Madam Speaker, I am pleased to speak today on the group of amendments submitted by the Bloc. For those who are listening, I would like to recall that the budget implementation bill puts into effect several initiatives including tax cuts, elimination of rules for tax deductibility for foreign corporations, and tax havens, which I will discuss in just a moment. It also includes changes to the employment insurance plan which, we believe, do not go far enough and do not address demand or provide the assistance needed by workers in these rather difficult economic times.
In addition, the budget will fund a transition office to oversee the creation of a single securities regulator, which my colleague from Montmagny—L'Islet—Kamouraska—Rivière-du-Loup spoke about earlier. The budget also sets a cap on equalization payments and reforms the equalization formula, which has outraged the National Assembly. We have in our hands a motion by the National Assembly and our colleagues in the Government of Quebec, which criticizes the federal government for this. The budget also includes items pertaining to the Employment Equity Act, about which our colleague from Laval talked about extensively last week when she initiated a debate about the status of women.
We would like the House to accept the amendments proposed by the Bloc. Clause 6, which permits the use of tax havens, should be deleted. This short budget clause eliminates a section of the Income Tax Act that was designed to close a loophole used by Canadian multinationals to avoid paying taxes. Tax havens have cost taxpayers hundreds of millions of dollars. Since 1995, and recently, from 2000 to 2002, as well as in the 2003 and 2005 reports, the Auditor General reported on the use of tax havens, which are a from of tax avoidance. Section 18.2 of the Income Tax Act would have plugged this loophole as of 2012.
There is no justification for rescinding this section and it is quite scandalous. We need measures that will create jobs here in Quebec and Canada. We do not need measures that will create competition for local businesses that do not have the means to benefit from such a mechanism.
In this difficult economic context, the Bloc Québécois as well as thousands of taxpayers would like to know why the Minister of Finance is surrendering in such an important battle. The global economy as a whole is threatened by offshore investments and tax havens.
It is inconceivable that we would approve a decision by the Conservative government to allow too many financial transactions to go through tax havens. We must not let companies escape the social contract with the people and run away from their responsibilities. Many Quebeckers and Canadians pay taxes, and I am sure they are outraged to learn that companies will have the right to use such a mechanism and that the government wants to encourage tax evasion by multinationals.
The lack of transparency of tax havens makes it hard to identify credit risks and promotes market distrust. A report by the Auditor General revealed that the Canada Revenue Agency had a hard time properly monitoring international financial transactions and tended to go easy in tax probes of major corporations so as not to hurt relations with those companies.
Is the finance minister so blind that he did not understand from what the lobbyists said that companies are evading billions of dollars in income tax? Tax havens equal major capital flight. In 2000, according to the Auditor General, losses due to tax havens were equivalent to 50,000 taxpayers not paying their taxes. What about today? Statistics Canada says that the use of tax havens is on the rise, which is cause for concern.
The young people in my riding, Vaudreuil-Soulanges, want to know why it was not right to use tax havens to avoid paying tax in 2007, yet it became a good thing in 2008. Workers, seniors and the most vulnerable members of our society are asking themselves the same question.
The Minister of Finance knows, however, that we need some sort of oversight over the international financial market. In his 2007 budget, he said that steps had to be taken to ensure everyone pays their fair share. He complained that some foreign and Canadian corporations were using the tax rules to get around paying tax. He said that every time this happens workers and small and medium-size businesses have to pay higher taxes. He concluded by stating that it was unfair.
The anti-tax-haven initiative was proposed to prevent multinational corporations from using tax havens and other tax avoidance structures to generate two expense deductions for the same investment. Today, not only has the economic situation worsened, but the Conservative government appears to have taken steps to increase the injustice.
The Minister of Finance, members will recall, had already backed off in the fight against tax havens by acting on pressure from financiers in Toronto. He gave them a five-year grace period before the implementation of his plan to fight tax evasion and then set up an advisory panel whose independence and neutrality are highly debatable.
The finance minister out and out reneged on his commitment in the fight against tax evasion when he blindly accepted the recommendations of the Advisory Panel on Canada' s System of International Taxation. This panel was clearly set up to justify the minister's change of heart.
Of the six members of the panel, four are from private companies that may have benefited from the strategy and still can. They include, for example, the former CEO of the Bank of Nova Scotia, the Canadian bank with the most branches in tax havens. The authors of the report are clearly in conflict of interest.
How can the Prime Minister today justify allowing banks and oil companies to avoid taxes through tax havens, when thousands of jobs are being lost each month and businesses are closing their doors?
The fight against tax havens is an ongoing fight. Things must change democratically. A number of European countries would like tighter legislation right away and a much more transparent means of disclosing international financial transactions. Billions of dollars are involved. The disappearance of over half of the money to tax havens is cause for concern.