Debates of May 25th, 2015

Finance—Main Estimates 2015-16

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

Mr. Chair, economic action plan 2015 announced an additional $200 million over five years to further strengthen the Canada Revenue Agency's ability to combat the underground economy, international tax evasion and aggressive tax avoidance. That includes $118 million over five years to expand the agency's underground economy specialist teams and $25 million over five years to allow the agency to expand its activities to combat international tax evasion and aggressive tax avoidance.

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

Mr. Chair, I moved a motion in the House calling on the government to calculate how much tax is lost annually because of Canadian investments abroad in tax havens. The government refused.

Why did the government refuse to calculate how much tax revenue is lost annually? Why refuse to submit the necessary documents to the Parliamentary Budget Officer so that he could do this analysis?

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

Mr. Chair, our government is committed to working with its international partners to improve compliance and address cross-border tax evasion. Canada is one of more than 90 jurisdictions that intend to implement the OECD's G20 common reporting standards in the automatic exchange of financial account information.

It is proposed that this standard be implemented in Canada as of July 2017, allowing for the first exchange of information in 2018. I have been in meetings with the G20, where we discussed this issue.

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

Mr. Chair, there are 1,859 names of Canadians on a list of HSBC Switzerland clients who evaded taxes. How many of those 1,800 people were charged?

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

Mr. Chair, the government is taking strong action in order to ensure the integrity of the tax system and protect Canada's revenue base. Since 2006, the government has introduced more than 90 measures to eliminate tax loopholes, clarify tax rules, reduce aggressive international tax avoidance and improve the integrity of the tax system.

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

Mr. Minister, there were no charges. However, 264 people used the voluntary disclosure program. How did they come to use this program if they got caught? That is not voluntary.

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

Mr. Chair, I have to say that while New Democrats are focused on this issue, they continue to demand reckless spending and want to impose higher taxes. We want to stay the course with sound fiscal management and balanced budgets.

We will continue with our low-tax plan. We will, of course, also continue to make sure that companies in Canada, operating in Canada and around the world, pay their fair share.

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

Minister, you do not seem to have an answer. Does the government not have the resources to combat tax evasion? How many full-time jobs will be eliminated by the Canada Revenue Agency in the next three years?

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

Mr. Chair, the tax integrity measures will modernize a group of existing anti-avoidance rules and dividend rental arrangement rules. Taxpayers have found ways to get around those rules. This measure will ensure that the dividend rental arrangement rules apply to certain operations in which equity derivatives, called synthetic equity arrangements, are used. It will prevent creative taxpayers from claiming significant recognized tax losses on some of these operations.

[Murray Rankin, NDP, Victoria, BC]

Mr. Chair, I first want to ask the minister questions about tax loopholes. What is the annual cost of the employee stock option deduction? Just the figure, please.

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

Mr. Chair, I do not have that specific number at hand, but I will be pleased to provide it to the hon. member.

[Murray Rankin, NDP, Victoria, BC]

Mr. Chair, I wonder if the minister can explain why the government supports this tax loophole that subsidizes the compensation of CEOs and other senior executives, like investment bankers, through these stock options. Why?

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

Mr. Chair, it is of course very traditional for taxes to be imposed only when the profit is realized. To tax people on the receipt of shares before they are realized would, of course, in many cases, require them to sell the stock immediately. This is what is done in the United States and other countries in the world. It is a very standard tax practice.

[Murray Rankin, NDP, Victoria, BC]

Mr. Chair, the minister has been talking about TFSAs and interactions. Does the minister believe that millionaires should be able to collect OAS and guaranteed income supplement benefits that are, of course, intended to help low-income seniors?

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

Mr. Chair, we have discussed TFSAs at length. They are clearly a benefit overwhelmingly for low- and middle-income Canadians. Half of TFSA holders earn less than $42,000 a year.

NDP Premier Greg Salinger says that the TSFAs should be especially helpful in encouraging low-income Manitobans to save.

I do not know why the NDP is so intent on taking away this important savings measure from lower-income Canadians.

[Murray Rankin, NDP, Victoria, BC]

Mr. Chair, GIS supplements are available only to people with low incomes. Of course, a loophole allows the wealthy to draw from their TFSAs while at the same time collecting GIS.

Does that seem fair and proper to you, minister?

[The Deputy Chair, Conservative, Barry Devolin]

I would ask that members ask questions to the Chair.

The hon. minister.

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

Mr. Chair, we always look to see whether there is unfairness in the tax system. We do not see an issue at this point. We are focusing on the benefits TFSAs can provide to seniors and to low and middle-income Canadians to save for a down payment on a home, or for education for their kids and for retirement.

[Murray Rankin, NDP, Victoria, BC]

Mr. Chair, the minister refused to answer that question as well.

I would like to turn to the auto sector. Was the minister aware of the pending 1,000 jobs being lost at GM's Oshawa plant when he decided to sell off the government's GM shares at a loss to balance the books?

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

Mr. Chair, there are so many errors in that statement that one does not know where to begin. First, we did not sell it at a loss; we sold it at a profit. The fact that we sold it had absolutely nothing to do with what the automotive company did or would have done. It is frankly quite naive of the member opposite to think otherwise.

[Murray Rankin, NDP, Victoria, BC]

Mr. Chair, speaking of naiveté, then what guarantees did the government seek and receive about the continuation of GM's Canadian operations?

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

Mr. Chair, we saved over 52,000 jobs. We saved the automotive sector and we did that because we believe in manufacturing. There is no relationship between the sale of the minority shares and GM's operational decisions.

We continue to support the industry, including providing up to $100 million over five years to support product development and technology demonstration by automotive parts suppliers through the automotive supplier innovation program.

[Murray Rankin, NDP, Victoria, BC]

Mr. Chair, were guarantees secured or even sought?

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

Mr. Chair, yes they were.

[Murray Rankin, NDP, Victoria, BC]

Mr. Chair, part 3 of the omnibus budget implementation bill would retroactively change a lot to absolve the RCMP from wrongdoing at the same time as the police are investigating whether it broke the law. How does this provision of the minister's budget bill address the Canadian economy?