Mr. Speaker, six years ago Ottawa promised to make it harder to hide money in offshore tax havens. Nothing happened.
In the meantime, a much larger tax avoidance scheme is sweeping the business community like wildfire as whole industry sectors are becoming tax fugitives by restructuring themselves as income trusts. This income trust revolution erodes tax revenue in two ways. Income trusts do not pay corporate taxes, thanks to loopholes in Canada's tax laws, and distributions paid out to unit holders can be viewed as a return on capital instead of income for the purpose of taxation.
We need to be clear with Canadians about the implications of income trusts. When corporations do not pay their taxes, citizens pick up the tab in the form of higher taxes, more service fees and cuts to social programs.
The tax loopholes that allow income trusts to avoid taxes should be eliminated. Canadian tax laws should be structured to provide revenue to government and to encourage growth and reinvestment. Income trusts do neither.