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.

Third Reading

[Larry Bagnell, Liberal, Yukon, YT]

Mr. Speaker, first I want to acknowledge that we are on the traditional territory of the Algonquin Anishinabe people.

I have a speech, but I think I will start by trying to answer questions and concerns that have been brought up. If I do that, then members could vote unanimously for this bill.

The first thing members have been asking is why there are only five more hours to debate this bill. For a lot of bills, that would be a valid question, but at this particular time we have had Conservative after Conservative getting up and not talking about the bill. We heard a lot about Bill C-48, Bill S-6, a letter from premiers not related to this bill, Bill C-15 and a northern moratorium.

I have been here awhile, and last night I witnessed an amazing situation. One of the Conservative speakers, in a 10-minute slot to speak on this bill, spent nine and a half minutes talking before they got to the bill, and then answering three questions by not referring to anything in the bill.

If the public wonders why Parliament has decided to call time allocation on this bill, it is obviously because the Conservatives have nothing more to say. We have heard the same arguments over and over again, and they are not valid. I will go through them one by one right now.

I am not sure why a party would want to stretch out a debate on a terrible injustice that it has caused, and it has done this a number of times. It is strange. Why would they want to put that in the light? Why would they not want to fix that injustice by supporting this bill? One of the members mentioned that he was not here at the time that it happened, so in good justice, he could support the bill.

People have asked what we have been doing for the last four years and why we did not debate this bill earlier. Some of the people in the House now have actually asked this question. This Liberal government has passed something like 85 bills. I think some members' constituents would like to ask them where they have been while these very important 85 bills were being discussed and debated.

One bill in particular was in the exact same situation as this one. It was Bill C-17. Again, the previous government had unlawfully, either technically or in spirit, abrogated a modern treaty, a constitutionally protected treaty, and tried to pass a law that got around it. That was certainly disrespectful.

Some may ask why Liberals did not get more things done, and a good example was what happened when Bill C-17, related to the treaty, was ready to pass. There was a grand chief, chiefs and aboriginal people here in the galleries. It cost thousands of dollars for them to get here from the Yukon. What did the Conservatives do at that time? They called a dilatory motion that the next speaker be allowed to speak, and then the bill could not be done. Some members ask why things are not done, yet they continue to do tricks like that.

This particular bill broke a constitutionally protected treaty, as I said earlier, a land claim. The members opposite have asked—and it is a good question for the ones who were not here before—why Liberals voted for that bill. This question has been brought up a number of times. The reason is that the part of the bill in which the law was broken in spirit or in technicality was snuck in in a much larger devolution bill.

The devolution bill transferred the remaining federal powers to the territorial government. That was a tremendous move, and that is why the party supported that initiative. Unfortunately, even though the people affected by this wanted this taken out and some parliamentarians tried to get it out, the Conservatives pushed ahead with the bill, and that is why the other parties voted for it.

Another concern the Conservatives have noted a number of times is that there are two parts to the bill. I think the member for Northwest Territories corrected them and said there are three parts. Nevertheless, they said there is part 1 and part 2, and there was no consultation regarding part 2. That is not true at all. When we consulted, we consulted with all the local governments involved regarding the entire bill, both part 1 and part 2. Shortly, I will read to members some of the things they said, because the opposition has suggested they did not support both parts of the bill.

The bill concerns the Sahtu, the Gwich’in and the Tlicho. When the Tlicho signed its constitutionally protected land claim and its self-government agreement, I was parliamentary secretary to the Minister of Indigenous Affairs. At that time, unfortunately, we had to fight against the Conservatives to get that agreement signed. At least the Conservatives can now make peace with that wrongdoing of the past and support the bill.

I will read some comments of support, because the Conservatives have said that indigenous groups did not support part 2 or the bill.

Grand Chief George Mackenzie, from the Tlicho Government, said, “We urge the community to move swiftly and decisively to ensure that Bill C-88 comes into force during the current session of Parliament.”

David Wright is legal counsel to the Gwich'in Tribal Council. I say to David, drin gwiinzih shalakat. He said the following at the INAN committee:

If Bill C-88 is not passed, not only will Canada not have fulfilled its commitment to Northwest Territories indigenous communities, but these communities will be forced back into time-consuming, expensive, acrimonious litigation, all adversely affecting that treaty relationship and the broader reconciliation project. Further, this would generate regulatory uncertainty that benefits no one....

I know the Conservatives have spoken against uncertainty in the past, so that is another reason for them to support the bill.

Premier McLeod and Grand Chief George Mackenzie, in a joint letter, said:

[W]e are hopeful that Bill C-88 will proceed expeditiously through the legislative process and receive Royal Assent [in this Parliament].... The negative implications of the status quo are significant.

Mervin Gruben was also quoted as supporting the bill, as well as Duane Smith from Inuvialuit. It was suggested he was not allowed to come to committee, but he was actually invited. He did provide a written submission, and it was nice to have that information added to the record.

A Conservative member talked about not listening to indigenous people and indigenous voices. The member said that not listening to the people of the north is arrogance. I just read that the four governments involved, the Sahtu, the Gwich’in, the Tlicho and the GNWT, all support the bill. Conservatives are right; we should listen to those people. They should listen to those people as well, along with the rest of the parties supporting the bill, and support the bill.

Another thing the Conservatives have talked about a lot is support for resource development. I am sure all other parties agree with sustainable development. It is another reason the Conservatives should vote for the bill. I will read some comments about how the bill promotes and ensures this.

Chief Alfonz Nitsiza, from the Tlicho Government, said:

[F]ailure to resolve this matter co-operatively would damage our treaty relationship and undermine the process of reconciliation as directed by the courts. Long-term regulatory uncertainty for any reason will damage the economy of the Northwest Territories, including within the Tlicho community. This is all avoidable with the passage of Bill C-88.

David Wright, legal counsel to the Gwich'in Tribal Council, said, “Bill C-88 is a step toward certainty in the Mackenzie Valley, and that is a step that should be taken at this time”.

Finally, Premier McLeod said:

The proposed amendments to the MVRMA in Bill C-88 would increase certainty around responsible resource development in the Northwest Territories. That certainty is something our territory needs as we continue to work with the indigenous governments in the territory to attract responsible resource development.

Conservatives, to be true to the values they so eloquently put forward on resource development, can support those values by supporting this bill.

I support Bill C-88, an act to amend the Mackenzie Valley Resource Management Act and the Canada Petroleum Resources Act. Although the debate so far has focused on the content of the proposed act, I want to talk about what is not in Bill C-88 and why it would be a mistake to make major amendments at this stage.

Amending Bill C-88 at this stage of the process would defeat its overall purpose, which is to resolve a court challenge arising from the previous government's decision to merge the land and water boards without holding appropriate consultations.

The Northwest Territories Devolution Act, Bill C-15, was assented to in March 2014. The act transferred the administration and control of public lands and waters to the Government of the Northwest Territories and amended the Mackenzie Valley Resource Management Act. The act includes provisions restructuring the Mackenzie Valley land and water boards.

The Tlicho government and Sahtu Secretariat Incorporated challenged the changes to the Mackenzie Valley Resource Management Act that would have dissolved their regional land and water boards. They argued that theses changes violated their land claims agreements and infringed on the honour of the Crown. They added that the consultations had been inadequate. On February 27, 2015, the Supreme Court of the Northwest Territories granted an injunction that suspended the proposed board restructuring, along with the coming into force of other regulatory amendments.

I would like to point out that those regulatory amendments, which included the addition of a regulation-making authority for cost recovery, administrative monetary penalties, development certificates and other provisions related to regional studies, all passed through the parliamentary process in 2014. Those same provisions are being presented today. However, they were rewritten to ensure that they could apply under the existing four-board structure. They were not part of the court challenge. Bill C-88 responds to the court challenge by reversing the provisions to merge the boards and re-introducing some regulatory elements that are applicable under the existing four-board structure.

On September 23, 2016, the Minister of Crown-Indigenous Relations sent a letter to indigenous governments, organizations and stakeholders to launch the consultation process on Bill C-88.

Consultations were held with indigenous governments and organizations in the Mackenzie Valley, transboundary indigenous governments and organizations, resource co-management boards, organizations from the mining, oil and gas sectors, and the territorial government. To ensure that the indigenous governments and organizations were able to fully participate in the process, the Government of Canada provided funding to these groups and to the resource co-management boards that took part in the consultations.

Representatives from Crown-Indigenous Relations and Northern Affairs Canada, or CIRNAC, held a teleconference with stakeholders to consider next steps and to discuss the consultation plan. A legislative proposal to repeal the board restructuring provisions was drafted and submitted to the groups for review. During the review period, the groups had the opportunity to meet with CIRNAC representatives in Yellowknife to talk about the content of the proposal and to ask questions. This was also an opportunity for CIRNAC representatives to determine whether any part of the proposal was unclear or could be improved, based on the feedback they received.

I will not have time to finish, but I do not want to miss this particular point. The only other questions someone could ask that I have not already answered are whether the consultation that was done was serious and, although they were in agreement at the end, whether any changes were made. The answer is yes. I will give an example of two of the changes that were made.

The first was that because of the consultations with the people involved, a court jurisdiction related to a judicial review of administrative monetary penalties, AMPs, was modified in order to ensure consistency with the exclusive jurisdiction of the Northwest Territories Supreme Court under section 32 of the Mackenzie Valley Resource Management Act.

A second change was that consultation obligations related to the AMPs were added to the bill to ensure consistency with the comprehensive land claim agreements.

The only other thing I think someone might ask is related to the position of national interest and whether this is the only case of that. The answer is no; it is a clause, an idea, that comes up in different legislation. I will give members some examples from the north: the Mackenzie Valley Resource Act, Statutes of Canada 1998, chapter 25, section 130, and the Nunavut Planning and Project Assessment Act, Statutes of Canada 2013, chapter 14, section 2.

Section 94 of the Mackenzie Valley Resource Management Act provides for the federal minister to refer a proposed project to the Minister of Environment for the purpose of a joint review of the Canadian Environmental Assessment Act if it is in the national interest to do so.

The Nunavut Planning and Project Assessment Act also provides for the responsible minister to reject a board decision or to reject or vary recommended terms or conditions if it is in the national interest to do so.

A few close references can also be found in section 51 of the Yukon Act, Statutes of Canada 2002, chapter 7, and in section 57 of the Northwest Territories Act, Statutes of Canada 2014, chapter 2, section 2.

To boil it all down, basically an act was passed that abrogated the land claim and went against a constitutionally protected law of Canada, which we cannot change by just doing another law. Of course, the court found that out and would not let it go ahead. All this bill would do is to put into law what the court had ordered.

[The Assistant Deputy Speaker, Anthony Rota]

I have the honour to inform the House that a communication has been received as follows:

May 27, 2019

The Honourable

The Speaker of the House of Commons

Ottawa

Mr. Speaker:

I have the honour to inform you that the Right Honourable Julie Payette, Governor General of Canada, signified royal assent by written declaration to the bills listed in the schedule to this letter on the 27th day of May, 2019 at 1:37 p.m.

Yours sincerely,

Assunta Di Lorenzo

Secretary to the Governor General and Herald Chancellor

The schedule indicates that the bills assented to were Bill C-85, An Act to amend the Canada-Israel Free Trade Agreement Implementation Act and to make related amendments to other Acts, Bill S-6, 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 and Bill C-55, An Act to amend the Oceans Act and the Canada Petroleum Resources Act.

Canada–Madagascar Tax Convention Implementation Act, 2018

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

Mr. Speaker, after so many tributes to one of our colleagues, it is hard to get back to the debate on a bill like Bill S-6.

I want to take this opportunity to congratulate the member for Sydney—Victoria on all he has done. The kind words coming from all sides of the House prove that he was obviously very well liked and wonderful to work with all these years. I too would like to wish him all the best.

We are here today to debate Bill S-6. Our job is to talk about bills and discuss the various motions brought before the House. Bill S-6 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 based on the Organisation for Economic Co-operation and Development's model tax convention on income and on capital. A bill like this is introduced for two main reasons. The first is to avoid double taxation, and the second is to prevent fiscal evasion. Once this bill is implemented, it will provide relief from taxation rules set out in the Income Tax Act. It cannot be implemented until the bill is passed. We on this side of the House plan to support the bill.

Since we are talking about international relations, I want to talk about a speech that the leader of the official opposition gave to the Montreal Council on Foreign Relations, or MCFR. He gave his excellent speech to a full house on May 7 in Montreal.

The leader of the official opposition spoke about this country's foreign affairs, which is why I am making a link to the bill we are debating today. Maintaining healthy relations with other countries based on respect and rules is what enables us to continue to prosper and find our place in an ever-changing, fast-moving world.

Before I talk about the opposition leader's vision for foreign affairs, I want to talk about the government's track record in that regard. Shortly after the 2015 election, the Prime Minister said that Canada was back. He took credit for the good reputation that Canada had built over the years under all of the previous governments. Unfortunately, in 2019, it seems that Canada has gone nowhere. Here is what the opposition leader had to say:

The profound arrogance of [the Prime Minister]'s words foreshadowed how the new Prime Minister would conduct Canada’s foreign affairs: with style over substance.

It is public knowledge that the government has made many serious mistakes, and they are almost always attributable to the Prime Minister's poor judgment. Let us not forget the trans-Pacific partnership. He was a complete no-show for a very important meeting. Observers said at the time that the Japanese were seething about what they perceived as a last-minute betrayal by the Prime Minister of Canada.

We all know the details of his trip to India. Certain images come to mind every time someone mentions it. As the Leader of the Opposition said before the MCFR, what is perhaps less known is how seriously that trip hurt Canadians. Bilateral trade with India totals about $9 billion annually. The Prime Minister's trip to India seriously set us back in terms of helping Canadians benefit from increased trade.

We need to look at what is behind the image and the photo ops, at the impact of these actions. As former Liberal minister Ujjal Dosanjh stated, it is disappointing that the Canada-India relationship could have gone to the next level, but we have bungled it.

More recently, we have witnessed the government's defeatist attitude toward China. A wait-and-see approach has now become the norm. China has taken totally unjustified trade actions directed against Canadian farmers, canola farmers, the pork industry, and livestock genetics companies. Unfortunately, the crisis only seems to grow worse every day.

The Minister of Agriculture and Agri-Food has just returned from a G20 ministerial meeting in Japan, where she had an opportunity to talk to her Chinese counterpart and clearly state Canada’s position on the canola crisis, which is preventing Canada from exporting canola seed to China. However, this meeting on the importance of market access rules-based trade for Canadian agri-food products and opportunities was inconclusive.

According to the news release issued by the minister, she had an introductory conversation with the Chinese minister of agriculture on the margins of the G20 meeting and expressed Canada’s deep concern with the suspension of Canadian exports. The Minister of Agriculture has been asking China to allow her send a technical delegation to verify the Chinese government's allegations about the quality of Canadian canola for a month now, but she is satisfied with an introductory conversation with the Chinese minister of agriculture.

Unfortunately, the department’s news release makes no mention of the Chinese minister’s response. We do not know what he said, and unfortunately, we do not expect a technical delegation to be sent to China, since the minister surely did not want to displease her Chinese counterpart, while China is causing billions of dollars in damage to the Canadian economy.

That is not all. Today, Grain Growers of Canada called on the federal government to provide meaningful support to the Canadian agriculture industry. They want it to develop a strategy to address an increasingly unpredictable trade environment that is affecting the incomes of grain farmers. The strategy should recognize that China’s blocking of Canadian canola is politically motivated, which was acknowledged last week by the Prime Minister. However, government politicians are hesitant. The ministers refuse to stand up to China, and we are seeing the consequences. We are caught in the middle of the trade war between the United States and China. That has serious repercussions for all grain farmers in Canada.

The GGC press release also reveals that, in addition to the suspension of canola imports from Canada, soybean prices are dropping and imports to China have slowed to a trickle, reaching levels not seen in a decade. Industry and government officials have confirmed that Chinese importers are reluctant to sign contracts for other Canadian agricultural products given the uncertainty in the market.

Grain Growers of Canada chair Jeff Nielsen says the time has come for the Canadian government to aggressively defend the interests of Canada's agricultural sector in China and around the world. GGC vice chair Markus Haerle of St. Isidore, Ontario, says that the issues we are seeing with trade into China can no longer be said to be commodity-specific. As a soybean farmer, he has seen his prices plummet and markets close due to the flooding of the market by U.S. product.

The press release concludes by saying that, in addition to Chinese disruption, the loss of the Indian pulse market and the Italian durum market has added to the long list of risks that farmers are expected to manage. That is what we have been saying for months. For at least two months now, we have been telling the House that the Government of Canada has to stand up to China because it did not stand up to Italy, it did not stand up to India when that country imposed tariffs, and it did not stand up to Vietnam. The Liberal government's inaction and wait-and-see approach are causing billions of dollars' worth of damage to the Canadian economy.

When we are talking about billions of dollars in damage to the Canadian economy, we have to spare a thought for every farmer in every province of Canada. Each of them has suffered losses on the order of $10,000, $20,000, $50,000 or $100,000 since the beginning of the year because they cannot sell their product.

We asked for three things. First, we asked for changes to the advance payments program. The Leader of the Opposition had to pressure the government into tabling a plan to help canola farmers. Second, we asked for a complaint to be filed with the World Trade Organization. There has been radio silence on that from the Liberal government. Lastly, we asked the government to appoint an ambassador to China. It seems obvious to me that if we want to resolve a crisis—

The House resumed consideration of the motion that Bill S-6, 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, be read the third time and passed.

[Chris Bittle, Liberal, St. Catharines, ON]

Mr. Speaker, I could not agree more with the hon. parliamentary secretary and his comments. A million new jobs is something to brag about. It is significant. Canadians have worked very hard and it is clear our policies have worked to help fuel that innovation and entrepreneurship. Part of that is our trade strategy, whether it is with Europe, Asia, or standing up to the United States or by standing firm on our commitments and with our industries.

Canada has unprecedented access to global markets. That speaks well to the economy. Bill S-6 is a small part of that and it will move us forward. We are always looking forward to creating new jobs and helping Canadians in their entrepreneurship and in investing.

[Chris Bittle, Liberal, St. Catharines, ON]

Mr. Speaker, as I mentioned in the introduction, the thrust of my speech is about tax fairness, as Bill S-6 is about tax fairness, and talking about the other measures the government has taken with respect to tax fairness. I am happy to continue and bring it back again.

Next year, the combined federal-provincial-territorial average tax rate for small businesses will be lowered to 12.2%, by far the lowest in the G7 and the fourth lowest among OECD countries.

However, tax fairness requires action on multiple fronts, not just Bill S-6.

For example, in each of our budgets we have taken steps to strengthen the Canada Revenue Agency's ability to crack down on tax evasion and combat tax avoidance. I know those are issues that have been discussed by the opposition members in questions they have brought up.

The government has also taken action to close loopholes that result in unfair tax advantages for some at the expense of others. Actions like these help ensure the government's ongoing ability to support the programs and services on which Canadians rely.

Today's legislation, Bill S-6, targets strategies used by businesses and wealthy individuals to exploit gaps and mismatches in tax rules to inappropriately reduce or avoid tax. Bill S-6 greatly enhances our ability to counter tax avoidance strategies that would otherwise abuse Canada's tax treaties and reduce or avoid Canadian tax.

While we have made significant investments in the CRA, we know that fighting tax avoidance is not something that we can do alone. It is not easy work. Bill S-6 implements a multilateral convention that contains a number of treaty-related measures to combat base erosion and profit shifting, or BEPS. BEPS refers to tax avoidance strategies in which businesses and wealthy individuals can use gaps and mismatches in tax rules to avoid tax or shift profits to low-tax or no-tax locations. In other words, these strategies enable businesses and wealthy individuals to avoid paying their full or fair share of taxes.

To implement all these measures in a timely and effective manner, a new approach was required. This new approach is the multilateral convention contained in the bill, ultimately known as the multilateral instrument, or MLI. The MLI is a product of a global initiative, working with more than 100 countries and jurisdictions, including Canada. The purpose of the MLI is to allow participating jurisdictions to adopt measures to combat BEPS without having to individually renegotiate their existing tax treaties. The MLI would also improve the functioning of international tax systems by including measures designed to better facilitate the timely and effective resolution of disputes under tax treaties.

We have listened to Canadians. They want the government to take action to address tax avoidance, and we are committed to that. We are making significant progress.

The bill builds on the government's ongoing work to ensure that we have a tax system that is fair for everyone. Starting with budget 2016, the government has been giving additional funds to the Canada Revenue Agency, so that it can more effectively crack down on tax evasion and combat aggressive tax avoidance. These additional investments continued in 2017, and again in 2018, and they are already paying dividends.

At the close of 2017-18, CRA had 50 ongoing criminal investigations related to the transfer of money that rightfully belongs in Canadian coffers to low- or no-tax jurisdictions. The government is also targeting those who promote tax avoidance schemes and has imposed more than $44 million in fines on those third parties.

We are joining this international collaboration in making these investments in the CRA because Canadians want their money back and want the loopholes through which these tax dollars flow out of Canada closed. If our economy does not work for everyone, if people do not pay their fair share, Canadians grow concerned and they want action.

We invested in the CRA, after years of cuts under the Harper government. Of course, it limited the CRA's ability to prosecute tax offences. We need to fund those who are on the ground. They are essentially police officers, and we saw today in Ontario, during Ontario Police Week, the provincial government cutting $46 million to front-line policing and the OPP.

We are doing the opposite. When we see criminal or illegal activity, in this case tax avoidance, we need to step up and take action. That is why we invested in the CRA. That is why we are putting more officials on the ground. This is not easy work.

Through my legal practice, I know that dealing with cases of fraud and white-collar crime is a very difficult burden for investigative agencies like the CRA. It is not a matter of seeing something on camera or hearing from an eyewitness. It takes a great deal of work to bring forward cases for enforcement and prosecution.

In the absence of investment, there will be a decline, and it will be easier for Canadians to avoid taxation and move their money overseas without fear of getting caught. This needs to be emphasized. The tax system needs to be seen to be fair. Justice should not only be done; it should be seen to be done.

This has been an important part of our investments in the CRA, ensuring that we have a tax system working for every man, woman and child in this country. That is money that needs to work for Canadians, including through some of the tax programs I talked about. It is about making our entire tax system fairer.

We talked about the CCB making the system fairer. I had a wonderful conversation with a constituent who is no longer receiving the CCB. She was able to use the CCB to start up her small business. There is more money in her pockets, tax-free. The opposition voted against this, but she received this benefit and was able to start up her business. She is now making enough money that she no longer receives the CCB. She is employing Canadians. She was able to take the step to help herself and better our community, and that is significant.

Coming back to the middle-class tax cut, I note that one of the first things we did as a government was lower taxes on the middle class and raise them on the wealthiest 1%. Again, it is about a tax system that works for everyone. We were shocked that the opposition voted against this, but it is a measure that Canadians wanted. They wanted to ensure that the wealthiest in our society paid a little more so those who make a little less could get a bit of a break, so that is what we did.

The previous speaker, the hon. member from eastern Ontario, said that families are not better off under our government. Nothing could be further from the truth. The average family is $2,000 better off—

[Chris Bittle, Liberal, St. Catharines, ON]

Mr. Speaker, thank you for allowing me to speak to Bill S-6. I will be splitting my time with the hon. member for Sydney—Victoria.

Bill S-6 proposes measures that would make the tax system fairer by addressing aggressive international tax avoidance.

To have an economy that works for everyone, we need a tax system that is fair, and we need all Canadians to pay their fair share. A fair tax system instils confidence and helps create opportunities for everyone. That is why, as one of our first measures upon coming into office, we introduced a middle-class tax cut. Single individuals who benefit from this middle-class tax cut are saving, on average, $330 per year. Couples are saving, on average, $540 per year.

We are providing simpler, more generous and better-targeted support for Canadian families who need it the most: the Canada child benefit or the CCB. As a result of the CCB, nine out of 10 Canadian families with children are better off than they were under the previous system of child benefits. On average, families benefiting from the Canada child benefit are getting $6,800 this year, to help pay for things like healthy food, back-to-school clothes and new winter boots for growing kids. Since its introduction, the CCB has lifted approximately 300,000 children out of poverty.

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

Mr. Speaker, I want to thank my hon. colleague from Leeds—Grenville—Thousand Islands and Rideau Lakes for his passion since he has entered the House of Commons. I really appreciate his enthusiasm.

The member talked in his speech about ways to tackle climate change in his own riding, and I am really grateful to him for that. He said businesses in his community are taking action.

Conservative members have raised concerns over the carbon tax in 2,100 interventions and there have been over 762 questions in the House of Commons against the carbon tax, so it is refreshing to hear that member talk about solutions. Those were lost opportunities. Those 2,100 interventions and 762 questions could have been pressing the government with solutions. I really am excited to hear about their plan.

Let me get back to Bill S-6, the bill that we are talking about today and a bill we all agree with.

A bigger problem in this country is tax avoidance. Billions of dollars are leaving this country, a country where hard-working people are paying their fair share and where large corporations, the elite and those at the top are not. Would the member agree that we should be making legislative and regulatory changes to prevent that from happening?

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

Mr. Speaker, I am pleased to rise today 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 and the prevention of fiscal evasion with respect to taxes on income.

There seem to be good measures found in this bill, especially on double taxation. This bill contains provisions for tax in both Madagascar and Canada.

In the case of Madagascar, double taxation shall be avoided as follows:

(a) where a resident of a Madagascar derives income which, in accordance with the provisions of this Convention, may be taxed in Canada, Madagascar shall allow as a deduction from the tax on the income of that resident, an amount equal to the income tax paid in Canada. Such deduction shall not, however, exceed that part of the income tax, as computed before the deduction is given, which is attributable to the income which may be taxed in Canada.

It is great to see the government is making a move that might keep more of people's money in their own pockets instead of going toward paying for the government's reckless spending. It is also good to see the government is concerned about double taxation. It is just a shame that it is only concerned about it when it is happening in the Republic of Madagascar and not here in Canada.

Would it not be great if the government made such an effort to avoid double-taxing Canadians? However, the government is doing exactly that with its carbon tax on everything. The Prime Minister is charging GST on top of that carbon tax. I would say that is a tax on a tax. That is just it. The government does not particularly care about the average Canadian, and especially rural Canadians, such as those in my riding of Leeds—Grenville—Thousand Islands and Rideau Lakes.

When the carbon tax took effect, it immediately raised the price of everything, from gas to home heating to groceries. Canadians are being taxed twice for living the life of luxury by heating their home and driving to work or driving their children to soccer or dance, or even driving to the doctor.

If the carbon tax were actually an environmental plan, would it not be logical that the great emitters of pollution in this country would pay most of this tax? They are not. Canada's biggest emitters are exempt from the carbon tax, while small business owners, commuters, hockey moms and dads, and farmers are expected to take public transit. That is not possible for many rural Canadians.

The Prime Minister expects rural Canadians to just hop onto public transit or buy a new Tesla. That does not jive with what is happening across Canada, and certainly not in my riding of Leeds—Grenville—Thousand Islands and Rideau Lakes. It does show how disconnected the Prime Minister really is with average Canadians. Average Canadians, at least half of them, are $200 away from insolvency, but they had better rush out and buy that new Tesla.

We have amazing farmers in my riding, and it would be great if this bill protected them from double taxation, but it does not. They are hit by the carbon tax and the GST on top of that.

The farmers in my riding are some of the greatest stewards of the land that we have in this country. They have long been at the forefront of sustainability and innovation. The way farmers have incorporated new technologies like biofuel and robotics into their operations is very interesting. The prevalence of the use of biogas and biofuel on today's farms is particularly noteworthy. Biogas is methane that is produced with the use of anaerobic digesters on the farm. Usually manure and leftover waste like corn stalks and husks are introduced into the anaerobic digester to create methane for use on the farm; then the solid byproduct of the methane production can be used as fertilizer.

Cavendish Farms, a large potato processing operation with plants in Alberta, Ontario and the Maritimes, has reduced emissions by 50% over the last decade through the use of biogas, not because they were forced to by a nonsensical carbon tax on everything but because it made good business sense and because it was the right thing to do.

In addition to that, biodiesel can be created on the farm through high-energy waste such as vegetable oil. We know that most of the machinery on the farm will run on diesel. If farmers can meet some 20% of their diesel needs by creating biodiesel, then they are reducing emissions and helping their bottom line at the same time.

These investments in sustainability and innovation have occurred because it makes good sense for farmers, their families and businesses, not because they were threatened with taxes.

Now the Prime Minister's carbon tax is raising the cost of bringing crops to market, buying fertilizer and drying grain, which causes margins to shrink, and farmers cannot afford new investments in innovation when they are worried about that bottom line. The question still stands as to why the government is concerned with people abroad keeping more money in their pockets while it neglects people at home. The answer is clear: The Prime Minister simply needs the revenue to pay for his reckless spending, which will be paid for on the backs of everyday Canadians.

This reckless spending has come with massive deficit after massive deficit, the latest of which came in the form of the 2019 cover-up budget. In the midst of the SNC-Lavalin scandal, the Prime Minister must have sat down with the Minister of Finance to make a plan to distract Canadians from the corruption and contempt the Liberals have shown for the judicial system, which they continue to demonstrate, so the Liberals announced a budget with a $20-billion deficit and $41 billion in new distraction-spending.

We saw a large corporation, with the clock ticking, launch a full-court press lobbying campaign. The corporation got the Prime Minister's top advisers and top government officials on board. Then we saw a former attorney general who respected the rule of law and would not cave to pressure from the PMO. Then there was a convenient cabinet shuffle that saw the attorney general fired and replaced with a Montreal MP from right next door to SNC-Lavalin, one who was willing to support the government's disregard for the rule of law.

Knowing the trial of Vice-Admiral Mark Norman was soon to be in court, the Liberals released this cover-up budget. It is clear the Prime Minister was trying to cover his tracks with this budget. There is overwhelming evidence that the Liberals politically interfered in this case and tried to destroy a decorated military officer, the vice-chief of the defence staff, Vice-Admiral Mark Norman. The prosecution made clear that the documents the Prime Minister and the Liberals were fighting to keep secret were the very documents that caused the charges to be dropped. This fact strongly suggests the government was deliberately withholding and suppressing documents to prolong the politically motivated attack on the vice-admiral.

From withholding documents that would have exonerated the vice-admiral to using code names in emails to having government lawyers coach witnesses, the interference and the lengths to which the government was willing to go were very clear. It is no wonder the government needed to rack up record spending and record deficits to distract Canadians.

If my memory serves me correctly, 2019 was supposed to be the year the budget would balance itself, like so many babies on the campaign tour that the Prime Minister is now on. In 2015 he said, “I am looking straight at Canadians and being honest the way I always have. We said we are committed to balanced budgets, and we are. We will balance that budget in 2019”.

That could not be further from the truth. The free-spending Prime Minister's and finance minister's own finance department documents show the budget will not be balanced until 2040. What they are engaged in is nothing short of intergenerational theft.

It is shameful. The government spent $50 million to impress a celebrity on Twitter, gave $10.5 million to a convicted terrorist who murdered U.S. Army Sergeant Chris Speer, and the Prime Minister is willing to raise taxes on everyday Canadians to pay for it.

While Bill S-6, an act to create a tax convention between Canada and the Republic of Madagascar for the purpose of avoiding double taxation and the prevention of fiscal evasion with respect to income taxes is a solid measure, the real issue is that the government has neglected to take the same measures on double taxation here at home. Canadians should not have to pay for the Prime Minister's reckless spending through raised taxes and double taxation for generations to come.

The Prime Minister advertised that he would balance the budget in 2019. As Canadians have learned over the last three and a half years, the current Prime Minister is just not as advertised.

[Steven Blaney, Conservative, Bellechasse—Les Etchemins—Lévis, QC]

Mr. Speaker, before I begin, I want to let you know that I will be sharing my time with the member for Leeds—Grenville—Thousand Islands and Rideau Lakes.

It is always a privilege to rise in the House and talk about matters of state. That is all the more true today as the end of the parliamentary session draws near. We have just a few weeks to go until the summer recess, and there is going to be an election this fall. With that in mind, I would like to express my support for Bill S-6, an act to implement a tax convention between Madagascar and Canada for the avoidance of double taxation and the prevention of fiscal evasion, as my colleague opposite just explained.

As a number of members have said today, we already have 93 such agreements, some of which were signed by our government before 2015 and all of which are meant to prevent tax evasion. I want to emphasize that tax evasion is a scourge that prevents the government from collecting monies owed, which it uses to provide services to Canadians.

Of course, the important thing is that there be trust between two countries. It is the reason why we are supporting the bill. Trust between the public and the government is equally important, but it has been shaken. It has been shaken because, as we are about to sign an agreement with Madagascar, we have to face the fact that Canada has its own major challenges with tax evasion.

For example, in an article published by the Journal de Montréal, Guillaume St-Pierre said that the Canadian treasury is losing up to $3 billion each year in unpaid taxes because wealthy Canadians are hiding money in tax havens.

A Canada Revenue Agency study revealed that Canada is losing significant tax revenue to tax evaders. These people use complex schemes to hide taxable income abroad. The $3-billion figure could be just the tip of the iceberg. It has been suggested that companies or individuals who evade or avoid taxes could owe as much as $17 billion in unpaid taxes.

Our system already has certain weaknesses. It is important that Canadians pay their fair share of taxes. This week, we learned that British Columbia also has challenges with money laundering, which is pouring huge amounts of money into B.C.'s real estate market. Several billions of dollars have been injected into the real estate market.

When the time comes to meet a need as fundamental as housing, the average Canadian who pays his taxes must turn to the real estate market, where he is in competition with unknown sources of money.

We support Bill S-6, but the trust between Canadians and the government has been undermined at a time when we are headed towards an election. I would like to remind those listening that, on taxation, which is the issue we are discussing today, the Liberal government looked us in the eye and promised that by now, so in 2019, there would be no deficit because the budget would be balanced.

Why is this important?

It is important to balance the budget, because a period of relative economic prosperity is the perfect time to generate revenue and pay down the deficit so we can get money flowing in the event of an economic crisis, in order to stimulate and support the economy. That is what our Conservative government did.

The difference between what is happening now and what we went through is that we were faced with an economic crisis. The Conservative government did three things: we paid down debt, stimulated the economy in a period of economic crisis and balanced the budget.

The Liberal government's four-year term is almost over, and we have yet to see the government taking any of these measures. In fact, it has done the opposite and plunged us into a bottomless deficit pit.

Writing about the 2019 budget for the Journal de Montréal, Michel Girard mentioned the $71-billion deficit and called the budget blatant vote buying. He wrote:

True to form, the Trudeau government is spending like there's no tomorrow. That is why, for the fourth time in a row, it's kicking off the new fiscal year with a colossal deficit.

I mentioned trust, and members will recall that we were promised a balanced budget and modest deficits.

Michel Girard goes on to say:

How big will it be this time? Nearly $20 billion, including a “small” $3-billion cushion.

Adding it all up, since [this Prime Minister and the Liberals] came to power, they have dug a massive $71-billion hole with four successive huge deficits.

As a result, [at a time of relative economic prosperity, under the Liberals' watch] the net federal debt has skyrocketed by $100 billion.

Where is that $100 billion going? Is it being invested in families, in infrastructure or in the fight against climate change?

Most of the Liberal government's spending is the result of direct program expenses, particularly expenses associated with the federal government's departments, agencies and Crown corporations.

What concrete benefits are there for taxpayers? Most of that $100-billion deficit goes to the departments. Basically, it goes into bureaucracy, unfortunately.

Direct program expenses have skyrocketed by $30 billion. Who is footing the bill? Ordinary Canadians are. Since the Liberals came to power in 2015, government revenues have increased by $43 billion. Money does not grow on trees. The Liberals are taking that money out of taxpayers' pockets, the same taxpayers who have recently been burdened with a carbon tax whose effects are still unknown.

Such is the government's record. It has lost the trust of the people.

It is okay for the government to sign partnerships with Madagascar, as it has done in 93 other cases, but it is not okay for the government to break its word.

I was saying that the Conservatives restored budgetary balance and that we invested during the economic crisis and paid down the debt. The Liberals spend left and right with no real result. I just explained today how this money went to the bureaucracy and taxpayers are the ones paying an extra $45 billion. Unfortunately, that is not all. This deficit includes measures that taxpayers will not benefit from but will have to pay for. For example, the Parliamentary Budget Officer told us that the government paid $4.5 billion for a pipeline. Taxpayer money is being used to pay an expense that will not even help Canadian energy access the market at a fair price.

I see that my time is running out. I will simply say that it is important that there be trust between countries, as is the case between Canada and Madagascar in this agreement, but the trust between the Canadian public and the Liberal government has been broken.

[Greg Fergus, Liberal, Hull—Aylmer, QC]

Mr. Speaker, I thank my colleague for her question, but I would like to set the record straight. The title of Bill S-6 being discussed today is very clear. It is 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. It is not unlike the bills we adopted to implement the 93 other agreements we concluded with other countries. It features the same measures.

There are indeed measures for avoiding double taxation, but there are also measures meant to reassure the public and to make transactions more transparent. The bill connects the Canada Revenue Agency and Madagascar's agency to ensure that there is no tax evasion by Canadians working in Madagascar or vice versa, by the people of Madagascar working here in Canada.

[Karine Trudel, NDP, Jonquière, QC]

Mr. Speaker, I listened carefully to my colleague's speech. The NDP will support Bill S-6. Sadly, however, it includes no provision to combat tax evasion. Its title is misleading. This treaty seeks to avoid double taxation between states; it does not directly address tax evasion.

I have a straightforward question for my colleague. Why do he and his government keep misleading Canadians with a bill like this, which clearly includes no provision to deal with tax evasion?

[Greg Fergus, Liberal, Parliamentary Secretary to the President of the Treasury Board and Minister of Digital Government]

Mr. Speaker, I am pleased to be participating in this debate on Senate Bill S-6 in my new role.

I would like to start by saluting my colleague opposite for his fine speech on this bill. I will continue in the same vein and express my support for this bill.

Until just recently, I was a member of the Standing Committee on Finance. I sat on the committee for nearly three years, and I absolutely loved it. We got to examine all the issues that fall to the federal government, including all bills related to taxation authority, and review our government's finances. One of the last studies I took part in was about Bill S-6, 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. It is part of our government's agenda for ensuring tax fairness and a fair tax system.

Before I get into the details of the legislation, I would first like to underscore the fact that this is not only part of this government's tax fairness agenda, but this also places itself within a whole framework of what we are trying to achieve to help Canadians who are trying to keep their taxes low, including small businesses as well as for middle-class families.

When our government took office three and a half years ago, we made a commitment to invest in growth and we made it while upholding the principle of fairness for all taxpayers. This proposed legislation goes a long way toward that end.

A fair tax system is key to ensuring that the benefits of a growing economy accrue to all and are felt by more and more people, especially people with good, well-paying jobs for the middle class and for everyone who works hard to join it.

I would like to remind hon. members that one of the first things our government did was lower taxes on the middle class and raise them for the wealthiest 1%. Over nine million Canadians benefited from that measure. That really fills me with pride. All members can take pleasure in knowing that nine million Canadian families enjoy a much lighter tax burden today.

After the middle-class tax cut, we took steps to replace the old system of child benefits with the Canada child benefit. I take pride in that measure because it fulfilled an election promise. The leader of the Liberal Party of Canada made that promise in my riding, Hull—Aylmer, surrounded by middle-class families and families hoping to join them. These people work hard to build a stable family life.

It is one of the biggest promises we have ever made, and the result is that 300,000 children were lifted out of poverty in Canada. That is remarkable.

I have been involved in federal politics for a long time now. I started here, in 1988, as a page in the House of Commons. I remember there was a debate that year called “campaign 2000”. The idea was to eliminate child poverty by the year 2000.

We made that commitment in 1988. Every single government since has made it too. However, it was not until 2015, when the current Liberal government was elected, that we were able to accomplish great things in that area. We cut the child poverty rate by a third, which is remarkable, and we did it in one fell swoop. It was one of the most important social programs—if not the most important—to have ever been implemented in Canadian history.

I would now like to return to the bill on the convention between Canada and the Republic of Madagascar. As I said earlier, I am on the Standing Committee on Finance; we examined the provisions of the bill and we unanimously voted to support this bill without amendment. I am very proud that we have now reached the stage where it is up to the House of Commons to approve it.

I know that this is not something that we generally do when we introduce a bill, but as a former member of the Standing Committee on Finance, it is very important for me to review and explain the five major clauses of the bill without getting into too much detail.

First, this bill sets the maximum withholding tax rate on dividends at 5%. That is important, particularly if the beneficial owner is a company that controls at least 25% of the voting power in the company paying the dividends. It sets the maximum withholding tax rate at 15% in all other cases. The first provision is consistent with other double taxation treaties that Canada has with a number of other countries in the world.

Second, the bill sets the maximum withholding tax rate on interest at 10% and eliminates withholding taxes when interest is paid in respect of a loan made, guaranteed or insured by a public agency or the central bank of one of the states or when the beneficial owner of the interest operates exclusively to administer or provide benefits under one or more pension, retirement or employee benefits plans, subject to certain other conditions. As I said, that is completely normal. That is something we do in the 93 other double taxation treaties that Canada has with other countries.

The third element of this double taxation treaty sets the minimum withholding rate of 10% of the gross amount of royalties and further provides for the withholding tax on certain royalties. This is particularly important, especially for people who might be involved in companies such as in the mining sector.

As members know, Canada is a worldwide leader with respect to investment in mining companies and in doing these investments around the world. It is very important for Canadians who are working for these companies in these countries to have this opportunity to participate and be protected by these taxation agreements.

The fourth element includes a provision to avoid potential double taxation that can arise in respect of the capital gains that an individual realizes on the deemed disposition of property upon immigration between two states, in this case between Canada and Madagascar.

This proposed bill will benefit Canadians by boosting our exports abroad, making it easier for Canadians to take part in these activities. In doing so, Canadians will know they are protected by these measures on double taxation.

Tax fairness is as important to Canadians as it is to our government's plan for economic growth. It is very important that Canadians know their hard work will be rewarded with greater opportunities and a fair chance of success. They need to know that their fair chance of success and opportunities are being protected and that their efforts will not end up being for not when they are caught in between differential taxation treaties between two different countries.

The legislation before us today will build on Canada's extensive network of income tax treaties. As I mentioned earlier, we have 93 comprehensive tax treaties that are currently in force with countries around the world. Canada's tax treaties are a part of a larger global network of approximately 3,000 tax treaties between nations worldwide. Therefore, we have 93 of 3,000 treaties. We have been doing quite well in ensuring we are protecting Canadians, their investments and efforts abroad.

This network of tax treaties is really fundamental to economic growth, not only for Canada but for many countries. It is fundamental to our trade and investment. At the end of the day, we can talk about companies but we really are talking about people. We are talking about how people are putting their creative efforts into creating economic opportunities through entrepreneurial opportunities that present themselves. This gives them that opportunity to ensure they are fairly taxed and their efforts are protected.

By eliminating double taxation, these treaties provide the certainty which Canadians need to support open and advanced economic opportunities and encourage our friends in our countries, in this case Madagascar, to support open and advanced economies as well. They permit the exchange of information needed to prevent international tax fraud and tax evasion.

From what I have gathered in listening to the speeches presented in the House today and with the support of all major political parties for this treaty and others like it, we are really creating a whole network of opportunity for Canadians to ensure they can take their economic activities abroad. Yes, we want investment here and yes, it is important, but we also have to ensure that we have equipped Canadians with the opportunity to go abroad, to find and create opportunities. This is not only be good for them individually, but also good for Canada in creating more international trade opportunities. I dare say if it is done in the right conditions, there are certainly great economic opportunities for the countries in which we decide to put our entrepreneurial know-how to work.

Bilateral double tax conventions are also fundamental to eliminating tax barriers to trade and investment between two countries. They achieve this purpose in a number of ways.

First, tax treaties provide greater certainty to taxpayers regarding their potential liability to tax in the other country.

Second, they allocate taxing rights between the two jurisdictions, thus eliminating double taxation.

Third, treaties like this one reduce the risk of burdensome taxation that may arise because of excessive withholding taxes.

Fourth, they ensure that taxpayers will not be subject to discriminatory taxation in the other country.

Fifth, tax treaties authorize the Canada Revenue Agency and its foreign counterpart to exchange tax information for the purpose of preventing tax evasion and tax fraud.

Last, tax treaties give jurisdictions a dispute resolution mechanism.

All of these objectives are important, and this bill will enable us to achieve them.

By updating our tax relationship with Madagascar, we can strengthen trade and investment between our two countries. By doing so, we are showing the world that Canada is an outstanding place to invest and to do business in and, more important, we are creating stability for Canadians to invest and do business outside of our country. We do this because we know that Canada's economic success rests on the hard of Canadians but also on the strong relationships that inform direct investment.

I would like to draw the attention of the House to the importance of signing such tax treaties.

Canada has 93 tax treaties with 93 countries around the world. These treaties are part of our government's efforts to ensure Canada's economic well-being. Since budget 2016, our government increased the Canada Revenue Agency's resources and funding in order to strengthen its ability to crack down on tax evasion and tax avoidance. The CRA's compliance programs now help them to better target those posing the highest risk of tax avoidance.

These efforts are producing tangible results for Canadians. Through the new system in place, our government can monitor international electronic funds transfers of $10,000 or more that enter or leave the country. This represents over one million transactions per month. Monitoring these transfers helps us better assess the risk of individuals and companies committing unfair tax avoidance.

In closing, by increasing the number of tax treaties we have with our partners, the Government of Canada is helping to create favourable conditions for long-term economic growth that will help strengthen Canada's middle class and support those working hard to join it. The bill we are introducing today is an important step towards achieving that goal.

I encourage all my hon. colleagues to support this bill. That concludes my speech. I thank my colleagues for their attention and hope to have the unanimous support of the House to pass this legislation.

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

Mr. Speaker, it is always good to rise in the House, and as I have announced I will not be running in the next election, every time I rise in the House, I am still overwhelmed with not just the beauty of the chamber, but also the great responsibility I have had from the people of Battle River—Crowfoot in being entrusted with bringing their voices to Ottawa.

Today we rise to support Bill S-6, an act to implement a convention between Canada and the Republic of Madagascar that has the objective of eliminating double taxation and preventing tax evasion. Tax treaties of this nature meet this objective through the sharing of information between signatory countries.

We know that for governments to build strong economies at home, it is important that they look at a number of very important subjects. All three or four of the points that I want to make today deal with having a strong economy at home. They deal with making sure that jobs stay here at home, making sure that our young people are not travelling overseas necessarily to work but can find jobs here so that we can prosper here at home, and making sure that Canadians who invest abroad or find work abroad will have a better opportunity to prosper there.

There are some very important conditions that have to be laid out in order to find that prosperity and allow those jobs to be created. We know in the Conservative Party know that one of the vitally important aspects of securing a strong economy and creating jobs is trade. We are an exporting country. Canada, whether it is resources or agriculture, exports more than what we use at home. We are a vast country. Our geography and land mass make us a country of amazing opportunity. It is one of the largest countries in land mass in the world.

However, compared to many other countries, our population base is fairly small. We have only 35 or 36 million people. How do we guarantee that we will be able to prosper in spite of having a small population base? One way is through trade, through making sure that our resources and our agriculture can be sold and marketed around the world.

I live in a fairly rural riding in Alberta, a province whose economy has been hurt over the last four or five or six years in a remarkable way. In my riding, we have many different industries and many different sectors of the economy: gas and oil, resources, coal. We are rich in resources in Alberta, and my riding is also very strong in agriculture.

With all of these, we have a high level of exportation of our products. In order to have a free trade agreement in South America, we realized that people there had a desire to secure a safe food supply and were looking to Canada to provide grains, oilseeds, pulse crops, and other agricultural products, including beef and pork. Much of the food stock for the world is created in Canada, and much of it in Alberta.

We realized that we want to have free trade agreements with many countries, and if we do not have a free trade agreement with a country, we still want to have some kind of opportunity to trade with that country.

We do not have a free trade agreement with China, but we still carry on a great amount of trade with China. However, always, agreements enhance our trade. Likewise, agreements on taxes will enhance it as well.

Regarding our agricultural products, right now we are really feeling the pinch with canola. We are feeling the pinch, with one of our largest markets, China, basically stopping our canola from coming into that country. We believe that this is unfair and ungrounded. We have no doubt that this is not about food safety. It is not about the product. As I have said, we have the safest, best product in the world. However, we do not have a free trade agreement with China. Maybe when we see what is happening, we understand why we do not have a free trade agreement with China.

Right now, our canola farmers are really feeling the pinch. Indeed, at this time of year, in the spring, when our crops are being planted, I am getting calls to my office asking me if I am expecting the market to open up. They are asking whether they should be planting canola or cutting way back, although their rotation does not allow them to do that. We are hearing all the concerns coming from agriculture with regard to trade.

The Conservative government had a free trade agreement with Europe. We were pretty well ready to sign onto the TPP. It was not ratified, but everything was laid out. We wanted to get our product into these countries so that we could prosper at home.

However, it is not all about trade. If we want a strong economy, we also have to recognize that we have to have training. We have to have a skilled workforce. We have to be able to invest so that when times get tough, if we cannot compete with Mexico on wages to manufacture, we can compete with the skill sets we have here in Canada. Therefore, we invested greatly in training young people and enhancing the skill sets our workforce had already. This was a driving force in our Conservative government in the last 10 years we governed. We put money into innovation and training.

It was trade, training and red tape. How are we going to have job creation? How are we going to enhance it? How are we going to attract businesses to start up in Alberta, or wherever in Canada, if the red tape to get that business going is a mile long?

We brought forward a red tape reduction strategy to make it easier for businesses, investors and job creators to create those jobs right here at home. That job is unending. With more government and more bureaucracy, the tendency is to see red tape grow. One of the strong things we brought forward was making sure that we were able to cut red tape, and we still need to do it. Therefore, I am pleased that Premier Kenney is committed to the reduction of red tape. There is a level of optimism we have not seen in Alberta for many years. I would also say that our government has always and would continue to look at ways to enhance job creation through the cutting of the red tape burden.

The fourth and final aspect, besides trade, training and red tape, is taxes. If we are not a country that can attract manufacturing and investment because our tax regime is so out of whack, then we cannot expect to see our economy grow. We cannot expect that people will have confidence in investing their capital here in Canada. In Alberta, because of regulation, red tape and high taxes, including the carbon tax, we saw between $80 billion and $100 billion in foreign investment capital flee, and with that went jobs and hope for a lot of young Canadians and Albertans.

To have a strong economy, we have to make sure that we have a strong tax system that has integrity but is also not overly burdensome. When the Conservatives came to power, and when the world fell into a global recession, we moved our corporate rate from 22% to 15%, because we knew that business and manufacturing would flee to the United States or Mexico, predominantly, and other places if we did not compete with a tax structure or a tax rate that would attract investors to Canada.

A lot is about taxes. A lot of what we want to do in building a strong economy is in regard to the tax structure. Tax levels make a large impact on investment, and we have seen that.

Canada not only mines and extracts resources around the world, it invests around the world. We have people who prosper and earn an income from foreign investment. We want to be sure that if we are allowing that, we avoid double taxation. If taxation is important, who, as an investor, would want double taxation, where a country, Madagascar, in this case, would tax us, and then Canada would when we came back home? How much investment do members think would take place in those countries, and here, if we allowed double taxation?

Predominantly where we have massive investment, we have double taxation treaties. A tax treaty contains rules regarding the circumstances under which a signatory country may collect certain taxes on income so that when investors invest, they are aware. They look at the treaty and say that this is what we have to pay, this is what we do not have to pay and this is what we will pay back home. It is a single tax base. In the absence of a tax treaty, the income of a Canadian citizen abroad would be hit on both sides, and investors would flee.

For that reason, we come to this today. This debate, I would say, is the meat and potatoes of what is going on here in Parliament. This is not a day when we are talking about the issues that are really important to Canadians. I do not know if I have had a call to my office in Camrose about Madagascar. My constituents expect that we are taking care of business so that they can prosper, whether on the farm, in investing or in the oil patch.

Most of the tax treaties to which Canada is partnered follow the Model Tax Convention. This is a tax treaty or convention that is given as a model by the OECD, the Organisation for Economic Co-operation and Development. This was done in 1963, and subsequent to that, there have been a number of occasions when it has been revised. Currently, Canada is signatory to 93 agreements. This is not something new. We are not stepping out into uncharted territory. This is common.

As I said at the outset, I fully support the intent of Bill S-6, but I am particularly concerned about the tax evasion side. We have heard much from all parties today about tax evasion and the ability of the Canada Revenue Agency to consistently enforce compliance rules and collect taxes.

I do not like high taxes. I look for ways to cut taxes. I formerly served as the minister of state for finance. We looked at every opportunity we could to drive this economy by lowering taxes and keeping more money in the pockets of Canadians. However, tax evasion is different. I think every Canadian expects that there is a certain level of taxes that they are required and willing to pay, not just by law but in order to have the services we have here in Canada.

From report 7 of the 2018 fall reports of the Auditor General of Canada, on compliance activities of the Canada Revenue Agency, the public accounts committee, which I have had the privilege of chairing, learned the following: “Most taxpayers are individuals with Canadian employment income. We found that the Agency requested information from these taxpayers more quickly,” and this is the important part, “and gave less time to respond, than it did with other taxpayers, such as international and large businesses, and taxpayers with offshore transactions.”

The Auditor General went on:

For example, if the Agency asked an individual to provide a receipt to support a claimed expense and the taxpayer did not provide the receipt within 90 days, the Agency would automatically disallow the expense as an eligible income tax deduction. The Agency would assess the taxpayer’s income tax return on the basis of the information it had available and would notify the taxpayer of the taxes due.

In other words, average middle-income Canadians are not cut much slack when it comes to their domestic income here in Canada.

Comparatively, the Auditor General's report states:

For other taxpayers, such as those with offshore transactions, we found that the time frame to provide information was sometimes extended for months or even years. For example, banks and foreign countries could take months to provide information on the taxpayer’s offshore transactions to the Agency or the taxpayer.

It continues, and this is important:

Sometimes the Agency did not obtain information at all, and the file was closed without any taxes assessed.

We can see that these agreements are vital. These agreements enhance what the CRA is given. If people understand the treaty, they know what to claim, they know what to put forward and they know what to show CRA. They feel less vulnerable to the Canada Revenue Agency and can also invest with greater confidence.

The Auditor General's office said that “over the past five years...the Agency took, on average, more than a year and a half to complete audits of offshore transactions.”

These agreements speed that up. The fall 2018 report was not the first time the Auditor General noted how long it took the agency to enforce compliance. The Auditor General further stated:

As we noted in the 2013 Spring Report of the Auditor General of Canada, Chapter 3, Status Report on Collecting Tax Debts—Canada Revenue Agency, the longer it took the Agency to enforce compliance, the less likely it could collect the taxes due. This was especially true for taxpayers with offshore assets, who may have been inclined to liquidate assets or transfer funds to make it more difficult for the Agency to obtain information and collect taxes due. On the other hand, for individuals and domestic businesses, the Agency had a better likelihood of collection by garnishing wages and seizing assets.

To add insult to injury, the Auditor General found that the Canada Revenue Agency did not proactively consider waiving penalties and interest consistently for all taxpayers. Again, the Auditor General stated:

We found that the Agency offered to waive interest and penalties for taxpayers in some compliance activities but not others—even when the Agency had caused the delays.

The inconsistent application of relief for taxpayers contradicts the Taxpayer Bill of Rights, according to the Auditor General. The report states:

[The] Taxpayer Bill of Rights gives all taxpayers the right to have the law applied consistently. It also gives all taxpayers the right to receive entitlements, such as benefits, credits, and refunds, and to pay no more and no less than what is required by law.

Although it may not quite be unanimous, I am pleased that most in this House, as far as I can see, see the importance of these kinds of meat and potatoes regulations and bills. Coming into compliance and making sure that Canadian investors are not vulnerable or put on an uneven playing field is imperative if we are going to increase foreign investment coming to our country and our investment in those countries, all of which will help build the economy, help Canada prosper and help us create jobs.

[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.

[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.

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

Madam Speaker, I have to come back to the member for Calgary Shepard, because having been one of the only members in the House of Commons who has actually been ankle deep in oil, having worked at one of the closed oil refineries, I have to state, for the record, that the Conservatives are not only incoherent and illiterate on energy policy and renewable energy policy, but the example the member has just given shows how completely out of touch the Conservatives are when it comes to the basic economics of exporting raw bitumen.

The reality is that the Conservatives love to cosy up to foreign-owned oil companies, but the idea that we would ship Canadian jobs overseas and contribute to a massive increase in greenhouse gas emissions makes no sense at all. It makes no sense to people right across the country, including the people who are suffering from the record levels of flooding we are seeing in Ontario, Quebec and New Brunswick. In British Columbia, we are already seeing the start of the forest fire season. In the month of May, there are now 15 out-of-control forest fires in British Columbia.

Over the last three years, we have seen our skies covered with smoke in the Lower Mainland and on southern Vancouver Island because of the catastrophic number of forest fires. In the last three years, in the month of August, the air has been unbreathable. Therefore, for Conservatives to say that there is no problem at all, let us just ship raw bitumen overseas, and for the Liberals to support them, shows the degree of irresponsibility we have in the House of Commons. That is something I think Canadians will want to change on October 21.

That being said, I will return to Bill S-6. We support it on this side of the House. We support it because it is the one initiative the Liberals have managed to put forward that does not increase tax havens, money laundering and the legalized tax evasion that is costing this country so much.

There is an idea that this massive tax evasion, started by the Conservatives and continued by the Liberals, with the largest and most profitable Canadian corporations taking their money overseas and not paying taxes on it, is something that is victimless. Somehow it does not hurt Canadians in any way, shape or form. In this corner of the House, we in the NDP caucus can only say that this is simply not true.

We have underfunding of our health care system and the inability of either the former Conservative government or the current Liberal government to bring in pharmacare. One in five Canadians are struggling to pay for their medication. There are Canadians, literally outside the House of Commons, like Jim, whom I have mentioned numerous times, who has to beg on the bridge between the Chateau Laurier and the East Block because of the $580 a month he has to pay for medication that he cannot cover any other way.

The fact is, we have tens of billions of dollars that should be paid as part of the fair share of Canada's largest and most profitable corporations. Tens of billions of dollars simply evaporate away. They are taken to overseas tax havens and sit in corporate bank accounts, because we do not have a fair and just tax system, which is something that hurts so many Canadians. It hurts Canadians who cannot access health care. It hurts younger Canadians who are forced to go into debt on a scale of tens of thousands of dollars, sometimes hundreds of thousands of dollars, just to go to college, university or trade school. They have to borrow the money because of the punitive fees that are charged for college and university.

At the same time, Canada's corporate sector is just laughing. I am not talking about Loblaws and the $12 million the Liberals doled out to Canada's richest billionaire, which is unbelievable. It is the fact that so many Canadian corporations do not pay their fair share of taxes because of the very intricate network of overseas tax havens, which the Conservatives started and the Liberals promote. That is what causes so much challenge for the average Canadian family, so much so that the average Canadian family is now the most indebted in the industrialized world and the most indebted in Canadian history. That was on the Liberals' watch during the last four years.

We have seen family debt load skyrocket because people are having to pay for medication and are having to struggle to save money because of college and university, because we simply allow that money to go overseas. Instead of having a fair tax system, Canadians are indebting themselves to a record extent, worse than any other country in the industrialized world. One would think the Liberals would say that it is profoundly unfair, that maybe they should do something about this intricate network of tax havens, that they should do something to force the corporate sector to pay its fair share. However, instead, they double down.

They have signed a number of arrangements with overseas tax havens, some of the most notorious in the country. The ones the Conservatives had not yet signed, the Liberals took up, such as the Cook Islands, Grenada, Antigua and Barbuda, notorious tax havens where people can put their money, report it and pay zero per cent income tax. Canadian authorities then say that since they paid zero per cent in Antigua, the Cook Islands or Grenada, they do not have to pay a cent in Canada. It is legalized tax evasion to an unbelievable extent. That is why many of the chartered accountancy firms that specialize in tax avoidance, as they would say, though I call it tax evasion, trumpet the fact that Canada now has the lowest effective tax rate in the industrialized world. It is at 9% for the corporate sector, because it can take so much money overseas.

Single parents, fathers or mothers, struggling to raise their children are indebted to an unbelievable extent but are still paying their taxes, because they believe, as most Canadians believe, that Canadians should pay their fair share of taxes, that we all contribute to this project called Canada, that we all contribute to this country. Canadians struggling to make sure that they are keeping up to date and paying their income taxes like good Canadians can take no comfort from what is massive and unbelievable tax evasion. We have the lowest level of corporate tax in the industrialized world and the highest level of family debt. Yes, those two things are related.

It is not just that. A few minutes ago, the finance critic, the member for Sherbrooke, stood to present a bill that should have been presented four years ago, if the Liberals had kept any of their promises, and 10 years ago if the Conservatives had been truthful to their ideology. It would ensure that the massive web giants, corporations like Facebook and Google, outside the country, which suck advertising dollars and revenue out of Canada, should pay some taxes. What a concept. How radical for these massive, multi-billion dollar companies to actually pay some taxes in Canada.

Conservatives said that they did not have to do it. When the Liberals came to power, they talked about a fair tax system but did nothing to address that. Therefore, as usual, as with medicare and in so many other cases, it is the NDP that is putting forward a plan in the House of Commons to ensure that these massive, multi-billion dollar companies, with enormous profits, actually pay some tax in Canada.

It is not just that, as we know. We have also seen reports coming out of British Columbia on the extent to which Liberal policies have contributed to amplifying, to an extraordinary extent, money laundering in Canada. The report, just last week, from the expert panel on money laundering, shows that under Liberal policies, money laundering has reached a critical stage: $47 billion in illegal funds were laundered in Canada last year, according to the expert panel. This is the product of criminal activities. This is the product of illegal activities, yet the government refuses to do anything significant to address the massive extent of money laundering.

This is not a victimless crime. The impact on just one sector, the affordable housing market in the Lower Mainland, the area I represent in the House of Commons, with the escalation in prices, now means that so many families in the Lower Mainland are struggling to keep a roof over their heads, or they have to live on the streets or move away.

I cannot tell the House the extent of suffering that comes from allowing this money laundering to continue without any due regard for cracking down or shutting it down. Honest Canadians, the ones who pay their taxes, are the ones who are most badly hurt by what has now been a couple of decades of complete negligence by Conservative and Liberal governments in this regard.

Last year, $47 billion of illegal money were laundered in Canada. The Liberals do nothing. The Conservatives do not care. However, this has a profound impact on average Canadians, not just on housing prices but on a whole range of activities.

When the finance committee was discussing measures that could have curbed money laundering, the NDP's proposal, which is one of the first recommendations by the expert panel, was to have public accessibility to beneficial ownership registries to ensure we knew how to track the money.

However, the old parties, the parties that have contributed to this system, a system that has been so detrimental for the average Canadian, said no. Members speak with seniors in their ridings. They know how seniors are struggling to make ends meet. Members see young Canadians, who are trying to acquire the skills to contribute to the country, forced to go into debt, in the tens of thousands of dollars. Families are struggling to keep affordable homes over their heads. All Canadians are struggling to pay for their medications. This is all a result of policies that put so much, tens of billions of dollars, in the hands of the very wealthy at the cost of the quality of life of Canadians right across the country.

When we talk about money laundering, the beneficial ownership registry and the NDP's proposal that it be publicly accessible, both of the old parties said no. They did not want to have that. They did not want to have that sunlight that would bring transparency, which Canadians want. It would allow us to combat what has become Canada's black eye around the world. We are now renowned as a haven for money laundering.

The Guardian newspaper talked about Canada being a haven for “snow washing”. It is a now a term that is used around the world to describe the systematic use of money laundering in Canada. It can be done through buying real estate. It can be with a whole range of things. It can be done with impunity because the Liberals have refused to fund the resources that would allow our over-strapped, overworked agencies to combat it. The Liberals and the Conservatives refuse to have a publicly accessible beneficial ownership registry that would allow all of us to track the money.

This is the legacy of the Liberal government.

Let us just take a moment to look at what we have after four years of Liberals in power. They could have done so much to help the quality of life of the average Canadian, to address seniors who eat dog and cat food because that is all they can afford if they want to keep a roof over their head, and often even that is not enough. What about people like Jim who have to beg to get enough money for the medication their doctors have prescribed, medications that are absolutely necessary for their health? What have they done to combat the underfunding of our health care system and the skyrocketing tuition fees that are leading so many families to not even be able to attend university, or college or trade school, at the same time as we have a crisis and shortage of trained and skilled workers in so many sectors?

All of this dysfunction has contributed to the highest level of family debt in the industrialized world. It all comes from the basis of having a profoundly unfair tax system, created by Conservatives and Liberals to benefit their buddies on Bay Street, a system that allows billionaires to get away with not paying taxes. In addition, they get grants that are paid for by those regular taxpayers who do pay their taxes. We saw with the $12 million the Liberal government handed to Loblaws.

It is shocking that we now have created a fossilized unfair tax system that provides us with the lowest effective tax rate in the industrialized world and ensures that some of the largest web giants on the planet do not have to pay a cent of tax in Canada. Even as they are running into bankruptcy, a whole network of community newspapers and local television and radio stations, sucking that advertising out of the country, they do not have to put anything back. It is a legalized tax evasion.

At the same time, we now know that $47 billion, and that is a conservative estimate from the expert panel on money laundering, have been laundered in the country in the past year, contributing to the rise of completely unaffordable housing prices for families that are struggling to keep a roof over their heads and contributing in so many ways to deterioration in the quality of life. Things definitely need to change.

How can we change that?

The NDP has already proposed putting in place a fair and equitable tax system. We are asking that Canadian corporations pay their fair share of taxes. We do not think that is too much to ask. We are not asking that they pay large sums, like 50% or 60% of their profits. However, an effective rate of 9% for corporations is absolutely ridiculous when we consider that the tax rate for individuals is higher than that. Some people do not have the means to be taxed at that rate, but they contribute to our country. We need to have a system that is fair. For that, the effective rate for corporations has to be greater than 9%.

Secondly, web giants have not been paying any tax in Canada for years. They make billions in profits and pay absolutely nothing. These web giants should pay their fair share of tax. If the NDP is elected to government on October 21, our party will get to work immediately. We will not allow this to continue. Instead of giving billions of dollars in gifts to web giants, we will lower tuition for students who want to go to CEGEP, learn a trade or attend university.

With respect to money laundering, our institutions, such as the RCMP, must have the resources required to deal with these crimes. They are not victimless crimes. This is a situation that has rather significant consequences. Eastern Canada is one of the worst regions in the world in terms of money laundering.

All these elements should be considered. All that is needed is the will to do something about it. In recent years, we have seen that the Liberals did not have the will to put in place a fair tax system. This bill is a small gesture made during four years of inaction on this file, which is extremely costly for Canadians.

In a few weeks, the Office of the Parliamentary Budget Officer is going to table a report that sheds light on this situation and all the money that is leaving the country. We are ready to examine it. Canadians will then judge the government.

[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.

As 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 dollars' worth 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.

[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.

[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.

[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?

[Joël Lightbound, Liberal, Parliamentary 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.

The House proceeded to the consideration of Bill S-6, 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, as reported (without amendment) from the committee.

Business of the House

[Bardish Chagger, Liberal, Leader of the Government in the House of Commons]

Mr. Speaker, this afternoon we will complete debate at third reading of Bill C-91, the indigenous languages act.

Tomorrow we will begin debate on the Senate amendments to bill C-55, an act to amend the Oceans Act and the Canada Petroleum Resources Act.

Next week the government will be proposing a motion to debate the rising climate emergency across Canada.

At noon on Monday, we will resume debate on Bill C-55.

On Tuesday, we will move on to Bill S-6, the Canada–Madagascar tax convention implementation act, 2018.

Wednesday shall be an allotted day.

Finally, pursuant to Standing Order 81(4), I would like to designate Tuesday, May 14, for consideration in committee of the whole of the main estimates for the Department of Justice.

In closing, mothers who provide love and guidance are present in our lives in many forms. I am thankful to the mother figures in my life. On behalf of the Prime Minister and the Government of Canada, and I am sure all members in this House, I wish all mothers a happy Mother's Day.

Finance

[Wayne Easter, Liberal, Malpeque, PE]

Mr. Speaker, I have the honour to present, in both official languages, the 29th report of the Standing Committee on Finance in relation to Bill S-6, 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. The committee has studied the bill and has agreed to report it without amendment.

While I am on my feet, I move:

That the House do now proceed to orders of the day.

[The Chair, Liberal, Wayne Easter]

Okay, I am going to rule it in order. The motion does relate to Bill S-6. The fact that we moved from the clause-by-clause examination of Bill S-6 to the letter from the committee also goes to committee business, and it doesn't necessarily have to be stated in the agenda.

The floor is yours, Mr. Sorbara.

[An hon. member]

We're on Bill S-6.

[The Chair, Liberal, Wayne Easter]

I think that's it for Bill S-6.

Mr. McGowan, today was a much easier run than yesterday.

We do have another matter that's just come up that we don't necessarily have to deal with, but to save time later.... This note has been sent to you electronically, so I'll read it. It deals with Bill C-97.

Dear Mr. Easter,

In response to your letter dated Tuesday, April 9, 2019, I would like to inform you that the Standing Committee on Citizenship and Immigration has accepted to study the subject-matter of Part 4, division 15 of Bill C-97, An Act to implement certain provisions of the budget tabled in Parliament on March 19, 2019, and other measures.

The Committee has also adopted a motion to study the subject-matter of Part 4, division 16 of the Bill and would invite the Standing Committee on Finance to consider any proposed amendments from the Standing Committee on Citizenship and Immigration, pertaining to this division, deemed to be proposed during your Committee's clause-by-clause consideration of Bill C-97.

Please find attached motions adopted by the Standing Committee on Citizenship and Immigration regarding the consideration of subject matter, Part 4, division 15 and Part 4, division 16 of the Bill.

As requested, the Committee will send the Committee's recommendation, including any suggested amendments, in both official languages no later than 4:00 p.m. on Friday, May 17, 2019.

Sincerely,

Rob Oliphant

Chair

What they're basically saying in the letter is that, beyond what we agreed in our motion to send them, they would also like to deal with the additional subject matter of part 4, division 16, of the bill, which relates, I believe, to asylum.

Are we in agreement? Do we want to say we accept their motion and the Standing Committee on Citizenship and Immigration can deal with that matter and report back to us? Are we agreed on that?

[The Chair, Liberal, Wayne Easter]

We'll call the meeting to order.

Pursuant to the order of reference of Wednesday, February 27, 2019, we are looking at Bill S-6, 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.

We have, as witnesses, Mr. McGowan, director general, tax legislation division, tax policy branch, who is no stranger to this committee; and Stephanie Smith, senior director, tax treaties, tax legislation division, tax policy branch, who has appeared before us previously as well on this particular bill.

There have been no amendments received, so we'll go to the clause-by-clause decisions.

Pursuant to Standing Order 75(1), consideration of clause 1, the short title, is postponed.

(Clauses 2 to 6 inclusive agreed to on division)

(Schedules 1 and 2 agreed to on division)

Shall the short title carry?

[The Chair, Liberal, Wayne Easter]

That's not far away.

Okay. Are there any questions on this section?

Boy, you guys get off easy.

Thank you very much, and that way you don't have to come back the next day we start on tax measures, etc.

With that, we have the Bank of Canada and the parliamentary budget officer tomorrow at 11. Then at 3:30 we have Bill S-6.

With that, thank you all.

The meeting is adjourned.

[The Chair, Liberal, Wayne Easter]

I call the meeting to order. The first item on the agenda is committee business, and then we'll move to Bill S-6.

Mr. Sorbara.

Fairness for All Canadian Taxpayers Act

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Mr. Speaker, I am glad to be joining this debate in this late evening on a Wednesday. At the outset, I am going to share a few observations about the debate so far on this Senate proposal as well as some observations about things that were said in the House.

First of all, this is a tax matter. We all remember that it was Motion No. 43, a duty of care motion, that was also put forward by the seconder of the bill in the House, the member for Calgary Rocky Ridge. At the time I spoke to it, the Canada Revenue Agency's customer service and the way it treats Canadians who are filing taxes continued to be deplorable, in my opinion. I thank the member for Calgary Rocky Ridge for having sponsored another move toward getting fair treatment for Canadians. I think this is part of it. Understanding the tax gap between what is expected to be collected and what is actually being collected is a very important matter.

Second, it was Senator Percy Downe, from Prince Edward Island, who moved this proposal in the other place. Let it be said that when Conservatives find honest Liberals, we will work with them. We will support their ideas. In fact, it is a Conservative member of Parliament who has brought this Senate proposal to the floor of this House for, I expect and I hope, swift passage.

It is interesting that it is a Senate Liberal, also someone who was kicked out of the Liberal caucus, who is pushing for greater tax fairness and more tax knowledge for fellow Canadians. Perhaps it is something to do with people who speak the truth and are interested in the truth being kicked out of that caucus.

Bill S-243 is about reporting on unpaid income taxes. The bill is quite short, but it provides an opportunity to define the tax gap. I note that at least on one other occasion, members were wondering what we are asking the CRA to do. We are asking it to disclose more information about taxes that remain unpaid. Every single year there is a discrepancy between what the government expects to collect and is able to collect and taxes that remain outstanding. That discrepancy between the two accumulates over time. I know that many Canadians are interested in knowing more about why it is accumulating and who these people are who are not paying these taxes.

I especially like the definition of the tax gap being put forward in proposed subsection 88.1(1), which is an amendment to the Canada Revenue Agency Act, because it is a simple amendment. It is very clear what type of information will be provided to the Parliamentary Budget Officer.

I have been a big believer in legislating more rules for civil servants, the bureaucracy, on how they do their work and report their work, both to Parliament and to the public. We spend far too much time in this House legislating what Canadians can do on an everyday basis, whether it is their hobbies or air travel. In general, we create a lot of rules that businesses, corporations and everyday people have to live up to. There is an expectation that they need to know what the rules are. We spend too little time legislating what the civil service does and the type of work it does on behalf of Canadians.

There is a Yiddish proverb that says, “Prayers go up and blessings come down”. It has been a prayer and a hope of mine that we will see more such private members' bills and more government bills, in fact, that would look after legislating what the civil service does and how it does its work, both in the collection of information and in the disclosure of information.

We see in this particular proposal the following:

The Minister shall provide the Parliamentary Budget Officer with the data on the tax gap collected and compiled under subsection (2) and any additional data that the Parliamentary Budget Officer considers relevant to conducting a further analysis of the tax gap.

That has been an issue in the past for the PBO. Finance Canada and other departments have been unwilling to disclose information to the PBO. I am going to allow the work they do, because often I will send emails to them, sometimes late at night, asking specific questions about budget line items. We saw that when the member for Edmonton West added up different sections of the budget tables, they did not, in fact, add up.

It is thanks to the PBO that parliamentarians such as us are able to do that work. If we have a question and we want to double-check whether our math is correct or whether we understand a concept being advocated by or pushed forward by the government, we can check with the PBO whether it is true. If it is not true, they can then double-check with the departmental officials they have connections with.

When department officials refuse to disclose information being requested from the PBO, it is a great matter of concern to parliamentarians. We rely on the PBO in a lot of ways to provide us technical information and to ensure our calculations are in fact correct. Perhaps if Finance Canada had taken advantage of the PBO's expertise, it would not have had to table a new set of fiscal tables, updating a great deal of them in the past budget document.

However, this is about the tax gap. This would provide Canadians with an ability to understand what it is over time. It is of great interest. The member for Sherbrooke mentioned in his speech that three times there had been major scandals and there had been great interest from everyday Canadians and members of the public. Different transparency and anti-corruption organizations have mentioned that such information would be of value for the public to have.

There is already a lot of information that the government makes public. This particular one, though, is something I have not seen made available on an easy-to-understand basis. The way it is being laid out in the definition of the tax gap, proposed subsection 88.1(1), offers that opportunity for Canadians both to understand what is being calculated and how it is being calculated. From then on, it would be up to parliamentarians to decide what to do with that information. More information from the civil service is always a good thing. At the end of the day, we are all hoping for greater transparency from the CRA, both on what it expects to collect and what it is actually able to collect.

That brings me back to the finance committee, the committee of the House on which I sit. It is looking at Bill S-6, a Madagascar tax treaty. I asked a question of the officials there whether they had any ability in calculating and telling us which corporations in Canada would be affected by that tax treaty and whether an analysis had been done. It was not clear to me from the answers at the time whether it was done.

Prior to Bill S-6 being proposed, a tax gap would have existed, at least in my mind it would have existed, between potential tax planning by certain corporations and individuals who would do business in Madagascar and what would happen after the ratification of Bill S-6. I was told that this information may be collected at some point by the CRA or it may not. That, again, is the tax gap between what may happen if a tax treaty is introduced or not. Aggressive tax planning does happen. It is illegal to do so in jurisdictions that do business with Canada.

Canadians will benefit greatly from the tax gap. It is perfectly reasonable to ask the Canada Revenue Agency to make the calculation. Part of the benefit will be that if it gets into the practice of collecting information and providing it to both parliamentarians and members of the public, it will also force it to start actually collecting that information after the fact. That is of great interest and great benefit. It would allow Canadians and parliamentarians to make access to information requests, to better understand the methods it is using to calculate it and to see the email transmissions among different government officials on the tax gap. It would also help us understand the conviction rate, who is being chased, whether a systemic abuse of the system is going on and whether particular tax treaties with Canada are being abused, which we should perhaps look at again.

All of this publicly available information that we do not have right now should be available right now. I am a parliamentarian who makes a lot of access to information requests and has a lot of Order Paper questions. Therefore, the disclosure of information is important, the calculation in the first place. Too often in this place, the government comes back with a response saying that it does not collect information in that particular way and therefore it cannot answer the question. This Senate proposal, from a Liberal senator, Senator Percy Downe from Prince Edward Island, will do what I have been, like I said before in the Yiddish proverb, praying for, which is more rules on civil servants and bureaucrats, less rules on everyday Canadians and a greater disclosure of information to Canadians and parliamentarians. It is a blessing that is coming down to earth.

I ask all members to heartily support the bill. It is a great proposal and it would provide greater transparency of tax information.

[The Chair, Liberal, Wayne Easter]

We'll see whether or not they have anyone.

Are we agreed on that strategy for Bill S-6?

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Sorry, Mr. Chair, but can you just repeat the last part of the amendments on Bill S-6?

[The Chair, Liberal, Wayne Easter]

I do believe those are all of the questions we have.

Mr. McGowan and Ms. Smith, thank you very much for coming and appearing as witnesses and answering our questions.

With that we will go to committee business. We don't really need to suspend because this is public as well. I think there are really three items that we have to deal with. One is whether as Bill S-6 goes forward we are going to want further witnesses. We'll have to establish the deadlines on that, with or without witnesses, and a proposal on that depending on where people want to go.

Second, and maybe we'll deal with this first, there's a budget that we need to vote on for the hearings on Bill C-82, which are already done. We had to pay for those witnesses.

Third is the chair's ruling on the February 21 meeting. I think Mr. Richards had a question on that.

Maybe we could start with the budget. The other thing I should mention is that I do believe we need to hold a subcommittee meeting as soon as possible next week. Hopefully by that time we'll know where things are at on the budget implementation act. We'll have to schedule out where we want to go through to June, I expect.

On the project, there's a request for the budget. The amount requested to do the study on Bill C-82, an act to implement a multilateral convention to implement tax treaty related measures to prevent base erosion and profit shifting, was $3,500. Do we have a motion to that effect?

That is moved by Mr. Fergus.

(Motion agreed to)

On Bill S-6, do we envisage having witnesses or not? That would make a difference. We had much the same as for Bill C-82. Do people, members, think that we will be bringing forward further witnesses on this tax treaty, similar to the case with Bill C-82 or not?

I'll give people a few minutes to think about it, because that will determine when we will have to establish deadlines.

While you're thinking about it, I'd put it this way. If there are no witnesses, we'll propose amendments by April 4, the amendment deadline. On April 9 we'll do clause-by-clause. If there are witnesses, we'll have to go to April 4 as the witness deadline. On April 9, we'll hear from witnesses and April 16 will be the amendment deadline. On April 30 we'll go to clause-by-clause. That's the difference. It's entirely up to committee.

Go ahead, Tom.

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

We, as a government, have obviously maintained our promise of entering into free trade agreements around the world. We've completed CETA and CPTPP and renegotiated USMCA. All of the countries we have trading relationships with are covered by tax conventions or multilateral tax treaties.

I would argue that it is along those lines that the Canadian economy benefits, that the investment flows between countries benefit, and that Bill S-6 is another step in that direction. Madagascar may not be a household name to all Canadians at home today, but nonetheless it is a country that we do trade with and have an investment relationship with.

Without the tax convention, how difficult would it be to undertake those trade and investment flows with a country like Madagascar?

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

My next question is with regard to Ms. Smith's allusion to the CRA's ability to collect information and how important that is to ensuring that all entities are paying their fair share of taxes. Our government has put over $1 billion in funds in the CRA to boost its services.

Recently we've had some action with regard to the Panama papers when some news came out that CRA is taking action. I think it's a good step, because we need to make sure that Canadians understand that everyone is paying their fair share of taxes to fund the services we depend on on a daily basis.

With regard to Bill S-6 and the way that multilateral organizations work in regard to transfer pricing and double taxation, how important is it that CRA be able to collect that information, use it properly and verify it?

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

In our time in Parliament in the last three years, we've also finished and completed the agreement with Taiwan, for example. It was a similar agreement allowing for flows of investment dollars to go back and forth. Certainty on taxation and investment allows corporations and individuals to decide whether to invest in Taiwan or here in Canada.

It's all on the same lines as what Bill S-6 is, if I'm not mistaken.

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

Thank you, Mr. Chair.

I want to welcome everyone to your House of Commons.

As you know, we support the principle of Bill S-6 and trade with the different countries. This agreement isn't a free trade treaty per se, but an information treaty that relaxes tax rules to provide for better trade.

This isn't new. There are 93 agreements of this nature. We know that Madagascar isn't the United States, but our trade with this part of the world is still worth over $100 million. We can only encourage this type of exchange between Canadian and Malagasy companies. We obviously want Canadian companies to live up to the honour and dignity of our country.

That said, one goal of the bill is the avoidance of fiscal evasion or, if we refer to the specific title of the bill, the “prevention of fiscal evasion with respect to taxes on income.”

The prevention of fiscal evasion is a major undertaking. All the countries in the world must make an effort to achieve this goal.

Ms. Smith, you told my colleague Mr. McLead earlier that this would provide for a more effective exchange of information among the various revenue departments. This is a step in the right direction, but it doesn't seem sufficient to prevent fiscal evasion with respect to taxes on income.

Does this bill implement or could it implement more specific measures to prevent fiscal evasion?

[Trevor McGowan]

Thank you for the question. I would be happy to.

This bill relates to a bilateral tax agreement between Canada and Madagascar. It's intended to both improve the administration of our tax system and reduce barriers to trade between two countries on a bilateral basis.

The base erosion and profit shifting project was born out of a multilateral effort to deal with global tax avoidance—the base erosion, profit shifting and moving income around. It was determined as part of that process that a number of bilateral tax treaties, such as with Madagascar.... Of course, we have them with 93 countries; this would be the 94th. Renegotiating all of those bilateral treaties would take a tremendous amount of time and effort by all of the countries involved. The multilateral instrument is itself a treaty. It serves to modify the application of existing bilateral treaties, so it can update a large number of treaties all at once by virtue of being entered into by a number of countries on a multilateral basis.

Here in Bill S-6 we have a bilateral income tax convention. The MLI in Bill C-82 affects and updates the application of Canada's existing multilateral treaty networks, as well as the networks of the other participants in the MLI.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Before I get to Bill S-6, Peter, nobody made a point of order on this side in response to your question. We welcome everything. I am all for transparency on crony capitalism when it happens, whichever government is responsible for it.

I've been listening to the Q and A so far. Was an analysis done on Canadian companies operating in Madagascar and who would stand to gain or lose from this Bill S-6 tax treaty? Was an analysis ever done by the department of that?

[Peter Fragiskatos, Liberal, London North Centre, ON]

The third bullet point has basically been dealt with.

The fourth issue I want to ask about is where you say that Bill S-6 “contains a mechanism to resolve disputes involving cases where a taxpayer may have been subjected to taxation not in accordance with the Convention”.

Does that anticipate possible disputes, or does it recognize that disputes have existed in the past and seek to provide a remedy?

[Peter Fragiskatos, Liberal, London North Centre, ON]

You also say that Bill S-6 prescribes a method for the elimination of double taxation. What's the key way it does so?

[Peter Fragiskatos, Liberal, London North Centre, ON]

I just thought I would take a stab at it, Mr. Chair.

That is appreciated.

If you can't shed any light on that, I think the record should reflect the fact that 25 meetings took place from 2011 to 2015, again under the previous government, involving SNC-Lavalin.

I thank my colleague, Mr. Fergus, for his work on that as well and for bringing that to light.

Now, perhaps we could get back to Bill S-6. I want to take my parliamentary duty seriously, so I will stay focused specifically on that. You say in your brief here that the objective of Bill S-6 is to encourage trade and investment.

There are a number of bullet points listed and in particular, in number one, you say that it “provides greater certainty to taxpayers regarding their liability to tax in the other country”.

In laypersons' terms and for those folks who are not immersed in Parliament but who are looking at this and want to know the gist of the bill, how does this improve upon the current situation?

Give me an example of why there's a problem now and how Bill S-6 helps to provide “greater certainty to taxpayers regarding their liability to tax in the other country”.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Thank you, Mr. Chair. I'm happy to ask a few questions.

I want to thank the officials for joining us today to answer our questions on Bill S-6.

Does the convention proposed in Bill S-6 reflect the text of the multilateral convention in Bill C-82? I'm afraid that we're working for nothing, and that the convention in Bill S-6 isn't the same as the multilateral convention and will therefore need to be updated in the near future. Is it the same text? Otherwise, why not speed up the process and avoid an update in a few years?

[The Chair, Liberal, Wayne Easter]

Could you make a connection between your statement and Bill S-6? Let's hear it.

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

Mr. Chair, today we're discussing Bill S-6 and details of that. We're not discussing prior BIA legislation, which contained the backstop to pricing pollution across Canada.

[Blake Richards, Conservative, Banff—Airdrie, AB]

Hopefully we can find out what the other meetings were about, and hopefully maybe the Prime Minister will choose to follow the example of the member who just gave an answer, because he certainly seems to want to avoid answering all the questions about what his dealings have been in regard to the former attorney general, so that's interesting.

Let's move on, though, because we don't seem to be getting any answers there.

In order to be able to discuss tax harmonization between Canada and Madagascar, I think it's important to be able to understand the unique tax policies of each country, and I don't think we'll be able to understand the impact of Bill S-6 on Canadian businesses without being able to understand what we're getting into, of course.

Yesterday the unfair Trudeau carbon tax took effect in New Brunswick, Ontario, Manitoba and Saskatchewan, and I believe it was increased in other provinces.

[Kim Rudd, Liberal, Northumberland—Peterborough South, ON]

It was November 24. I apologize.

This is not within the scope of Bill S-6, and I would appreciate it if the member of the opposition who is going down this line of questioning would respect the officials and the position they're in and get back to the discussion of the bill.

Thank you.

[Peter Fragiskatos, Liberal, London North Centre, ON]

On a point of order, Mr. Chair, I think we've strayed dramatically from the substance of Bill S-6.

[Trevor McGowan, Director General, Tax Legislation Division, Tax Policy Branch, Department of Finance]

Thank you, Chair.

We're appearing before the committee today to speak about Bill S-6, 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 bill is intended to enact into law the Canada-Madagascar tax convention, or simply, the convention.

The substantive provisions of the convention are largely based upon the Organisation for Economic Co-operation and Development's Model Tax Convention on Income and on Capital. The OECD model represents the collaborative efforts of the member states of the OECD, including Canada, and is intended to provide a uniform basis on which to conclude tax treaties.

Bill S-6 would build on Canada's extensive network of tax treaties which includes 93 comprehensive tax treaties currently in force.

These tax treaties, including the convention, are intended to benefit Canadians by encouraging cross-border trade and investment. As a trading nation, Canada has implemented tax policies that are designed to assist individual Canadians and Canadian businesses in taking advantage of the opportunities that international trade and investment can offer.

The convention contains a number of specific provisions that support the overall objective of encouraging trade and investment. ln particular, it provides greater certainty to taxpayers regarding their liability to tax in the other country. It prescribes a method for the elimination of double taxation. It ensures that taxpayers will not be subject to discriminatory taxation in either country. It contains a mechanism to resolve disputes involving cases where a taxpayer may have been subjected to taxation not in accordance with the convention. Finally, it reduces the risk of burdensome taxation that may arise because of high withholding taxes.

With respect to withholding taxes, payments originating in one country and paid to a resident of the other country of certain passive forms of income, such as dividends, interest and royalties, may be subject to withholding taxes as high as 25% of the gross amount paid. Because the withholding tax does not take into account the expenses incurred in generating the income, the recipient of the payment may be subject to an effective rate of tax that is higher than the rate that would be applicable if such expenses were taken into consideration.

The convention alleviates this potentially burdensome taxation by setting maximum levels of withholding tax that each country may impose. For example, the convention limits the rate of withholding on direct intercorporate dividends to 5% if the recipient controls 25% or more of the voting power of the payer. It limits the rate of withholding on interest to 10% and eliminates withholding entirely in respect of interest paid to certain pension, retirement, and employee benefit plans. It also limits the rate of withholding on certain copyright royalties and royalties paid in respect of computer software to 5%.

ln addition to encouraging cross-border trade and investment, tax treaties such as the convention play an important role in preventing tax evasion by facilitating the exchange of information for tax purposes between the tax authorities of the two contracting states.

ln this respect, the convention allows the respective tax authorities of Canada and Madagascar to exchange information relevant to the administration of each country's tax laws, in conformity with the standards developed by the OECD for the effective exchange of information for tax purposes.

These standards provide that the exchange of tax information between the two countries is not impeded by bank secrecy laws or domestic interest requirements—that is, a country's need to have a domestic interest in the information requested by the other country before providing the information.

ln summary, the convention contained in Bill S-6 is intended to improve the economic links between Canada and Madagascar. lt is intended to promote certainty, stability and a better business climate for residents and businesses in both Canada and Madagascar and to assist both countries in addressing potential cases of tax evasion.

This concludes our introductory remarks. My colleague, Stephanie, and I would be happy to answer any questions you may have.

[The Chair, Liberal, Wayne Easter]

We'll come to order.

Pursuant to the order of reference of Wednesday, February 27, 2019, we are considering Bill S-6, 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. We have Department of Finance officials with us to start. Mr. McGowan is the director general, tax legislation division, tax policy branch, and Ms. Smith is senior director, tax treaties, tax legislation division, tax policy branch.

Mr. McGowan, I believe you have an opening statement, and then we'll go to questions from there.

Finance

[John Barlow, Conservative, Foothills, AB]

Mr. Speaker, this goes to what I am speaking about regarding Bill S-6 and why it is important for this committee to travel.

We are talking about the value of canola and how it has dropped for Canadian producers by $1 billion on the product they are trying to sell now. Where is our agriculture minister when all this is going on? She is travelling around Canada doing photo ops. She should be in China resolving this issue as quickly as possible.

Our Canadian producers can no longer be paying the price for the Liberals' failures on economic policy and certainly on foreign affairs. Over and over again, it is Canadian agriculture that is paying the price, whether it is the carbon tax, trade issues with India, durum wheat to Italy, and now China no longer taking our canola, wheat, peas and who knows what is next.

In fact, I am so frustrated with what has been going on with the Liberal government that I would like to move:

That the House do now adjourn.

[John Barlow, Conservative, Foothills, AB]

Mr. Speaker, I appreciate your clarification on the debate today. I feel it is very important for me and my colleagues to get up and speak to Bill S-6, which is the Canada–Madagascar double taxation legislation.

Today we are talking specifically about allowing the Standing Committee on Finance to travel as part of that study. I feel that it is a very important element for this legislation.

I am not usually in support of committees travelling for unnecessary reasons. However, in this case, I believe it is absolutely vital that the Standing Committee on Finance have the ability to travel. The reason I say that is that it seems to me that on some of these issues we have faced over the last few months, we have seen a real lack of presence when it comes to some very important foreign affairs issues.

For example, right now we do not have an ambassador in China. That means that we do not have the right representation from Canada in China. We are already seeing the consequences of that. Late last night, as we were going through our 30th hour of debate, it broke that China has now refused to purchase any canola from Canadian producers. Initially it was from just one supplier, Richardson, but that has now been expanded to include canola from every Canadian producer.

It ties it back to Bill S-6 and the importance of having representation from the House of Commons and from parliamentarians reaching out to some of our trading partners around the world and some of our allies around the world, including Madagascar. Had we had that relationship with China, we may have been able to address this crisis before it started.

Not only was the announcement late last night about canola very disconcerting to the 45,000 canola producers across Canada, but this morning we also heard that it has been expanded to include peas, wheat and possibly other Canadian commodities.

I want to expand on the consequences of not having representation from Canada and Canadian parliamentarians with our trusted trading partners. Let us go back in time a little, when one of our number one importers of Canadian lentils and peas was India. Under our government, we expanded that market to more than $5 billion in Canadian lentils and peas being exported to India.

After our Prime Minister's ill-fated trip to India, India has refused to give us an exemption to their fumigation rules. It has also put extremely high tariffs, up to 50%, on some of our lentils and peas. As a result, our exports of these products to India have gone from $5 billion, a high under a previous Conservative government, to as low as $500 million now. That is a massive market for our pea and lentil producers we have lost because of the inept foreign affairs positions and strategies of the Liberal government.

Sometimes good can come out of bad. Because we lost that significant market in India, many of our producers were able to look to other markets. They had to. We cannot sell that much of that product here in Canada. Ninety per cent of the agricultural products we produce here in his country are exported.

Our producers were able to find other markets, including China. With this morning's announcement, we have now lost that secondary market. Within one calendar year, our pea and lentil producers have lost their first and now their second major markets in the world. A big part of that is because of the failures of the Liberal government when it comes to our foreign relations.

That goes directly back to Bill S-6 and why I think it is so important for the Standing Committee on Finance to have the opportunity to travel as part of this study to rebuild some of those foreign relations we had with some of our trading partners.

I talked about canola at the beginning of my intervention. I want to stress the fact that it is clear that the Liberal government does not understand the urgency of this decision by the Chinese government to block Canadian canola imports. This is a $26-billion market with economic impacts on Canada's economy. There are 250,000 jobs. These are decisions that are going to impact our producers, not in the fall, when they harvest next year's canola crop, but now. This is impacting the decisions they make right now.

The cost of a bushel of Canadian canola has gone down by more than a dollar a bushel. The value of the canola that farmers have in their bins from last year's harvest has reduced by more than half a billion dollars and is probably getting close to a billion. Every single day, the price a bushel—

[The Deputy Speaker, Bruce Stanton]

We are going to resume debate. However, I want to bring to members' attention that the issue of relevance was brought up in the last exchange. Members are reminded that we are in debate on a matter that was proposed by the member for Carleton in respect to the Standing Committee on Finance during its consideration of Bill S-6. This is just to remind hon. members with respect to the rule of relevance that these things do come up on a regular basis.

I am quoting from the third edition of House of Commons Procedure and Practice, which states:

Notwithstanding their importance, these rules remain difficult to define and enforce, not least because such enforcement must respect the freedom of debate enjoyed by all Members. The rule against repetition can be invoked by the Speaker to prevent the repetition of arguments already made.... The rule of relevance enables the Chair to counter any tendency to stray from the question before the House or committee. It is not always possible to judge the relevance...of a Member’s remarks until he or she has spoken at some length or even completed his or her remarks....

The Speaker must exercise his or her discretion:

...if the rules are applied too rigidly, they have the potential for severely curtailing debate; if they are neglected, the resultant loss of debating time may prevent other Members from participating in debate. Particular circumstances, the mood of the House and the relative importance of the matter under debate will influence the strictness with which the Speaker interprets these rules.

I say that just as a reminder to hon. members, since the time of the House is limited when a matter is before it. This is why we encourage members, who have great liberties to phrase their arguments in the way they wish, to ensure at the very least that the arguments they make have relevance and can be tied to the question the House has been presented with.

Resuming debate, the hon. member for Foothills.

National Defence Act

[The Assistant Deputy Speaker, Anthony Rota]

I want to remind hon. members that we are discussing Bill C-77, so the questions should be relevant to that. I have flashbacks to the debate on Bill S-6 the other day when Madagascar was mentioned occasionally, and it was not pertinent in the questions.

Canada–Madagascar Tax Convention Implementation Act, 2018

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, one of the most tangible examples I could give my colleague is the Canada child benefit program. Just over $9 million a month goes into Winnipeg North to support children. That same principle applies in all 338 constituencies across Canada. We are talking about hundreds of millions of dollars. It is policy initiatives like this that have lifted thousands of children out of poverty.

To me, that is why we are here. We are here to help and assist and boost our fellow citizens while at the same time bringing in policies that are going to make a difference, things like the Madagascar trade agreement, Bill S-6, and expanding trade, having better tax laws, fighting tax evasion and making sure that there is a higher sense of tax fairness.

That is what this government is all about. That is what this government is going to continue to advocate day in and day out, no matter what kind of political rhetoric and criticism comes from the other side.

Those members want to make it personal; we want to make it all about Canadians.

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

Mr. Speaker, it has been an interesting debate. I was here the other day when we were talking about Bill S-6. It goes to show that members on both sides of the House really want to have that discussion about taxation and Canada's economy. There is a lot of contrast between the Conservatives, New Democrats and the Liberals on those types of issues. What I thought I would do is provide what I think is a fairly accurate snapshot in terms of the types of things that we have seen, and Bill S-6 is a good example of that.

Bill S-6 is about Madagascar and Canada achieving a tax agreement. However, tax agreements are not new. There are tax agreements between Canada and many other countries, but when we look at the bigger picture, we see that Canada is in fact a trading nation. In order to sustain ourselves going forward, trade is critical and of the upmost importance for all Canadians, whether they are directly, indirectly or not at all engaged in trade, particularly with the exports of services, goods, technology and so forth.

Over the last few years, we have seen the government, on a number of fronts, focus its attention on Canada's middle class, and one of the ways was by dealing with the issue of tax fairness between Canada and other countries. One of things we have to look at is the OECD and the tax conventions. We have to take a look at the individual tax agreements that we have been able to achieve, and Canada has seen dozens of tax agreements achieved over the last number of years. All of this assists us in facilitating trade and investment. We are very much dependent on that.

I have stood in my place on numerous occasions talking about the importance of the middle class. When we talk about how we support the middle class, we address it directly by saying that, as a government, the first thing we did was bring in legislation to cut the taxes for Canada's middle class, which was a very popular piece of legislation, at least on this side of the House. It was very well received by Canadians throughout the country, because it literally put hundreds of millions of dollars directly into the pockets of Canadians. However, less direct but just as supportive for Canada's middle class is our aggressive trade agenda, which takes place in different forms, such as in legislation, budgetary announcements and discussions among different levels of government, with ministers and internationally with governments around the world.

In a relatively short period of time, we have seen a good number of agreements reached between Canada and other countries. The previous speaker made reference to Stephen Harper and 50-plus trade agreements, but that is not necessarily accurate. However, I will give credit where it is mostly due, and that is with some incredible civil servants who have been at the table negotiating on Canadians' behalf. They recognize the importance of international two-way trade and the potential for agreements with many different countries.

Within a few months of our taking office, our Prime Minister was in Ukraine, signing off on a trade agreement. We were all very proud of that. There is a valid argument to be made that a good portion of that work was in fact done by the previous administration, but let there be no doubt that it was actually finalized through this government.

The significant trade agreement that has so much opportunity for firms and companies across Canada has to be the European Union trade agreement. This agreement was off the rails. It was because we were aggressive on that trade agreement that we were able to get it back on track and ultimately bring it across the line. We still have to see other countries sign off on it and so forth, but that was an agreement that was achieved under this administration.

We can also talk about the trans-Pacific partners that we have, and the trade agreements that have been achieved there. Earlier today, I was talking to one of our ministers, and he was mentioning that because Canada was one of the original six who actually passed it off, we were able to deal with some other issues that allowed us to benefit more than other trading partners within the trans-Pacific agreement, which has enhanced our export sales of industries dealing with pork, cattle and more.

Whenever I hear of pork being sold outside of Canada, I think of the fabulous, fantastic pork industry that we have in the province of Manitoba. We actually have more pigs in Manitoba on an annual basis than we have people. We are a great exporter of the best pigs, I would argue, in the world. We have a product that is in high demand, and it is creating thousands of jobs in my home province. In Brandon, Winnipeg or Neepawa, three beautiful communities in Manitoba, we get a sense of the size of the pork industry, not to mention the many farmers and other individuals within our agricultural community. There are many success stories as a result of that one industry.

There are many different industries out there that have benefited directly as a result of the aggressive trade agenda of this government. That is something that has assisted in the generation of hundreds of thousands of jobs in the last three years. That is something that should be recognized, at least in part.

When we talk about the tax agreements with other nations, we should be reflecting on how important it is, as much as possible, to get that level playing field. Having these tax agreements allows us to move that much further ahead in serving Canadians, because it is about trade and investments.

We understand how important it is to watch and be very diligent about tax avoidance and tax evasion, and we know they are very different. I would like to think that as a government we have been very progressive in our thinking and actions to ensure we are minimizing the amount of evasion and avoidance out there.

A couple of years ago, the Minister of National Revenue, the minister responsible for the CRA, announced well over $400 million to deal with individuals trying not to pay what we would argue is their fair share of taxes, through tax avoidance.

When we think of the money that is lost as a direct result of both avoidance and evasion, we are going into the hundreds of millions, into billions of dollars on an annual basis. It is hard to believe that for 10 years, while Stephen Harper was our prime minister, very little was done on that file. It took our government to say we need to put additional resources in the budget in order to ensure that the CRA is better equipped to go after those who are avoiding paying taxes, or those who are evading paying their fair share.

It is not like it was a commitment of just one budget. The following year, once again, we saw hundreds of millions of dollars invested in the CRA in order to again deal with the issue of tax avoidance and evasion. In total, we are probably looking at somewhere in the neighbourhood of close to a billion dollars of additional resources that have been allocated in order for us to deal with those two very important issues.

As a government, we see these tax agreements. Today, it is about Madagascar. We have seen other tax agreements achieved that allow the Canada Revenue Agency and the many different departments involved to continue to build relationships with other countries through tax agreements.

Most countries around the world recognize that in order for us to move forward where there is more world wealth, we need to do what we can to enhance trade. There is a sense of competition, and we have to be in a position to compete.

I differ from my colleague across the way, when he said that all we have to do is lower taxes and the jobs will come. Arguably, that is the formula Stephen Harper attempted with the boutique taxes. He reduced the GST. I will give him that. However, we need to recognize the economic performance of the 10 years of Stephen Harper's governance. We will find that in many ways the economy moved ever so slowly forward. We have created more jobs in three years than the Conservatives did in over 10 years.

My friend across the way talked about investment and said investment is leaving the country. The Conservatives have to take some responsibility for that loss of investment. The example the speaker before me gave was in reference to our oil industry. He talked about investments leaving the country because of pipelines not being built. I would challenge members across the way to reflect on that. On these tax agreements and trade agreements, we believe Canada has the competitive edge. If we are on a level playing field, we will do exceptionally well.

I think of what we could have been doing as a government, because we need to recognize that there is a role for the government. Far too often, the previous administration would step aside and not take action. Let me use the very same example that the previous speaker used, the issue of pipelines.

Over 99% of the oil that comes out of our ground goes first to the U.S. through the lines that are currently in place. That was the case when Stephen Harper became the prime minister of Canada. When Stephen Harper lost the election in 2015, that was still the case. The Conservatives were completely reliant on the U.S. market, and that is one of the reasons that sector is hurting today.

When the Conservatives talk about taxation fairness and the importance of tax agreements and so forth, yes, that is really important. However, when my colleague from across the way tries to give the impression that it is the only thing the government needs to do, he is wrong in that assertion.

We have a government that was prepared to move forward to get that commodity to new markets. We were able to acknowledge that by setting up a process that takes into consideration indigenous issues, environmental issues and others. It might not be happening as fast as the opposition members would like, but they had 10 years and it did not change.

If we go back to the issue of trade and commerce, and how we attract investments, I would suggest that in the future we will see many of those oil or commodity dollars continue to be invested in Canada, because we are in many ways giving attention to issues of our environment, with green technology as an example.

When we look at the future of exportation, we are going to be at an advantage or have a competitive edge because we have a government that recognizes that. We have a government that not only goes out to secure trade agreements and tax agreements but also recognizes that there are other ways in which it can contribute.

That is why having Canada's investment bank, having investment hubs and supporting our economic diversification funds have all become very important to this government. If we can build on taxation fairness and trade and investment, we will have a healthier economy. On many occasions I have indicated that if we have a healthy economy, we will have a healthier middle class. Those aspiring to be a part of it, those individuals who are in need and in fact all Canadians will benefit.

It is taking a holistic approach at developing Canada's economy and being sensitive to the areas and stakeholders that we need to be listening to. At the same time, I know that these tax agreements and trade agreements are not something that have happened overnight. They have taken years to develop. I recognize that the two major parties in the House can share some of the credit in terms of the trade we have seen.

I am running out of time. To conclude my remarks, I would like to thank members for the opportunity to speak on a very important issue.

[The Assistant Deputy Speaker, Anthony Rota]

I just want to remind hon. members that we are debating Bill S-6, a treaty between Madagascar and Canada.

The hon. member for Haliburton—Kawartha Lakes—Brock.

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

Mr. Speaker, I was just paying attention to the testimony going on at the justice committee. If people are watching at home, I suggest they turn to that and watch the testimony by the former attorney general. It is quite riveting. I will not take offence if my words get missed.

It is my pleasure 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 and the prevention of fiscal evasion with respect to taxes on income. In November of 2016, the convention was signed between the governments of Canada and Madagascar. While reviewing the bill, I was surprised to learn that we have had diplomatic relations with Madagascar for nearly 55 years.

In terms of economic activity between our two countries, Canada imported $100 million in goods last year. The bulk of these imports were mineral and vegetable products. Madagascar imported $16 million of Canadian goods last year. Global Affairs Canada reports that Canadian direct investment to Madagascar was $28 million in 2017. Canada has mining companies there. We do business with Madagascar.

Since 1976, Canada has entered into similar tax agreements with countries all around the globe. In fact, we currently have 93 such agreements in place. The main purpose of the convention is to eliminate double taxation and prevent international tax evasion.

I want to support Bill S-6 and the international efforts coordinated by the organization for Organisation for Economic Co-operation and Development aimed to reduce treaty shopping for tax havens. However, the bill reminds us that the government's overall approach to addressing international tax evasion is inadequate and more needs to be done.

I had the pleasure of rising in the House on September 28 of last year to speak to Bill C-82, an act to implement a multilateral convention to implement tax treaty related measures to prevent base erosion and profit shifting. For the benefit of those at home and as a reminder to my colleagues in the House, Bill C-82 aims to make it more difficult for corporations to hide money in offshore tax havens.

What is double taxation? It is a taxation principle referring to income taxes paid twice on the same amount of earned income. It could occur when income is taxed at both the corporate level and the personal level. It also occurs in international trade when the same income is taxed in two different jurisdictions.

I had a number of concerns with Bill C-82. I will not repeat them all here, but one of my major concerns, which is an underlying problem with these agreements, is this. I really have no problem with the agreements that inevitably make other jurisdictions more attractive to Canadian investment. Promoting investment in Canada should be a priority for the federal government, but in truth we live in a global community with economic opportunities for Canadians outside the country, whether through direct investment or indirectly through mutual or pension funds.

What I see as a problem is when the government fails to support competitively lower taxes for Canadians and businesses domestically. With respect to businesses, we need to lower corporate taxes, reduce red tape and create an investor-friendly climate. This is something we must do in concert with bills like Bill C-82 and Bill S-6.

We have companies moving from Canada to the United States because of a lower corporate tax regime. If we want to stop the use of tax havens, we need to make it attractive to invest at home and make tax rates competitive with other jurisdictions. The more investment dollars we can attract and retain in Canada, the less taxes we need to spend in pursuit of those who exploit loopholes in tax rules.

Let me be clear. The Conservatives support measures to crack down on tax evasion. Aggressive tax avoidance is a major source of lost tax revenue for high tax jurisdictions like Canada. The vast majority of citizens and businesses in Canada pay their taxes and follow the rules. We need a competitive and fair tax system for all Canadians and corporations that do business in Canada. That is fundamental to a healthy and equitable economy.

During the fall economic statement, the Minister of Finance confirmed that the Liberals were borrowing about $18 billion this year and almost $20 billion next year to pay for their spending, and they have no plan to balance the federal budget. This year's deficit is more than three times what the Prime Minister said it would be. He has added $60 billion in debt.

We are giving the impression to Canadians, through bills like Bill S-6, that the Liberal government is more interested in hunting down tax evaders in Madagascar, although I am not aware of an outbreak of tax evaders in Madagascar, than creating a fair and equitable system here in Canada.

Canadians know that one does not need to be an economist to understand that more debt today means higher taxes tomorrow. Tax treaties might be important, but something that is far more important is the halting of the ongoing plundering of our children's economic futures.

Canadians are going to pay higher taxes once the government's Canada pension plan tax increases are fully implemented by 2025. That is up to $2,200 per household. The Prime Minister's national carbon price, the carbon tax, will cost up to $1,100 per household. Canadians are going to pay more in future taxes to service the interest on the government's ballooning deficit fuelled by out-of-control spending.

The Liberals' previously proposed tax grab would have forced business owners in Canada to pay 73% on savings income, penalized family businesses for sharing earnings and work with family members and doubled the tax on the sale of a farm from parents to children, forcing them to sell to multinational corporations instead.

This is not how we create a friendly investment climate in Canada. This is not how we create wealth and lift people out of poverty. This is not how we safeguard our children's future.

The previous Conservative government signed tax agreement's like Bill S-6, but we did this in concert with reducing taxes for Canadian families and businesses. The average Canadian middle-class family is paying $800 more income tax today than it did before the Liberal government took office in 2015.

The Conservatives implemented family tax cuts, arts and fitness tax credits and education and textbook credits, all of which were cancelled by the government.

Bill S-6 is more than just about cracking down on tax evaders. Trade and commerce between two countries are supported by these agreements. That is why our previous Conservative government signed a record number of them.

Under the previous Conservative government, Canadian workers and businesses won free trade access to more than 50 countries around the world, creating hundreds of thousands of jobs and opportunities for everyone. In just three years, the Prime Minister has failed to secure a trade deal with China and delayed and nearly derailed plans for Canada to join the CPTPP trade agreement.

Worst of all, the Prime Minister made massive concessions to the United States at the NAFTA negotiation table. He backed down on cars, giving the U.S. limits on how many cars we could export. He even backed down on pharmaceuticals, giving the U.S. higher profits at the expense of Canadians from coast to coast to coast. Canadians cannot bid on American government contracts and we still have tariffs on steel, aluminum and softwood lumber, with no timeline to end them.

Bills like Bill S-6 are important and need to be supported. Tax evasion is a real issue. We need to crack down on tax evasion, but we also need to support lower taxes for Canadian businesses. We have lost out on tens of billions of dollars' worth of investment because of the government's misguided fiscal policies.

Investment is fleeing, we are losing jobs, families are worse off than they were before and we are going in the opposite direction with respect to what most countries are doing by lowering taxes and making themselves investment magnets.

[The Assistant Deputy Speaker, Anthony Rota]

Before the member begins, I want to remind members that we are debating Bill S-6 on the trade agreement between Madagascar and Canada, in case they are wondering what the topic is and they stray a bit.

Resuming debate, the hon. member for Haliburton—Kawartha Lakes—Brock.

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

Mr. Speaker, it is great to be here this afternoon. Bill S-6 is along the lines of what our government's platform and agenda has been over the past three and a half years. The bill fits well within our tax treaties with our international partners and international organizations. It is a routine bill, a routine tax convention, which we need to have implemented.

If I may, I will take a step back in terms of what our government has done over the last three years with regard to improving our tax system, investing in the CRA and investing in middle-class Canadians. Yesterday we had Statistics Canada report to us on the annual Canadian Income Survey, 2017. As an economist by training and someone who reads the daily notices from Statistics Canada, it was wonderful for me to see this report. It was wonderful to know that from the work we have been doing for three years, not only have 900,000 jobs been created by hard-working Canadians and Canadian entrepreneurs but also that the growth that has occurred is inclusive, widespread and benefiting Canadian families from coast to coast to coast, including families and their children in my riding of Vaughan—Woodbridge. It was great to see that over 850,000 Canadians have been lifted out of poverty.

We based our platform three years ago on the Canada child benefit, which benefits nine out of 10 Canadians. It is tax free, simple and monthly. We based it on cutting taxes for nine million middle-class Canadians, which benefits them and their families. We also asked the 1% of Canadians, the wealthiest, most fortunate in our country, to pay a bit more. Now we see the fruits of those results, which have lifted hundreds of thousands of Canadians and their families out of poverty.

We ran on a platform of strengthening the middle class and helping those working very hard to join the middle class. I am happy to say that we are getting there. We have seen our poverty rate decline significantly. We know we have more work to do.

We have seen tens of thousands of seniors now being lifted out of poverty. That 10% increase in the guaranteed income supplement for our most vulnerable seniors is benefiting my riding and the 17,810 seniors who, according to Statistics Canada, live in my riding of Vaughan—Woodbridge. I know that 1,530 of those vulnerable seniors in my riding received, on average, $800 more every year from the 10% increase in the guaranteed income supplement we campaigned on, that we promised and that we implemented.

I look at this Canada–Madagascar tax convention bill, Bill S-6, as another step forward in improving our tax treaties with our international partners and in building a stronger Canada by ensuring that all Canadians pay their fair share of taxes and that all Canadians can depend on the services that we, as a government, deliver. When I say we, I mean all members of Parliament.

Over the past three years, we have taken action on multiple fronts to ensure that this happens, because when everyone pays his or her fair share, the government can continue to deliver the programs and services Canadians need while keeping taxes low for middle-class families. Again, I allude to the fact that we cut taxes for nine million Canadians, as we promised at the outset. Promise made, promise kept.

As members know, one of the government's first actions was to cut taxes for middle-class Canadians. Over nine million Canadians are now benefiting from this change, with nearly $20 billion over five years of tax relief for families from coast to coast to coast. To help pay for this middle-class tax cut, we asked the wealthiest to pay a little bit more.

Next we made changes to better provide targeted, more generous and simpler support for Canadian families with children. We accomplished this with the introduction of the Canada child benefit, or the CCB, which was implemented, proudly, on July 31, 2016.

In my riding of Vaughan—Woodbridge, in looking at the numbers for one of the time periods, I see that nearly 17,000 children benefited, and 9,510 payments were made on a monthly basis for nearly $5 million.

If I look quickly at the numbers for the year, I see that nearly $57 million was paid out from the Canada child benefit to families in Vaughan—Woodbridge. That is incredible. That is lifting families and their children out of poverty. That is helping families save for a rainy day and pay for their kids' winter boots. I understand it is a snow day back home in Vaughan—Woodbridge and that the buses were cancelled. If those funds paid for those kids to have an extra pair of boots or a new pair of boots, then I am proud of that.

The CCB is particularly helpful for families led by single parents. These families are most often led by single mothers, who tend to have lower total incomes. In fact, close to 95% of CCB amounts paid to single parents with incomes below $30,450 are paid to single mothers.

The government is committed to ensuring that Canada's tax system is fair, effective and competitive. I am certain that all hon. members know how important small businesses are to Canada's economy. They account for 70% of all private sector jobs and are vital drivers of economic growth in communities all across the country.

In looking at Bill S-6 and this tax convention with Madagascar, we see that this is another tax treaty that is made for the benefit of businesses on both sides of the Atlantic. We need to know that we as a country are eliminating barriers to investment and eliminating barriers to trade, and we have done that with the implementation of CETA and the implementation of the CPTPP and, mostly recently, the newly signed USMCA accord with the United States and Mexico, our two largest trading partners.

This is about creating good middle-class jobs, growing the economy, and growing the economy in an inclusive manner that benefits all Canadians, all middle-class Canadians and all those working very hard to join the middle class.

When small businesses succeed, Canada succeeds. That is why the government reduced the small business tax rate to 10% in January 2018, with a further reduction to 9% coming on January 1, 2019. These low tax rates will enable small businesses to create good, well-paying jobs in communities across Canada.

We know that the best poverty reduction plan is a job. It is giving Canadians skills training and lifelong learning. Hard-working Canadians and entrepreneurs, such as the 13,000 small business owners in the city of Vaughan and in my riding of Vaughan—Woodbridge, have created approximately 900,000 jobs in Canada since we were first elected. The unemployment rate hit around 5.4%—I think it is at 5.6%—because people are being drawn into the labour market. The unemployment rate is at a 40-year low, something that we should be proud of.

We know there is more work to do, but the fact is that there are over 500,000 job openings in Canada currently. The fact is that people from all over the world want to come and work and invest in our country. There is a reason for that: We have the best entrepreneurs, we have one of the best educational systems in the world, and we are a great place to invest. We have access, through three major trade deals, to all our major trading partners. We have free trade access to over 1.6 billion people, and businesses across the world know this.

These low tax rates will enable small businesses to create good, well-paying jobs in communities across Canada. When we say we expect these results from small business tax cuts, it is because we have a track record of success, giving us confidence in the direction we are headed.

Many positive signs tell us our plan is working. Since 2016, hard-working Canadians have created—as I said, to re-emphasize—hundreds of thousands of jobs, pushing the unemployment rate to a 40-year low and giving Canada one of the strongest records of economic growth in the G7.

Canadian workers are experiencing the strongest wage growth in a decade. We have seen some of the numbers that came out yesterday from the Canadian income survey, showing that after two years of stagnation, wages are on the rise and incomes are on the rise. That is more money in the pockets of Canadians, whether they are low-income, middle-class or upper-class. That is a good-news story. It is more income to invest, more income for Canadians and their families to save.

Most importantly, I would argue, as we compare our finances of governments around the world, that we have had the flexibility in Canada to invest in Canadians. We invest not only in skills training and the Canada child benefit but also in infrastructure through a $180-billion, 12-year infrastructure plan. We sat down at the table with our municipal, regional and provincial partners and worked on both the urban side and rural Canada, where we invested funds in both broadband and public transit. That is due to the inherent flexibility in our fiscal strength in Canada, where we can make these investments and plan for the long term.

Canada's net debt-to-GDP ratio is the lowest among all G7 countries, and we intend to maintain it and bring it down over the medium and long term. However, we understand, as Canadians do, that more needs to be done to encourage long-term economic growth. As I said earlier, one of the things we need to do is ensure that everyone pays his or her fair share of taxes. It is unacceptable that some corporations, both foreign-owned and Canadian, take advantage of Canada's tax rules to avoid tax. It is unacceptable that some wealthy people use offshore jurisdictions to hide income and evade tax.

I am happy to re-emphasize that we as a government, since taking office, have invested nearly $1 billion in CRA to provide it with resources, after a number of years when the prior government cut funding to agencies like CRA and did not allow them to have the tools to do their jobs effectively. We have reversed that. Canadians understand and appreciate that, because our services are delivered and funded through taxpayers, and, as a government, we respect them. We have lowered taxes for nine million Canadians, but we have also asked the wealthiest 1% to pay a little more, and those who attempt to avoid paying their fair share need to be held accountable.

We have addressed base erosion and profit shifting, which was recently debated in the House and which we had the pleasure of speaking to, and we have worked with our multilateral partners to look at ways to deal with transfer pricing for corporations, strengthening the exchange of information with our multilateral partners and providing the tools to CRA to do its job effectively. We need to ensure that corporations and wealthy individuals continue to pay their fair share of taxes and that our tax laws are being enforced judiciously, diligently and effectively.

In order to stop this profit shifting from happening, the Canada Revenue Agency needs information from foreign jurisdictions. That is why the tax convention in this bill puts in place measures to make possible the exchange of tax information from one country to the other. Bill S-6 would help Canadian tax authorities prevent international tax evasion while gathering the information they need to enforce our tax laws.

Canada's network of 93 income tax treaties currently in force is one of the largest in the world. However, we must keep updating and expanding this network in order to encourage international trade and make it easier for other countries to invest in Canada. In this way, getting our tax treaties in order will help the Canadian economy and Canadian businesses compete globally and enable them to hire workers, invest, grow our economy and improve the future of middle-class Canadians, such as those living in my riding of Vaughan—Woodbridge. Bill S-6 gives Canadians more certainty about the tax implications involved in doing business with, working in or investing in Madagascar.

This bill would make our tax system more efficient, while also ensuring tax fairness for Canadians who already pay their fair share. It would encourage more foreign investment in Canada, remove barriers to international trade and help grow and strengthen the middle class across the country. I encourage all members to support this bill.

As I conclude my remarks on Bill S-6, 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, I see this bill much like Bill C-82 on base erosion and profit shifting and much like the work we have done in the finance committee on a study with regard to tax avoidance and tax evasion, which was done very judiciously by the finance committee.

It is great to see committees doing the work that they are tasked to do independently. They work judiciously, make recommendations and produce reports, which are then looked at both externally and internally by ministers.

On this issue of a tax convention and its implementation, it is obviously very important for Canada as a country to work with all of its international partners, no matter how big or small, no matter how near or far, to ensure that we have the proper information exchanged between the two entities so that on a technical basis we ensure that we eliminate double taxation between the two countries for individuals investing both ways, reduce the risk of burdensome taxation and ensure that taxpayers are not subject to discriminatory taxation.

In closing, I will say that by strengthening our ties with Madagascar, our government is seeking out the kind of investments and trade opportunities that are vital to grow the economy.

I have spoken about the treaties we have put in place on the trade front, such as CETA, CPTPP and USMCA. I have also spoken of our plan to grow the economy by lowering taxes for middle-class Canadians and asking the 1% to pay a little more, and the results are bearing fruit. The numbers that were produced yesterday by Statistics Canada show that over 850,000 Canadians have been lifted out of poverty in the last two and a half years. These are real people working hard every day to provide for a better future for themselves and their families. We as a government will continue to invest in them, believe in them, work with them and work with all of our partners.

The House resumed from February 22 consideration of the motion that Bill S-6, 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, be read the second time and referred to a committee, and of the amendment.

National Defence Act

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Madam Speaker, I like the question posed by the government House leader.

This is not the only legislation. We also had Bill S-6. The Conservative Party is saying that it welcomes and likes the bill and that it will vote for it, but it seems that with every piece of legislation it likes, it would like to have virtually endless debate.

Could the member opposite tell me why even when opposition members support legislation and want us to pass it, they feel obligated to continue talking about it endlessly?

Bill S-6—Notice of time allocation motion

[Bardish Chagger, Liberal, Leader of the Government in the House of Commons]

Madam Speaker, an agreement could not be reached under the provisions of Standing Orders 78(1) or 78(2) with respect to second reading stage of Bill S-6, 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.

Under the provisions of Standing Order 78(3), I give notice that a minister of the Crown propose at the next sitting a motion to allot a specific number of days or hours for the consideration and disposal of proceedings at the said stage.

Canada–Madagascar Tax Convention Implementation Act, 2018

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

Mr. Speaker, I am pleased to rise today to speak to Bill S-6 regarding an agreement between Canada and Madagascar.

I will support Bill S-6 because I think it is good for Canada to have agreements with other countries.

I would like to talk about the agreements that were signed while the Harper government was in office and compare them to what the current Liberal government has done. I will talk about the impact on my riding and a few other things.

To start, having agreements with other countries is a good thing. In this case, we are trying to prevent double taxation and fiscal evasion between Canada and Madagascar. If I look at the number of trade agreements that were signed under Stephen Harper, I see 43 trade agreements with huge significance in terms of economic benefit to Canadians. If we compare that to Bill S-6, which seems to have a very small impact, we can see that the government is focusing on things of lower priority.

Where is the focus, for example, on NAFTA? This is an agreement between Canada and the U.S. that has huge economic implications for us, but this agreement still has not been ratified on either side. We still have tariffs of 20% on steel and 10% on aluminum, and that situation is impacting businesses in Canada, especially in my riding. Sarnia—Lambton has a manufacturing base. These kinds of tariffs actually cause jobs to move to the U.S. I would think that the government would have a concern there and spend more time on that issue than on talking about the offshore impacts here in Madagascar.

Again, the CETA accord was negotiated but has not been signed yet by any of the 13 countries. Where is the government's effort to get that in place? It would have a huge economic benefit to Canadians if we could get that going. On the CPTPP, there is not much to say, except that the Prime Minister made a lot of countries angry when he went over there. We are still waiting to see the economic benefit of that agreement.

While I think it is good to have agreements in place, there has to always be a concern about priorities and about working on the things that have the largest impact first.

In terms of the fiscal evasion of taxes, we saw the paradise papers and the Panama papers, but where is the follow-up on that by the Canada Revenue Agency? To me, the amount that could be at risk in Madagascar is a very small amount compared to what is in those papers. We have seen no follow-up, and that is a definite concern.

In terms of avoidance of double taxation, I can certainly speak a lot to the issue of double taxation because we have seen double taxation happen all the time with the Liberal government. Most recently, this week I held a press conference to talk about the tax on a tax on a tax on medical cannabis. In this case, the government put in place a 2.5% tax on the producers after all the deals were signed, an additional tax, and then the provinces have an excise tax of 7.5%. On top of that, there is the GST. There is a 15% tax on what is prescribed by doctors for people who are suffering from pain, vulnerable people with medical conditions.

This is not the first time the Liberal government has decided to target the vulnerable with taxation. We saw this happen with the disability tax credit. In the past, 80% of people with type 2 diabetes or conditions such as autism or mental health disorders, such as being bipolar, were able to take advantage of that disability tax credit. The Liberal government got involved, and then 80% of people were not eligible. In fact, the reason for that change was to try to make them ineligible for the retirement disability pension, which had built up to about $150,000 per person. The government was attempting to claw that back.

It is not good to try to double-tax our own citizens, and to be focusing on the double taxation in Madagascar compared to the double taxation that is happening in Canada does not seem to be the right priority.

It is always good to try to get more tax revenue. It is very important. In order to get tax revenue, we have to take advantage of the opportunities that present themselves.

As an example, with respect to Sarnia—Lambton, the government would receive $4.3 million in tax revenue every year if the ferry border crossing at Sombra was repaired. However, two years ago now, the border crossing was broken by the Coast Guard's operation of an icebreaker when the ice was too thick, crushing the border crossing. It has not been fixed. There has been a lot of time wasted and a lot of economic job loss on the Canadian side. All of the restaurants and services located there went out of business. On the U.S. side, the restaurants have gone out of business.

There was an outcry to multiple ministers in Canada. One would think that the Minister of Public Safety, whose CBSA organization was getting this $4.3 million worth of tax revenue, would have done something. It was only going to be $2 million to fix the border crossing and the government is spending $80 billion on the Gordie Howe bridge, so it is surprising to me that the public safety minister chose to do nothing.

The Minister of National Defence had combat engineers in my riding. I was told that if it was in the national interest to have a border crossing opened, it could be done out of the budget of Minister of National Defence, and he also refused. The member for Milton, the former minister of transport, indicated there was a contingency fund there that could have been put in place, but the current minister told me that this was not the case and that he could not do anything. The Minister of Infrastructure and Communities refused to help.

We even appealed to the Prime Minister's Office. In fact, it is really disturbing to me that when the Marine City mayor, congressman Paul Mitchell, senators from the state of Michigan and the U.S. ambassador to Canada appealed to the Prime Minister's Office to reopen this border crossing, nothing was done. In this example, there was an opportunity for payback in less than a year, in terms of paying to fix the Sombra ferry crossing and getting the revenue, yet the government did not take advantage of that opportunity. That was wrong.

It is currently in litigation, so the crossing will remain closed and the economic opportunity to use that border crossing is lost.

People question the seriousness of the government on the NAFTA agreement. If the government really wants to do business with the United States and will not even spend $2 million to open a border crossing, there is a question about the government's priorities.

That is certainly something we have been talking about as we study Bill S-6 and think about the government bringing this forward as a priority when we know there are other huge issues. There is a huge loss of jobs in some sectors, such as the oil and gas sector, and what about the forest products sector? We know the government has done nothing to address the problems with the tariffs on softwood lumber. This is something we have been talking about since the Liberal government was elected in 2015, and still there is no resolution to this issue.

While it is great to have an agreement between Canada and Madagascar and it is fine to address issues there, hopefully that will be leveraged to take advantage of all of these other priorities that are being ignored while we are discussing this particular bill in the House today.

When it comes to CRA, one of the concerns I have is that we are not taking action on the Auditor General's report. We are very sad about the passing of the Auditor General, but if we recall the results of his report, we know that on average people have to call four times and wait 110 minutes to get an answer from CRA, and a third of the time the answers they get are wrong. I have personally seen all kinds of mean-spirited letters sent to my constituents from CRA, basically threatening to put them in jail. These are hard-working, taxpaying people, and there are very small amounts of money at risk. The amount of money we are talking about in offshore accounts for tax avoidance is far superior to that, and it seems to me that there are already 70 CRA employees in a position to work on this specific sort of thing. Perhaps we should increase our focus on going after the people hiding their taxes in the millions of dollars range rather than the hundreds of dollars range.

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

Mr. Speaker, what Bill S-6 does, in good part, is take away barriers for investment in trade. The government has taken a very aggressive approach regarding world trade and tax agreements like this to enable Canada to have a stronger, healthier economy. That will give strength to our middle class.

Now to the question for my colleague across the way. The member who spoke before him talked about whether we should stop debating this proposed legislation, since all parties in the chamber are supporting it. She asked the government why we could not just let the bill go through so that we could debate other issues, perhaps those that the member across the way would like to talk about.

Would he not agree with me and his colleague, who spoke just before he did, that we should allow the bill to pass so that we can change topics?

[The Assistant Deputy Speaker, Anthony Rota]

Before I move to questions and comments, I will note that from the start of this debate, Bill S-6 was supposed to be the topic of discussion. Debate has gone far and wide. Normally, we allow members discretion. I assume they have a different path for their argument and that they will bring it back to Bill S-6. I ask the hon. members to ask questions and give answers about Bill S-6, the item we are debating.

Questions and comments, the hon. member for Winnipeg North.

[The Assistant Deputy Speaker, Anthony Rota]

Order. I will stop this now. It is turning into a debate. Again, the point of relevance does come into play. I will leave it to the hon. member for Carleton to hopefully come back to Bill S-6 and talk about the treaty with Madagascar.

We have a point of order from the hon. member for Timmins—James Bay.

[The Assistant Deputy Speaker, Anthony Rota]

The hon. member for Winnipeg North does have a point with respect to this. The argument is very much about an activity that took place outside of this chamber. I will remind the hon. member for Carleton that what we are debating today is Bill S-6.

The hon. member for Carleton.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, I rise again on a point of order. It is about relevance. The member seems to be upset about something that took place in the standing committee. I would suggest that he go back to the standing committee and raise a point of order if he is not happy with what took place there.

Today we are talking about Bill S-6, and I would ask the member to reflect on the content of Bill S-6.

[The Assistant Deputy Speaker, Anthony Rota]

I believe that the hon. member for Winnipeg North was talking about relevance. I will be honest with you. Through this whole debate, there has been nothing relevant to Bill S-6.

The hon. member for Carleton seems to be going in a different direction. However, I will let him bring it back to Madagascar. I am sure it has something to do with Bill S-6.

The hon. member for Carleton.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, as you can see, my colleague wants me to stand up on a point of order. I am not disappointing the member.

There is an expectation that we be somewhat relevant. I know the Conservatives want to change the focus of all debate to one issue, but this has nothing to do with Bill S-6.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Mr. Speaker, I must admit that I had the same reaction as my colleague. For once, I agree with the member for Winnipeg North.

I must remind the Canadians who are watching at home that we began with three good 20-minute speeches that were directly related to Bill S-6. They were given by the parliamentary secretary, a member of the Bloc Québécois, and me, which I say in all modesty. A Conservative member also gave a speech that was more or less related to Bill S-6. The Conservatives focused a little less on the bill, but they mostly stayed on topic.

When my colleague finishes her speech, will she allow the bill to be passed? All of the parties agree. The Conservatives, the Bloc Québécois, the Liberals and the NDP all agree on the bill. Could the member allow us to move on to the next item on the orders of the day? She is criticizing the Liberals' agenda and priorities. Can we move on to the next priority after her speech, or will another Conservative member, perhaps the finance critic, be speaking?

If so, it will mean that the Conservatives are the ones filibustering today in the House.

[Michelle Rempel, Conservative, Calgary Nose Hill, AB]

Mr. Speaker, today we are debating a bill called 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.

For those who might not be aware of the process on how the legislative calendar is set in the House of Commons, it is important that people who are watching this debate understand that the government House leader found it proper and a great use of time to prioritize this piece of legislation in the House today.

My objection to the bill is an objection to the fact that it has been prioritized. This particular bill, a tax avoidance with Madagascar bill, has been prioritized for debate in the House of Commons today, when, arguably, the House is on fire. This is kind of like a “the House is on fire and the government is choosing to water the rosebushes outside” situation.

Let us recap the week. We are debating the implementation of the convention between Canada and the Republic of Madagascar for the avoidance of double taxation, after a convoy of trucks of out-of-work western Canadian energy sector workers had to drive to Ottawa to talk about the fact that we do not have a pipeline built, after the Prime Minister spent billions of dollars buying something that the private sector was going to build but then decided not to after he put in place legislation that has completely bankrupted the investment climate in Canada.

Maybe we could be debating that. Maybe we could be talking about getting energy sector workers back to work or the ridiculously poor investment climate for energy investment in Canada. That sounds important. However, I do not think the Prime Minister wanted to meet with any of those people. What we are talking about today is the Canada-Madagascar avoidance of double taxation bill. That seems about on par in terms of importance.

We could talk about the fact that we just found out this week that for refugee claims, after the Prime Minister has allowed 40,000 people to illegally cross the border from upstate New York, the haven of persecution that is upstate New York, to claim asylum in Canada, the wait times to hear whether or not their claims are valid, and they are coming from upstate New York, has ballooned past two years and is on track to be five years.

The government has spent over $1 billion to give hotel rooms and social welfare payments to people from upstate New York. Maybe we could talk about that. No, what we have here today is the convention between Canada and the Republic of Madagascar for the avoidance of double taxation. What?

Okay, those are two things we could have talked about. I am happy to talk about those things. I think they are important. They are certainly important to my constituents. One thing my constituents have not emailed or called me about, and I have not heard about at the door in any of the ridings I have door-knocked in, is the convention between Canada and the Republic of Madagascar for the avoidance of double taxation.

I could be surprised. Maybe this is a burning issue in a riding that went from a single-digit national rate of unemployment to one of the highest unemployment rates in the country because of the government's failed policies that have been punitive to the energy sector. My constituents phone me about the fact that they might have to move out of Alberta, that their houses are up foreclosure and they are out of credit card room, and they ask me to do something about their jobs. No, maybe my constituents want me to talk about the convention between Canada and the Republic of Madagascar for the avoidance of double taxation. Come on, what is going on in this place?

Seriously, how could this even make the legislative agenda, given the government tabled a eight-billion-page omnibus budget bill where it conveniently snuck in the deferred prosecution agreement? Maybe we should have debated that at the justice committee but the government stuck that in there.

However, we have to have a whole day of debate on the convention between Canada and the Republic of Madagascar for the avoidance of double taxation. Why would the government want to spend a whole day of debate on—

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Mr. Speaker, I would like to thank my colleague for his speech and the work he does on financial and tax matters on the Standing Committee on Finance.

He is familiar with our tax treaties. To return to Bill S-6, I was wondering whether my colleague shares the NDP’s concerns that tax treaties can be abused over time, and that they can become a means of avoiding and ultimately evading taxes.

Does my colleague share these concerns about the treaties? Does he think that, as a country, we should not be blindly signing treaties with other countries? We have 93 or 94 such treaties now. Does he agree that we should not be blinded by these treaties but that we should do our due diligence to make sure that, over time, they do not end up facilitating tax evasion and abusive tax avoidance?

[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 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.

[The Assistant Deputy Speaker, 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.

[The Assistant Deputy Speaker, Anthony Rota]

I want to point out that members are debating Bill S-6, which has to do with Madagascar. I want to make sure everybody is aware of that.

The hon. member for Saanich—Gulf Islands.

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

This is Bill S-6, 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.

My friend from Saanich—Gulf Islands appreciated my quip at the beginning. I will say that I do hear a lot about taxation issues in my constituency—not as much about the particulars of our relationship with Madagascar, but a great deal about taxation.

I do think it ironic that the government is proposing the implementation of a bill for the avoidance of double taxation, because if we want to avoid double taxation, I might suggest that the government start at home in avoiding it.

This is a good bill. This is a good agreement. However, as they say, charity starts at home. This is not really a matter of charity; it is a matter of letting people keep more of their own money and avoiding double taxation. How about if the government starts in an area of its own direct control?

Before I get into the particulars of this legislation and this issue, I want to mention that I had the pleasure this morning of meeting with Ms. Chemi Lhamo, who is the elected University of Toronto's Scarborough campus student union president, someone who has faced significant bullying, intimidation and threats from people who oppose her on the basis of her Tibetan background and her human rights advocacy on behalf of Tibet. There is indication that some of this intimidation and bullying may have as its source the nefarious inclinations of some diplomats here in Canada. This is a very serious issue in terms of freedom of speech on campus, and also in the way in which foreign diplomats may be engaging in intimidating Canadian students. Perhaps at a future point, the kind of response we as parliamentarians should have to these events should be the subject of detailed consideration and debate.

Having said that, I will now return to Bill S-6 and the proposal to seek, through an agreement with Madagascar, to avoid double taxation and address the issue of fiscal evasion.

I will make the case in my remarks that we should support this bill, but the first priority of the government should actually be to take the necessary steps here at home to address these very same issues: the tax burden that Canadians face and, in the area of fiscal evasion, the way in which the Canada Revenue Agency interacts with citizens.

On the issue of the Canada Revenue Agency and its relationship to citizens, it was interesting to see a post from the Minister of National Revenue, who is very excited that it is tax-filing season. I do not know if there has ever been a tax collector who was so enthusiastic about collecting taxes. Canadians are not enthusiastic about the taxes they are paying, and they are not enthusiastic about these incidents, which we hear about on a regular basis, of Canadians being harassed by the Canada Revenue Agency, having difficulty getting good information and having a hard time getting clarity and support around key issues.

That is why my colleague, the great member for Calgary Rocky Ridge, put forward a motion to give the Canada Revenue Agency a duty of care. Whatever people perceive to be the magnitude of the problems in terms of the behaviour of CRA in its interactions with citizens, giving the CRA a duty of care would ensure that citizens were treated well and fairly in their interactions with the agency.

Members in both the Liberal and NDP caucuses voted against this motion. That is interesting, because recently I have been hearing, in speeches being given by members of the NDP caucus, that they may have had a change of heart on this issue. We hear members of the NDP caucus speaking about instances they are hearing about in their ridings of CRA going after single moms and other citizens who do not have the lobbyists and connections of, say, an SNC-Lavalin. My friends in that section of the House have criticized the government for not addressing this poor treatment of citizens who lack those connections and points of access while at the same time exploring special deals with well-connected insiders.

I applaud the direction of that discussion by my colleagues in the NDP, but I hope that in the future they will support measures like the initiative from my colleague from Calgary Rocky Ridge. They had an opportunity to show clearly with their vote that they have these concerns and that they are standing up for their constituents. Instead, they voted against that motion. It is better late than never if they want to now come onside and support that initiative. It is maybe a little too late for this Parliament, but if we have their support and they have changed their minds and recognized the problem, maybe we can move forward in the future.

Certainly, though, the government has had no change on the issue. It voted against the motion for the CRA to have a duty of care in its interactions with citizens. In all of its statements and interactions, it continues to seem to not appreciate the need to address this vital issue, the frustration that so many citizens have in their dealings with the Canada Revenue Agency.

The time the government spent and the energy and resources it put into certain problems versus others make it very clear who the government is invested in helping. Are the Liberals seized with the challenges of the middle class and those working hard to join it, or are they seized with the challenges of SNC-Lavalin and, maybe more importantly, the political implications for themselves?

There was a very long cabinet meeting two days ago, and one wonders about it. Were the Liberals discussing how to help struggling families or struggling energy workers? Were they discussing how to address the challenges we face on so many fronts and the way in which those challenges affect everyday Canadians? I suspect they were discussing how to politically manage the message, something they have failed to do until now, on the worst corruption scandal we have seen in this country in a very long time. Canadians at home are wondering whether or not the government cares about their priorities when it votes down motions like the one from my colleague from Calgary Rocky Ridge and continues to pile on taxes.

We should reflect not only on the failures of the current government to attend to the needs of Canadians but also on its general lack of interest in the plight of Canadians. Its focus is not on what people at home are thinking about or on struggling energy workers and auto workers, but on protecting well-connected insiders. That is what we have seen from the government in recent weeks. We have seen in how many meetings how eager it was to try to get a legislative change into a budget bill, and then there is the implication that the Prime Minister inappropriately tried to encourage the former attorney general to do something with respect to the SNC-Lavalin prosecution. These are serious allegations.

One thing we know from the government's repeated and ongoing conversations is just how seized it was with this issue, while there was a corresponding lack of regard and concern for the struggles that Canadians face, showing a disconnect between the priorities of the government and those of Canadians. We can see it in what the government spends its time on and what it talks about. We can see it in its legislative program. We can see it in how its members vote on key opposition proposals, such as the proposal from our leader, which would have made parental leave tax-free. The Liberal members voted against that great proposal to cut taxes for new parents.

We also had a great proposal from our shadow minister for finance, the member for Carleton, for legislation that would have helped ensure that Canadians with disabilities are not penalized for entering the workforce.

Those are our priorities: cutting taxes for Canadians, helping Canadians with disabilities, helping new parents, and as my colleague from Calgary Rocky Ridge tried to do, helping those who have problems in their interactions with the CRA.

That is what we are trying to do on this side of the House. The government, though, is focused on helping well-connected insiders, and that disregard has consequences for people at home.

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

Mr. Speaker, it is the thinness of the bill before us, Bill S-6, a convention between Canada and Madagascar to avoid double taxation and prevent fiscal evasion, that has led us to go so far afield from the bill at hand during the time available for debate.

The member for Cariboo—Prince George said he lamented, as I do, the use of omnibus bills and omnibus budget bills to sneak things through. I completely agree with him, as many members of this House do, that having a Criminal Code provision stuck into the back of an omnibus budget bill was inappropriate.

My only point, and it may seem churlish, because my hon. friend from Cariboo—Prince George is indeed a friend and was not here in the 41st Parliament, is that the previous Conservative government used omnibus budget bills far more often and far more nefariously.

Now that we stand in these beautiful new quarters in West Block, in a courtyard with a glass roof, we may in fact say that we live in a glass house. I would recommend that all members remember that we all live in glass houses, and we should not throw stones.

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

Mr. Speaker, it is an honour to stand in the House and speak to Bill S-6, 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. It has been said that this is the 94th agreement of this type and it deals specifically with tax evasion.

In preparation for this debate, I did some research and homework on Canada's relationship with Madagascar. We established diplomatic ties with Madagascar in 1965. The latest data on our two-way merchandise trade shows a total of $115.5 million. I enter that into this debate because the hon. parliamentary secretary mentioned that very often tax treaties are seen as a way to break down barriers to trade. That is something of importance.

I want to thank my hon. colleague who hosted me as we toured the Davie shipyard. The day we were there we saw the pride of hundreds of workers in the product they put forth. The Asterix ship is the pride of our navy.

Our hon. colleague also touched on my file. I am the shadow minister for Fisheries and Oceans Canada and the Canadian Coast Guard. Did members know that Canada has the longest coastline in the world, yet we have the oldest marine fleet to protect our sovereignty? Our marine fleet also ensures that all of our waterways remain open and free for the coastal communities that depend on them. It ensures that the transportation of good and people flows freely, that our trade can take place and that our waterways are safe. That is what the brave men and women of our Canadian Coast Guard do every day. Their service to our country should never be forgotten.

It is shameful that we have a government that makes a lot of promises. The Liberals like to stand in the House and on stages right across our country with their hands on their hearts to talk about their most important relationships. I do not know what number they are at now in terms of their most important relationships but there are a lot, and that is why we are here again today talking about a relationship between Canada and Madagascar.

I want to talk about our most important relationships and I want to go back to something my hon. colleague brought up about our brave men and women who serve our Canadian Coast Guard. We need to make sure that we outfit our men and women who serve, whether as first responders or in the military. Our Canadian Coast Guard needs to have the equipment necessary to fulfill its job and we know the government has not done that. The Liberals talk a good game but they have failed to do that.

The department has appeared before committee a number of times, yet the Liberals have failed to give any kind of schedule indicating when they will proceed with the procurement of new vessels to make sure that our waterways remain free. God forbid that we have an incident in the Arctic where we have to save a ship that is trapped or, heaven forbid, even in worse conditions.

This leads me to another part of why we are here today. We are talking about tax evasion and the estimated $47 billion annually that is lost to our economy. I want to talk about our economy. Not only are we losing an estimated $47 billion annually but we are losing investment in our country. Business is fleeing our country at record levels right now. The levels are astronomical. They are at 70-year highs. We have tax evasion and we have business investment fleeing our country at record levels.

Why is that? It is because of the policies and inconsistent messages the government has delivered in the short term it has been here. I would argue that it has been a long three and a half years. It feels very long.

Businesses appear before us every day. They come into our offices and talk to us about how concerned they are. They are no different than our constituents who come to us when we have our riding breaks.

This brings me to the experience I had last week. An accountant in my riding talked about the mineral exploration tax credit for start-up businesses. The CRA has now deemed it assistance, so now companies have to claim it as income. It is another barrier, when we are talking about breaking barriers to trade. We need to do whatever we can to break the barriers to investment for businesses.

The Liberals like to talk about how many jobs they have created, but here is a news flash. Governments do not create jobs. Their job is to create the environment so that businesses can invest and create jobs. We know that the numbers are staggering. It was recently reported that nowhere has a government spent so much and received so little, boasted so loudly and spent so much to achieve so little.

We know that the Prime Minister, in the 2015 campaign, made a lot of promises. He promised to be different. He promised real change. He promised that there would not be omnibus bills and that he would not sneak things into these big bills. What we have seen in the headlines lately is that in the Budget Implementation Act, there was a little clause snuck in that was really a justice clause. Some could argue that this was sneaky and underhanded. Why was it in there and not where it should have been? Why did the former attorney general not put that forward if that was something they wanted?

The Conservatives on this side of House support this. We see the importance of breaking down barriers to trade and of making sure that the flow of dollars lost to tax evasion is stemmed. We want the legislation coming before the House to have fulsome debate, and we want the 338 members of Parliament who were elected to be the voices of Canadians to all have a say in those pieces of legislation.

The Prime Minister campaigned on being open and transparent, but the Liberals tell us to just trust them and that when it gets to committee, we will have that fulsome debate. We also know that the Liberal majority on committees shuts down that debate, and the conversations are very one-sided, as much as they like to talk about it being very collaborative.

I want to bring this back to our committee. We do good work when we put aside our partisan ideas and the committee works at arm's-length from the minister. We managed to do some great work that actually helped expose the clam scam issue, which then saw the former fisheries minister quietly shuffled in the middle of the summer to another position. Why? It was because the Liberals awarded a lucrative surf clam quota to a sitting Liberal member of Parliament's brother and a former Liberal colleague, also a relative of the then fisheries minister, as court documents now show.

Why does this side of the House have concerns? The government says that the opposition is loud and boisterous, but our job is to give sober second thought to what those folks are doing on the other side.

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

Mr. Speaker, under Bill C-82, future tax agreements will be based on OECD standards, which allow for comprehensive tax information exchange.

We will continue to support that bill as well as Bill S-6, the Canada-Madagascar convention. We believe that the convention honours the spirit and the standards set out by the OECD even though the wording itself is not exactly the same as what was signed in Paris. Again, that is based on my understanding of the file.

Madagascar is not a tax haven at the moment, so, in my opinion, the wording about the information exchange agreement is fine. Obviously, it would be better if this were standardized across all our agreements, which is the goal of Bill C-82. The real problem lies with the tax information exchange agreements with tax havens, which make effective tax information exchange complicated or well-nigh impossible.

In such cases, the Canada Revenue Agency has to request specific information about a known taxpayer. We do not have enough information to monitor data about information exchange. If everything were available, auditors could identify situations in which tax fraud or tax evasion likely took place. That is what needs to change. Tax information exchange agreements with tax havens are the problem.

I would remind members that when these agreements were entered into with tax havens, the Income Tax Act was changed. It was not done openly, but hidden in the information on medical expenses, among the thousands of pages of the Income Tax Act. It stated that when Canada enters into an agreement with a tax haven, the portion of income that the Canadian corporation declares was generated in the foreign country will no longer be taxable here. The income will only be taxed in the tax haven, where the tax rate is zero or close to that. That is what we are speaking out against and it must change.

Canada is a lame duck in the fight against tax avoidance; it is letting the big banks and multinationals shift their profits to tax havens under these agreements. At the time, there were 22 agreements. This is still going on. Things have to change.

I introduced a motion in the House to do just that. Every Liberal, except for one, and every Conservative member voted against the motion. Do the parties that aspire to govern represent the Canadians who want to eliminate the use of tax havens, or do they serve the big corporations and major banks that are the main beneficiaries of these immoral schemes?

I think that in asking the question, we have our answer. This must change.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Mr. Speaker, I thank my colleague for his speech and his expertise on the matter. I know that he also analyzed Bill C-82. I am sure that he fully understands the fact that this bill aims to renew and improve our tax treaties. Our partners must also accept the improvement of a treaty; it goes both ways.

Today, we are studying Bill S-6, a tax treaty with Madagascar. However, this treaty was modelled on the old system. The tax treaty was signed on November 24, 2016, and the multilateral treaty, which is the subject of Bill C-82, was signed on the same day in Paris. Therefore, while a treaty was being signed in Antananarivo, Madagascar, and another in Paris, two different things were being signed.

Can my colleague tell us about the difference between the new and improved OECD treaties, which were adopted in Paris, and the one signed in Madagascar, which is based on a version that the government believes taxpayers can abuse?

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Mr. Speaker, I am pleased to rise in the House to speak to Bill S-6, following two of my colleagues who have already spoken on this subject.

At first glance, this bill may seem a bit dull. I will therefore try to be as interesting as possible to ensure that Canadians tuning in know how important these issues are and that there are risks associated with establishing tax treaties with other countries. That is what is at stake here. A new tax treaty is being proposed to us. As we already have 93 of them, this would be our 94th tax treaty. That is not a small number. Consequently, we should not take this new treaty lightly, since it will be one of a series of treaties we have with many countries that have significant tax implications.

All Canadians feel concerned about tax issues because they all file a tax return each year to pay their dues and get all the credits to which they are entitled. They all know that taxation is an extremely important issue related to fairness and justice.

I have said this before, but in our country, we are fortunate to have a tax system that allows the federal, provincial and municipal governments to deliver services to the public. In some provinces, there are even school boards with a tax system. The ultimate goal of taxation is to ensure that the government can operate, but the government's primary focus is to serve the public and provide the best possible services to Canadians. They deserve value for their money, as they say in the business world.

When we buy a product or service, we want value for our money. The same goes for taxation. When we pay taxes to different levels of government, we hope to get our money's worth and get good services. The problem is that some Canadians feel like other taxpayers like them, usually the rich, are getting out of paying taxes by hiding their money either in Canada or offshore.

Some cases involve domestic tax evasion. For example, there are people who work under the table and hide their cash under a rug or in a mattress. We have all heard of that before. In other cases, people hide their money in tax havens. In both cases, the principle is the same, namely to avoid paying their fair share of taxes to the system that helps provide services to all Canadians.

As I have said in other debates on taxation, most Canadians receive more in services than they contribute in taxes. That much is clear when we add up all the services they receive. This means that we have a fair system, but it needs to be even more progressive so that the least well off can still receive the best services.

No one wants to live in a country or a society where a person's wealth determines the services they receive from the government. It is therefore important to make sure that the wealthy contribute their fair share, especially multinationals and Canadian banks, which post record earnings in the billions of dollars every year, and which make use of many tax havens. This is fundamental to preserving Canadians' trust in our tax system.

This is perhaps a brief preamble to the debate we are having on tax treaties, which avoid double taxation.

I will use an example that many Canadians will recognize. Consider a Canadian company that has a U.S. subsidiary or does business there. If that company pays taxes there, where rates are similar or even higher than ours, it will not be taxed a second time when its profits are repatriated to Canada. That is the basic premise of tax treaties, and it is a matter of fairness. If the taxpayer pays taxes in another country, that money should not be taxed a second time when it is brought home. The main purpose of a tax treaty is to avoid taxing the same income twice.

Having said that, this makes sense in the case of countries like the United States, which has tax rates that are comparable to and even higher than ours depending on the state. However, in the case of other countries with which we have tax treaties, we must ask ourselves what the real purpose of the treaty is. Take for instance Barbados, with which we have a tax treaty. Barbados is a small country. For reasons that are still unclear to me, even though I have asked many questions about it, this country ranks third, and sometimes even second, in terms of countries where Canada makes direct investments abroad. This information comes from Statistics Canada. Barbados, of all the countries in the world, ranks third in terms of Canadian investment. After the United States and the United Kingdom, Barbados often ranks third or fourth in terms of our foreign direct investments. We have to ask ourselves why.

The answer seems simple to me. We have an agreement with Barbados to prevent double taxation, and Barbados has a tax rate ranging from 0.5% to 2.5% for foreign companies. We need look no further to understand this. This is not new, but from 1982. It was one of the first international tax treaties we signed.

When we ask questions about this agreement with Barbados, we hear snippets about why, historically, we have this very close relationship with Barbados. It is hard to find it anywhere in writing, but Barbados being Canadian companies' gateway to the rest of the world actually seems to be part of Canada's tax policy. If a Canadian company wants to do business abroad, Barbados is the gateway to those countries with its low tax rates ranging from 0.5% to 2.5% for foreign corporations. A Canadian company that establishes a subsidiary in Barbados will do business with countries from around the world, and since their revenues are reported in Barbados, that is where they are taxed. Instead of being based in Canada, the company uses Barbados as the gateway to the entire world. The government will not admit it but, unofficially, during many discussions, I heard that this tax policy dates back to 1982, and that Canada adopted it because that is what every other country was doing. We are being told that we have to do this because everyone else is. If everyone is doing it, why should Canada be put at a disadvantage by not doing it? That is what we are hearing.

It is extremely important now, more than ever, to have a real discussion and to work together on tax havens, even though the current and former governments have never taken real action on this. More than ever, we need to put an end to these dishonest practices by many taxpayers, especially companies and multinationals, which use shell companies in tax havens all around the world.

Barbados is the preferred tax haven for Canadians. Other countries will have another. We need to put an end to this practice for good. All industrialized countries that are missing out on taxes and whose tax base is incorrect as a result of these practices need to get what they are entitled to. They are owed the taxes that these multinationals generate on their billions of dollars in profits every year. These billions made all over the world are hidden away in bank accounts, in tax havens, to avoid fair and equitable taxation that would be used to provide public services.

The worst is that these companies are often the first to make use of these public services. They are the first to use the infrastructure that our industrialized countries have built. Their employees are the first to use roads, public transit and public services like education and health care. It can therefore be argued that they are taking advantage of Canada. They are taking advantage of Canada's system and of its generosity, and they are then hiding their money abroad, without contributing to our system in return.

What we keep hearing from governments, especially Conservative ones, is that there is not enough money. Fortunately, not all of them are sending that message, but around the world, more and more of them are saying that the money has run out and that governments no longer have the means to provide services to Canadians. Governments are drowning in debt, they cannot balance their budgets, and they have to cut services, yet billions of dollars are being hidden abroad, where they are not contributing to society as they should. We want to see more services, better services, services that benefit everyone, including people in Canada, of course.

That is the crux of the matter. That is why it is important to consider this issue carefully. Far from being a boring bill, Bill S-6 is exciting. The tax convention with Madagascar may enable continued abuse of a convention. I am not alone in saying that tax agreements are being abused. Bill C-82 is being debated at this very moment two floors down in a committee room.

As finance departments officials themselves have admitted, taxpayers can and do abuse tax treaties. That is why Bill C-82 was tabled. It is clear, it has been said in so many words, which is fortunate. I think this was the first time I heard anyone admit it out loud. Earlier I was saying that we often hear things through the grapevine that are never said out loud into a microphone. However, it was said loud and clear that tax treaties do get abused, which is why Bill C-82 had to be tabled and now has to be passed.

My question for the parliamentary secretary, who did not seem to know the answer, was related to that. I actually know the answer to my own question. Bill S-6 follows the old tax treaty model, which, by the government's own admission, produced tax treaties that get abused.

Today we are debating a bill on a tax treaty with Madagascar. In this case, it seems all right. As I said earlier, we do not want double taxation. Madagascar has reasonable tax rates that are comparable to those in Canada. That is fine, but we do not want tax treaties to be abused.

However, Bill C-82 demonstrates that tax treaty abuse is already happening. Also, Bill S-6 seeks to adopt a treaty just like the ones that the Liberals themselves admit are open to abuse. That makes no sense.

They should have taken the time to negotiate the treaty using the new model developed by the OECD to come out with a better agreement. I am not saying it would have been perfect—and I will be saying that in committee—but at least it would have been a step in the right direction. They acknowledge that tax treaty abuse is a possibility, and they are making an effort to close these loopholes in the treaties to keep that from happening. However, by the government's own admission, taxpayers could abuse this treaty.

That is why I wanted to say in my speech today that the government has a responsibility to make a clear commitment to ensure that these conventions cannot be abused over time. As I was saying earlier, a convention with Madagascar is a good idea because its tax rate is similar to Canada's.

However, this does not meant that five years down the road, Madagascar will not become a tax haven or will not change its tax laws to lower the tax rate of foreign companies operating on its territory. We need to ensure that there is a monitoring and control mechanism. We need to monitor the 94 conventions that are in place to ensure that they do not become tax conventions that can be abused. That is extremely important. Unfortunately, the government did not commit to monitor the conventions and ensure that they do not become gateways to tax evasion and aggressive tax avoidance for Canadian companies. As everyone knows, tax evasion is reprehensible and illegal.

The government talks a lot about tax evasion and says it is doing great things to address it, but the Liberals do not have any results to show Canadians.

The Conservatives got zero results in that regard, and they had no intention of doing anything to address tax evasion. For the benefit of Conservatives who may be listening, I repeat, a former minister of national revenue even admitted that tax evasion was not a priority. I did not address that in my speech, but I did mention it in a question I asked my Conservative colleague, although that member made no reference to the issue. Jean-Pierre Blackburn admitted that tax evasion was not a priority.

This government promised to do more to combat tax evasion, but it has no results to show for it either, even though concrete results are all that matter. It is all well and good for the government to say that it is doing what is necessary, it has invested $1 billion and it hired 1,300 auditors, but if there is nothing to prove that the plan is effective, then clearly it is not working. This government does not have the motivation or any real intention of getting to the heart of the problem. The government is actually only scratching the surface.

Since the Liberals took power, there have been three tax and financial scandals: the Bahama leaks, the Paradise papers and the Panama papers. In all three cases, it was determined that many Canadians were involved in these scandals. Today, three years later, no taxpayers have been convicted of tax evasion. Worse still, no charges have been laid against even one taxpayer involved in these financial and tax scandals. This clearly shows that the system is not working and that it is flawed.

Even if they invested $1 billion and hired 1,300 auditors—as the Minister of National Revenue says every day—if the system is flawed, nothing will change. Taxpayers will still be able to shirk their responsibilities. That is the crux of the matter, but the government refuses to see it.

The tax system needs to be reformed as a whole. It is not enough to close a few loopholes here and there. The first version of the tax code was 15 pages long. Today, the code is 1,800 pages long. This is proof that the system is flawed.

Canada's chartered accountants are calling for a comprehensive reform of the tax system. That is what is at issue today, and that is what the government needs to address. Otherwise, investing $1 billion and hiring 1,300 auditors will not change anything. The government must review the Canadian tax code from top to bottom, to simplify it and ensure that everyone pays their fair share. It is often easier to comply with something simple.

I hope that the government will also study this issue. The NDP is committed to reviewing the entire tax code in order to close all loopholes and have a simple tax code.

Canadians expect to receive quality services commensurate with the money they invest in the system.

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

Mr. Speaker, it may not seem like it, but I have some expertise in this area. Having worked as a television journalist for 20 years, I know a little bit about lighting issues. I sat in the National Assembly, and I even worked on the TV broadcast of the National Assembly debates 30 years ago. I will not recount my life story, but I can say that I know a little bit about it.

If, by chance, it can help the people who have done an excellent job, I will say that some adjustments do need to be made.

I will not go into detail, because it does not concern Bill S-6, but I will say that the lighting in the National Assembly is much more focused and more vertical. Based on my experience in TV, that is my humble suggestion.

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

Mr. Speaker, I want to pay my respects to my hon. colleague, the member for Yellowhead. In the last three and half years it has been a privilege to work with him and to know him better.

As a reminder, a few days ago he talked about his experience as an RCMP officer and having contact with first nations people. This is what MP work is all about. It is based on our own experience, talking about it and sharing it with people, to provide good legislation.

I will get back to my hon. colleague's question.

We believe that if Canada takes action to prevent tax evasion but other governments, countries or administrations do not, the miscreants and scoundrels of that world who live in Canada will be able to use the loopholes in these other countries to pay less tax. They will avoid their social responsibility and the responsibility that we all have as Canadian workers. That is what we must fight against. There needs to be more of these types of agreements. This is the case today with Bill S-6.

Are we doing enough? We can never do enough.

Are there any improvements to be made? Certainly, more than ever.

Should we sign new agreements with as many countries as possible, or even global agreements for the whole world? That is the objective we need to have.

Until then, every step is a step in the right direction.

[Jim Eglinski, Conservative, Yellowhead, AB]

Mr. Speaker, we can come up with all the regulations we want as an individual country. Parts of Bill S-6 and Bill C-82 are about that. However, he talked about the importance of working with other governments from other countries.

Could he perhaps exemplify what he meant when he said that it was important that we work with other countries?

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

Mr. Speaker, I commend my colleague from Sherbrooke whom I respect and hold in high esteem. I appreciate his contributions to the debates here in the House and in parliamentary committees.

I did say in my remarks that tax evasion is a fight that should not be fought alone and that Canada should contribute to the effort. Did we do enough when we were in government? The NDP naturally does not think so. We believe we made an effort and took steps in the right direction.

I did mention in today's debate that we have to move in the right direction. We believe that Bill S-6 moves in the right direction, and in fact, we had taken similar steps ourselves, and if Canadians should decide to put their trust in us in eight months time, then we will continue in that direction.

Solutions are not limited to the debates we have here in the House or the measures we propose here. It is a step in the right direction, but this is a fight that needs to be taken up internationally in a joint effort by every country around the world. As long as there is a loophole in any country that leaves room for tax evasion, any effort or will to combat it is a step in the right direction. We understand that, but everyone has to do their part if we are going to get concrete, real, or tangible results in combatting tax evasion.

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

Mr. Speaker, I appreciate very much the member opposite's support of the legislation being debated. In part of his speech, he talked at length about commitments and promises. It is really important we recognize that the government has fulfilled many promises. There is always room for us to do better, and we have a Prime Minister who is committed to doing that.

The most significant commitment that this Prime Minister and government gave was to improve the standards for Canada's middle class, and we have been very much focused on Canada's middle class. Even when the opposition has been focusing its attention on personal attacks on the Prime Minister, we have continued to stay focused on Canada's middle class and those aspiring to become a part of it.

We see this in our policy decisions and legislation such as Bill S-6, as well as tax treaties. We have been expanding the whole area on international trade, which adds to our economy and gives strength to Canada's middle class. That was a solemn commitment given to Canadians in the last election, and one that we fulfill, day in and day out, through very progressive measures such as tax cuts to the middle class, increases to the Canada child benefit and the GIS, as well as so many other things.

Does my friend acknowledge that the legislation we are debating today is yet another piece of the puzzle that ultimately builds Canada's economy through the expansion of trade, which helps Canada's middle class?

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

Mr. Speaker, I am very pleased to rise on behalf of the official opposition at this stage of Bill S-6.

As I mentioned earlier, I want to assure members right off the bat that the official opposition supports this bill, the spirit of the bill and the measures it proposes, and we understand that there is still a lot of work to be done to combat tax evasion. We believe that this bill is a step in the right direction.

First, I want to give some background about what we are talking about. Bill S-6 is a Senate bill that seeks to facilitate work and trade between Canada and Madagascar by cracking down on tax evasion and eliminating some of the problems that could be created by differences in administration in Madagascar and Canada and the taxation principles underlying trade relations between the two countries.

This bill contains measures to eliminate double taxation, which is good for international trade. The bill also contains measures to eliminate discriminatory taxes. The field needs to be as open as possible to facilitate trade. Every country has its own measures, which is fair. However, some tax measures can undermine things more than others. The bill would therefore eliminate discriminatory taxes. It counters tax evasion. We will be able to talk about this later, but tax havens obviously warrant closer scrutiny, and this is not an issue that can be solved with a snap of the fingers. It takes time, co-operation and the support of some 180 countries on this planet. This is not a problem that can be fixed overnight, but we must do everything we can to fix it, and this bill is a step forward.

Furthermore, this bill would create mechanisms in the unfortunate event of a challenge on either side. These mechanisms will help find a way forward for finding a way forward with trade agreements.

Lastly, this bill will enable different administrations to share information when an investigation is required, for a company or individual, either in Madagascar or in Canada.

In essence, there are five measures in this bill: eliminating double taxation, countering tax evasion, eliminating discriminatory taxes, allowing for information sharing, and creating mechanisms to settle disputes.

We agree with these principles. We also agree that this should become Canada's 93rd treaty with other trade partners to simplify the tax system and boost trade. This is not a free trade deal per se, but it will allow for better agreements and greater flexibility. Madagascar may not be the best-known country in the world, or indeed among Canadians. It is an island in the Indian Ocean off the eastern coast of Africa. It is actually quite a big country. The island is about 1,500 kilometres long and 800 kilometres wide. Fifteen hundred kilometres is like the distance from the Alberta Rockies to the Ontario border, spanning the provinces of Alberta, Saskatchewan and Manitoba. That should give everyone a rough idea of the size of this country, which has a population of 25 million.

History tells us that Canada and Madagascar share similar roots, because Madagascar is a francophone country. We both belong to the Francophonie. We know that the Francophonie summit was held there a few years ago and that Madagascar was a French colony that gained independence in 1960 when a wave of decolonization swept through British and French societies around the globe. The decolonization movement reached Madagascar in the 1960s.

We should also know that Canada and Madagascar have had a trading relationship for years, particularly in the mining sector. A Canadian company has set up shop there, so to speak, to operate one of Madagascar's biggest mines. Furthermore, trade between Canada and Madagascar hovers around $100 million or $115 million.

Canada buys roughly $100 million in goods and services from Madagascar and in return Madagascar spends roughly $20 million buying in Canada. For the record, that represents 0.001% of our volume of trade with our biggest partner, our friends and neighbours, the U.S. Yes, that is significant. We recognize that, but we should still maintain some degree of perspective in terms of Canada's trade with Madagascar and our trade with the U.S.

The thing about this bill that we need to discuss is the issue of tax evasion. I addressed it briefly earlier. Tax evasion is an ongoing challenge facing every country in the world. Yes, we must make an effort. We certainly did when we were in government, and efforts to combat global tax evasion must continue. That is why the 180 or so countries on this planet cannot work in isolation in that regard. Everyone must join forces, work together and share the knowledge, efforts, energy and potential talent of each country and each country's experts in order to combat the scourge of tax evasion.

Canada is making an effort. With Bill S-6, we have a treaty that will help us move in that direction. That is largely why we support this bill. It is important to always be alert and always keep in mind that tax evasion is a blight on our planet that must be tackled in a serious and rigorous manner. However, no one can do it alone. Major countries need to join forces, and tax havens, the smaller countries that unfortunately serve as tax shelters for some people, need to do their part to combat this situation. We completely agree with the principle that everyone must pay their taxes fully and legitimately. Everyone must pay them, and no one should be able to resort to tax havens, for when they do, Canadians do not get value for their money.

I am very concerned about this bill. We agree that this situation should be debated in the context of a truly independent bill. How many issues are never properly debated here in the House of Commons? This is a problem.

A year ago, the government tabled Bill C-74, an omnibus bill that is almost 800 pages long. Ostensibly, the bill implements budget measures, which is fine because that is how things work. However, scattered throughout the 800-page bill are measures that have absolutely nothing to do with the budget tabled by the Minister of Finance.

Need I remind the House that the Liberal Party was elected nearly three and a half years ago? I would say it was a sad day, but democracy is what it is, and we respect the choice Canadians made. Those people were elected on the strength of a clear promise.

I have here the Liberal Party's platform, which was called “Real Change: A New Plan for a Strong Middle Class”. The title sure sounds good. On page 30, under “Prorogation and omnibus bills”, it says:

We will not resort to legislative tricks to avoid scrutiny.

How interesting. That is exactly what is going on with Bill C-74.

[The former Prime Minister of Canada] Stephen Harper has used prorogation to avoid difficult political circumstances. We will not.

That is the Liberal Party of Canada saying that.

Stephen Harper has also used omnibus bills to prevent Parliament from properly reviewing and debating his proposals.

That is exactly what is going on with Bill C-74. Here is the end of the paragraph:

We will change the House of Commons Standing Orders to bring an end to this undemocratic practice.

That is the Liberal Party promise.

Bill C-74 flies in the face of the party's promise. This reversal should certainly not come as a surprise. I remind members that in their document the Liberals said that they would run three small deficits in the first three years and would then balance the budget in 2019. In reality, the three small deficits they promised were three times higher than projected. The budget that was supposed to be balanced will be presented soon, as the Minister of Finance announced yesterday, but we know that it will not be balanced. There will be a deficit in the neighbourhood of $20 billion or more.

In that same document, the Liberals also spoke about electoral reform. Did that happen? No. This is the very essence of the Liberal Party's privilege. It was elected on its promises, but it did not keep its word. On October 19, 2015, Canadians elected the Liberal Party. I respect democracy, but as they say, the people's will is not foolish, but the people can be fooled. This is exactly what is happening here.

Bill C-74 is supposed to implement budget measures, but dozens of items that have nothing to do with the budget were slipped into the bill, in particular clauses 715.3, 715.31, 715.32, 715.33, 715.34, 715.35, 715.36 and 715.37. This is no small matter. These clauses are found in the section “Remediation Agreements”. I do not have the time to read all of them. They directly address the problem that the government and, unfortunately, Canadians are grappling with today, and have to do with the special agreements that the government can enter into with corporations that, sadly, have failed to fulfill their responsibilities and find themselves in court on fraud charges.

That is exactly the crux of the SNC-Lavalin scandal, which broke two weeks ago. Every day new situations arise that are an embarrassment for the government. The problem is that they are not only an embarrassment for the government but also for Canadians, who want answers.

I would like to remind members that these clauses were inserted into an 800-page bill. Earlier, the parliamentary secretary said that we could have discussed it in committee. Quite frankly, how would he expect us to directly address this issue if we have to study an 800-page bill. Today, we are spending many hours, and rightfully so, studying Bill S-6 on trade and tax agreements between Canada and Madagascar. However, we did not have the time to appropriately debate a matter that has embarrassed the Government of Canada and, consequently, Canada and Canadians.

Unfortunately, that is typical of this government, which says one thing and then does the opposite. When it comes time to get to the bottom of things, the Liberals trip on their own shoelaces, which results in what we have been seeing for the past two weeks. It has been a real comedy of errors on the part of the government, which is incapable of telling Canadians the truth about the Liberal SNC-Lavalin scandal. What is more, the government is preventing the former attorney general from giving clear and specific explanations.

Day after day, we have been asking the Prime Minister very simple questions. On September 17, 2018, he met with the former attorney general. Yesterday, in the House, the Leader of the Opposition asked the Prime Minister more than a dozen times what was said at that meeting and who asked for the meeting to discuss what has now become the Liberal SNC-Lavalin scandal. The Prime Minister never gave a clear answer to the very simple question of who asked for the September 17 meeting. The same goes for the other very important meeting in the Liberal SNC-Lavalin scandal, the meeting that took place on December 5, 2018, at the Château Laurier, between the former attorney general and the Prime Minister's former principal secretary, Gerald Butts.

Once again, yesterday, the leader of the official opposition asked the Prime Minister a very simple question: who asked for the meeting between the Prime Minister's top adviser and the former attorney general?

The Prime Minister did not give anything remotely resembling an answer, even though it was a very simple question. Which one of them requested the meeting? He was not even able to answer that. Canadians want answers. They have the right to know what happened.

Canadians deserve clear and simple answers to clear and simple questions on this issue. The Liberal SNC-Lavalin scandal is totally unacceptable to Canadians.

What we have noticed is that we are debating this bill in the House for many hours today, which is fine. I agree we have to debate Bill S-6, with respect to taxation between Canada and Madagascar. This is an important issue and we have to take the time to address it. On the other hand, why did the government dodge its responsibility to address the specific issues we find in proposed sections 715.32 to 715.37 of Bill C-74, an omnibus bill of more than 800 pages? Those sections in the bill addressed the specific issue that we have today with the Liberal SNC-Lavalin scandal.

This is the trademark of the Liberals. They say one thing during their electoral campaign and do the exact reverse during their mandate. Do members remember that they had clearly indicated in their platform that they would never table omnibus bills containing other issues that do not address the main omnibus bill, which is the budget implementation bill?

Unfortunately, they failed to do what they had promised Canadians, just as they failed to bring about the electoral reform they promised in their electoral campaign. Everybody knows they failed to budget the Canadian economy properly. During their campaign, they said there would be three small deficits in the first three years to invest in infrastructure and then a zero deficit in 2019. This is not the situation. During the last three years, the current government has tabled three huge deficit budgets. That is the reality of the situation. It is three times more than was expected and what they promised.

Also, 2019 was supposed to be a zero-deficit year. That is not the case. We are talking about at least $20 billion of deficit. The government has failed its responsibility and nobody in the government knows when the budget will balance, or I should say, when the budget will balance itself. That was the famous economic theory of the Right Hon. Prime Minister of Canada, who is the only person in the world to table that economic theory, which is absolutely stupid. However, this is the Liberal trademark.

Talking about deficits, let me remind members that, during the election, the Liberals said they would run small deficits because they wanted to invest in infrastructure. Let me remind hon. colleagues that the plan was to invest $180 billion in infrastructure over the next 10 years, starting in 2015. Only 10% of that amount has been invested in infrastructure. Therefore, the huge deficits were not for infrastructure but for the daily business of the government, which was not elected to do that.

I want to reiterate that our party supports Bill S-6, but unfortunately, although we are spending plenty of time debating the omnibus Bill C-74, which is perfectly normal, there are other very important elements that the government snuck in and that should have been debated. If they had been, maybe the Liberal SNC-Lavalin scandal we are facing today would not have happened.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Mr. Speaker, I thank my colleague for her speech. I am always happy to debate with her.

I would like to come back to Bill S-6, which is before us today.

Bill C-82, which is currently being examined by the Standing Committee on Finance, would renew all tax conventions, if the two countries come to an agreement that, according to the government, is renewed and improved.

We have before us a new tax convention with Madagascar. I have a very specific question about this bill. I would like to know whether the convention with Madagascar uses the same renewed and improved text that is set out in Bill C-82 and whether the government is trying to incorporate it and renew it with all of the other partners with whom we have tax conventions.

Are we in the process of passing a bill that contains the old version or the new version of the conventions?

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

Mr. Speaker, let me begin by acknowledging and thanking my colleague, the Parliamentary Secretary to the Minister of Finance. I have often enjoyed serving and crossing swords with her at the finance committee. I imagine we will have the pleasure of debating many economic issues over the next few weeks and months, and obviously during the election campaign.

I want to mention at the outset that our party, the official opposition, supports this bill. We support any and all measures to help combat tax evasion and ensure greater flexibility to facilitate trade between Canada and countries around the world. We will have another chance to talk about that later.

I would like to point something out, however. The bill was introduced, yes, and while we recognize this is an important bill, a number of important aspects could not be debated properly here in the House.

For example, let us not forget Bill C-74, which was more than 800 pages long. Technically that bill would implement the budget passed by the House of Commons. However, there were clauses slipped into that omnibus bill, clauses 715.3 to 715.37, that were on everything but the budget. We call that an omnibus bill with clauses slipped in for the purpose of passing something without properly debating it in the House of Commons.

Bill C-74 and the clauses I mentioned included content on the remediation agreements, the very topic at the heart of the Liberal government scandal involving SNC-Lavalin.

If the government had acted as swiftly on Bill S-6 as it did on the very important issue of remediation agreements, things might be different—but they are not.

I have a very simple question for the parliamentary secretary: does she believe that Bill C-74 could have been split to allow for a fair and equitable debate on the issue of remediation agreements, as we are currently doing with the Canada-Madagascar tax agreement?

[Bill Blair, Liberal, Scarborough Southwest, ON]

moved that Bill S-6, 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, be read the second time and referred to a committee.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Okay.

The government has tabled Bill S-6 from the Senate. It's a tax treaty with Madagascar. Is Madagascar a party to this multilateral instrument? Will that then fall into this if this is put into effect, into force? Will this apply to that treaty as well?

[Bill Morneau, Liberal, Minister of Finance]

moved that Bill S-6, 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, be read the first time.

(Motion agreed to and bill read the first time)

Message from the Senate

[The Assistant Deputy Speaker, Anthony Rota]

I have the honour to inform the House that a message has been received from the Senate informing this House that the Senate has passed Bill S-6, 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.

Resuming debate. The hon. member for Charlesbourg—Haute-Saint-Charles.