Finance Committee on June 14th, 2016

[The Chair, Liberal, Wayne Easter]

The meeting will come to order.

Pursuant to Standing Order 108(2), the committee is studying the Canada Revenue Agency’s efforts to combat tax avoidance and evasion.

We have with us Alain Deneault, a researcher with the Réseau pour la Justice fiscale Québec. Welcome, Alain.

I might point at the beginning, Alain, that you are aware of the previous meeting and that a certain amount of restraint is put on the committee as a result of the sub judice convention under our rules.

That said, we certainly welcome you here. Whatever you can add to our study on combatting tax avoidance and evasion will be helpful.

[Alain Deneault, Researcher, Réseau pour la Justice fiscale Québec]

Thank you Mr. Chair. Thank you for inviting me to appear before the committee. I am delighted to be able to discuss some issues with you this morning.

I am a researcher with the Réseau de la Justice fiscale, an organization that looks at the policy aspects of fighting tax havens. We have close ties with various comparable organizations around the world, such as the Tax Justice Network, in London, and Canadians for Tax Fairness. Dennis Howlett from that organization has also appeared before this committee.

I have also written books about tax havens, including Paradis fiscaux: la filière canadienne, which has been translated under the title, Canada: A New Tax Haven. In collaboration with tax law professor André Lareau, who also appeared before the committee last week, and on behalf of the collective known as Échec aux paradis fiscaux, I have also written this report, Paradis fiscaux : des solutions à notre portée. It is specifically directed to federal legislators in Canada, and has been translated under the title Solutions within our reach. Copies are available here. Instead of saying that Canada cannot act alone, it raises the question of why Canada is the only country that has not taken action.

I have a doctorate in philosophy from the Université Paris 8. I was recently appointed research director of the Collège international de philosophie, in Paris. I have studied tax havens from the perspective of political thought. I think this matter requires an interdisciplinary approach. In other words, it requires analysis from economists, legal specialists, and tax specialists, as well as political scientists and thinkers in the social sciences.

With respect to the administrative, legal and technical aspects of tax evasion and tax havens, I agree with many of the statements made before the committee last week by Arthur Cockfield, Dennis Howlett and André Lareau. I agree in particular that the Canada Revenue Agency is sending the wrong message when it negotiates reduced sanctions for potential tax cheats, especially when it argues that it costs less to reach out-of-court settlements with potential tax cheats as compared to what a court would rule, rather than following through with legal action. There was a sad joke by Charlie Chaplin that if you kill someone, you are a criminal, but if you kill millions, you become a hero. This could apply by analogy to the loss of capital.

The problem is that, under the rule of law, the law must not be negotiable in a narrow-minded way. We must not view the duty to enforce the law as an accounting exercise. I am thinking of the arrangements that have become public knowledge recently, whereby individuals could negotiate to have no record, no penalties and reduced interest rates on amounts that the Canada Revenue Agency considered to be problematic transfers. I will not get into a legal debate here, since the matter could not be thoroughly analyzed before a court.

Since what I am proposing involves a complementary approach, I would add that, despite the technical, legal and administrative issues raised here, we have to look at tax avoidance in diplomatic terms. We have to look at the international structure of the problem and not just the domestic issues. This is not an issue that can be negotiated and it is not merely a legal issue.

In Canada, it seems that the federal executive branch and public institutions are not giving serious and active consideration to what tax havens represent internationally.

It is telling that, when the Panama Papers affair hit the press, every day the main leaders of the countries in question, including Barack Obama, Angela Merkel, David Cameron, François Hollande and so forth, stepped up to the plate. In Canada, however, aside from a few surreptitious appearances by the Prime Minister, it fell primarily to the Minister of Revenue, Diane Lebouthillier, to tackle the issue and speak for the government. One would certainly have expected the Prime Minister's Office, Global Affairs, and perhaps Finance Canada to step up and take on the issue, as we saw in other countries around the world.

Why is that the case? Because lax jurisdictions or tax havens and, in broader terms, free zones and regulatory havens, are not states like other states. They are in fact adversaries of the rule of law. Very often, the laws in lax jurisdictions or tax havens is specifically designed to neutralize the law as it applies in other countries under the rule of law. In that sense, it is an adversary of the rule of law or of the way countries impose the rule of law in their territory.

Tax havens and lax jurisdictions, including the British Virgin Islands, Panama, Hong Kong, Bermuda and so forth, have laws that often allow the creation of entities within their territory—tax-exempt companies, international companies and certain kinds of holding companies—that pay no tax whatsoever on their capital assets. These companies are nearly free of state monitoring as regards the identity of rights holders, providing that the capital held by these companies does not have any impact on the country's domestic life. For example, a tax-exempt company here would not pay any tax providing that it does not have any activities in Canada.

Lax jurisdictions regulate assets, activities, and players all over the world except in their own jurisdiction. In this regard, it could be said that a government such as Canada's, through its embassies and department of global affairs, should point out to those countries that their laws go beyond the prerogatives of their sovereignty because they pertain to assets, players, and activities that have nothing to do with what is happening within their borders.

This has very serious effects on local populations. First, billions of tax dollars are lost, which has a huge impact. This explains the austerity plans of various governments here and around the world. Secondly, the state cannot even play its legal role in governing how these entities conduct their activities.

My point is that this is a political and diplomatic issue.

[The Chair, Liberal, Wayne Easter]

Thanks very much, Mr. Deneault.

Starting the first round, Mr. MacKinnon, for seven minutes.

[Steven MacKinnon, Liberal, Gatineau, QC]

Thank you, Mr. Chair.

Hello and welcome, Mr. Deneault.

I know you are from Gatineau. As the member for Gatineau, I extend a warm welcome to you here.

At the end of your presentation, you stated that a void has developed over time as regards cooperation between countries on fighting tax havens which, because of their legal framework, host the head offices of entities that do not want to pay taxes.

In recent years, efforts have been made by Canada and by the OECD and G20 countries. What do you think of those efforts? How does Canada defend itself within these bodies? How could it increase its participation and become even more effective in this regard?

[Alain Deneault]

Thank you for your question.

The measures relating to BEPS, base erosion and profit shifting, are certainly encouraging, but they are also quite inadequate because they do not address a number of fundamental mechanisms of tax evasion, such as patent boxes.

Patent boxes enable companies to avoid paying taxes by transferring intellectual property titles to subsidiaries in tax havens. In that way, these companies can ensure that, within the tax year of a multinational group, for instance, the trademark of a group is the property of a subsidiary in a tax haven. This subsidiary can issue royalty interests to other members of the multinational group in the form of invoices, so that as much capital as possible is concentrated in accounts in tax havens. You see what I mean. This mechanism was not raised in BEPS deliberations, even though it is fundamental. We know full well that this is how the transfer price is established, which is one of the most common practices that multinationals use to evade taxes. There is a way to attack the structure of this system. E-commerce is another topic that was not fully discussed.

There is also the whole issue of confidentiality, and there is now talk of the automatic exchange of tax information between countries. Secrecy is already a big problem, but this would at least make it possible to pinpoint a number of tax evaders who are individuals. Very often, even if banking secrecy is lifted, companies arrange their financial affairs to give the appearance of legality. Even with banking secrecy lifted, we are no further ahead. More complex provisions are clearly needed.

This might be progress, but citizens have no way of monitoring public authorities. This is evident in the various matters that the Canada Revenue Agency has taken an interest in recently. The report by Canadians for Tax Fairness is relevant. I know you find it controversial, but there is potential for political interference. This is nothing new. We know there is potential for political interference in public agencies. If there is no mechanism to ensure that, when a government receives information about a company or wealthy individuals, it does not remain anonymous or confidential, that is problematic.

That's all I'm saying. What I'm saying is that there are problems at the OECD. Thus far, Canada has not been the strongest advocate in the OECD in this regard. For my part, I hear from my international partners that Canada does not have a good reputation in these circles or, in any case, in the view of those fighting tax avoidance and evasion. Let's hope this situation improves.

I would just add one point in this regard. Canada gives the impression—to use Pierre Bourdieu's phrase—of the right hand not knowing what the left hand is doing. While it claims to be fighting tax havens by being active within the OECD, Canada shares its seat, at the World Bank and the International Monetary Fund, for example, with 12 tax havens, 11 of which are in the Caribbean and which are among the most controversial. They include the Bahamas, St. Vincent and the Grenadines, and St. Kitts and Nevis, which are not known for their strong rule of law. When Canada speaks out at the World Bank or the IMF, it does so on behalf of these 12 governments, that is, 11 tax havens in the Carribean, and Ireland. Its message is mixed. In my book, Canada: A New Tax Haven, I provide examples of when the Government of Canada officially stands up for the tax havens it is mandated to represent. At some point, you have to decide which side you are on.

[Steven MacKinnon, Liberal, Gatineau, QC]

I have noted a considerable increase in the CRA's accounts receivable. The CRA would explain this by saying it's a sign that its efforts to recover taxes and fight tax evasion are working. If I'm not mistaken, this year's receivables are in the order of $30 billion.

We have made considerable investments, $444 million, in the CRA. We hope that, with the assurances it has given us, with improved and additional resources, it will be able to do a better job fighting the problems you mentioned. I agree, however, that this does not solve the problems you raised regarding intellectual property, e-commerce and so forth. Under existing laws, the CRA maintains that it can improve its performance in collecting the amounts owed to Canada.

Would you agree with that?

[Alain Deneault]

Things can only get better. Hundreds of billions of dollars are circulating in tax havens, in the order of $21 billion. That is calculated in tera dollars. Clearly, there is room for improvement.

Once again, it's all well and good to send the CRA to the front, armed with 100 additional auditors, but let's not forget that the previous government made drastic cuts to the CRA's budget. The additional funding invested in its operations will just barely bring things up to par. So we are back to the way things stood before the cuts.

It is doubtful that the CRA is equipped to conduct monitoring operations of wealthy individuals. I must stress that this is a global problem. Wealthy individuals are an important group of tax evaders, but the main issue is tax evasion, that is, the way we have legalized a number of transactions of multinationals or have lost control, as the case may be. If we do not take that broader view of the matter, we will be working in the margins. If you are saying that we are making progress in the margins, I'll give you that much. We are making progress in the margins, but the problem must be seen from a broader perspective.

If Canada had done nothing about tax havens since 1980, I think we would be further ahead today. Canada has been lax, in particular by signing an agreement against double taxation with Barbados. This agreement is completely unacceptable from the perspective of political thought. An agreement against double taxation only makes sense if the tax policies of the two countries are similar. Barbados, however, has a tax rate of 0.25%, while capital is taxed at 35% in Canada. The suitability of such an agreement is questionable.

[The Chair, Liberal, Wayne Easter]

Mr. Deneault, I'll have to go to the next questioner. We're well over time.

Mr. McColeman.

[Phil McColeman, Conservative, Brantford—Brant, ON]

I thank the witness for being here.

To pick up on where my colleague across the table was originally going, the efforts that have been made internationally to combat tax evasion and the kinds of agreements that countries have made with each other stem back several years, as do some initiatives to clamp down on the enforcement side. One recent report stated that this has resulted in $1.57 billion, I think, being recovered as a result of those efforts, and the new government is putting in more resources to build on that focus that was taken and to do more.

My take-away from what you've said so far is that you don't believe this is nearly enough. Your comments would lead me to think there's something missing, and that there's a disconnect on a much larger scale, as you've mentioned, in that CRA, and perhaps the senior people at CRA, don't see it in a global context the way you do.

Could you expand a little further to help me understand that? We've had CRA officials here. They've told us about the way they manage and the way they focus on this issue. How, in a practical way, would you say they should change what they're doing?

[Alain Deneault]

In fact, I am not totally committed to a study that would be limited to what the Canada Revenue Agency can do about that. I am trying to say that the Canada Revenue Agency is one of the vectors that we can use to fight tax havens. So the point is not to discredit the agency but to explain that if we send it alone to the front, sooner or later we are bound to see small improvements on the fringe of the issue.

There is the globalization architecture, the result of decisions taken most often by western governments since the 1980s, and which explain the global geopolitical situation. If there is a place where we should be able to ask questions on that global architecture, surely it is in this Parliament.

To be as concrete as possible, I would say there are two broad categories of problems. The first concerns capital transfers to tax havens done by individuals. Most often this is done illegally. An individual, as opposed to a multinational, knows that when he is in Ottawa, he cannot be in Belize, Panama, Luxemburg or Hong Kong at the same time. However, a business can manage funds and do intra-corporate transfers if it is dispersed into several entities. The issue of tax evasion is closely linked to the very structure of multinationals that escape public monitoring because of their multinational nature. States are played one against the other, but operations are coordinated from locations that are not subject to government monitoring, that is to say tax havens, with legislation of convenience.

So how does an individual profit from this extraterritorial global structure? Secrecy is at the heart of the issue, in that people defraud the tax authorities, they omit disclosing a certain number of things, and secrecy guarantees that the Canada Revenue Agency will not be informed of the presence of assets that have been hidden abroad. This is where automatic information exchange policies are necessary. The tax information sharing agreements that have been signed and are in effect currently make it possible to break the seal of banking secrecy around the time when we already have the information we want to obtain. In any case, when we are that advanced in a file, all we need to do is collect a few elements. It is a major issue that requires a diplomatic approach.

I would like to point out that even if we obtain automatic information sharing, there are certain area such as in Hong Kong or the British Virgin Islands where the legislation does not even require that they keep records. We may get bank confidentiality lifted, but it can happen that the documents we find contain not a trace of the names of the interest owners. This legislation does not even oblige a business lawyer or an asset offshoring expert to keep these records. Consequently, even if we manage to lift banking secrecy, there will always be this problem, which one day or another will be political. One of these days a global, political, and diplomatic solution must be found to deal with these issues, since legislation is at the core.

As for the large businesses, please allow me to say just one word. The Canadian government has greatly encouraged the tax evasion practices.

[Phil McColeman, Conservative, Brantford—Brant, ON]

This may not relate totally to your area of expertise, but I bring it up as another area of missed opportunity for government revenues, and that's the underground economy in this country. Working for cash is another way to say it. Some people call it the black market.

A study that I'm aware of from the mid-nineties in the housing and renovation industry estimated that $6.9 billion was lost in revenue annually from the building and construction industry.

Do you have any views on how we might recover more of that unpaid tax where people are having their shingles replaced on their roof or having their driveway redone, and it's all done on a cash basis? Is it a big problem in your mind?

[Alain Deneault]

The question is relevant. A few years ago I prepared a report entitled “Paradis fiscaux: l'aveuglement volontaire du ministère québécois des Finances”, [Tax havens: the willful blindness of the Quebec ministry of finance]. This report said that this expertise you are seeking is right here within the various departments of finance in Canada, at both the federal and provincial levels.

In fact, for years, the main targets of the federal and provincial departments of revenue were black market workers, servers who receive tips, provincial notaries, the small neighbourhood restaurateur; they took a close look at the black market economy, at under-the-table activities, at small sordid operations. They never or almost never found any documents—and I certainly went through all of the documentation with a fine-tooth comb—on those who own large fortunes, multinationals and the tax avoidance issue. It is but recently that we began to hear about abusive tax planning. It has only been talked about for a few years.

This documentation on the small-scale fraudster who is easy to nab and who is beset by large numbers of tax agency representatives is very present at the Department of Finance. Moreover, I refer you to this abundant documentation, as this very abundance is suspect, given the very few documents there are on the far bigger fraudsters.

[The Chair, Liberal, Wayne Easter]

Mr. Dusseault.

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

Thank you, Mr. Chair.

First I would like to mention the fact that I'm disappointed that Mr. Hamersley—the whistleblower in the KPMG affair—is not with us even though he was invited to testify. He refused our invitation. That is a dangerous precedent, all the more so since Mr. Hamersley no longer works for KPMG. It would have been important for us to obtain his opinion on KPMG's role in all of this.

Mr. Deneault, thank you for honouring us with your presence. I would like to ask you a question on those who facilitate tax evasion.

In exchange for large sums of money, accounting firms and legal firms offer tax products to rich clients—tax products is the term they use—that are clearly identified in internal documents. The fact that their purpose is to allow them to avoid paying tax is publicized. Nothing is hidden. They are told that these firms will ensure that they will pay less tax at the end of the year.

Could you comment on what the government and parliamentarians could do to deal with the people who facilitate tax evasion in this way, those who advertize tax products whose objective is clearly to allow people to pay less tax when they are provided with them?

[Alain Deneault]

The people involved will tell you what they're doing is legal. If it's legal, it's because we've turned a blind eye to certain abuses, or we've legalized processes that may suit some of the country's powerful players with strong voices.

I want to remind you that, a few years ago, an influential finance minister in this country created an advisory group. The formal advisors in the group were retired administrators and retired people who had established ties to companies such as Scotiabank, Royal Bank of Canada, PricewaterhouseCoopers, Barrick Gold Corporation, SNC-Lavalin, Rogers, and Shell. However, the group did not include a single tax expert, sociologist, obviously, or union official. Forget it! It was made up of business people who were no longer even lobbyists but, despite all that, were the minister's official tax advisors. And we wonder why the legislation has so many shortcomings!

Now I want to come back to the key issue I wanted to discuss. What does it mean when countries like Bermuda, the British Virgin Islands, and Panama make laws for capital that is never present in their jurisdictions? It means that, here in Canada, specialists in the offshoring of assets will say they are Canadian. They will tell Canadian clients who have assets in Canada and who have been here a long time to enter property titles and capital into a sort of protective glass bubble that's been created. The contents of the glass bubble are covered by the laws in Panama or Bermuda. The assets do not come under the authority of any country because in those countries, it's considered that the assets must not somehow interfere with the country's real economy. A type of legal system was created that's nowhere to be found. This was accomplished by designers who were often the creators of the tax policies of tax havens in the first place.

Keep in mind that, for the most part, Canadians were the ones who created tax havens in the British Caribbean. A former Canadian finance minister, Donald Fleming, is well-known for promoting the establishment of tax laws in the Bahamas. The Bahamian finance minister in the 1960s, Sir Stafford Sands, was also on the Royal Bank of Canada's board of directors. Back then, Jim MacDonald was living on the Cayman Islands. He was closely tied to the Progressive Conservative Party, and he did roughly the same thing. They all worked with Canadian banks that have a long history in the British Caribbean, as we know. They were responsible for designing the tax havens, and they specialized in transferring assets there.

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

I want to ask another question about the contradictory message Canada sends on the international stage.

On the one hand, Canada tries to show citizens that it works hard and devotes energy and resources to fighting tax evasion. On the other hand, it maintains a tax haven for mining companies on its own territory.

It also has tax agreements with notoriously lax jurisdictions. For instance, Barbados and Canada have a double taxation agreement.

I want to make it clear to committee members who will be looking at solutions that Canada needs to tighten its rules, in particular for mining companies, so that we don't become their tax haven.

The rules also need to be tightened for our tax agreements and treaties with lax jurisdictions.

[Alain Deneault]

These are broad issues that should be addressed at a seminar, but I will try to be as brief as possible.

There are dozens of lax jurisdictions, and they each have a specialty. Different approaches are taken in Guernesey, Liberia, the Turks and Caicos Islands, and the Marshall Islands. Each lax jurisdiction creates, within its legal framework, ways for powerful outside players to benefit from a laissez-faire attitude.

There is something I call hybrid lax jurisdictions. The countries involved are constitutional states that have "offshored" part of their legislation. I am referring to the Netherlands, Ireland, the United Kingdom, Delaware in the United States, and Austria. Canada, in a way, developed legislation that created a real regulatory haven for the global mining industry. The odds are three out of four that a mining company is Canadian because 75% of global mining companies are Canadian. The companies are not always created using Canadian capital. International investors establish a structure in Canada to operate mines abroad in order to benefit from our liberal legislation. A commission of inquiry should be created to look into the matter. I discussed it my book Noir Canada and in another book that I wrote with William Sacher, Paradis sous terre.

The first step is to start dismantling a few things. Under subsection 5907(11) of the Income Tax Regulations, when Canada signs a tax information exchange agreement with a tax haven, Canadian businesses can transfer assets to the tax haven and transfer the assets back tax-free in the form of dividends. Canada has been completely integrated into this system.

The free trade agreement between Canada and Panama should also be discussed. Panama is one of the world's top launderers of drug trafficking funds. By signing a free trade agreement, Canada is encouraging bilateral trade. Clearly Canada, while claiming to fight the problem, is sometimes complicit in it.

[The Chair, Liberal, Wayne Easter]

We're well over time. We've been running over with all our questioners this morning.

Mr. Sorbara is next, but first, Mr. Deneault, could you explain to me what you meant by “patent boxes”? In an earlier question from Mr. MacKinnon, you mentioned patent boxes. What do you mean by that?

[Alain Deneault]

It's a structure that promotes capital transfers in lax jurisdictions and enables a group to charge members under the authority of a board of directors artificial patent royalties or intellectual property royalties. That's the most common way to carry out transfer pricing.

Consider a business whose brand is very valuable. I don't need to give examples. Patent boxes encourage tax exemption or the reduction of taxes on transfers concerning the right to use a brand. For example, when a multinational group entrusts the brand's property rights to an entity in a tax haven, the entity can then charge royalties to the other multinational group members to transfer the most possible assets into the subsidiary's accounts.

[The Chair, Liberal, Wayne Easter]

Thank you.

Mr. Sorbara.

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

Bienvenue.

I want to comment before I ask a question. In our budget, we have dedicated over $400 million to the Canada Revenue Agency to combat tax avoidance and tax evasion. I think it was a large step forward, and it built upon prior measures, which I think is great. I have always commented that Canadians should have confidence in our tax system, the confidence that everyone is paying their fair share and that no one group is subsidizing another group. Here in Canada, we have very valued social programs that Canadians pay for and care about. We need to ensure those, and having an efficient tax system and confidence in our tax system are very important.

I want to ask you a question about what is maybe a perceived tax gap in Canada. I believe there's a study or two going on about that. How important is it for us to get a good understanding and estimate of how large this tax gap is in Canada currently?

[Alain Deneault]

That's a very good question. Given my field of expertise, I think the observable gap you mentioned can't be strictly analyzed from an accounting perspective. Certainly math is involved, but it's not a matter of just throwing out some numbers. Instead, I think the situation keeps escalating. I'll explain quickly.

According to Statistics Canada, Canadian businesses have "invested" about $200 billion in the 10 main tax havens where the businesses are located. I won't get into that assessment, which strikes me as extremely low. We can take into consideration that these funds are not taxed, but it would be a mistake to look only at that type of data. Afterward, it's obvious that, to retain capital—in my work, I quote finance ministers who use this type of expression explicitly—and to prevent it from flowing out like other capital, the tendency of Canadian federal and provincial governments has been to reduce the corporate income tax rate.

At the federal level, for example, the rate was 38% in 1981 and is now 15%. The capital tax has been abolished, and a large number of taxation measures have been reduced, resulting in less cash going into the public purse. Not only is a large amount of capital leaving the country as a result of tax evasion, but the remaining capital is taxed less because, to retain capital, Canada is imitating tax havens. The situation thus keeps escalating. The government is unable to balance the budget, but is incurring debt from financial institutions that are no longer being taxed or are being taxed less than before. Servicing the debt therefore enters the equation. This also explains tax evasion because, obviously, a link exists between tax revenues and government spending. Fees are then charged for services that were previously free for all citizens, or public services are simply cut outright, as we are seeing now. The gap must be assessed using sociological factors and criteria because multiple issues are at play. Every day, our population pays a high price as a result of tax evasion, because it also leads to policy and accounting logic that is hard to calculate but no less real.

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

To follow up, I have a quick question.

I have to just comment on the tax rates, where they were at and where they've now come down to. I would obviously argue differently and say that lower task rates have spurred investment in capital and job creation here in Canada. That's my personal view.

This has been done by both the Liberal and prior Conservative governments. I would argue that corporate tax rates are currently at a good level.

When you talk about the transfer of capital to these tax havens, are you saying that there are a number of Canadian corporations that have practised this? Are they doing it via transfer pricing? Are they doing it with this patent box?

Could you just elaborate on that because our government and other governments have entered into a number of agreements with multinational entities regarding corporate governance and taxation issues. We've made a lot progress on that front. I would argue that many Canadian corporations, employing tens of thousands of Canadians across this country, are good corporate partners for their communities, and so forth.

[Alain Deneault]

I will respond to your comment.

Businesses do have more money to invest when the tax rate is lower. That explains why they have accumulated $630 billion in their coffers and deposit accounts at home and abroad. It's an enormous amount that shows that, when businesses are swimming in cash, they don't necessarily invest it. When they do invest, it's often in speculative products, such as hedge funds in the Cayman Islands or hedge funds for financial products that are of no benefit to Canadians. They invest in countries whose names are written on the labels of the products we consume, such as Bangladesh, China, India, and Jamaica, in other words, tax havens for labour—free trade zones where sweatshops and all those things can be found. We have to face the facts.

Sorry, I forgot your question.

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

Can I pass the remainder of my time to the parliamentary secretary?