Evidence of meeting #7 for International Trade in the 39th Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was withholding.
A recording is available from Parliament.
Liberal
Sukh Dhaliwal Liberal Newton—North Delta, BC
So if we really want to filibuster this, then we can go either word by word or we can go paragraph by paragraph too.
Liberal
The Vice-Chair Liberal John Maloney
I don't detect any filibustering at this time. There's certainly legitimate questioning back and forth.
Shall schedule 1 carry?
(Schedule 1 agreed to)
Liberal
Bloc
Serge Cardin Bloc Sherbrooke, QC
One moment, Mr. Chair. What did you talk about? Are you on Schedule 2?
Liberal
Bloc
Serge Cardin Bloc Sherbrooke, QC
I have a question on Schedule 2, I believe.
This shows us, as Mr. Julian said, that the procedures for analyzing bills are being somewhat abused along the way. For me, and I've have been here for nine years, it is a precedent to study a bill without considering it clause by clause and without assessing and comparing what exists and what is being proposed.
I don't even know if this is Schedule 2, but earlier we were talking about interest. This bill also talks about dividends. There are also withholding taxes on dividends. In your assessment, I imagine that, in the $180 million, not only interest, but dividends paid by investors and financial corporations were subject to a withholding tax. Now foreign investors will no longer have to pay withholding tax on dividend payments. Were those withholding taxes on dividends part of the $180 million? Since the Conservative government favours foreign investment, those withholding taxes will probably disappear. That will have the effect of increasing foreign investment.
Senior Chief, Tax Legislation Division, Tax Policy Branch, Department of Finance
On cross-border dividend payments, the protocol includes some technical adjustments that update the language in some cases and accommodate particular situations. But there is no change of substance to the possibility of imposing withholding tax on dividends, and Canada domestically imposes that tax.
It's imposed under the treaty at two different rates: a rate of 5% in the case of so-called direct dividends between a subsidiary and the parent corporation, and a rate of 15% in other cases. That's not changed by the protocol.
Bloc
Serge Cardin Bloc Sherbrooke, QC
I have a general question to put to my Conservative Party colleagues. Have they read the bill? Are they aware of all the financial effects it entails?
Liberal
The Vice-Chair Liberal John Maloney
Thank you for your question. I don't think there was an answer forthcoming or required.
(Schedule 2 agreed to)
Shall the title carry?
Mr. Julian.
NDP
NDP
Peter Julian NDP Burnaby—New Westminster, BC
Next is the subsequent motion?
I apologize for this. You're not chairing in a poor way at all, but we have no supporting documentation to track the discussion and debate around this. So you can understand it's of concern to any member of the opposition that we're not following any pre-set plan for debate on this.
Normally we have clause-by-clause analysis accompanied by a diagram of clause-by-clause debate and votes. We have none of that. The government has prepared absolutely nothing on this half-a-billion-dollar bill. It's just appalling.
Liberal
The Vice-Chair Liberal John Maloney
So you're objecting to the process again, Mr. Julian. We've heard you.
NDP
Peter Julian NDP Burnaby—New Westminster, BC
No, I'm asking where we're going. So we're going to the title, and after that...?
Liberal
The Vice-Chair Liberal John Maloney
I will ask, “Shall the bill carry?”, and then, “Shall we report the bill to the House?” There are three motions.
NDP
NDP
Peter Julian NDP Burnaby—New Westminster, BC
This has been an appalling process, Mr. Chair. What we have is a government that's brought forward a bill, brought it to the Senate. There was no examination, there were no witnesses at the Senate in terms of the overall fiscal implications of the bill, then it was brought forward this week to this committee. At the time, Conservatives on the committee, you'll recall, Mr. Chair, didn't even want to open up the bill to see what the implications were. They didn't want it read. They didn't want any discussion. They just wanted to adopt it--let's just throw the Christmas present out.
Subsequent to that, Mr. Chair, it's fair to say that in answer to questions we have--and I'm thankful at least that we did have our Department of Finance experts come forward--we know now that the implications are considerable. We're talking about half a billion dollars. There was no preparation--a diagram--on clause-by-clause, no analysis of the articles of the treaty itself, and now we're talking about something that at least has implications of half a billion dollars in taxpayers' funds. We don't know where those funds are going and who will benefit from that. We've had no witnesses come forward to actually examine the bill in detail.
If this is how the new government functions, Mr. Chair, I think it would be appalling to taxpayers across the country and to Canadians across the country. This has been a complete abdication of due process. There's been no due diligence, aside from the questioning from Bloc members and from NDP members. I think it's a very sad, sad chapter in parliamentary life. It appears that Conservative and Liberal members are going to adopt a tax treaty that has such huge ramifications for the fiscal capacity of the government and the ability to get things done when we have so many problems in this country--environmental, housing, economics. Two-thirds of Canadian families have actually seen their incomes decline since 1989, and yet we're giving half a billion dollars away, and we're not sure to whom.
In some cases, beyond that half a billion dollars for the cross-border interest payments, we have some additional measures that I think members of this committee can support. On the half a billion dollars that is being given away on withholding tax on cross-border interest payments, we don't know who that is going to, and Conservative members can't pretend it's going to ordinary folks. I doubt that very much. Their track record belies that it might go to ordinary Canadians. They seem to be willing to give to the wealthiest of Canada's corporations with alacrity, but they're very miserly when it comes to ordinary Canadians.
So, Mr. Chair, I just protest in the strongest terms this action by the government. I think this is a shameful day for Canada's Parliament.
Liberal
The Vice-Chair Liberal John Maloney
Mr. Dhaliwal.
Mr. Dhaliwal withdraws his question.
Shall the bill carry?