Debates of March 11th, 2005

Canada-Gabon Tax Convention

[Gurmant Grewal, Conservative, Newton—North Delta, BC]

Mr. Speaker, I understand where the member is coming from, particularly on human rights records, which is important to all of us when we deal with a foreign state. However the job of the foreign ministry is to strengthen relationships and sell Canadian values when we go abroad. The diplomats and department officials and bureaucrats should not tell us that we should not raise the issue of human rights when we meet with foreign nationals.

I can remember my personal experience when I was in Tibet and I was told not to raise certain issues with the foreign minister who attended our meeting. I did not care what they were telling me. I raised the issue and I was told that I was one of the first Canadian politicians to raise the human rights issue with the Chinese government.

I then told Chinese officials point blank that I would like to visit their labour camps. I was the first foreign national to visit a labour camp in Tibet. I understand that we have to do our job but we should stand for Canadian values when we go abroad. Human rights are important to all Canadians and when we can talk about them, we should talk about them and we should take a strong stand.

On the other hand, the government's record is weak and it continues to be weak in closing the tax loopholes and tax havens. In fact, it is moving in the other direction. The five major banks are now trying to take advantage. I am sure that hundreds and thousands of other businesses will follow suit if the government does not close those loopholes and tax havens.

Those tax dollars could be spent for Canadian purposes. We know health care is in shambles and students are suffering from a lack of quality education. The money could be used for infrastructure development in our constituencies. Surrey Memorial Hospital and the Delta Hospital in my constituency both need money. They have a shortage of beds, doctors, nurses and medicines. We need tax dollars to be spent in Canada not siphoned out of Canada to tax havens.

I want to make a final comment with respect to our relationship with the United States. Our government has been dithering for five years on signing a tax treaty with the United States. In contrast, the Liberal members, one after the other, stand and make inflammatory and anti-U.S. comments and the Prime Minister does nothing to stop them.

Members of the opposition have raised those issues from time to time but the Liberal government continues to tolerate them, even keeping parliamentary secretaries as well as other members in their positions. Those members should be fired from their positions, which would send a strong message to our American friends that we will not tolerate any kind of nonsense from any member who goes against our American trading partners and our friends and neighbours.

We talk about signing treaties with Americans but the government's actions have been in the opposite direction so far. I would like the Liberals to get their act together.

Committees of the House

[Mauril Bélanger, Liberal, Deputy Leader of the Government in the House of Commons]

Mr. Speaker, there have been discussions among the parties and, if you were to seek it, I think that you would find unanimous consent for the following motions regarding committee travel. First, I move:

That, notwithstanding the orders made on Tuesday, February 8, 2005, in relation to its study on the Canadian feature film industry, 12 members of the Standing Committee on Canadian Heritage be authorized to travel to Winnipeg from April 3 to 4, 2005; to Toronto from April 5 to 8, 2005; to Montreal from April 19 to 22, 2005; to Vancouver from May 3 to 5, 2005; to Halifax from May 17 to 19, 2005, and that the necessary staff do accompany the committee.

(Motion agreed to)

[Mauril Bélanger, Liberal, Deputy Leader of the Government in the House of Commons and Minister responsible for Democratic Reform]

Mr. Speaker, second, I move:

That, notwithstanding the orders made on Tuesday, February 8, 2005 concerning travel to Victoria and Winnipeg in relation to its study on fiscal imbalance, 5 members of the Subcommittee on Fiscal Imbalance of the Standing Committee on Finance be authorized to travel to Victoria on April 3 and 4, 2005, and to Winnipeg on April 17 and 18, 2005, and that the necessary staff do accompany the committee.

(Motion agreed to)

[Mauril Bélanger, Liberal, Deputy Leader of the Government in the House of Commons and Minister responsible for Democratic Reform]

Mr. Speaker, third, I move:

That, in relation to its study on the government action plan on official languages, the Standing Committee on Official Languages be authorized to travel to Bathurst, the Eastern Townships, Toronto, Windsor, Whitehorse, Vancouver, St. Boniface and Sudbury in April 2005, and that the necessary staff do accompany the committee.

(Motion agreed to)

The House resumed consideration of the motion that Bill S-17, An Act to implement an agreement, conventions and protocols concluded between Canada and Gabon, Ireland, Armenia, Oman and Azerbaijan for the avoidance of double taxation and the prevention of fiscal evasion, be read the third time and passed.

Tax Conventions Implementation Act, 2004

[Pierre Paquette, Bloc, Joliette, QC]

Mr. Speaker, I will split my time with the hon. member for Richmond—Arthabaska. The purpose of the bill before us is to implement tax conventions with a number of countries.

Of course, the Bloc Québécois supports the principle of this bill. That having been said, we support tax treaties that are concluded with countries whose tax system is comparable to ours, without being necessarily similar. As we know, societies' visions are not necessarily the same. Take the example of our American neighbours. They are not very strong on taxing, but then they are not very strong on public services either. This means that a whole segment of the American population does not have access to health care and to a number of other services which we, in Quebec and in Canada, view as services that should be provided to the public.

Other countries tax a great deal more than Canada. In fact, overall, Canada ranks in the middle of the pack, currently, in terms of taxation in OECD countries. Consequently, half of these countries have higher taxes than we do, probably because they provide more public services and greater social protection than we do. Half of them have lower taxes, probably because they have decided to provide fewer services to their citizens.

I talked about “comparable taxation” because unfortunately I heard some Liberal members trying to imply that the Bloc Québécois was demanding that all countries, including developing countries, adopt the same taxation rate as ours. This is simply not true.

However, we agree with the principle of having tax treaties to avoid double taxation. As I mentioned, we want to avoid the double taxation of Canadian citizens, be they corporate citizens or individuals, because if they pay taxes in another jurisdiction, it is quite normal for Canada, in calculating their taxes, to take that into consideration. In this respect, there is no problem. I think that most of the countries identified in Bill S-17 comply with this approach.

This means, when countries have insignificant, unreasonable or negligible taxation—I am thinking for example of Barbados, but also of tax havens in general—a tax treaty makes no sense because our goal is to avoid double taxation. If there is no taxation in the other jurisdiction, earnings, be they profits or dividends or even income not subject to tax in that jurisdiction, must be subject to full taxation in Canada.

For this reason, the Bloc Québécois is taking advantage of this debate on Bill S-17 to reiterate our opposition to the tax treaty signed with Barbados. As the House is aware, this is the only place in the world considered a tax haven with which Canada has signed a tax treaty. Canada has not signed such a treaty with Liberia, Bermuda or any place else.

Barbados is a tax haven in that it meets all the criteria set out in the OECD definition of a tax haven. I will read the House an excerpt from the 1998 report:

These territories and countries offer the foreign investor an environment with no or only nominal taxation, which is usually coupled with a reduction in regulatory or administrative constraints. The activity is usually not subject to information exchange because, for example, of strict bank secrecy provisions. [...] these jurisdictions are generally known as tax havens.

The Barbados fits the OECD definition perfectly. I know what the government will say, that the Barbados was not on the most recent OECD list of tax havens. In 1998, it was on the list. The Barbados had been identified as a tax haven by the OECD.

In 2001, in the subsequent report, the Barbados was dropped for essentially two reasons. The OECD found that this tax haven was cooperating with international financial authorities in terms of bank secrecy. Since then, nothing has really been done to make the banking and taxation system in the Barbados more transparent.

The second reason is that Canada and the United States have pressured the OECD to drop the Barbados from the list of tax havens. Nonetheless, when we refer to the 1998 definition, we cannot deny that the Barbados is a tax haven.

I will come back to this, but I want to touch on the fact that even the Auditor General—and it was a male Auditor General at the time—in his February 27, 2001, report identified tax havens as a very serious problem for the Canadian tax base, and I quote:

One of the biggest threats to the tax base lies in the international activities of Canadian taxpayers, particularly the use of tax havens.

That was in the 2001 report. Nothing has been done since, so that for foreign investments by Canadians in other countries Barbados has become the third ranking destination for Canadian investors. It is rather amazing that a small island with a population of 270,000 could attract $23.340 billion in Canadian investments in 2001, for example. That certainly creates a lot of investment amount per capita.

Over the years, Barbados have become Canada's tax haven. This makes it easier to understand why the Canadian government pressured the OECD to get it taken off the list of tax havens.

As I was saying, it is absolutely amazing that $23 billion in investments could go to a tiny island with a population of 270,000, but it is even more amazing that Barbados has become, as I also said, the third-ranking destination for Canadian investment dollars, after the U.S. of course, and Great Britain.

So there is more Canadian investment in Barbados than in Mexico, for example, where the figure is $4 billion; Japan: $6.4 billion, or France, $3.3390 billion. It does not take a genius to figure it out. It is simply that the tax convention with Barbados has encouraged individuals and corporations to make use of the mechanism made available to them in order to avoid their collective responsibility, that is to pay taxes in Canada.

For instance, Canada's five largest banks alone admitted in 2002 to having saved $10 billion over the years in Canadian taxes through tax havens such as Barbados in particular.

This is a well known fact. The Bloc Québécois, through the hon. member for Saint-Hyacinthe—Bagot, and myself when I was the finance critic, has been raising the issue since 1994. We have put forward motions in the House. These motions were supported by all opposition parties. Only the Liberals have objected to tightening the rules, especially in the case of Barbados, to prevent tax avoidance and close up these loopholes.

Why? Because the government is hiding behind appearances and denying the facts. We will hear that the tax rate in Barbados is approximately 40%. That is window dressing. International business corporations actually pay between 1.5% and 2.5% in tax. Not only did the Canadian government arrange its tax law to allow for this but it also made special arrangements to ensure that Canadian businesses would not be subject to Canadian taxation.

We are confronted with this totally objectionable situation where the current Prime Minister was the owner of a company—now owned by his sons, as hon. members know—which took advantage of this tax loophole. We believe that, over the past five years, this loophole has saved CSL International approximately $103 million in taxes, at the expense of all middle-class taxpayers and the social protections that could have been put in place both federally and provincially. That is totally unacceptable.

[André Bellavance, Bloc, Richmond—Arthabaska, QC]

Mr. Speaker, I congratulate the member for Joliette on his excellent presentation. I have had the honour of working with him in recent years, in his capacity as the Bloc Québécois critic on finance. I can say that he has probably become—in spite of himself—an expert on tax havens. Still, unlike some other members of this House, he has never used them for tax evasion purposes.

As my colleague states, we are in complete agreement with Bill S-17, an act to implement an agreement, conventions and protocols concluded between Canada and Gabon, Ireland, Armenia, Oman and Azerbaijan for the avoidance of double taxation and the prevention of fiscal evasion.

In fact, we are in favour of tax conventions with countries which have taxation systems similar to Canada's and Quebec's. That is the case with the conventions covered by Bill S-17.

But the same income must not be taxed twice, once when it is earned and a second time in the taxpayer's country of residence. That is only natural. Many tax conventions signed by Canada respect this principle.

The problems arise when Canada signs a tax convention with a tax haven. At that time, the tax convention makes it possible to avoid taxation entirely, and that is tax evasion. Believe it or not, Canada has signed such an agreement with Barbados, a recognized tax haven. As my colleague said, it has only 272,000 inhabitants but has become the third most popular destination for Canadian capital, behind the United States and Great Britain. This is no surprise when one sees the tax rates applied in Barbados.

In 1994, financial transfers from Canada to Barbados totalled $5 billion, a hefty sum. Less than 10 years later, in 2002, this amount stood at nearly $24 billion. That is nothing short of a 369% increase. The previous Auditor General, always ready to sniff out something fishy, and his successor both quite rightly denounced the danger tax havens pose to the Canadian tax base. Let us can take a closer look at this.

In 1992, the Auditor General brought the problem of tax havens to public attention for the first time.

A few years later, in 1996, the Auditor General raised the alarm again, stating this time that the results of Revenue Canada's program to combat it indicate that avoidance continues to pose a serious threat to the tax base.

The current Prime Minister, who was the finance minister back in 1996, responded to the report by saying, “the government is proposing to implement those recommendations swiftly and fully”. That was 1996, almost 10 years ago. The Liberal government has not acted on anything in that Auditor General's report.

In 1998, the Auditor General expressed concern for the third time about the growing use of tax havens and increasing number of bilateral income tax conventions. His report reads, and I quote:

—failure to take urgent action on these matters will severely limit Revenue Canada's ability to manage the risks to Canada's tax base that international transactions represent.

In 2001, the Auditor General raised for the fourth time the issue of tax havens. In his report of February 2001, he wrote, and I quote:

One of the biggest threats to the tax base lies in the international activities of Canadian taxpayers, particularly the use of tax havens.

Finally, the issue of tax havens was raised, for the fifth time, by the current Auditor General, who wrote in her December 2002 report:

Although Canada amended its rules in 1995, little has changed. Tax havens continue to attract Canadian money. For example, Statistics Canada reports that Canadian direct investment in Barbados has increased from $628 million in 1988 to $23.3 billion in 2001—over a 3,600 percent increase... Information provided to us by the Canada Customs and Revenue Agency shows that in 2000, Canadian corporations received $1.5 billion in dividends from corporations in Barbados.

Another very instructive chronology demonstrates Canada's lack of action and this government's lack of ethics. Let us go back 1992 this time.

My colleague referred to Canada Steamship Lines, which then created CSL International. This is an empty shell that was incorporated in Liberia to take charge, on paper, of all CSL's international operations. CSL International does very little shipping. It is a holding company that owns businesses that do engage in shipping. At the time, it was possible to bring into Canada, tax-free, the profits generated by the Liberian subsidiary of a Canadian company.

In 1994, the current Prime Minister and then finance minister tabled his first budget. The date was February 22, 1994. At the time, he said he wanted to put an end to the use of tax havens, because some Canadian corporations were not paying enough taxes. Therefore, at the time, he wanted to take measures to prevent Canadian based corporations from using foreign affiliates to avoid paying taxes in Canada.

However, the budget implementation bill and the regulations that came into effect in 1995 left one loophole available: Barbados. So, in January 1995, CSL International moved to Barbados. On February 1, 2003, Pierre Préfontaine, the first vice-president of CSL International, confirmed to the CBC that the move had been motivated by the changes made to Canada's taxation rules.

In 1996, far from seeking means to stem the exodus of capital to Barbados by denouncing the convention with that tax haven, Canada encouraged the situation by signing a foreign investment promotion and protection agreement with Barbados on May 29, 1996. In 1996, while he was finance minister, the present Prime Minister introduced Bill C-69, the budget implementation bill proposing more flexible tax treatment for, oddly enough, international shipping companies. That bill died on the order paper when the election was called.

In 1998, the then finance minister and now PM, not having given up, introduced budget implementation Bill C-28, one of the clauses of which addressed shipping.

[Raynald Blais, Bloc, Gaspésie—Îles-de-la-Madeleine, QC]

Just by chance.

[André Bellavance, Bloc, Richmond—Arthabaska, QC]

Yes, just by chance, as my colleague from Gaspésie—Îles-de-la-Madeleine says.

Since then, a foreign-incorporated holding company owning businesses engaged in international shipping is considered to be involved in shipping itself. It is therefore exempt from Canadian taxes, even if its profits are brought into the country. The provision is retroactive, again just by chance, to 1995, the year in which CSL International moved to Barbados.

The bill affects only a limited number of taxpayers. In fact, the Canadian Shipowners Association has only 11 members including eight active in international shipping, among them CSL International.

In 2000, a group of 13 countries, including Canada, proposed loosening the OECD regulations on tax havens. Since then, the correct term is no longer “tax havens” but “uncooperative tax havens”. This measure reduced to 11 from 35 the number of countries on the list of countries with which the OECD recommends not concluding tax treaties. In 2001, the same group of 13 countries, still including Canada, proposed even more flexibility in the OECD rules. As of that date, a country only needed to agree to share tax information in order to be considered cooperative. In 2002, the black list shrank from 11 to 7, and to 6 in 2003. Barbados is no longer on the OECD black list. It remains, just as my colleague from Joliette has said, a tax haven nonetheless.

In 2002, the government introduced Bill S-2, the Tax Conventions Implementation Act. Far from denouncing the 1980 tax convention between Canada and Barbados, Bill S-2 simply renewed it by amending its schedules.

To illustrate how to avoid paying taxes in Canada, let us take a random example. I will take Canada Steamship Lines, as a random example.

Its subsidiary in Barbados, Canada Steamship Lines International, may be nothing more than an empty shell, as I said earlier, that can declare exorbitant profits. The tax rate in Barbados is ridiculously low, between 1% and 2.5%. On average the tax rate is somewhere around 1.12%. Once these few taxes are paid, the parent company, a Canadian company, can bring these profits back to Canada and be completely exempt from paying taxes in Canada since the tax conventions prohibit double taxation.

As my colleague from Joliette said so well a few moments ago, this is a matter of roughly $103 million that could have gone to public services such as health and education, among other things, for the people of Quebec and Canada. It is just another scandal.

I will conclude by saying that it would be very easy for the government to shut down the Barbados loophole. It would simply have to abolish, by order, section 5907(11.2)( c ) of the Income Tax Regulations. Income brought back to Canada by Canadian companies with subsidiaries in Barbados would be taxable in Canada, at the applicable rate in Canada, less the amount of tax paid in Barbados.

This simple measure would generate at least $350 million in additional income for the federal government. It is a constructive solution. It is up to the government to act.

[Pat Martin, NDP, Winnipeg Centre, MB]

Mr. Speaker, I too am looking forward to this opportunity to debate Bill S-17 brought forward via the Senate. I should mention first that the NDP as a matter of principle and a matter of policy resents and objects to bills that come to the House of Commons through the unelected second chamber, the other place. Let me make that point right off the bat.

I am looking forward to speaking to Bill S-17 for two reasons. First, I will speak to the fact that we recognize this has merits and it is seeking to be a reasonable initiative to enter into expanded tax treaties with countries so we can avoid the issue of double taxation. We welcome that. We recognize the need. It increases the number of tax treaties of that nature to 87, I believe. The nation of Canada is in relations with 87 other places in that regard.

Second, it also gives us the important opportunity to address the larger issue, we believe, the lost opportunity involved with tax avoidance, tax evasion and what we in our party call tax fugitives.

We condemn in the strongest possible terms the economic treason associated with those Canadian companies that knowingly and willingly undermine our tax base by avoiding taxes, by taking advantage of the tax havens and the tax loopholes that exist. Very real opportunities exist for Canadian companies that have the will and the ruthlessness, I would say, to undermine the integrity of our Canadian tax system through tax avoidance.

Tax avoidance is perfectly legal in the context of the tax havens that we allow in this country. We are not calling anybody a criminal here. We are questioning their ethics and their morality, perhaps, for what is in known in chartered accountants' circles and tax accountants' circles as “tax motivated expatriation”. They call it tax motivated expatriation because it has a nicer ring to it than “sleazy tax-cheating loopholes”, which is what I call it when these companies take advantage of the tax system to locate offshore for the express purpose of avoiding paying their fair share in this country.

This is a megatrend in corporate Canada. It is a growing trend. More and more Canadian companies are reincorporating themselves offshore as a way to slash their tax bills, often by hundreds of millions of dollars. In fact, the total aggregate lost revenue estimated by the tax havens that exist currently is $7 billion a year.

We see our Minister of National Revenue wrestling to find another $1 billion a year in revenue that the Liberals can put toward more useful spending. They do that by cutting and trimming and frankly by reducing programs in many cases, programs delivered to Canadians and that Canadians value. However, they are ignoring and showing a wilful blindness to the $7 billion that is hemorrhaging offshore and is not being taxed.

Furthermore, I will point out another problem. Profits move offshore to these havens like Barbados. If the profits come back into Canada in any way, they are taxed, but if they are reinvested in a third foreign country, in another place, they are not taxed.

This actually encourages the flight of capital from Canada. Not only is it deposited in Barbados long enough for companies to avoid paying income tax on it, but if it is reinvested in Mexico or China or some third world country for building a plant there rather than bringing it back to Canada to build a plant or grow a company, it is tax free altogether. This is an absolutely self-defeating policy that shortchanges Canadians and undermines everything we are doing. It makes me furious, frankly, the more that I think about it.

Setting up shop on a sun-kissed island like Barbados really is as simple as creating a post office box and the bare shell of a company. When companies say they are investing their profits in Barbados, we all know that is tongue in cheek. It simply is not true. There may only be four or five employees in the shell company in Barbados, a post office box and a telephone, but as my colleague from the Bloc Québécois, the member for Joliette, just pointed out, $23 billion a year is invested in Barbados in a country of 700,000 people. I do not believe them. I am not calling anybody a liar here, but I do not believe that is a legitimate investment in that country. That is a tax shelter to avoid paying Canadian taxes. It is to our detriment, to our great loss, because we are losing this revenue.

It is completely unfair for a Canadian citizen or a Canadian company to enjoy the benefits of all the things that are good about Canada, but to legally avoid paying their fair share to maintain what we consider a great country and a great place to live. I do not know how they sleep at night.

I know we are not alone. It occurs in the United States. This is a trend that we are copying in the corporate world generally. Capital knows no borders. I also argue that capital has no conscience, but it certainly knows no borders and we are following this negative trend in the United States.

Everybody's favourite company to beat up these days is Enron, which pushed the envelope, I suppose, farther than anybody else. It had 881 dummy tax companies in the Caribbean, Bermuda and Barbados, and they paid no taxes for the last four out of five years until they completely collapsed. People without scruples, morals or ethics will find a way to avoid paying their fair share.

Another more famous Canadian company, Canada Steamship Lines, does not have one company in Barbados; it has 13. There are reasons companies move their money to one Barbados company, then to another and another, all within the same tax haven and tax shelter. Then, as I said, if they move it farther offshore out of Barbados, they avoid paying taxes altogether, because they never repatriate that money into Canada. It never gets reinvested in this country. It is a motivation to keep moving that Canadian money farther and farther away.

This is a real travesty. Those Canadian companies which are availing themselves of this unethical practice are in the company of Tyco and Enron which paved the way for them. The most irritating thing of all is that these companies I accuse of economic treason are still given federal government contracts. We still reward their bad behaviour with contracts.

At least the state of California put its foot down, to its credit. It is way ahead of us here. The state of California has a blacklist of 23 major contractors, such as Ingersoll-Rand and Tyco, major corporations that it refuses to deal with. It refuses to invest in them. It refuses to give contracts to them because they are tax fugitives who refuse to pay their taxes in the United States, but they are still given contracts from the federal government.

Interestingly enough, one company was given the very contract to design a website for the Internal Revenue Service. Accenture received a $1 billion contract to design Internal Revenue Service's website. That company is a tax evader, a tax fugitive which moved all of its company offshore so it does not have to pay American taxes. I wonder if it built into that IRS website a portal through which people who go to that website can funnel their money out of the country so they do not have to pay taxes on it in that country. That is how bad it is getting.

It is similar to inside information. Those guys who meet with the secret handshake in the corporate boardrooms of the nation all know how to do it. They share that information with each other and it is compounding and growing.

It is incumbent upon governments to put in place a tax regime where people pay their fair share of taxes, yet the government has taken no steps to plug this outrageous tax loophole that exists for the Barbados. One would think that while we are debating a bill about tax treaties and havens, we would plug this last remaining egregious tax loophole, because our dollars have wings on them and they are flying out of this country.

Imagine what we could do with the $7 billion in lost revenue that we knowingly and willingly allow to walk out of the country every day. We would not have to pay so much tax if others paid their fair share of taxes.

We keep lowering the corporate tax rate. One could argue the efficacy of that on either side; there are two debates to be made. We knowingly and willingly allow corporate Canada to lower its tax rate to 1% and 2% by sending it to Barbados. Why would we do that? How low do we have to go?

I guess the story we would hear from the Business Council on National Issues is that the only acceptable corporate tax rate is no corporate tax rate and it does not want to participate in paying taxes to build this great nation. That burden falls to the individual taxpayer. It is negligence on the part of the government to knowingly and willingly allow this money to fly out of the country.

There have been $23 billion of investment in Barbados. I have never been to Barbados but I know there is not $23 billion per year worth of construction going on by Canadian companies.

The banks are masters at this game. Of course banks know money. Money is the banks' stock and trade. It is their business. There was some excellent research done which I will recognize and pay tribute to today by Professor Léo-Paul Lauzon at the Université du Québec. He pulled no punches in condemning the big banks for their exploitation of tax havens.

According to an article in the Montreal Gazette , the tax bill for the Canadian Imperial Bank of Commerce would have been roughly $844 million last year, but it dropped to $239 million largely due to the bank's use of tax haven branches. That is $500 million from one of Canada's five chartered banks in lost opportunity to Canadians.

The last time I checked, the banks were not struggling. They are showing record profits from quarter to quarter. Why are we not making them pay their fair share of taxes? Why are we inviting them to abuse the tax system and making us all pay more to struggle to maintain the social services that we value? It is incomprehensible to me. At some point in time while I am here I hope I will be able to--

[Dick Harris, Conservative, Cariboo—Prince George, BC]

Mr. Speaker, on a point of order, I would ask for some clarification. I believe the member while speaking about the tax havens in Barbados said in his speech that Canada Steamship Lines is registered in Barbados and has a direct tie to the Prime Minister. Is he permitted to say something like that in the House?

[The Deputy Speaker]

I think that is a point of debate. We do not have any records on who owns what, but it is within the context of the taxation bill that we are discussing.

We should resume debate and allow the member to get to his conclusions.

[Pat Martin, NDP, Winnipeg Centre, MB]

Mr. Speaker, the topic of my speech is tax treaties, tax havens, and Canadian companies' use of tax havens. When I cite examples that are common knowledge and a matter of public record, I do not expect to be corrected nor sanctioned for pointing those things out.

We owe a great debt to people in the private sector like Professor Léo-Paul Lauzon who are compiling the empirical evidence on the actual experience of our current tax system and the cost to Canadians in allowing this corporate ripoff to continue. This is the biggest corporate giveaway since the railway. It is knowingly and willingly allowing Canadian dollars that should properly be put to use for the benefit of Canadians to fly out of the country.

We are being gouged and ripped off. We look to our federal government for help and support in situations like that. Governments are elected to look after our interests, to put our interests first. Somehow big money has controlled things in Ottawa for so long that not surprisingly all the legislation seems crafted to look after their interests instead of looking after the interests of the ordinary person.

Just once I wish common sense would prevail in this place. Just once I wish reason and logic would carry the day.

I am not an accountant or even particularly bright and I get what is wrong with this. I saw it immediately. Anybody on the Sparks Street Mall would say it is fundamentally wrong to be gouged and ripped off like this. If this were common knowledge, it would make Canadians' blood boil.

It could be simple. Within the parameters of Bill S-17 the government could have introduced tax treaties with Gabon, Ireland, Armenia, Oman, and Azerbaijan and torn up the tax haven with the Barbados. Eliminate it. Get rid of it. Let us do something useful around here. It is the end of the week and it would be delightful to leave on a positive note that we just found $7 billion that knowingly and willingly has been flushed down the toilet for many years but now we can put that money to good use. I can think of any number of positive things the money could be used for in my riding of Winnipeg Centre.

While I recognize the merits of Bill S-17 in terms of the effect it will have on our financial relationship with Gabon, Armenia and Oman, we have been victims of a diversion. We are avoiding the issue of tax avoidance as it pertains to corporate Canada, and we continue to allow Canadians to be ripped off. It is shameful that many companies avail themselves of that.

[The Deputy Speaker]

Is the House ready for the question?

[Some hon. members]

Question.

[The Deputy Speaker]

The question is on the motion. Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

(Motion agreed to, bill read the third time and passed)

[Pauline Picard, Bloc, Drummond, QC]

Mr. Speaker, I would not want you to consider our agreement as dissent. We are in favour of the motion.

[The Deputy Speaker]

It was carried and not on division.

The House proceeded to the consideration of Bill C-23, an act to establish the Department of Human Resources and Skills Development and to amend and repeal certain related acts, as reported (without amendment) from the committee.

Department of Human Resources and Skills Development Act

[Pierre Pettigrew, Liberal, for the Minister of Citizenship and Immigration]

moved that the bill be concurred in.

[The Deputy Speaker]

The question is on the motion. Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

[Some hon. members]

No.

[The Deputy Speaker]

All those in favour of the motion will please say yea.