Mr. Speaker, I listened to the remarks of my colleague with interest. As a matter of fact, we believe that this bill will generally improve the situation. I noted in particular his comment that we need to take the time to look at it very seriously.
I would remind him that under the previous Liberal government, at one point, the tax treaty with the United States was amended concerning American pensions. The result was that some people who had previously been taxed at a rate of 50% were suddenly being taxed at 85%. It took the intervention of several members from ridings near the U.S. border, and from all the parties in this House, acting in a non-partisan way, to try to bring that situation to a reasonable solution.
I recall that more than a thousand people in my own riding were affected by that measure. I also remember that Herb Gray, a minister in the Liberal government, was dealing with the same problem in his corner of Windsor. Many people worked hard to persuade the Minister of Finance to correct the situation. This kind of proposal gives me cause for caution. Indeed, in the matter of tax treaties, it is often true that “the devil is in the details.”
While considering that significant amendments will justify adopting the bill, one measure in the existing tax treaty may cause some difficulty. It is the regulation that now provides that when a Canadian taxpayer borrows money in the United States, Canada can hold back up to 10% of the interest paid to the American bank. To offset the effect of that holdback, the American bank imposes a surcharge on loans granted to Canadians. We would like to eliminate that barrier.
I would like to be sure that the consequences will be positive. That is why it would be worthwhile to examine this matter carefully in committee, without necessarily spending an inordinate amount of time. We must ensure that there are no adverse effects, in spite of initial good intentions, so that the difficulties we encountered with American pensions do not recur.
I would like to hear my colleague’s opinion on that question.