Mr. Speaker, I am very pleased to speak to the bill.
At the outset, I would like to take a moment to recognize the Parliamentary Secretary to the Prime Minister. An hour or so ago he indicated that the Prime Minister had just signed a double taxation avoidance agreement with Switzerland today in Switzerland. He gave information, for which we have been looking for some time now, as to how much money has been recouped by Revenue Canada.
The Parliamentary Secretary to the Prime Minister said that last year $138 million had been collected on behalf of Canadian taxpayers under the amnesty program. He said that even more than $138 million had been collected to date this year, but he did not give us an indication of how much. I know the parliamentary secretary to the finance minister is here and perhaps he could make a note of this and get back to us with the information as to how much has been collected so far this year. I think that is a good sign.
For many years now, the banking systems of Switzerland, Liechtenstein and other countries becoming tax havens for arms dealers and drug dealers. As well, regular everyday Canadian taxpayers and corporations have been taking advantage of these tax shelters primarily because they can get away with it.
After several hundred years of Switzerland keeping its bank secrecy laws and veils in place, after 9/11 we started to see some breakthroughs. President Obama took on the Swiss banking establishment over the last couple of years, demanding information. Under the guise of finding out information about terrorist financing, he was able to break open the veil of secrecy. However, up until 9/11, up until the worldwide concern about terrorism, there did not seem to be too much concern about drug dealers, arms dealings or about other people hiding their money from tax authorities. Things have developed and progressed for the better.
Here is another bit of information that the public knows about now. A bank employee in a Liechtenstein bank two or three years ago sold bank diskettes containing thousands of names of taxpayers to the German government. In a more recent case, a Swiss bank employee did the same thing. He took the records into France and turned them over to the French government. Now the Canadian government has been faced with this information being made public and Canadian taxpayers are demanding to know what the Canadian government is doing about it.
The Canadian government is essentially offering an amnesty to taxpayers in Canada who have not paid their taxes. The government wants them to walk into Revenue Canada, declare that they have been bad and it will let them off the hook with no penalties, no jail terms, nothing more than just “pay your taxes”. That has been its approach. Now the Prime Minister has gone off to Switzerland and has an agreement with the Swiss government.
I ask the parliamentary secretary to the finance minister to take note of what France did, and it was quite substantial. Only this February, France compiled a list. There is the OECD grey list, but there is also France's black list. It put 18 countries on this list and one was Panama.
France acted proactively, and Canada should do what France did. France levied a 50% tax on dividend, service fees, royalties and interest paid by French entities to any beneficiaries in any of these blacklisted countries, including Panama, a 50% upfront tax levy. Gains from real estate and securities transactions were also subject to the same levy. In addition, France's 95% tax exemption on dividends issued by subsidiaries to their French-based parent company will be removed if the subsidiary resides in any of the blacklisted jurisdictions. France brought these rules in immediately, in February.
What happened? The results have been phenomenal. France now has a double taxation avoidance agreement signed with Panama. When Panama realized the game was up, that it would have to comply, it signed agreements not only with France, but with Mexico, Barbados, Belgium, the Netherlands, Qatar and Spain. That is since February. It now has these agreements that it refused to sign for many years.
Guess what? Canada is not one of those countries. Canada is a country that is looking at implementing a free trade agreement.
This is perfect timing for Parliament and the government to become proactive and to do what France did. It should compile a blacklist, follow the OECD's list if it wishes, and levy the 50% tax on dividends, on interest, on royalties, on service fees, all the measures that France took, then watch Panama come immediately to the table. Within weeks of the government doing this, I can guarantee the Panamanian government will be knocking on the government's door, asking to sign the double taxation avoidance agreement. That definitely would be putting the cart behind the horse because the government is not doing things in a way that would get results.
The member for Mississauga South has been desperately seeking answers from successive speakers all morning, and not getting them, about why the Americans are not ratifying the agreement. He wants to know the reasons why 43 or 45 congressmen have demanded that President Obama not ratify it. He points out that Panama signed and ratified the agreement within 13 days, yet after 3 years the United States has not ratified, nor is it likely to be any time soon.
The reality is 45 American legislators have resisted signing. Part of the reason is the Americans are aware that 350,000 corporations have offices in Panama to shelter income. In order words, they are taking advantage of the tax haven status. One of the corporations is none other than AIG. AIG received gazillions of dollars in bailouts just two years ago and it gave a huge amount of bonuses to its executives six months later. Now AIG is suing the U.S. government for $306 million in back taxes it claims it is owed because of the use of one of its Panamanian corporate entities. It wants to involve itself in tax havens like Panama—