House of Commons Hansard #79 of the 35th Parliament, 2nd Session. (The original version is on Parliament's site.) The word of the day was justice.
Paul Zed LiberalParliamentary Secretary to Leader of the Government in the House of Commons
Mr. Speaker, pursuant to Standing Order 36(8), I have the honour to table in both official languages the government's response to three petitions.
Paul Martin LiberalMinister of Finance
Mr. Speaker, pursuant to Standing Order 83(1), I have the honour to lay upon the table a notice of ways and means motion to amend the Income Tax Act.
I also table explanatory notes and ask that you designate an order of the day for the consideration of the motion.
Paul Martin LiberalMinister of finance
Mr. Speaker, perhaps I will be allowed, first, to join in with what the Prime Minister and the Leader of the Opposition had to say about Robert Bourassa. He was a good friend and a great statesman.
In May of this year the auditor general reported his concerns about a 1991 tax ruling that allowed a taxpayer to transfer property out of Canada without being subject to capital gains tax in Canada.
The House of Commons finance committee examined the issue and issued a report in September, just last month.
The House of Commons finance committee found that Revenue Canada's interpretation of the law as it stood in 1991 was correct but recommended in its majority report that the law be changed to ensure that tax is paid in Canada in similar circumstances from now on. With the tabling of a notice of ways and means motion today, the government is acting to implement the finance committee's recommendations.
This is a textbook case of the system working as it should. The auditor general has done his work as a watchdog. Parliament listened and asked a committee of the House to investigate. The committee probed and reported back to Parliament with recommendations. And now the government is proposing to implement those recommendations swiftly and fully.
It is imperative that Canadians have absolute faith in the tax system. People have a right to demand that everybody pays their share. That is why, from the time this government took office, we have worked hard at constantly improving the fairness of the tax system.
Each of our budgets has closed loopholes. We have said that we will constantly scrutinize the fairness and effectiveness of the tax system. This measure today is further evidence of our commitment. It will ensure that all emigrants from Canada-including individuals, trusts and corporations-will pay Canadian tax on any
capital gains that have accrued in Canada up to the time of departure. They will either pay the tax immediately or give Revenue Canada security to pay those gains when the property is actually disposed of.
This measure takes effect immediately.
This measure will ensure that all those leaving Canada to live abroad, including individuals, trusts and corporations, will pay Canadian tax on any capital gains that have accrued in Canada up to the time of departure, if they are in fact emigrating. They will pay the tax immediately or will give Revenue Canada security to pay those gains when the property is actually disposed of. This measure takes effect immediately.
If these measures had been in place in 1991 the tax policy issue identified in the auditor general's report would not have arisen. This is not an issue about family trusts.
We removed all tax advantages for family trusts in the 1995 budget. One faces same tax policy questions whether one is talking about the transaction described in the auditor general's report or determining what rules apply to the small businessperson who moves from St. Stephen, New Brunswick, to Calais, Maine.
Exceptions to this rule will include gains that accrue on Canadian real estate and Canadian business property: things that Canada can always tax when they are ultimately sold. There will also be an exemption for pensions.
As well, emigrants with any significant property, including real estate, will have to report it all to Revenue Canada when they leave. This will help Revenue Canada ensure that former residents pay the tax they owe to Canada.
All persons who have been in Canada only temporarily will of course not be subject to these requirements.
With our new measures, Canada will be implementing one of the strictest systems in the world with regard to taxpayer migration. Indeed, Canada is only one of three or four countries that have any system at all for taxing people who leave. The United States does not have such a system, nor does most of Europe or Japan.
The motion to which I speak also implements the committee's more technical recommendations which have to do with issues such as the scope of the definition of the term taxable Canadian property and the character of property that is distributed from a trust to a non-resident beneficiary. These are complicated points of law and policy.
I expect that many members in this House and many of their constituents will want to take part in shaping this legislation's final form. They will have that opportunity as it proceeds through Parliament.
I would like to thank the auditor general for bringing an important issue to Parliament's attention. I would also like to thank the chairman and the members of the finance committee. Their careful research and their thorough report have laid the foundation for this motion.
Yvan Loubier Bloc Saint-Hyacinthe—Bagot, QC
Mr. Speaker, first of all, I wish to convey my sincerest sympathy to Mr. Bourassa's family.
In his statement, the Minister of Finance confirmed that the Liberal government helps some people to avoid paying taxes. He confirmed that he has done nothing to end the family trust scandal in which $2 billion in assets was transferred to the U.S. without a penny in tax being collected.
Should we be surprised? Since the beginning of this affair, the behaviour of the Liberal members on the finance committee has been unworthy of parliamentarians. They tried to undermine the credibility of the auditor general.
According to the minister's statement, Canadians must have confidence in the tax system. They are entitled to demand that everyone pay his or her fair share.
On behalf of all the taxpayers in Quebec and Canada, I ask the Liberal government to shed light on this scandal and plug the tax loophole, instead of throwing the borders wide open as they are now doing.
If the minister truly wants, as he claims in his ministerial declaration, to re-establish confidence in the fiscal system, he must shed light on the scandal of December 1991 which permitted a family trust of $2 billion to be transferred tax free in the United States. He must demonstrate to Canadians that they can have confidence in the system. With the scandal and the complicity of the government, the proof must be given.
Herb Grubel Reform Capilano—Howe Sound, BC
Mr. Speaker, I have three points with respect to the government's policy initiatives just outlined by the Minister of Finance.
First, I am glad that in his statement he eliminated the criticism of the auditor general which had pervaded the finance committee's own report.
It makes no sense to distinguish criticism based on wasteful policies and the wasteful implementation of sound policies caused by faulty bureaucratic decisions. Waste is waste and the auditor general must fight it wherever he finds it.
Second, I agree with the minister that this entire controversy is not about the roll of family trusts as a vehicle for the evasion of taxes. The contemptible tax loopholes that once existed were closed by legislation some time ago.
I respect the integrity and goodwill of my colleagues from the Bloc Quebecois serving with me on the finance committee. However, after listening carefully for many hours to expert testimony on family trusts and capital gains taxation, I reluctantly and respectfully disagree with their continued allegations that family trusts have served recently and continue to serve as vehicles for tax evasion and avoidance.
Third, I want to raise a point of disagreement with the government's approach to solving the one clear and important problem identified by committee witnesses. This problem concerns the lack of data on real estate and private business assets left behind untaxed by emigrants. Under present rules the government taxes capital gains on these assets whenever they are sold and a fair value has been established.
Presently Revenue Canada has in place a rather unreliable system for assuring that the sales of these assets are recorded and taxed properly. Such sales are not brought to the attention of Revenue Canada automatically and emigrants avoiding the payment of these taxes are difficult to catch once they have moved abroad.
The government has chosen to tighten the net for catching all capital gains on such assets by a mandatory reporting rule and the payment of a security deposit. I find the latter provision to be an unnecessarily harsh and punitive measure. Many emigrants will not have assets acceptable to Revenue Canada as a security deposit and will be hard pressed to come up with some.
It would have been much kinder and more efficient for Revenue Canada instead to put contingent liens on real estate and ask operating divisions of the department to report the sale of privately held firms showing up in tax returns.
I regret that the government has failed to take the kinder and gentler approach to regulation and the treatment of Canadians. These emigrants deserve our respect and compassion even after they have decided to take up residence in another country.
Eleni Bakopanos Liberal Saint-Denis, QC
Mr. Speaker, pursuant to Standing Order 34(1), I am pleased to table, in both official languages, the third report of the Canadian NATO Parliamentary Association.
It is the report of the official delegation representing Canada at the joint session of the defence and security committees, the economic committee and the political committee of the North Atlantic Assembly held in Brussels on February 18 and 19, 1996.
Bob Speller Liberal Haldimand—Norfolk, ON
Mr. Speaker, pursuant to Standing Order 34, I have the honour to present to the House three reports from the Canadian Branch Commonwealth Parliamentary Association concerning our parliamentary seminar which was held in London, United Kingdom from March 5 to 16, 1996, a parliamentary visit which was held in London, United Kingdom from May 8 to 24, 1996 and the Canadian Regional Conference which was held in Winnipeg, Manitoba from July 27 to August 2, 1996. These are in both official languages.
Paul Zed LiberalParliamentary Secretary to Leader of the Government in the House of Commons
Mr. Speaker, I have the honour to present the 34th report of the Standing Committee on Procedure and House Affairs regarding the associate memberships of the Standing Committees on Justice and Legal Affairs and on Health.
If the House gives its consent, I intend to move concurrence in the 34th report later this day.
If the House gives its consent, I move that the 34th report of the Standing Committee on Procedure and House Affairs be concurred in.
(Motion agreed to.)
Paul Szabo Liberal Mississauga South, ON
Mr. Speaker, I have two petition is from Sarnia, Ontario. The petitioners draw to the attention of the House that managing the family home and caring
for preschool children is an honourable profession which has not been recognized for its value to our society.
The petitioners therefore pray and call on Parliament to pursue initiatives to eliminate tax discrimination against families that provide care in the home for preschool children, the chronically ill, the aged or the disabled.
Paul Szabo Liberal Mississauga South, ON
Mr. Speaker, the second petition comes from Burlington, Ontario. The petitioners draw to the attention of the House that the consumption of alcoholic beverages may cause health problems or impair one's ability, and specifically that fetal alcohol syndrome and other alcohol related birth defects are 100 per cent preventable by avoiding alcohol consumption during pregnancy.
The petitioners therefore pray and call on Parliament to enact legislation to require health warning labels to be placed on the containers of all alcoholic beverages to caution expectant mothers and others of the risks associated with alcohol consumption.
Ed Harper Reform Simcoe Centre, ON
Mr. Speaker, I have four petitions to present today on behalf of the constituents of Simcoe Centre.
PetitionsRoutine Proceedings
The Speaker
Order. My colleague, four is a bit much. Maybe we could split them down to two and two or three and one. Would you consider that, rather than four today?
Ed Harper Reform Simcoe Centre, ON
Yes I will, Mr. Speaker.
The first petition deals with age of consent. The petitioners request age of consent laws. The petitioners ask that Parliament set the age of consent at 18 years to protect children from sexual exploitation and abuse.
Ed Harper Reform Simcoe Centre, ON
Mr. Speaker, the second group of petitioners request that the Government of Canada not amend federal legislation to include the phrase sexual orientation.
The petitioners fear that such an inclusion would indicate societal approval of homosexual behaviour. The petitioners believe the government should not legitimize this behaviour against the clear wishes of the majority.
Maurizio Bevilacqua Liberal York North, ON
Mr. Speaker, pursuant to Standing Order 36, I am pleased to present to this House two petitions signed by the residents of York North.
The first petition is about the Helms-Burton law. The petitioners draw to the attention of the House that the Cuban liberty and democratic solidarity act attempts to impose American domestic policy on other sovereign countries and therefore violates international law.
The petitioners further draw to the attention of the House that Canadian interests, rights and businesses must be defended with strength and vigour.
The petitioners therefore call on Parliament to pursue all avenues available to ensure the rights of Canadians are protected.
Maurizio Bevilacqua Liberal York North, ON
Mr. Speaker, the second petition draws to the attention of the House that Canadians of all ages view our health care system as a defining element of Canadian society.
The petitioners therefore call on Parliament to continue to uphold the fundamental principles of the Canada Health Act so that public health care remains accessible, comprehensive, portable, universal and publicly administered.
Ronald J. Duhamel Liberal St. Boniface, MB
Mr. Speaker, this petition was submitted by the St. Boniface Chapter of the Ukrainian Catholic Women's League of Canada.
The petitioners call for the present laws on obscenity and pornography to be strictly upheld. It is a pleasure for me to present this petition.
Jim Abbott Reform Kootenay East, BC
Mr. Speaker, I have in my hand a petition signed by people from all over Canada. It is really quite interesting.
They are concerned about the increased entry fees to our national parks, that there was a lack of public consultation on the new fee structure and that they believe a standard fee of $2 for all passenger vehicles or $25 for a yearly pass should be set for entry to all Canadian national parks.
Paul Devillers Liberal Simcoe North, ON
Mr. Speaker, I have two petitions from my constituency to present pursuant to Standing Order 36. The petitions contain 75 and 58 signatures respectively.
The petitioners request that Parliament regulate the longstanding Canadian practice of marketing generic drugs in a size, shape and colour similar to that of their brand name equivalents.
Paul Steckle Liberal Huron—Bruce, ON
Mr. Speaker, pursuant to Standing Order 36, I wish to present the attached petitions I have in my hand. These people petition the government to take notice of an issue they feel is very important. These constituents come from the riding of Huron-Bruce for the most part. They embrace the
philosophy of zero tolerance toward individuals who drive while impaired by alcohol or drugs.
The petitioners therefore pray and call on Parliament to proceed immediately with amendments to the Criminal Code that will ensure that sentences given to anyone convicted of driving while impaired or causing injury or death reflects both the severity of the crime and zero tolerance by Canada toward this crime.
Diane Ablonczy Reform Calgary North, AB
Mr. Speaker, I have petitions on two subjects to present to the House on behalf of citizens in my riding Calgary North.
The first petition asks Parliament to establish a pedophile registry.
Diane Ablonczy Reform Calgary North, AB
Mr. Speaker, the second petition asks Parliament to commit to a triple E Senate and to permit the selection of senators by the people of a province directly.
Gary Pillitteri Liberal Niagara Falls, ON
Mr. Speaker, at the request of 74 senior citizens of my riding of Niagara Falls, I would like to table a petition asking that Parliament regulate the longstanding Canadian practice of marketing generic drugs in a size, shape and colour similar to its brand name equivalent.
Mauril Bélanger Liberal Ottawa—Vanier, ON
Mr. Speaker, on behalf of 43 citizens in the national capital region I would like to present a petition.
The petitioners pray that members of Parliament enact Bill C-205, introduced by the hon. member for Scarborough West, at the earliest opportunity so as to provide in Canadian law that no criminal profits from committing a crime.
Nelson Riis NDP Kamloops, BC
Mr. Speaker, it is my privilege to present a petition pursuant to Standing Order 36 on behalf of the constituents of Kamloops.
About 1,800 constituents have signed a petition asking for the complete removal of section 745 of the Criminal Code. They are going to get half of that so I suppose they will be half pleased, but they are calling for full abolition of section 745.