Mr. Speaker, we are debating the second and last budget implementation bill. Unfortunately, the needs expressed by Quebec citizens and organizations are still not addressed in the budget. With respect to the health, education and social service transfers, the cuts announced by the Conservatives have not been reversed. In short, Quebec still gets nothing.
Our students' education and textbook credits were cut and they have not been adequately offset. In the case of Quebec students, for example, we are talking about a net loss of $120 million. They have been shortchanged, and the bill does nothing to address the situation. That is very disappointing. The government has really disappointed us. There is nothing for our strong economic sectors such as the green economy, high technology, aerospace, and informatics, nor is there anything for our farmers and unemployed workers.
In short, we are disappointed that Quebec's needs are not among the government's priorities. However, that is not a big surprise. Canada and Quebec are such completely different nations that for years now millions of Quebeckers have understood that we would be rather better served by being masters in our own house.
This bill basically deals with two things. The first is the indexing of the Canada child benefit. It is reasonable and appropriate that it be indexed. The second is a host of small changes to close tax loopholes that allow tax avoidance. For example, the bill eliminates the possibility of claiming the small business tax credit multiple times. That does not make sense. Companies that own companies that own companies and so on down the line like nesting dolls will no longer be able to use this strategy.
However, if the government really wants to crack down on tax avoidance, it is missing the mark. It does not realize that, while it is trying to put out the fire in the recycling bin, the whole house is going up in flames.
When it comes to tax avoidance, the root of the problem lies primarily with the banks, the financial industry, and the multinationals that happily and legally send their billions of dollars to tax havens. That is shameful. For Canada's five big banks alone, we are talking about $6 billion a year in lost revenue for the governments, whether it be the federal government, the Government of Quebec, or the other provincial governments. That has nothing to do with the amounts announced in this bill. The Liberals have missed the boat.
What is more, we do not need to renegotiate international agreements to solve the real problem with tax avoidance. The government can take action right here and now.
I would like to remind members of a little known fact: no treaty or law authorizes the use of tax havens. For example, Canada's tax treaty with Barbados stipulates that companies entitled to any special tax benefit in Barbados, or in other words companies that are entitled to a ridiculously low tax rate of 0.25% to 2.5% rather than Barbados' usual tax rate of 25%, must pay taxes in Canada. It says so in article XXX of the treaty.
Tax avoidance is legal because of backdoor changes that have been made to Canada's tax regulations. Previous governments put these regulations in place without even allowing MPs to debate or discuss them.
I would like to make a positive contribution to the debate by suggesting one simple, practical thing that could be done to resolve an essential element of the problem of tax evasion. We simply need to get rid of two regulatory changes.
First there is paragraph 5907(11.2)(c), which invalidates article XXX of the Canada-Barbados tax treaty, a subparagraph that stipulates that taxes must be paid here. Thanks to that regulation, Barbados became a tax haven for Canada just over 20 years ago. That regulation passed quietly, and it might even be illegal.
That regulation was put in place without a vote in the House, and it made it possible for banks and multinationals to legally profit from tax havens. It is high time that we outlawed something that is unethical, in the name of justice and fairness.
We also need to get rid of the amendment to subsection 5907(11) that was passed in 2009. With the stroke of a pen in the regulations, the government opened up 22 other tax havens.
As soon as Canada has a comprehensive tax information exchange agreement with a tax haven, any profits that come back to Canada are tax-free, plain and simple. Once again, that amendment was passed quietly.
It can be found in a schedule to one of the mammoth budget implementation bills, tucked in the section “medical expense tax credit” even though it is totally unrelated. That shows bad faith, and not just a little.
Again, when it comes to tax avoidance, we have to tackle the root of the problem and make illegal what is unethical. Tax avoidance is a legal practice that puts enormous pressure on public finances. It is not right that people who are paying more and more taxes and user fees are seeing public services disappear, while big corporations and major banks shirk their responsibilities.
Inequality is growing and we have to change that. It is time to take action. However, we will have to start by changing the culture of Parliament and of successive governments. Even though Canadians generally deplore tax avoidance, as Quebeckers do, the banks have so much power that the government, the party in power, and the official opposition continue to wash their hands of the matter, just as Pontius Pilate did in a well-known story. The time has come for elected officials to start truly representing Canadians, rather than the economic interests of the giants.