Mr. Speaker, it is with great pride that I rise to make my maiden speech in this 36th Parliament.
I would like to take this opportunity to thank the people of the riding of Trois-Rivières for once again placing their trust in me, and in particular the people of the new area in the Trois- Rivières riding that takes in Louiseville, Maskinongé and Saint-Léon-le-Grand, who placed their trust in me for the first time. I intend to keep doing a good job, as Mr. Duplessis once said, and to try to represent my constituents to the best of my ability by taking to heart their hopes and their problems, and by devoting a good part of my energy, for this is also fundamental for me, to promoting, in keeping with the Bloc Quebecois' mandate, the sovereignist proposal, which we feel is the best status for the people of Quebec in the international community.
I am also happy to speak to Bill C-10. If I may, I will read the purpose of this bill, an act to implement a convention between Canada and Sweden, a convention between Canada and the Republic of Lithuania, a convention between Canada and the Republic of Kazakhstan, a convention between Canada and the Republic of Iceland and a convention between Canada and the Kingdom of Denmark for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and to amend the Canada-Netherlands Income Tax Convention Act, 1986 and the Canada-United States Tax Convention Act, 1984.
The main purpose of this bill is to prevent tax evasion. Its fair and equitable purpose is to prevent double taxation when a company pays taxes in a country with which Canada has signed a treaty. This is, therefore, a measure aimed at ensuring fair and equitable taxation for residents and non-residents, as well as at encouraging trade and investments between countries.
These treaties must not, however, open the door to abusive tax evasion. It must be kept in mind, moreover, that the purpose of tax conventions is to eliminate double taxation; in other words, profits and income earned in one country covered by the convention will be taxed in that country alone. A Canadian company earning 50% of its profits in the United States will be able, under certain conditions, to bring those profits back to Canada without being taxed once again by Revenue Canada.
This is more or less what the bill is all about. It will define financial and trade relations between corporations.
There are some things that bear repeating on the operation of our taxation system, and I will address it by using the May 1996 auditor general report as my main inspiration. First of all, however, I would like to make you aware that in Canada we have a bad example, coming from our No. 2 man in politics, the finance minister who, as a businessman, has a major interest in Canada Steamship Lines.
We were given some valuable information in Le Soleil on April 24, 1997 on the actions of that company, no doubt carried out by the agents of the Minister of Finance. Canada Steamship Line, until 1981, oddly enough, operated exclusively in Canada; since then, it has diversified, with globalization, and now deals, strangely enough, with countries that have very little taxation, countries known as tax havens.
As we saw earlier, tax treaties should be signed by economies which are more or less on a par, with the understanding that some gains and losses will result, thus the consequent dealings on tax issues. However, there are countries in this world where one can make profits, pretend to pay taxes and come back to Canada saying I paid my dues over there«, just like in well-structured countries where people really pay taxes. Such countries are called tax havens.
So, Canada Steamship Lines expanded its operations to three countries that are tax havens and banana republics, namely Bermuda, Liberia and Barbados. In Bermuda, there is no tax on revenues, with a possible exemption until the year 2016. Canada Steamship Lines does business there.
In Liberia, there is no tax on ship operations. There is only an annual tax of $350 U.S., but no tax on ship operations.
In Barbados, a decreasing tax is imposed. Believe it or not, the rate goes from 2.5% down to 1%. Canada Steamship Lines pretends to pay taxes in these countries and then tells Revenue Canada that it indeed paid taxes, but this is against the spirit of the law.
It is very unfortunate. There are probably not too many countries in the world where a finance minister, albeit very honourable, can behave in such fashion. People in certain circles have been saying for quite a while that this situation should be addressed and it has not been addressed. A kind of conflict of interest therefore exists which we have a right to denounce.
I would now like to quote extensively from the auditor general's report of May 1996, an entire chapter of which deals with tax avoidance. The very fact that an entire chapter deals with this issue shows that there is a deep uneasiness with the way revenue collection is managed in the Prime Minister's great big Canada.
On page 11-9 of his report, the auditor general prefaces the chapter by stating that “Amending tax law is crucial”. Paragraph 11.12 reads as follows:
—Problems in the application of the law need to be noted and corrected as soon as possible.
Paragraph 11.13 states, and I quote:
11.13 We noted that Revenue Canada has brought to the attention of the Department of Finance—
Because there are discussions between these people; information flows between them. The finance department we mentioned earlier is at the heart of the whole process.
11.13 We noted that Revenue Canada has brought to the attention of the Department of Finance many situations suggesting that the law needed to be strengthened. When this is the case, it is customary for both departments to exchange views on the best way to modify the tax legislation.
He goes on to give examples of delays. The auditor general criticizes among other things the fact that action is slow in coming despite the urgency of the situation with regard to the tax base, which he himself referred to.
We can see the practical repercussions on the tax base. This is why there were so many cuts and why, on the back of the provinces and the most disadvantaged, the most vulnerable in our society, and I'll get back to this in a few minutes, the deficit was cut.
The auditor general said:
—For example, in 1989, changes to the rules dealing with non-resident corporations were requested by tax avoidance officials. The changes are still under consideration.
That was in 1989: “The changes are still under consideration”.
In 1990, changes to rules dealing with forgiveness of debt were requested; the change was introduced in 1994 and became effective in 1995.
In 1991, changes to the rules dealing with tax shelters were requested. These have not been finalized.
Paragraph 11.15 is very interesting, and I quote:
11.15 Our 1990 report à this was written in 1996—noted that the law enables a private foundation to loan back to a non-arm's-length donor all funds donated. Interest payments on the loan may also be loaned back to the donor. Revenue Canada has reassessed some cases where donations were loaned back, and is pursuing other cases, no legislative action has been taken yet to stop these abusive schemes.
This is tax evasion. It deprives the tax system of funds it is entitled to and obliges the government to penalize those who have no money. Thus the auditor general tried as well to look at the government's political intention to really collect the funds due it to ensure greater fiscal justice. He went to the offices of Revenue Canada in Toronto.
In paragraph 11.25, the report states:
—the Department's large business tax auditors referred only 27 cases to the tax avoidance unit in 1994-95. Only one referral was made by its large business tax auditors in Toronto—
Only one referral was made by the large business tax auditors in Toronto, where many large businesses are located.
Finally, the West is not left out where money is concerned. The Reform Party ought to be thrilled to hear that. The auditor has a kind thought for the westerners in paragraph 11.30 of his document, where he states, this time about Calgary:
11.30 Calgary tax avoidance auditors have identified avoidance schemes in the oil and gas sector involving the inappropriate use of losses totalling $826 million.
This time it is a matter of tax evasion compromising the tax base. This is nothing but talk, at a time when the decision has been made to put our fiscal house in order, a time when the decision has been made that the welfare state is no more, at a time when it is announced that there will be no more money paid out unless we know where it is going, at a time when systematic cuts are being made in services which would, normally, be useful, unemployment insurance primarily.
There was no hesitation here, as in the rest of the western world, to cut unemployment insurance, which they have blithely renamed employment insurance. Now fewer than 50% of unemployed people can get unemployment insurance. This is scandalous in itself, that people pay in and criteria after criteria after criteria are created with the result that, when people do get into the vulnerable position of losing their jobs, they are deprived of something they have paid into for so many years. The result of this is that today fewer, far fewer, than 50% of those who end up unemployed are entitled to unemployment insurance.
We know the shameful cuts that have been made in all provinces, cuts that have put the provinces in difficulty and that have forced them to make cuts to health care throughout Canada. Provincial governments have been forced to make cuts in education and in sectors fundamental to a civilized society. And for what reason? But the tax base is being destroyed, as we have just shown, through evasion.
Yet, we know about the many women who are single parents in Canada right now and about the rampant poverty. We know about the staggering growth in food banks—they are almost doing more business than any of Canada's other banks. We know about the crushing level of individual debt—and if there were a new increase in interest rates, you know what would happen. We know about the terrible situations in which people find themselves, and which drive too many of our fellow citizens to take their own lives. We know about the number of people burning out in our society today. We know that the ranks of the poor have swelled by 300,000 since the Liberals came to power in 1993. We know that 1.5 million people are unemployed in this wonderful country called Canada, and that the Prime Minister makes disgraceful claims here in the House and abroad, as though there were no problems, as though he were uninformed. We know about the record number of personal bankruptcies being declared in our economy right now, which undermines both individuals and their families.
Things are not going well in this country. Why? Because the government is too lax and too soft with those who hold financial power, those who can develop schemes such as the ones condemned by the auditor general because they deprive our tax base of its ability to better redistribute wealth. This scandal is a daily occurrence and, even though it was condemned by the auditor general, it has yet to be corrected.
There is the issue of tax avoidance. There is the issue of family trusts, which is another major scandal. What emerged was probably the tip of the iceberg, once again thanks to the auditor general's work. We know that, on December 23, 1991, a series of discussions secretly took place between Finance and Revenue officials, with Revenue Canada almost refusing to comply with the finance department's order to practically amend its Income Tax Act regarding the transfer of assets from the Canadian economy to the American economy, because this is exactly what happened.
The Canadian tax legislation is very clear. There are two times when each and everyone of us must normally à and I mean normally à pay our dues to the Canadian tax man: when we die or when we leave the country.
Following this undue pressure from the Department of Finance, once again, one very big, or perhaps two à it is all very nebulous à family trusts were able to take assets worth $1 billion Can. each and transfer them to the United States without paying taxes. This is a very serious action, whose implications are unfortunately yet unknown because everything is so nebulous and kept secret at the expense of low income earners.
This has led to the cuts that we know about, depriving the government of hundreds of millions of dollars in tax revenue, anything between $350 million and $700 million depending on the interpretation. That is how, in this great big country, we have come to make cuts at the expense of the less fortunate and at the expense of the provinces, which, in turn, have to make more cuts at the expense of the less fortunate.
What this means is that an in-depth tax reform is required in Canada to ensure that all Canadians pay their fair and equitable share of taxes according to their means, their individual wealth, in a spirit of social justice, this social justice about which we have heard so much rhetoric by the likes of Pierre Elliott Trudeau, as the members across the way know very well. In a fair society, wealth is distributed equitably instead of being increasingly concentrated, because wealth that is not distributed does not evaporate, it is concentrated.
It is safe to say that wealth is increasingly concentrated in Canada, as well as throughout the western hemisphere, where, unfortunately, approximately 200 boards of directors or families are gaining more and more control over the planet, subjugating government more and more everywhere, in the western hemisphere and around the world.
According to a UN report—and I will conclude on this—if I remember correctly, there are 358 billionaires controlling 45% of the global wealth. We have problems in Canada, Quebec and the western hemisphere. It is high time that governments freely generated revenue and communicated more so that we can have, around the world, in this country and in the new state that Quebec will be, a fairer and more equitable society where everyone contributes according to his means.
