Mr. Speaker, allow me to say a few words before I start my remarks on Bill S-3.
On Sunday, we will be celebrating Mother's Day across Canada. I would like to take this opportunity to wish a happy Mother's Day to my mother, my wife, all the mothers in my riding, in Quebec and in Canada. Mr. Speaker, I am sure you will join me in wishing a happy Mother's Day to your mother.
Let us now revert to less serious matters, namely Bill S-3. The Bloc Quebecois is not opposed to income tax treaties between Canada and other countries. Therefore, we will support this bill, inasmuch as such treaties are aimed at ensuring the just and fair tax treatment of persons—I stress this word, which includes private persons and corporate persons such as companies, trusts and any aggregate of individuals—to encourage trade and investment in those countries.
Although tax conventions avoid double taxation on corporate and personal income, in a number of cases they are a source of problems and tax evasion.
Indeed, although the most recent treaties, which are based the OECD model, are relatively standard, Canada does have some older ones with countries considered tax havens because their individual and corporate tax rates are low, or non-existent.
By signing tax treaties with these countries that are considered tax havens, Canada is turning a blind eye. It treats these profits as if they had been taxed at comparable rates abroad and does not tax them when they are brought back to Canada.
I should point out that, since 1992, the auditor general has raised this issue on several occasions. I want to give an example of these tax havens and what they allow Canadians to do.
Let us consider the case of Canada Steamship Lines. We know that, before 1981, that company operated solely in Canada and, therefore, paid its fair share of taxes. In 1981, our dear Minister of Finance bought CSL and opened subsidiaries in Bermuda, Liberia and Barbados. We know that those three countries have signed agreements with Canada and are considered tax havens.
For instance, Liberia is described by people involved in international trade as the safest tax haven, the best there is. That is nothing to be proud of. Apparently, a Liberian company can do anything as it pleases, and in total secrecy. Liberia has no tax on profits from shipping. The government of that country only requires shipping companies to pay an annual flat amount of $350 U.S. That means that profits made in Liberia are subject to $350 flat tax and nothing more.
CSL, Canada Steamship Lines, also has subsidiaries in Bermuda. Everyone knows that there is no income tax in Bermuda. A company can, through a contract, be exempted of any taxes until the year 2016.
In Barbados, companies are subject to a decreasing local tax, from 2.5% down to 1%. So, the higher the amount, the lower the tax rate.
This brings me back to the fact that the government opposite should continue to sign tax treaties with countries that are not considered to be tax havens. It should spend money and be serious, so as to be in a position to readjust or change the contracts or agreements already signed with tax haven countries, since these involve millions and even hundreds of millions of dollars in tax losses for Canada.
We know how much that government has cut in social transfers to the provinces. It could certainly recover these amounts and put them back in the transfers to the provinces.
Tax treaties establish what is called reciprocal treatment between countries with respect to income tax, provided that tax rates for Canadian businesses and those in the countries with which tax treaties are signed are equivalent or more or less comparable.
I will conclude by saying that the Bloc Quebecois will support Bill S-3, which seeks to ensure a fair and equitable tax treatment for residents and non-residents, and to promote trade and investments between the countries that are parties to these conventions.