House of Commons Hansard #151 of the 39th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was companies.

Topics

Business of SupplyGovernment Orders

11:45 a.m.

Bloc

Paul Crête Bloc Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC

Mr. Speaker, I would like to thank my colleague for his question. As to the comments made by the NDP and the Liberals, I will leave it to them to sort it out.

First, the major problem with the whole tax fairness issue is the Barbados convention and the $4 billion that comes back here from Barbados tax-free. We think there is a simple solution to this problem, a solution that should have shown up somewhere in the Liberals' motion.

The second reason we do not support the motion is the disconnect between the Liberal critic's statements about an action plan not unlike the one the government wants to implement, and the motion, which attacks the government from a very partisan perspective.

Given that we are being asked to vote on the text of the motion, that is not nearly good enough. We are facing a huge problem on the issue of fairness and income trusts. The Conservatives promised one thing but are doing another. That being said, the situation could not be allowed to go on because everyone has to pay their share.

With respect to income trusts, all of the tax experts helped companies figure out how to turn income trusts into a tax efficiency tool without necessarily creating wealth. As such, changes had to be made.

That is why the Bloc will not vote for this motion.

I will conclude by saying that the Bloc Québécois believes that the Liberals' adjustment proposal as written in the motion is not an acceptable way to deal with income trusts.

Business of SupplyGovernment Orders

11:45 a.m.

Calgary Nose Hill Alberta

Conservative

Diane Ablonczy ConservativeParliamentary Secretary to the Minister of Finance

Mr. Speaker, I listened carefully to my friend's speech. I appreciate the fact that he made a good attempt to be fair and balanced on these issues while still getting a few good whacks in at the government, but I want to ask him about his position with respect to the issue of the double deduction for one interest expense.

The member said that he felt it needed more study. I did mention in my remarks that this tax loophole had been studied already by the House finance committee, the House public accounts committee, the Auditor General and the Jack Mintz committee, and all of those recommended that the loophole be plugged.

Why would the Bloc still have concerns or reservations about it and feel that needs more study because I think it has been studied to death and the government really should have moved on it a while ago, and we did move now?

Business of SupplyGovernment Orders

11:45 a.m.

Bloc

Paul Crête Bloc Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC

Mr. Speaker, I thank my colleague for her question. In the wake of the government's announcement, we voted for the budget. We believe that some tax loopholes must be closed.

But there are major financial implications. The budget implementation bill will be introduced shortly. I am very anxious to see how the minister will clarify the issue in his speech on Monday.

The government's announcement has caused an outcry, and companies' reactions are having a significant economic impact. People need assurances that the part that enables companies to compete internationally is good. However, tax avoidance looks like a business subsidy. We therefore need to find a way to address this issue.

I will give an example. A small business in my riding won a $30 million contract from England, but may have to buy a small company there to manage operations. In a case like this, interest deductibility is valuable if it helps the business grow. It could also have negative consequences, though, and I do not need to mention any examples of that here. This is what we must prevent. That is why it will be important for the committee to seriously examine the budget implementation bill and for the government to make a serious proposal.

Once the bill is introduced, no further amendments can be made on this issue. Let us hope that all the necessary consultations will have taken place and that if we take different positions, we will find ways of ensuring that the final answer benefits Canada's economy but still produces satisfactory tax fairness. The measure announced in the budget is interesting, but the message is not clear and is causing an outcry. We need to find a solution that gives us the tax fairness we want.

Business of SupplyGovernment Orders

11:50 a.m.

Liberal

Paul Szabo Liberal Mississauga South, ON

Mr. Speaker, on the interest deductibility question, the member will know that the United States, Japan and Europe all provide interest deductibility. The member also knows that Canada has enjoyed interest deductibility for over 30 years.

I have not seen the analysis myself, but I am told that should Canadian companies lose the opportunity to deduct interest on foreign acquisitions, it will put them in a position where other countries that have that opportunity will have a 37% bid advantage. In other words, they can pay 37% less and still have the same outcome. Without the deductibility, Canadians could not possibly be competitive in terms of international trade and competitiveness.

Why is it that the member wants to put Canada at a disadvantage to the United States, Japan and Europe? What is the explanation?

Business of SupplyGovernment Orders

11:50 a.m.

Bloc

Paul Crête Bloc Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC

Mr. Speaker, I do not think my colleague listened to my speech. I do not want the Quebec or Canadian economies to be at a disadvantage in international competition. We put up a great fight for the aerospace industry, we are continuing with the technology partnerships program, and we got the government to provide adequate assistance to the industry so that it can be competitive on a global scale.

Tax fairness is important. If the public has the perception that a measure is not fair, it will be difficult to uphold it. In this case, the tool is used by a number of countries, as my colleague said, and I agree. This is why I hope the review of tax havens and the budget implementation bill by the Standing Committee on Finance will produce a balanced solution that will provide the necessary tools to help businesses as well as a fair system in terms of taxation.

In conclusion, I will repeat that the best move we could make now would be to eliminate the advantages of the treaty with Barbados, which allows $4 billion in profits to enter Canada without being taxed. That is a real scandal that should be put right as soon as possible.

Business of SupplyGovernment Orders

11:50 a.m.

NDP

Judy Wasylycia-Leis NDP Winnipeg North, MB

Mr. Speaker, I am pleased to hear the member for the Bloc address this issue from the point of view of it being a grab bag of many issues on the whole front of corporate taxation. He clearly identified the failure of this motion in terms of some of the most egregious tax loopholes and corporate giveaways this country has ever seen. I appreciate the fact that the Bloc has made a difficult decision to oppose this motion for very good reason.

I stand here today to comment on the arrogance of this Liberal motion, and the audacity and bravado of Liberals to bring forward such a motion dealing with corporate tax loopholes, giveaways and tax havens that have been around through many years of Liberal government and still are not addressed by members opposite.

I have listened very carefully to the heckling from my colleague across the way, the member for Mississauga South, and I want to begin by pointing out that the arrogance of the Liberals and the corporate ties of the Liberals most clearly comes to mind given the instant line, the instant phone call, between members of the Liberal Party and the Canadian Association of Income Trust Investors.

It is interesting that the member stands in this House or heckles from his seat at about the identical moment that I received a threatening email from Brent Fullard, who is the coordinator for the Canadian Association of Income Trust Investors. I find it rather curious to see this kind of ongoing tactic of intimidation and threats that have been used by this association when it comes to anyone who opposes the Liberal position. I certainly find it reprehensible that the Liberals would immediately adopt that same kind of line and tactic.

I want to say very clear for the record that my concern generally about the Liberals has been made more clear by the fact that the statistics we have received indicate the donations that have been made by members of the Canadian Association of Income Trust Investors to the Liberal Party and to leadership contenders, including I might add the member for Kings—Hants who received a donation in his leadership bid. The member for Kings—Hants received $5,000 from James Kinnear, president of Pengrowth Energy Trust, one of the founding members of the Canadian Association of Income Trust Investors.

Now that is a pretty small amount in comparison to the amount of money that actually went to Bob Rae, which was in the neighbourhood of $40,000. Yet, it is about in the same neighbourhood as the amount of money that went to the leader of the Liberal Party. I have not even mentioned the money that went to the leadership campaign for the member for Etobicoke—Lakeshore.

I raise this today because in fact there are huge questions about why the Liberals felt so compelled to take up the cause of the Canadian Association of Income Trust Investors. They feel so compelled today to defend this organization and the member representatives of this organization, and have no compunction about standing in this House and identifying with Brent Fullard and the president of this association when he writes me that I need to publish an immediate retraction of my supposed false statements and assertions made, otherwise I will face a lawsuit.

Business of SupplyGovernment Orders

11:50 a.m.

Liberal

Paul Szabo Liberal Mississauga South, ON

Say it outside.

Business of SupplyGovernment Orders

11:50 a.m.

NDP

Judy Wasylycia-Leis NDP Winnipeg North, MB

Is that not interesting? The member still continues to bluster from his seat because in fact the Liberals are having a hard time dealing with the fact that--

Business of SupplyGovernment Orders

11:50 a.m.

Liberal

Paul Szabo Liberal Mississauga South, ON

You have to say this outside.

Business of SupplyGovernment Orders

11:50 a.m.

NDP

Judy Wasylycia-Leis NDP Winnipeg North, MB

Mr. Speaker, the member is suggesting I should say this outside the House. I will be glad to say outside the House what I have just said here.

The founding members of the Canadian Association of Income Trust Investors donated heavily to the Liberal Party to the tune of $282,000 over the last decade and about $53,700 to leadership contenders in the last Liberal leadership race. I specifically mentioned the amounts for the leader of the Liberal Party, the member for Kings—Hants, and others.

Business of SupplyGovernment Orders

11:55 a.m.

Liberal

Scott Brison Liberal Kings—Hants, NS

Have you ever received union money, Judy?

Business of SupplyGovernment Orders

May 10th, 2007 / 11:55 a.m.

NDP

Judy Wasylycia-Leis NDP Winnipeg North, MB

My question today is, did this money have any influence--

Business of SupplyGovernment Orders

11:55 a.m.

NDP

The Deputy Speaker NDP Bill Blaikie

Order, order. The member for Kings—Hants will have an opportunity to ask questions and make comments after the member for Winnipeg North is finished.

Business of SupplyGovernment Orders

Noon

NDP

Judy Wasylycia-Leis NDP Winnipeg North, MB

Mr. Speaker, I am glad you called him to order. I have found it difficult this morning to listen to what I consider to be very sexist comments of a personal nature and I find that it continues now.

It is interesting. Maybe it has something to do with the fact that today is his birthday and so, on behalf of everyone in this House, I would be happy to wish him a happy birthday and ask him to relax and consider what we are talking about today.

We are debating the question of corporate giveaways, tax havens and tax loopholes at a time when Canadians are finding it hard to make ends meet, and are finding that their share of income taxes went up and up on a personal basis, while corporate taxation is going down and down.

Perhaps the member for Kings—Hants needs to be reminded how he has made some very curious statements over the years himself, going back to a few years ago when he suggested that the Kyoto protocol was written on the back of a barf bag. That was changed to the Kyoto protocol being written on the back of a napkin.

Let us get our facts straight. Let us understand that whether we are talking about Kyoto, or we are talking about corporate loopholes, or talking about income trusts, or income interest deductibility, we have to ensure that we are talking from the basis of facts and from the point of view of trying to understand why a party that had 13 years to address this serious situation chose not to. The Liberal Party chose not to close tax loopholes such as Barbados and today is standing up in the House and defending two programs that have been identified as a way to give more and more money to corporations at a time when Canadians are struggling and paying more and more of their income tax to support government programs.

Canadians want balance. They want an understanding that the government is prepared to apply a measure of fairness. They have seen none of that from the Liberals. The Conservative proposals to date may be somewhat confusing. There may be some need for clarification, but at least the Conservatives have identified some areas of corporate taxation that are not justified and have to be dealt with.

The motion we have today is interesting because it really is a rare 12-year-old blend of Liberal corporate friendly neglect of tax havens and tax loopholes with the Liberal corporate friendly neglect of income trusts. That is the essence of this motion.

Only the Liberals, and we have seen it again this morning, have the nerve to drag out their past failures to act for ordinary Canadians rather than corporations and get self-righteous about it at the same time. Only Liberals can do that. Is there no end? Is there no end to the lengths the Liberals will go to help feather the bed of Canada's corporate elite?

It is not a hidden fact, not unknown information, that Canadian corporations will take advantage of any existing tax havens and loopholes to avoid paying their fair share of taxes. The role of government is to deal with those loopholes that are unfair and allow for income to be hidden and taxes to be avoided. It is something we pleaded with the Liberals to do for years.

I want to go back to the whole Barbados tax haven debate. We raised in 2003 the Barbados tax haven and the fact that the company owned by the present member for LaSalle—Émard, the former prime minister of this country, former leader of the Liberals, had used the Barbados tax haven as a tax avoidance measure. That was clearly, irrefutably stated in 2003 when this whole issue was dealt with by the Ethics Commissioner.

I quote again from the dialogue that went on between the representative of the member for LaSalle—Émard and a member of the committee investigating this:

Question: Why did you move your shell companies to Barbados in 1995?

Answer: We moved them to Barbados because of the change in the Canadian tax rules.

I could go on. There is no shortage of evidence to show that in fact this was a tax haven that was used by Liberals, it was a benefit to Liberals, and the Liberals stand today refusing to address that issue.

There is a real question for the Conservatives today. They have dealt with income trusts. They have dealt with interest deductibility. Will they finally deal with this outstanding issue left by the Liberals? Will they finally close the Barbados tax haven? Will they finally shut down this lucrative vehicle for Canadian companies to hide money, companies such as Merck Frosst, which is being audited for putting $2 billion in the Barbados tax haven and not paying taxes?

Is that not enough of a reason for the government to act? Is that not enough of a justification for the Conservatives to make a commitment in the House today that they are going beyond interest deductibility measures and income trust provisions to deal with tax havens and all other loopholes, havens and hidden arrangements that allow businesses to avoid paying their fair share of taxes?

What is at stake here is that hard-working, honest Canadians are left to pick up the slack. There is nothing about that in this Liberal motion. There is nothing about how the balance shifted between the corporations and individual hard-working Canadians over the last 10 years that the Liberals were in power. There is nothing in the motion that says we will actually work to ensure that corporations pay their fair share of taxes and ordinary Canadians will start to get a break. There is not a word.

Why is that? The Liberals have a chance to bring a motion to this House and what do they do? They bring something that stands up to defend corporations and the likes of these companies I have just mentioned, companies that want to see the income trust program maintained exactly as it was because they stand to benefit. They are companies like Brompton Funds, Gluskin Scheff and Associates, Borden Ladner Gervais, Lawrence Asset Management, and Pengrowth Energy Trust; the list goes on of people, organizations, businesses and trusts that are part of the Canadian Association of Income Trust Investors. Yet those Liberals stand here and get all excited because we have identified the fact that there are donations going back and forth between these organizations and the Liberal Party.

I think the question for Canadians is legitimate. What kind of influence has this had on the Liberal Party? Why has it taken such a clear stance against cracking down on corporate loopholes? What is behind this whole support of big banks and big corporations?

I suppose one could argue that the Liberal finance critic's connections to Bay Street are reason enough, but surely we leave some of the hats we have worn in previous lives at the door when we enter this place, try to do what is in the best interests of the public, and put in place good public policy. We have not seen evidence of that to date.

In fact, as a good example of this, just two days ago at our finance committee I attempted once again to convince committee members to call upon the banks to give to the committee and to Parliament information pertaining to the costs of providing ATM services, to give a breakdown of those fees and to enunciate the profits involved in that particular operation.

Those were reasonable requests, I believe. Canadians have a right to basic information. The banks have a responsibility to be somewhat transparent and accountable to Canadians. That is why we have a Bank Act. That is why this place spends a great deal of time on banking legislation.

However, would members believe that except for two Liberals, the rest, including the Liberal finance critic and the former Liberal finance critic, voted against that motion? It is not surprising that the Conservatives did as well. Surprisingly, the Bloc supported the Liberals and the Conservatives on this, so we are left with no motion and with no message from this place to ask the banks to provide basic information.

I am not talking about a motion at the finance committee to call on the government to end ATM fees, although certainly that is something that I think has to be addressed by this place. I was simply asking for this place to ask for information that the consumers of this country have a right to know.

What are the different fees that banks are charging? Under what terms and circumstances? What are the costs? What is the profit margin? How do the banks justify the huge profits and the price gouging, which is so evident when it comes to ATMs?

Here is our example of what is wrong with the Liberals in this place and their supposed concern about the public good: when push comes to shove, each and every time Liberals stand up against consumers and on the side of big banks and big corporations.

Now, to talk about the issue of foreign investments, those members are making the spurious connection between the problem of foreign takeovers of Canadian businesses and the interest deductibility and the income trust programs. There is no connection.

In fact, I would hope by now that members clearly would have read some of the expert advice. Let us go back to Jack Mintz, who actually called for the removal of this interest deductibility provision, the double-dipping, a number of years ago. Perhaps he has changed his mind now. We are not sure, given the fact that the Liberals are using his name, but it was clear back when the Auditor General made this recommendation, and on numerous occasions, that Jack Mintz made this recommendation.

Others made this recommendation because in fact it is a case of revenue being lost to Canada because of an escape hatch, because of double dipping, because of corporate interests taking advantage of a provision that was not intended for double dipping but which has become so.

I would hope that members might have listened very carefully and might have read the letter we received from the Canadian Labour Congress. I know that members on the Liberal side often like to cite the CLC and Ken Georgetti's words in many of their debates and like to create the illusion of being on the side of workers. They pretend that they are all in favour of ending anti-scab legislation and then they turn around and vote against it. Or they pretend they are in favour of cracking down on poor working conditions and lack of pay equity and they do not take any measures when they have their chance to do so.

However, I would hope that in this debate they would at least listen to the words of Ken Georgetti and the CLC, who have written very clearly to the minister and to parliamentarians expressing support for the promise in the budget to end the corporate tax deductions for interest on debt used to finance foreign affiliates, stating:

At a time when Canada has lost 250,000 manufacturing jobs, Canadian tax dollars should not be used to subsidize the transfer of such jobs out of the country. Ending this subsidy for foreign investment will raise revenues needed to finance vital public investment and help to promote business investment in Canada.

I see that my time is at an end. Let me say that obviously we vehemently oppose this motion. We stand up for working Canadians and ordinary families. We believe that it is time for public policy, government actions and federal budgets to reflect the growing gap between the very rich in our society and the rest of us. The fact is that we are dealing with a 30 year high in terms of that gap in income.

We are dealing with the fact that fewer and fewer people are controlling all of the wealth in this nation and more and more Canadians are working harder and harder to make ends meet, without support and without public policies that benefit them. It is time to change that. The Liberals are going in the wrong direction.

Business of SupplyGovernment Orders

12:10 p.m.

Conservative

Patrick Brown Conservative Barrie, ON

Mr. Speaker, I am wondering if the member can further touch upon who the Liberal Party is really in cahoots with on this. There was an interesting comment by a previous Liberal cabinet minister when she wrote her article on February 21, 2007 in the Ottawa Sun. She said:

--only the Liberals can benefit from a “grassroots” lobby to reverse the income trust decision.

The only problem? The “ grassroots” is not grassroots at all. It is a big money, orchestrated effort, which would leave ordinary taxpayers holding the bag.

What are the member's thoughts about who the Liberal Party is really in cahoots with and in what world would a political party try to side with those who are trying to evade the Canadian tax system? What it really boils down to is taking advantage of regular taxpayers, hard-working Canadian taxpayers. Why would the Liberal Party get involved with a group that has taken on this very unfortunate approach?

Business of SupplyGovernment Orders

12:15 p.m.

NDP

Judy Wasylycia-Leis NDP Winnipeg North, MB

Mr. Speaker, I certainly appreciate the question and the opportunity to elaborate, although I cannot fully understand the motives behind the Liberal motion today or behind any of their other decisions on public policy matters that are in the interests of corporations and totally against working people, ordinary families and middle class Canadians.

Time and time again the Liberals have come forward with motions in this place, with projects for the finance committee and with recommendations that fly in the face of any kind of progressive policies that will actually ensure benefits for all Canadians.

I can only say as I said in committee when the Liberals so vehemently denied my request for information about bank fees, something that still boggles the mind, that it is hard to believe the Liberals would oppose a motion as simple as mandatory disclosure of ATM fees, or that they would vote against public accountability for proposed bank closures, or that they would vote against the limitation of cheque holds to 24 hours; or that they would vote against disclosure of security breaches leading to identity theft, or that they would vote against adherence to an international standard in handling consumer complaints, or that they would vote against increased penalties of banks for violations.

I could go on with my absolute disbelief at the Liberals' actions today, yesterday and over the past number of weeks and months. All I can say, as I said in committee, is that the Liberals seem to be more interested in supporting those on Bay Street and not at all interested in ordinary people who live on Main Street. Main Street runs through my constituency of Winnipeg North. It is one of the most hard pressed constituencies anywhere in this country, with very serious economic problems. It has seen all banks abandon our community. It has seen small businesses struggle as governments refuse to deal with problems about how to access credit and how to engage in reasonable business at the community level.

Business of SupplyGovernment Orders

12:15 p.m.

Conservative

James Bezan Conservative Selkirk—Interlake, MB

Mr. Speaker, I rise on a point of order. There have been discussions among all parties and I think if you were to seek it you would find there is unanimous consent for the following motion: That, in relation to its study on the Canadian agriculture policy, eight members of the Standing Committee on Agriculture and Agri-Food be authorized to travel to Washington, D.C., from May 14 to 16, 2007, and that the necessary staff accompany the committee.

Business of SupplyGovernment Orders

12:15 p.m.

Conservative

The Acting Speaker Conservative Andrew Scheer

Does the hon. member have unanimous consent to move this motion?

Business of SupplyGovernment Orders

12:15 p.m.

Some hon. members

Agreed.

No.

Business of SupplyGovernment Orders

12:15 p.m.

Liberal

Paul Szabo Liberal Mississauga South, ON

Mr. Speaker, earlier the member for Winnipeg North asked a question of the leader of the official opposition. I would like to quote from the blues. She said: “We did a little digging in terms of the Canadian association that is sponsoring all these libellous ads and found it very curious in fact that over the last 13 years the Liberals received about $282,000 from the Canadian Association of Income Trust Investors. In the leadership race they delivered about $39,000 to Bob Rae in his leadership bid and $6,000 to the Leader of the Opposition. My question is did that money influence his decision today?”

I have been advised by the Canadian Association of Income Trust Investors that it did not come into existence until January 2007. It could not possibly have made those donations.

During her speech, the member then went on to advise the House that she had received a threat from the Canadian Association of Income Trust Investors. I would like to read into the record what the Canadian Association of Income Trust Investors wrote to the member by email today at 11:04 a.m. It states:

You need to publish a[n] immediate retraction of your false statements and assertions made in today's House of Commons today about our association funding the Liberal Party. CAITI did not come into existence until January 11, 2007. Please provide evidence to support you[r] statement that we have funded the Liberal Party to the tune of some $280,000. We have provided no funding to any political party directly or indirectly' Never have, Never will.

Please advise immediately.

In the absence of an immediate response, CAITI will pursue legal recourse.

The member has immunity in the House. She can say whatever she wants, whether truthful or not, but she cannot say those things, I believe, outside the House. Will she go outside the House and say the same things to the media and expose herself to the consequences of misleading of the House of Commons?

Business of SupplyGovernment Orders

12:20 p.m.

NDP

Judy Wasylycia-Leis NDP Winnipeg North, MB

Mr. Speaker, it is interesting how the connection between the Association of Income Trust Investors and the Liberal Party is so close.

Let me clarify for--

Business of SupplyGovernment Orders

12:20 p.m.

Liberal

John Cannis Liberal Scarborough Centre, ON

Go outside and say it.

Business of SupplyGovernment Orders

12:20 p.m.

NDP

Judy Wasylycia-Leis NDP Winnipeg North, MB

Perhaps the members will give me a chance instead of blustering and yelling from their seats, as has been their custom all morning.

As I already clarified in the House, if there was any suggestion that I was implying that the association itself, without any of its representative membership, made these donations, I have apologized for that and clarified it.

What I have said and I will say outside the House or anywhere because I am not seeking any immunity is that founding members of the Canadian Association of Income Trust Investors made a total of $282,000 in donations to the Liberal Party since 1993 and, in the year 2006, made donations to the Liberal leadership contenders to the tune of $53,700. These are founding members of the Canadian Association of Income Trust Investors who have lobbied this place day in and day out for many months and who are tied to the hips of members in the Liberal Party.

Does the member for Mississauga South and others think it is acceptable for that association to be putting out personal ads that reference me with words like “Hail Judy!” and, What do you really know about finance?” What about the one that states my name and then states “Finance critic or Judas?” Based on the reactions of members of the Liberal Party, they clearly support this kind of irresponsible, unethical and libellous advertising.

Agriculture and Agri-FoodCommittees of the HouseRoutine Proceedings

12:20 p.m.

Conservative

James Bezan Conservative Selkirk—Interlake, MB

Mr. Speaker, there have been discussions and I think you would find unanimous consent for the following motion. I move:

That, in relation to its study on the Canadian agriculture policy, eight (8) members of the Standing Committee on Agriculture and Agri-Food be authorized to travel to Washington, D.C. from May 14 to 16, 2007, and that the necessary staff accompany the committee.

Agriculture and Agri-FoodCommittees of the HouseRoutine Proceedings

12:20 p.m.

Conservative

The Acting Speaker Conservative Andrew Scheer

Does the hon. member have unanimous consent to move this motion?