Madam Speaker, I am pleased to rise in the House at third reading stage of Bill S-4. I would like to take this opportunity to wish everyone happy holidays.
I realize that I will be the second last person to speak in the House and that my colleague from Pierre-Boucher—Les Patriotes—Verchères will be the next and last speaker. He will have the honour of ending the debate. I would just like to extend my best wishes to the House.
We are not debating the most controversial bill. All parties worked together making it possible for the government to move the bill quickly through all stages in the House, including study by committee. All parties collaborated to ensure that everything went smoothly.
Naturally, the government used the excuse that without royal assent and diplomatic notification before December 31, the convention with Taiwan could not go into effect on January 1, and if it was not in effect on January 1, 2017, we would have to wait until January 1, 2018.
It goes without saying that we have been working together in order to advance this file, even though we have some reservations about tax conventions overall. In this case, the new concerns with respect to Taiwan are not problematic, nor is the use of the OECD model to update the agreement with Israel, which was signed in 1975. There is also a technical update for the Hong Kong agreement, which clarifies the status of Hong Kong as a territory of China.
It goes without saying that we support the bill and that we are letting the government proceed. The Governor General will thus be able to sign it soon, give royal assent and, a few days later, notify Taiwan that the convention has been ratified and that it can take effect on January 1. We will be monitoring this file during the holidays.
During those proceedings, I gave a very serious yet broad overview of tax conventions that can be problematic in some instances. That is why, during my speech at second reading, I encouraged the government to keep a closer eye on our 92 and soon to be 93 tax conventions with 93 nations in the world, in order to ensure that these conventions are used properly and for the right reasons and that they do not facilitate tax evasion, as is the case in Barbados.
The title of Bill S-4 mentions combatting tax evasion. However, we know that in some situations tax conventions to avoid double taxation facilitate tax evasion because the businesses can claim resident status if they are sufficiently set up in the respective country and then claim the right to be taxed only once, which means, in the case of Barbados, to be taxed in Barbados only. When those businesses bring their money back here to Canada, they do not have to pay any additional tax since they already paid the taxes that they owe. Barbados has a low tax rate of 0.5% to 2.25%, if memory serves me correctly, and in that case, a tax convention is totally unacceptable.
However, it goes without saying that this sort of convention would work well in the case of Taiwan or Israel because they have tax rates similar to those in Canada. We do not see a problem with this. However, I would like to remind the government of the importance of having a formal mechanism for the periodic review of these conventions. This would ensure that the countries with which we have conventions continue to have tax rates similar to ours and that we are not creating an even bigger problem and acting contrary to the spirit of these conventions by not seeking to prevent tax evasion.
I wanted to mention that again in this debate at third reading and commend the government for passing this bill, which we hope will come into effect on January 1, if all goes well.
I would like to say happy holidays to all my colleagues, yourself included, Madam Speaker. I hope to see everyone back here in good health in 2017 so that we can continue the important work that we do in the House and that we will continue to do in co-operation with all parties. We will see everyone in 2017.