Mr. Speaker, I will be sharing my time with my colleague, the member for Argenteuil—Papineau—Mirabel.
This is a most important day for the Bloc Quebecois. Through this motion, the Bloc Quebecois is saying to all those who are watching us and to all Quebeckers and Canadians that:
In order to ensure tax equity, the government should terminate Canada’s tax convention with Barbados, a tax haven, which enables wealthy Canadian taxpayers and companies to avoid their tax obligations, and should play a leadership role at the international level in activities to eliminate tax havens.
This motion allows parliamentarians to express their concerns, because it is important to have fairness in our tax system. Everybody pays taxes. It is not fair that the richest among us can get away with paying so little.
There must be tax equity, because all taxpayers have to bear the cost of tax evasion by some businesses, some banks and even some individuals.
As mentioned in the motion, we will be talking about the tax agreement between Canada and Barbados, a tax haven according to the original definition established by the Organization for Economic Co-operation and Development, or OECD.
Tax havens are countries with a very low or nonexistent tax rate. Their lack of fiscal rigour encourages wealthy taxpayers to discreetly transfer a portion of their fortunes there, and many businesses to set up subsidiaries there, in order to shelter part of their income from the tax collector.
In 1998, the OECD drew up a list of tax havens, based on four criteria. Tax havens are places with no taxes or nominal taxes, a lack of effective exchange of tax information, a lack of transparency, andno substantial activities or performance obligations for businesses in the country.
The OECD found 35 countries that met all these criteria and pointed to 47 others which, although not tax havens, had some harmful fiscal practices similar to those in tax havens.
Given all these facts about tax havens, it is also important for people to know what a tax convention is. It is an agreement between two countries. There have been tax conventions in the past. Some people get tax conventions confused with tax havens.
A tax convention is an agreement between two countries enabling them to exchange tax information concerning taxpayers with income in these countries. It also prevents taxpayers from having to pay income tax in both countries. There is an agreement: it is called a tax convention. A clear distinction has to be made between a tax convention and a tax haven, otherwise, these two goals will be completely misunderstood.
Let us take Barbados as an example. We know that the member for LaSalle—Émard knows Barbados very well. It is a country with which Canada has a tax convention. Since we are all family here, let us imagine a Canadian company, say, for example, the company owned by the former minister of finance and current member for LaSalle—Émard, Canada Steamship Lines, which has a subsidiary in Barbados. The subsidiary in Barbados, which need be nothing more than an empty shell, can declare enormous profits. Its tax rate in Barbados will be ridiculously low, perhaps 2.5%.
Imagine the situation when we realize all the profits they make. It was in the papers over the summer, but being summer I am certain not many saw it. Their companies recorded $82 million in profit—scandalous.
There are also a number of Canadian banks with direct foreign investments. These investments total $389 billion. We are not talking millions, but billions. Of that total, $38.7 billion was invested in Barbados, the Bahamas and Bermuda, three tax havens according to the OECD. That is what tax havens are all about.
What is more, the Canadian government is encouraging these havens right now. I would like to give those listening some examples, since we all do business with banks.
In 2002, the total saved in taxes through the use of foreign subsidiaries was: Royal Bank, $841 million, or $61.9 million more than in 2001; Bank of Montreal, $530 million, or $29 million more than in 2001; Scotiabank, $463 million. For the Toronto Dominion, it was $235 million, $5 million more than in 2001, and for the CIBC it was $92 million, a tax saving of $8 million over the 2001 figure. In all, that makes 2 billion,161 million dollars.
I had thought that the present finance minister would adopt a different approach than the former one. But no, he sanctions the same situation and makes no changes, claiming that Canadians have nothing to complain about, because of their $1 billion tax decrease over five years.
If I were not taking this so seriously, I would die laughing at that one. But what is going on here is too serious. They are really taking us for fools. They must think we just fell off the turnip truck.
The $2 billion the federal government is letting the banks have represents, for example, the amount that has been committed in transfer payments to Quebec for health. Now they are backtracking because there is no longer any certainty of a budget surplus.
If the banks were taxed, we would have that money for health. We know how important that is, but no. The former finance minister, the member for LaSalle—Émard—as everyone in Quebec and in Canada knows, we hear it everywhere—owns several companies operating out of Barbados.
It should be noted that the taxation system in Barbados has the following characteristics and that is why it wants so many companies to have their head offices there. In Barbados, the tax rate is 1% for profits over $15 million US and 2.5% for profits under $5 million. There is no tax on capital gains, no deductions at source and no surveillance or control over exchanges.
We know that the current member for LaSalle—Émard is in love with Barbados. I can understand, considering all the money he makes there.
I have run out of time, but if the people who are listening to us would like to have statistics and be truly aware of everything that is going on with the current member for LaSalle—Émard, who will soon be Prime Minister of Canada, all they have to do is call the Bloc Quebecois. It would be our pleasure to provide them with information. The Bloc Quebecois, with its motion, is telling this government to refuse to have tax agreements with countries that are tax havens.