Mr. Speaker, I rise to speak to Bill S-3 from several vantage points.
Bill S-3 is a fairly conventional taxation bill with regard to establishing international relations with the countries as described in this bill. In this case, the countries are Colombia, Greece and Turkey.
My party always has concerns over a bill that does not emanate originally from this House, as opposed to the other House. That is particularly true given the gross abuse of democracy we saw flowing from that other House last week, as it killed a bill that had substantial democratic support from this House, the elected House. We always have a concern when we see this, but I have to say that when we look at the purpose of this bill, as opposed to the one the other place voted down last week, it is so typical of that House that the bill would be coming through it, because this bill is really about establishing favourable tax arrangements to avoid double taxation. It is the type of elitism we see in that House that permeates the background of this bill.
We are saying to the government that its approach of using the other place the way it has, both to defeat bills that this House has passed and to initiate bills into this House, is a practice that really should stop. From a democracy standpoint, that House has no credibility. To use that House in the process of passing legislation and laws in this country is a fundamentally flawed approach to democracy.
The second concern we have with this bill will come as no surprise to this House or people who have followed our relationship with Colombia and the gross abuse of human rights that has occurred in that country and our opposition to the free trade agreement that has passed this House, which is giving it favourable arrangements with our country that it has no entitlement to, from the perspective of human rights as practised, or abused, in that country.
There is no possible way we can see extending a positive relationship between ourselves and Colombia until such time as it ceases those kinds of practices. The number of deaths, both in the aboriginal community and within organized labour and among workers generally in that country in the last few years, is so offensive to the values of this country, of Canada, that we should not be having any arrangements of this kind with it.
With regard to the other two countries, it is quite clear that the bill is doing what it has conventionally done, which is to try to avoid double taxation. We sort of have this image that the concept behind this bill and these conventions that we are entering into with these other countries is to avoid double taxation. This image is probably not the most common one that should be applied here, as members will see with some of the points I am going to make with regard to what is in the convention.
My colleague from Outremont used the example of the couple who are spending part of their working year in Canada and part in one of the other countries and making sure that they are not double taxed in both countries. This agreement obviously addresses itself to that.
It goes way beyond that, and I want to just go quickly through the areas it does address. It deals with the issue of residency. The type of revenue one is generating will define whether the taxation is going to occur here in Canada or in the other country. It deals with that fairly extensively at the beginning of the convention that we are now entering into if this bill goes forward, which it appears it will, given that it has support from the official opposition.
It then goes on to list the various types of incomes that one can have. It is important to note these because the approach as to how we will tax those incomes will vary by the nature of the income. I am not going to go into that detail because it just becomes too complex, but we deal separately with income from immovable property, from business profits and from the shipping and air transport sector of the economy. It then goes into a general category of associated enterprises.
It then goes on to other types of income with regard to dividends, interest from investments, royalties. It deals specifically with the capital gains area, which is always a problem between states as to how that will be taxed. It deals with general income from employment and for directors fees. It deals specifically with artists and sportspersons, which has become more of a problem in both those areas. It deals specifically as to how their incomes will be taxed. It finishes off with pension and annuities both in terms of how it will tax those and how they will be received, and there are some agreements in that regard.
It then goes on, under a separate category, to deal more specifically with the taxation of capital gains and capital loses, setting out criteria the countries we agree to follow.
It deals with one final area that is important to note because of some of the scandals we have had. I think members in the House agree we have taxation so the government generates revenue so it can provide for the needs of our society. Whether that is creating a military and supplying the resources it needs, to providing government pensions for those who are in retirement or disabled, assisting the provinces with health care, we can go down the list as to why we tax.
There is of some concern with this convention. Although it begins to address the abuse that we see regularly of corporations in particular, but wealthy people more generally, moving their assets offshore, both in terms of assets that continue to generate revenue but otherwise capital assets offshore to avoid taxation in the country, it does not address it very well. We have seen that any number of times.
We have seen it with some of the scandals that have flowed out of Switzerland, Liechtenstein and a couple of banks in Belgium that have facilitated this abuse. What it is really about is fair taxation, that everyone, individuals and corporations, pay their fair share so the needs of society are met. If one segment of society is intentionally and regularly avoiding its responsibilities by moving assets offshore, we should be doing whatever we can do to bring that in line and seeing that those assets are taxed appropriately and fairly to society as a whole.
We cannot do that without co-operation from the international community. It is just impossible to do it as a sovereign country by oneself. We need to have co-operation with the state to where the assets flow.
We have seen the kind of abuse particularly with Switzerland. Because of its banking system, it has been able to shield abusers over the last 100 or better years who have abused their responsibilities to pay a fair share of their taxes. We are beginning to break through that in many ways.
We saw horrendous abuse in that regard with protection that it gave to organized crime and to the Nazis and fascists both during and after the second world war. We are breaking this down in that country, but it is occurring elsewhere. The bill would not address that to any significant degree. The only point it goes to in that regard is it requires both countries at either end of this relationship to share information if that data is compellable in the country of origin.
Beyond that, the bill would do nothing to increase our ability to, in effect, enforce our tax laws in our country or to ensure that the tax laws in the country with which we have entered into this convention are enforced, oftentimes with assets that may have flowed from our country, whether it is income or capital assets.
It is obviously a flaw in these conventions. I come back to Colombia. Given the high level of corruption in that country, it is going to be a particular problem and it is not going to help us at all. Quite frankly, I seriously doubt the ability of the government of Colombia to enforce those parts of the agreement and to see that taxation is done fairly. If assets are being secreted in that country from Canada, I doubt it will share information with us so we can deal with it in an appropriate way. That is clearly a flaw in the agreement. I do not think we are in any position, as a party, to support that part of it.
With regard to Greece and Turkey, we would generally be supportive. Our relationship with both those countries is well established and well founded. They are countries that overall have a strong reputation of co-operation with Canada. It is appropriate that we enter into these types of arrangements them, whether it is with regard to how we deal with retirement pensions. We see pension moneys flowing between the two countries in some substantial amounts, so it is appropriate we deal with that. It is appropriate they are there to assist us if there is abuse of the taxation process in their countries, of assets flowing into Canada or out of Canada into Greece or Turkey. We have no problem supporting that, but we have very serious problems with regard to Colombia.
This is one of those bills, because of where it has come from, that we cannot support. Because of the arrangements with Colombia, we cannot support it. Support from our party would flow with regard to Greece and Turkey. It is a step in the right direction when we enter into conventions with those countries. They are countries we can deal with in a honest and trusting manner.