House of Commons Hansard #172 of the 39th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was income.

Topics

Public AccountsCommittees of the HouseRoutine Proceedings

12:05 p.m.

Liberal

The Speaker Liberal Peter Milliken

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

Public AccountsCommittees of the HouseRoutine Proceedings

12:05 p.m.

Some hon. members

Agreed.

Public AccountsCommittees of the HouseRoutine Proceedings

12:05 p.m.

Liberal

The Speaker Liberal Peter Milliken

(Motion agreed to)

Income TrustsPetitionsRoutine Proceedings

12:05 p.m.

Liberal

Paul Szabo Liberal Mississauga South, ON

Mr. Speaker, I am pleased to present this income trust broken promise petition on behalf of Mrs. Elaine Hughes from Saskatchewan, who remembers the Prime Minister boasting about his apparent commitment to accountability when he said that there is no greater fraud than a promise not kept.

The petitioners want to remind the Prime Minister that he promised never to tax income trusts, but he recklessly broke that promise, imposed a 31.5% punitive tax and wiped out over $25 billion of hard-earned retirement savings of over two million Canadians, particularly seniors.

The petitioners therefore call upon the Conservative minority government to admit that the decision to tax income trusts was based on flawed methodology and incorrect assumptions; to apologize to those who were unfairly harmed by this broken promise; and to repeal the punitive 31.5% tax on income trusts.

Fisheries ActPetitionsRoutine Proceedings

12:10 p.m.

Conservative

John Cummins Conservative Delta—Richmond East, BC

Mr. Speaker, it is my pleasure to present a petition today on behalf of residents of various communities on Vancouver Island and in Kimberley and the surrounding area as well.

The petitioners are expressing their concern about the impact that Bill C-45, the proposed new fisheries act, will have on them. They decry the fact that they were denied input into the drafting of the bill. They are calling upon Parliament to withdraw it and to accept input from recreational and commercial fishermen and others.

Income TrustsPetitionsRoutine Proceedings

12:10 p.m.

Liberal

John Maloney Liberal Welland, ON

Mr. Speaker, I wish to present a petition on the income trust broken promise on behalf of Alan Shulman, who remembers the Prime Minister boasting about his apparent commitment to accountability when he said that the greatest fraud is a promise not kept.

The petitioners remind the Prime Minister that he promised never to tax income trusts, but he recklessly broke that promise by imposing a 31.5% punitive tax which wiped out over $25 billion of hard-earned retirement savings of over two million Canadians, particularly seniors.

The petitioners therefore call upon the Conservative minority government to admit that the decision to tax income trusts was based on flawed methodology and incorrect assumptions; to apologize to those who were unfairly harmed by this broken promise; and to repeal the punitive 31.5% tax on income trusts.

Firearms RegistryPetitionsRoutine Proceedings

12:10 p.m.

Conservative

Maurice Vellacott Conservative Saskatoon—Wanuskewin, SK

Mr. Speaker, I have a petition with a number of names on it. The petitioners are calling on Parliament to end the registration requirement for non-restricted long guns. The constituents come from throughout my riding in the areas of Spiritwood, Glenbush, Rabbit Lake, Warman, Hague and Hepburn, and also the communities of Osler, Blaine Lake, Saskatoon, Ruddell and Maymont. All through my riding, individuals are asking to end the registration requirement for non-restricted long guns.

Age of ConsentPetitionsRoutine Proceedings

12:10 p.m.

Conservative

Maurice Vellacott Conservative Saskatoon—Wanuskewin, SK

Mr. Speaker, the second petition is in respect to the matter of the age of sexual consent. These petitioners are from the grand city of Saskatoon. They want Parliament to raise the age of sexual consent, or the age of protection, from age 14 to age 16.

DarfurPetitionsRoutine Proceedings

12:10 p.m.

Conservative

Pierre Poilievre Conservative Nepean—Carleton, ON

Mr. Speaker, I rise today to table two petitions.

The first is from a group of high school students in my riding who seek to have Canada's government take a strong stand against the ongoing genocide in the Darfur region of Sudan. These students have worked diligently to pressure not only government in Canada but all around the world to take a strong principled stand to defend the more than 80,000 people in Darfur who have been displaced.

Animal CrueltyPetitionsRoutine Proceedings

12:10 p.m.

Conservative

Pierre Poilievre Conservative Nepean—Carleton, ON

Mr. Speaker, the second petition I have relates to cruelty toward animals.

Child CarePetitionsRoutine Proceedings

12:10 p.m.

Liberal

Ralph Goodale Liberal Wascana, SK

Mr. Speaker, I have a petition to table today on behalf of a number of people in Saskatchewan, most of them from Regina, dealing with the issue of child care.

The petitioners support strongly the child care agreement with the province of Saskatchewan that the Government of Canada had in place as of April 2005.

The petitioners note that the taxable allowance that is now provided by the government is small and will not establish any new child care spaces. They call upon the government to reinstate the previous arrangement that did in fact provide funding for the creation of a high quality system across the country.

Questions on the Order PaperRoutine Proceedings

12:10 p.m.

Regina—Lumsden—Lake Centre Saskatchewan

Conservative

Tom Lukiwski ConservativeParliamentary Secretary to the Leader of the Government in the House of Commons and Minister for Democratic Reform

Mr. Speaker, I ask that all questions be allowed to stand.

Questions on the Order PaperRoutine Proceedings

12:10 p.m.

Liberal

The Speaker Liberal Peter Milliken

Is that agreed?

Questions on the Order PaperRoutine Proceedings

12:10 p.m.

Some hon. members

Agreed.

Income Tax Amendments Act, 2006Government Orders

12:15 p.m.

Bloc

Thierry St-Cyr Bloc Jeanne-Le Ber, QC

Mr. Speaker, I am pleased to speak to this bill today in the House. I will be brief, since I had the opportunity to speak at second reading and to speak in more detail in committee. This is a very technical bill whose purpose is to address some shortcomings in the Income Tax Act which make it possible for some people to avoid paying the taxes they should be paying.

We spoke about this this morning. All the parties agree with the bill, so there is not much to debate in terms of content. However, I will take this opportunity to talk briefly about tax havens. When the Liberals were in power, we talked about these havens a lot, since the then finance minister, and current member for LaSalle—Émard, had modified the tax treaties. He signed tax treaties with Barbados and made the act retroactive to allow companies—including his own, Canada Steamship Lines—to use this tax treaty to bring profits back to Canada that had been earned in Barbados, without paying taxes.

This is something that has worried the Bloc Québécois for a long time and we are very concerned. A great deal of work remains to be done to fix this problem.

When the Standing Committee on Finance studied tax havens, stakeholders told us all kinds of stories. Some were very interesting, and others were hard to believe, such as the claim that Barbados,for example, is not a tax haven.

That is a little ridiculous. Even if it is true that income tax levels for ordinary companies based in Barbados can be as high as 40%, companies known as international business companies or IBCs, which operate internationally out of Barbados, pay fixed fees on the order of $250 per year, plus taxes amounting to 2.5% on the first US$5 million. Then the tax rate declines gradually to 1% on profits over $15 million.

The OECD defines tax havens as countries that do not cooperate with other taxation authorities, meaning countries that collect no income tax or that do not share their data, that hide information and that lack transparency. Even if that is not exactly the case here, it is still fair to say that this is a very appealing situation for a business. When it comes to tax havens, we have to talk about Barbados, or at least the IBCs in Barbados. In fact, nearly all Canadian companies operating out of Barbados are doing so under the IBC structure.

There are very few requirements for becoming an international business corporation. That is part of the problem. The company must be registered in Barbados—which is pretty easy—and have its headquarters there. The media have reported on this issue. In Quebec, a journalist with Enjeux put together a report called Les Évasions Barbares—that would be The Barbarian Evasions in English—which revealed that there are plenty of large buildings in Barbados, containing many corporate headquarters offices, most of which are practically empty.

Among the other conditions that must be met, the company must hold its board of directors meetings there. In reality, a conference call will suffice. It must also keep its board meeting minutes there—all that takes is a filing cabinet—and have a Barbadian resident as one of its directors.

However, an analysis published in 2002 by the PricewaterhouseCoopers office in Bridgetown estimated in its brochure concerning Barbados, that an independent director in Barbados can be hired for only $1,500 a year.

As we can see, these restrictions are not very serious, especially for a very powerful multinational that could save millions of dollars in taxes. These conditions are not very hard to meet. And finally, in its international activities, the multinational could use Barbados as an avenue to get out of paying taxes in Canada, once those taxes are brought back to Canada.

As we can see, there is a real problem and many companies—which once included and probably still include Canada Steamship Lines—are not really located in Barbados and do not really operate out of Barbados. They are simply an empty shell there, a mere legal entity in order to take advantage of the Income Tax Act and pay less in taxes.

I hope the Standing Committee on Finance meetings on tax evasion will encourage the government to legislate quickly on this matter. In short, the Standing Committee on Finance will table a report when the House resumes sitting next fall, and I hope this will inspire the government.

Income Tax Amendments Act, 2006Government Orders

12:20 p.m.

NDP

Judy Wasylycia-Leis NDP Winnipeg North, MB

Mr. Speaker, I am pleased to speak on this important matter of taxation pertaining to tax avoidance and tax evasion which is part of Bill C-33. For those who are watching, the bill is at third reading. It is an important issue for all of Canada.

Bill C-33 may be a bill about technical matters and may contain some necessary steps that are long overdue. However, we support it because we, through this legislation, are taking steps to ensure that money that is owed to the country is not lost through arrangements that are questionable in nature.

Yet, we have to wonder why it is taking so long to close tax loopholes, to shut down tax havens, to deal with tax evaders, and to crack down on tax avoidance.

Why in the world are we still here talking about something that has been raised in the House on numerous occasions over the last two decades? It is a matter that has been studied to death by the Auditor General of Canada and here we are today taking a few baby steps to deal with some of the most egregious problems pertaining to tax avoidance.

This is a government that promised, in opposition, to take on the Liberal government, to crack down on tax evaders, and to do everything in its power to ensure that money that rightfully belonged in Canada stayed in this country and was not allowed to be frittered away through different loopholes and avoidance schemes.

Today we have a bill finally that has taken probably about five years. A good number of those years are a result of Liberal delays. The current government has only had a couple of years to really get its teeth into these matters, so we applaud the government for actually bringing this forward. But we regret that the government is not yet prepared to in fact deal with some of the big issues around tax avoidance and tax evasion that are so obviously present in our system today and around which the government has spoken a great deal.

It made a lot of statements about trying to ensure that we have a fair system of taxation. A system where in fact corporations pay their fair share and the wealthy are not able to use the system to avoid paying taxes. We would in fact move away from a system that is inherently biased in terms of the wealthy and the powerful in our society today, and is without concern for the needs of ordinary working families and hard-working Canadians.

The question we have today is, why in fact did the government, when it had the chance following the budget to implement its promise about dealing with interest deductibility, back off? It had a chance to actually make a difference. It had a chance to do something that had been identified by many as a significant step in the right direction.

Members in the House will know that we had a fairly lengthy discussion about interest deductibility at committee. It was an issue pursued quite rigorously in the House.

I think the government should have been able to detect considerable support for a complete crackdown on this issue and should have in fact been able to know that it would have considerable backing if it had decided to in fact go the complete distance and do what its own budget said. Budget 2007 said:

Assuming an exemption from withholding tax on both arm’s length and non-arm’s length interest is implemented in the Canada-U.S. Tax Treaty as expected, Budget 2007 will further simplify the Canadian international tax system by eliminating Canadian withholding tax on interest paid to all arm’s length non-residents regardless of their country of residence.

The budget speech went on to very clearly indicate that it was prepared to take on an issue of tax evasion, or I should not say tax evasion, of tax avoidance that has no place in our system today.

It has no place in the international scheme of things when we have countries such as Great Britain and other countries actually dealing with an international taxation system, so that one cannot move money around to different countries and avoid paying taxes.

The members in the House will know that in fact at committee and at other times organizations spoke out in favour of the government's position. In fact, the Canadian Labour Congress was very vocal at these hearings, recommending that the minister stick to his guns, stick to his plans to actually crack down on this particular egregious example of tax avoidance.

In fact, at committee hearings the representative of the CLC basically suggested to us that we needed to push the government to prevent corporations from deducting foreign affiliate interest here. It did not say to only limit it to double-dipping or talk about tax towers, but actually said to deal with the fact that corporations are deducting foreign affiliate interest here and get them to start paying their fair share of taxes from foreign affiliate income.

Other countries do it. They tax the income regardless of where that corporation has moved money or opened up new affiliates. They consider it as income earned and therefore as taxable income. Therefore, it is money that is then put back into the economy of a country like Great Britain to be used for expanding other job opportunities in the domestic economy, for training workers to meet new challenges, or dealing with a loss of manufacturing capacity. That is what this country should be doing. It should take that money and use it to make a difference.

It was very disappointing to in fact see the Minister of Finance backtrack on this promise. That was regrettable on his part.

I know the Liberals do not agree with us, do not agree with me certainly, and do not agree with the need to crack down on tax avoidance. They seem to want to keep all avenues open for tax avoidance to occur. That is not surprising given the past practice of the Liberals when they were in government.

There is a long history of Liberals in Canada standing up for the corporate elite, for the wealthy and the powerful, and for any scheme imaginable that will allow those individuals and those entities to avoid paying taxes.

I would like to go back to a couple of examples. I would like to make the case that instead of simply waiting for community organizations, the labour movement, individual parliamentarians, and the non-governmental community to fight for changes to the tax system which might eventually produce some good results, the government ought to start to take some initiative, show some initiative, be proactive and not wait.

Our history on this issue is nothing but waiting for the government to catch up with the community, waiting for the government to finally address something after an issue has gone through the court systems and finally resulted in some pretty clear direction for the government.

I want to go back to an issue that actually began under the Conservatives during Brian Mulroney's time. It went through most of the Liberals' term and finally resulted in some changes, but not before some individuals were able to take advantage of the system.

I want to take members back to what we in Manitoba call Project Loophole. Folks might remember that it was in 1996 that Winnipeger George Harris decided to force the Canadian government to collect an estimated $750 million in taxes that were owed to the government by one of Canada's wealthiest families. Harris and Project Loophole forced the courts to acknowledge that the government had acted as if a citizen had no choice but to pay his taxes and be quiet. It was a David and Goliath situation in the battle for tax fairness and for an end to tax loopholes that allowed the wealthy and powerful to rewrite the tax laws in their favour.

It was a volunteer initiative. I was part of a group, back then in Winnipeg in the mid 1990s, called Choices, a Winnipeg-based coalition for social justice. It was out of this organization that George Harris found the backing and the support in order to go forward with this court challenge. It was a lengthy, costly battle, with money raised from ordinary consumers, Manitobans and citizens everywhere concerned about taxation fairness.

It really was a stinky case. Some lawyers called it a smell test. They were concerned that this was about power being abused or rules being bent. According to one of the judges in the case along the way, Federal Court Justice Frank Muldoon, it reeked and really did not seem to be about transparent government.

The case started with a wealthy Canadian family. It is not important to know the name of the family, although I think it is well known now, but it is important to know that the family was wealthy enough to be able to set aside a family trust worth $2 billion, not the typical college fund nest egg. It was a wealthy family with an incredible amount of money that wanted to avoid paying taxes. This trust was established in Canada under Canadian law to take advantage of Canadian tax rules.

Let us go back to 1991 when in fact the case first came to light. For its own reasons, the family decided to transfer the assets in the trust to a trust in the United States that it would control. This was back in 1991. Normally when this happens the family would be required to pay taxes on the increase in the value of the fund since it was established and it was estimated those taxes could have amounted to $750 million. However, in November of that year the family asked the federal government for a tax ruling that would allow it to move the money to the United States without paying taxes.

To cut a long story short, the issue went back and forth between the family's lawyers and officials in the finance department in the Government of Canada and eventually officials backed off and agreed to this family's request. It was then that Project Loophole took shape and began to mount a very serious campaign that went right to the Supreme Court.

Regrettably, the courts, in the end, did not precisely rule in favour of the citizens' coalition but sent a message to the federal government. It sent a message to say that the provisions that allowed this to happen had to be changed. In other words, everything that the government did in conjunction with this wealthy family's lawyers was apparently okay according to existing law and regulations. That is what the court said, but it also said this should not be allowed to continue.

Finally, after this lengthy battle and all of this uproar by community members across this country, governments finally listened and did something. As we learned from the officials at the finance committee, when we were dealing with Bill C-33, the rules have been changed to prevent that kind of development from happening.

Why does it have to come to this? Why does an issue of such obvious unfairness need a voluntary citizens group to raise money and take it through the courts before the government will act? Why can the government not see the wisdom of acknowledging the tax avoidance schemes, the tax havens and this trend of setting up these offshore centres? Why does the government not take a hard look at that and do something about it? Why are we studying this again?

That is what came out of the federal budget, finally, after the government backtracked and said that it really was not going to crack down on interest deductibility, that it really was not going to make foreign corporations pay their fair share of taxes and that it really was not going to collect taxes that rightly belonged to this country.

What does the government do? It sets up a couple of more studies. We now have a short term round table over the summer to draft legislation pertaining to this issue of interest deductibility on its limited basis involving double-dipping and towers. We do not have anything in place yet in terms of double-dipping, never mind the broader issue of interest deductibility in terms of foreign affiliates.

On the broad issue of tax avoidance, the government has agreed to a longer term panel, called an expert panel, that would look at the fairness and the competitiveness of the tax system as a whole. The panel will report back sometime by the end of 2007 or 2008.

I think this issue has been studied enough. We have lots of credible information. We have been going around the mulberry bush at the finance committee.

Income Tax Amendments Act, 2006Government Orders

12:35 p.m.

Liberal

John McKay Liberal Scarborough—Guildwood, ON

So is your speech.

Income Tax Amendments Act, 2006Government Orders

12:35 p.m.

NDP

Judy Wasylycia-Leis NDP Winnipeg North, MB

Mr. Speaker, the member for Scarborough—Guildwood likes to heckle from his seat and throw insults my way. Every time we question the wisdom of the Liberals when they were in government, he likes to insert put-downs and make personal comments about my speech and about my beliefs. I hope he realizes that it is time to get beyond personal politics and start to talk seriously about these issues. I have put up with a lot of insults from him and others on that side of the House and, frankly, I get quite tired of it.

If we really want to get serious about this issue, then let us look at the Canada Steamship Lines issue and the involvement of the Liberals around the tax holdings of the member for LaSalle—Émard.

Let us go back to February 2003 when the member for LaSalle—Émard used the peek-a-boo clause in a supervisory agreement when dealing with members of the board of Canada Steamship Lines.

Let us go back to March 1, 2003 when we said in the House that we in this party could not live with ourselves if we had to deal with this kind of situation and if there were not a crack down on it immediately.

Let us go back to January 28, 2004 when the government announced that the companies of the member for LaSalle—Émard, including Canada Steamship Lines, received $162 million in federal government contracts, grants and loans.

Let us go back to February 4, 2004 and the CBC town hall meeting when the member for LaSalle—Émard defended his flags of convenience, saying that Canada Steamship Lines was a Canadian company, that it pays it taxes in Canada and that the bulk of its operations were here in Canada. We have a study by credible sources that shows that Canada Steamship Lines, owned by the member for LaSalle—Émard, avoided paying $103 million in Canadian taxes between 1995 and 2002 by setting up nine shell companies in Barbados.

I ask the member for Scarborough—Guildwood why his government did not shut that down when it had a chance? Why is it still before us?

Now the question is: when will the Conservative government finally do what is right and ensure that these kinds of wide open loopholes, tax avoidance and tax evasion schemes are shut down once and for all?

Income Tax Amendments Act, 2006Government Orders

12:40 p.m.

Conservative

Dean Del Mastro Conservative Peterborough, ON

Mr. Speaker, while I have some philosophical differences with the member as related to overall levels of taxation and spending, one area where I do not differ from the member is on tax fairness. The member for Winnipeg North stands and talks against the illegal use of tax havens all the time. She does not believe that tax loopholes are a good thing for Canada and neither do I. I believe that tax fairness is what is needed in Canada. I appreciate the fact that she has stood wholeheartedly behind that.

However, I do want to talk a bit about the anti-tax haven initiatives, double-dipping and so forth that our government has moved on. By closing these tax loopholes we are trying to ensure that Canadian taxpayers are not indirectly subsidizing wealthy multinational corporations.

Income Tax Amendments Act, 2006Government Orders

12:40 p.m.

An hon. member

It's about time.

Income Tax Amendments Act, 2006Government Orders

12:40 p.m.

Conservative

Dean Del Mastro Conservative Peterborough, ON

It is about time.

One of the things that really floors me about the former government is that this bill, the one that we are speaking about today, has been around since 1999. The questions are: What stopped us? Why did we not do better? We just did not get it done comes to mind. However, I do not think that is why it did not move on this. The fact is that closing tax havens and closing down tax loopholes did not matter to the Liberal government. It did not care.

Indeed, the member for Markham—Unionville and the Leader of the Opposition went to Bay Street when we announced that we would be moving to close some of these tax loopholes. The member for Markham—Unionville started off by saying, “We subsidized farmers. Why shouldn't we subsidize corporations?”

Does he not get it? Does he not get it that there is a big difference between, quite frankly, the problems that the Liberals caused in agriculture because they did not understand how to manage the Department of Agriculture? There is a big difference between that and subsidizing wealthy multinational corporations through tax loopholes and encouraging the use of these loopholes.

The member has been here for a long time. The Auditor General has spoken on this issue a number of times. Did the member ever see anything done? Did she believe the Liberals were ever going to move on it? Why should anybody ever believe that the Liberals would ever support anything to do with tax fairness?

Income Tax Amendments Act, 2006Government Orders

12:40 p.m.

NDP

Judy Wasylycia-Leis NDP Winnipeg North, MB

Mr. Speaker, my colleague makes a very important point concerning the length of time it takes for anything to happen in this place under either a Liberal government or a Conservative government to deal with tax havens and tax loopholes.

The record, obviously, of the Liberals, who had 13 years to fix these problems, is the most egregious one. The Conservatives are just beginning and their first big mistake was to backtrack on the interest deductibility issue. Since the Conservatives have talked about cracking down on tax havens, and since the Liberals refused to do anything, we now have a chance in this House to do something.

I want to mention that I think the inaction by the Liberals over the years was directly related to their ties with big banks and big corporations. I think the fact that their own members had investments in big corporations that wanted to take advantage of tax havens had something to do with it. However, I do not know for sure.

I tried earlier to read a quotation but I was talking too fast to get it out. It was in response to a question from my leader, the member for Toronto—Danforth, back in 2003 when we were concerned about the member for LaSalle—Émard still running the Canadian Steamship Lines even with the apparent conflict of interest. In response to that question, the member for LaSalle—Émard said that he would not be able to live with himself if his dream were turned over to another country. He said that he would not be able to bear Canada Steamship Lines suddenly finding itself nothing but a collection of ships being run from the States.

It was not too long after that when the member decided that it would be important to have his sons run the company but they made no changes with respect to the flags of convenience and with respect to the tax evasion policies. They continued to accumulate revenue because they were not paying their fair share of taxes.

On the issue of the Auditor General, let us note that we are talking about several reports that go back to 1999, 2002, and now another one in 2007, and still the concerns raised by the Auditor General have not been fully addressed by any government. We are still waiting for some plan of action. We are waiting for more than studies. We are waiting for the Conservative Government of Canada, Canada's supposedly new government, to do something new and different. We are waiting and waiting and waiting.

When will the government decide to finally shut down Barbados as a tax haven? When will it decide to take on all of these loopholes and ensure that Canadians have the resources they need to build the programs they need to have a strong united country?

Income Tax Amendments Act, 2006Government Orders

12:45 p.m.

Conservative

Dean Del Mastro Conservative Peterborough, ON

Mr. Speaker, I would suggest to the member that this government is a government of great courage when it comes to tax fairness. As the member well knows, on October 31 this government, in a minority situation, moved to close what we considered to be a great risk to overall corporate tax revenue. I appreciate that the NDP has stood behind that decision pertaining to the income trusts.

We further moved to take all of those taxes that would be placed on income trusts and give it to Canadian seniors. It was completely revenue neutral. We made sure that wealthy corporations would not avoid taxes on the backs of not only retired Canadian seniors, but hard-working Canadians right across the board. This government has been very brave and courageous in bringing tax fairness to Canadians. I know the hon. member stood behind that.

When these reports were being brought forward by the Auditor General, they were being covered in the media and being talked about a lot by Canadians. I heard a lot about them. I was in business in Peterborough and I was really concerned that I was paying a lot of taxes and it did not seem fair to me that I had this enormous tax burden but large corporations were paying nothing.

Did the member ever hear the Liberal Party talk about coming down on these egregious actions by corporations that were avoiding taxes? Did she ever see them do anything about it? Did she ever see any action?

Income Tax Amendments Act, 2006Government Orders

12:45 p.m.

NDP

Judy Wasylycia-Leis NDP Winnipeg North, MB

No, I am afraid not, Mr. Speaker. On this front, dealing with fairness in our taxation system and loopholes available to the wealthy and corporations in our country, it is very hard to find any kind of action. There is a trail of negligence and broken promises. The Auditor General has made report after report with very little action flowing from them.

What I worry about is that the Conservatives are beginning to go down the similar path that the Liberals followed, which is to make a lot of promises, do a few things like the income trust issue and the double-dipping, and then not really get at the big issues around tax havens.

What we really need is for the Canadian Conservative government to take immediate steps to shut down all remaining offshore tax havens, especially when we consider the fact that the Canada Revenue Agency is now investigating Merck Frosst for putting $2 billion away in Barbados.

We spent years trying to get the Liberals to lower the flags of convenience flown overseas by Canadian corporations to avoid taxes. I do not want to spend another decade fighting Conservatives to get the same thing done. Conservatives have the time and the mandate to actually act against tax havens, and I am waiting to see the signs of that. I am waiting to see if they are serious about this.

In opposition, the Conservatives railed against the Barbadian tax haven, just as we did, because it benefited certain members of the government and the corporate elite. Many Conservatives, including the current Prime Minister, voted for a motion to close this tax loophole that results in individual Canadian taxpayers having to make up the difference. If the Conservatives leave this loophole open, they are demonstrating that it is not ordinary Canadians who benefit from their policies. If the Conservatives do not act to close the Barbados tax haven, all their protests in the case of Canada Steamship Lines and other obvious examples will mean nothing but cheap politics.

I urge the Conservatives to put their money where their mouth is and actually do something to prevent so much investment from going to offshore financial centres. They should keep in mind that between 2003 to the present that number has increased eight-fold.