Madam Speaker, I want to begin by thanking my colleagues from Portneuf—Jacques-Cartier and Saint-Hyacinthe—Bagot for the direction and opportunity they have given us. I learned a great deal from both presentations.
I learned a great deal about things that horrify me, frankly, and I learned things that made me angry. I am not an expert in tax law like my colleague from Saint-Hyacinthe—Bagot, but I am not a sucker either and it seems to me that the Prime Minister of Canada views Canadians the way that P.T. Barnum viewed circus goers. That is the way it appears to me.
Our taxation system is not supposed to be run like some sleazy ring toss game on a carnival boardwalk. That is the way it seems to be stacked against ordinary Canadians. If I learned one thing here today, it is that this idea of “tax motivated expatriation” is the technical term for the popular trend in corporate Canada of using offshore tax havens to avoid paying a fair share of taxes.
The reason they call it tax motivated expatriation is that it sounds better than sleazy tax-cheating loopholes, which is actually what it is to an ordinary Canadian like myself. This is tax avoidance in a systematic and structured way.
If there is one thing that rings true to me from the debate tonight it is that when corporations do not pay their fair share of taxes, not only are they ignoring their social responsibility but the rest of us have to make up the burden. These guys are avoiding taxes in a systemic way that is unfair to the rest of us. It is no wonder our social programs are underfunded. It is no wonder that ordinary working Canadians are being asked to assume more than their fair share of the tax burden. It is because sleazy tax-cheating loopholes like the Barbados tax haven exist.
I know I am probably not using the technical terminology. Some say it is not a tax haven as such, that it is exploiting an aspect of a tax treaty, but it seems to me that since I have been a member of Parliament the government has torn up a number of similar arrangements with other countries. I believe there were 11 or 12 such countries around the world where Canadians could avoid taxes. The government tore up those agreements except, by some happy coincidence, in regard to the country where our Prime Minister happens to have nine shell companies of Canada Steamship Lines. It is galling and infuriating to me that we even need to have this debate.
Corporations are dodging taxes like never before. The latest trend is income trusts. I will not even get into that because there is not enough time, but it is astounding to me that since 1991 our major banks alone, by using tax havens, have avoided paying $10 billion in taxes while showing record profits during those years. Some of them were very tough years for the rest of us. While we were forced to tighten our belts, they were avoiding $10 billion in taxes. Six years ago, Ottawa promised to make it tougher to hide money offshore and today government lawyers are still tinkering with the proposals.
Our Prime Minister, being a corporate CEO, is no stranger to tax havens. One study shows that Canada Steamship Lines avoided paying $103 million in taxes between 1995 and 2002 by setting up these nine shell companies in Barbados. When I say shell companies, I mean just that: we are talking about a table, a telephone and one employee who may or may not have anything to do with the company.
An added complication to allowing this wholesale tax avoidance is that it actually encourages further offshore investment and starves capital from Canada. If the profit from the offshore activity were repatriated it could be re-taxed as earnings, so there is a further motivation to continue investing that sheltered offshore money further offshore and never getting it repatriated back into Canada.
It starves not only the tax revenue for our social programs but it starves money that would otherwise be used to reinvest in companies and expand and grow that Canadian enterprise. This is an added complication.
Speaking on behalf of ordinary Canadians who perhaps do not understand all the technical details the parliamentary secretary tried to explain, frankly in a paternalistic kind of way, it is not that we do not understand the technicality of this tax arrangement. We get it. Instinctively, in our gut as Canadians, we get it when we are being hosed, when we are being gouged, and when we are being cheated. That is what this wholesale tax avoidance represents in my mind.
I want to thank my colleague from Portneuf—Jacques-Cartier for bringing this issue forward. It should be debated in this House. It is an embarrassment to me that we allow this situation to exist. Members of Parliament on every side of the House should stand up in outrage to slam the door on this kind of abuse of our tax system.
If there has to be a tax treaty with Barbados, how the heck do we allow companies to get taxed earnings from Canada being taxed at 1% and 1.5% in that offshore tax haven. Let us call it what it is. It is a sleazy, tax cheating loophole designed by the Prime Minister's buddies on Bay Street for their self-interest. It is against the public interest of Canadians.