House of Commons Hansard #239 of the 42nd Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was finance.
The Speaker Liberal Geoff Regan
I am not sure how a question about who sold shares in a company is the responsibility of the government. However, I see that the Minister of Finance is rising.
Bill Morneau LiberalMinister of Finance
Mr. Speaker, I actually see it as an opportunity to talk about why we did in fact raise taxes. What we did was that we said to Canadians that we thought the appropriate thing to do was to raise taxes on the top 1%. We said that would enable us to lower taxes on middle-class Canadians. Therefore, we lowered taxes on Canadians in the $45,000 to $90,000 tax bracket by 7%. The tax rate went down from 22% to 20.5%. Thus, we lowered middle-class taxes on nine million Canadians. We think this is a really important initiative to ensure tax fairness in our country, and we will stay on top of that.
Pierre Poilievre Conservative Carleton, ON
Mr. Speaker, the minister's office told John Ivison that he sold 680,000 Morneau Shepell shares. At 10:25 on November 30, 2015, someone sold 680,000 Morneau Shepell shares. That someone saved a half a million dollars by avoiding the drop in the stock market that followed the minister's introduction of tax measures in this House of Commons. Was it just a coincidence that those two transactions lined up so carefully, or did in fact the minister jump the gun and sell his shares before he introduced his tax measures?
Bill Morneau LiberalMinister of Finance
Mr. Speaker, I think I have a good idea of why members on the opposite side are trying to create conspiracy theories out of thin air. I think their objective is to deflect Canadians from understanding what they do not want them to understand, that the policies we have put in place are making an enormous positive difference for Canadian families. By introducing the Canada child benefit, we are helping nine out of 10 families do much better. By indexing that benefit, we will see it keep up with inflation. We are also moving forward with the working income tax benefit to help working Canadians get into the middle class. We will continue with these efforts—
The Speaker Liberal Geoff Regan
Order, please. I would urge the hon. member for Foothills, as we would all love to hear from him when he has the floor, to reserve his comments for when he has the floor.
The hon. member for Carleton.
Pierre Poilievre Conservative Carleton, ON
Mr. Speaker, reading the Liberal platform, one would have expected that tax increase to take effect at the beginning of the fiscal year. That is when the revenues were projected from. Instead, the minister confirmed in the House of Commons that it would take effect at the beginning of the calendar year. Investors quickly sold their shares in the 2015 year so they could realize their gains in a lower-taxed year. The markets dropped. Morneau Shepell dropped by 5%, but not before someone who knew what was going on was able to sell his shares and save a half a million. Who was that somebody?
The Speaker Liberal Geoff Regan
Once again, it is not clear that this is within the responsibility of the government. As I see no one rising to answer, the hon. member for Carleton.
Pierre Poilievre Conservative Carleton, ON
Mr. Speaker, it is actually the responsibility of government to ensure that no minister ever uses inside knowledge to benefit from transactions in the stock market. We know that when this member locked in stone the changes to the tax system that would raise capital gains taxation, investors quickly sold so they could make their gains before those changes took effect. The stock market dropped as a result. Morneau Shepell went down 5%. However, somebody sold $10 million in shares before that could happen. Somebody sold those shares before the minister introduced his measures on the floor of the House of Commons. Was that this minister?
Bill Morneau LiberalMinister of Finance
Mr. Speaker, I am happy to answer to the fact that as Minister of Finance, I am looking to make sure that our economy does well. Of course, one of the ramifications of that is positive—
The Speaker Liberal Geoff Regan
Order. I need to hear the answer, members need to hear the answer, and we need to know whether someone says something that is out of order. Or, would members prefer that we go on to something else? Order.
The hon. Minister of Finance has the floor.
Bill Morneau Liberal Toronto Centre, ON
Mr. Speaker, one of the things the finance minister does is to work to make sure the economy is doing well. What has happened over the last couple of years is that the economy has done well. Of course, one of the positive upsides of that is that sometimes the stock market does well also. Of course, the stock market is significantly up from when we came into office.
We are working on behalf of middle-class Canadians and trying to help Canadians to get into the middle class. The good news is that those efforts are working. Canadians are seeing the benefit and, at the same time, we are seeing advantages across the economy.
Gérard Deltell Conservative Louis-Saint-Laurent, QC
Mr. Speaker, this is a very serious and very important question.
On December 7, 2015, the Minister of Finance proposed tax measures that would have a direct impact on the stock exchange. Morneau Shepell, for example, lost 5%. One week earlier, on November 30, someone sold over 670,000 shares, so that transaction saved that individual half a million dollars.
Can the Minister of Finance confirm whether he was or was not the person who made that transaction?
Bill Morneau LiberalMinister of Finance
Mr. Speaker, I will keep working for Canadians across the country. The good news is that our economy is doing well. Thanks to our policies, we are enjoying the highest level of economic growth we have had in a decade, and the unemployment rate is the lowest it has been in a decade.
The truth is, this is a good situation for Canadians across the country.
Gérard Deltell Conservative Louis-Saint-Laurent, QC
Mr. Speaker, again, the question is very serious. For months we have been saying that the Minister of Finance is in conflict of interest. The conflict of interest is glaringly obvious.
Can the minister tell us who sold shares in Morneau Shepell just days before the Minister of Finance brought in a tax policy that caused a 5% drop in the company's value?
Can the minister seriously set the record straight for Canadians?
Is he the one who sold those shares or not?
Bill Morneau LiberalMinister of Finance
Mr. Speaker, this is what I can say to Canadians. The opposition wants to talk about me because they do not want to talk about Canadians. We want to talk about our economy, which is performing really well. There is very good growth for Canadian families, and the situation for the middle class is much better. We will pursue our policy to improve our economic situation.
Pierre-Luc Dusseault NDP Sherbrooke, QC
Mr. Speaker, the Auditor General had some harsh words for the Canada Revenue Agency last week. He accused the agency of a cover-up and misrepresentation.
However, the Liberals refused to delve into this issue at the Standing Committee on Finance. That is right, in addition to hiding the data and the real statistics of the call centre, the Liberals are avoiding being accountable in the House. That is deplorable and insulting for Canadians, as they expect the Liberals to take these matters seriously and get to the bottom of things.
Why is the minister refusing to accept responsibility for this abysmal failure? What else is she hiding? Her incompetence?
Diane Lebouthillier LiberalMinister of National Revenue
Mr. Speaker, I read the Auditor General's report and I agree with all his recommendations. In our first budget, we invested $50 million to help our call centres provide better service to Canadians.
We have already started hiring more agents to respond to more Canadians, and we have an action plan that focuses on modernizing our telephone platform, improving training, and updating our service standards.
Murray Rankin NDP Victoria, BC
Mr. Speaker, instead of targeting five wealthy neighbourhoods, the Liberals can act right now on tax avoidance by closing tax loopholes. In fact, the Liberals voted in favour of an NDP motion that would do just that, but, of course, they failed to act. My private member's bill aims to shut down tax loopholes very similar to the ones that were used in the paradise papers.
I have a simple question. Will the Liberals prove to Canadians they are working for the middle class by closing tax loopholes to make sure their wealthy friends stop abusive tax avoidance, yes or no?
Diane Lebouthillier LiberalMinister of National Revenue
Mr. Speaker, we are fully committed to fighting tax evasion and aggressive tax avoidance. The NDP is talking about the importance of fighting tax evasion and is criticizing what we are doing about it. We are getting results and we have a plan. Last year, 335 cases were sent to criminal investigations and 123 search warrants were executed. We continue to work on ensuring that our tax system is fair for all Canadians.
Pierre Poilievre Conservative Carleton, ON
Mr. Speaker, Gordon Pape, the famous financial expert, wrote in the Globe and Mail after the minister's tax increase was introduced on the floor of the House of Commons, “If you've been considering taking profits on some of your stocks, do it now. You'll save the equivalent of 2 per cent federal tax plus the provincial share.” As a result, many sold their shares and the stock market dropped. Morneau Shepell dropped 5%.
A week before the minister introduced his measures on the floor of the House of Commons, someone sold $10 million of Morneau Shepell shares. Was it him?
Bill Morneau LiberalMinister of Finance
Mr. Speaker, I will continue to advocate on behalf of a tax system that is broken. What we did was something that we believe was absolutely the right thing to do. We did raise taxes on the top 1%, including families like mine—
