Madam Speaker, I am pleased and honoured to have the opportunity to rise today to speak to Motion No. 42, regarding the Canada-Barbados income tax agreement. I want to thank the member for Joliette for bringing forward the motion.
Millions of hard-working Canadians pay their taxes in full every year, year after year. Meanwhile, some of the wealthiest people in this country are able to avoid paying their fair share by stashing billions of dollars in offshore tax havens. This unfair, sweetheart deal for millionaire tax evaders is leaving less money for health care, infrastructure, transit, and the other crucial public services all Canadians rely on.
Motion No. 42 seeks to ensure that all Canadians from billionaire corporations to single-income families would pay by the same fair tax rules. Instead of executives from Petro-Canada enjoying a new yacht or a luxury vacation thanks to the savings they benefited from due to filtering their money into tax havens, I would prefer to see middle-class Canadians benefit. People in my riding of Courtenay—Alberni could certainly benefit, as could people across the country.
We can look at the needs in our country. There are people living on the streets. We need money for homeless shelters. We have talked about a national child care program to help tackle inequality. This is billions of dollars that could pay for this important infrastructure and the needs we have in our communities, such as a pharmacare program. We know aboriginal education is heavily underfunded, yet we are giving tax breaks to the rich.
The amount of money that these big corporations and CEOs are saving could be huge if invested in clean energy and tackling climate change. We have opportunities to move forward if we do the right thing, and that is to make sure that these big corporations are paying their fair share.
The NDP has always fought for the rights of hard-working Canadians. As a party, we wholeheartedly support the idea of fighting tax havens that cost Canadian taxpayers. We believe that Motion No. 42, by the member for Joliette, is a good initiative for restoring Canadians' trust in our tax system and closing a multi-billion tax loophole.
In 2014, an NDP MP tabled a private member's bill, Bill C-621, that sought amendments to make it easier for the government and the courts to identify, prosecute, and convict tax cheats who hide their money in tax havens.
In 2013, Peggy Nash said that over the past 10 years, Canadians have invested over $390 billion in Barbados, which has a population of 284,000 people. They invested $175 billion in the Cayman Islands, which has a population of 55,000 people. Obviously, some of the money is absolutely above board and legitimate, but the money that is not legitimate means that the average middle-class family gets hammered and ends up paying more in taxes while getting less in government programs and services than they would have if the money were adequately reported and taxed.
Barbados has become the tax haven of choice for Canadian corporations and billionaires, ahead of other countries such as Luxembourg and the Cayman Islands. In 2007, there was a reported $33.4 billion parked in Barbados tax havens. Moving forward to 2008, it was $53.2 billion. Over the last five years, since 2011, it has gone from $45 billion to $108 billion, being parked offshore.
Simultaneously, Canada has been lowering income tax rates for Canada's largest corporations. In the last 25 years, we have seen taxes reduced from 28% to 15%. Corporations are getting a great tax break here at home, yet they are moving money offshore.
When I think about my riding, I think about a third of the children living in poverty in the Alberni Valley. A fifth of the children, 20% of the children in the Comox Valley are living in poverty. Seniors in Oceanside are living in poverty. The average income in my riding is $26,000 a year.
The government has brought forward a tax break for the middle class, while anyone earning $23 an hour, working full time or less, gets nothing. That is two-thirds of Canadians. It is more like three-quarters of the people living in Courtenay—Alberni.
When we see tax breaks for CEOs that cost Canadian taxpayers $750 million a year, when we see corporations pushing money offshore and not paying their fair taxes, when we see so-called tax breaks for the middle class that benefit the most those who earn between $50 and $100 an hour, we know there is a problem.
Tax havens are not only unfair but are also helping to fuel growing inequality in Canada. We are seeing huge inequality. Inequality is one of the biggest economic crises in our country today. This tax loophole is the biggest economic leakage in Canada right now.
The government has an opportunity to take concrete action to prevent Canadian companies and taxpayers from using these loopholes to avoid paying their fair share of taxes. According to 2015 Statistics Canada data compiled by Canadians for Tax Fairness, the Caribbean island of Barbados is now Canada's third-biggest destination for foreign investment, after the United States and the United Kingdom.
I want to thank the government member across the floor for bringing forward the actions the government is going to take to deal with these tax loopholes, through which companies can avoid paying tax. It is one thing to invest money in the CRA to chase people who are avoiding paying tax, but it is another to actually change the law so that we can make sure that it is illegal for those who move money into tax havens. We have an opportunity to change these agreements with other countries and close these tax loopholes. There is a big difference between that and breaking the law when right now it is legal to move money offshore.
Again, I want to thank the member for Joliette for bringing the motion forward, because this would be an important solution. The government needs to look at legislation to do that, and this is the right legislation to get it started. We have many deals with other countries that also need to be looked at, but this is an excellent start.
Former Prime Minister Paul Martin registered companies in Barbados to avoid paying Canadian taxes. No wonder the current Liberal government is so unclear regarding its policy on tax havens.
I will talk about another former Liberal, who at the time was a New Democrat. I am speaking of Bob Rae. To the CBC in 1980, Bob Rae said, “the government is entering into these tax treaties without being fully aware of the impact they will have on domestic taxation in Canada.” Income that is not taxed at the corporate level and from which the government receives no revenue has the unfortunate effect of increasing the tax load on the average citizen. Is that not true?
In an era when we have skyrocketing health care costs and infrastructure costs that are soaring through the roof, and when we need to address our greenhouse gas emissions, this is a really important time for us to plug this economic leakage.
Dennis Howlett, executive director of Canadians for Tax Fairness, sums this up perfectly when he says, “It isn’t just Donald Trump who likes to brag that it is 'smart’ to avoid paying taxes. Some Canadian multinationals and wealthy individuals are unapologetic about setting up shell companies or foundations in tax havens for no other reason than to avoid paying their share at home. In some—but not all—cases it is technically legal. But it contravenes the spirit of the law and is simply not fair.”
We have to talk about fairness, because when I talk about everyday Canadians, I think about my friends at home; my friends Jennifer and John, who run a whale watching company; my friend Mike Madison, who went to work this morning at the mill, and his wife Michelle. I think about my friend Cory, who is working on the golf course today, and law-abiding Canadians from Qualicum Beach to Tofino, who are doing everything they can to make sure they pay their fair share of taxes to build a healthy Canada while these corporations are taking the money out of the country.
Motion No. 42 tabled by the member for Joliette is a step in the right direction for restoring Canadians' trust in our tax system and closing this multi-billion dollar tax loophole. While Barbados appears to be the tax haven of choice for Canadians, there are several other countries, including Panama and the Turks and Caicos and Bermuda, with similar sneaky taxation agreements with Canada. Motion No. 42 is a good start, but it is just the tip of the iceberg when it comes to tax fairness for all Canadians.