Debates of June 10th, 2013

Tax Conventions Implementation Act, 2013

[Murray Rankin, NDP, Victoria, BC]

Mr. Speaker, I would agree entirely with my colleague's thoughtful intervention.

It is a matter of some sadness to me that the government's rhetoric is all about going after tax evaders, all about a crisis and tax havens and so forth. The government announced a while ago that it was going to put $30 million over five years, having already cut 2,000 people from the job and $250 million. We are now supposed to believe this serious action.

What Canada is doing is an embarrassment at the international level. The Globe and Mail reported on it recently. The Financial Post has reported on it. It is not me that is saying it.

Canada has to get on board with automatic tax information exchange agreements, measuring the problem, doing the kind of things that Mr. Cameron, a Conservative prime minister, wants to do, not just talk and do so little.

[Philip Toone, NDP, Gaspésie—Îles-de-la-Madeleine, QC]

Mr. Speaker, I would like to thank the member for Victoria.

I know that he works very hard in his riding, and I am sure that his constituents greatly appreciate the fine job he does representing them in the House of Commons. His comments on fiscal issues are second to none.

Today being Tax Freedom Day, the member has made it very clear that when it comes to overseas tax evaders everyday is Tax Freedom Day. The government has a lot to be reproached about for making it possible for Canadians to celebrate Tax Freedom Day today, but it is not talking about everyone else who is evading paying their taxes. This day could actually come much more quickly than what the government leads us to believe.

We need to work a lot harder at this. The member's speech made it clear that there were a lot of things we could do that could lead to much better tax fairness in the country.

Just today, Canadians for Tax Fairness indicated that Statistics Canada surveys have indicated that overseas Canadians are putting away in the 12 biggest tax havens in the world over $170 billion worth of revenue that the government could be taxing. I wonder if the member could speak more to the fact that perhaps the government is unaware that all of this money is available.

What makes the Conservative government so slow at reacting to this when we know this money should be taxed in order to pay for the services Canadians deserve?

[Murray Rankin, NDP, Victoria, BC]

Mr. Speaker, the amount of money that the same organization, Canadians for Tax Fairness, has indicated every year is lost bears repeating. Its study shows it is $7.8 billion. The Tax Justice Network, of which it is a part, has done enormously good work around the globe in trying to come up with a figure. As I said, the Conservative government refuses to even try to measure that tax gap.

I think the reason the government does not see this as a problem is that it does not see it through the lens of investment. If it characterized this as making an investment of a few billion dollars in return, maybe that would get through to it, maybe then it would see that this could be an investment well worth making.

It is an issue of fairness all right because that $7.8 billion would, as my hon. friend said, allow us to reach Tax Freedom Day months earlier, because that $7.8 billion would now be available, even some portion of it, so we would have more money so Canadians would achieve tax fairness a few weeks or months earlier.

There are fairness issues and there are equity issues, but there are simple bottom line issues. If the government saw it as an investment, maybe then it would get it.

[Anne Minh-Thu Quach, NDP, Beauharnois—Salaberry, QC]

Mr. Speaker, I would like to thank the member for Victoria for yet another informative speech. He always provides statistics and specific examples. It is clear that he does his homework before sharing his point of view.

Something he said earlier really struck me. A total of 3,000 full-time positions will be cut at the Canada Revenue Agency. The people being cut will not be able to investigate the money being lost to tax havens. Billions of dollars are lost and are not being reinvested into the fight against climate change, for example. It would mean more money in our economy.

The Conservatives made $29 million in cuts to Parks Canada when we are trying to attract visitors. Our parks create ecotourism jobs, for example, which means jobs for the regions. The Conservatives are slashing family farms. They are cutting everywhere; meanwhile, the money from uncollected taxes could be reinvested in my area's economy, ensuring sustainable, high-quality positions.

Can the member again explain how all these job cuts—and the fact that we are losing money that should be coming back to us from companies—are negatively affecting our economy?

[Murray Rankin, NDP, Victoria, BC]

Mr. Speaker, I appreciate that the hon. member has put these cuts in the personnel of the Canada Revenue Agency in a very interesting context and much broader context. She talked about parks, climate change, family farm regulation and so forth.

The cuts the government has made to public services to Canadians are having real impact. I know the Conservatives like to say that these are back office jobs that have been cut and we should not worry, that it will not affect their fight against tax havens. That is what they say in the context of CRA.

In my community of Victoria, I keep getting seniors telling me that they do not have telefile anymore. There is no front counter service. That has all been cut. It is as if we are supposed to believe, with the millions and millions of dollars that have been cut and, if I use the government's figures, 2,568 more people will be cut after the budget goes through, that this has no consequence in the real world.

What do the Conservatives think we are? Of course there will be consequences and the examples the hon. member has given on climate change and parks are just examples that we could replicate throughout Canada Revenue Agency's experience just as much.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, it is a pleasure to rise to speak to Bill S-17. Taxation and taxes is always a hot topic. No matter what day of the year it is people always want to talk about taxes. One thing that they like to tie to taxes is the idea that it is an absolute necessity. Government has to generate revenues and part of those revenues is taxes. I will make reference to a multitude of different types of taxes shortly.

I will first start off from the whole aspect of what I made reference to earlier today. There are some bills that I believe are fairly straightforward, standard and receive a considerable amount of support. When we look at Bill S-17, we find there is substantial support of all entities in the House to see the bill ultimately pass. The objections are reasonable in what it wants to accomplish. I do not think we have too many advocates suggesting that we should be creating tax havens. We might hear some differences in whether the government is doing enough. Again, I will provide some further comment on that point shortly.

First and foremost, what I want to start off with is why we have Bill S-17 before us today and the manner in which the government has brought it forward. It concerns me because even though the bill we have before us is relatively non-controversial, the government has made it more controversial. The reason why we might want to speak to it that much more is because of the manner in which the government has chosen to bring in the legislation.

I have been a parliamentarian for a number of years and have had the opportunity to negotiate session wind-ups, albeit at the provincial level, but it is a parliamentary system very similar to the type of procedures that happen in the House of Commons. As we look to our days winding down here, in my beloved home province of Manitoba the legislature is winding down its session. However, it looks as though its session will go on well into July if we believe some of the reports. What is interesting about that with respect to the relevancy of that bill is that it is all about taxes.

In Manitoba, the NDP government of the day is increasing the provincial sales tax from 7% to 8%. There is an issue surrounding the balanced budget legislation. There was supposed to be a referendum, but that was not held. I suspect the reason being is that the government would likely lose the referendum because there is no appetite to see the provincial sales tax increased, especially when the province next door is decreasing its sales tax and that gap continues to grow. The bottom line is there is a bit of a stalemate happening there.

As much as I might not necessarily be a strong advocate for the New Democrats in the province of Manitoba, I do respect the fact that they are going through a process and are not yet putting in limits in the form of closures, from what I understand. This is with respect to a bill that is exceptionally controversial and no doubt will receive hours of debate and go into committee, which is a different system. I believe there are close to 200 Manitobans who have expressed an interest in wanting to talk about taxes in that legislation. Therefore, there is what I classify as due process. There they have controversial legislation where there is no unanimity within the legislative chamber.

Contrast that to Ottawa, where we have a bill, subject matter, taxes, tax evasion and tax havens. We seem to have wide support for the bill and its passage. Yet we have a government that has brought in time allocation. This is not the first time it has brought in time allocation. I believe this is already the 40th, 41st or 42nd time that the government has brought in time allocation. I have had the opportunity on numerous occasions, probably 30 times or even more than that, to stand in my place to talk about the serious nature of time allocation. It is serious, when we have a majority government making a decision before the House to define the amount of time to be allocated for debating Bill S-17.

When I listened to the Minister of State for Finance, he indicated that we have had a piece of legislation before the House for 100 days, trying to give people who may be following the debate the impression that for 100 days, we have actually been debating Bill S-17, and that the government is doing us a huge favour by bringing in time allocation.

Nothing could be further from the truth. We might have had a few hours, not even a full day of real debate inside the House of Commons on this issue. Yet it is the perception. The government has made the decision that it will limit the amount of opportunities for members of Parliament to address the issue of taxes.

When I had the opportunity to review Bill S-17, I had the opportunity to talk about taxes in general and the whole issue of fair taxation, spending smarter and so forth. I believe that is what the constituents of Winnipeg North would want me to do, to express concerns I might have on the legislation and to talk about taxation policies.

We have 300-plus members of Parliament, and the government has said that it wants a very limited number of MPs allowed to speak to this legislation. I am grateful to my party. It made sure I was afforded the opportunity to express my concerns. On this bill, I suspect that if there was any goodwill coming from the government House leader, maybe even working with the Minister of Finance and approaching opposition parties, negotiating, talking about what kind of legislation it is, how many hours would we like, then respective caucuses could work with their colleagues to get a sense of how long the debate could or should be.

We have all sorts of ways to enable legitimate, full, wholesome debate on bills that are deemed important, where members of Parliament want to stand up and address their concerns. The government, through this whole time allocation addiction it has, is preventing that.

The unfortunate things is that in principle we support Bill S-17 because of its objectives and what it hopes to accomplish. I suspect it may not even have required five hours of debate. I do not know, because we had no sense of interest within our own caucus or whether it was brought to our caucus; I have no idea how many New Democrats would have chosen to speak to it.

Even though in principle I support the bill we are talking about, what upsets me is the fact that the government continues to use time allocation in order to get through its legislative agenda.

I want to emphasize how important it is that we recognize that we have seen a significant change in attitude in the Prime Minister ever since he received his majority Conservative/reform government. It has been a significant shift in attitude. He has been very disrespectful toward individual members when it comes to their participation in debate.

The government has invoked time allocation, another form of closure, on legislation that definitely should have had a lot more debate. As a result of the government's inability to negotiate in good faith, now we find that every time it introduces a bill, either one day later or even sometimes on the same day, a time allocation motion is invoked. We are seeing that again today on Bill S-17. That lack of respect for proper procedure inside the House of Commons is going to hurt the government. Conservative members may not realize that today, but at the end of the day, it will have an impact.

Canadians respect our democratic system. They appreciate the fact that there is a proper process to be followed. The degree of the Conservative government's lack of respect for due process will become better known. It is an issue I plan to raise significantly going forward, because the frequency is the greatest insult to the House.

I will conclude my remarks on the issue of the process by saying very clearly that no government in the history of Canada has used time allocation in the fashion the Conservative government has, and we are only two years in to a majority government. I want to emphasize that particular point.

Let me get to taxation.

When we look at what the bill would ultimately do, we think of achieving bilateral agreements. What we are attempting to do is ratify them through this legislation. We can have as many of these bilateral agreements as ultimately can be developed and passed through the House, but that will not really address the issue to its fullest degree. If we want to deal with the issue of tax avoidance or people hiding money or not paying their fair share, then we have to look at resources and to what degree we are allocating resources to those authorities, such as the Canada Revenue Agency, and its ability to go after those individuals who feel they do not have to pay their fair share of taxes.

Former prime minister Paul Martin allocated $150 million to combat international tax evasion. We took the issue of tax evasion very seriously, so $150 million was put in the Liberal Party's last budget in order to combat tax evasion. If we follow that through, in 2009 we could ultimately argue that $150 million had a fiscal impact of about $2.5 billion. When we think of how effective that $150 million was in terms of being able to return $2.5 billion to the coffers in some fashion or another, that shows very clearly and decisively just how effective it would be to allocate the appropriate resources in order to avoid tax evasion. That is very important.

The other issue is with respect to bilateral information. At the end of the day, bilateral information or establishing some sort of an exchange framework is one way to deal with this. Those who participate in tax evasion are very creative: they come up with different ways to avoid having to pay taxes. Working toward the larger, multilateral information exchange framework is ultimately the next best way, I would argue, to clamp down on those companies that are participating in tax evasion.

I want to very briefly comment on the issue of taxation, in general.

We all know that governments need to have revenue in order to function. What I would like to see, and I believe what most Canadians want to see, is that the money collected is in fact being spent smart. As a taxpayer, I want, number one, to pay my fair share. I do not want to have to pay more, but I am prepared to pay my fair share. I think a vast majority of Canadians have that attitude. The other concern is that they want the sense that those tax dollars are being spent wisely.

On both of those fronts, there is a wide belief that this is not taking place today. It does not matter what level of governance, there is this suspicion that the government is just not doing enough. I think what we need is the Prime Minister and his government to take the issue of tax evasion more seriously and look at how we can have multilateral agreements to ensure that those who try to avoid paying taxes are held accountable. The government, the Canada Revenue Agency, must be empowered to do what is necessary to ensure that people pay their fair share. I believe that is quite reasonable.

When I look at Bill S-17, it is a step forward. However, I do not believe that the government is doing enough. All we need to do is look at the last Paul Martin budget where there was a huge investment of tax dollars to deal with the issue of tax evasion. The return for that $150-million investment was overwhelmingly positive.

If the government had its priorities right, I think that there is so much more out there that we could benefit from. A more aggressive government would ensure that all Canadians paid their fair share.

I will save my comments in terms of spending that money in a better fashion for another debate on another bill. For now, suffice it to say, there needs to be a lot more improvement.

I will conclude my remarks by saying when we talk about taxes, it is important that we recognize that taxes come in many different forms, whether it is hiking up tariffs, the PST, income tax and many others. I look forward to this bill passing. If there are any questions, I am more than happy to answer.

[Philip Toone, NDP, Gaspésie—Îles-de-la-Madeleine, QC]

Mr. Speaker, I thank my hon. colleague for his interesting remarks. However, they were sometimes difficult to follow. It is hard to know whether the information was 100% reliable.

For instance, he said:

Those who participate in tax evasion are very creative.

I would like to point out that Paul Martin himself was perhaps a little too creative when it came to tax evasion. Representatives of his family business, Canada Steamship Lines, were repeatedly criticized for failing to pay their fair share when they created subsidiaries in Barbados, for example. Barbados is a known tax haven.

Frankly, it is pretty hard for us to understand how the Liberal Party can tell us that, on the one hand, it spent up to $150 million to fight tax evasion, while on the other hand, the prime minister of the day owned a business that seemed to be evading taxes. I am having a very hard time understanding my Liberal colleague's logic.

If Canada Steamship Lines, which has subsidiaries in Barbados, did not pay its fair share in either Canada or Barbados, how is it that the Government of Canada spent $161 million on contracts with Canada Steamship Lines and its subsidiaries until 2004, the last year for which I have statistics? Yet, Canada Steamship Lines did not pay its fair share of taxes.

I am having a very hard time understanding my Liberal colleague's point. I would like him to explain Paul Martin's tax evasion.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, the important word the member used was “seemed”. He said it seemed as if there was tax evasion. If the member genuinely believed what he is trying to give the impression of to those who might be watching, then he should feel comfortable enough to go outside of the House of Commons chamber and say that the former prime minister did some sort of illegal activity and make the accusation he just made here outside the House. I suspect his comments would be greatly watered down.

If we want to talk about individuals, we have to be very careful. If I were to bring up individuals, much as we have seen the Conservative caucus do during S. O. 31s, where they constantly cite not one but two NDP, and I underline “NDP”, members of Parliament who are not paying their taxes. The member needs to be very careful. I would argue that there is an equally strong case to be made, if not a stronger case to be made, with regard to his two colleagues, members of Parliament who sit with him today, than there is with former prime minister Paul Martin. If he believes that Paul Martin did something illegal, then I would challenge him to have the courage to say outside the House that there was illegal activity and let Canada Revenue Agency know about it. However, I suspect he would not do that. I suspect that because he used the word “seemed”.

Let there be no doubt that there are many Canadians across the country who, when they process their tax returns, look at ways to minimize the amount of tax they have to pay, and there is nothing wrong with doing that. The problem is when individuals choose not to pay their taxes, as are the allegations with two of his colleagues, which is a problem, or when people conduct themselves in an illegal way to avoid paying taxes.

I do not think the Liberal Party has to make apology any more than the New Democratic Party, especially if we apply the relevance of time. As of today, there are two members of his own caucus whose behaviour is being questioned on the issue of paying their fair share of taxes.

[Jasbir Sandhu, NDP, Surrey North, BC]

Mr. Speaker, I heard the question from my hon. colleague, and I think he was talking about closing the loopholes that currently exist in our system. The newspaper this morning said that Canadians for Tax Fairness cited recent statistics from Statistics Canada that show that in the top 12 tax havens around the world, Canadians have stocked away $170 billion. If we taxed those $170 billion, we could have $7.8 billion in additional revenue. Where is that additional revenue going now? It is going on the backs of Canadians.

I googled “tax evasion” just now, and the top four or five news articles say that France is expanding its inquiry of tax evasion, India is also going after tax evaders, the U.S. is cracking down on virtual currency tax fraud and the headline in the Ottawa Citizen says, “Canada slammed for lagging behind in fighting tax evasion...”. This is from just punching it into Google. This is just today's news.

I know the G8 summit is taking place. It would appear that Canada has been dragging its feet and we can do more to collect that $7.8 billion. I would like the member to comment on that, please.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Absolutely, Mr. Speaker. I applaud the member for the question. At the end of the day, we lose billions of dollars in annual revenues that should be coming into our coffers. Can anyone imagine what we could do with those billions of dollars? It could go to deficit reduction, reducing other forms of taxes for the middle class and others, or not having to increase other forms of revenue. If only we had a government that was prepared to do more.

Canada is lagging behind, and that is the reason I used the example of the $150 million that was put into fighting tax evasion back in 2005 under the last Liberal administration. That $150 million is ultimately responsible for generating close to $2 billion. That is a whole lot of money that I would argue assisted in preventing us from having to increase other taxes.

Again, I want to emphasize that Canadians as a whole believe that taxation is something in which people have to participate. People have to pay taxes, but we ask that taxes are fair and that we do not allow individuals to get away with things such as tax evasion. This upsets people, and justifiably so. People who put in 40-hour work weeks making $20 or $25 an hour, or whatever it might be, are paying hard taxes. They want to ensure that the guy who is making $3 million a year or $500,000 a year is also paying his taxes. They have a right to feel comfortable in knowing their government truly cares, to the degree in which it is going to fight to ensure that everyone is paying their fair share.

We need to invest more time, energy and resources, and work toward international multilateral agreements on information sharing.

[Wladyslaw Lizon, Conservative, Mississauga East—Cooksville, ON]

Mr. Speaker, I appreciate the opportunity to speak today to the second reading of Bill S-17, the tax conventions implementation act, 2013.

Over the years, our government has worked hard at signing many tax treaties to help improve our system of international taxation. Bill S-17 would add to Canada's ongoing measures to update and modernize its network of income tax treaties with other countries, which is one of the most extensive in the entire world. Canada has tax treaties in place with a whopping 90 countries, including most of our major trading partners, and is working on agreements with other jurisdictions. Bilateral income tax treaties like the one before us today help us to prevent double taxation, thus creating tax fairness for all Canadians, and ensure everyone pays their fair share, something we know we must do.

Tax treaties also eliminate tax barriers to trade and investment. As we noted in the economic action plan 2013, deeper trade and investment relationships in more overseas markets help support jobs and growth in Canada. In this respect, Bill S-17 would provide benefits to both taxpayers and governments by setting out clear rules that would govern tax matters relating to cross-border trade and investments. The treaties covered in Bill S-17 would promote certainty, stability and a better tax climate for taxpayers and businesses in Canada and these treaty countries. While these treaties would help to secure Canada's position in the increasingly competitive world of international trade and investment, they would also help combat tax evasion.

While Bill S-17 is a relatively standard, routine and innocuous piece of legislation, these new and updated treaties would strengthen Canada's already-strong network of tax treaties. Bill S-17 proposes to implement tax conventions, either new or updated, with Canada and Namibia, Serbia, Poland, Hong Kong, Luxembourg and Switzerland. With these six new and updated treaties adding to the 90 tax treaties already in existence, we could be proud that Canada boasts one of the largest networks of bilateral tax treaties, ensuring a fair and competitive international tax system.

I mentioned previously why the legislation before us today is a standard fare, but it is nonetheless very important in achieving the above goals. Bill S-17 would help to stop tax cheats and help to combat tax evasion. It would create tax fairness and prevent double taxation. Finally, it would help improve international trade and investment.

Cyndee Todgham Cherniak of LexSage Professional Corporation said this recently to the Senate banking committee:

Tax treaties facilitate trade. Tax treaties are symbols of cooperation, trust and friendship between nations. Tax treaties prevent double taxation.... They improve stability, transparency, fairness, procedural fairness and tax certainty relating to international trade and transactions. Tax treaties are good for Canadian businesses with activities abroad through branches, subsidiaries and other business enterprises. Tax treaties are good for individuals, employers, directors of corporations, students, shareholders, et cetera.

We can all agree on the importance of working with other countries to provide tax fairness for Canadians, and the bill before us today would do just that.

Tax treaties like those in Bill S-17 complement our Conservative government's overall commitment to a more competitive tax system, one that improves the standard of living of all Canadians. Tax treaties like those in Bill S-17 directly support and encourage cross-border trade in goods and services, which in turn helps Canada's domestic economic performance.

Moreover, Canada's wealth as a proud trading nation depends on a strong global marketplace where information, investment and technology flow with ease.

In fact, during the Senate committee's examination, Nick Pantaleo, a well-respected tax expert with PricewaterhouseCoopers LLP, remarked that:

...a key objective of the Canadian government is to pursue new and deeper international trade and investment relationships. This is not surprising given that more than 60 per cent of the Canadian economy and one in five jobs in Canada are generated by trade. In my view, tax treaties contribute towards the success of such global trading arrangements.

Accordingly, the tax treaties contained in Bill S-17 are a critical tool in strengthening Canada's trade and investment relationships, creating jobs for Canadians here at home.

How does Bill S-17 do that? I would like to take a moment and discuss one particular issue dealt with in this legislation and tax convention implementation through the years, preventing something called double taxation.

Double taxation in the international sense arises as a result of the imposition of taxes in two or more countries on the same taxable income for the same period of time. The treaties in Bill S-17, through bilateral rules, would help avoid double taxation and ensure that taxpayers pay tax on the same income only once.

The Canadian income tax system generally taxes residents on their worldwide income. However, in recognition of the fact that a foreign country may also have a right to tax income earned in that country by a Canadian resident, Canada will provide a credit for foreign income taxes paid, and vice versa. Indeed, if this rule did not exist, there would be unfair consequences for taxpayers, who would be punished for trying to grow or expand their Canadian businesses internationally.

Simply put, nobody should have their income taxed twice—at least, this is what we think on this side of the House. The exception may be the high-tax NDP. Unfortunately, without a tax treaty like those contained in Bill S-17, that is exactly what would happen, and I am happy this legislation will address that problem.

In the time I have left today, I would like to single out how Bill S-17 would be beneficial to Canada's relationship with its dear friend, Poland.

Canada and Poland enjoy a close relationship, including growth in trade and investments as well as increasing military co-operation and academic relations programs. Canada is home to a vibrant community of nearly one million Polish-Canadians, and since 2008, Poles can travel to Canada visa-free with their e-passports, further expanding people-to-people ties among our citizens.

In February 1998, Canada was the first North Atlantic Treaty Organization country to ratify Polish accession to the organization. Since then, Canada has become a leader among NATO countries in language and peacekeeping training in Poland, with hundreds of Polish officers and senior general staff having received training in Canada and Poland.

Further, Canada and Poland co-operate closely through multilateral initiatives as valuable partners in NATO, in Canada-EU relations and across a wide range of United Nations organizations and initiatives, including the International Security Assistance Force in Afghanistan.

With regard to academic relations, there are seven Canadian studies programs in Polish universities that conduct research, offer courses and organize conferences on Canada. Some have extensive library holdings and are a rich source of information for Polish students, researchers, academics and the general public.

Finally, Canada and Poland are also seeing rapid growth in our cultural relations. Canadian artists frequently entertain audiences in Polish cities.

Given our two countries' close ties, in 2009 two important agreements between Canada and Poland came into force: the social security agreement, which coordinates pension benefits between the two countries, and the youth mobility agreement, which allows youth from Canada and Poland to travel and work in the other country for up to one year.

In May 2012, during Polish Prime Minister Donald Tusk's visit to Canada, a new tax convention that will reduce tax barriers and encourage increased trade and investment between the two countries was signed.

This convention is a significant element of Bill S-17, which will further develop and facilitate Canada and Poland's mutual economic relationships and will eliminate double taxation with respect to taxes on income and on capital.

The impetus for the new convention with Poland, which was signed on May 14, 2012, was the need to replace the existing tax convention signed in 1987 in order to reflect current Canadian tax treaty policies.

The new convention will continue to contribute to the elimination of tax barriers to trade and investment between Canada and Poland and will help further solidify the economic links between us.

This convention remains consistent with the government's long-standing commitment to seek out new trade and investment opportunities for Canadians and to promote economic prosperity.

In addition to the close relationship Poland and Canada share, we also enjoy excellent trade relations. Poland is Canada's largest merchandise trading partner in central and eastern Europe. In 2011, the value of bilateral trade was $1.69 billion.

Canadian exports to Poland amounted to $251 million and included primarily machinery, electrical and electronic equipment, mineral ores, scientific and precision instruments and vehicles.

Canadian imports from Poland were valued at $1,439 million in 2011, with top sectors being machinery, furniture and bedding, aircraft and spacecraft products and electrical machinery.

EU membership, coupled with Poland's resilience during the recent global economic slowdown, makes it an attractive investment destination for Canadian companies.

Canadian cumulative direct investment in Poland totalled $411 million in 2011. Major Canadian investors in Poland include such companies as Pratt and Whitney Canada and Bombardier Transportation.

Hon. members, this convention also modernizes the income tax system between our two nations. Most countries, including Canada and Poland, tax their residents on their worldwide income. Moreover, when a resident of a particular country derives income from sources in another country, it is not uncommon for that other country to subject that income to tax.

The convention recognizes this international taxation dynamic and sets out under what circumstances and to what extent Canada and Poland may tax the earnings of one another's residents.

The convention also provides that when income, profits or gains may be taxed in both countries, the country of residence is to allow double tax relief against its own tax for the tax imposed by the country of source.

Specifically, the convention sets a maximum withholding tax rate of 5% for dividends paid to a company that holds directly at least 10% of the capital in the company that pays the dividends, and a maximum rate of 15% in all other cases.

The convention also generally limits to 10% the maximum withholding tax rate on interest and royalties. As well, the convention limits to 15% the maximum withholding tax rate on payments of pension income.

It includes a provision that limits the potential for double taxation arising from the application of Canada's taxpayer migration rules without restricting Canada's ability to tax its departing residents under pre-departure gains.

Finally, it includes the latest standard of the Organisation for Economic Co-operation and Development on exchange of tax information in order to assist Canadian tax authorities in the administration of Canadian tax laws.

In conclusion, trade and foreign investment are major engines of economic growth. Canada relies on open markets as a source of opportunity and a stimulus to efficiency, which in turn contributes to economic growth and rising incomes. Openness to trade, investment and global economic engagement are thus critical to Canada's long-term prosperity.

Bill S-17 is another step forward in ensuring the reduction of trade and investment barriers with our close ally, Poland. Considering the close relationship Canada and Poland have, it is only fitting that we ensure that our tax policies reflect the same mutual advantages. Further, Bill S-17 adds to Canada's low-tax commitment, ultimately allowing Canadians to keep more of their hard-earned money.

Since 2006, we have introduced more than 150 tax relief measures for Canadian families, individuals and businesses. The overall federal tax burden is the lowest it has been in 50 years. As a result, the average family of four now receives over $3,200 in extra tax savings. Going forward, we will continue to open markets and keep taxes low in pursuit of our main objective of increasing jobs, growth and long-term prosperity.

With that, I urge all members to vote yes on Bill S-17 and yes to closer Canada-Poland relations, stronger international trade relations and tax fairness.

[Matthew Dubé, NDP, Chambly—Borduas, QC]

Mr. Speaker, I thank my colleague for his speech.

He spoke at length about what Canada is doing abroad to combat tax evasion. We support this bill. It is important to note that this is an administrative bill, the kind that comes up intermittently to update various conventions signed with various countries.

The morning papers reported that Canada is not working with other countries to fight tax evasion. Many initiatives are in the works to do just that.

The member talked about the economic power of countries working together, free trade, information exchange and so on.

If those things truly matter to the government, can the member explain why it will not be participating in the efforts of the rest of the international community and why it will not be going beyond the administrative measures we support in this bill?

[Wladyslaw Lizon, Conservative, Mississauga East—Cooksville, ON]

Mr. Speaker, I think the hon. member's question goes way beyond the scope of the bill that we are debating here today. Actually, one of the aims of the bill and those tax treaties is to make sure that people cannot avoid taxes.

I suppose the hon. member understands that all these treaties were negotiated by teams from the respective countries over the years. They came to certain agreements. With the ratification of those treaties, we will move forward to make sure that there are no tax havens, that the information on taxation is exchanged and that residents of our countries would not be double-taxed and would not be subject to unfair taxation.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, one of the things I made reference to when I had the opportunity to address the legislation was the fact that government needed to do more than just bring in the legislation, which is almost a given. One would expect the legislation that we have today.

Does the member not see the value or merit in giving additional resources to the Canada Revenue Agency so it can have the resources necessary to get tough with tax evaders? Does he not agree that would be a good step forward?

[Wladyslaw Lizon, Conservative, Mississauga East—Cooksville, ON]

Mr. Speaker, it is hard not to agree with the member and there is always a way to improve. We should all work together to ensure that everybody pays his or her fair share of taxes. That would include the members of the NDP caucus who chose not to participate and pay their fair share of taxes.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

Mr. Speaker, before I speak, I would like to reply to my colleague's inappropriate statement.

Any Canadian has the opportunity to approach Revenue Canada and negotiate a payment of taxes over time, which is the situation here. It is time the Conservatives stop slurring hon. members of the House.

However, the issue here is the rising loss of revenue to the country by people who evade taxation. The member raised something very interesting. My colleague asked why the government did not go a step further, for example, along the lines of what the U.K. did with Switzerland. It reached an agreement where the U.K. could recoup up to 30% of the taxes that should have been paid to it.

When the government entertained these agreements, why did it not take a harder line in what should be included in the agreement? Do the Conservatives have a shopping list such that they have agreements with 999 countries, or are they actually seeking to improve the system of taxation so we can recover taxes and not have tax evasion in our country?

[Wladyslaw Lizon, Conservative, Mississauga East—Cooksville, ON]

Mr. Speaker, Bill S-17 includes tax treaties with certain countries because some are renegotiated treaties, which is a step forward.

I was speaking about the Canada-Poland treaty, which is an improvement from the previous treaty that was negotiated in 1987. It reflects the new worldwide situation and new regulations in both countries. When the previous agreement was signed, Poland did not have personal income tax. It adopted personal income tax in 1991, which was four years after the previous treaty was signed. Of course this had to be reflected.

Therefore, for all those treaties, when they are renegotiated and up for improvements, we move forward and improve the situation.

[Pierre Jacob, NDP, Brome—Missisquoi, QC]

Mr. Speaker, I thank my colleague for his speech.

I would like to ask him why the Conservatives keep refusing to estimate how much money Canada is losing to tax havens and tax evasion. The United Kingdom, the United States and even Australia have all produced estimates of their tax gap.

[Wladyslaw Lizon, Conservative, Mississauga East—Cooksville, ON]

Mr. Speaker, I indicated in my previous answer that the work did not end. There is always improvement that has to be made. We all work toward ensuring that everybody pays their fair share of taxes in our country.

[Jasbir Sandhu, NDP, Surrey North, BC]

Mr. Speaker, it is very clear from the speeches that we all agree everyone needs to pay his or her fair share of taxes. Conservative members say one thing and do another. If we look at their record, they have cut $250 million to the CRA, which is equivalent to 3,000 full-time employees. If we are not going to make investments in people to go after tax cheaters, how will we collect that?

Would my hon. colleague not agree that we need to make an investment in CRA and hire people to go after tax evaders instead of making cuts to the Canada Revenue Agency?

[Wladyslaw Lizon, Conservative, Mississauga East—Cooksville, ON]

Mr. Speaker, I am surprised anybody would suggest that the efficiency of any organization should be measured by the number of people employed. Many changes have been implemented. There was a lot of investment made in Canada Revenue Agency. There are technological innovations that will help us with the workforce that exists.

Therefore, I do not know why we should say that if there are less employees, we will be less efficient. That is absolutely not true. We are in the 21st century. We do not need 100 million people employed in one agency to be efficient.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Mr. Speaker, I am pleased to rise to speak to Bill S-17. I would have been much happier if this did not come on the heels of another time allocation motion moved by the government.

The government does not want us to debate the principles of this bill. That is what I want to focus my comments on during the 20 minutes I have been given, because this aspect is extremely important. Today, by presenting Bill S-17, the government is telling us that it has everything all worked out.

The Senate had the chance to debate the bill, but I will not get into the credibility of senators for now. The Conservatives think that by introducing this bill, they are accomplishing something. The sad thing is that the opposite is true.

First, let us start off with the issue of what we are talking about here. We have had a number of Conservatives who have tried to raise the issue of tax debt. It is true that on any given occasion, in fact, in every one of the ridings of the Conservatives who are here today, about 6% of Canadians fall behind on their tax debt. As they are Canadians, they endeavour to catch up and pay their taxes. There are those who fall behind and they are Conservatives, Liberals and New Democrats. The important thing is that those individuals eventually catch up. That is part of the $29 billion in uncollected tax debt that is being paid back.

I would like to speak to a broader issue which is the issue of the uncollected tax debt that Revenue Canada is seemingly unable to follow-up on. My colleague from Surrey North mentioned a few minutes ago the issue of the government saying that it was going to take on tax havens and that it was getting that uncollected tax debt. However, at the same time it would be cutting cut one-quarter of a billion dollars out of Revenue Canada's overall expenditures, cut 3,000 employees and somehow this time, even though Conservatives have screwed up pretty well everything else they had over the last seven years, they would get it right.

The Auditor General had something to say about that in the report that came out this spring. It is important to note, when we talk about what the Auditor General referenced, that he has seen his department cut back severely under the government. The government does not seem to like independent thought around issues of financial accountability and fiscal transparency. Even though the Auditor General's department has been cut back, here is what he said:

The level of tax debt is driven by the economic climate, tax policy, taxpayer behaviour, and the Agency’s efforts to collect taxes in a timely manner. In Canada, 94 percent of individuals...pay their taxes to the Agency on time. However...there is always a balance of unpaid taxes...

Those taxes get paid later on. As I mentioned earlier, in every one of our ridings, about 6% of our constituents have fallen behind. For Conservatives to denigrate those people who are endeavouring to catch up is something that is quite disrespectful. However, the reality is in each and every riding we are looking at about 6% of Canadians who work to catch up.

However, the Auditor General found on the corporate sector it was actually 90% where the taxes that were owed were paid on time. Therefore, there is a much bigger problem in the corporate sector.

It gets worse when we talk about large tax debts. This is obviously why the Conservatives wanted to shut down debate on this. As we bring forward the pathetic Conservative record in terms of tax debt in the corporate sector, Conservatives are understandably embarrassed by their inability to put in place a tax sector that functions.

This is what the Auditor General said about the Canada Revenue Agency, and we are talking about the mega accounts of tax debt. He said:

When we reviewed the additional criteria for accounts over $10 million, we found that the Agency did not meet its targets for danger of loss reviews; they were either missing or not adequately documented in [about half]...the...accounts that required them. A danger of loss review is important, since it will allow the Agency to act quickly where the taxpayer may be disposing of assets instead of paying a tax debt.

That is very interesting. Among ordinary Canadian families, there is a fall of about 6%, but when we are talking about the large accounts, the $10 million accounts, Conservatives failed about half the time. That is fascinating. Half the time they failed. This is interesting, because when we talk about the overall issue of uncollected tax debt, it should be no surprise to any of us that the Conservatives' failure on this is one reason there has been a substantial increase in uncollected tax debt. You will recall, Mr. Speaker, that they have now slashed 3,000 of the positions of hard-working public servants in the Canada Revenue Agency, so it is going to get even worse.

In other words, in 2006, the Conservatives came into power, and there was about $18 billion in uncollected tax debt. What is it after seven years of the Conservatives mismanaging pretty well everything they touch? I would say that they cannot even run a peanut stand, but that actually would be doing a disservice to people who run peanut stands. We saw how they incredibly botched the F-35 debacle, with $8 billion moving up to somewhere around $40 billion, and apparently that was without engines. When we see that kind of fiscal mismanagement, we have to just shake our heads.

On uncollected tax debt, it is the same kind of thing. The Conservatives started with $18 billion, and after seven years of Conservative mismanagement, we are now up to $29 billion. That is an increase of 57% in uncollected tax debt. If people say they are surprised and cannot believe that the Conservative government would be this awful and ineffectual, and they ask why it is that there is that substantial increase, they would have to come back to the Auditor General's report. In the Auditor General's report, we see that even in the case of danger of loss reviews for accounts over $10 million, the Conservatives are simply incapable of getting the job done.

A very wealthy man owing $10 million, according to these Conservatives, will get off scot-free. It is not a problem if people owe millions of dollars. The Conservatives just say that it is fine, that they will slash the jobs of the people who are supposed to collect that money, because the Conservatives do not really care. That is why they have had a 57% increase in uncollected tax debt over the course of just a few years. My goodness. Since Conservative governments cost all Canadians so much in terms of quality of life and the fiscal mismanagement they are showing, we simply cannot afford too many more years of Conservatives. Fortunately, in 2015, Canadians will put an end to this, and they will be putting in place an NDP government that actually knows how to manage the tax system.

What do we mean when we talk about going beyond the uncollected tax debt? We have seen Conservative failure there. That is why the Conservatives prudently say, since the New Democrats would be talking about this for the next few days, that they will just invoke closure and shut down the debate so that hopefully, Canadians will not find out how badly they have botched the issue of uncollected tax and how much worse it will be because of the slashing and the cuts to the Canada Revenue Agency.

We have to ask about the money that has been put in tax havens. That has not even been calculated. We understand that. They have gone from $18 billion to $29 billion, an increase of 57%. That is the uncollected tax debt we know about. However, let us look at tax havens and the level of investment being pumped into tax havens. In 2011, about 24% of Canadian investment overseas went into tax havens. Going back a few years, it was in the single digits, but under the Conservatives, we have now moved to a situation where about a quarter of overseas investment goes into tax havens.

Given how badly the Conservatives have botched the issue of uncollected tax debt, one can imagine that the issue of tax havens is of major concern. However, what we have is a Conservative government that seems to be unwilling to deal with this fundamental issue. We are talking about tens of billions of dollars invested in tax havens overseas. The Conservatives just do not seem to care very much about that.

I have just a little aside. My grandmother was orphan. She came from England. She came to Canada to start a new life in her 20s. It was quite brave at the time. She had to take a ship across the Atlantic Ocean and take a train all the way across Canada. This was a young woman who decided that she wanted to start her new life in Canada.

She had an expression she loved to use. She would say that somebody who is not thinking very far ahead is being penny wise and pound foolish. Of course, that is a reference to English currency. Penny wise and pound foolish is what applies to this Conservative government.

It cut back and slashed $250 million from Revenue Canada. It slashed 3,000 positions and says that it is being penny wise. Yet it is being pound foolish when we see the billions of dollars of uncollected tax debt that has accumulated under the Conservative government and the tens of billions of dollars that are now flowing freely offshore into tax havens.

Members will recall that the NDP raised this a few years ago, even before the lightning breakthrough in 2011 that gave the NDP official opposition status, with 100 strong NDP members of Parliament, who come from all walks of life and really reflect the diversity of this country in a way that has never been reflected on the floor of the House of Commons. Even before that, we were raising this issue of tax havens on the floor of the House of Commons.

Members will recall the famous Canada-Panama trade agreement the Conservatives brought forward. We raised concerns at committee, and not only the NDP but also a number of other people who were concerned about Panama's status as a tax haven. It was not just me speaking. The Internal Revenue Service in the United States said very clearly that Panama does not have the transparency that is required. It is a tax haven.

At the time, we had Todd Tucker, of the Public Citizen's Global Trade Watch, come forward and say that Panama was one of the world's worst tax havens and that the Panamanian government had deliberately allowed Panama to become one of the worst tax havens in the world.

The Conservatives got it in their heads to actually put in place the Canada-Panama free trade agreement that would worsen that issue of tax haven status. Members will recall that the Liberals were just going along for the ride, as they usually did. They were the accomplices pushing along with the Conservatives saying that it was a great idea. Only the NDP caucus stood up and said that we could not sign a trade deal until we had an official tax treaty with Panama, because otherwise, we would be worsening the situation and would be making even worse the possibility of money transferred from Canada to Panama simply going into a tax haven, one of the worst tax havens in the entire world.

That was in January 2011. I dare say, two years later, yet again, the NDP has been proven right. We were right to say that it was the wrong thing to do.

I think, implicitly, the Conservatives are trying, through their Prime Minister's Office talking points, to say that they now want to somehow take action against tax havens. I think what the Conservatives are really saying is that the NDP members were right and that the Conservatives were wrong and are sorry. We accept the apology from the Conservatives, but that is not good enough. What they actually have to do is make things right, and that means not signing these types of free trade deals when what they actually do is enhance the tax haven status of these countries they are signing deals with.

Here is the real problem. We have a situation whereby hundreds of Canadians are now sending their money offshore. Again, those are estimates that come from a variety of sources. This is an increasing problem that is more and more manifest right across Canada. We are seeing tens of billions of dollars flowing offshore now. A quarter of our investment in this country is going offshore to tax havens.

We are seeing an additional $170 billion, it is estimated by the Canadians for Tax Fairness, going into 12 global tax havens. That means a difference of about $8 billion a year in tax income. Yet we are seeing the Conservative government do nothing except offer Bill S-17. It has signed a few agreements, yes. That is good. We support that on this side of the House, but that does not resolve the problem in any way, shape or form.

What it does, in this case, is allow a bit of cover for the Conservative government. It may have messed up with the Canada Revenue Agency. It may have messed up by cutting thousands of positions that would have allowed it to go after tax evaders in the corporate sector that are taking money offshore with impunity. Having messed up on the uncollected tax debt, having messed up, as well, on the whole issue of money going into tax havens, the government now presents Bill S-17. It is saying that it resolves all the various problems that exist on the issue of tax havens and uncollected tax debt.

New Democrats actually have a different and smarter idea about the kinds of things needed to resolve this issue. As is our normal practice, Mr. Speaker, having been a member of Parliament with long experience, you know that what the NDP always does is bring forward a wide variety of solutions to resolve issues, because we get the job done. I wanted to get in another plug, because I know it particularly embarrasses my Conservative friends. It is not meant unkindly.

This morning we had the debate on the parliamentary budget officer that was proposed by the member for Outremont and the leader of the official opposition. We had a chance, yet again, to talk about the fiscal period returns issued by the ministry of finance that have shown, for 20 years running, that NDP governments are by far the best at managing money, balancing budgets and paying down debt.

That is not me speaking. That is the federal ministry of finance, which is surely not a hotbed of social democrats yet, but it will be. It will be a hotbed of social democrats in a couple of years, and that means that we will have even better financial management than we have shown at the provincial level. We are number one provincially. Just imagine an NDP federal government, with all those social democrats with all that great experience of being number one at balancing budgets and paying down debt, then being able to change the priorities of the federal government so that Canadian families actually benefit. We would have the housing we need, the kind of health care system we need, high-paying jobs for Canadians rather than low-paying jobs for temporary foreign workers, which is where the government seems to love to put the emphasis, and perhaps, more importantly, a transparent, accountable government that actually honours and respects Canadian taxpayers.

At the finance committee level, New Democrats offered a whole range of amendments. We talked about the federal government studying and measuring, to the greatest accuracy possible, Canadian tax losses to international tax havens and tax evasion to determine the Canadian federal tax gap. Australia has done that. The United Kingdom has done that. The U.S. has done that. It is time for Canada to actually measure the tax gap.

We talked about greater transparency and telling Canadian corporations that they have to disclose all taxes paid in other jurisdictions. We also said that the Auditor General should evaluate the success of the Canada Revenue Agency in prosecuting and settling cases of tax evasion. We put all those forward, and the Conservatives rejected every single one.

New Democrats are going to vote for Bill S-17. The reality is that if we really want an effective income tax system, in which everybody pays according to what they earn, and there are not these tax havens and growing tax debt, then Canadians have to elect an NDP government in 2015, and that is what they are going to do. I have no doubt about that.

[Wayne Marston, NDP, Hamilton East—Stoney Creek, ON]

Mr. Speaker, I want to thank the member for Burnaby—New Westminster for his speech and his passion, which he always shows.

One thing he highlighted in his speech was the $29 billion purported to be offshore now. Here is some news that came out recently. Heinrich Kieber, the whistleblower who brought this forward in 2007, offered the information to the Conservative government. The information is now being used by the British and the Americans. They paid a fee to Mr. Kieber to get that information. That could have been used in 2007-08 and going forward to prevent that $29 billion growing to what it is today, which is a national embarrassment.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Mr. Speaker, the member has a lot of wisdom and experience in the House of Commons and is always the one asking the right questions at the right time in the House of Commons. I just wanted to compliment him on his great work here.

It is amazing. The Conservatives like to talk a big game about how they are willing to take on these tax havens, but every single action that they have taken, every decision they have made over the last seven years, has actually proven the contrary. The uncollected tax debt has grown exponentially, nearly 60% on the Conservative watch. The number of tax havens, of course, has grown. The amount of money estimated by Canadians for Tax Fairness is $170 billion in 12 of these special tax havens that the Conservatives seem to want to show a green light to. Then, as the member mentioned, when there is an opportunity to actually crack down on these tax havens and get these corporations to pay their fair share of taxes, the Conservatives say no. That is why they do not have much credibility on this issue.

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

Mr. Speaker, Bill S-17 deals with tax treaties, as we know, with a number of countries. It is an interesting collection: Namibia, Serbia, Poland, Hong Kong, Luxembourg and Switzerland.

However, relative to collecting on tax debt, I was prompted by the member's comments about cutting back on staff at CRA. I am wondering if he is familiar with the train of reports we have had since 2006 from the auditor general pointing out that the CRA seemed to have a very poor understanding of where the tax debt was and why it was rising. It was failing to use its risk assessment models properly. The auditor general, for years, has found that CRA staff tends to go after smaller debts, harassing what I think of as regular folks, and leaving aside the millionaires. The large, low-hanging fruit is with the millionaires. Does the hon. member have any comments on the pattern of CRA tax collection?