Evidence of meeting #63 for Finance in the 40th Parliament, 3rd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was banks.
A recording is available from Parliament.
9:55 a.m.
Liberal
The Vice-Chair Liberal Massimo Pacetti
For example, if the purpose is to be competitive, as opposed to engaging in tax evasion.
9:55 a.m.
Chairman, Research on Public Finance and Taxation, Professor, Université de Sherbrooke, As an Individual
This is a rather vague response, but I'd say that one of the characteristics of offshore financial centres is that there is generally a lack of transparency with respect to their administrative, legal or legislative provisions. That characteristic has no equivalent in Canada. In tax haven countries, there is no Security and Exchange Commission, nor is there any financial market authority. Therefore, it is easier to develop financing packages that would be impossible under Canadian or U.S. laws.
10 a.m.
Liberal
The Vice-Chair Liberal Massimo Pacetti
We have been told that, in order to be competitive, international corporations have to open accounts in countries with very low taxation rates.
10 a.m.
Chairman, Research on Public Finance and Taxation, Professor, Université de Sherbrooke, As an Individual
It's somewhat paradoxical that we have reached that point, because Canada does offer tax benefits, but they have a negative rebound effect on Canadian tax revenues. It's because of the administrative and legal loopholes in these tax havens--
10 a.m.
Liberal
10 a.m.
Chairman, Research on Public Finance and Taxation, Professor, Université de Sherbrooke, As an Individual
Well, there would have to be an effort made at the international level. As the Canadian Bankers Association pointed out, if Canada prohibits Canadians from using offshore financial centres while the residents of every other country in the world continue to have that right, it will be shooting itself in the foot. That's obvious. There would have to be a centralized effort made for such a thing to actually happen.
10 a.m.
Liberal
Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC
With your Liberal jacket, you get to go again.
10 a.m.
Conservative
Shelly Glover Conservative Saint Boniface, MB
Gee, we're witty this morning.
What I wanted to comment about was that in all fairness to--
10 a.m.
Conservative
10 a.m.
Voices
Oh, oh!
10 a.m.
Conservative
Shelly Glover Conservative Saint Boniface, MB
It's so interesting to watch the chair forget that he has to control those members across the way.
10 a.m.
A voice
But he's heckling too.
10 a.m.
Conservative
Shelly Glover Conservative Saint Boniface, MB
I wanted to comment with regard to something Mr. Brison brought up when speaking with Mr. Hannah. Mr. Brison brought up the fact that during surplus years there was a move towards reducing corporate taxes. Yes, I agree with that statement; however, when Mr. Brison claims they would stop all of that because we're in a deficit situation, I'm sorry, but Mr. Brison seems to forget that in 2009, during the budget, which restated the low-tax plan to reduce corporate taxes even further, the Liberal Party voted in favour of budget 2009, and in fact in favour of further reductions in corporate taxes. And that in fact was during a time of deficit.
Furthermore, that budget reiterated that we planned to be in deficit for the next few years. Why? Because there was a global recession. The biggest story in the last few years has been the fact that Canada has come out of a global recession better than has any other country in the G-7.
I would remind Mr. Brison of his voting record, and I would ask that he not interrupt; I think that's rude. I think his staff members laughing while we're having a meeting is rude.
I would beg the chair to do something about that, because he is responsible for controlling decorum in this venue.
In any event, I would ask Mr. Hannah to continue to talk. Mr. Mulcair had asked a question. I would like you to finish your answer, without being interrupted, with regard to the study I had mentioned earlier. If you would like to take the floor, go ahead.
10 a.m.
Director, Banking Operations, Canadian Bankers Association
Sure.
Mr. Lauzon comes to his conclusion by taking the statutory Canadian tax rate and then taking the effective tax rate that institutions pay on their worldwide income, and then taking the difference from that and concluding summarily that this is tax evasion. The reality of it is that while we've made progress in Canada towards a competitive tax system, we're still just in the middle of the pack in the OECD. So as a consequence, Mr. Lauzon decides that half the OECD is a tax haven, including most of western Europe and all of Scandanavia.
10 a.m.
Chairman, Research on Public Finance and Taxation, Professor, Université de Sherbrooke, As an Individual
Please don't point to me when you say that.
10 a.m.
Director, Banking Operations, Canadian Bankers Association
Oh, I'm sorry. I did not. I did refer to Mr. Lauzon, not Mr. Larin. It's the Italian blood in me.
10:05 a.m.
Director, Banking Operations, Canadian Bankers Association
Yes. So Mr. Lauzon makes a very sweeping conclusion that simply isn't supported by the facts.
10:05 a.m.
Conservative
Shelly Glover Conservative Saint Boniface, MB
How did you come to know so much about this study, sir? I know, as a member of Parliament—I've been here a few years—that there aren't many members of Parliament who actually do all of their own research by reading everything that is put out, because we would never be able to come to committee or be in the House of Commons. But we certainly have staff who do the reading, who do the assessments, who do the summaries. Can you tell me how you came to these conclusions, sir?
10:05 a.m.
Director, Banking Operations, Canadian Bankers Association
I came to the conclusions because I've seen the analysis, I've seen the summaries, I've seen the translated.... Unfortunately, he only releases in French, and I don't speak French, so I can't read the original analysis. But I've seen the analysis, I've seen the summaries, I've talked to very informed individuals, both within the industry and more broadly, and these are the conclusions that have been arrived at. From my point of view, it makes sense.
10:05 a.m.
Conservative
