain pipeline expansion to languish. Private dollars were going to build opportunity for the people of Merritt. I am not sure I mentioned this before, but the community of Merritt was promised, under a community development agreement, that it would get certain funds to use for flood mitigation. However, because the company did not have that certainty and did not feel there was an opportunity, it decided to use its money to fund pipeline development in the United States. That is a real shame.

It is not just having the framework like Bill S-6 in place. There also has to be a sense that the rule of law will always be followed, that we are bound by the rules that have been put in place, that our word is our word, that there is no political interference once the Governor General has given the nod to a piece of legislation and it is the law of the land.

Mr. Speaker, earlier you raised the issue of you wanting all of us to talk about Bill S-6. However, the elephant in the room is we find out that cabinet confidences have been broken. We find out that caucus confidences have been broken on the Liberal side. It is all over the papers. When people find out that someone is allegedly trying to interfere in an independent prosecution case, they start to ask themselves if this is a country that follows the rule of law. That erodes confidence. That makes people say that perhaps they will not invest in Canada, that they instead will go to Australia, or the United States, where they have certainty and opportunity.

As a Canadian, this is so important for us. We have bills, like Bill S-6, that put forward proper frameworks. However, even if those frameworks are in place, if people do not feel that officials will follow those laws, both elected and bureaucratic officials, that dissolves or erodes the sense of rule of law. May we never find ourselves in such a state where people question the Canadian government or the Canadian people on our commitment to the rule of law.

I call upon the government to have that public inquiry. I call specifically for the Prime Minister to waive client-solicitor privilege for the former attorney general. Why? Because I am all about certainty, opportunity and feeling proud of our country and telling people that I am a proud Canadian. I am sure the people on the street are saying the same thing. It does not look good. It does not make us feel good. That needs to change.

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

Mr. Speaker, the member across the way is losing his focus in regard to the bill at hand. The government has not lost its focus as we continue to work, day in and day out, for Canadians in all regions of this country, dealing with issues that are of the utmost importance. These are things such as jobs, health care, services for seniors, ensuring we are lifting seniors and children out of poverty, and a litany of different activities all focused on improving the lifestyle of Canadians in all regions of our country. As a demonstration of that, over 800,000 jobs have been created in the last few years.

When we talk about the bill that we have before us today, I would suggest these tax treaties are a good part of the outreach by this government in terms of expanding our markets. By expanding our markets and allowing additional investments and so forth, we are adding strength to the Canadian economy. By doing that, we are supporting Canada's middle class.

Would the member across the way not agree that by looking abroad at trade agreements and tax agreements, we are actually giving more strength to the economy and that all Canadians and all regions benefit from that? That is one of the reasons the bill should be passed.