Evidence of meeting #196 for Finance in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was barbados.
A recording is available from Parliament.
NDP
Pierre-Luc Dusseault NDP Sherbrooke, QC
For the convention to be applied by both countries, such as Canada and Barbados, they must not only sign it, but also ratify and implement it. Is that correct?
I'm worried about the fact that Barbados signed the convention on January 24, 2018, but has never done anything more to date. The danger is that Barbados signed the convention only to please the rest of the world and that, unlike Canada, it won't pass legislation to implement the convention.
Liberal
NDP
Pierre-Luc Dusseault NDP Sherbrooke, QC
Can one of them answer whether it is true that both sides need to ratify?
Liberal
The Chair Liberal Wayne Easter
Can you give us a quick answer on that last question, either one of you?
Co-Chair of Tax Group, Osler, Hoskin & Harcourt LLP, As an Individual
The changes in the MLI don't take effect unless both countries to that ratify it—
Co-Chair of Tax Group, Osler, Hoskin & Harcourt LLP, As an Individual
—but it's not relevant to....
Peter Fragiskatos London North Centre, Lib.
I want a chance to set the stopwatch here to make sure that I stay on time, Mr. Chair.
Liberal
The Chair Liberal Wayne Easter
I'll make sure you get all of your time. Pierre got two minutes more.
London North Centre, Lib.
I appreciate the passion of my colleague opposite. I say that sincerely.
Thank you very much to both of you for being here this morning.
I have a few questions. They are general ones because I think we're still trying to get a very general sense of the issue. It's complex, but it's highly important. Both of you have worked on it, and it's appreciated.
First of all, Mr. Marley, is it possible for one agreement to address all the tax avoidance problems a federal government could face?
Co-Chair of Tax Group, Osler, Hoskin & Harcourt LLP, As an Individual
That's quite clearly “no”.
Co-Chair of Tax Group, Osler, Hoskin & Harcourt LLP, As an Individual
That's really by its nature. The multilateral instrument is really just meant to be an effective way of making uniform changes to all tax treaties around the world. That's the goal of it. As a result, it's limited in terms of what you can put into it with regard to things that Canada as a country would agree, in all of our treaties or most of our treaties, to give up.
It doesn't get into that bilateral negotiation of “I'll give you something if you give me something.” As a result, particularly on the anti-avoidance side, it has to be broad and ambiguous to give tax authorities around the world the ability to apply it in the way they would want to, even though that's going to create a lot of uncertainty for taxpayers.
London North Centre, Lib.
I appreciate that.
Basically, we have a step in the right direction. It's something that is addressing a number of issues, but it's not a panacea and, by definition, it can't be. It's not a magic wand.
Mr. Sanger, what do you think on that? Is it possible to have...? I know you have a number of issues with this particular agreement, but I think it's reasonable to say, as we just heard from Mr. Marley, that you can't capture tax avoidance problems—call it base erosion and profit shifting if you want to get technical—in one agreement. We can't deal with that challenge in one agreement.
Executive Director, Canadians for Tax Fairness
No, you can't. As I said, this is an attempt at patching up a system that's, I would say, broken. Countries are moving beyond it. There's been a lot of discussion about what the definition of a permanent establishment would be in different areas. That's really problematic.
Executive Director, Canadians for Tax Fairness
Some of the exemptions or reservations that are being suggested, I think, would perpetuate some of those problems.
Executive Director, Canadians for Tax Fairness
I do think that we need to look at the system not just in terms of the self-interest of some sectors that might be represented in Canada. Canada is home to about 50% of the mining companies around the world.
London North Centre, Lib.
I appreciate that you're opposed to....
I'll have to interrupt you because I have limited time, Mr. Sanger.
London North Centre, Lib.
I appreciate that you have issues with mining companies and I would suspect with many companies.
London North Centre, Lib.
That's not the point here. The point is, as you put it—to be fair to you—that it's a patch.