House of Commons Hansard #243 of the 35th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was countries.

Topics

Public WorksOral Question Period

2:55 p.m.

NDP

Vic Althouse NDP Mackenzie, SK

Mr. Speaker, my question is for the minister of public works. During this summer's

renovations to the Peace Tower, the general contractor, Fuller, subcontracted to Karmash, who contracted Ray Wolfe to do masonry work. Wolfe's female engineer, Anne Raney, was subsequent harassed off the job by Karmash.

Given the government's commitment to equity in the workplace and given this workplace is within the jurisdiction of Parliament Hill, literally outside our doors, why did the minister of public works subsequently reward such unacceptable behaviour by granting Fuller and Karmash contracts for the rest of Centre Block even after the Raney incident?

Public WorksOral Question Period

3 p.m.

Cape Breton—East Richmond Nova Scotia

Liberal

David Dingwall LiberalMinister of Public Works and Government Services and Minister for the Atlantic Canada Opportunities Agency

Mr. Speaker, I thank the hon. member for his question.

The hon. member will know that our contract is with the main contractor and not with the subcontractors. There is no, what they call in law, privity of contract between the Government of Canada and the subcontractor. However I instructed my deputy minister to apprise the main contractor to try to resolve the issue as expeditiously as possible. We have sent communications to him and we are hoping the matter which occurred will not occur again.

With regard to subsequent contracts I assure the hon. member as well as other members of the House that, notwithstanding the fact it is beyond the legal ramifications of the Government of Canada in terms of the privity of contract, we will ensure this kind of behaviour is not tolerated. Therefore we will have to look at all contracts awarded in that manner.

Public WorksOral Question Period

3 p.m.

The Speaker

This will conclude question period. I have a point of privilege followed by a point of order. Before I recognize the hon. member for Perth-Wellington-Waterloo, I might ask him whether his point of privilege arises out of today's question period.

Public WorksOral Question Period

3 p.m.

Liberal

John Richardson Liberal Perth—Wellington—Waterloo, ON

Yes, it does, Mr. Speaker.

PrivilegeOral Question Period

3 p.m.

Liberal

John Richardson Liberal Perth—Wellington—Waterloo, ON

Mr. Speaker, I rise on a point of privilege. The member for Red Deer referred to the Canadian soldiers that we send abroad as "big, bad junk yard dogs". What a terrible and unfair characterization of the members of the Canadian forces who have served our country and the UN for decades.

There seems to be an attempt by the members of the third party to smear the Canadian forces.

PrivilegeOral Question Period

3 p.m.

The Speaker

That is not a point of privilege. The hon. member for Red Deer has been named and I saw him getting to his feet. Does the hon. member have something to add to the point before the House?

PrivilegeOral Question Period

3 p.m.

Reform

Bob Mills Reform Red Deer, AB

Yes, Mr. Speaker. First I quote the minister of defence when he said: "Our force would have to be robust and tough".

In my question I said that we were not sending peacekeepers, which is what the defence minister went on to say. The U.S. defence minister said that the force has to be the biggest, baddest junk yard dog.

PrivilegeOral Question Period

3 p.m.

Some hon. members

Oh, oh.

PrivilegeOral Question Period

3 p.m.

The Speaker

Once again I urge members to be very judicious in the choice of words we use in the House of Commons as they can be interpreted in various ways.

I believe the House of Commons is a place where we have very strong feelings and from time to time we use very strong words. I would hope this is not an indication of things to come and I would like the matter to rest where it is. It is not a point of privilege.

Points Of OrderOral Question Period

October 19th, 1995 / 3 p.m.

Bonavista—Trinity—Conception Newfoundland & Labrador

Liberal

Fred Mifflin LiberalParliamentary Secretary to Minister of National Defence and Minister of Veterans Affairs

Mr. Speaker, I rise on what I think is a genuine point of order. It is on the same subject with a slightly different twist.

Points Of OrderOral Question Period

3 p.m.

Some hon. members

Oh, oh.

Points Of OrderOral Question Period

3 p.m.

Reform

Darrel Stinson Reform Okanagan—Shuswap, BC

You are twisted.

Points Of OrderOral Question Period

3 p.m.

Liberal

Fred Mifflin Liberal Bonavista—Trinity—Conception, NL

I beg your pardon?

Points Of OrderOral Question Period

3 p.m.

An hon. member

I heard that.

Points Of OrderOral Question Period

3 p.m.

Liberal

Fred Mifflin Liberal Bonavista—Trinity—Conception, NL

The hon. member for Red Deer in his question to the Prime Minister in the context of another country used the term "meanest junk yard dogs" in reference to members of the Canadian forces.

My concern is not just that he used that term; but in reference to the tenor of the questions from the third party that morale in the Canadian forces was so bad that perhaps we may not want to send the troops, this was totally out of context. In that context I ask the member to withdraw that statement.

Points Of OrderOral Question Period

3:05 p.m.

The Speaker

We had a point of privilege which I ruled was not a point of privilege. The hon. member for Red Deer rose to his feet to give some explanation. I said I wanted to let the matter rest there.

The hon. parliamentary secretary raised the same point on a point of order. I would rule at this point at least-I do not want to

get into a debate-that members of Parliament should not be curtailed by the Chair any more than is absolutely necessary when they are giving some opinions.

There are some words that are offensive to the House in total. There are some words that are inflammatory to some members. Once again I would appeal to members that the more they push their Speaker to making decisions on the comments they make by bringing it right up to the end, the more difficult it is to conduct a civilized question period, if I might use that word.

I urge all hon. members to be very judicious in their choice of words and I would rule it is not a point of order.

Business Of The HouseOral Question Period

3:05 p.m.

Bloc

Michel Bellehumeur Bloc Berthier—Montcalm, QC

Mr. Speaker, in keeping with tradition, might I ask the house leader to tell the House what will be on the program in the coming days.

Business Of The HouseOral Question Period

3:05 p.m.

Windsor West Ontario

Liberal

Herb Gray LiberalLeader of the Government in the House of Commons and Solicitor General of Canada

Mr. Speaker, we will continue this afternoon with Bill C-105 which ratifies a number of international tax conventions.

I understand there have been discussions and as a result all parties have agreed to complete debate on this bill at all stages in the House of Commons. I thank the other parties for their co-operation in this regard.

When that is completed we will then proceed with second reading of Bill C-107, the British Columbia Treaties Commission bill. I expect that will carry us into tomorrow or even Monday of next week. When second reading of Bill C-107 is completed, we will then call report stage of Bill C-93 respecting cultural properties.

I will want to examine what further legislation is reported from committee before I set the program for after Bill C-93 is completed.

The House resumed consideration of the motion that Bill C-105, an act to implement a convention between Canada and the republic of Latvia, a convention between Canada and the republic of Estonia, a convention between Canada and the republic of Trinidad and Tobago and a protocol between Canada and the republic of Hungary, for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, be read the second time and referred to a committee.

Income Tax Conventionsimplementation Act, 1995Government Orders

3:05 p.m.

Parkdale—High Park Ontario

Liberal

Jesse Flis LiberalParliamentary Secretary to Minister of Foreign Affairs

Mr. Speaker, the conventions we were talking about this morning under Bill C-105 are actually patterned to a large extent on the model double taxation convention prepared by the Organization for Economic Co-Operation and Development.

Under the convention a general rate of withholding tax of 5 per cent will apply to dividends paid to a parent company and on branch profits and 10 per cent on interest and royalties. The rate of withholding tax on other dividends is set at 15 per cent. The convention also provides for a number of exemptions in the case of interest.

The Standing Committee on Foreign Affairs and International Trade is holding many meetings with small and medium size Canadian companies. These companies are already exporting Canadian goods to other countries or are interested in penetrating the export market.

I compliment the committee for taking on the task to stimulate exports where $1 million in trade can create over 30 or 35 jobs. If we want to create more jobs in the country, which is the mandate of the government, there are two ways of doing it: first, by increasing our exports for companies that have never been in the export market and, second, by encouraging those who are exporting to increase their exports by 5 per cent, 10 per cent or 15 per cent.

We were very pleased that some of the witnesses who appeared this morning talked about trading with companies such as the ones mentioned in the bill.

The fact that we have Canadians who came here from countries around the world makes Canada a great country. We have to capitalize on our strengths. Some Canadians understand not only the languages of Hungary, Latvia and Estonia, Trinidad and Tobago but the cultures. It is very important when trading with a country to know its culture. This is why it is important to preserve our policy of bilingualism and multiculturalism.

Before question period I debated with the hon. member for Jonquiére who tried to compare the province of Quebec with small countries such as Estonia, Latvia, Hungary, Lithuania, et cetera. He was really comparing apples and oranges because la belle province is a beautiful province within Canada. When I think of Canada I include the territories and all the provinces.

I reminded the hon. member that better protection there would not be to preserve the French language than having it entrenched in the Canadian Constitution and in our overall policy. That language will never die in Canada if we stay united and keep our country strong. However, if we start splitting up the country and if Quebec separates, that guarantee of the French language and French culture

will no longer be there. When the people of Quebec vote on October 30 I hope they will take that into consideration.

The referendum is glossed over with fancy language. The referendum question should read: Do you want to separate from Canada? Yes or no. If it were worded that way I think we would find that the majority of Canadians living in Quebec, regardless of origin, would vote no. Canada has been twice declared by the United Nations the number one country in the world in which to live. Canada has been identified as the second richest country on the planet, next to Australia.

Why would any Canadian or any province want to separate? It is nonsense. That is why we need bills like Bill C-105 so that all Canadians interested in exporting, be it to Estonia, Latvia or Trinidad and Tobago, have the freedom to do so and at the same time have the protection of not being double taxed, of not losing their profits and of not being taxed unfairly.

These are agreements we have already signed with 55 other countries. It is nothing new. I am pleased that the official opposition and the third party, if I heard correctly, will be supporting the bill.

I appreciate the opportunity to take part in the debate. I remind all Canadians, especially people living in la belle province, that we have something no other country in the world has. Let us keep it that way.

Income Tax Conventionsimplementation Act, 1995Government Orders

3:15 p.m.

Vancouver South B.C.

Liberal

Herb Dhaliwal LiberalParliamentary Secretary to Minister of Fisheries and Oceans

Mr. Speaker, it is with great pleasure that I stand before the House to speak on Bill C-105, an act to implement tax conventions between Canada and Latvia, Estonia, Trinidad and Tobago, and a protocol with Hungary.

Canada has such agreements with more than 55 countries. This type of agreement is very normal in today's business environment because the global economy is becoming smaller. The barriers for trade are coming down. The fences that were built between countries are no longer in existence. The trend is that there will be more and more trade. There will be more investment among different countries.

When Canadian companies invest in other countries they have to look at the tax implications that exist. Obviously those companies are making a profit there and when they do we have to have certain rules on withholding taxes. The same is true when investments are made here by companies outside of Canada. We have to have rules and regulations to govern how those moneys can be taken out of the country.

Bill C-105 provides the legislative authority for the implementation of the tax agreements which Canada has signed. The tax treaties are designed to alleviate double taxation of income earned in one country by a person resident in another country. Obviously it would not be beneficial for someone to invest in another country only to have to pay the full taxes of that country and then once again pay taxes in their resident country. That would not be an incentive to invest.

This is very good for Canada. We are a trading nation. One out of every five jobs in this country is related to trade. Trade will be increasing.

In the criteria used as to which countries we should and should not have these types of agreements with, three primary factors are to be considered when negotiating a tax treaty with a particular country.

One is how much Canadian investment is planned for that country. Obviously if we have a much larger amount of capital and investment going into another country, there is a greater urgency. If we have very little, then it is not that apparent to have a tax treaty. The second requirement is Canada's desire to encourage economic reforms. If we want to encourage economic reforms, that is an additional reason to ensure there is a tax treaty. Another requirement is a country's interest in expanding its trade and economic relations with Canada.

We are building new relationships all the time with other countries. For example, there are companies investing in the tourism business and mining in Cuba. To ensure that those investments are encouraged and that we have an understanding with Cuba, we need to look at tax treatments, to ensure there is a fair tax treatment for both countries, for the other country and for Canada.

There is also the capital gains situation. There has to be a way to ensure that when a foreign company or an individual in another country comes to Canada that the tax is paid on their profits here but that they are also treated so that there is equity in the tax being paid. In other words, a company paying taxes back home does not have to pay twice. This is an advantage for both countries.

Bill C-105 is neither earth shattering nor housekeeping legislation. Rather, it is workaday legislation which addresses the dual issue of fair taxation and good international relations.

In this era of governments reappraising their roles, particularly their economic roles in an increasingly interdependent open global economy, reciprocal tax treaties make good common sense. They certainly do not hinder economic competition, which for Canada is an important fact of life. Canada is above all a trading nation. We must keep expanding our trading boundaries and our relationships with other countries.

A few items in the bill apply to all four treaties. First, while tax treaties vary from one country to another, because there are special circumstances, each treaty must be negotiated individually. These proposed conventions are similar to other treaties already concluded by Canada. They are patterned on the model of the double

taxation convention prepared by the Organization for Economic Co-operation and Development.

Second, each treaty has been negotiated individually and has taken into account the relevant policies in each country.

Third, Bill C-105 provides an equitable solution to the double taxation problems which exist between Canada and these countries. Double taxation occurs when international transactions result in the same income being taxable in the hands of the same person by more than one nation.

In addition, the protocol brings the convention with Hungary in line with the current Canadian tax policy, particularly with regard to the rates of withholding taxes.

Here are some of the technical aspects of Bill C-105 which apply to the treaties with Estonia, Latvia, and Trinidad and Tobago.

There will be a withholding tax rate of 5 per cent on dividends paid to parent companies and on branch profits, 10 per cent on interest and royalties, and management fees in the case of Trinidad and Tobago. A 15 per cent rate of withholding tax will apply on other dividends. The conventions also provide for a number of exemptions in the case of interest. For Estonia and Latvia, a zero rate will apply to interest paid to the governments, the central banks, the Export Development Corporation, and from sales made on credit. I could go on with more of the technical details of this bill, but I would like to talk about taxation in general.

Because there is more and more trade happening around the world, and for very good reason, we as a country want to ensure that our energies are put into doing the type of economic activities in which we have a trade advantage, where we are more competitive and have the resources, the skills and the technology which will enable us to be more competitive than other countries. We would be able to produce that product at a lower price than other countries that may not have the same advantages. As we see more and more trade developing around the world, some of the costs will decrease.

One of the most important things is taxation in general. As Canadians we have to ensure that we do not burden our companies and our business people with high taxes which would make it more difficult for them to compete in the international community.

Canadians are overtaxed and our tax system is too complicated. We have to work on both of those areas to ensure that we simplify our tax system and that we reduce the tax burden. If we do not do that, we will find it more and more difficult to compete around the world. If our neighbours or our trading partners have a much lower tax rate, obviously our companies and our business people will not have the same advantages.

As trade develops and the barriers come down, as we saw with the world trade agreement, we will need to focus more on taxation, on our rate of taxes and on the complexity of our taxation system. We will also need to ensure that our duties and excise taxes are also very competitive and consistent so that we can compete efficiently with the rest of the world.

Our finance minister will ensure that some of those areas get attention so that we can continue to be a strong trading nation. In doing that, we will continue to create employment and opportunities for all Canadians.

Income Tax Conventionsimplementation Act, 1995Government Orders

3:25 p.m.

Liberal

Don Boudria Liberal Glengarry—Prescott—Russell, ON

Mr. Speaker, I have the pleasure to rise this afternoon to say a few words about Bill C-105, at second reading.

This piece of legislation implements tax conventions between Canada and Latvia, Estonia, Trinidad and Tobago and a protocol to the tax convention signed with Hungary.

Canada has signed tax conventions with 55 countries; Bill C-105 allows for the implementation of conventions with four of these countries. The purpose of these conventions is simply to avoid double taxation of income. This means that an individual would not be required to pay taxes both in Canada and Trinidad and Tobago, for instance, or in Canada and Hungary.

Indeed, some engineering companies in my riding do business in such countries, where they plan and build bridges and other things. I refer to civil engineering, of course. The purpose of this bill is to avoid things of this kind.

I must say that I was rather taken aback by the remarks made by the Bloc member this morning in the House. The member for Jonquière, I believe, used the time he had been given to speak on Bill C-105 to extol the virtues of separation.

The member opposite had a great time explaining that Bill C-105 meant that Quebec would automatically have access to all the international agreements signed by Canada. This is stretching the truth, to say the least. Indeed, it is true that Canada has agreements with several countries in order to avoid double taxation. But to say, as the member is claiming and as he mentioned in some of his statements, that Quebec, if it were to separate, and I hope that never happens, would automatically have all the rights or most of the rights that it now has within Canada in terms of international agreements, that is not only an exaggeration, but as we would say in Hawkesbury, "that is stretching it quite a bit".

I say to the member opposite that, what he would want Quebecers to believe is that, in fact, Quebec would automatically have the

right to join NAFTA, for instance, or other trade agreements such as the Canada-U.S. free trade agreement.

That is simply not true. Yesterday, Mr. Christopher said clearly that, if Quebec were to separate, things would not be necessarily the same at all.

Of course, the Deputy Premier of Quebec has attempted to give a different twist to all of this. Last night, on the news, we saw him try his best to put other words in Mr. Christopher's mouth. But it did not work, of course. Mr. Christopher's words are clear. Besides, a few days ago, we saw the Roh report, which was even tabled in this House and which indicated, once again, that agreements signed exclusively between Canada and the United States or Mexico are not automatically offered to other countries, including Quebec if it became a country. And I repeat that I hope that this will not happen. I hope we will remain a united country, the great country we live in.

However, that would not be automatic, and the Minister of Finance made it clear. The minister mentioned that one million jobs in Quebec depend on trade. He clearly said that those jobs are at risk. He did not say that they would all disappear. He did not say that. The member opposite knows that and so do his colleagues. But it is true that these jobs are threatened. Does that mean that some would have to take salary cuts, while others would lose their jobs, their benefits, or whatever else? I do not know, but there is no doubt that jobs are at stake. There is a potential loss for one million workers. This is not to say that they will all lose their jobs. Absolutely not. The member knows that too.

However, it also does not mean that everything will remain the same as it is, and the member is also aware of that. There are potential losses and there are great risks. As we saw, the referendum campaign went through various stages. For example, at the beginning, these separatist members told us about sovereignty, without elaborating. Then we saw one separatist leader give way to another and, at the same time, we started hearing about a new union, a unifying separation, if you can imagine.

According to the Leader of the Opposition, this unifying separation would lead to all sorts of agreements, imaginary or otherwise with the rest of Canada, in addition to ensuring that Quebecers would enjoy all the benefits resulting from Canada's international agreements and prestige, including the Canadian passport, if you can imagine that for one second.

Yesterday, the Leader of the Opposition went so far as to admit it may not be quite that way. Trying another tack, he said that, maybe, the passport will not be a Canadian passport. It may turn out to be something else. We can see that he is starting to sing another tune, once again. Separatists are shifting like that all the time. It is a case of moving targets.

What takes the cake, concerning agreements and privileges that some separatists envision, is that they used the Canadian dollar, the loonie with the word Canada on it, to replace the "o" of "oui". It is very hard for me, and probably for you too, to imagine they had the gall to do that, but it goes to show how low the separatists across the way have stooped during the referendum campaign.

Last weekend, I campaigned in the Saint-Janvier area, near Mirabel. Senior citizens told me and some of my colleagues that separatists had told them that voting yes meant voting for Canada. That is what they were told by separatists.

How awful. This shows how little conviction they have on the other side if they go around telling people the opposite of what they think in order to get their vote.

That is what I witnessed last week. This is the sort of thing going on. They tell senior citizens that voting yes means voting for Canada. That is what I have seen in that area. Members opposite must not be too sure of their arguments if they are willing to tell the opposite of the truth to win votes. It is even worse than the unifying separation the Leader of the Opposition was talking about last week. That is the kind of thing we have heard.

This morning, the hon. member tried to rewrite history when he said that the province of Ontario and Quebec have been together only since 1867, only for 130 years is what he said, when he knows full well that the Union Act of 1840 was signed-guess when, ladies and gentlemen-in 1840. That is why it is called what it is called. Being a teacher yourself, Mr. Speaker, you know that is so.

The pages here in the House of Commons are all students who have learned that the Union Act of 1840 was signed in 1840. It does not come as a great surprise to them, but it seems that the Bloc members have to revisit the past, because the rest of their arguments does not hold so good either.

Let me tell the hon. member opposite who spoke this morning that the agreements referred to in Bill C-105 are not side agreements nor are they similar to agreements made under the Canada-U.S. free trade agreement and NAFTA signed by Canada, the United States and Mexico.

U.S. trade representatives, whether it is Senator Dole, Mr. Roh, and even Mr. Christopher no later than yesterday, have all clearly stated that there will have to be concessions for a sovereign Quebec to keep the prerogatives it now enjoys within a unified Canada. That is why Canada must remain unified, if for no other reason than

to serve the commercial interests of the country and the interests of all the workers in Quebec and the rest of Canada.

That is what the prime minister said, that is what the Minister of Finance said, and that is what other ministers said. All of my colleagues as well as Mr. Johnson and the Chambers of Commerce have said it. A united Canada will bring us prosperity, but a divided Canada will bring us adversity.

This must not be. We have all been elected to this House to help build this great country, to make it better and more prosperous. Those are the commitments we made in the red book and that is what we will do as a government. This is why we urge Quebecers to vote no in the referendum, so that we can continue to build this country, to build an economy for each and everyone of us.

[English]

Mr. Speaker, before you put the question, I believe you will find the unanimous consent of the House that the bill be referred to committee of the whole to be dealt with immediately. I understand one of the chairs of the committee of the whole is preparing to enter the Chamber shortly in order to take over that measure should the House give its consent.

Income Tax Conventionsimplementation Act, 1995Government Orders

3:40 p.m.

The Speaker

Is that agreed?

Income Tax Conventionsimplementation Act, 1995Government Orders

3:40 p.m.

Some hon. members

Agreed.

Income Tax Conventionsimplementation Act, 1995Government Orders

3:40 p.m.

The Speaker

Is it the pleasure of the House to adopt the motion?