Finance Committee on April 2nd, 2019

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

That's just fine. I'm asking the questions right now, and you certainly aren't, Mr. Chair, so thank you for your interruption.

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

Mr. Chair, on a point of order, I'm happy to answer the question.

The meeting was on CANDU nuclear reactors.

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

Thank you. That's appreciated.

[The Chair, Liberal, Wayne Easter]

Okay.

Mr. Richards, the floor is yours.

[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.

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

I have a point of order, Chair.

[The Chair, Liberal, Wayne Easter]

Mr. Sorbara.

[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]

On that point of order, Mr. Chair, first I'll note that the government members seem quite sensitive today. I guess I can understand after the run they've been on, trying to hide their cover-up.

I did point out that when we're looking at tax harmonization, it's important to look at the context in both countries.

[The Chair, Liberal, Wayne Easter]

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

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

Without question, I am doing that, Mr. Chair. If I am allowed to finish, I will do that.

That new Liberal tax will raise the cost of everyday items. It will raise the cost of services for Canadians and businesses. They're now paying more to get to work, to heat their homes and for the food they eat. In nearly every part of their life, they're paying more. Gas prices went up 5¢ overnight, and will only keep rising if the Liberals are allowed to further implement their plan.

My question for you is this. Does Madagascar have a carbon tax plan?

[The Chair, Liberal, Wayne Easter]

I don't know how that relates to—

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

Mr. Chair, you need to allow them to answer the question so you can see....

[The Chair, Liberal, Wayne Easter]

I don't know how this relates to the bill.

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

Well it does, Mr. Chair. If you allow them to answer the question, I can continue to show you.

[The Chair, Liberal, Wayne Easter]

They're chatting about it and deciding what their answer might be.

Ms. Smith, I believe you're going to answer, or whoever. Go ahead.

[Stephanie Smith]

In responding to the question, it might be helpful to clarify the taxes that are within the scope of this double taxation agreement for Canada. It includes taxes on income under the Income Tax Act. In respect of Madagascar, it includes the tax on income, the synthetic tax, the direct tax on hydrocarbons, the tax on salaries and assimilated income, the tax on income from removable assets, and the tax on gains from immovables.

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

Do you know whether Madagascar has a carbon tax plan?

[Stephanie Smith]

I am not aware of any specific carbon tax plan in Madagascar.

[The Chair, Liberal, Wayne Easter]

Mr. Dusseault.

[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?

[Trevor McGowan]

Perhaps it would be a good idea to describe briefly the objects or intentions of the two bills and two types of treaties.

The multilateral instrument is an efficient and effective way of modifying the application of existing tax treaties that are currently in force, but it is not itself a bilateral tax treaty between Canada and another country. Rather, it affects the application of those tax treaties whereas this tax convention between Canada and the Republic of Madagascar is itself a bilateral agreement between the two countries. The MLI does not serve to replace the existing tax treaties; rather it is intended to modify and supplement their application.

My colleague can provide more details, but this convention between Canada and Madagascar is not covered by the MLI, which as I noted is largely intended to, in an efficient manner, modify the application of Canada's existing stock of treaties, or the existing worldwide net of treaties, not just Canada's.

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

That fully answers the question. It's clear for everyone.

My second question concerns the Global Affairs Canada data that you mentioned in relation to Canadian investments in Madagascar and Malagasy investments in Canada, which seem to be almost non-existent. I'm wondering which country started the negotiations a few years ago. Can you go back that far?

[The Chair, Liberal, Wayne Easter]

Mr. McGowan, go ahead.

[Trevor McGowan]

With apologies, we don't have the detailed history of the negotiations. As my colleague Stephanie said, negotiations started some time ago and concluded with the signing in November of 2016. Canada has a large number of tax treaties. This would be, I believe, the ninety-fourth. Concluding bilateral tax conventions with other countries is very much a part of how Canada does business internationally.

As my colleague said, there is Canadian investment in Madagascar. African nations are in a growing region of the world. In addition, with Madagascar's being a largely francophone country, Canada has perhaps some advantage in terms of our opportunities for business investment and dealing with them. Beyond a few mining projects, there is a fair bit of opportunity there. It's also consistent with our general policy, since it is a well-connected country with a wealth of tax treaties available for Canadian businesses.