Mr. Speaker, I would like to continue a question that I asked back on April 2, 2003. Just so the viewers out there understand exactly what that question was and to remind the parliamentary secretary, since no one ever answered the question, the question was:
Mr. Speaker, the 1994 budget boasted about taking measures to prevent Canadian based companies from using foreign owned affiliates to avoid paying Canadian taxes.
This is a very serious issue. The question continued:
These measures did not affect Barbados. The Auditor General estimates that Canadian direct investment in Barbados has swollen from $628 million in 1998 to $22.3 billion in 2001. She estimates this loophole has cost Canadian taxpayers hundreds of millions of dollars.
My question directly to the Minister of Finance was, “Who decided to keep Barbados open when it closed down Liberia?”, which was another foreign tax dive, so to speak.
The issue is simple. In 1994 the Department of Finance introduced a regulation that would close the Barbados tax loophole in the Income Tax Act. In the final draft, the member for LaSalle—Émard, the minister of finance at the time, added a clause that kept that loophole open. This allowed his company and others to move several companies to Barbados, avoiding hundreds of millions of dollars in Canadian tax.
The facts are simple. We had the finance minister at the time, the member for LaSalle—Émard, creating a tax loophole that allowed a gain for his own company that he moved to Barbados, knowing full well that he had just closed down the loophole in Liberia, knowing full well that the one in Barbados was left open, the whole time having a trust that was supposed to be at arm's length.
It gets worse. This regulation from the Department of Finance was introduced as a regulation in February 1994, which should have closed this loophole, closed Liberia, closed Barbados and closed other places around the world. When the minister of finance was speaking to Parliament and to the issue of the loophole, he said:
Certain Canadian corporations are not paying an appropriate level of tax...we are taking measures to prevent companies from using foreign affiliates to avoid paying Canadian taxes which are otherwise due. We are taking other decisive measures to close loopholes in the current corporate tax system.
This is unbelievable hypocrisy for a minister of the Crown, knowing full well that he had deliberately from his department created a loophole that he could take advantage of. It is a very difficult situation for a minister of the Crown to be in.
That was in the budget speech in 1995. Here is the reality. He then went on, having already amended the regulation in 1994 previous to the speech, to create a special exemption for foreign owned shell companies, so that is saying one thing and doing another. I really think the Canadian public deserves an answer.