Debates of Feb. 27th, 2014

Strengthening Canadian Citizenship Act

[Costas Menegakis, Conservative, Richmond Hill, ON]

Mr. Speaker, the minister said no such thing, nor did he allude to any such thing. The process in the House, and I think all members know, is that the bill will go to committee once it has passed second reading, and we will have an opportunity to study it at committee stage and hear experts. We cannot prejudge or preempt what the conclusions or decisions of the committee will be after it has an opportunity to study the bill at that stage.

One of the concerns the member opposite had was the fee. I do not know if she took the time actually to read the content of the bill, or at least investigate the reasons behind some of the things that are in the bill. She commented about our increasing the fee for Canadian citizenships. Had she done a little homework, she would have found out that it costs about $550 for a Canadian application today. We are taking the fee to a proportion of that. Is it not fair for Canadians to expect that the cost of that application should be borne by the person who is applying and not by taxpayers?

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Mr. Speaker, I would like to congratulate the parliamentary secretary. I never had the chance to congratulate him here in the House for his nomination since he became parliamentary secretary.

I have just a quick question. At the beginning of his speech he was saying that the reason the bill is before the House is that there have been a lot of fraudulent applications, like people living outside the country, and people using false documents. I would think that would already be breaking the law and I am not sure why he would need this extra piece of legislation. I would think we would need an extra piece of legislation to help people who want to obtain their Canadian citizenship.

I previously asked my colleague from the Liberal Party about being a member from the Toronto area. This member is from the Toronto area. Does he not see cases where it is a huge problem getting Canadian citizenship with proper documents? Applicants are waiting for way too much time and are also waiting sometimes because the fee is too high. Can he comment on that?

[Costas Menegakis, Conservative, Richmond Hill, ON]

Mr. Speaker, I will point the member to the bill. The bill clearly puts forth some excellent points in dealing with the regulation of the whole citizenship and immigration consultant industry.

In the second part of his question, of course I am a member of Parliament from the Greater Toronto Area. He will be happy to hear this, I am sure. One of the things the bill does is streamline the decision making process for granting citizenship. We are going to have more people within the decision making body now, people who are experts, officers in citizenship and immigration. Once they obtain all of the proper information, they will be able to grant citizenship, whereas today, the authority for that only belongs to citizenship judges.

If the bill passes through the House—and I hope all members see the light and pass it, because it really is excellent legislation—it would speed up the process from a three-step process to a one-step process. Those people coming into our offices would obtain their citizenship in under a year, as opposed to waiting the length of time they are waiting now.

[Joan Crockatt, Conservative, Calgary Centre, AB]

Mr. Speaker, it is an honour for me to be here to rise to speak in support of Bill C-24, which really does demonstrate our government's commitment to strengthening the value of Canadian citizenship.

Canadian citizenship, as every one of us in the House knows, is among the most valued citizenships in the world and the bill would ensure that it remains that way.

First, let me be clear. We want newcomers to come to Canada. We need them to grow this country, as Canada has throughout its great history. They are the nation builders of today and the nation builders of tomorrow. The question is how we get there.

We have accepted 1.4 million new citizens to Canada since the Conservatives were elected in 2006. That is an unprecedented number that puts Canada among the top countries among our peers. That is a lot of people, and we welcome them.

We also believe we should help to prepare those people, those newcomers, in the very best way we can, so they can succeed here. Enter Bill C-24. It is in all of our best interests to do that.

What does this really mean on the ground? There are three things it means.

First of all, it means we want newcomers to bond with their new home. We want them to feel they are part of Canada. We believe they should have a strong attachment to this country by having a significant Canadian experience before they become citizens. Hence, that means adding one year, going from three years to four years' residency, or actually 1,460 days now, before they can become a citizen.

Second, we require that they, yes, actually be present here in Canada while they are building that understanding of Canadian values and way of life.

Third, to help our newcomers integrate, we believe they should know one of our official languages. It seems reasonable to most people. This will help our newcomers to succeed and it will help Canada to succeed by opening its doors to them.

Gillian Smith of the Institute for Canadian Citizenship works extensively with Canada's newcomers, and she said she has found overwhelming support among them for these kinds of changes. Our newest citizens report that the measures that actually help them to foster their connections and attachment with Canada have had the most positive effect on their integration.

Their sense of belonging comes in large measure from actually experiencing Canada first-hand, its people, nature, culture, heritage, and yes, its cold winters, its hockey, its Tim Hortons, and all of that which goes along with being a Canadian. This is where our connections with each other really develop.

An understanding of one of our official languages and a deeper knowledge of these kinds of values and traditions help newcomers become active members of Canadian society a lot sooner. This will assist them on their path to seize the opportunities that are the reason they are coming to Canada, and that is what we want.

Our government's proposed changes would also expand the ages for citizenship applicants who are required to demonstrate this kind of language proficiency, as well as take the knowledge test. Currently, it is from ages 18 to 54. It would go from ages 14 to 64.

There are critics who will say that these moves to strengthen the residency and language requirements would make it harder to become a Canadian citizen. We believe that people who really wish to hold the coveted Canadian passport, to call Canada their home, will achieve these requirements. Something valued is something that really is worth working for.

In the past, it has not always been that way. I point to immigration lawyer Raj Sharma, who told my friend Doug Dirks, the host of CBC Calgary's The Homestretch, that “basically, an eight-year-old with a crayon could have passed the previous knowledge test to become a Canadian citizen...”. That is actually what he said. This is one very busy immigration lawyer.

This is something we do not take lightly. By strengthening the residency and knowledge requirements, we are making sure new citizens are both more committed and fully prepared to actually take up life here in Canada. This is balancing rights and responsibilities.

The Aga Khan was here in this House today, and he spoke about this very thing. He talked about a healthy civil society, and he said that Canada accepted a major wave of Ismailis in the 1970s during the brutal Idi Amin era. The Aga Khan placed Canada first among all in creating a pluralistic society. However, in building a healthy civil society, the Aga Khan said what that takes is balancing rights and responsibilities. That is exactly what the act would do for new citizens.

Author Nick Noorani expressed a similar sentiment on CBC Radio a while back when he said it is not becoming more difficult, it is putting in place checks and balances.

He also said he is a very proud Canadian and believes that anyone who wants to become a Canadian should follow certain rules and regulations. For instance, he said, for people who have misused the system, the government is now putting a premium on Canadian citizenship, as well it should be.

To come back to the residency requirement, it would only include time that the person spends in Canada as a permanent resident, which has not always been the case. In the past, the rules were a little fuzzy and often taken advantage of by unscrupulous people. We are making them crystal clear. Newcomers who are coming to build Canada expect and want to be contributors, and this would give them more time to establish themselves here.

My own son-in-law would be affected by these proposed changes. He would have to spend an extra year in Canada to get citizenship, and that is okay. Canadian citizenship is something worth working for.

This is what Canadians rightly expect. They welcome newcomers as citizens and full members of our Canadian family, but not people who want to hold a citizenship of convenience as a backup plan while they live and work somewhere else.

However, there will be exceptions. Applicants who are outside of Canada because they are accompanying either their Canadian spouse or parent who is employed in the Canadian Armed Forces, or as a servant of the Crown, could still qualify for citizenship. This is to prevent residents from being penalized for their family's service abroad for Canada. We are honouring those who serve Canada, and showing our gratitude for those who put their lives on hold in service to our country.

Canadian citizenship is an honour and a privilege. It comes not only with rights, but with responsibilities. Immigrants understand that. They are very proud to fulfill these responsibilities. In fact, over 85% of permanent residents who have gone on to become citizens support these initiatives.

In 2012, more than 110,000 people became proud Canadian citizens. This year alone, we held 1,722 citizenship ceremonies from coast to coast to coast.

One of my favourite things to do as a member Parliament is to preside over citizenship ceremonies. They are heartwarming and even tear-jerking. As a Canadian, I feel honoured that these people have chosen Canada and are taking a pledge to become part of the Canadian family. They have often undergone great hardship to come to Canada, but it has been worth it because of the value of Canadian citizenship that this act underscores.

These people want to come and contribute to our economy. Many have come to Canada for security for their home and family under the rule of law. They are overwhelmingly pleased with these changes because, again, they value Canadian citizenship. They believe that it should only be granted to people like them who live and play by the rules.

We have to continue to ensure that this is the Canada we are protecting and preserving for all of us into the future. The strengthening Canadian citizenship act would enhance the value and integrity of our Canadian citizenship and would ensure that it is going to be valued just as much by future generations.

We are accepting unprecedented numbers of immigrants, and earlier I mentioned it has been 1.4 million people since 2006. We are ranked as the top among our peer countries in this.

The strengthening Canadian citizenship act that we are very proud to be putting forward today is a necessary measure. It is supported by newcomers to Canada. It will ensure that we can continue to keep the doors to Canada open, create this pluralistic society that the Aga Khan talked about and that all of us are proud of, and ensure that newcomers are in the very best position to succeed when they come to Canada.

[The Deputy Speaker, NDP, Joe Comartin]

The member for Calgary Centre will have five minutes of questions and comments when we resume debate on this bill.

It being 5:30 p.m., the House will now proceed to the consideration of private members' business as listed on today's order paper.

Tax Evasion

[Pierre Dionne Labelle, NDP, Rivière-du-Nord, QC]

moved:

That, in the opinion of the House, the government should: (a) study and measure Canadian tax losses to international tax havens and tax evasion, in order to determine the Canadian federal “tax gap”; (b) order the Canada Revenue Agency (CRA) to provide the Parliamentary Budget Officer (PBO) with the information necessary to provide an independent estimate of the Canadian federal tax gap arising from tax evasion and tax avoidance through the use of tax havens; (c) mandate the Auditor General or the PBO to provide estimates of the marginal revenue of additional CRA resources (i.e. auditors) in the areas of tax evasion and tax avoidance; and (d) mandate the Auditor General to evaluate, on a regular basis, the success of the CRA in prosecuting and settling cases of tax evasion.

Mr. Speaker, today I am pleased to move in the House Motion No. 485 on combating the use of tax havens.

At a time when wealthy countries are desperately looking for revenue to reduce their deficits, tax evasion results in annual losses of 100 billion Euro in Europe, and, according to some estimates, up to $30,000 billion worldwide.

We often think of tax havens as pertaining strictly to taxes. Let us not forget, however, that they also play an essential role in business investment strategies. According to data from the United Nations conference on trade and development, a third of offshore direct investments by multinational companies are made in tax havens, a trend that has been on the rise since the 1990s.

According to a 2005 study by Statistics Canada, Canadian assets in offshore financial centres increased eight-fold between 1990 and 2003, increasing from $11 billion to $88 billion. Today, they represent more than double that, at $170 billion. The strongest growth in direct Canadian investment during that period was observed in Barbados, Ireland, Bermuda, the Cayman Islands, and the Bahamas. That 2005 study on offshore financial centres was the last of its kind conducted by Statistics Canada.

In 2009, Statistics Canada suggested that Canadian entities had invested up to $146 billion in tax havens. We learned that this represented 25% of direct investments by Canadians abroad. Among the tax havens blessed by Canadian investors we have the Cayman Islands, Ireland, Luxembourg, Bermuda, Hungary and Barbados. In 2012, Canadian business people injected $60 billion in Barbados, an 80% increase since 2007.

The first time I heard of Barbados being used as a tax haven was when we found out that former prime minister Paul Martin registered his ships there to avoid paying taxes in Canada. What a prime minister.

His example led the way for other Canadian business leaders who, like him, wanted to evade taxes. Former prime minister Paul Martin's decision in 1995 kicked off a veritable race offshore for wealthy taxpayers and Canadian businesses.

After that date, the increase in Canadian investment in Barbados was somewhere in the order of 3,600% in a few years. Nothing else can explain this interest in a small island where this is no oil or gold mines to be found. Barbados seems to have become the bridgehead that gives Canadians access to other tax havens.

How much tax revenue is Canada losing because our businesses and wealthy individuals are using tax havens? Unfortunately, there are currently no reliable studies that assess that tax gap. While Canadian families are struggling and trying to make ends meet, while small and medium-sized businesses are dealing with increased global competition, while the government is gutting social programs to bring down the deficit, rich Canadians and major Canadian companies are investing billions of dollars in tax havens, tax-free, and the government is not even making a serious attempt to determine how much tax revenue it is losing out on. According to some independent estimates, the Canadian tax system is losing between $5.3 billion and $7.8 billion in revenue per year to tax evasion.

The NDP strongly believes that the federal government has an obligation to determine, as best it possibly can, how much tax revenue Canada is losing to international tax havens and tax evasion. We need to determine how big the tax gap is. Without that kind of estimate, it is impossible to determine how serious the issue of tax erosion is or how effective the adopted corrective measures are.

Accordingly, the motion that I am moving today urges the federal government to take serious measures to determine the federal tax gap arising from the use of tax havens. In order to obtain reliable numbers on the tax gap, the motion also calls on the Canada Revenue Agency to provide the Parliamentary Budget Officer with the information necessary to provide an independent estimate.

My motion also calls on the Auditor General or the Parliamentary Budget Officer to provide estimates of the marginal revenue of additional CRA resources in the area of tax evasion.

According to an OECD report, providing additional resources is remarkably cost effective. The United Kingdom invested £4 million in the fight against tax evasion and ended up recouping £7 billion.

Lastly, my motion asks that the Auditor General be given a mandate to evaluate, on a regular basis, the success of the CRA in prosecuting and settling cases of tax evasion. Canadians are entitled to wonder whether the Conservative government really wants to pull out all the stops to combat tax evasion and aggressive tax avoidance.

Let us take a look at some numbers. First, since 2011, the Conservatives have cut $220 million from the Canada Revenue Agency's budget, and they will cut the equivalent of 3,000 full-time positions by 2015. The government's actions do not indicate that it is taking this issue seriously.

According to Le Devoir, in May 2003, 422 employees were responsible for the international audit program. Even though that number has risen slightly over the past three or four years, it is still lower than the 512 employees in the program in 2008. Since then, the use of offshore accounts has skyrocketed. In 2012, the Canada Revenue Agency estimated, conservatively, that it failed to collect $4 billion worth of tax on funds hidden in tax havens.

The 2010 audit conducted by the agency's own management confirmed that the agency is unable to track complex files involving multi-million-dollar bank accounts in tax havens. According to a leaked internal document, it would rather take aim at easy targets, such as small businesses, self-employed workers, the corner hairdresser and the small restaurant owner. When it comes to billions of dollars, the agency is afraid to take on the big guys.

The Conservative government tried to convince people of its supposed intent to combat tax havens. The government likes to talk about how it has implemented 75 measures to combat tax evasion since 2006, yet only 44 people were convicted of tax evasion between 2006 and 2012.

These numbers are truly fascinating. Thanks to the Access to Information Act, CBC recently obtained the names of 25 people who were convicted. Of those 25, only eight were found guilty of hiding income or assets in a tax haven. Of those eight, two were found not by the Canada Revenue Agency, but by Project Colisée, which identified Rizzuto as one of the people who had an account in a tax haven.

From 2006 to 2012, CRA managed to lay charges in six cases. That number seems rather low to me. That means one case per year. However, since 2007, CRA has received a lot of information thanks to major leaks of offshore financial data. That is how it was able to get the names of many Canadians who hold foreign accounts.

In 2007, Canada Revenue Agency got its hands on a list of 106 Canadians who had accounts with the LGT bank in Liechtenstein, and another list of 1,785 Canadians who had accounts with HSBC in Switzerland. In 2010, an international leak revealed the names of 2,000 Canadians once again associated with HSBC. Lastly, in April 2013, recently, the International Consortium of Investigative Journalists identified 450 Canadians linked to firms or trusts established in countries known for their low tax rates and lack of transparency.

Many countries, such as Germany and the United States, have agreed in recent years to pay compensation to informants who allow them to recover money. It seems that this government is now willing to pay for information. As someone else said, “it is about time”.

If I do the math, by adding up the 106 names from 2007, the 1,785 names from 2000, the 2,000 names from 2010 and the 450 names obtained recently, in April 2013, that adds up to 4,341 names of people who have accounts in tax havens.

The Canada Revenue Agency has the names of 4,341 people. How many have been charged and found guilty? Six. I would say that more effort is required.

I will go back to Barbados, which is a textbook case. The Government of Canada, during Joe Clark's short Conservative reign, signed a controversial agreement to prevent double taxation. This made it possible for Canadians to register their assets in Barbados and pay virtually no taxes, and then transfer the assets to Canada without being taxed.

Repealing the agreement between this Caribbean island and Canada would put an end to this problem. Today, the opposite is happening. As of 2012, business people had invested $60 billion in Barbados.

Instead of repealing this agreement, the Conservatives are looking to sign similar agreements, called tax information exchange agreements, with other tax havens, which is even more hypocritical. In June 2010, Canada signed this type of agreement with eight other countries: Bahamas, Bermuda, Dominica, the Cayman Islands, Turks and Caicos, St. Lucia, and St. Vincent and the Grenadines. The government then presented them as agreements to obtain information about Canadian taxpayers who are hiding their money from the tax man.

Today, there are 19 countries or tax havens on this list. Aruba, Antigua, Costa Rica, Uruguay, Guernsey and others were added to the list.

I will quote Professor Alain Deneault:

...The agreements exist in principle to allow tax authorities of the countries involved to investigate potential fraudsters in the countries that have signed the agreements, under certain conditions. However, compared to other international agreements in effect, the Canadian TIEA has a distinct feature. The [Conservative] government's 2007 budget inserted a clause to the effect that Canadian investors who place their assets in one of the tax havens signatory to an agreement with Canada can repatriate their assets as dividends without having to pay taxes....

At the same time that it was signing tax information exchange agreements with tax havens, the Conservative government made legislative changes that watered down these agreements. They no longer cover just the exchange of information; they also exempt subsidiaries located in the countries concerned from paying income tax.

This is what accounting firm Deloitte had to say:

...the Income Tax Regulations were amended in 2008 to extend to countries with which Canada has a TIEA certain favourable corporate tax provisions that had previously only been available to countries with which Canada has concluded a tax treaty. These incentives provide that if a jurisdiction enters into a TIEA with Canada, active business income earned by a foreign affiliate of a Canadian corporation that is resident in that jurisdiction and carrying on business there will be included in “exempt surplus” and, consequently, dividends paid to the Canadian corporation from the affiliate will not be subject to Canadian tax.

We need to do away with duplicity in Canada. Other measures could be put in place to put an end to this. The Canada Revenue Agency could require Canadian corporations, including their subsidiaries, to disclose all taxes paid abroad, broken down by country, to provide increased transparency of the activities of Canadian companies that use tax havens. It could require that the government create an effective system to identify the people who facilitate tax evasion, including accountants, lawyers and other professionals. It could require that the government conduct a quantitative re-assessment of whether the bilateral model of those famous information exchange agreements is effective. It could require that the federal government focus more on multilateral co-operation. It could require that the Standing Committee on Finance study the issue of transfer pricing by multinationals, including a study of the international best practices in this field.

I am prepared to answer questions.

[Hélène LeBlanc, NDP, LaSalle—Émard, QC]

Mr. Speaker, I wish to thank my hon. colleague from Rivière-du-Nord for his excellent speech and for his passionate commitment to exposing this tax injustice that exists in Canada and the huge burden it puts on our economy. I would also like to take this opportunity to congratulate him on his motion.

I would like to ask my colleague what economic impact this use of tax havens has on Canada. I wonder if he could also talk about the Conservatives' lax approach to developing effective measures to combat tax havens.

[Pierre Dionne Labelle, NDP, Rivière-du-Nord, QC]

Mr. Speaker, I thank my hon. colleague.

At this time, internationally, within the International Monetary Fund, the G20 and the OECD, Canada has committed to fighting tax havens. It has signed agreements and supported final declarations. For instance, at the summit in St. Petersburg, Russia, Canada signed the final declaration pledging to fight hard against tax havens.

My greatest fear, in light of the cuts that have been made and what we are seeing now, is that those commitments become the new Kyoto. Canada promises to do all kinds of things, which makes it look good on the international stage, but in reality, it amends Canadian legislation to promote tax corridors between Canada and the Caribbean. I am quite afraid that, without concrete measures and without the vigilance of both parliamentarians and the civil society groups that watch these people in action, this system will continue. We need to take meaningful action against tax havens. That is not the case right now.

[Hoang Mai, NDP, Brossard—La Prairie, QC]

Mr. Speaker, I would like to congratulate my colleague on his motion. I also want to congratulate him for tackling tax havens.

I used to be the national revenue critic for the official opposition, and I can say that this issue was a priority for the NDP. We keep lagging further and further behind under successive governments, including the Liberals. All of sudden, we are talking about it because the NDP has brought it to the forefront.

My colleague mentioned the fact that Paul Martin, back then, and the Conservative government, now, both said that they would propose numerous measures to address tax havens.

Can he tell us what is actually being done? Why are they saying that they will work on this and where do things stand now?

[Pierre Dionne Labelle, NDP, Rivière-du-Nord, QC]

Mr. Speaker, I would like to thank the hon. member for his question.

In my speech, I gave an overview of all the data that the Canada Revenue Agency has at its disposal to undertake legal action and the meagre results it has gotten. We are being lax. The information is not being used systematically. There are no reports on what is happening. The Auditor General will eventually have to look at how the Canada Revenue Agency is managing and using the data and what is being done with the information gathered.

Other information will come to light. International leaks seem to happen every six or seven years, and we can expect more. However, we have no idea what the Canada Revenue Agency will do with that information. It received 450 names in 2013. Where is the legal action? Where are those people? What are they doing? How much money are we losing? We have to resort to the Access to Information Act just to get tidbits of information. When we do get something, it is not what we had hoped. We want convictions. There have only been six convictions since 2006. What a joke.

[Joyce Bateman, Conservative, Winnipeg South Centre, MB]

Mr. Speaker, I welcome this opportunity to clarify the actions being taken by our Conservative government on multiple fronts to combat international tax evasion and aggressive tax avoidance. It is a track record of which we are very proud.

I would also like to debunk the unfounded assumptions and misconceptions on which Motion No. 485 is based. This is a very complex issue.

I would like to explain exactly why I am against the motion.

This problem is universal. It is certainly not confined to our borders.

The globalization of trade, the free international movement of people and funds and the rapid growth of online business have made international tax evasion and aggressive tax avoidance a priority for tax administrations worldwide.

We are not sitting on our hands, and we are not letting tax cheats get away with it. From complex corporate schemes to individuals using sketchy foreign administrations, tax havens or tax shelter strategies to avoid or evade taxes, we will do what needs to be done to protect the integrity and fairness of Canada's tax system.

Anyone looking at the facts can conclude that our government has been very steadfast in its efforts to identify those who attempt to hide their money offshore, people who think it is okay to cheat their neighbours and have them pay their way.

This is fundamentally unfair to the vast majority of honest, hard-working Canadians, who pay their fair share of taxes. They understand that this is how government pays for the important programs all Canadians depend on for our children, for our seniors, and for our health care.

It is illegal not to declare income from Canadian and foreign sources. Failing to declare can result in taxes, penalties and hefty interest charges. Tax evasion can also be punished by fines and prison sentences.

Our government takes tax evasion and deliberate tax avoidance very seriously. Over the past few years, we have instituted significant measures to protect the integrity of the Canadian tax system to ensure that cheats get the message.

For evidence, we need look no further than Canada's economic action plan 2013, which introduced new tools and legislative measures that are strengthening CRA's ability to combat international tax evasion and aggressive tax avoidance.

Economic action plan 2013 also established requirements for banks and other financial intermediaries to report electronic transfers.

Commencing in January 2015, they must report international electronic fund transfers of $10,000 or more to the CRA, as they currently must do to the Financial Transactions and Reports Analysis Centre of Canada.

Another measure our government introduced was extending the normal reassessment period with respect to foreign income and property.

We can go back an additional three years for taxpayers who have failed to report income from a specified foreign property on their annual income tax return and failed to properly file their foreign income tax verification statement, form T1135.

That is not all. The CRA is revising form T1135 to require taxpayers to report more detailed information. They now have to indicate the name of the foreign institutions and countries that are holding their assets and the income they earned on those assets.

Another measure that is just as essential to our work is that we are streamlining the legal process whereby the CRA obtains information concerning unnamed persons from third parties, such as banks.

Economic action plan 2013 set aside $30 million in additional funding to equip the CRA with the tools it needs to put these new measures to work. Half of this amount, $15 million, is earmarked to develop and implement the electronic systems the CRA will require to receive reports from banks and other financial intermediaries on international fund transfers. The remaining $15 million is being allocated over the next five years to establish dedicated audit and compliance resources to address offshore non-compliance.

These resources are intended to enhance the CRA's existing internationally focused programs, such as those for international audit, aggressive international tax planning, and offshore tax evasion.

Thanks to these resources, the CRA was able to establish the Offshore Compliance Division. This will guarantee a targeted approach when action plan 2013 measures are implemented to combat international tax evasion and aggressive tax avoidance.

The division will require strategic information to detect, select and coordinate high-risk offshore non-compliance cases for auditing. Audits are among the main methods the CRA uses to detect and deter non-compliance.

The division will also implement a framework.

It is actually putting in place a robust accountability framework to report on the progress in identifying and addressing offshore non-compliance.

Although the division is still relatively new, I can assure the House that the CRA continues to make significant inroads in its measures against taxpayers who try to hide their money offshore.

Since 2006, the CRA has audited over 7,700 cases of offshore aggressive tax planning, worth some $4.6 billion in unpaid taxes.

The CRA has also completed compliance actions on roughly 340 audits of high-net-worth groups using sophisticated business structures and offshore arrangements to avoid taxes. This resulted in the identification of more than $195 million in unpaid federal taxes.

What is especially encouraging is that this tough approach has made converts of many people who previously failed to declare their income. Canadians are now taking it upon themselves to come forward, reporting previously undeclared income and paying up what they owe. In fact, the number of voluntary disclosures has increased more than threefold in the past number of years.

Those are the facts, and the facts speak for themselves. Clearly, our efforts are paying off, and we anticipate even better results in the years to come once the Offshore Compliance Division is fully operational.

Just as clearly, we do not need this opposition motion. I urge all the parties in the House to reject it and focus on more urgent matters. I am against the motion.

[Emmanuel Dubourg, Liberal, Bourassa, QC]

Mr. Speaker, I am very pleased to rise to take part in this debate on Motion No. 485. First of all, even though I do not agree with all of the arguments made by the NDP member, we in the Liberal Party plan to vote in favour of the motion.

I just listened to the Conservative government member, who is asking us to do the opposite. She said that we would see better results in the future and asked us to focus on more urgent matters.

How can we focus on more urgent matters when the CRA cannot go and collect billions of dollars that many Canadian taxpayers are hiding through international tax evasion and tax avoidance?

This motion has a number of parts. First of all, it calls on the government to study and measure the shortfall resulting from international fraud. I think it is entirely reasonable and normal to want to know exactly how much the shortfall is.

Not too long ago, the International Consortium of Investigative Journalists obtained several files revealing that over 550 Canadian taxpayers were investing money in tax havens. Those taxpayers are therefore hiding literally billions of dollars.

What did the CRA do with that? In light of the few bits of information we are given, the CRA's results are really disappointing.

A CBC article stated that there were only eight convictions for offshore tax evasion between 2006 and 2012. Those results are disappointing, to say the least, given that Statistics Canada says that $148 billion worth of assets are sitting in the top six tax havens.

We need to understand how urgent it is to take action on this issue. The government could be investing that money in social programs, health care or education. Instead, it is cutting resources, including those we want to see put in place for veterans. That is what the Conservative government is doing. Why not use the necessary resources to recoup that money?

This motion also proposes that the government order the Canada Revenue Agency to provide the Parliamentary Budget Officer with the information necessary to provide an independent estimate. Why not be transparent and give him the information so he can do his job? Other countries, such as the United States and the United Kingdom, have done it, yet Canada is the exception. That is not right.

There is a third element to this motion. It calls on the government to mandate the Auditor General or the Parliamentary Budget Officer to provide estimates of the marginal revenue of additional CRA resources. It is clear that that would pay off. The Liberal budget in 2005 invested $30 million a year for five years, which equals $150 million to tackle tax evasion. A total of $2.7 billion, or 18 times that investment, was recouped in 2009.

In Quebec, for example, I know that each dollar invested in resources brings in $10. Why does the government not want to allow the Auditor General to make that assessment? We are not saying that it needs to happen right away, but why not took a look at it and determine if we should provide additional resources in this area? The Conservative government is doing something else.

What else did it do? It chose to cut $300 million from two programs: the international audit program and the aggressive tax planning program. I know those people at the Canada Revenue Agency. I worked there myself. They are competent, but have limited resources. How do we expect the auditors to do their job?

What is more, to correct its mistakes, the government announced bare-bones funding of $3 million a year for five years. The time it takes to hire these auditors is one thing; the time it takes to train them is another. They will be dealing with experts, people who put their money in other countries to avoid paying taxes. It can take three or four years, or even longer, to train these auditors until they are skilled enough to go after this money.

The Conservatives prefer to make cuts and to tell us that there are more important things to work on. In the meantime, there are billions of dollars in taxes that we should be looking for.

I hope that our comments will give pause to government members when they vote. For once, they could agree to move forward and allow the auditors to simply do an analysis. This would show whether we should increase the number of auditors and the resources provided so that the Canada Revenue Agency can move forward.

We know that it is easier to go after small taxpayers, whether they are restaurant owners or taxi drivers, and to have iron-clad measures to chase them down, rather than working to ferret out these billions of dollars.

I am asking the government once again to change its position and to support this motion moved by our colleague, which would allow the Auditor General or the Parliamentary Budget Officer to obtain the information required to conduct this study, because billions of dollars are hidden in tax havens.

[Hélène LeBlanc, NDP, LaSalle—Émard, QC]

Mr. Speaker, today, I address my colleagues and all Canadians with the intent of expressing my support for Motion No. 485 on tax havens moved by my colleague, the hon. member for Rivière-du-Nord.

This motion calls on the government to take all the necessary measures to ensure that certain Canadians and Canadian businesses stop using tax havens to avoid paying their fair share of taxes. I reaffirm my support for this important initiative, which, once again, shows the NDP's interest in working on developing measures to protect Canada's finances and economy.

The motion calls on the government to address the problem of tax evasion. This motion proposes five measures. I would like to talk about three of those measures. The motion calls on the government to accurately measure the Canadian tax losses to international tax havens and tax evasion, in order to determine the Canadian federal tax gap.

Then it calls on the government to take measures to allow federal agencies to study the federal tax gap arising from tax evasion and tax avoidance through the use of tax havens.

Also, under one of the five measures that the motion proposes, the Auditor General would evaluate, on a regular basis, the success of the Canada Revenue Agency in prosecuting and settling cases of tax evasion.

This motion targets various aspects of tax evasion while enhancing the government's ability to act efficiently. The government must get tougher on tax evasion.

That is why the estimate of the Canadian federal tax gap arising from tax evasion, as proposed in this motion, is so important to fighting tax erosion and measuring how effective potential corrective measures will be. Public policy must reflect a needs analysis that identifies the best solutions. We have to be aware of how important it is to pass the measures in this motion without delay.

Estimates released on behalf of Oxfam International in 2013 illustrate the extent of the problem. According to the organization, individuals have hidden at least $18,500 billion in tax havens worldwide, which represents a tax gap of over $156 billion for governments. In Canada, independent estimates have indicated that tax revenues lost to foreign tax havens could add up to between $5 billion and $7.8 billion per year.

A Globe and Mail article published in May 2013 discussed this problem. It also provided information about the locations of these tax havens and the money Canadians had parked there. The article said:

The amount of money Canadians have parked in three top offshore tax havens has more than doubled since 2005, showing the scale of tax avoidance in Canada is “getting larger every year,” says lobby group Canadians for Tax Fairness.

The advocacy group, which is pressuring the government to do more to crack down on the flow of money to tax havens, says Canadians now have $59-billion invested in Barbados, $30-billion in the Cayman Islands and $20-billion in Luxembourg — the three biggest offshore tax haven destinations for Canadian funds.

If the government really wanted to tackle tax havens, it would be better off not cutting the CRA's budget but making sure that the Agency has the resources it needs to prevent tax evasion and conduct investigations when necessary. Unfortunately, if measures are not taken, tax cheats will go unpunished while thousands of honest Canadians will continue to bear more than their share of the tax burden.

Taxpayers in LaSalle—Émard contribute to Canada's tax revenues and will continue to do so by completing their tax returns. This is the time of the year when people do that, and they can do so until April. They make honest contributions, as do small and medium businesses. Canadian taxpayers, mostly those in the middle class, and small and medium businesses bear the bulk of the tax burden in Canada. They are the ones who pay most of the tax to federal, provincial and municipal governments. These Canadian taxpayers, the taxpayers in my riding, LaSalle—Émard, are demanding tax fairness.

However, it is clear that some individuals do not do their duty to pay taxes in Canada. In light of this fact, my constituents have two questions: why does Canada not introduce measures to identify the fraudsters, and why is the government deliberately walking away from billions of dollars in revenue that could help finance all kinds of programs and services for Canadians?

A very shocking article in Le Devoir quoted the latest book by Alain Deneault of the Université de Montréal's political science department, entitled Paradis fiscaux : la filière canadienne. Mr. Deneault points out that the link between Canada and some tax havens goes back to the 19th century. The article said:

As a result, when Caribbean countries started to become tax havens about 60 years ago, “Canadian banks were already there”. One after another, they gradually moved into the Caribbean: Scotiabank (Jamaica, 1889); Royal Bank (Bahamas, 1909); CIBC (Jamaica, 1920); and so on.

Later in the article, the author mentions a report that a panel presented to Industry Canada in 2009:

“For example, Canadians invest more than four times as much in Barbados (7.3 percent) as they do in Brazil (1.6 percent). Indeed, Canadian investment in the relatively small Caribbean economies of Barbados, Bermuda and the Cayman Islands represents 12 percent of the total.”

The motion before us today suggests concrete measures to address the problem of tax havens. These measures will finally create tax fairness for my constituents and also for all Canadian taxpayers, meaning that each and every person will contribute to the well-being and advancement of our country.

I urge the government members and all of my colleagues to unanimously support and vote in favour of Motion No. 485 on tax havens.

[Gerald Keddy, Conservative, Parliamentary Secretary to the Minister of National Revenue and for the Atlantic Canada Opportunities Agency]

Mr. Speaker, I rise this evening to oppose private member's Motion No. 485 and to take this opportunity to highlight some of the most significant steps our government has taken to tackle the growing problem of international tax evasion and aggressive international tax avoidance, a problem that the previous Liberal government completely ignored.

If my hon. colleagues had only taken a moment to listen to the member for Winnipeg South Centre, they would have heard a number of their questions answered.

This is an extremely complex issue. Therefore, let me begin by stating the obvious, that Canada's tax system is based on the premise of self-assessment and voluntary compliance. Canadian taxpayers, individuals, corporations, and trusts, are required by law to file their fax returns on time and to pay whatever taxes they owe in full. To comply with Canada's tax laws, Canadians who invest abroad must report their worldwide income and pay the correct amount of tax on those earnings. The majority of them do.

It does a disservice, quite frankly, for opposition members to state that somehow everyone with a foreign bank account is not paying tax or is deliberately trying to hide tax. Indeed, the vast majority of Canadian taxpayers are honest, law-abiding citizens. They file their tax returns, report their income, and pay whatever taxes they owe as required by law. When these honest Canadians hear about those who attempt to evade or avoid their tax obligations, particularly where the potential loss of revenue is significant, they are justly outraged. They want to know, and indeed deserve to know, what their government is doing about it.

Let me assure members of the House that our government takes the abuse of Canada's tax laws very seriously. Tax evasion and aggressive tax avoidance, whether domestic or international, places an unfair burden on law-abiding taxpayers and businesses. They erode public trust in the tax system and jeopardize the integrity of Canada's tax base. I believe everyone in the House would agree with those words.

I understand the intentions of the member of Parliament for Rivière-du-Nord in proposing a motion to study Canadian tax losses due to international tax evasion and the use of tax havens. However, I would argue that attempting to measure the so-called tax gap is not the most effective solution to this complex global problem. I think the member opposite knows this as well.

The Organisation for Economic Co-operation and Development, the OECD, has reported that “Given the widely varying types of non-compliance behaviours that comprise the overall tax gap, it will be apparent that measuring its overall size is a difficult, costly and (some would say) inevitably quite an imprecise undertaking.”

Those are not the government's words. Those are the OECD's words.

For the sake of clarity, let me explain that the tax gap is the difference between the tax revenues the government actually receives in a year and the tax revenues it would receive if all taxpayers respected their tax obligations under the various acts and regulations administered by the Canada Revenue Agency.

Here comes the rub. Estimating the income that is deliberately hidden in secret offshore investments is virtually impossible with even a minimal degree of accuracy or reliability. By their very nature, tax evasion and tax avoidance are difficult to quantify since they involve people or entities deliberately and aggressively hiding money from the government.

Therefore, like the vast majority of OECD countries around the world, Canada does not estimate the amount of revenue lost to international tax evasion and aggressive tax avoidance. However, to that point, I must stress that our government takes the issue of international tax non-compliance extremely seriously and it is by no means turning a blind eye to the problem. One of my colleagues has already summarized the important measures that our government introduced in economic action plan 2013 to tackle international tax evasion and aggressive tax avoidance.

These new measures and tools will strengthen the Canada Revenue Agency's ability to identify and audit abusive tax schemes and arrangements that use offshore jurisdictions to hide assets and income.

On January 15, the hon. Minister of National Revenue announced the launch of the new offshore tax informant program, which is one of the economic action plan measures I just mentioned.

For the first time, the Canada Revenue Agency is in a position to financially reward individuals when they provide information that leads to the assessment and collection of additional federal taxes in cases of major international tax non-compliance. Informants are now able to contact the Canada Revenue Agency through a toll-free number that is accessible throughout North America and a local number that can be reached from anywhere in the world.

After considering the information provided, and there is a very clear protocol, the Canada Revenue Agency may enter into a contract with the informant if the federal tax owing, excluding interest and penalties, is more than $100,000 and all other program requirements are met.

Of course, no payment would be made to anyone already convicted of tax evasion in relation to the information provided. Our government will not reward tax cheats from turning on one another.

Regardless of whether the information ultimately results in a payment under the program, the Canada Revenue Agency can use the information provided to carry out its mandate to ensure compliance with Canada's tax laws. Offering a reward for information about major cases of international tax non-compliance would both encourage those with information to come forward and discourage Canadians from breaking the law in the first place.

The new offshore tax informant program is not the only way the Canada Revenue Agency obtains information about tax non-compliance. The agency already has an informant leads program in place that accepts information about all forms of tax non-compliance, although it does not pay informants for such information. The informant leads program can be used to report cases of international tax evasion and aggressive tax avoidance that fall below the $100,000 threshold that is set for the offshore tax informant program.

Taxpayers with previously undisclosed income may also avail themselves of the Canada Revenue Agency's voluntary disclosures program. Should Canadians choose to rectify their tax affairs through voluntary disclosure, they may be able to avoid penalties and prosecution for tax evasion and only have to pay the taxes they owe, plus interest.

Taxpayers file many different types of disclosures in relation to income and property located outside of Canada. For example, CRA has received a significant number of disclosures in relation to foreign asset reporting information and investment income located offshore. To be eligible for the voluntary disclosures program, taxpayers must come forward and file a valid disclosure before they become aware of any compliance action that CRA begins against them.

We encourage all Canadians with unreported or underreported income to avail themselves of the voluntary disclosures program, pay their taxes upfront, or otherwise the financial penalties for being caught cheating on their taxes could be dire.

While our government will not support Motion No. 485, Canadians can rest assured that we are taking strong action to protect the integrity and fairness of Canada's tax system. We believe that following up on information and intelligence provided by informants is one of many effective solutions to addressing the complex issue of international tax non-compliance.

This is more effective than attempting to substantiate some elusive “tax gap” that only exists because someone is deliberately and very aggressively, and usually with a fair amount of finesse, hiding income offshore. That so-called “tax gap” is almost impossible to quantify. The OECD says that it is impossible to quantify, and we believe it. However, that does not take the burden off government to aggressively follow up on international tax evasion and international tax cheats. It actually increases the burden on government to aggressively seek out people who are not paying their income tax or who are hiding their money offshore.

As my hon. colleague from Winnipeg South Centre said earlier, there are a number of tools in the government's toolbox. We are using every single one of them to aggressively search out these tax cheats and make sure they are in compliance. If not, we will use the force of the law to force them into compliance.

[The Deputy Speaker, NDP, Joe Comartin]

The time provided for the consideration of private members' business has now expired and the order is dropped to the bottom of the order precedence on the order paper.

The House resumed from February 6 consideration of the motion.

Procedure and House Affairs

[The Deputy Speaker, NDP, Joe Comartin]

Pursuant to an order made on Wednesday, February 26, 2014, the question is deemed put and a recorded division is deemed requested.

Pursuant to Standing Order 66, the recorded division is deferred until Wednesday, March 5, 2014, at the end of the period provided for government orders.

A motion to adjourn the House under Standing Order 38 deemed to have been moved.

Health

[Francis Scarpaleggia, Liberal, Lac-Saint-Louis, QC]

Mr. Speaker, there is a dangerous grey area in the regulation of medical drugs in Canada, namely with respect to drug compounds prepared by mixing together two or more ingredients, of which at least one is a drug, to create a final product in an appropriate form or dosing for administration in a patient-health care professional relationship, typically in a hospital.

The emergence of this new form of drug delivery—through pre-filled syringes and bags, for example—has become problematic because companies in this sector fall between the definition of a drug manufacturer and that of a pharmacy. The latter is regulated by the provinces and the former by the federal government.

The absence of sufficient and appropriate regulatory oversight of drug compounders has led to mistakes and human tragedy both in Canada and the U.S. In Canada, the Marchese fiasco resulted in patients receiving diluted doses of a chemotherapy drug. In the U.S., in late 2012, there was an outbreak of viral meningitis associated with a compounded steroid injectable, known as MPA, which was contaminated when it was administered—64 people died and 750 others became sick.

The U.S. compounding industry was operating in the same kind of balkanized regulatory environment as drug compounders in Canada today. The tragedy prompted the U.S. to adopt the Drug Quality and Security Act. Under the act, compounders register as outsourcing facilities, which brings the same type of regulatory oversight by the FDA as is reserved for drug manufacturers, with the same standards of compliance, risk-based inspections, record retention, and adverse event reporting.

The question is this. Why does the federal government in Canada not step in and deploy its expertise in the regulation of drug manufacturers to drug compounders? It would seem a logical extension of federal authority and a wise application of existing federal know-how, all in the interests of the general health welfare of Canadians from coast to coast to coast, who as citizens of this great country, deserve to benefit from common standards of health protection.

Why do the Conservatives fail to show initiative? Are they afraid of the costs? Is it because doing so would require discussion with provincial health ministers, who are not pleased with Ottawa's growing neglect of co-operative federalism in health care?

[Eve Adams, Conservative, Parliamentary Secretary to the Minister of Health]

Mr. Speaker, from the moment our government was told about the reported under-dosing of certain chemotherapy drugs in Ontario and in New Brunswick, we took the situation very seriously. We supported the provincial government's investigation into this incident and we accept the findings of the Thiessen report.

We agree that compounding-like activities conducted by third parties, such as Marchese Hospital Solutions, require more effective regulatory oversight, and we are determined that Canadians will have tough, effective regulations for drug safety.

While this work is ongoing, Health Canada has given direction to companies providing these types of services to ensure that they have oversight in place to protect patients' safety.

This direction states that admixing and compounding activities are done within a hospital, meeting provincial regulatory requirements; are done outside of a hospital, as a service under the supervision of a provincially licensed pharmacist; or, in the third instance, are done in a manner that meets the licensing and manufacturing requirements of the Food and Drugs Act and the Food and Drug Regulations.

Canadians can be assured that organizations following these directions have the appropriate oversight in place to help ensure the safety and effectiveness of health products prepared in this way.

The facts that emerged surrounding the under-dosing incident in Ontario highlighted how the practice of pharmacy has changed and evolved to include new drug preparation and purchasing models.

The regulation of traditional drug compounding is premised on the issuance of a prescription by a health care practitioner for a single drug to a single patient as part of the practice of pharmacy, and as such, it is in the realm of provincial and territorial jurisdiction. The regulation of drug manufacturing requirements and processes most often undertaken by pharmaceutical companies is in the realm of the federal government.

Under new drug preparation models, compounding-like activities are being conducted in dedicated facilities by third parties outside a health care setting for many patients at once and often without a specific prescription. This type of activity can be described as a hybrid of compounding and manufacturing.

As I said, Health Canada has taken on a leadership role in addressing this issue and is developing a proposal for a federal approach for these compounding-like activities. Our objective is to enhance the oversight of these practices for the safety of all Canadians: for my family, for members' families, for families across Canada. Federal oversight would focus on the quality of products and would include additional requirements such as labelling and reporting and enhancing patient safety.

Moving forward, it is important that we continue our collaborative, thoughtful approach with provinces, territories, and other partners to avoid unintended consequences in developing the new approach.

We also want to create an approach that respects both the federal role in drug safety and the provincial and territorial role in the safe use of drugs, particularly because of the diversity of approaches in the oversight of these activities across Canada.

[Francis Scarpaleggia, Liberal, Lac-Saint-Louis, QC]

Mr. Speaker, I thank the parliamentary secretary for the information she has provided on this issue.

I would say that hospitals would welcome the peace of mind that standardized federal regulatory oversight of compounders would bring when it comes to purchasing large quantities of drug preparations for patients in hospitals. This kind of national regulatory oversight would also bring economic benefits; specifically, compounders would be able to demonstrate to potential buyers that their processes and products respect the most stringent national regulatory standards associated with drug manufacturing. In addition, they would be able to operate more efficiently inside the internal Canadian marketplace, as they would be able to avoid having to deal with a costly patchwork of different provincial regulations.

[Eve Adams, Conservative, Mississauga—Brampton South, ON]

Mr. Speaker, having an appropriate level of regulatory oversight for compounding-like activities is a priority for our government.

Health Canada acted quickly following the reported under-dosing of certain chemotherapy drugs in Ontario and has taken on a leadership role in facilitating the development of a long-term solution for all of Canada.

Health Canada issued an interim directive to facilities undertaking admixing and compounding activities and outlined the conditions under which they could be allowed to continue providing those services.

The department continues to work with provinces, territories, and other stakeholders to develop a collaborative approach to increase patient safety and to ensure that an appropriate level of regulatory oversight is in place for compounding-like activities.

Rail Transportation

[Yvon Godin, NDP, Acadie—Bathurst, NB]

Mr. Speaker, two weeks ago, I asked a number of questions about VIA Rail.

CN decided that the railway tracks between Moncton and Campbellton needed repairs. New Brunswick's provincial government negotiated with CN. I am not proud to say it, but New Brunswick is one of Canada's poorest provinces because of all the infrastructure and the fact that only 750,000 people live there. The provincial government invested $25 million to repair the tracks between Moncton and Miramichi, and Bathurst and Campbellton. CN invested $35 million. These are tracks for freight trains.

Consequently, freight will leave Miramichi and travel through Moncton and Rivière-du-Loup to get to Quebec City, Montreal, Toronto and the rest of the country. To make things clear, from Bathurst, the train will go through Campbellton, Rimouski, Rivière-du-Loup and then on to Montreal and the rest of the country. A piece of the puzzle is missing between Miramichi and Bathurst. That is the part they do not want to repair, because freight trains do not use that section of track. VIA Rail would have to foot the bill.

We have had a train since Canada was founded. We built a national railway, from sea to sea, as they say. People can take the train from Vancouver to Halifax. Without the link from Miramichi to Bathurst, VIA Rail trains will no longer go through Moncton, Rogersville, Miramichi and Bathurst and on to Beresford, Nigadoo and Petit-Rocher to get to Dalhousie, Campbellton and the Acadian peninsula, where they get on the VIA Rail line to the Gaspé.

That means VIA Rail will lose 50% of its passengers. That means we will also automatically lose VIA Rail service from Quebec City to Halifax. We will no longer be able to talk about a train from sea to sea. We will have to talk about a train that goes to the St. Lawrence, that stops at Quebec City. This is part of our heritage. It is important for our seniors who use the train to get to Montreal. They go to hospitals, they go to see specialists, or they go to Halifax. Our students go to Halifax, Moncton, Montreal and everywhere. There are also people who are travelling as tourists.

I have asked the question a number of times in the House of Commons. Will the Conservative government at least invest $10 million? That is how much is needed to repair the railway. The government says that VIA Rail is a crown corporation. We are asking the government to save the railway. It is important to Canadians.

Finally, we learned that the hon. member for Miramichi said that she was working behind the scenes and on the ground with the government to make it aware of the needs. The hon. member for Madawaska—Restigouche said the same thing. He said he is not like the member for Acadie—Bathurst and he does not do this out in public. That is what he told the journalists, on the radio. He said he was working on this.

My question for the government is simple. Does the Conservative government today want to be the government that will go down in history as having lost VIA Rail from sea to sea? Will it be the government that takes away VIA Rail from the Atlantic, from Quebec City to Halifax? Will it be this government? I ask the question very respectfully.

[Eve Adams, Conservative, Parliamentary Secretary to the Minister of Health]

Mr. Speaker, I thank the hon. member for the question.

VIA Rail's objective is to operate a national rail system that is safe and efficient. To help VIA Rail accomplish this, our government provides it with significant funding to deliver passenger rail services to Canadians.

In 2012-13, our government provided $275 million to VIA Rail for operation and maintenance of its network. In addition to providing annual funding, our government has provided nearly $1 billion in capital funding since 2007 for VIA Rail to upgrade track and signalling infrastructure, modernize stations, and refurbish rail cars.

As the minister has indicated on previous occasions, VIA Rail is a crown corporation that operates independent of our government. Our government does not operate the railway or get involved in its day-to-day operations. It is VIA Rail that is responsible for determining how best to provide passenger rail services, what routes or tracks those services will operate over, and how frequently its various services will be offered to consumers.

VIA Rail also determines the price that it charges for these services. VIA Rail is ultimately responsible for making business decisions on its operations, including making decisions about its passenger rail services in New Brunswick. Our government has made it clear that it does not intend to purchase the rail line in New Brunswick that CN has listed for sale. Our government is not in the business of buying rail lines and believes this is best left to those who are in the business of operating railways.

Instead, our federal government's approach and role is to provide a legislative framework under the Canada Transportation Act that encourages stakeholders to seek commercial solutions to issues such as the discontinuance of rail service. The line transfer and discontinuance provisions in the Canada Transportation Act are aimed at encouraging the retention of rail lines, by giving railway operators and other interested parties the opportunity to buy rail lines for continued operation where it makes economic sense for them to do so.

In the meantime, CN will continue to be responsible for maintaining the rail line during the discontinuance process to ensure that service is not disrupted. It is also important to note that there are public transportation options available in this region. In addition to the service that is provided three times weekly by VIA Rail, there is a bus service between Moncton and Campbellton that provides daily service.

[Yvon Godin, NDP, Acadie—Bathurst, NB]

Mr. Speaker, with all respect to the parliamentary secretary for her help, we are talking about shutting down VIA Rail from Quebec City to Halifax.

The government is saying that it does not invest in rail. That is not true. The government has invested in part of the rail between Ottawa and Montreal because CN did not want to get involved with VIA Rail.

VIA Rail has invested in other places where the government has invested. In the riding of the member for Peterborough, it bought a piece of rail. Now it is saying it did not do that. The member of Parliament for Peterborough was the parliamentary secretary to the Prime Minister. Now the government is saying here in the House that it does not do that.

It is the current Conservative government that will be on record as closing down VIA Rail from Quebec City to Halifax. It is taking away our passenger train that goes from coast to coast in this country, something that our people, our grandfathers and great grandfathers, have worked so hard on. Is that what the government is going to do? I hope that it studies it and that is not its final answer on the issue.