House of Commons Hansard #149 of the 42nd Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was money.
Kevin Lamoureux LiberalParliamentary Secretary to the Leader of the Government in the House of Commons
Mr. Speaker, pursuant to Standing Order 36(8) I have the honour to table, in both official languages, the government's response to 10 petitions.
James Maloney Liberal Etobicoke—Lakeshore, ON
Mr. Speaker, I have the honour to present, in both official languages, the third report of the Standing Committee on Natural Resources entitled “The Future of Canada's Mining Sector: Sustainable Growth Beyond the Global Downturn”.
John Barlow Conservative Foothills, AB
Mr. Speaker, the Conservative members of the Standing Committee on Natural Resources feel that some parts of this report are lacking substance. There are recommendations in it based on testimony we did not hear, and it excludes any concern we heard from industry stakeholders and leaders relating to the Liberal carbon tax. As such, we are offering supplementary recommendations to the report and call on the Minister of Natural Resources to take action on our supplementary report.
Rhéal Fortin Bloc Rivière-du-Nord, QC
moved for leave to introduce Bill C-340, An Act to amend the Canada Elections Act and to make a consequential amendment to another Act (political financing).
Mr. Speaker, today I am pleased to introduce a bill to amend political party financing. This bill will help overcome the mistrust with which many people view politicians by reducing the often undue influence of major donors on the party in power. This bill will also make the votes cast by voters of all parties in all ridings more meaningful.
This fundamentally democratic bill is inspired by Quebec's Act to Govern the Financing of Political Parties, which was passed unanimously in Quebec. I hope this bill will have the support of all parties.
(Motions deemed adopted, bill read the first time and printed)
Marjolaine Boutin-Sweet NDP Hochelaga, QC
Mr. Speaker, there have been discussions among the parties. If you seek it, you will find consent for the following motion: That, at the conclusion of today's debate on the opposition motion in the name of the member for Rosemont—La Petite-Patrie, all questions necessary to dispose of the motion be deemed put and a recorded division deemed requested and deferred to Wednesday, March 8, at the expiry of the time provided for Government Orders.
Canada Elections ActRoutine Proceedings
The Speaker Geoff Regan
Does the hon. member have the unanimous consent of the House to move the motion?
Kevin Lamoureux LiberalParliamentary Secretary to the Leader of the Government in the House of Commons
Mr. Speaker, I would ask that all questions be allowed to stand.
Alexandre Boulerice NDP Rosemont—La Petite-Patrie, QC
moved:
That, given the government loses tens of billions of dollars annually to tax loopholes, deductions, and exemptions that mostly benefit the wealthy and estimates suggest that tax evasion through the use of offshore tax havens costs the government more than $7 billion dollars annually, the House call on the government to: (a) address tax measures that primarily benefit the wealthy, including keeping its promise to cap the stock option deduction loophole; and (b) take aggressive action to tackle tax havens including (i) tightening rules for shell companies, (ii) renegotiating tax treaties that let companies repatriate profits from tax havens to Canada tax-free, (iii) ending penalty-free amnesty deals for individuals suspected of tax evasion.
Mr. Speaker, I would first like to inform you that I will be sharing my time with the always very diligent and meticulous member for Sherbrooke. It will be my pleasure to give him the floor on this fundamental issue. I do not think I have ever discussed an issue with such serious consequences on the state's ability to provide services to Canadians.
I think it is now fair to say that we no longer live in a fair and equitable tax environment that works well for our workers, those less fortunate, and the poorest families in our country.
Let us put things in context. We live in a society where every year we hear the same old story: by noon on January 2, CEOs of major Canadian companies have already earned as much in a little over 24 hours as an average worker will earn for the entire 365 days of the year. It is this type of inequitable society that the successive Conservative and Liberal governments have built over time.
Two billionaire Canadians have as much money as the poorest third of the population. Two people alone have the equivalent of what 12 million people have in our country. Are we supposed to just accept that and move on? The highest paid CEOs in Canada earn 193 times more than the average salary and the gap has only gotten bigger over the years.
A number of things explain this increased inequality. According to the Gini coefficient, which measures inequality, for a decade now, inequality has been growing at a much faster rate in Canada than in the United States, a society often considered to have greater inequality. Inequality is growing faster here than there. How did that happen? What caused this to happen? There are several reasons. In his book Une escroquerie légalisée, Alain Deneault provides a list of reasons that is impressive, but not comprehensive.
First, there was the reduction in federal corporate tax rates, which dropped from 37.8% in 1981 to only 15% in 2012. Next, the federal capital tax was eliminated. Then, the federal capital gains inclusion rate was cut from 75% to 50% in 2000. I will come back to that. We could also mention the sales tax and duty exemptions, and the fact that some companies can indefinitely defer payment of their taxes. Well, imagine that! Let us attempt to do the same with our T4 slips in just over a month's time, see how that goes. Let us not forget that some mining and oil and gas companies can be set up as non-taxable income trusts, and that tax rates for Canadian taxable assets owned by non-residents are declining.
This is not an exhaustive list, but it does show that over the years the trend has been to systematically favour big business and the wealthiest in our society to the detriment of those who receive a pay cheque every two weeks and are required to pay their taxes in order to receive, incidentally, fewer and fewer services.
One thing that is not on that list but is nevertheless a reality is the phenomenon of people sending money to tax havens to avoid paying their fair share of taxes here in Canada. Were that tax money collected, it could be used to provide social programs and social housing, improve public transit, provide care for the elderly, and help students take on less debt. We are losing billions of dollars because that money is being sent to a bunch of sunny tax havens. It is hard to put a number on exactly how much is being lost. It is kind of frightening.
What is more, the problem is exacerbated by all of Canada's bilateral tax treaties, such as the one we have had with Barbados since 1980. Since then, Canadian direct investments in Barbados have increased by 3600%. Canadian businesses and individuals sent $130 billion to Barbados in 2011. Two years later, $170 billion was sent to Barbados and hidden there. Why?
This happened because we foolishly agreed that, if people paid their taxes in Barbados and reported their earnings in Canada, they would no longer have to pay taxes in Canada. It is the principle of the avoidance of double taxation, under which people do not have to pay taxes on the same income in both countries.
There is just one small problem: in Canada, the corporate tax rate is 15% and the individual tax rate is approximately 25% or 30%, whereas in Barbados, the tax rate is 1% or 2%. Obviously, that is nothing. People are paying their taxes in Barbados and reporting the income here in Canada. It is completely legal. There is nothing that can be done about it. Billions of dollars are being lost every year. That is why the NDP's motion proposes that all of the bilateral tax treaties be reviewed and renegotiated. These treaties are obvious scams that are depriving us of necessary resources and giving gifts to those who do not need them. It is rather mind-boggling.
Canadian investors invest four times more in Barbados than in Brazil. Looking at total Canadian investments, twice as much is invested in about 10 tax havens than the total invested in China, India, and Brazil—growing countries where we need to be present.
All of these multinationals are profiting from crime. They are now responsible for 40% to 60% of international economic transactions, transactions that are taking place between the same companies and their subsidiaries. They are what is called shell companies or dummy corporations, and their sole purpose is to move money to a certain address via a certain country. They are also called PO box companies. They are empty shells that produce nothing, or are sometimes paid to manage a company’s branding or logo. We have seen millions of dollars being paid to manage a logo. I would like to be able to do that.
This has created totally absurd situations where all these dummy corporations, all these PO box companies, are often accommodated in the same place. I have one good example: in Georgetown, in the Cayman Islands, there is one building in which 18,000 companies are registered. In fact, the Cayman Islands have more registered companies than inhabitants, making their population the most entrepreneurial in the world. And the tax havens or shell companies do not exist only in the southern hemisphere. In Delaware, in the United States, the Corporation Trust Center houses no fewer than 250,000 companies on its premises. Now that is quite a number.
I have spoken a little about the tax havens, which make up a large part of the problem. Statistics Canada estimates them at $7 billion or $8 billion. The Conference Board of Canada says it is probably more like $47 billion, while Canadians for Tax Fairness cites $80 billion. The range is huge, but in any case it is a lot of money.
The other thing we would like to talk about is the Liberal promise to put an end to certain tax loopholes, particularly stock option deductions. This was a promise made during the election campaign that unfortunately has been totally forgotten.
All these tax loopholes were examined by the Canadian Centre for Policy Alternatives in November 2016. That study has some absolutely incredible things to tell us. When we add up all these deductions, all these tax loopholes and all these tax credits, the shortfall to the public purse comes to $103 billion. Every year, about one hundred billion dollars eludes our coffers, money we could be using to care for our seniors, to treat our sick, and to have roads that make some sense. They examined 64 tax measures that constitute exemptions or deductions. Of those 64, only five are progressive; the other 59 are regressive. What does that mean? For a tax measure to be progressive, one assesses whether most of the benefit of the measure goes to the 50% poorest or the 50% wealthiest Canadians. Only five tax measures benefit the poorest, while the other 59 benefit the wealthiest. In certain cases, such as that of dividend tax credits, it is the wealthiest 10% who benefit, as much as 91% and 99%.
The Conservative and Liberal governments pulled off something absolutely incredible—they created a tax environment called Robin Hood in reverse. All of us together are going to chip in and subsidize the wealthiest.
Opposition Motion—Tax FairnessBusiness of SupplyGovernment Orders
Winnipeg North Manitoba
Liberal
Kevin Lamoureux LiberalParliamentary Secretary to the Leader of the Government in the House of Commons
Mr. Speaker, the number one priority of this government has been Canada's middle class and those aspiring to be a part of it. In the first budget, we saw a major shift in terms of the middle class tax cut and the Canada child benefit program. We saw it in the redistribution for our seniors with the 10% GIS increase. We saw it with the special tax of 1% on Canada's wealthiest. I would remind NDP members across the way that they voted against all of these measures. However, this is a substantial shift in addressing the issue of inequality, which the member has referenced.
More importantly, we recognize that this is an important issue that the member is talking about today, and we invested over $400 million in the last budget to deal with it. This is why we will be supporting the motion. Does the member not agree that investing over $400 million to provide CRA the resources needed to get these tax evaders is encouraging? Maybe the NDP should have supported that particular initiative.
Alexandre Boulerice NDP Rosemont—La Petite-Patrie, QC
Mr. Speaker, the Liberal government crows over its investment of $444 million in the Canada Revenue Agency. No one has been arrested and no charges have been laid, however, so they cannot be said to have a good batting average, as we say in baseball.
In his mandate letter to the Minister of National Revenue, the Prime Minister wrote:
We have also committed to set a higher bar for openness and transparency in government.... Government and its information should be open by default. If we want Canadians to trust their government, we need a government that trusts Canadians.
One man wrote:
Now is the time for the prime minister to order the Canada Revenue Agency to get with the program and provide the Parliamentary Budget Officer with the required information, so Canadians will know the actual amount of taxes owed, but not collected, and what resources the CRA needs to collect those taxes. Only then will the CRA meet the standard of openness and transparency set by the prime minister.
This was written by a senator from Charlottetown.
Ziad Aboultaif Conservative Edmonton Manning, AB
Mr. Speaker, there is a $7-billion figure in the member's proposal. Can he provide some backup on that figure?
Alexandre Boulerice NDP Rosemont—La Petite-Patrie, QC
Mr. Speaker, I am pleased to report that Statistics Canada itself came up with the $7-billion figure when estimating lost revenue due to tax evasion and the use of tax havens. It would be no problem for me to find out the year the report was published.
The problem with the figure provided by Statistics Canada is that employees are able to estimate the amount only when the companies or individuals tell them that they have sent money to tax havens and that money came back here after the transfer. They are not obligated to systematically report this to Statistics Canada. The result is that these estimates are based on data that has been voluntarily submitted.
This is why the Conference Board of Canada and Canadians for Tax Fairness quote numbers much higher than $7 billion or $8 billion.
We regard that figure as a minimum and believe the actual amount to be much higher.
Linda Duncan NDP Edmonton Strathcona, AB
Mr. Speaker, I understand that one of the problems is that, unlike the American government, the Canadian government actually refuses to charge any of these tax evaders and is simply working out a deal to recover the taxes that should have been paid. The problem with that is, if these tax evaders are not charged and convicted, then they can keep getting contracts with the government. Would the member like to speak to that?
Alexandre Boulerice NDP Rosemont—La Petite-Patrie, QC
Mr. Speaker, indeed, the mess of the KPMG scheme, with some degree of complicity from the Canada Revenue Agency, is very worrying. The government is failing to take action.
In the United States, when someone is found guilty of tax evasion, the fine is from 20% to 27% interest on the amount owed to the government. In Canada, unfortunately, it is zero. That is not much of a deterrent.
Pierre-Luc Dusseault NDP Sherbrooke, QC
Mr. Speaker, I am happy to take the floor after my colleague from Rosemont—La Petite-Patrie. I thank him for tabling this motion which is extremely pertinent in the context of last week’s revelations about the KPMG affair. That affair is coming back to haunt the Minister of National Revenue, who had quite a hard time defending herself yesterday in the House over settlements negotiated with tax evaders.
This issue is a priority for the NDP, which is fighting for greater equality and tax fairness. That is why we are debating this motion today. We hope all members of the House will support these measures, which can be taken immediately or in short order to resolve this major problem. I would like to discuss some of the solutions we are proposing to the government. It is my understanding that the government may support our motion, so I am optimistic about convincing it that these short-term measures are feasible. They will help reduce the inequality in our society.
We reserve our harshest criticism for the fact that we have a two-tier tax system. Not only is there an endless array of tax credits, deductions, and exemptions for businesses and the wealthy, but also, if ever the Canada Revenue Agency does catch up with them, they typically negotiate deals to pay back the money they owe to society at preferential interest rates while avoiding penalties and fines that could, at the very least, serve as a warning to others.
That is why Canadians are so outraged by what they have seen in the recent reports. It seems as though there is a two-tier system: one for wealthy taxpayers, multimillionaires and billionaires, and another for ordinary taxpayers. If the latter make a mistake, even acting in good faith, or if they fail to report income, the CRA is ruthless and does not hesitate to drag those taxpayers to court, people who may not have the means to defend themselves. Wealthy taxpayers, meanwhile, are offered amnesty deals. They are asked to pay the taxes they should have paid in the first place and are told that all will be forgotten. The slate is wiped clean moving forward for them, and yet, ordinary taxpayers are not given the same advantage.
Our motion comes at a time when international tax competition is becoming increasingly fierce. This competition is extremely harmful to tax bases all over the world. This problem is not unique to Canada. The problem of tax evasion and aggressive tax avoidance exists around the globe because of certain unscrupulous countries that are contributing to this highly competitive tax environment in which each country tries to have the lowest tax rates and give tax benefits to companies and wealthy taxpayers so that they will do business there.
Canada is no exception. In some ways, we play into this competitive tax environment. Many of the tax measures that are in place today are a product of that very environment. Canada grants benefits, deductions here and exemptions there. In the end, only the wealthiest members of our society benefit. If we talk to our neighbours, if we go door to door and ask average taxpayers if they are receiving deductions for dividends, tax credits, or capital gains exemptions, if we ask ordinary people about that, we see that they are not the ones benefitting from these credits. Only the upper class benefits from these measures, which are found within a framework that encourages Canada to compete in a way that is damaging in the long term. We may be making some gains here and there in the short term, but this approach is not productive in the long term because, if all of that money is left in the pockets of the rich, we are not able to provide quality services to Canadians.
Let us not forget that services are not free. As a society, we collectively decide to pool our resources to achieve our goals, in other words, provide high quality and affordable, even free, services to the entire population. That way, regardless of where a person comes from or their financial situation, they can obtain said services. Take health care, for example. We want health care to be provided to everyone, independently of their income. We want everyone to have access to an education without having to spend a fortune on it.
My philosophy is that we should pool our efforts and money to provide our fellow citizens with the best services at the best possible cost. Tax competition is causing us to lose more and more means to provide services. Governments are forced to cut more and more from services or increase prices, which is really unfortunate.
That is why we are focusing on a few solutions. Among other things, the government needs to tighten the rules around shell companies. How many shell companies are in tax havens that are actively part of this tax competition? How many shell companies are being used only to report profits offshore?
It is one of our society's biggest problems. Real economic activity takes place here, in Canada, or in other industrialized countries, where consumers live. The consumers are not in Barbados, but in Canada, the United States, and Europe. Even though the economic activity takes place in these countries, the profits are reported elsewhere, with different schemes that are increasingly complex. Over the years, the OECD and the government have worked together to address tax schemes. In our opinion, the profits should be reported where the economic activities take place.
Accordingly, if the economic activities take place in Canada, then the Canadian subsidiary must pay its taxes in Canada. That is currently not the case. That is why the motion mentions shell companies. We must tighten the rules for these companies. There is work being done on this. We have to tighten the rules in order to ensure that companies report their profits where the economic activity really takes place and not in countries where taxes are low.
Tax treaties are another issue. Since my colleague has talked about this, I will not go on at length about the subject. In some cases, tax treaties have legalized non-taxation. The goal was to do something good by not taxing the same income twice. For example, if a Canadian company does business in the United States through an American subsidiary and the subsidiary pays taxes at a higher rate than in Canada and then repatriates its profits for its Canadian shareholders, obviously that will not be taxed twice; we are not crazy.
However, double taxation agreements have been signed with countries that have a low or non-existent tax rate; Barbados is the best example of this. There is a good reason why billions of dollars in foreign investment are finding their way to Barbados. Barbados is second on the list of countries where Canada makes the most foreign investments. As I said earlier, that is certainly not where the consumers are, and that is not where real business is being done. That is where the profits are reported, and that is where billions of dollars are sent every year. In Barbados, the tax rate is between 0.25% and 2%. Canada and Barbados have a double taxation agreement. My colleague provided more details on this subject a little earlier.
We are asking that the government examine this question, to ensure that double taxation agreements are not being abused. In this case, there has certainly been abuse.
We must make every effort to create something that is not a two-tier system. This is a major problem that Canadians condemn. In the KPMG case, agreements were signed and settlements negotiated. It was told that its slate would be wiped clean if it paid the tax owed. It was decided that all would be forgotten.
It is not too late for the government to file criminal charges in the case of KPMG, which facilitates tax evasion and aggressive tax avoidance, and against the clients who participated in this scheme. In fact, that is what I asked the Minister of National Revenue to do, yesterday. That would allow for exemplary sentences to be imposed, and it would show others what happens when you engage in tax evasion. We hope that will mean we can put an end to this scourge in our society.
Opposition Motion—Tax FairnessBusiness of SupplyGovernment Orders
Winnipeg North Manitoba
Liberal
Kevin Lamoureux LiberalParliamentary Secretary to the Leader of the Government in the House of Commons
Mr. Speaker, the member across the way said that the NDP is fighting for tax fairness. This is something, as I indicated in my first question, which we have made a high priority. In fact, I would suggest we made it the number one priority for Canada's middle class and those aspiring to be a part of the middle class. We saw that through a number of policy initiatives by this government.
Having said that, we also want to recognize that over $400 million was allocated under last year's budget to ensure that we go after the individuals who are trying to fraudulently avoid having to pay their fair share of taxes. Would the member not, at the very least, acknowledge that a part of dealing with this issue is investing resources for the Canada Revenue Agency, something this government has done in a very tangible way, and that doing that is a great step forward? Yes, we could always do better, and we will continue to move in that direction, but would he not agree that the over $400 million was a good investment to try to ensure there is even more tax fairness in Canada?
Pierre-Luc Dusseault NDP Sherbrooke, QC
Mr. Speaker, I thank my colleague for his question.
We completely support additional investments. During the Conservatives’ term in office, we asked that they reinvest in the Canada Revenue Agency. We made very frequent requests for hiring more auditors. Unfortunately, the Conservatives reduced investment instead. Fortunately, $444 million has now been invested. For the moment, my colleague is the very person who tables the government’s answers to questions on the Order Paper. If I look at the recent figures we have, dated today, with the new international investigations branch that was created on April 1, 2006, 56 investigations have been opened, but none has yet been sent to the Public Prosecution Service of Canada. We have therefore seen no results.
If we take the case of the Panama Papers, more than 397 individuals had been identified on the date when my question was answered, including 50 companies and 80 individuals. How many of those cases were referred to the criminal investigations program, the step before prosecutions? None. This is not moving fast enough. Canadians are outraged by this situation, and the government keeps saying that it is investing money. However, we are not seeing any results. It is all very well to keep up the fine talk, as the minister has done with her pink cards, but if there are no results at the end of the line and if no white-collar criminals are convicted in the Canadian courts or in the criminal courts, these are not positive outcomes.
I support these additional investments, but I am anxious to see concrete results and people who are actually in handcuffs for tax fraud and tax evasion. That is not what we have seen, however, and it is not what we are seeing. I hope it comes to pass.
Ziad Aboultaif Conservative Edmonton Manning, AB
Mr. Speaker, the motion calls for renegotiating tax treaties. Would the hon. member be able to tell us which treaties he is referring to in the motion?
Pierre-Luc Dusseault NDP Sherbrooke, QC
Mr. Speaker, I am happy to answer that question. I alluded to it in my speech. The tax treaties are double taxation treaties, among others. The most telling example, which was even raised by the Bloc Québécois in the past, was the one signed with Barbados in the 1980s, under a certain Minister of Finance, Mr. Martin—I do not know whether that tells you something—who perhaps had interests, even personal interests, at the time this double taxation agreement was signed, because he himself had companies in the country with which the treaty was signed, namely Barbados.
That is the classic case, the most telling example, where we have a double taxation treaty with a country that has a low or non-existent tax rate. That is the major problem. That is why, in the recent debate on double taxation concerning the Canada and Taiwan Territories Tax Arrangement and the Convention between Canada and the State of Israel, which have been renewed, I implored the government to monitor our double taxation conventions very closely, to assess whether the tax rates in the countries concerned were reasonable and whether they would allow Canadians to see that everything was as fair as it should be and that these conventions being signed with many other countries were not being abused. There are over 90 treaties at present. I gave the example of the convention with Barbados; it is high time that we terminated that convention, which is being abused, and look to see whether there are others being abused and terminate them.
Opposition Motion—Tax FairnessBusiness of SupplyGovernment Orders
Moncton—Riverview—Dieppe New Brunswick
Liberal
Ginette Petitpas Taylor LiberalParliamentary Secretary to the Minister of Finance
Mr. Speaker, first of all, I would like to thank my colleague from Rosemont—La Petite-Patrie for moving this motion today.
I am pleased to address the issue raised by the hon. member for Rosemont—La Petite-Patrie. I would like to state unequivocally that the Government of Canada is committed to ensuring that the tax system is fair to the middle class. We believe that Canadians must pay their fair share of taxes. That is why, after our government came into office in fall 2015, one of our first actions was to increase taxes for the wealthiest Canadians in order to reduce taxes for the middle class.
Specifically, the government reduced the second personal income tax rate to 20.5% from 22%. In addition, only those individuals earning the highest incomes in Canada, or the richest 1%, should pay more taxes after the introduction of the new 33% tax rate for individuals earning over $200,000. Since January 1, 2016, nearly nine million Canadians have seen more money in their pockets as a result of the middle-class tax cut. Not only was this a good thing to do, but it was also the intelligent thing to do for our economy.
The tax cut for the middle class and the measures that go with it have helped make the tax system fairer to ensure that Canadians can succeed and prosper in their lives. Single individuals who benefit from the reduced second personal income tax rate will see an average tax reduction of $330 per year, while couples will see an average tax reduction of $540 per year.
At the same time, the government returned the tax-free savings account, or TFSA, annual contribution limit to $5,500 from $10,000, effective January 1, 2016. Returning the TFSA annual contribution limit to $5,500 was in line with the government’s objective of making the tax system fairer and helping those who need it the most.
When other registered savings plans are taken into account, the $5,500 contribution limit will enable most taxpayers to meet their ongoing savings needs in a tax-efficient manner. Furthermore, indexation of the TFSA annual contribution limit was reinstated so that the amount will retain its real value over time.
We have also taken action to improve the child benefit that Canadians receive. In our 2016 budget, we implemented the Canada child benefit, which is completely tax-free, in addition to being simpler and more generous than the old benefit system it replaced.
It also does a better job than the previous system of targeting the people who most need it. I firmly believe that the many parents who receive this greatly needed assistance agree with me. Thanks to the introduction of a much better-targeted Canada child benefit, about 300,000 fewer children will be living in poverty in 2017, as compared to 2014. This represents a nearly 40% drop in the child poverty rate since 2014.
Since the Canada child benefit was introduced in July 2016, nine out of ten families are now receiving more money than they did under the previous system, or nearly $2,300 more on average in 2016-17. Parents with children under 18 will receive annually up to $6,400 more per child under age 6 and $5,400 more per child aged 6 to 17.
Whether these additional funds are used for things like buying school supplies, covering part of the family grocery bill, or buying warm coats for winter, the Canada child benefit helps parents cover the high cost of raising their children.
As announced in budget 2016, the government is currently conducting a comprehensive review of the federal tax expenditures. It is doing so in recognition of concerns that have been expressed regarding the efficiency, fairness, and complexity of the tax system. The objective of this review is to ensure that federal tax expenditures are fair for Canadians, efficient, and fiscally responsible for all. External experts have been engaged to provide advice to the Department of Finance. This approach ensures the review is informed by a range of perspectives.
I can assure all hon. members that the government remains committed to ensuring federal tax expenditures are doing what they are meant to do and that they are doing it to help middle-class Canadians. In addition, the government is committed to strengthening efforts to combat international tax evasion and avoidance, and we have taken, and will continue to take, this important step and actions to do so.
These efforts help protect the revenues base and give Canadians greater confidence that the system is fair for everyone. Canadians work hard for their money, and the majority of Canadians pay their fair share of taxes. However, some wealthy individuals participate in complex tax schemes to avoid paying their fair share of taxes. This is unacceptable, and it needs to change.
The Government of Canada is working hard to crack down on offshore tax evasion and aggressive tax avoidance in order to ensure a tax system that is fair and responsive for all Canadians. In budget 2016, we invested $444 million over five years for the Canada Revenue Agency, better known as the CRA, to crack down on international tax evasion and combat tax avoidance.
These investments by the government are enabling the CRA to hire additional auditors, develop robust business intelligence infrastructure, increase verification activities, and improve the quality of its investigative work. These new investments to support the CRA's effort to crack down on tax evasion and combat tax avoidance are expected to generate around $2.6 billion in taxes over the next five years.
In April 2016, the offshore compliance advisory committee was created to advise the Minister of National Revenue and the CRA on strategies to combat offshore tax evasion and avoidance. However, we also recognize that assessing tax revenues alone is not enough. Once we do an assessment, we need to be able to collect the unpaid amounts. That is why budget 2016 invests an additional $351.6 million over five years to improve CRA's ability to collect these outstanding tax debts.
Canada has been a very active participant in international efforts to address tax evasion. Canada is an active member of the Global Forum which was established to ensure that high standards of transparency and exchange of information for tax purposes are in place around the world. Canada has developed an extensive network of bilateral tax treaties and tax information exchange agreements which provide for the exchange of information that could be extremely critical in investigation processes.
Another international development with regard to addressing tax evasion is the new common reporting standard developed by the OECD and endorsed by the G20 leaders. The standard provides a framework under which information on financial accounts in a country held by non-residents will be automatically shared with tax authorities of the jurisdiction in which the account holder is a resident. Legislation has now been adopted to implement the common reporting standard in Canada, starting July 1, 2017, joining more than 100 other countries.
With our partners in the G20 and the OECD, Canada has been an active participant in the multilateral project to address base erosion and profit shifting, BEPS. BEPS refers to aggressive international tax-planning arrangements undertaken by some multinational enterprises to inappropriately minimize their taxes. Budget 2016 announced a series of actions Canada is taking to implement recommendations from the BEPS project.
First, Canada has enacted new legislation to require country-by-country reporting for large multinational enterprises. Second, the CRA is applying revised international guidance on transfer pricing. Third, we participated in international work that developed a multilateral instrument to streamline the implementation of treaty-related BEPS recommendations, including addressing treaty abuse. Finally, the CRA is undertaking a spontaneous exchange with other jurisdictions of certain tax rulings.
Going forward, the government will continue to work with the international community to ensure a coherent and consistent response to the BEPS. The government is also taking action in other areas to protect the integrity of Canada's international tax rules. In particular, budget 2016 introduced measures to extend the application of the income tax back-to-back loan rule to royalty arrangements, and to prevent unintended tax-free cross-border distributions of capital to non-residents.
The government has also agreed to strong standards in support of corporate transparency in both the Financial Action Task Force and the Global Forum on Transparency and Exchange of Information for Tax Purposes.
I would like to point out that the proceeds of crime—also known as money laundering—and terrorist financing regulations include requirements for the collection of information on beneficial owners of corporations. Furthermore, the government recently took action to enhance corporate transparency by prohibiting the use of bearer shares.
I would now like to draw attention to some of the government's investments that provide a great many Canadians with more equitable opportunities for success.
Last June, the government reached a historic agreement with the provincial governments to improve the Canada pension plan. This agreement followed a review conducted by the Department of Finance to determine whether families approaching retirement were adequately prepared for retirement.
Finance department officials found that around one in four families approaching retirement, namely 1.1 million families, may not save enough to maintain their current standard of living. This is very troubling. Middle-income families are the most at risk. Families with no workplace pension plans are at an even greater risk of not saving enough for retirement. In fact, a third of those families are at risk.
The government is aware of the need to help Canadians invest more. Armed with a higher level of savings, they would be able to more confidently envision their future and their ability to enjoy their retirement years with dignity.
Our government is particularly concerned about the situation of young Canadians, who are likely to be more exposed to market risks and, in most cases, will live longer than previous generations. Young people are faced with the challenge of trying to save enough money for retirement at a time when fewer of them can expect jobs that come with a workplace pension plan.
In short, the actions that our government has taken reflect our commitment to helping the middle class and those working very hard to join it.
In this context, the government firmly believes that the best way to increase prosperity for more Canadians is to invest in today's economy. This is why the government has made targeted investments totalling $50.2 billion over six years as part of budget 2016. These investments will ensure stronger growth right now and increase the long-term growth potential of the Canadian economy.
We have forged ahead in the knowledge that when Canadians achieve their full potential they can build a better life for themselves, their families, and entire communities. In doing so, they are building a better and stronger Canada for current and future generations.
As Canada's population ages, our prosperity will increasingly depend on young Canadians getting the education and training they need to prepare them for the jobs of today and tomorrow. That is why, in budget 2016, we increased the Canada student grant amounts for students from low- and middle-income families, as well as part-time students. As a result, more than 360,000 students across Canada will receive more assistance to pursue their education.
We are also working with provinces and territories to expand eligibility for Canada student grants, so that even more students can receive non-repayable assistance.
What is more, under the youth employment strategy, the government invests more than $330 million each year to help young people gain the skills and experience they require to find jobs. Our government has taken action to build on this investment and strengthen the youth employment strategy with an additional investment of $165.4 million in 2016 and 2017. These investments will increase the number of youth who can access the skills link program, which helps young Canadians overcome barriers to employment. It will also create new green jobs for youth and help support employment opportunities in the heritage sector.
Canadians are among the most highly educated people in the world, placing at the top of all members of the Organisation for Economic Co-operation and Development for post-secondary education attainment. More than half of Canadian adults have a post-secondary degree.
We are world renowned for scientific research and discovery, and we can often be found on the cutting edge of clean technologies emerging right now on the world stage.
We have an abundance of natural resources, outmatched only by our greatest resource, and that is our people.
I hope I have made it clear that we are making effective, targeted investments that continue to unleash their full potential and, in turn, Canada's full potential.
We will continue to build on our success in budget 2017.
Pierre-Luc Dusseault NDP Sherbrooke, QC
Mr. Speaker, although I thank my colleague for her remarks, I am very disappointed that she spent three-quarters of her time talking about things other than what is in the motion being debated today in the House. It is really very disappointing. She did not even respond to the three measures in the motion, which are specific courses of action the government can take. She simply took the cards of the Minister of National Revenue and again mentioned the $444 million; those are fine words. What we have heard from the government on our motion is clearly not enough.
Canadians are asking for action and, above all, for results. The figures I presented earlier and what we hear in the media reports clearly show that the results are not there. There are no results in the fight against tax evasion and there are no exemplary penalties imposed on fraudsters who decide to avoid paying their fair share.
Can my colleague at least commit to some of the measures in our motion that will allow us to fight more actively? Can she also tell us that criminal prosecution will come soon in the KPMG case and that some people will be in prison as soon as possible?
Ginette Petitpas Taylor Liberal Moncton—Riverview—Dieppe, NB
Mr. Speaker, once again, I thank my colleague for his question.
As I said, our government recognizes that all Canadians must pay their fair share of taxes. Indeed, the vast majority of Canadians do pay their fair share of taxes. For those who do not, we need to make sure that we finally have a system in place to fix the problem.
The government invested $444 million to make sure those investigations happen. We want to make sure the department in charge has the tools it needs to do the work that has to be done because it will be doing those investigations.