Madam Speaker, it is a pleasure to rise to speak to the Bloc Quebecois motion moved by my colleague from Joliette. This motion states:
That, in the opinion of this House, 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.
The timing is good because, only yesterday, we raised the problem of these tax havens and of tax evasion during oral question period and we did not get any meaningful answer from the Minister of Finance.
The use of tax havens is mentioned in what the media called “horror stories by the Auditor General” last year. The Liberal government is losing millions of dollars by allowing large businesses to transfer their profits to tax havens. This is what the Auditor General, Sheila Fraser, is denouncing. This is why the Bloc Quebecois has decided to give parliamentarians an opportunity to express their concerns over a situation that is threatening the tax base. This is a significant issue, both ethically and economically.
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.
The use of tax havens is an important phenomenon. Last year, the Canada Customs and Revenue Agency instigated an investigation on a scheme that allegedly enabled a dozen multinationals to hide $1.1 billion from the taxman. Today, I had the impression that the minister responsible for the Canada Customs and Revenue Agency, who spoke on behalf of the government, did not remember that investigation; we heard that $1.1 billion was sheltered from the tax system.
How did it work? It was brilliant. Large corporations simply put the Canadian subsidiaries into debt. The beauty of all this it that, on top of that, they obtained tax deductions from the federal government for their interest charges. The money that was borrowed was then invested in tax havens, depriving our economy of considerable revenues.
It is sad to think that 1.5 million children live in poverty in Canada, that we have no program to help them and that we allow large corporations to pocket $1.1 billion.
The money that was borrowed was immediately invested in tax havens. These corporations did not have to pay taxes. It is unbelievable. This is not an isolated case. The Auditor General is concerned about the proliferation of these types of schemes, which are very lucrative for a handful of investors at the expense of the rest of taxpayers.
What are the consequences of this little game? They are higher taxes for the rest of taxpayers or reduced public spending, which means cuts in social programs. The fact is that tax evasion is very costly for the majority of taxpayers.
I point to the findings of the Auditor General. Ottawa loses hundreds of millions of dollars in revenues because of tax evasion through tax havens. And it is not I or the Bloc Quebecois that says so, but the Auditor General.
Therefore, our fellow citizens need to know that this problem, this threat to our economy, is growing.
Canadian investments in Barbados, a tax haven that the former finance minister and would-be prime minister knows well, have jumped by 3,600% since 1988, from $628 million to $23.3 billion.