Mr. Speaker, I am pleased to speak today on this bill. I will begin by saying that the Bloc Québécois will support this bill because we feel it is a step in the right direction.
Allow me to explain what I mean by that. I believe that many members of this House went into politics to try to make our society fairer. Fairness can apply to many things, such as upholding rights or justice, but it should also apply to all tax measures. There is much criticism of our taxation system, and many people wonder why they should work so hard when others can use tax avoidance strategies to hold onto nearly everything they earn.
This bill really comes down to fairness, and it is important to us. We are not saying that the bill is perfect and should stop there. On the contrary, we even think the government should keep going in this direction and ensure that the middle class and the disadvantaged are treated fairly compared to the wealthy.
Often, the disadvantaged and the middle class feel that the wealthy have access to an unfair number of tax avoidance measures. Tax fairness is crucial to the continued health of a society. People see it as unfair that they are doing a good job but are not being paid enough or that governments are deducting too much money for the services they provide.
Once they sense this unfairness, many people will engage in illicit behaviour, such as working under the table or moonlighting, in order to make ends meet at the end of the month. This is because these people realize that the very wealthy can avoid paying what they should ordinarily pay.
Offshore trusts are commonplace today, and they are not currently illegal. I believe that people object to such measures not because they are illegal, but because they are improper. People say that the very wealthy should not be able to get away with depriving the government of revenues and thereby depriving the middle class and the disadvantaged of additional services.
To achieve a balanced budget, revenues are either increased through supplementary taxes, in other words, taxing a little more, or by cutting expenses, or both. However, in society, when exorbitant amounts of money escape the tax authorities, someone else must pay, either by paying more taxes or by giving up various services.
As we speak, places like Quebec are experiencing problems in health care and education. I think people realize that we cannot place full responsibility for these problems on the provincial level of government. People realize there are a number of levels of government: federal, provincial, municipal and even boards of education. People know they have to contribute to all these levels.
Like the fiscal imbalance, when there is imbalance people start to wonder why things are that way and why balance is not restored. That is the whole issue with the fiscal imbalance between Ottawa and the provinces. I think we are not alone in Quebec in complaining about this injustice and imbalance.
Many other provinces are having a hard time making ends meet when it comes to health care and education. Ottawa has been amassing surpluses, year after year, for many years now.
I will not get into employment insurance, even though there is injustice there as well. People know that they do not get out of it what they pay into it and that some of this money ends up in the consolidated revenue fund. People question these measures and start to wonder. They wonder why Ottawa has so much money while the public is dealing with extremely costly health care and education services. Ottawa does not really have extremely costly budgetary items, with the exception perhaps of the Department of National Defence. The government is investing a lot of money in defence right now.
People are wondering how we can regain balance in all this. The bill we are debating today will help to that end, or at least it is a start. For far too long now, in my opinion, the government has not moved on these matters. This has caused people to ask questions and express misgivings about all governments.
I would venture to say that this is the type of injustice people are criticizing, regardless of where the member or public official stands in the polls.
Unfortunately, people often lump all politicians together, even though they are certainly not all the same. There are certainly some good MPs. When a minister of finance or a prime minister does something that seems unjust to the public, they react. Often, the whole party or group of public officials end up paying for it.
So we think that this is a positive step. Non-resident trusts make income splitting possible, which is also completely absurd. This means that someone who has a large fortune and many children could split his income in a non-resident trust. This lets people who have no means and who have 18- or 19-year-old children who do not work or are still in school, split their income in order to pay less tax. It is very important to change this as soon as possible, because it is not right that someone who earns a lot of money and who has a big income at the end of the year is able to use this out, to split their income among three, four or ten people, and to pay less tax. In such situations, progressive taxes apply. What does that mean? Usually, the more income a person makes, the more taxes they pay. If someone earns $1 million per year, they must pay more than 50% tax. If they can split it among 10 people in the family, this would mean each person earns $100,000, and will pay less tax. This must be fixed. A number of other injustices must be fixed.
Consider tax treaties, for instance. On that topic, the former finance minister for the Liberal Party thought he was doing a good deed when he said he wanted to eliminate tax havens. He wanted to put an end to tax treaties because they were robbing the government of revenue. Furthermore, it was not fair that very wealthy people were going elsewhere, such as to the Bahamas, to shelter all of their income from Canadian taxation.
I would remind the House that the hon. member for LaSalle—Émard, the former federal finance minister for the Liberals, eliminated nearly all tax havens, except for Barbados. A few months before the elimination of all the other tax havens, that individual—the one I just mentioned—transferred his funds from various tax havens to Barbados. Barbados was the only tax haven that remained active. He patted himself on the back for eliminating 80% of the tax havens. However, he transferred his own fortunes from other tax havens to the only one left, Barbados.
Thus, a tax loophole still exists for wealthy families. We must continue to work to correct this.
The Bloc Québécois analyzed the bill in detail. I would now like to briefly address the importance of ensuring not only of the appearance of tax equity, but also that the government has enough revenues to deliver all the necessary services.
In that regard, if we decide to amend legislation—as we are discussing here today—and say that it will be increasingly difficult for non-resident trusts to avoid taxation, this will mean that people are going to have to pay more taxes. If they pay more income tax, the government will have greater revenues. If the government has greater revenues—because everyone is treated equally—there will be a number of possibilities. For instance, we can lower taxes for middle-income Canadians, who very much need that. We can create additional social programs, and we can also ensure, with appropriate fiscal balance in Canada, that all Canadians are treated equally from province to province.
I referred earlier to problems in the areas of health and education in Quebec as well as in other provinces. There are, however, provinces where there are no problems in these areas. Alberta comes to mind, with the huge amounts of money oil companies are making. This points to some unfairness. We have to correct not only inequities between individuals, but also inequities between regions and jurisdictions. Additional federal income could help resolve once and for all the fiscal imbalance in Quebec. That is not what the government has done in its latest budget.
As we said before, we voted for the budget because the government took a step in the right direction by addressing part of the problem. But transferring money from Ottawa to Quebec is not the whole answer. A tax transfer is also required. The government has to recognize that there is a problem. The way to solve it is through a tax transfer, because the great benefit of a tax transfer is that it makes it possible to plan over a much longer term.
At present, Quebec is practically choked by its health and education services. It takes what Ottawa is giving, but this government's philosophy and policies could change next year, and Quebec and the other provinces in need could be getting much less. That has a direct impact on health and education services.
This government does not want to hear about a tax transfer from Ottawa to Quebec—which would allow the Quebec government to make long term plans—because tax transfers are hard to take back. A cash transfer of $700 million, $800 million or $900 million, however, does not bind the government to keep transfers coming year after year. Should things get rough at the federal level one year, it could simply decide not to make transfer payments that year.
It is therefore important that the bill before us today not only restores tax equity between individuals, but also between the various Canadian provinces. When a state has increased revenues, it can do as it pleases with its surpluses.
Middle-income people and workers will finally be able to see that a particular individual or family that makes a lot of money will also have to pay a lot in income tax. They know that, with the help of a good accountant, people can use tax instruments and invest their money elsewhere or invest it in a tax haven, because the bill before us did not resolve this aspect. Instead, it resolves the issue of non-resident trusts, but we also need to resolve the tax haven problem. We are not the only ones to denounce them. The Bloc Québécois has always denounced tax havens. We must not be taken in by the ploy used by the former Liberal finance minister, who said he eliminated 80% of tax havens, as I mentioned to the House a moment ago.
This bill is therefore important to us. The Bloc Québécois intends to examine it carefully and in detail. At first glance, we are pleased with this bill. Generally speaking, the Bloc Québécois is pleased with everything that comes from the Auditor General, which is also why we like the bill.
For a number of years, the Auditor General has been criticizing the unfair treatment of citizens and the fact that certain very wealthy families are able to find loopholes. Thus, we always pay close attention when the Auditor General has something to say. She also instigated a number of changes, including policy changes. Although she normally acts as more of a watch dog, the sponsorship scandal had serious political ramifications for certain parties in this House.
Because our federal government spends more than $250 billion a year, we need someone, an Auditor General and his or her team, to thoroughly examine various issues in order to be able to eliminate unfounded tax loopholes or denounce certain realities.
The federal government has a number of important departments. I sit on the Standing Committee on National Defence, and I often listen to the Auditor General's criticism of defence. There is currently a lot to criticize. Some scandals have been reported by the Auditor General and some changes have been made not just to the Canadian electoral map, but also to Canadian law. That is what we are dealing with today.
We are pleased with what the Auditor General said in 2005, and we are pleased that the government is taking action today and making changes through this bill. It will put an end to what we want to see an end to and that is offshore trusts. No longer will these wealthy families be able to take this route. However, the issue still has not been resolved. If people withdraw money from their offshore trusts and deposit all of it in Barbados, we are back at square one. We would simply be plugging one loophole and allowing these wealthy families to benefit even more elsewhere and still not pay taxes. The government, which is depriving itself of revenue, will continue to do so.
Once again, as far as fairness is concerned, people are taking notice. Unfortunately, they often blame the government for these loopholes and these ways of doing things. They also say that the government is never on their side and is always siding with major corporations. This is currently the case with the Kyoto protocol. We know what side the government is on. It is not a green plan they keep proposing, but a brown one the colour of oil. People know it. They even see a certain association between the government and major companies.
On the political spectrum, the Bloc Québécois is much closer to the centre; maybe slightly left of centre. We agree that everyone should pay their fair share of taxes.
There are indeed legal tools. For example, the middle class can use RRSPs. You would never see the Bloc Québécois ever agree to axing the retirement savings programs. With much greater longevity and limited government resources, we are going to run into problems.
The bill before us is important. The government has to recover revenue and they know how to do that. Gone are the days of trying to get this money from the middle class by raising taxes or cutting services. Wealthy families now have to do their part. We feel this bill is the first step and that is why the Bloc Québécois is pleased to support it.