Hearing the truth gets them riled up over there, but I will continue to tell the truth. I am too attached to my principles. It is their own business on the other side if they want to say any old thing, but I am going to tell the truth, whether they like it or not.
So, the former Minister of Defence wrote the chair of the Immigration and Refugee Board to get an immigration case fast-tracked. The case involved a Canadian citizen who was very ill and wanted her husband to be allowed to come here to look after her. Because of that,
For a humanitarian cause, the Minister of Defence of the time wrote in his capacity as an MP to the chair of the Immigration and Refugee Board in order to get the case of the unfortunate sick lady who wanted her husband here to take care of her speeded up. Because this action by an MP, especially by a government MP, that is trying to influence the decision of a quasi-judicial board, is unacceptable from an ethical standpoint, the Minister of Defence of the time resigned. And this was over a humanitarian case.
When we see all that and then we see the scope of the action taken by the Minister of Finance in creating for himself clause 241, which favours his offshore shipping companies, which favours his shipping holding companies and protects them from all claims by Revenue Canada, we say to ourselves “How come there is a double standard?”
How is it that, when the Prime Minister was in opposition, he cited a case that was far less serious than this one, and now there are no more problems? How could he accept the resignation of his Minister of National Defence in 1996 for having behaved in a humanitarian case contrary to the code of ethics? He would not consider any other course of action than to accept the resignation of the minister of defence.
Why is the Prime Minister now, in the more serious case before us, considering it reasonable for a Minister of Finance to table a bill with 14 lines hidden in 464 pages that could give an advantage to his shipping companies and that do favour offshore shipping companies.
There seems to be a bit of a problem. In fact it is a big problem when the government refuses to come clean and orders the chair of the Standing Committee on Finance to reject all requests for witnesses, specialists and ethics counsellors, other than the one paid by the government, who, in passing, is more of an elastic counsellor than an ethics counsellor, in our opinion. The problem is twofold and that becomes serious.
A second issue arose throughout all this, which was refuted, but not argued, by the Minister of Finance when he sputtered out the first day the Bloc Quebecois mentioned this rather interesting discovery about the provisions of clause 241. They objected that “The Minister of Finance's shipping companies will not benefit from the new provisions”.
In fact, three versions were given. In the first, the Minister of Finance said his companies would not be affected because they were Canadian. We wondered why he used that argument and why—with the code of ethics, he had no business discussing this bill or sponsoring it either, and then he goes before the cameras and says that he will analyze it. Already, the minister was violating the government's code of ethics. He was saying that it was a Canadian corporation, that we were totally mistaken, etc.
The vice-president of Canada Steamship Lines—the shipping company owned by the Minister of Finance—said “Maybe they apply to us, but we will not use these provisions. We do not intend to use these new clauses”. The mere fact they were saying they did not intend to use the provisions implied that they had the right to use them and that these provisions could apply to the Minister of Finance's shipping corporations.
Within a day, there was a reversal, a new version was different. And that was just the next day. First, the Minister of Finance said “These provisions do not apply to us, you do not get it at all”. Then the vice-president of Canada Steamship Lines said “We do not intend to use these provisions”, thus implying that the minister's companies could do so and that those provisions did indeed apply to them.
The third version was given to us by Len Farber. It was in reply to the second question which was “Could the minister benefit from the provisions that he is getting passed in the House, yes or no?” Len Farber appeared before the Standing Committee on Finance. At the finance minister's invitation, I met with Mr. Farber in my office the day after our revelations. Far from convincing us, Mr. Farber gave us more reasons to believe that there was indeed a problem.
I met with Mr. Farber in my office, and then he appeared at a finance committee meeting, which was a public meeting, a few days later. We asked him questions, we showed him a corporate organization chart and we told him “Look, we have companies with offices in Montreal, for example, with subsidiaries in various places that are actively involved in international shipping, that also have holdings, that own shares in shipping corporations directly involved in international shipping. Could the provisions of clause 241 of Bill C-28 apply to such corporations?” Mr. Farber did not say yes right away. He is a friend of the Minister of Finance and he is his principal adviser. It was the minister himself who had told us “Go talk to Farber, he will tell you what is going on. You do not understand anything”.
We realized that we understood everything. That was a good start. In the end, to the questions asked by the Bloc Quebecois, Mr. Farber simply responded that, yes, it could apply to businesses like those owned by the Minister of Finance.
From the outset, it was illogical to have an arrangement like clause 241 to attract foreign shipowners operating abroad in international shipping to open up offices in Canada, to offer them tax benefits, to provide them with tax savings, while our own Canadian companies operating elsewhere in competition with these foreign companies coming to set up operations in Canada cannot take advantage of the same arrangements. This is not logical. It takes a really twisted logic to tell us that these clauses did not apply to foreign companies operating in international shipping, but only to foreign companies which we wanted to attract into Canada.
If there are tax advantages to attract foreign shipbuilders, there must also be tax advantages to keep our shipbuilders here in Canada. Logic must come before anything else.
When we questioned Mr. Farber, logic won out. He indicated to us that, yes indeed, it would be possible, it would be necessary to look at the structure of Canadian businesses, where the decisions are made and so on.
The other part of the response came to us two days later. We were not expecting additional arguments for our thesis from the Parliamentary Secretary to the Minister of Finance, the hon. member for Stoney Creek. I will quote the hon. member for Stoney Creek if I may. He might gain something from listening to me this morning. With some of his revelations, he is adding to our arguments rather than defending his minister.
On March 23, two days ago, the member for Stoney Creek said as follows:
Around 1990 some foreign shippers, especially in Asia, wanted to open offices in Canada that would create jobs and economic activity.
These foreign shippers were concerned that the 1920s tax rule—we are talking about a tax saving for these companies—was not clear enough. To benefit from the rule a foreign shipper had to be a non-resident.
The Asian companies were concerned that if they opened Canadian offices they would fall under this definition and be found to be resident in Canada.
The clarifying rule was enacted in 1991. It gives foreign shipping companies the assurances that they are not resident in Canada provided their principal business is international shipping and that is where substantially all their revenue comes from.
He is talking about the old 1991 provision. What clause 241 does is not just exempt international shipping companies from taxes, but it also exempts international shipping companies holding shares in offshore shipping companies from paying taxes on dividends.
If everything the parliamentary secretary told us on March 23 is true, why would it not be true in the case of Canada Steamship Lines and Passage Holdings, the blind trust for the Minister of Finance's companies?
We are told that, in 1994, the Minister of Finance put all his assets in a blind trust. The company now managing these assets is Canada Trust, based in Montreal. Canada Trust—as for any offshore shipping company that has just opened offices here—contributes to the economy, creates jobs, and so on. Canada Trust manages shipping and holding companies owned by the Minister of Finance, including Canada Steamship Lines here in Canada and offshore holding companies in Liberia, Bermuda, Barbados, and so on.
What difference is there between the example given by the member for Stoney Creek, parliamentary secretary to the finance minister, and the situation of the finance minister's companies? There is none. Both have an office in Canada, operate in international shipping, have offshore holding companies, and enjoy tax exemptions. Now, their holding companies are going to enjoy exactly the same advantages because of clause 241.
The parliamentary secretary gave us a description of foreign businesses to attract here. The foreign businesses wanting to start up initially in Vancouver, for example, are exactly the same and have the same structure as the businesses and holdings of the Minister of Finance.
There is a problem with these provisions, with the process surrounding the introduction of the bill and with clause 241. There is definitely the appearance of a conflict of interest and I would even go so far as to say there is a real conflict of interest.
The attitude of the government adds to our doubts about its integrity and that of the Minister of Finance. The recent responses by the Prime Minister are very demagogic in this regard.
I asked him a question a couple of weeks ago about his intention to respond to the four opposition parties and requested he establish a special committee of inquiry on the Minister of Finance, on clause 241, on the appearance of a conflict of interest and on the entire process leading to the introduction of a bill. He answered saying, and I quote to be sure I have it right:
The hon. member attends sittings of the Standing Committee on Finance. I suggest he uses that venue to ask whatever questions he may have.
We can ask questions, but anyone with a modicum of intelligence needs someone to ask question to, someone to answer them. We can ask all the questions we like, but if there is no one to answer them we look rather stupid.
That is what is happening in the finance committee. The bill was introduced on February 23. A few days later, as the representative of the Bloc, I personally tabled four motions with the finance committee.
The first motion called for the government ethics counsellor to appear before the Standing Committee on Finance. The Liberal majority supported this motion as did the opposition parties. But when I asked that the Minister of Finance appear before the Standing Committee on Finance to provide explanations, it did not work. The Liberal majority systematically refused and voted against my motion. I got the support of the Progressive Conservative Party, the Reform Party and the New Democratic Party, but I did not get the support of the Liberal majority.
The result was the same when I tabled my third motion, asking that the committee invite members of the board of Canada Steamship Lines, which has been wholly owned by the Minister of Finance since 1988. The Liberal majority voted against the motion. Liberal members were under so much pressure from the Prime Minister's office that if they could have voted three times against the motion, they would have done so.
When I tabled the other motion, in which I asked that the directors of Passage Holdings Inc.—that is the directors of Canada Trust—appear before the Standing Committee on Finance, even behind closed doors, it was the same thing. The Liberal majority said “No way, we do not want to have witnesses shed light on this bill”. But I did get the support of the three opposition parties.
In order to test the democratic sense of the Liberal majority and their desire to shed light on such an apparent conflict of interest, I even tabled a general motion asking that the Standing Committee on Finance invite any witness who could shed light on Bill C-28 and on clause 241.
I was not asking for specific individuals, but for any witness. It could have been a senior official from Revenue Canada, from the Department of Finance, or someone from outside the public service. We voted against it. I had the support of the three other opposition parties, but the government members decided no witnesses would be heard in an attempt to shed light on Bill C-28 and clause 241.
When the Prime Minister stands up in the House and says “The hon. member sometimes attends sittings of the Standing Committee on Finance. I suggest he uses that venue to ask whatever questions he may have”, he is laughing at us. He is laughing at the people. The fact of the matter is that he does not want witnesses to be called. He does not want to get to the bottom of this apparent or real conflict of interest involving his finance minister.
He has the nerve to stand up in the House and tell us to go and ask any question we may have to the finance committee. But they do not want us to call any witnesses to answer our questions.
That is not all. We—and by “we” I mean the Bloc Quebecois, the Progressive Conservative Party, the Reform Party and the New Democratic Party—have sent the chair of the finance committee a joint letter asking that a special committee be struck. This letter was sent more than a month ago, with certified copies to the Prime Minister, the Minister of Finance, the Deputy Prime Minister and everyone who is anyone in government. We are still waiting for an answer.
A week and a half ago, I sent another letter to the Prime Minister, a letter directly addressed to him, asking that, as suggested by him on February 19, a special committee or a subcommittee of the finance committee be put in charge of shedding light on this matter of conflict or apparent conflict of interest involving the Minister of Finance, and that all the witnesses who could help clarify the matter be called. I am still waiting for an answer.
To me, it is pure hypocrisy to take such an approach, to object to our getting to the bottom of what I consider to be a very serious matter, which puts into question the finance minister's integrity and that of the Prime Minister as well.
Many aspects remain to be clarified in this whole matter. All sorts of contradictory statements were made after the Bloc Quebecois revealed the existence of a certain 14-line provision of Bill C-28 concerning international shipping companies, including the one owned by the Minister of Finance. Many conflicting statements were made by various people.
There has also been much confusion in the reactions of government representatives. One thing is certain, and that is that we are not satisfied with the answers we have been given as to the process, content and real impact of clause 241 because they are completely illogical.
The Minister of Finance and the government have friends all over the place, and the government awards contracts to companies of tax experts. Has anyone heard a tax expert from outside the government—not Len Farber, the finance minister's hatchet man, but an outside expert—say that there is no real or potential problem with clause 241, which amends section 250 of the Income Tax Act regarding international shipping? Has anyone heard a single tax expert express such an opinion since this saga first started?
We have been talking about it since February 23. Not a single tax expert has dared to put his credibility on the line publicly and say that the Minister of Finance was not in apparent or outright conflict of interest and that the structure of his companies was not such as to provide him with undue advantages or tax savings related to clause 241. Not one. This creates even more doubts.
I was waiting to raise this point, but when the Prime Minister himself or the Deputy Prime Minister jump to the defence of the Minister of Finance, a well known member of the government, on a particular matter, it seems to me we might have expected a tax expert somewhere, a friend of the Liberal Party, to come forward and state publicly that there is no problem. Why has this not happened? Because there is indeed a problem.
And it is not the only problem. This bill does not just apply to international shipping. The Minister of Finance has managed to alienate many people in other sectors of activity who would like to be in the same boat as he is, but who are unable to take advantage of the tax savings available to him for his own companies.
That having been said, I would like to move the following amendment at third reading, seconded by my colleague, the member for Châteauguay. I move:
That the motion be amended by deleting all the words after the word “That” and substituting the following:
“Bill C-28, Income Tax Amendments Act 1997, be not now read a third time but be referred back to the Standing Committee on Finance for the purpose of reconsidering Clause 241.”
If the Prime Minister asks his members to vote against this amendment, he will be contradicting himself, because he told us in the House that the Standing Committee on Finance would be able to shed light on the issue and answer our questions. That is what he told us. His handling of this amendment will tell us what kind of Prime Minister he is and whether he is as full of integrity as he claims to be.