Mr. Speaker, I rise to address Bill C-28, sponsored by the Minister of Finance. Its short title is “Income Tax Amendments Act, 1997”. It was important to have a short title for this bill, because the full title of the French version is 23 lines long.
As for the bill itself, it is a document of 464 pages written in an obscure jargon that only tax experts or accountants can understand. I strongly suspect that, like me, a large number of members of this House did not manage to clearly understand the measures included in this legislation.
I am extremely concerned that legislators like us, most of whom have a good education, cannot understand the documents on which they have to vote. The Canadian Income Tax Act has so many thousands of pages that, by comparison, telephone books look like flyers. Moreover, these thousands of pages are written in a language that is just as obscure as that of Bill C-28.
The principle of tax equality now only exists in theory, because it is impossible for ordinary citizens to understand the act. The individuals and corporations that can afford to hire administrators, lawyers and tax experts are the only ones who can benefit from the multitude of clauses that provide tax breaks.
There is a reason why the Minister of Finance is presenting us with an omnibus bill that includes so many complex tax changes. The minister is quietly trying to make us pass provisions that will benefit the shipping companies he owns. He is even trying to cloud the issue.
My comments will primarily take into account the amendment proposed by the hon. member for Saint-Hyacinthe—Bagot, which reads as follows:
That 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.
In this omnibus bill of 464 pages, clause 241 includes two paragraphs dealing exclusively with shipping.
Clause 241 of Bill C-28 improves the tax treatment of offshore shipping companies held by Canadian companies.
As it happens, the Minister of Finance, who sponsored this bill, is the sole owner of Canada Steamship Lines Incorporated, an international shipping company with subsidiaries in Great Britain, Bermuda, Barbados and Liberia. The finance minister's company might benefit from tax advantages if this bill were passed at it stands.
In politics, this kind of coincidence constitutes an apparent conflict of interest, which violates the government's code of conduct. That is why we demand an explanation and a serious investigation of this matter.
In fact, the code clearly states that, on appointment to office, and thereafter, public office holders must arrange their private affairs in a manner that will prevent real, potential or apparent conflicts of interest from arising. The code has obviously not been adhered to, and we believe the Minister of Finance is at fault.
The government's own ethics counsellor, Howard Wilson, who works for the Prime Minister, finds this matter fishy. In his testimony before the finance committee on February 1998, he stated, and I quote “Mr. Martin sponsored this bill and questions have been raised by some members that this constitutes an apparent conflict of interest. Had I been informed in advance, before this bill was tabled, there would have been a discussion on how best to handle the tabling of the bill under the name of the Minister of Finance, who is responsible for all tax legislation. However, this prior consideration of our options did not take place as it should have”.
Mr. Wilson also suggests that the Minister of Finance was unaware of the contents of Bill C-28 before the Bloc Quebecois raised these issues in the House a few weeks ago. Could the minister responsible for the Income Tax Act so easily have shirked his responsibilities in connection with a bill he was sponsoring? And how does the public view a Minister of Finance who did not know what was in his own legislation? Is ministerial accountability not a fundamental principle of our parliamentary system?
For several weeks, the government has been denying that the Minister of Finance's companies can take advantage of this measure but Department of Finance officials, as well as the government's ethics advisor, have admitted that Canada Steamship Lines could do so in future.
Howard Wilson, the government's ethics advisor, stated that same day, February 5, 1998, on the CBC that:
—has clearly indicated to me that it has no intention whatsoever of making use of this clause.
The fact that the company has told the ethics advisor that it has no intention of making use of this clause clearly implies that it could do so if it wished. The fact that it does not intend to do so at present does not mean that it would not have the right or the desire to do so later on.
We had confirmation of this from the Standing Committee on Finance this past February 10, when Len Farber, the Director General of the Department of Finance's Tax Legislation Division, stated as follows:
“If the subsidiary or the parent of that company chooses to repatriate the management of that company to Canada and operates that subsidiary out of Canada, yes, these provisions could be available to that company”.
In short, if a company like that of the Minister of Finance or its subsidiaries were to reorganize its administration, it could take advantage of the tax benefits in Bill C-28.
Some important questions remain unanswered, and the parties in opposition are unanimous in calling for the creation of a finance subcommittee to investigate this matter thoroughly.
The Bloc Quebecois finance critic, the member for Saint-Hyacinthe—Bagot, with the support of the other opposition parties, moved five motions before the Standing Committee on Finance, so that various witnesses who could shed some light on this issue for us could appear before the committee.
These motions asked that people from Mr. Martin's company, representatives from the blind trust managing Mr. Martin's company, the Minister of Finance himself, and Howard Wilson, the government's ethics counsellor, be called as witnesses. The most important of these motions sought permission to call any other witness that might help the committee get to the bottom of clause 241 of Bill C-28.
Four of the five motions were rejected by the Liberal majority on the committee, and the only witness authorized to appear was Mr. Wilson, the government's ethics counsellor, an employee of the Prime Minister who is paid by Parliament and who reports only to the Prime Minister.
So far, by turning down our requests, the Liberal government has prevented us from doing our work as parliamentarians. The government's stubborn refusal to clarify this issue is doing nothing to lift the cloud of suspicion hanging over the minister, quite the opposite in fact.
In this murky affair, there even seem to have been contradictions between the versions given by the managers and the owner of Canada Steamship Lines, the Minister of Finance. On February 5, 1998, the company's vice-president, Pierre Préfontaine, said on Radio-Canada, and I quote “They [the company's foreign subsidiaries] are managed offshore. They are not subject to Canadian tax law”. On February 6, 1998, on page A5 of Le Devoir , the Minister of Finance, Paul Martin, said, and I quote “My interests will not benefit from this legislation. My interests are Canadian companies. They cannot benefit”.
So the mystery deepens. The vice-president says he is running foreign companies, and the Minister of Finance says he has Canadian companies. So, are the finance minister's companies Canadian or are they foreign? Will they, or will they not, be in a position to benefit from the tax advantages flowing from Bill C-28?
What the public needs to be told about Bill C-28 is that the Liberal government's Minister of Finance is getting ready to pass a bill that he himself sponsored and from which he could very likely, one day anyway, benefit.
I remind you that in their 1993 red book the Liberals promised to restore parliamentary integrity. They wrote, and I quote “There is considerable dissatisfaction with government and a steady erosion of confidence in the people and institutions of the public sector. This erosion of confidence seems to have many causes: some have to do with the behaviour of certain elected politicians, others with an arrogant style of political leadership”.
The Liberal government cannot today allow its Minister of Finance to fail to meet the high standards of integrity required of people holding public office. It is deplorable to think the Minister of Finance is failing to honour the spirit and the letter of the government's code of ethics.
We in the Bloc will continue to demand that the government respect the people and honour its commitment to restore government integrity. This is why the Bloc Quebecois is calling for the removal of clause 241 from Bill C-28 until all aspects of this matter have been brought to light.