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House of Commons Hansard #153 of the 39th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was measures.

Topics

Business of SupplyGovernment Orders

3:40 p.m.

Conservative

The Acting Speaker Conservative Royal Galipeau

Does the hon. parliamentary secretary have the unanimous consent of the House to move the motion?

Business of SupplyGovernment Orders

3:40 p.m.

Some hon. members

Agreed

Business of SupplyGovernment Orders

3:40 p.m.

Conservative

The Acting Speaker Conservative Royal Galipeau

The House has heard the terms of the motion. Is it the pleasure of the House to adopt the motion?

Business of SupplyGovernment Orders

3:40 p.m.

Some hon. members

Agreed.

Business of SupplyGovernment Orders

3:40 p.m.

Conservative

The Acting Speaker Conservative Royal Galipeau

(Motion agreed to)

Income Tax Amendments Act, 2006Government Orders

3:45 p.m.

Liberal

Paul Szabo Liberal Mississauga South, ON

Mr. Speaker, I thank the member for doing a very good job on some selected issues out of this bill. It is only 550 pages long. I can assure the House that I will vote in favour of the bill to get it to committee where it can have the rigorous scrutiny it requires.

The member has raised some interesting points with regard to tax havens and other issues. He also talked quite a bit about some of the values or some of the attitudinal positions we should take with regard to a number of these changes, particularly as it relates to the interest deductibility quagmire that we seem to be in, given the finance minister had made a very broad sweeping general statement about cancelling the interest deductibility on foreign investments.

Now we have some changes again. We have had ten year periods, now we have five year periods. We have had some towering effect. This is a moving target.

It concerns me because similar to the income trust debacle, the broken promise, signals were given to the marketplace, which interrupted the market and disrupted the marketplace to the extent there was a virtual meltdown.

Now we have some questions within the investing community on the interest deductibility. It is disruptive in my view. Does the member feel that the uncertainty or the lack of clarity from the finance minister, whose name rhymes with clarity, could give us an idea whether this can have some negative impact on the decision making of businesses while we deal with this strange animal that he has put on the table for us?

Income Tax Amendments Act, 2006Government Orders

3:45 p.m.

Bloc

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

Mr. Speaker, ever since the budget was tabled, we have been waiting for the budget implementation bill that will address this issue. We expected that the Minister of Finance's statement today would clarify the situation. In his statement, we read this:

Our proposed anti-tax-haven initiative is composed of four specific parts:

--Firstly, preventing the use of double dipping and other tax avoidance schemes—

--Secondly, we are providing corporate Canada with a transition period of almost five years—

--Thirdly, any tax revenues generated through the anti-tax-haven initiative will be used to further reduce business taxes in Canada—

--Finally, we will continue to look for ways to bring fairness to Canada’s tax system.

This is not clear. The government said it was important to have the right tools to help companies compete internationally. Many other countries have these sorts of measures. The government told us that it would do away with tax avoidance and the excesses that result from it.

Yet today, the statement simply says that double dipping—making one tax deduction here in Canada and another in the country that receives the funds—will be prohibited. There may even be three countries involved. This should be clarified.

The statement also says that companies will have five years to comply with the rules. These rules must be defined as soon as possible. If they are not clarified in the coming months, companies might invest in the wrong place or delay investing. This is a downside to the government's current position. We need clear, accurate, relevant information as soon as possible.

The government still has work to do. We hope it will release information as soon as possible. In a similar vein, why does the government not just go ahead and abolish the tax treaty with Barbados or at least the specific provision of the treaty whereby profits that return to Canada from Barbados are tax exempt? This is not fair to taxpayers.

Income Tax Amendments Act, 2006Government Orders

3:45 p.m.

Bloc

Guy André Bloc Berthier—Maskinongé, QC

Mr. Speaker, I would like to congratulate my colleague for his excellent speech on this bill that amends the Income Tax Act as far as trusts are concerned. Of course, as our colleague told us, we approve this bill because it contains some measures that are more in keeping with some social measures that we have put forward.

However, I would like my colleague to explain something. What is the public to think of a government that cuts programs for the poorest in our society—whether they are literacy programs, the court challenges program or women's programs—, a government that does not encourage people on EI but at the same time maintains a treaty that provides tax havens to rich companies?

How does my colleague explain this situation? What is the public to think about this lack of ethics on the part of a government that continues to help the rich while cutting programs for the poorest of the poor?

Income Tax Amendments Act, 2006Government Orders

3:50 p.m.

Bloc

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

Mr. Speaker, I want to thank my colleague from Berthier—Maskinongé for his question and the examples he gave us. Indeed, the money not paid in taxes under the tax treaty with Barbados is paid by others. As a result, we do not have adequate services. We can list the cuts made by the Conservative government over the past year in a number of areas, including the court challenges program, programs concerning women's groups or different parts of our society that need these types of services. There lies the answer.

For this year, the federal government will probably fail to collect $800 million in taxes. This $800 million would go a long way. Some of it could go toward lowering taxes and some of it could be used to reinstate services that have been cut. This would be an important gesture and it is a very good illustration of the current balance in Canadian taxation. There is a major problem with the tax treaty with Barbados and the solution is simple: the elimination of just one paragraph from section 5907 would correct the situation and bring about more fairness.

This would be realistic, quick and we could assess the facts, while the government's position on interest deductibility seems to be bogged down. There is no indication as to how the government is going to get out of this. I am anxious to see how the business sector will react. Between yesterday and this morning's announcement, things seem to be looking up because the government is putting off its decision. However, this sends a tenuous message to the business sector.

It is this type of situation that needs to be corrected. I would like the federal government to take a swift decision to correct the tax treaty with Barbados. This does not require vast studies. We already have all these figures at the Canada Revenue Agency or at the Department of Finance. Then a very clear message could be sent that would be consistent with the minister's promise to take care of tax havens. Nonetheless, to make good on his comments, he needs to at least take that one step.

Income Tax Amendments Act, 2006Government Orders

3:50 p.m.

Liberal

Paul Szabo Liberal Mississauga South, ON

Mr. Speaker, the member commented on an interesting point. If we provide tax cuts in certain areas and reduce revenue, it means it has to be made up by either raising taxes in another area or cutting services.

The member may want to comment on the advisability of the pension income splitting program, which would only benefit those who have defined pension benefit plans, who have a partner and whose pensions are in excess of about $38,000 just to start to get any benefit. It seems that it is benefiting high income earners over low. How does that ties in with the whole theme of tax fairness?

Income Tax Amendments Act, 2006Government Orders

3:50 p.m.

Conservative

The Acting Speaker Conservative Royal Galipeau

The member has 45 seconds to answer.

Income Tax Amendments Act, 2006Government Orders

3:50 p.m.

Bloc

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

Mr. Speaker, this is a complex issue which deserves much attention and probably more than 45 seconds. Obviously, at each step, it must be determined if a given tax measure is adequate. Its fairness, its efficiency in generating revenues and its relevance must be taken into account.

I hope that the government will display the same maturity we are finding today in Bill C-33, which we support, but many aspects of this issue have not been addressed.

Income Tax Amendments Act, 2006Government Orders

3:55 p.m.

Bloc

Pierre Paquette Bloc Joliette, QC

Mr. Speaker, to begin with, I would like to congratulate my colleague from Montmagny—L'Islet—Kamouraska—Rivière-du-Loup. His presentation was extremely clear. I will probably have the opportunity, in my own presentation, to substantiate even more what he just said. As he pointed out, the Bloc Québécois is in favour of Bill C-33, An Act to amend the Income Tax Act, including amendments in relation to foreign investment entities and non-resident trusts, and to provide for the bijural expression of the provisions of that Act. It corrects a number of things.

Again, this is somewhat like when I spoke to the changes to the excise tax. Sometimes, we debate in the House of rather casual subjects. This is far from Tintin in the Congo or Tintin in Tibet and even farther from The Crab with the Golden Claws or, for example, The Castafiore Emerald . This is not very sexy for a debate, but it is a necessary debate, just as the one on the excise tax. Bill C-33 corrects various provisions of the Income Tax Act which made it easy to circumvent tax rules and allowed tax evasion.

The bill responds to the shortcomings identified by the Auditor General in her November 2005 report. This bill will require disclosure of additional information about non-resident trusts, which will allow a more rigorous analysis of the figures submitted to the Canada Revenue Agency, in accordance with the recommendations of the Auditor General.

As my colleague has mentioned, tax evasion goes against the basic principles of horizontal and vertical fairness in the way we treat individuals. We must never forget that fairness is of paramount importance if we want people to have any trust in the tax system. This means fairness not only between individuals, but also between the different categories of individuals.

When the tax system is viewed as being unfair, there is also, unfortunately, a certain nonchalance in the public opinion about everything that relates to tax evasion. Working for pay under the table is a case in point. We absolutely need a tax system that not only is extremely fair, but that also has the appearance of being fair. Every time we can close a loophole and prevent people from believing that there is a double standard that benefits those who can afford those mechanisms, we have to do so. We were talking earlier about tax havens and about specialists and experts who can teach people how to avoid their collective responsibility.

It seems to me that we have to try and close those loopholes, and that is what this bill is doing. As I mentioned before, the Bloc Québécois will support Bill C-33.

Both the absence of fairness and the perceived absence thereof create a sense of laxity within the affected society. They also cause taxpayers to feel that they are being treated unfairly. As I said, practices that do not quite comply with the legislation are becoming more and more accepted and commonplace. Moreover, the government is losing revenue that, as my colleague said, must be made up for by higher taxes elsewhere, especially for the middle class, or by cuts to necessary public services.

As I said, we will support this bill even though it lacks that something special. It is definitely relevant, and as such, I think it deserves our attention even though it is not exactly a fun read.

I will provide a little background. In Canada, taxable revenue on trusts is calculated for individuals, not families. Here, income can be split among family members, resulting in major tax advantages. In fact, this is a common financial planning tactic among higher-income taxpayers.

They use family trusts to split income among as many family members as possible to take advantage of those family members' tax brackets. Obviously, when the income is split among many, some members of the family may have lower tax rates than if just one or two family members declare the income.

Canada's income tax system is based on a progressive tax rate structure. As such, individuals who have low or medium income pay less tax than high-income earners. As I just said, splitting income is one way to save taxes within a family or household.

To take advantage of this method, one must have a family trust. In addition to allowing income splitting, the trust can protect assets against the beneficiaries' creditors or ensure the use of an asset by a spouse until death before transferring the property rights to the children. The trust can also ensure that children have sufficient capital to cover the cost of tuition or living expenses while studying.

Even though trusts may seem to be an attractive way of avoiding tax, annual management fees can run to several thousand dollars. Once again, often it is the wealthy who are able to invest and who have enough money so that the advantages and disadvantages balance out and these trusts become attractive investment vehicles. Therefore, trusts are clearly investment vehicles that are available primarily to wealthy taxpayers.

In my opinion, on the whole, taxpayers do not appreciate income splitting, because it goes against one of the main principles of taxation policy: fairness. I mentioned this earlier. To comply with the principle of tax fairness, government gradually regulated the use of trusts and tried in various ways to reduce the benefits of income splitting.

The use of offshore trusts as investment vehicles has many advantages in terms of tax avoidance. Offshore trusts enable Canadian taxpayers to shelter assets from the tax system. Since Canadian tax authorities can have a very hard time obtaining information on investments in such vehicles, this opens the door to tax avoidance.

I remember that in a report—I think it was on the show Enjeux—journalists went to Barbados to locate companies such as the ones owned by the sons of the former Prime Minister, the member for LaSalle—Émard. The journalists were astonished to find that the headquarters of CSL International was not only a law office with four employees, but also the headquarters of about 100 other companies. Unfortunately, this information was not known previously, because it is not always easy to travel to conduct the necessary investigations. That is why it is important to have an easier way to obtain the necessary information.

In January 2000, the federal finance department introduced legislation to prohibit splitting with minors. People may not use children under 18 years of age, who are usually not yet working and therefore have no income of their own.

Under the attribution rules, capital gains on shares in the trust can be split, enabling the trustees to save on tax. Contrary to the attribution rules, this provision taxes the recipient of the split income at the top marginal rate, instead of reattributing the income to the transferor or lender.

However, the lack of clear legislation pertaining to foreign trusts created loopholes allowing the use of trusts established in foreign countries in order to continue to profit from the various advantages of income splitting. Moreover, the problems with information gathering—and I gave an example of that earlier—to establish the market value of assets of offshore trusts has facilitated tax evasion. In my opinion, it is important to remember that.

We also need to remember what the market value of assets is, that is, the highest price that would be agreed upon in a completely open and unrestricted market between fully-informed, knowledgeable and willing parties dealing at arm's length without constraint. This is the definition of fair market value. As I said earlier, it is a provision that was put in in that regard.

It was hard to establish the fair market value of offshore trusts. This value could be underestimated or the owners could find ways to ensure that the people at the Canada Revenue Agency had the impression that the value was lower.

Consequently, in a section of her 2005 report the Auditor General looked at the various loopholes found in the application of the Income Tax Act. She made a number of recommendations to close these loopholes with respect to the treatment of foreign investment trusts.

Of course, a ways and means motion was introduced on November 9, 2006. The Minister of Finance included this motion in Bill C-37 and its purpose is indeed to amend various rules concerning income tax. This ways and means motion had three main components.

First, the bill amends the Income Tax Act in order to clarify and specify the tax rules for non-resident trusts and foreign investment entities. Those provisions will allow the government to better regulate the use of those offshore investment vehicles by clearly establishing the foreign investment entities that may be exempt from taxation, the rules for ensuring that the foreign trust will be deemed to be resident in Canada and the investment vehicles to be taxed. The provisions will also specify how the attribution rules will apply when a foreign trust is deemed to be resident.

On that subject, I would remind the House that California, for instance, amended its legislation two or three years ago to ensure that, in the case of a company established in California and whose head office is in California, but that does business all over the world, revenue generated by that company must be included in the revenue of the head office. People saw this as strong action against tax avoidance and against tax havens. In fact, this has existed in Canada for a number of years. As a rule, a company whose head office is in Canada must pay taxes on all its revenue, regardless of whether it is generated in Canada or abroad, as long as there is no tax treaty, of course. If a tax treaty exists—we have such treaties with several countries—it is a matter of not taxing the same entity twice for the same revenue. This is completely understandable.

The problem I want to underline, and maybe I will be able to come back to it, is that when we have a tax convention like the one we have with Barbados, where the tax rate varies between 2.5% and 1%, this is a regressive tax instead of a progressive tax. The tax rate goes down as revenues go up. Of course these are only symbolic tax rates. Canada considers that revenues have been taxed a first time in Barbados and does not tax them a second time in Canada. When the tax rate of the foreign country is reasonable and comparable to the rates we have in Canada, tax conventions are totally acceptable. Unfortunately, when we deal with a country that does not have a real and transparent tax system but a system that is used only to allow taxpayers to avoid paying income tax in Canada, we do have a serious problem.

The second aspect relates to a number of general provisions in the Income Tax Act. I am still referring to the ways and means motion of November 9, 2006. First, it changes some general provisions of the act to ensure an efficient enforcement of the measures contained in the first part. The bill proposes a few changes to the Income Tax Act to include different measures in Bill C-28, A second Act to implement certain provisions of the budget tabled in Parliament on May 2, 2006. That is to say that the bill is modifying a previous bill that had already been introduced in this House. Some of the changes were suggested by the Canada Revenue Agency to clarify or facilitate the enforcement of measures included in the Income Tax Act.

The third and final component deals with the bijural aspect of the proposed amendments.

In other words, this last part adds or modifies expressions in the English and French versions in order to respect the semantics of civil law and common law. As we know, both apply in Quebec. This is inherent to the unique nature of the Quebec nation.

Let us now examine the individual parts of the bill resulting from the means and ways motion. The first part refers to changes to the rules that apply to non-resident trusts and foreign investment entities. A certain number of amendments and clarifications to section 94 establish the rules for taxation of non-resident trusts.

This part of the bill establishes and clarifies the rules regarding taxation of non-resident trusts. These clarifications and changes are made by amending article 94 of the Income Tax Act, as I already mentioned, which sets the tax rates for non-resident trusts.

As a general rule, a trust is subject to the Income Tax Act if it has received the transfer or loan of assets from an association, a joint venture, a trust, a fund, an organization, a natural person, a partnership or a financial syndicate resident in Canada. The non-resident trust must pay tax on income to the Government of Canada. If it does not, the beneficiaries are held responsible and must pay the amounts due. However, beneficiaries only pay their share of the tax on the trust. Additional relief is provided for beneficiaries who make a minimal contribution compared to other contributions to the trust.

The various changes proposed in this section of the bill amend the rules that apply to repatriation of moneys to Canada. More specifically, these rules define additional criteria for calculating the fair market value of assets. I have already mentioned the definition of fair market value for assets held by a non-resident trust.

Second, again in part 1, there are definitions of foreign trusts exempt from the Income Tax Act. This part of the bill specifies which type of trusts are eligible for tax exemption under the Income Tax Act. These measures will ensure that only trusts truly eligible for tax extensions could use this tax benefit. This will result in fairer tax treatment for everyone. Without going into too much detail, the following list indicates which trusts can be exempt and which trusts must pay tax.

Among the trusts eligible for exemption under the Income Tax Act, the exempt non-resident trusts, are trusts for beneficiaries with a mental infirmity who are not residents of Canada, and whose contributions to the trust are made to provide for the beneficiary's needs. This goes without saying.

Also exempt are trusts established after the breakdown of a marriage to provide for the children from the marriage who are under 21 years of age or under 31 years of age if they are enrolled full time at an educational institute, as well as charitable trusts, of course.

As far as the first exemption is concerned, I believe it is entirely consistent with what the Minister of Finance announced in his budget in February on the possibility of parents amassing, through a specific plan, money to provide for the needs of their severely handicapped children.

Resident trusts eligible for tax exemption are trusts for administering or providing pension benefits to employees, as well as charitable trusts.

Finally, the changes made to the Income Tax Act essentially mean that we have to ensure, quite simply, that the legislation as a whole is consistent.

In closing, Bill C-33 will ensure better application of the Income Tax Act.

The Bloc supports this bill to restrict the use of non-resident trusts as tax loopholes. This will allow us to maintain tax fairness—or improve it since it is not fair enough yet—and also show taxpayers in general that parliamentarians are interested in this and are concerned about their perception of fairness in the system. This will bring in a little more money for the good government.

Income Tax Amendments Act, 2006Government Orders

4:15 p.m.

Liberal

Paul Szabo Liberal Mississauga South, ON

Mr. Speaker, the member has raised some extremely good points particularly with regard to the family trust issues. Prior to becoming a member and as a chartered accountant, I used to work for a couple of clients who had these arrangements. They are not illegal, but the avoidance of taxes or the reduction of taxes can be very substantial for the highest income earning Canadians.

In a speech given by the member for Peterborough, he said that one of the objectives of this bill was to maintain the integrity of the tax base. He also talked about income trusts.

In terms of maintaining the integrity of the tax base, I would ask the member to comment on the income trust broken promise, and whether or not it appears the government thought this through in terms of the impacts on investors and indeed on the consequential sell-off of income trusts through private equity takeovers. This has been estimated to now cost Canada the loss of about $6 billion of revenue each and every year. That is way more than the differential in the tax burden between corporations and income trusts. This does not seem to be protecting the integrity of the tax base.

I wonder if the member is aware of the impact of the lost revenue on the takeover of income trusts. Should we not be pursuing some protections to ensure that this kind of hemorrhaging of the tax base does not continue?

Income Tax Amendments Act, 2006Government Orders

4:15 p.m.

Bloc

Pierre Paquette Bloc Joliette, QC

Mr. Speaker, I thank the member for his question. Indeed, Bill C-33 contains interesting aspects regarding the reduction of tax evasion. However, it is still just a band-aid on a cancer. We think there are other priorities. I spoke about the tax treaty with Barbados. If the Minister of Finance and the Conservative government really want to reduce tax evasion, they will have to amend that treaty and the law in order to turn off the tap. Until now, we have not seen the minister show any such commitment.

There has been a lot of talk about interest deductibility for Canadian companies investing abroad. The minister backed off and said that he was doing this to prevent tax evasion in tax havens. This is also a measure which could be interesting in some regards, but it is throwing the baby out with the bath water. So, it is good to see the minister backing off from his initial plan, but even if he maintains the non-deductibility of interest charges for Canadian companies investing abroad, this is still a small measure in the big picture. It is somewhat the same for income trusts.

During the proceedings of the Standing Committee on Finance, I was very surprised to see that the Minister of Finance was not able to demonstrate to us that existing income trusts were generating a tax loss that is extremely harmful to the Government of Canada's financial position.

Minister Audet told me that, in the case of Quebec, these trusts were responsible for a shortfall of about $40 million. That is significant, particularly since the Prime Minister made a promise regarding this issue during the election campaign. It seems to me that the government could have found a solution that is more respectful of the two and a half million Canadians who contributed to income trusts and who, among other things, probably believed the Prime Minister during the election campaign, when he promised that he would not touch these trusts.

That said, my greatest concern with income trusts was their effect, in the longer term, on Canada's economic development. For example, BCE, a corporation, was to become an income trust, because of the pressure exerted by one competitor, TELUS, and not because of its own corporate interests. In my opinion, this was more important than the issue of revenue losses for the federal or the Quebec government.

The hon. member is right when he says that this is creating a perverse effect, particularly regarding the value of the Canadian dollar. Many of these businesses represent a minor investment for foreigners, particularly Americans. So, we found out that there was a very real risk.

I have learned one lesson from all this. As with interest deductibility, as with income trusts, and as with many other issues, the Minister of Finance has good intentions, but he takes measures that seem improvised and whose consequences have not, in my opinion, been properly examined.

In conclusion, this will not prevent the Bloc Québécois from supporting Bill C-52. However, it could mean that, in the coming years, all parliamentarians, and the members of the Standing Committee on Finance, may have to look at this issue again, in order to suggest to the government, regardless of which party may be in office at that time, ways that are more effective on an economic, fiscal and financial level.

Income Tax Amendments Act, 2006Government Orders

4:20 p.m.

Bloc

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

Mr. Speaker, I would like to expand on the comments of my colleague from Joliette, who is very familiar with financial matters. He gave examples of situations where the current minister, with the best intentions, proposed a policy that was in need of some fine-tuning. The picture I am getting could be added to the one he was talking about. I am thinking about the program for GST rebates for tourists.

In this case, the Bloc Québécois, the industry and other political parties had to make strong and repeated arguments to achieve a few partial corrections to an unacceptable situation, in which organizers of conventions for outfitters or other similar events were losing a considerable international competitive advantage. It is the same type of situation with interest deductibility.

As for GST rebates for tourists, an extra effort should be made to come up with a reasonable solution for duty-free shops.

But my question is more general. I would like my colleague from Joliette to tell me, since pre-budget consultations on next year's budget will be starting soon—it is already the time to be working on these things—should tax avoidance not be an important issue? Should it not be important to make increasing transparency in Canada's tax situation a priority, or to ensure that there is a significant improvement beyond Bill C-33, which we are studying right now?

Income Tax Amendments Act, 2006Government Orders

4:20 p.m.

Bloc

Pierre Paquette Bloc Joliette, QC

Mr. Speaker, I thank my colleague from Montmagny—L'Islet—Kamouraska—Rivière-du-Loup. I finally pronounced the name of his riding correctly. I will prepare myself a little better when he asks me a question in the future, so I can get the name of his riding correct.

He is absolutely right. In my opinion, if we want the public and the taxpayers to remain confident in the income tax system, we must resolve this tax evasion issue which, year in year out, erodes the tax base, as a former Auditor General, Mr. Desautels, pointed out, I believe.

The part that is not paid by those taxpayers who do not assume their collective responsibilities has to be paid by others who have no other choice, simply because they have no TP4 and they cannot play with all these loopholes in the Income Tax Act.

In such cases, we sometimes feel—as we clearly felt in Quebec and I think it must have happened in other regions as well—a kind of revolt of the taxpayers, because they think the joke is on them and they are the only ones being stuck to pay for everyone else. This is not entirely true, because our system is actually rather progressive, but at the same time it is not entirely false, because there are big holes that need to be fixed. The tax treaty with Barbados is one of these holes that we have to fix if we want to keep the confidence of the whole population in our taxation measures.

Income Tax Amendments Act, 2006Government Orders

4:20 p.m.

Conservative

Dean Del Mastro Conservative Peterborough, ON

Mr. Speaker, I thank the hon. member for his comments and his efforts on the finance committee. I want to point out that it was with the support of that member and his colleague on the committee that allowed us to have the whole topic of tax havens put into the federal budget recommendations.

Would the member like to make some comments on why that is important and why it should be important to all federal members of Parliament?

Income Tax Amendments Act, 2006Government Orders

4:25 p.m.

Conservative

The Acting Speaker Conservative Royal Galipeau

The hon. member for Joliette has 30 seconds for his comments.

Income Tax Amendments Act, 2006Government Orders

4:25 p.m.

Bloc

Pierre Paquette Bloc Joliette, QC

I have to admit that any time he gets an opportunity, the Minister of Finance talks about tax havens. He talked about it last October in his fall economic statement, and he also talked about it in his two budgets.

We see a number of measures that are headed in the right direction, but it seems that the government is reluctant to tackle the root of the problem which is the tax agreement with Barbados. For the whole financial world, at the international level, Barbados is a tax haven for Canadian interests and we must adopt very strong measures to counter that.

Income Tax Amendments Act, 2006Government Orders

4:25 p.m.

Conservative

The Acting Speaker Conservative Royal Galipeau

Is the House ready for the question?

Income Tax Amendments Act, 2006Government Orders

4:25 p.m.

Some hon. members

Question.

Income Tax Amendments Act, 2006Government Orders

4:25 p.m.

Liberal

The Speaker Liberal Peter Milliken

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

Income Tax Amendments Act, 2006Government Orders

4:25 p.m.

Some hon. members

Agreed.

On division.