Mr. Speaker, I too am very pleased to participate in this crucial debate brought about by my colleague, the member for Joliette. It is in line with a issue of concern to the Bloc Quebecois ever since we came to the House in 1993, the issue of tax havens.
Let me read the motion for the benefit of the House:
That, in the opinion of thider to ensure tax equits House, in ory, 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 is a major issue. Personally, I think this is one of the ugliest aspects of international capitalism, which involves great fortunes and the most important stakeholders of this world. Approximately 250 large corporations secretly control the universe using all the possible means and pulling all the strings available to them.
These corporations manipulate governments through election funds. We have to know that there is a direct link between the attitudes of western governments, the complacency with which they treat large corporations, and their electoral funds. Those people are all good friends. This colours the whole debate.
Yet, organizations have examined this phenomenon, which, one must also realize, is about impoverishing societies.
The Organization for Economic Co-operation and Development, better known by its acronym OECD, worked on this issue and in 1998, set out parameters for identifying tax havens. It is good, for our purposes, to repeat them here.
There are four major criteria for identifying a tax haven. First, it is a place where taxes are non-existent or insignificant. Second, there is no real exchange of tax information; things are done in secret. The most legendary example of that is Switzerland. Third, there is a lack of transparency in the laws or taxation. Fourth, there are no substantial activities or obligations for a corporation to truly operate in the country. In many places it is just a mailing address or a desk with a phone, but likely no secretary to answer it.
At the time, 35 countries met these criteria and could be called tax havens. If we broadened the parameters slightly, 12 more countries would be added for a total of 47, including Canada. In the eyes of the OECD, our tax policy is linked to international freight transportation.
In Canada, there are very few entities that transport freight internationally in a serious and institutional manner. The former finance minister has always developed his talents not only here, on the backs of the provinces and the unemployed, but also with his financial advisers.
For instance, in 1992, he created four subsidiaries to his Canada Steamship Lines group in Liberia. Liberia is sure to be on the list of 35 tax havens. Every company, no matter what their profits are, pays Liberia a maximum of $350 a year in taxes. Companies benefit from tax conventions with countries like that.
That is another element of the debate. There have to be tax conventions between countries, in all honesty, in order for taxes to be paid. If a Canadian or Quebec company invested in Germany, for example, tax rules and laws would ensure that taxes would have to be paid either in Canada or in Germany.
But when one does business in Barbados, things are not quite the same. The tax rate is 2.5% in that country, compared to 30% here, which means that one would pay ten times less taxes under an advantageous tax agreement with Barbados. This means that the economy of Quebec and of Canada is deprived of all these revenues that would normally be used to develop new services.
A law-abiding and socially responsible corporation pays its taxes.
When people do not pay their taxes in a society like ours—and this is not a phony debate, far from it, it is a question of public morality—when people do not pay their taxes, either they do not have access to public services or other people pay taxes for them.
That is what is happening in Quebec and in Canada. Other people pay the taxes that the banks and Canada Steamship Lines do not pay. That is what is immoral.
This is why Canadians and Quebeckers may complain about the high tax rate. The federal government is not dealing with this issue, which the Bloc Quebecois has been raising for 10 years. It has dealt with the unemployed, though. It made sure that in Trois-Rivières, for example, where there may have been some abuse under the old act—but that is another issue—employment insurance benefits are no longer available to 85% of those who lose their job, as used to be the case, but to a much smaller percentage of people.
It is well known that $45 billion has been taken from the EI fund, first to eliminate the deficit and then to pay down the national debt. Instead of making the rich people pay, we are forcing the poor and less fortunate people to do so.
Let us take, for instance, the guaranteed income supplement. The Canadian government has, in an underhanded and despicable manner, pocketed $3 billion in the last five years by attacking those who are most vulnerable in society. In the meantime, the five major banks in Canada have deprived the tax man of $5 billion in the last five years, if I am not mistaken.
Some of the communicating vessels seem to be blocked up. That has not happened as if by magic. They are blocked up because there is a lack of political will to do take action, or rather a political will to maintain the status quo.
It might be that the campaign fund is ever-present in people's minds. It might be because good friends have agreed to pay $500, $1,000, $1,500 or even $3,000 a ticket to attend a cocktail party, for a total of $9 million—and you know just how fast that was collected—to help someone become the next prime minister. We know that.
All that is related. The Canadian government is not doing anything to straighten out this mess. To the contrary, it part of the problem. People should know that there is an Internet site called Barbados International Business Centre, where Canadian exporters are invited to invest in Barbados. It is the Department of Foreign Affairs and International Trade that is inviting people to invest in Barbados, where they pay practically no income tax. These Internet sites are harmful to the Canadian economy.
This is nothing short of outrageous. The more I think of it, the more outrageous it seems. I am convinced that what we are experiencing as citizens of the world is almost anarchy. There is a total disregard for the citizens and the taxpayers. We urgently need an international mechanism to try, with limited means, given the clout these people have, to find something like the Tobin tax that will make the rich pay, as the CSN used to say in its heyday. By levying a modest tax of 0.5% on the $1,500 billion in daily transactions, we could create a fund of a few billion dollars each year. It could help provide drinking water in Africa, for example, and thus help alleviate problems that should not even exist in this day and age.
There are places in Africa where they do not yet have drinking water. They do not have clothes. They do not have a shelter where they can sleep. They still have just the bare minimum required for community living and human dignity. And people opposite tolerate and indeed condone this kind of scheme. When you accept tax rates of 2.5%, how could a developing country assess rates of 30%?
This is institutionalized underdevelopment. Not a single developing country will be able to make it, if the international community is not willing to bring these people into line. At a minimum, they should redistribute wealth in a decent way. The fact that this is not being done is a daily scandal.