Debates of March 7th, 2017

Opposition Motion—Tax Fairness

[Jenny Kwan, NDP, Vancouver East, BC]

Mr. Speaker, I am pleased to rise in this House to support the motion tabled by my colleague, the member for Rosemont—La Petite-Patrie. The motion calls on the government to close the loopholes on tax havens and to crack down on tax evasions.

Why is this motion so important? Decade after decade vital public services are left underfunded, ignored, or even cancelled. Far too often, the justification for the inaction or cuts in programming is that we cannot afford it. Oddly enough, the affordability question is only asked when we are talking about investments in support of social programs. It never seems to get asked when it comes to providing lucrative tax credits for the wealthy or the continual slashing of corporate taxes or maintaining costly and inefficient tax expenditures that only apply to the highest earners in the country.

Successive governments, Liberals and Conservatives alternating, have chosen to allow these oh so splendid tax loopholes that benefit Canada's wealthiest to continue. For the Liberals and Conservatives, these tax giveaways for the elite are never questioned. For them it is a standard practice. Why? It is in their DNA. Election cycle after election cycle, it is the same old story. Even when they pretend that it is an issue they are concerned about and they campaign on clamping down on these ludicrous tax loopholes, for example, as even written in the Liberals' platform, after the election, boom, it is as though someone waved a magic wand and that promise disappeared. It is gone.

In the most recent election, the Liberals thought that the employee stock option deduction was disproportionately benefiting the very wealthiest Canadians at the expense of everyone else, and of course they were right about that. The Liberals specifically noted in both their 2011 and 2015 election platforms that 8,000 Canadians with very high incomes were deducting an average of $400,000 from their taxable income through these stock options. This represents 75% of the fiscal impact of this deduction, which in total cost $750 million in 2014. The Liberals proposed changes to this tax loophole to raise an additional $560 million for the government's coffers that could have been put into use for public services. Then, in March 2016, just months after the election, when the Liberal government was asked what it was going to do and whether it would follow through on the promised changes to crack down on this lavish tax loophole for the ultra-wealthy, the Minister of Finance stated, “It's not in our plans.”

What happened, we might ask. Documents obtained under access to information show a direct correspondence between CEOs and the Minister of Finance pressuring him in advance of the 2016 budget to backtrack on that promise, and guess what. The corporate elites got exactly what they wanted, a $560-million gift courtesy of the Liberal government.

According to a CCPA report, roughly 99% of this money is given to the highest 10% of income earners in Canada. In fact, the study found, “In essence, there is no benefit from this tax expenditure to anyone making less than $215,000 a year.” While this loophole might have originally been designed to help raise money for start-ups and expansions, it is now primarily used by Canada's ultra-rich to avoid paying their fair share of taxes. In case members are wondering, Canada's top CEOs now make 193 times the average Canadian's salary. In fact, Canada's richest CEOs made the average Canadian's annual salary before lunchtime on the first day of work this year.

The heads of Canada's five big banks own $6 million in stock options. Is there a real reason for these individuals to need preferential tax treatment? Are Canada's big banks at risk of being unable to start up or expand if these loopholes are closed? Are they not making record profits already?

To be sure, these are the corporate elites, and in the end, no matter what the Liberals say, they always have the interests of these elites at heart. Canadians get conned every time. They want to believe in the Liberals and what they campaigned on, but in the end, frankly, the campaigning Liberals are not the same as the governing Liberals. What they say is not what they do. They just cannot resist the pressure being put on them by the most powerful in this country to leave in place a system which benefits them at the expense of everyone else.

If people think these tax giveaways stop with stock option loopholes, they should think again. Over the years, between the Conservatives and the Liberals, Canada's corporate income tax rate has dropped dramatically, from 37% to 15%. Members heard me correctly. That is a 22-point drop. The office of the parliamentary budget officer found that the former Conservative government's corporate tax giveaways cost taxpayers an additional $12 billion every year. That is $12 billion, not $12, not $1,200, but $12 billion.

If that is not enough already, recent international headlines, such as the Panama papers and the Canadian-born KPMG tax haven scandal, among others, showed the wealthiest and corporations are increasingly turning to aggressive tax avoidance measures through the use of shell corporations and offshore accounts in tax havens to avoid paying their fair share of taxes. It is estimated that in 2015, Canadian corporations alone stashed almost $40 billion in the top 10 tax haven destinations.

From 1988 to 2001, Canadian direct investments in Barbados, a top tax haven destination, increased from $628 million to $23.3 billion, a 3,600% increase. The increased use of these tax havens means Canadian taxpayers are losing $7 billion in taxes each year. That is $7 billion that Canadians will never see invested in much-needed infrastructure programs for hard-working Canadians.

It does not stop there. Another big tax giveaway is the dividend gross-up and tax credit. This measure cost taxpayers $4.1 billion per year. By the way, 91% of this money goes to the top 10% of income earners and roughly 50% of that actually goes to the top 1%. Do not forget that the foreign tax credit comes with a price tag of $740 million per year. According to the CCPA's recent study, if we add up all the measures that benefit mostly the wealthy, in 2011 alone, there was more than $100 billon in forgone revenue. That is money that could be invested in critical programs for Canadians.

What are some of those critical programs? How about restoring the national affordable housing program that the Liberals axed in 1993? Homelessness exists because we allow it to exist. A 2014 study found that putting Canada on a path to ending homelessness would cost roughly $3.7 billion per year.

There was a gathering of concerned citizens bound by one common thread, the desire to end homelessness, on February 25, the third annual Coldest Night of the Year walk for the homeless. In Vancouver, close to 200 people came out to walk on that cold winter night in my riding. Together we raised $50,000 in support of those who are homeless, hungry, and hurting. United across the country, some 118 communities also joined in this annual walk. This event was a clear statement that many Canadians want to see an end to homelessness. Ending homelessness is entirely possible. It is not rocket science. All we need is to close these tax loopholes.

What about big corporations? If we closed the tax loopholes for big corporations, we could invest in a much-needed pharmacare program. I have met seniors who are cutting their pills in half so they can stretch out their medications. I have met seniors who are eating pet food to survive each day. We are providing these huge tax giveaways. Why? The government says we cannot afford these other programs. I say yes we can. We should close the loopholes, tax corporations, reinvest the money into communities for the people, so all Canadians can have the benefit of succeeding in our country.

[Kevin Lamoureux, Liberal, Parliamentary Secretary to the Leader of the Government in the House of Commons]

Mr. Speaker, we have heard a number of New Democratic Party members of Parliament stand up and say it is about corporations and taxing the corporations. I find it interesting because I came from the province of Manitoba, where the provincial NDP actually cut the corporate tax rate seven times while I was there. When the NDP is in government, it tends to want to have a different policy, it would seem, at least at the provincial level.

What I want to raise, and I have done this in the form of a question before, and I will do it again for the member, is that when we talk about income inequalities, we saw in the last budget a middle-class tax cut. We saw a budget that brought in help for our seniors, and for our youth with the Canada child benefit program. It was a massive redistribution of wealth into the hundreds of millions of dollars, including a special tax on Canada's wealthiest. Why did the NDP vote against that?

[Jenny Kwan, NDP, Vancouver East, BC]

Mr. Speaker, the member needs to actually look at his party. It was actually in its own platform in the last election that it would close the stock option loopholes. However, after the election, the Minister of Finance said it was not in their plans to do what they promised Canadians. Perhaps he should look in the mirror about what he promised Canadians and then make sure his government actually follows up on that commitment.

On the question around programming, some of the measures were good, but the government could do a whole lot more if it reduced the corporate income tax. By the way, successive governments have reduced corporate income tax, Conservatives to Liberals, Liberals to Conservatives, from 37% to 15%, and the Liberals continue to hold it at 15%. If they did not do that, they would actually recuperate another $12 billion that could be invested into programs. Imagine what that could do for Canadians.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

Madam Speaker, personally I find this motion presented by the NDP today very interesting. I listened to the speech given just a while ago by my colleague from Vancouver East and it seems to me that this motion focused on tax evasion, specifically the KPMG case, on the investigations that need to be launched and also on the tacit agreements that allow companies to walk away without paying any penalties. Furthermore, KPMG is not going to be penalized for its practices.

What I am trying to understand here is why we are lumping other things in with it. Stock options and corporate taxes are also mentioned. I completely agree with my colleague that stock options and corporations should be taxed more. However, there is really no link between those issues and tax havens. That is why I am trying to understand if we may be getting things confused.

[Jenny Kwan, NDP, Vancouver East, BC]

Madam Speaker, before I respond to the question, I just want to make sure I correct the record. I think I said the Liberals could reduce taxes. I obviously meant the opposite, that the Liberals need to increase the corporate income tax rate in order to recoup the monies that could be invested into the community. I want to be clear about that.

To the member's question, these things are all interrelated, of course. We are talking about tax havens, where the ultra rich can hide their money so they do not have to pay Canadian taxes. We are talking about a corporate income tax that successive governments have reduced over the years, which actually gave a huge windfall. I would call it corporate welfare, frankly; handouts to these big corporations at the expense of Canadians.

What we need to do is look at all of these measures in advance of the budget. The budget is coming down, and I would like to see the government do a comprehensive approach and redirect these resources to Canadians who need it. Every Canadian deserves a chance to succeed, and the people who need it the most are not the people who are benefiting from these huge tax loopholes, billions and billions of dollars in tax loopholes. We could invest that money for all Canadians so we can all succeed.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Madam Speaker, I am pleased to speak to the important issue of tax evasion and aggressive tax avoidance brought forward by my colleague the member for Rosemont—La Petite-Patrie. I will be splitting my time this morning with my friend and colleague the member for Brampton East.

First, let me state unequivocally that the Government of Canada is committed to combatting international tax evasion and aggressive tax avoidance. We believe every Canadian must pay his or her fair share of taxes, period.

Last year's budget introduced a number of measures to combat tax evasion and avoidance and to improve compliance, actions that will help ensure that everyone does their share and pays their fair share.

Furthermore, they support the objective of an economy that works for the middle class and not those who seek to skirt our tax laws or otherwise gain an unfair advantage. Tax evasion and aggressive tax avoidance by individuals and businesses have a fiscal cost to governments and to taxpayers. They reduce the fairness and integrity of the tax system. They shift the financial burden onto Canada's middle class, while often benefiting those who may be more than capable of paying their own fair share.

This is why our government took decisive action through budget 2016 to crack down on tax evasion and to combat tax avoidance. Budget 2016 invested $444.4 million over five years to enhance the Canada Revenue Agency's assessment capabilities through the hiring of more auditors and specialists who will have the resources needed to undertake more expansive and comprehensive investigative work.

These investments to support CRA's efforts to crack down on tax evasion and combat tax avoidance are expected to generate approximately $2.6 billion in additional taxes over five years.

With the benefit of these new resources in the last year, CRA has begun reviewing all taxpayers and certain segments of the population identified as high risk. The agency is using external data and publicly available information to maximize its effort to identify non-compliance.

The CRA has also toughened its response to leaked lists of taxpayers with offshore holdings. For example, with the Panama papers, the CRA has more than 76 taxpayer audits under way, and extensive data is currently being reviewed. The CRA has also executed search warrants, and several criminal investigations involving both participants and facilitators are ongoing.

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 and that is why budget 2016 invested an additional $351.6 million over five years to improve CRA's ability to collect these outstanding tax debts. This is revenue we will be investing to help strengthen and grow our middle class.

Indeed, creating an economy that works for the middle class and those working hard to join it is what guided our actions right from the start of our mandate. As one of our first actions in December 2016, we introduced the middle-class tax cut. Nearly nine million Canadians are now benefiting from this measure. Single individuals who benefit are seeing an average tax reduction of $330 every year, and couples who benefit are seeing an average tax reduction of $540 every year.

Also with budget 2016, we put more money directly into the pockets of low- and middle-income families through the Canada child benefit, a more generous, tax-free, and better targeted benefit that is lifting hundreds of thousands of children out of poverty. The CCB is giving nine out of 10 families with children more money every month to spend on everything from school supplies, to school clothes, to sports equipment. Families benefiting have seen an average increase in child benefits of almost $2,300 during the 2016-17 benefit year.

These actions and others are helping to strengthen and grow the middle class and our economy. However, we also know that more needs to be done. We need to make sure that our tax system functions as intended and that it is fair, effective, and equitable.

We will continue to take legislative and other actions on both the international and domestic fronts to ensure that Canada's tax system is fair and works for the middle class.

Globally, Canada has been a very active participant in efforts to address international tax evasion and avoidance. Canada is an active member of the Global Forum on Transparency and Exchange of Information for Tax Purposes, which was established to ensure that high standards of transparency and exchange of information between jurisdictions for tax purposes are in place around the world.

Canada has also developed an extensive network of bilateral tax treaties and tax information exchange agreements, and it is party to the multilateral Convention on Mutual Administrative Assistance in Tax Matters, which provides for exchange of tax information. This allows the CRA to obtain information from foreign tax authorities on Canadian taxpayers' investments and activities in foreign countries that is relevant for Canadian tax purposes.

To build on this information sharing, Canada recently adopted legislation to implement the common reporting standard developed by the OECD and endorsed by G20 leaders. Canada is one of more than 100 jurisdictions worldwide that have similarly committed to implement this reporting standard, which provides a framework under which the tax authority in a country will share information, securely and automatically, on the financial accounts held by non-residents in that country with the tax authority of the country in which the account holder is resident. This House has recently passed legislation to implement this standard, starting on July 1 of this taxation year.

Canada has also been actively engaged in a second multilateral initiative aimed at addressing base erosion and profit shifting, commonly known as BEPS. This refers to certain tax planning arrangements undertaken by multinationals, which often through legal means exploit the interaction between the tax rules of different countries in order to minimize taxes. Canada has already implemented a number of the BEPS project recommendations, and going forward, the government will continue to work with the international community to ensure a coherent and consistent response to BEPS filing going forward.

Canada supports the important goal of improving corporate transparency worldwide. The Government of Canada has agreed to international standards developed by the Financial Action Task Force and the Global Forum on Transparency and Exchange of Information for Tax Purposes in support of corporate transparency. The proceeds of crime, money laundering, and terrorist financing regulations include requirements for financial institutions regarding the collection of information on beneficial owners of corporations.

Taken together, all of these actions are consistent with the basic principles of fairness that define us as a nation. Canadians should have confidence that their tax system has integrity. This is what tax fairness is all about. By taking action to prevent tax evasion and close tax loopholes, we will improve the fairness and integrity of the tax system, and contribute to fiscal sustainability both at home and abroad. We believe that our plan is the right one to improve the integrity of Canada's tax system.

[Gord Johns, NDP, Courtenay—Alberni, BC]

Madam Speaker, the member for Vaughan—Woodbridge talked about tax fairness. I appreciate his bringing up that word. We saw tax havens go up from $45 billion in 2011 to over $108 billion in 2015 under the past Conservative government. My concern is that the government is still protecting those tax agreements. Currently, there are legal loopholes.

I hope the member will choose to close those tax loopholes, in fairness to Canadian taxpayers. We have heard a lot of numbers. We hear it is costing us about $7 billion in tax revenue annually. When we look at all of the tax loopholes and all of the different things in our tax system that are benefiting the rich, we hear from some that the number is about $100 billion. However, if we divide the $7 billion by 338 ridings in Canada, that is over $200 million per riding per year. It would actually be almost $3 billion if we took the $100 billion number. I think about what $200 million a year would do for my riding: it would build more affordable housing, it would create all of the sewer and water infrastructure for Port Alberni, Courtenay, Parksville, and Ucluelet in the first year, and it would create opportunities for economic development, and dock replacement. Maybe the member can tell me and his constituents what $200 million a year would do for his riding and his constituents; or even $3 billion a year, if we actually get it right. It would be great to hear what he can tell us he could do.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Madam Speaker, I have the privilege of sitting on the Standing Committee on Finance. I was the MP who brought forward the motion for us to study the goings-on with respect to tax evasion and tax avoidance in relation to the Isle of Man. Therefore, this is an issue that is of paramount concern for us, for me and our government, to ensure that all organizations and individuals are paying their fair share of taxes, that our social programs are being supported and fully funded, and that all Canadians contribute to our economy and the betterment of our society.

What I would like to note is the number of actions that we in our government have undertaken to combat tax avoidance and tax evasion. Over the weekend, the Minister of National Revenue put out a release, which I think everyone should take a look at. When we look at the CRA's domestic offshore audit activities, we see they put our government on a pace to raise assessments by over $13 billion this year. We have increased the number of auditors reviewing offshore tax schemes, promoters, and large multinational corporations. In our budget, we put in place a plan to invest $444 million over five years for increased tax evasion and tax avoidance monitoring.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

Madam Speaker, the Liberal member, obviously part of the government, is praising the Liberal government’s plan.

Last year, in that plan, about $400 million was announced for going after money that should have been paid to the government. However, when investments are made in the Canada Revenue Agency, for example, to go after money, does that mean that tax havens and fraud artists are being targeted, or are hairdressers, bartenders and restaurant operators also going to be targeted?

The government says it is very interested in the middle class, and we can see that. When we want to go after the big fish, as the motion introduced by the Bloc concerning Barbados was intended to do, the Liberals stand in our way. At the international, the big fish like KPMG get an amnesty.

In our opinion, the government should pay more attention to the wealthier people and go after the big fish. Essentially, if the government of Canada does not do its job, it should let Quebec do it.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Madam Speaker, if we look at the findings to date from the CRA, in 2015-16 alone, over 120,000 audits resulted in more than $12 billion in additional taxes assessed as well as penalties and interest. Our government is committed to cracking down on aggressive tax avoidance and tax evasion.

I would like to add that I do understand the member's comments about going after small business or middle-class Canadians. I do share that concern, and we should focus on larger participants who have the capability of tax evasion and tax avoidance.

[Raj Grewal, Liberal, Brampton East, ON]

Madam Speaker, it is always a privilege to rise in this House.

In an uncertain future, our government is working hard to ensure that Canada's economy works for the middle class. We believe that when we have an economy that works for the middle class, we have a country that works for everyone, and that means ensuring everyone pays their fair share of taxes.

Over the last year, our government has done some big things. We were elected on the platform of growing the middle class, and that is exactly what we have been doing.

We started by raising taxes on the wealthiest 1% of Canadians so we could cut taxes for the middle class. Specifically, we reduced the 22% federal income tax rate to 20.5% for 2016 and all subsequent tax years, and we raised the taxes on the wealthiest Canadians by introducing a new top income tax rate of 33% for individuals with a taxable income of over $200,000. As a result, nearly nine million Canadians pay fewer taxes today.

In today's economy, Canadian families need all the help they can get. This is why we introduced the Canada child benefit, which is a real game changer. The Canada child benefit is making a real difference in the lives of Canadians and their families' budgets. Compared with the old system under the previous government, the Canada child benefit is simpler, fully tax-free, more generous, and better targeted to those who need it most. Because the government is no longer sending cheques to millionaires, nine out of 10 Canadian families are receiving more child benefits than they did under the previous government. Families benefiting saw an average increase of almost $2,300 per year. On a monthly basis, that is almost $190, on average, that families receive directly into their pockets. That is extra money to help Canadian families pay for school supplies, their children's education, and child care expenses.

Furthermore, on March 2, the final step to strengthening the Canadian pension plan was put into force. This means that strengthening the CPP is no longer an idea, but a reality. This historic agreement between Canada's federal, provincial, and territorial governments will ensure that today's young Canadians will be able to count on a strong public pension plan when they retire in the future. At maturity, the CPP enhancement will increase the maximum CPP retirement benefit by about 50% which, in today's dollars, represents an increase of nearly $7,000 to a maximum benefit of $20,000.

It is evident that we are working hard to deliver real change for Canadians. In that time, significant early progress has been made. However, more hard work lies ahead.

Paying our fair share of taxes is essential to financing the measures that enhance the lives of all Canadians. When certain individuals or corporations find ways to skirt the system, it is the middle class that usually picks up the tab. That is totally unacceptable and counterproductive to our country's goals. That is why making the tax system more fair is an ongoing priority of this government.

As announced in budget 2016, the Government of Canada is conducting a comprehensive review of federal tax expenditures. It is doing so in recognition of concerns that have been expressed regarding efficiency, fairness, and the complexity of the tax system. The objective of the review is to ensure that federal tax expenditures are fair for Canadians, are efficient, and are fiscally responsible.

External experts have been engaged to provide evidence and advice to the government. This approach ensures that the review is informed by a range of perspectives, both inside and outside government.

In addition, the government is committed to strengthening the efforts to combat international tax evasion and avoidance. We have taken, and we will continue to take, measures to do this. These efforts help protect the revenue base and give Canadians greater confidence that the system is fair to everyone.

Budget 2016 invested $444 million over five years directly into the Canada Revenue Agency to crack down on international tax evasion and combat tax avoidance. This investment is 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 efforts to crack down on tax evasion and combat tax avoidance are expected to generate around $2.6 billion in taxes over five years.

With the benefit of these new resources, the CRA has set up teams to focus exclusively on promoters of offensive tax schemes. As a result of these new reporting requirements, the CRA has been tracking information on electronic fund transfers over $10,000. Based on the information collected, audits of the highest risk taxpayers moving money between Canada and offshore jurisdictions are under way.

So far, a total of 41,000 transactions have been analyzed, totalling over $12 billion. Overall, the CRA is currently conducting audits of over 820 taxpayers and criminally investigating 20 cases of tax evasion related to offshore accounts.

That said, 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 million over five years to improve the CRA's ability to collect these outstanding tax debts.

The Standing Committee on Finance, of which I am a member, tabled a report just last October on the study of tax avoidance and evasion. The report concluded with 14 recommendations to the government, including, but not limited to, the following: conducting a review of the voluntary disclosures program; requiring all tax advisers to register their tax products with the CRA; improve relationships between the CRA and the Department of Justice, which prosecutes these cases of tax evasion; improve statistical reporting requirements at the CRA on their efforts on tax evasion and avoidance, for transparency; and taking a lead in ensuring global implementation of the OECD and Group of 20's recommendations on the issue.

Just two weeks ago, the government provided its official response to the report. I am proud to share that in the response, the government affirms its support of all 14 recommendations. Additionally, the government shared the work that has already been done or is currently being undertaken to ensure all Canadians pay their fair share of taxes in our great nation.

Before I conclude, let me emphasize that our government is focused squarely on Canadians and the things that matter most to them. Things like growing the economy, creating jobs, strengthening the middle class, and helping those working hard to join it. Part of this responsibility includes making sure Canada's tax system works for everyone and that we all pay our fair share.

Going forward, we will continue to monitor and strengthen the tax system, so that we can continue to bring real change to the middle class and to all Canadians.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Madam Speaker, I thank my colleague for his contribution to the debate. I am always pleased to work with him on the Standing Committee on Finance. He mentioned the work that has been done at the Standing Committee on Finance on the subject of tax evasion and tax avoidance.

Once again, the Liberal members are saying that the government is doing a wonderful job and has invested $444.4 million. I do not know where that figure comes from, but even if they are investing millions of dollars, we are not seeing any concrete results in the courts.

For example, in the case of Liechtenstein, 106 individuals have been identified, and none of them has been questioned by the Public Prosecution Service of Canada. In the Panama Papers case, 397 individuals have been identified, and so far, none of them has been questioned by the Public Prosecution Service of Canada. That means there have been even fewer convictions.

Why, then, are we not seeing the results of this $444 million investment on the ground, in the courts?

[Raj Grewal, Liberal, Brampton East, ON]

Madam Speaker, my hon. colleague is asking me about results. I will go back to my earlier comments. Forty-one thousand transactions, totalling more than $12 billion, have been looked at by the CRA. Currently, 820 audits are going on, and there are 20 criminal investigations on tax evasion. These are a direct result of our government investing $444 million in the CRA, giving it the resources it needs to conduct these audits and to hire auditors to do investigative reporting. This is after 10 years of the previous government reducing the budget of the CRA time and time again.

When CRA officials appeared before the finance committee, we directly asked them what is hampering their ability to catch Canadians who are not paying their fair share of taxes, and they specifically said it was the cuts made to the CRA's budget by the previous government. That is why I am so proud of our government's investment in the CRA, which will ensure tax fairness for all Canadians and ensure that they all pay their fair share.

[Bob Bratina, Liberal, Hamilton East—Stoney Creek, ON]

Madam Speaker, internal documents from Canada Revenue Agency show that it cut some of its most highly trained staff and folded international tax evasion units because of the 2014 budget freeze. Senior managers and trained auditors who were considered among the most highly skilled experts were let go.

With regard to projections of potential revenues, would the member not agree that a six-figure audit investigator could easily return seven figures in terms of revenue for the country? We know that money is out there.

[Raj Grewal, Liberal, Brampton East, ON]

Madam Speaker, my hon. colleague is 100% correct. Over the last 10 years, under the previous Conservative government, the CRA's budget was drastically reduced, and that is why a lot more tax avoidance and tax evasion occurred. The CRA did not have the resources to combat it. Now our government, in its first budget, has invested $444 million, and from that $444-million investment, we are expecting $2.6 billion back in collected unpaid taxes, which will help and strengthen the middle class and bring real change to all Canadians. It will ensure tax fairness for all Canadians from coast to coast to coast.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

Mr. Speaker, in his speech, my colleague talked about fairness. In French, we might use the words justice or équité or traitement équitable.

I wonder whether my colleague thinks it is fair to vote against a bill that puts an end to tax avoidance and tax evasion using tax havens like Barbados. The Canada Revenue Agency is also granting amnesty to fraudsters who come up with shell games to avoid having to pay income tax.

In his speech, my colleague talked about reducing income tax. Not too long ago, Alain Deneault wrote a book in which he asked whether Canada was becoming a tax haven.

Transforming Canada into a tax haven, letting poor people and ordinary people suffocate and not making the rich pay taxes: is that the Liberal strategy for combatting tax evasion?

[The Assistant Deputy Speaker, NDP, Carol Hughes]

Time is up, but I will allow the member for Brampton East to give a brief answer.

[Raj Grewal, Liberal, Brampton East, ON]

Madam Speaker, all my hon. colleagues in the House would agree that tax fairness is extremely important. It is important to send a message to Canadians that if they work hard, they have to pay their fair share. No matter if one is a taxi driver or a truck driver or a CEO of a Fortune 500 company, if one lives in Canada, one is going to pay one's fair share. That is what our government is committed to.

[Tracey Ramsey, NDP, Essex, ON]

Madam Speaker, I will be splitting my time with the member for North Island—Powell River.

I am pleased to speak in support of today's opposition day motion, brought forward by my colleague, the hon. member for Rosemont—La Petite-Patrie. He is also the New Democrats' newly minted finance critic, and I congratulate him on the appointment. Based on the debate he has brought forward today, I know he will do a terrific job as our finance critic.

The motion we are debating today is very straightforward, and I would hope that the Liberal government would support it. It is a two-part motion. It calls on the government to address tax loopholes and to crack down on the use of tax havens. It is about enforcing the basic principle that every Canadian should pay his or her fair share of taxes. It is about tax fairness.

I am not suggesting that the current tax system is the model of fairness, but we know that far too many of the wealthiest Canadians are shirking their responsibility to pay their taxes, and in some cases, are going to extraordinary and even criminal lengths to avoid paying them at all.

A few years ago, Warren Buffett famously claimed that he was paying a lower tax rate in the U.S. than his secretary. It goes to show how many loopholes exist for the wealthiest in society. In Canada, the stats are staggering. Canada's top CEOs earn 193 times the average person's salary. Two Canadian billionaires possess the same amount of wealth as nearly a third of Canadians, $33.1 billion U.S. Canada's richest CEOs earn the same in half a day as the average Canadian worker earns in a year.

What New Democrats are suggesting here today is not radical. All we are saying is that the government needs to tighten up the rules and crack down on these tax loopholes and tax havens that are allowing the super-rich to avoid paying their fair share.

According to the Canadian Centre for Policy Alternatives, there are about 59 tax measures that mostly benefit people above the average income level, which costs the government more than $100 billion in foregone tax revenues. These loopholes significantly undermine the government's ability to provide funding for key priorities, such as improving health care and seniors care, investing in affordable housing and public transit, and even launching an affordable child care system and national pharmacare plan, two ideas that would go far in building a stronger, healthier Canada. I think about what these programs would mean in my riding of Essex. They would improve the quality of life and the affordability of life for so many families and individuals.

In the last election we talked a lot about the stock option deduction loophole. In most of Canada, profit from stock options is considered to be a capital gain and therefore is taxed at half the rate for regular income. Many companies offer stock options to their employees as an incentive in their compensation packages. This tool was initially designed to help raise money for startups and expansion, but now it is being primarily used by Canada's wealthiest.

Stock options now make up about 25% of CEO compensation at Canada's top 60 publicly traded companies. This costs federal and provincial governments close to $1 billion every year in foregone revenue. The Liberals know this to be true. In 2011 and in 2015, their platforms acknowledged these very facts. Both the New Democrats and the Liberals campaigned on closing the stock option deduction loophole, but here we go again, another promise made by the Liberals that apparently they never meant to keep.

The other week, at the international trade committee, we had the pleasure of hearing from the Minister of Small Business and Tourism, who discussed what her government is doing to support more small businesses in accessing international markets. I asked her about the Liberals' campaign promise to reduce the small business tax. She referred to it as a great sound bite but said that it was not a good idea anymore. Her comments struck me as very cynical and certainly is not what I am hearing from those in my riding of Essex.

When parties make election promises, such as reforming the electoral system, lowering the small business tax rate, or closing the stock option deduction loophole, Canadians expect the government to deliver, not to turn its back and later scoff at the very premise of these commitments. The Liberals are breaking campaign promises left and right. It is shameful. I am worried that after four years of the Liberal government, Canadians will be even more cynical about politics than they were after 10 years of the Conservative government.

After promising to fully tax individual stock options exceeding $100,000 during the last election campaign, after forming government the Liberals announced that they will leave it untouched. We have now learned of intense lobbying by Bay Street CEOs, who benefit greatly from this measure, to keep this loophole open.

Both the Liberals and the Conservatives have now claimed that closing the stock option loophole would hurt small businesses and start-ups, arguing that they would not be able to give employees stock options as an incentive to help companies grow. However, closing the stock option loophole does not mean that companies would not grant stock options as compensation. Start-ups could still offer stock options to attract and retain employees. Those employees would just have to pay fair tax on the income, the same rate normal Canadians pay on their income, rather than receiving a 50% discount.

When we talk about loopholes and tax evasion, we are not talking about Canadians putting their money into RRSPs or TFSAs. We are talking about off-the-book illegal schemes, like the one cooked up by KPMG to hide Canadians' money in offshore accounts.

The second part of today's motion calls on the government to “take aggressive action to tackle tax havens”. The key word here is “aggressive”. It means “tightening rules for shell companies”. It means “renegotiating tax treaties that let companies repatriate profits from tax havens to Canada tax-free”, and it means “ending penalty-free amnesty deals for individuals suspected of tax evasion”.

This is not just a tax issue. It is about cracking down on white-collar criminals. The government members talk about the size of CRA's budget for going after tax evaders, but we still have not seen any criminal charges. It is clear that the government must do more to tackle tax cheats, who are robbing Canadians of billions of dollars of revenue that is sorely needed to improve our communities.

Canada is lagging behind other G7 countries in tackling tax havens. The previous Conservative government eliminated 3,000 jobs at CRA in the unit responsible for detecting tax evaders, including the jobs of hundreds of auditors and 50 highly trained managers. This is a perfect example of why ideologically driven budget cuts can be so shortsighted. The finance department's own numbers show a $10 return for every dollar invested in combatting international tax evasion and aggressive tax avoidance. The Liberal government has made new investments in CRA, which are welcome, but this is not a silver-bullet solution. Instead, it is a starting point in a larger conversation about how we tackle this complex problem.

I have already talked about many elements of an aggressive, effective strategy to combat tax loopholes and tax havens. Another policy I would like to draw my colleagues' attention to is the impact of drastic cuts to the corporate income tax. The Conservatives cut the rate by one-third, from 22% to 15%, over six years, and the Liberals have kept it at this very low level, which is even lower than the U.S. rate. The parliamentary budget officer has said that these corporate tax giveaways cost the government $12 billion annually. Evidence shows that the Conservatives' drastic cuts have not boosted investment or led to the promised job creation. Again, we have another ideologically driven decision that has not led to economic growth and job creation. It has just been a massive tax giveaway. Its only real impact has been to deplete the government of tax revenues that could be used to build better health care, community infrastructure, and other urgent priorities in Canada.

The Liberals promised change for everyday people. They promised policies that would build a fair economy that lifts everyone up, not just those at the top. Canadians are increasingly frustrated that the Liberals are failing to deliver. Instead, we are seeing business as usual. Instead of listening to the voices of everyday Canadians, the Liberals are listening to the loudest voices in the room, the ones of the lobbyists and well-connected insiders who look out for the interests of the wealthiest CEOs and corporations.

As a New Democrat and as the member of Parliament proudly representing Essex, I want to be a voice for the hard-working people who have been left behind by an economy that excludes too many. I want to fight for a Canada that works for everyone, not just the wealthy and the well-connected. Today, New Democrats are calling on the Liberal government to ensure that CEOs and big corporations pay their fair share. I hope all hon. colleagues will join me in voting yes to this motion.

[Kevin Lamoureux, Liberal, Parliamentary Secretary to the Leader of the Government in the House of Commons]

Madam Speaker, the Government of Canada has been firm and strong on the issue of tax evasion, whether it is the $444 million that has been allocated to CRA to give it the resources necessary to get tough on this issue, or some of the international initiatives we have taken, including implementing and enhancing reporting standards, which has been endorsed by G20 leaders, to help close loopholes. We have also signed tax treaties with other jurisdictions, which help provide information to crack down on tax cheats worldwide.

The member talks a very strong line in terms of standing up for Canadians as a whole. I wonder if the member can explain why she voted no when it came to having a tax on Canada's wealthiest, or having a tax break for Canada's middle class and those aspiring to be a part of it, or the Canada child benefit program, or our 10% increase of GIS for our most vulnerable seniors across Canada. Why did the NDP vote no to these things and to the $444 million to get tough on tax evasion?

[Tracey Ramsey, NDP, Essex, ON]

Madam Speaker, once again we have a Liberal standing in the House trying to avoid the fact that the Liberals have broken a campaign promise, something that was repeatedly part of their platform. Again, the New Democrats are having to push the government so the Liberals will honour the promises and commitments they have made to Canadians.

In 2011 and 2015, it was a Liberal campaign platform promise to Canadians to set a cap on how much could be claimed through the stock option deduction. The government has not acted. The Liberals are not moving forward on this. Therefore, the New Democrats are proud to stand in the House and push the government for all Canadians who are losing out on billions of dollars that could be captured, instead of going into the pockets of the friends of the Liberals, the most wealthy.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

Madam Speaker, I am very happy to see my NDP colleagues seize upon this issue, because it is important to fight tax evasion. It is important to fight the fraudsters who think they have all the rights and can do what they want.

At the same time, on the other side we have a government that is laughing at the population and the people. Solutions are proposed, such as the bill tabled by the Bloc Québécois designed to combat tax evasion, but no one is interested in them. After that, we hear that, in the KPMG case, preferential treatment and amnesties are being handed out. Basically, they are continuing to encourage people who do not need to pay for their crimes, because it is indeed a crime to circumvent the law in this way.

However, the Canada Revenue Agency does not seem to be doing its job, and the federal government seems to be standing in our way. This morning, we in the Bloc Québécois asked for something. We asked to have the information forwarded to Revenu Québec as soon as a case is opened and even before it wraps up. That way, should the federal agency be found to be complacent, Revenu Québec can do its job and and collect the money if Canada does not.

Would my colleague like to support us on this?

[Tracey Ramsey, NDP, Essex, ON]

Madam Speaker, something really shocking is happening on the other side of the House, and it was referenced. Not only are the Liberals not following through with campaign promises, they are not pushing hard enough as other progressive parties in the House would like to see happen. However, what is really concerning is the pressure they are receiving. Under access to information, we know the Minister of Finance, in some communications between CEOs and himself, was being pressured, in advance of the 2016 budget, to backtrack on the Liberal promise to close the stock option loophole. Now it is clear that the minster has succumbed to pressure.

The Liberals continue to succumb to the pressure of those corporate elites, and they are not listening to Canadians across the country.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Indeed, Madam Speaker, we agree that the stock options issue does not concern ordinary Canadians, or our neighbours down the street in our ridings, be they Essex or Sherbrooke. They are not the ones who use the stock options offered by companies.

The people who use them are well connected to the Liberal government, and may know the finance minister, himself a product of Bay Street who is among the wealthiest 1% of the Canadian population. Does she think it possible that this financial industry and the multinationals may have exerted some influence that could have caused the Liberals to go back on their promise to put an end to this tax loophole?

[Tracey Ramsey, NDP, Essex, ON]

Madam Speaker, absolutely, the Liberals are bowing to pressure. I am an auto worker. In my riding of Essex, I do not know anyone who is offered these corporate tax options, such as stock options. Average Canadians do not have stock options attached to their jobs. We are not saying no one should have them. We are saying if people do have them, they should pay their fair share of taxes on them, not the 50% cut that the Liberals are letting their friends have.