Mr. Speaker, from the outset, I wish to inform you that I will be sharing my time with my colleague from Brome—Missisquoi.
The NDP is in favour of this bill. For once, the Conservatives cannot accuse us of always being against the government. We are in favour of this bill, essentially because it is purely technical. It implements bilateral tax treaties with a certain number of countries, including Namibia, Serbia, Poland and Hong Kong, and makes amendments to treaties with Luxembourg and Switzerland.
This bill is worthwhile. It will make things easier for people who want to pay their taxes, who are not trying to defraud the government. Why would we be against virtue? We are pro-virtue. We are totally in favour of making it as easy as possible for people to pay taxes. However, I want to mention something important. Under Canadian tax law, any taxes paid in a foreign country are deducted from our nation's revenue. So much for savings.
This new rule makes it easier to pay taxes. Nothing more. If the government suddenly decided to harmonize tax regulations to make it easier for people filling out their tax returns, we would very much support that.
We disagree when the Minister of National Revenue and the Minister of State for Finance tell us that the bill is an important step in the fight against tax evasion. Nothing could be further from the truth, and that is dangerous. The head of our country's finances is telling us that this bill offers a way to combat tax evasion. That is not true. All this bill does is make it easier for people who want to pay taxes to file their tax returns.
I want to point out to the House that Luxemburg and Switzerland are tax havens. These countries allow financial institutions to have numbered accounts and to be protected by banking secrecy. This enables people to hide money and do so secretly. This will continue to be allowed. Switzerland will co-operate if we present a warrant and proof of criminal charges. However, it will not tell us whether the main people involved in trafficking cocaine in Canada have bank accounts there. Let us be realistic: we cannot expect any co-operation from them. It is quite sad.
The Auditor General already indicated that Canada's tax debt has significantly increased. It has jumped from $18 billion to $29 billion. These are people who openly declare that they owe money. Quite often, if they do not pay it is not because they are dangerous criminals but because they simply cannot.
When you are stretched to the limit because you have to pay your mortgage and car and grocery bills, and maybe buy clothes for your children from time to time, you might not be in a position to pay taxes. Self-employed workers are a good example of that. When they get a cheque, they do not set part of it aside to pay taxes. When they get that cheque, it is already spent on everything they owe. They do not want to cut their electricity or telephone, so that is what they pay. That is what accounts for the $29 billion. That amount is absolutely not owed by people who have made use of tax havens. These are our neighbours, our friends and our parents who had a hard time paying taxes because they had too many other bills to pay. Paying taxes is an expense, just like groceries or the electricity bill.
This is a problem. When people cannot pay taxes, they are not able to pay all their other bills either. The $29 billion represent a lot of people who will file for personal bankruptcy. That is quite often the problem.
The second problem with the $29 billion is that the greater the debt, the less likely it is to be repaid. This bill does not solve this problem, and that is truly unfortunate. The bill is being presented as a significant piece of legislation that will get results. In fact, I do not deny its positive effects for people who are willing to pay taxes. Rather, the problem I see concerns those people who are unable to pay taxes either because they do not earn income or because they have too many bills to pay. The household debt ratio is now at 163%. The bill will not mitigate this problem.
There are huge numbers of tax havens, and Canadians have put their money in well-known tax shelters. Indeed, $53 billion has been invested in Barbados, $25 billion in the Cayman Islands and $23 billion in Ireland. A total of $13.8 billion has been invested in Luxembourg, a country with which we have treaties. Bermuda has received $13.2 billion in Canadian investments. This represents 51% of Canada's foreign bank investments. This figure has doubled since 1987.
What was the government's response? It decided to cut the Canada Revenue Agency's budget by $250 million. Europe, Spain, Italy, Portugal and Greece are in a deep economic slump, largely because they did not collect the taxes owed to the government. Not paying taxes is a national sport in those countries.
The level of debt in those countries shows that these people are particularly adept at tax evasion. Why do they do it? Simply put, it is because tax equality is non-existent. Why ask someone to work 40 or 60 hours a week to make ends meet and pay taxes when he knows full well that a mafia member in Sicily, a crooked politician in Greece or a flashy real estate developer in Spain will not pay taxes?
Why ask someone to keep paying taxes for services when the rich are not paying those same taxes? The poor man is paying the rich man's share. That lack of tax fairness is the main reason people in certain European countries avoid taxes and shirk their responsibilities. This government is leading us down exactly the same path.
Instead of saying that they will do things differently since Spain's and Italy's economies have tanked, the Conservatives are following the worst examples. Then they say that they are doing well, that they are among the best. They should not be following the worst examples then. This problem will not go away overnight. Tax evasion requires two things. First, it requires the means to do it without getting caught. Second, it requires motivation, which exists when tax fairness does not.
The NDP has proven its good faith by supporting technical measures such as this bill. However, do not try to tell us that this law will solve the problem of tax evasion. That is untrue.