Mr. Speaker, Bill C-37 is designed to implement income tax conventions that have already been signed with Russia, South Africa, Tanzania, India and Ukraine.
Tax treaties such as these have two main objectives: first, the avoidance of double taxation; and second, the prevention of tax evasion or avoidance. Since they contain taxation rules that are different from the provisions of the Income Tax Act they only become effective if an act giving them precedence over domestic legislation is passed by Parliament.
The conventions and protocols in the act are patterned on the model double taxation convention prepared by the OECD. This act sets out a system of taxation protocols and conventions with nations that previously had no such conventions with Canada.
The act is designed to eliminate double taxation whereby an individual is taxed on income in his home country as well as in another country, and to restrict the ability to evade taxes by shifting income into other localities. The act reproduces tax conventions already signed with Russia, South Africa, Tanzania, India and Ukraine.
Reform supports horizontal and vertical equity, and removing the ability to evade or avoid taxes is in keeping with this philosophy. The act basically simplifies the system of taxation as it applies to resident individuals and corporations in Canada as well as owners of income producing assets in Canada or one of the signatory states. Therefore, I am pleased on behalf of the Reform Party to support this bill.