Bill S-6 (Historical)

Canada–Madagascar Tax Convention Implementation Act, 2018

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

This enactment implements the Convention between Canada and the Republic of Madagascar for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and a related protocol.
The convention is generally patterned on the Model Tax Convention on Income and on Capital developed by the Organisation for Economic Co-operation and Development (OECD).
The convention has two main objectives: the avoidance of double taxation and the prevention of fiscal evasion. Once implemented, it will provide relief from taxation rules set out in, or related to, the Income Tax Act. That implementation requires the enactment of this Act.

Canada–Madagascar Tax Convention Implementation Act, 2018

[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 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.

[The Speaker, Liberal, Geoff Regan]

I do not wish to take away from any of time for further questions and comments, but I should clarify that while the rule generally is that a member must rise uncovered, as they say, which means no hat and no sunglasses, I know members have been having some concerns.

While we are all very happy with the wonderful work done to prepare this interim chamber, the lights are quite bright and some members are having trouble with that, and it is bothering them. Therefore, I understand why members in some cases may feel they have to wear sunglasses. Where it necessary to do so, we understand that.

In the meantime, I want to assure members that the administration is working to try to remediate this problem. I think it is a little less bright this week than it was previously, but these LED lights are very strong. I hope we can find other ways to resolve this.

[Jim Eglinski, Conservative, Yellowhead, AB]

Mr. Speaker, I would like to thank you for recognizing that. I normally never wear sunglasses. Even as a policeman, I never wore sunglasses. The decor is great, the chamber is great, but the lights are bothering a lot of members. The last few days I have been going home with headaches and my eyes have been watering badly. I normally never have that problem. That is the only reason I am wearing them. I think some other members are starting to wear them too, just to protect our eyes so we can get through the day.

[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.

[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.

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

Mr. Speaker, I listened to my colleague's speech on Canada's 94th agreement with another country to curb tax evasion and his warning that we should not let this come back to haunt Canada and its taxpayers.

He also told us that he is in favour of reforming the tax system. I would like him to comment on the fact that Canadian families currently pay more taxes under the Liberal government, considering that the benefits it gives with one hand are clawed back with the other. The Fraser Institute released a study to that effect today. Canadian families currently spend more on taxes than on food and shelter.

Is the government headed in the wrong direction? Does it rely on deficits and have a spending problem? Has it lost control of its spending? I would like to hear what my colleague has to say about that.

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

Mr. Speaker, I am not sure that my colleague and I will be able to come to an understanding, since the Conservatives often do not have the same definition of tax. In their definition of tax, they include anything they possibly can, just so that they can say that Canadians are paying more taxes. They even consider Canada pension plan contributions to be taxes. In my opinion, this makes their calculation incorrect, which leads to some false conclusions. Investments in a public or private pension plan are investments, not taxes, as the Conservatives claim.

Unfortunately, my colleague's question today follows the same pattern. The Conservatives see taxes everywhere, even in things that are not taxes. An ideological bias prevents them from seeing the truth, from seeing that taxes are also necessary in a society if we want good-quality services, like access to health care and education, regardless of the individual's income. This is what the Conservatives do not want to see. In their view, there should be no government involvement. It is every person for themselves. Those who earn enough will be fine, and too bad for everyone else.

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

Mr. Speaker, here is the way I look at it from the New Democrats' perspective and these are the issues I have with them. Within the last couple of budgets, we have seen a serious commitment, hundreds of millions of dollars and getting close to a billion dollars, to go after individuals who are trying to avoid paying their taxes. This government has been focused very much on that issue.

Along with that issue, we have also been focusing attention on tax agreements with other countries as we expand. We recognize the importance of world trade and the benefits of that. The New Democrats tend to be reluctant to support the government when it moves into the area of expanding exportation or markets abroad. When we do that, tax agreements, such as the bill that we are debating today, become an essential part of ensuring a fairer sense of taxation, no matter where a person may go. We recognize and we have invested hundreds of millions of dollars to get those tax avoiders. We are also putting into law agreements that will assist in ensuring there is a fairer sense of taxation.

Would the member across the way not agree that the NDP should be supporting this legislation and legislation like it?

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

Mr. Speaker, I may have forgotten to mention that our caucus supports Bill S-6. As I am sure I mentioned, the reason we support this bill is that Madagascar's tax rates are comparable to ours. They are reasonable tax rates compared to those in Canada. That is why it is possible to accept a bill like this one on an agreement with Madagascar.

That being said, I would put a big asterisk next to tax treaties, because over time, they can be abused. We must ensure that these countries do not become tax havens, like Barbados, with which we have a tax treaty. That is why I am warning the government. By its own admission, as evidenced by Bill C-82, taxpayers abuse tax treaties. That is precisely the government's argument in the case of Bill C-82, and that is why I am cautioning the government against tax treaty abuse. I am only reiterating what the government is saying.

As far as investments are concerned, it is all well and good to say that $1 billion has been invested and that we have 1,300 more auditors, but when the system is broken and no longer works, then it will not change anything. That is why the government has nothing to show for this investment. There have been no convictions or even charges related to offshore tax evasion. The government sent out 12 notices of assessment, and that is it. Congratulations.

[Marjolaine Boutin-Sweet, NDP, Hochelaga, QC]

Mr. Speaker, can my colleague tell us what kind of oversight could be included in a convention like this one to prevent abuse?

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

Mr. Speaker, I think the best way to do that is to have a transparent approach. The process should be public, and the information should be available to Canadians.

We have 94 conventions. Every one of them should indicate the foreign corporate tax rate in the country in question. There should be absolute transparency, and that information should be updated every year. If countries change their tax rates significantly, Canada and Canadians will know about it. If necessary, we can change or repeal tax conventions that start to be abused. I think that is the best approach to oversight.

We can talk about other approaches, but I think the easiest way to keep track of things is to make the information public. We should be open and transparent about countries' tax rates. Finance Canada should keep that information up to date and take it into consideration.

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

Mr. Speaker, I thank my colleague for the very interesting discussion on a tax treaty with Madagascar. Some people may have thought this would not be too stimulating a discussion, but he made it very interesting and very appropriate for the times.

I want to bring up one example of a tax haven, which I have brought up many times in the House. A mining company in Vancouver had a mine in Mongolia and made a huge profit there. Over a period of five years, I think it should have paid Canada $600 million in taxes and should have paid Mongolia $200 million in taxes, but instead, it opened a post office box in Luxembourg and paid Luxembourg $80 million in taxes, about one-tenth of what it should have paid. The kicker is that the company contacted CRA and asked if it was okay, and CRA said it was fine; Canada has a tax agreement with Luxembourg, so it could fill its boots.

I am wondering if the member could comment on the problem of these tax agreements being abused. I spoke to a tax lawyer once who said that the simplest thing would be to have a minimum tax put in these agreements, say 20%, so that the agreements could not be abused. Companies would be paying more or less the same tax they would pay in Canada so that they would not be tempted to funnel all their money out of our country, causing Canada to lose taxes.

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

Mr. Speaker, I want to thank my colleague for that great question and for his expertise on this subject.

This is a glaring problem. The example he described is just one of many. Companies, especially multinational corporations, are using highly complex tax schemes because they can afford to do so. My neighbour in Sherbrooke cannot afford to pay an accountant to figure out how to exploit the same loopholes, because that would cost him far more than he owes in taxes.

Taxpayers like the mining company my colleague mentioned can afford to hire tax lawyers to explain how to use complex tax schemes. Even the CRA's top auditors have a hard time untangling all these schemes, especially in light of the bank secrecy arrangements that certain countries have. That means these companies get away with shirking their tax responsibilities.

It is important to do due diligence and monitor our tax treaties to ensure that they do not become abusive. It is also important to take measures to ensure that companies pay taxes at the correct rate in Canada, even when our foreign partners have lower tax rates. There are ways to achieve that, and it is important to study these kinds of potential solutions.

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

Mr. Speaker, the existing tax convention with the Republic of Madagascar, which was signed at Antananarivo on November 24, 2016, contains an interesting element that is not systematically included in other agreements. That is what I want to focus on here.

I would like to draw the attention of the House to article 25 of the convention, which has to do with the exchange of tax information. The wording of that article is consistent with the standard established by the Organisation for Economic Co-operation and Development or OECD, on the exchange of tax information. Article 25 provides for the automatic sharing of the tax information set out by the OECD to address base erosion and profit shifting. The information is automatically transferred on both sides, and that is a very good thing. In other words, Canada receives all of that information automatically.

We could relate that to Quebec's single tax return proposal. With an information exchange agreement like the one in this bill and with the co-operation of Ottawa, Quebec could have access to all of that information. Such a convention is therefore fully compatible with the much-talked-about proposal for a single tax return administered by Quebec, which we recently discussed here in the House.

The wording based on the OECD standards is used in a number of Canada's information exchange agreements. Unfortunately, however, it is not used in most of the agreements Canada signed with tax havens. I find that extremely disappointing.

Take Barbados for example. In the Canada-Barbados tax treaty, paragraph II(3) states that, “The existing taxes to which the Agreement shall apply [only] are, in particular: in the case of Canada: the income taxes imposed by the Government of Canada, (hereinafter referred to as “Canadian tax”)”.

A bit further, article XXVIII, which deals specifically with information sharing, states that the only information that Barbados is entitled to share within the meaning of the treaty are “taxes covered by this Agreement insofar as the taxation thereunder is in accordance with this Agreement.”

In other words, it can share information only with Ottawa, it can share information regarding federal tax only, and it cannot possibly share any information that would allow the application of any Quebec tax law that is not an exact copy of federal tax law. The Canada-Barbados tax treaty therefore prevents Quebec from having access to tax information if its tax legislation differs from federal legislation. However, it is an old treaty from the 1980s. Let us look at another tax information exchange agreement concluded with another tax haven. One example that comes to mind is the 2011 agreement with Bahamas.

Article 3(1) indicates that the exchange of information, for the purposes of the agreement, pertains only to “existing taxes imposed or administered by the Government of Canada”. I repeat, “imposed or administered by the Government of Canada”, meaning the federal government. The same is true of the agreement with Barbados.

To summarize, when Canada signs information exchange agreements with countries that are not tax havens, in this case Madagascar, it has access to all of the information available, and that information can be used by Quebec, even if its tax law differs from Ottawa's, as long as the federal government co-operates.

On the other hand, when Canada signs information exchange agreements with tax havens, such as Barbados or the Bahamas, Canada no longer has access to all of the information available. The only information that can be obtained is what is specifically requested by Ottawa, according to its tax law, the wording of which conflicts with the OECD standards. This prevents Quebec from waging an effective war on tax havens and makes its single tax return proposal difficult to implement. I believe that the federal government, regardless of the party in power, did that deliberately.

Obviously, Canada does not want to share information about tax havens with Quebec, even though the current agreement with Madagascar shows that it is entirely possible to do so. This clearly shows that it is possible to reach agreements that are compatible with Quebec's single tax return proposal. The problem is that we cannot tax income if we do not know that it exists.

In his testimony on this topic before the public finance committee of Quebec's National Assembly on September 15, 2016, tax expert André Lareau said right off the bat that we cannot control what we cannot see.

Access to tax information is crucial for the enforcement of the Income Tax Act. To that end, the federal government has entered into nearly 100 tax treaties and more than 20 tax information exchange agreements, which, despite their serious flaws, all include provisions related to the sharing of information. Without those provisions, the government would not have the information it needs to enforce its own legislation. Treaties are the cornerstone of international taxation.

The tax information sharing provisions in these treaties contain many flaws. For instance, they do not provide for automatic sharing of information. Requests must be very precise and refer to specific information on a clearly identified taxpayer, which makes it impossible to go after a taxpayer if we do not have details about their activities in tax havens. Above all, they pertain only to income tax collected by the Government of Canada and existing taxes established or administered by the Government of Canada.

In other words, only Ottawa can request tax information from other countries because only Ottawa signed the treaties, and it can only request that information for the purpose of enforcing federal tax law. Current agreements with tax havens explicitly forbid foreign countries from exchanging tax information except for the purpose of enforcing federal tax law. That works as long as Quebec's tax law is essentially the same as federal law, but if Quebec's law ever differed from federal law, the Government of Quebec would not have access to the information it would need to enforce its law. Basically, Quebec is free to come up with its own tax system, but if it exercises that freedom, it will no longer be able to enforce its law. Regardless of whether we have a single tax return, if Quebec wants to go after tax havens more vigorously than Ottawa, it will not be able to, because it does not have access to the information. Where agreements relate to tax havens, it does not have access to the information. Where agreements relate to countries that are not tax havens, like this agreement, it will have access to all the information. That is frustrating and outrageous.

Therefore, even though Quebec has autonomy in matters of international taxation, it is subject to restrictions. Quebec has autonomy on condition that it does the same thing as Ottawa. For all international aspects of Quebec taxation, including tax havens, this is unfortunately the crux of the problem, regardless of what the Constitution states. This agreement shows that we can do things differently.

I sincerely hope that all tax information exchange agreements with tax havens will be reviewed and amended to incorporate the wording based on the OECD standard that is used in this agreement with Madagascar. That was the main point that I wanted to raise.

In my opinion, part of the reason for this new treaty is that, since the early 2000s, there has been a resurgence in oil development and uranium, ilmenite, nickel and even niobium mining. These are important areas of investment for Canada's oil and mining companies. This treaty will also include a foreign investment protection agreement, which has been signed but not yet implemented. That agreement contains a provision similar to what is found in NAFTA chapter 11, which protects foreign investment. It could effectively allow western oil companies and mining companies from Toronto and elsewhere in Canada to plunge Madagascar into bankruptcy. That is well known.

With this kind of investment protection provision, the foreign entity, the Canadian firm in this case, will have the power to take the Madagascar government to court over any changes in legislation or regulations that could reduce future profits. If environmental standards were implemented by the government, the Canadian company's profits might suffer and it could sue the government.

A standard to protect mining workers would do the same. The Canadian mining company could take the Madagascar government to court. However, that country's economy is struggling even more than those of developed countries, so a court case could bankrupt the government, which is a big problem.

The government boasts about establishing progressive agreements and partnerships that respect workers' rights and environmental rights. We do not know whether that is the case in the information exchange agreements currently being discussed. However, the problem is with the foreign investment protection agreement, which has been signed and will be implemented at some point in the future. I hope there will be an amendment.

With that, I conclude my speech.