moved for leave to introduce Bill C-621, An Act to amend the Income Tax Act (economic substance).
Mr. Speaker I rise to introduce an act to amend the Income Tax Act. This enactment would enable the government and courts to more effectively identify, pursue and convict tax cheats.
The amendment would require the minister or the court to take into consideration the economic substance of a transaction in determining whether it constituted an avoidance transaction and whether it resulted in a misuse or abuse of the Income Tax Act. Further, it would establish the presumption that an avoidance transaction that did not have a substantial economic substance in relation to its anticipated tax benefit resulted in a misuse or abuse of the act.
I would like to thank Dr. Robert McMechan for his expertise in proposing these legislative changes in his acclaimed book, entitled Economic Substance and Tax Avoidance: An International Perspective. Dr. McMechan is a former general counsel in the tax litigation section of the Department of Justice and is with us today.
Recognizing the role that these transactions play in tax avoidance and recognizing that Canada is now out of step with many other jurisdictions, this bill would help bring tax avoidance laws in Canada into closer harmony with tax avoidance measures already in place elsewhere.
(Motions deemed adopted, bill read the first time and printed)