Mr. Speaker, thank you for the opportunity to speak on Bill S-3. This bill lets Canada ratify income tax treaties with Kyrgyzstan, Lebanon, Algeria, Bulgaria, Portugal, Uzbekistan and Jordan. It also amends Canada's current treaty with Japan and replaces the longstanding treaty with Luxembourg.
At present Canada is involved in over 60 tax treaties. These treaties set out a framework for taxes on investment income flowing between Canada and other countries. They provide mechanisms to avoid double taxation and prevent tax evasion.
A tax convention is an agreement between two governments under which each government agrees to limit or modify the application of its domestic laws in order to avoid double taxation. Double taxation can occur when the same person or business pays comparable rates in two or more countries on the same taxable income for the same period of time. For example, double taxation would occur if a resident of Japan was taxed in both Canada and Japan on dividend income received from a Canadian company. Preventing this helps to facilitate investment which is something that the Progressive Conservative Party of Canada feels that the government should further encourage. Furthermore, limits on withholding taxes in the country where the income is earned are established. Exemption is provided for certain income that would otherwise be taxed in the country where it is earned.
Tax treaties also seek to minimize or prevent tax evasion. They deal with tax evasion by providing for the exchange of information between tax authorities in the signatory countries. In some cases they provide for assistance in collecting taxes.
Most treaties are based on the model double taxation convention prepared by the Organization for Economic Co-operation and Development, otherwise known as OECD countries.
In regard to Bill C-3, Canada did not previously have treaties with Kyrgyzstan, Lebanon, Bulgaria, Portugal, Uzbekistan and Jordan.
The amendment to the treaty with Japan addresses a specific issue pertaining to Japanese local enterprise taxes. Japan in turn will exempt Canadian enterprises operating ships or aircraft in international traffic provided that Canadian provinces do not subject similar Japanese enterprises to similar taxes. There is also a reduction in withholding taxes on inter-company dividends to 5%.
Changes to the tax treaty with Luxembourg are intended to clarify and modernize the convention's wording. Although the Progressive Conservative Party is supportive of new tax treaties which help to facilitate and encourage new investment, we do have some grave concerns with the human rights abuses committed by many of those countries.
What kind of message are we sending by ratifying such treaties with those countries? For example, Kyrgyzstan, a former Soviet republic that gained independence in 1991 when the U.S.S.R. collapsed, has been known for its rampant human rights abuses. It is located in central Asia and has a population of about 4.5 million people. The government has limited its citizens' ability to change the government.
There were serious irregularities in the October 1998 constitutional referendum. These included widespread cases of police abuse and brutality, including arbitrary arrest and detention before and after the referendum. Not a pretty sight.
I will quote from the Human Rights Watch. It said that:
...the government began with increasing vigour to obstruct the formation, registration, and activities of groups of citizens intending to organize support of opposition candidates or to participate in the upcoming votes as monitors. Authorities charged five prominent opposition leaders with administrative offences—the equivalent of misdemeanours—for forming their group called the Movement for Honest Elections.
Executive domination of the judiciary limited citizens' rights to due process, although the judiciary is undergoing reform. Furthermore, the government regularly infringes on freedom of speech and of the press. Authorities at times pressured journalists who criticized individual members of the government.
Lebanon is another example of a country with dismal human rights abuses. For example, members of the security forces continually use excessive force and torture. There have been hundreds of arbitrary arrests and detentions of people who opposed government policies. Lengthy pretrial detention and long delays in trials are problems and the courts are subjected to an enormous amount of political pressure.
The government also has limited press freedom by continuing to restrict radio and television broadcasting in a discriminatory manner. It has also banned the satellite broadcast of political programming. Discrimination against women and Palestinians and violence against women are also problems in Lebanon.
In Algeria, the security forces are responsible for hundreds of disappearances, routinely tortured or otherwise abused detainees, and arbitrarily arrested and detained many individuals suspected of involvement with armed Islamic groups.
Human Rights Watch reported that on numerous occasions over the last several years, security forces have failed to intervene to prevent or halt massacres of civilians by armed groups and terrorists. Armed Islamists continued their widespread campaign of insurgency, targeting government officials and families of security members, as well as persons whose lifestyles they considered to be in conflict with Islamic values.
Human Rights Watch summed up the situation nicely by saying that the government is involved in, and I quote:
...the gravest human rights abuses, including extrajudicial executions, torture, forced “disappearances”, arbitrary arrest and detention, failure to protect the right to life, and restrictions on the rights of freedom of expression, association, and assembly.
Finally, bombs left in cars, cafes and markets have killed and maimed civilians indiscriminately. It is estimated that over 7,000 civilians, terrorists and security forces have died during the last year of domestic turmoil. Close to 80,000 people have been killed during the last seven years alone.
In Uzbekistan the current government has not permitted the existence of an opposition party since 1993, something maybe this government would appreciate. Nonetheless in a serious sense citizens cannot exercise their right to change the government peacefully.
In a recent report Human Rights Watch stated:
—has independently documented a pattern of political arrest, detention and harassment of family members of political activists and religious dissidents during the past six months. There is also a wealth of credible evidence that police routinely plant small amounts of narcotics or ammunition on persons whom they arrest for their political or religious affiliation.
Furthermore the executive director of Human Rights Watch for Europe and Central Asia said:
The Government of Uzbekistan professes to be preparing for free and fair elections but at the same time is locking up the opposition's family members and throwing away the key. This is no way to achieve democracy.
Currently Canada has only minor commercial interests in Uzbekistan. Total trade in 1998 with this country was only $18 million and there are no major Canadian investments in the country. Why are we then pursuing a tax treaty with a country that has a dismal human rights record and a minimal amount of trade?
In conclusion, although the Progressive Conservative Party of Canada will be supporting the bill, it is important to highlight the many gross and inconsistent patterns of human rights violations in many of the countries Canada is entering into a tax treaty with.
New tax treaties both help and encourage new investment and should be looked at positively.