Mr. Speaker, I shall resume my demonstration where I left off when I was interrupted by question period. I was trying to make taxpayers in Quebec and Canada understand why we oppose Bill C-36 which is implementing certain measures announced not in the finance minister's latest budget but rather in the 1995 budget.
We were noting earlier that many of the measures contained in this bill and in the 1995 budget were merely ad hoc measures relating to some small and often insignificant aspects of corporate taxation. Let me give you an example.
Last year, the Minister of Finance told us: "I am pleased because my 1995 budget will ensure that corporations, and large corporations in particular, the big companies, pay more taxes. The relative amounts paid by taxpayers versus businesses-small, medium and big in particular-will be readjusted".
One of the measures announced with great pomp to restore equity and efficiency to the corporate taxation system was a special tax whereby $160 million would be collected from Canadian banks.
Before going any further, I would have two remarks to make on this subject. First, this special tax of $160 million is ridiculous, given that last year major Canadian banks made record profits of close to $5 billion. Second, it is also ridiculous that, in Canada, major banks, financial institutions and corporations, as well as very rich families, can take advantage of the tax system's flaws, flexibility and loopholes, as shown by two recent scandals.
There always has to be a scandal somewhere. In the first part of my speech, I referred to two major scandals that were uncovered: one by the Auditor General of Canada, the other by the prestigious Toronto Star .
The auditor general was very clear. Through family trusts, a system which the Bloc Quebecois, the official opposition, has been condemning since it arrived in this House, two family trusts were able to transfer $2 billion to the United States, without paying one penny in taxes on capital gains, $2 billion.
The second scandal, which involves, indirectly if not directly, major Canadian banks, was exposed on May 9 by the Toronto Star . The newspaper got hold of a Revenue Canada study which had been released shortly before to a select group and which stated that, in 1991, tax evasion amounted to no less than $60 billion. In other words, no less than $60 billion left Canada, possibly to be invested in countries deemed to be tax havens.
Since then, there has been no major change in the way capital gains are taxed, even though we have been asking the Minister of Finance for almost three years now to take action and to overhaul the tax system. We are not talking peanuts here. When you think that $60 billion in assets in 1991 alone were moved out of the country tax free, as if by magic, and there was nothing that could be done because of weaknesses in Canadian tax law, and also because of weaknesses with respect to relations between Canada and the so-called tax havens. You know what that means. That means that taxes not collected on this wealth must be found somewhere else.
Since his first budget in 1994, and even more so since his 1995 and 1996 budgets, the finance minister has been trying to get this money from the taxpayer, through various means, first, by cutting transfers to the provinces for welfare, postsecondary education and health. It is always the same taxpayer getting hit. But because the minister has not taken a firm approach to tax reform, he must make up the shortfall through other cuts.
While these wealthy Canadian families and big businesses are taking advantage of tax loopholes, the Minister of Finance will be
making up the shortfall by dipping into the unemployment insurance fund, in complicity with the Minister of Human Resources Development, who certainly showed us how little he cared today. He will use the contributions of workers and employers to make up for what others are not paying. That is Canada's so-called fair tax system.
The Toronto Star focussed on certain interesting points concerning this $60 billion tax evasion, one of which was that the bulk of these transactions were linked to the major Canadian banks.
We in the official opposition are not surprised by this. We have nothing against the big banks, but they must behave like good corporate citizens as far as taxes are concerned. For the past two and a half years or so now, we have been criticizing the fact that Canadian banks have about 46 branches in the Caribbean alone, this area being considered the ideal tax haven. Why do they have these 43 or 46 Caribbean branches, twice as many as they have anywhere else outside of Canada? This is not right.
And now we see why. With branches in these countries which are considered tax havens, it is easy to take advantage of the weakness of the tax agreements signed with those countries and to ensure that profits are not taxed at the fair rate they ought to be.
As I recall, when the Minister of Finance tabled his budget in 1995, the one that has given rise to this Bill C-36, he said: "We have taken drastic measures against the major Canadian banks. We will be imposing a special tax of $160 million on them". Do not make me laugh. The Minister of Finance should stop trying to be funny.
This concerns us, because it took two scandals, one involving $2 billion and another involving $60 in tax evasions, flights of capital abroad, for the Minister of Finance to decide finally to give the finance committee openly, not behind closed doors, the task of reviewing corporate taxation and particularly taxation of capital gains.
We on the other hand will continue to monitor very closely the Minister of Finance's accession to the demand we in the Bloc Quebecois have been making since our arrival here. The experts who will be working with the finance committee, with the elected members on the committee, were appointed by the minister at the time of the latest budget. Some of them at least may be clearly in a conflict of interest.
Some of them work for firms advising major Canadian families, Canada's wealthy families, along with large companies on ways to take advantage of tax loopholes, on how to make transfers like the one we saw involving family trusts, where $2 billion was moved to the United States without being taxed, or the $60 billion in tax evasions reported by the Toronto Star . My feeling is that the official opposition, and all members of this Parliament, will have to be extremely vigilant.
As far as we are concerned, we are not prepared to take any chances with the review process; it is far too important to us. The well-being of taxpayers in Quebec and Canada is far too important to us to allow the continued protection of tax loopholes that benefit large corporations and wealthy Canadian families at the expense of Canadian taxpayers.
What we intend to do is to scrutinize the taxation system in order to be able to oppose arguments of our own-on behalf of the official opposition and on behalf of the people of Quebec and Canada-to the arguments put forward by these eight experts, a number of whom are in conflict of interest.
However, there are two positive measures contained in this bill. See how seriously we do our job in the opposition. The first one deals with business numbers and allows Revenue Canada to exchange business name and address information with other federal government departments and the provinces. As part of the effort to have corporations actually pay their fair share of taxes, I think that this measure may prove positive.
The second measure deals with interest rates applicable to unpaid taxes. It is a good idea to increase the rate of interest on taxes payable to encourage speedier payment, but we were hoping the government would take our advice. Ever since we were elected to the House of Commons, in 1994, we in the official opposition have been suggesting that resource levels should be increased at Revenue Canada to really go after those whose taxes are unpaid.
Since 1994, we have been told over and over again by the Minister of Finance that additional resources would be provided because, year after year, approximately $6 billion in taxes payable to the Canadian government remain unpaid. That is a lot of money. For all the conviction shown by the Minister of Finance and the many promises made by the various revenue ministers, out of $6.4 billion in unpaid taxes, $200 million has been recovered on average every year for the past two years. That makes no sense.
Government must be streamlined. We in the official opposition were the first to say that downsizing is required across government. But the idea is not to blindly make cuts across the board, downsizing to the same extent everywhere. Some departments, including Revenue Canada, might benefit from additional resources to recover more revenue, to recover more than $200 million out of $6.4 billion in unpaid taxes. This does not make any sense. The money is not in dispute. Taxpayers-most of them rich people, since the average amount of taxes owed has increased considerably over the last eight years-do not dispute these amounts. They know they owe the money to Revenue Canada, but the federal government does not invest in the necessary resources to go and recover it.
It might not be a bad idea to do like the Government of Quebec did and to get the additional resources necessary to recover these
unpaid taxes. These initiatives are about the only two positive measures in the 1995 budget that I see in Bill C-36.
I can tell you, as we did in 1995 when the Minister of Finance brought down his budget, that we will oppose Bill C-36. First, it does not go far enough in terms of a true reform of corporate and capital gain taxes. Instead, this government condones, through its laxness, the loopholes, the tax evasion schemes, and the fact that very rich taxpayers or corporations do not pay their fair share to Revenue Canada.
We will also oppose the bill because, in spite of the two minor initiatives to which I referred, most of the measures, particularly those that concern family trusts, are just a joke.
The government tells very rich Canadian taxpayers: "You have four years to invest your assets in other financial vehicles that will allow you to save taxes". This is a rather cavalier way of dealing with the issue of family trusts, particularly since we learned, from the auditor general, that at least two trusts transferred $2 billion to the United States without paying any taxes.
It shows an obvious lack of determination on the government's part to take action to make very rich Canadian families and major corporations pay their due to Revenue Canada, as do small businesses and individual taxpayers. This situation is totally unacceptable. For all these reasons, and for those mentioned before question period, I will ask members of the official opposition to vote against Bill C-36.