Debates of Oct. 15th, 2018

Multilateral Instrument in Respect of Tax Conventions Act

[Pierre Poilievre, Conservative, Carleton, ON]

Mr. Speaker, there is no question that the governing side has some expertise on this. We have a finance minister who, after increasing income taxes that took effect January 1, 2016, deliberately carried out a massive sale of shares just a month before that tax increase would take effect so that he would not have to pay higher taxes on his capital gain.

This is the same finance minister who registered his shares for a Toronto company in Alberta, even though he lives in Toronto, so that he could pay the lower corporate tax rate in Alberta, rather than paying the same tax rate as everyone else in the province in which he lived.

This is the same finance minister who set up a subsidiary for his family business, Morneau Shepell, in Barbados, which is a jurisdiction notorious for allowing corporations to avoid paying their fair share of taxes.

Then, of course, we have the Prime Minister, who despite being a multi-millionaire recipient of trust fund money from his family, has accepted hundreds of thousands of dollars of speaking fees and other benefits that other Canadians could not dream of receiving.

They are the trust fund twins, the finance minister and the Prime Minister, wanting to tell us that they are going to bring tax fairness to Canadians. It is just a little bit rich.

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

Mr. Speaker, as the Conservatives and particularly the member across the way want to continue the personal attacks on members of this House, this government will continue to be focused on what really matters to Canada's middle class and those who aspire to be a part of it.

An interesting question about tax fairness is this. Exactly what did the Conservative Party do? The member in one sense is correct when he says that there was a special tax put on Canada's 1% wealthiest, something which the Conservative Party voted against. The members across the way need to be reminded of that. When it came time to have a decrease for Canada's middle class, the Conservative Party voted against that tax break.

I wonder if my friend from across the way can tell Canadians why he voted against the increase to the taxes for Canada's wealthiest 1% and the tax break for Canada's middle class.

[Pierre Poilievre, Conservative, Carleton, ON]

Mr. Speaker, I did no such thing. In fact, according to the CRA, the wealthiest 1% paid $4.5 billion less in the first year after the government's tax changes took effect. According to the renowned and objective Fraser Institute, the middle class paid $800 more as a result of the tax changes by the government. Therefore, as a result of the tax changes by the government, the wealthiest 1% are paying $4 billion less, while a middle-class family is paying $800 more. That is the sum total of their changes.

What did the Conservative Party do? That was my colleague's other question.

According to the Parliamentary Budget Officer, the previous Conservative government reduced taxes by $30 billion with a preponderance of that money going to low- and modest-income families. That is why poverty fell by almost one-third during the previous Conservative government and middle-class incomes were up by over 11% after tax and inflation, the largest increase of any government in the last 40 years. That is what the Conservative Party did.

[Mark Gerretsen, Liberal, Kingston and the Islands, ON]

Mr. Speaker, I want to give the member for Carleton an opportunity to answer this. I am going to make the question as simple as possible to follow up on the last one, because I know he is very good at doing that during question period. He wants a direct question so that he can get a direct answer. I am going to ask the direct question that he did not answer from the previous question.

Why did he and the Conservative Party vote against cutting taxes for the middle class and increasing taxes for the 1%? Why did they vote against it? I would like an answer to that question.

[Pierre Poilievre, Conservative, Carleton, ON]

Mr. Speaker, the answer is that we did not. The government introduced changes to the tax system that had the effect of lowering taxes on the wealthiest 1%. This is CRA data. If the government does not like the CRA, then it should talk to the officials there.

The CRA has reported that in the first year after these tax changes took effect, the wealthiest 1% paid $4.6 billion less in income taxes while middle-class Canadians paid $800 per family more. How did they pay more? They lost the children's fitness tax credit. They lost the transit tax credit. They lost the education tax credit. They lost the textbook tax credit, in addition to the overall tax burden. That does not even include the carbon tax and the increases in payroll taxes that are expected to take effect on January 1 of this coming year and in the year following that.

Even without those additional forthcoming tax increases, middle-class people are already paying more while wealthy people are paying less. That is what we voted against.

[Todd Doherty, Conservative, Cariboo—Prince George, BC]

Mr. Speaker, I wonder if our hon. colleague could expand on the comparison between the current Liberal government and the record of our previous Conservative government.

[Pierre Poilievre, Conservative, Carleton, ON]

Mr. Speaker, Conservatives were obsessed with lowering taxes for the people who needed it the most, the working poor, the struggling middle class.

We cut the GST from 7% to 6% to 5%. We brought in the working income tax benefit, which gives a 25% pay raise to people who earn between $3,000 and $11,000 a year. We raised the personal exemption so that one million of our poorest working people would no longer pay income tax at all. We lowered the payroll tax, which is one of the most regressive taxes that targets the working poor, our youth, and our disabled. The people who need the money the most were able to keep the most under our government.

According to the Parliamentary Budget Officer, under the Conservative government, tax reductions amounted to $30 billion and the preponderance of those savings went to low- and modest-income people. We allowed the working poor to springboard into the middle class and that is why poverty was down almost one-third while the Conservatives were in government.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, it is like looking over there and seeing Stephen Harper all over again. That has to scare a lot of Canadians.

The reality is that there was legislation and there were budgets. It is unbelievable that the Conservatives are trying to deny factual history. Do not let the facts get in the way of a good speech seems to be their motto.

The Conservatives voted against tax breaks for Canada's middle class. There is no two ways about it. The record will show that. The Conservatives voted against having a special tax on Canada's wealthiest. The member talked about poverty. Through the Canada child benefit, our government lifted hundreds of thousands of children out of poverty, not to mention what we did with the guaranteed income supplement, which lifted thousands of seniors out of poverty.

Where does the member get his facts from?

[Pierre Poilievre, Conservative, Carleton, ON]

Mr. Speaker, I am glad that the member asked that question. I get my facts from the Canada Revenue Agency, which says that the wealthiest 1% are paying $4.6 billion less under the Liberal government. Should we really be surprised, when we have the trust fund twins, the Prime Minister and the finance minister, making tax policy?

One of them received a multi-million dollar trust fund from his grandfather's petroleum empire, and I speak now of the Prime Minister, and yet he had the audacity to take money from charities for speaking fees that all members of Parliament typically give for free. He then forced middle-class and working poor Canadians to pay for his $30,000 worth of nanny services. This is someone who has lived in government-funded mansions for the better part of his life.

Then there is the finance minister, who registers his assets in Alberta even though he lives in Ontario, so that he can avoid paying the taxes that everyone else pays.

What else would we expect from the trust fund twins but more breaks for the wealthy, which is exactly what the Liberal government has delivered?

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

Mr. Speaker, I will be splitting my time with my friend and colleague from the east coast from the riding of Sackville—Preston—Chezzetcook. It is great to see him in the House this morning.

It is great to be back in the House this morning and to hear some of the debate. It is not so great to hear the level of discourse coming from members on the other side, the opposition benches, where they will stay for a very long time if they continue as such. I say that through you, Mr. Speaker, to my friend from Carleton, who I sit on the finance committee with.

Bill C-82, an act to implement a multilateral convention to implement tax treaty-related measures to prevent base erosion and profit shifting, is one of those international accords we can all applaud. We can also applaud the tax cut for nine million Canadians, which brought about $20 billion in tax savings over a four-year period, or about $550 per year per couple. To a working couple benefiting from our tax cut for middle-class Canadians, $550 is a substantial amount of money. It helps pay for many activities for their kids. It helps put gas in their vehicle and to buy groceries and so forth. It is too bad the Conservatives voted against that, and I think they need to be held to account for that. It is too bad they also voted against the Canada child benefit, which benefits nine out of 10 Canadian families, representing an average of $2,300 more. In my riding of Vaughan—Woodbridge, I consistently hear about how the Canada child benefit is helping families fund their kids' day-to-day activities.

It was also noted about what is called “refundable” or “non-refundable” tax credits. A lot of the boutique tax credits the opposition party member referenced in his comments were ones working middle-class Canadians could not take advantage of because they did not have taxes payable, and only benefited wealthier working Canadians. It is a little fact that was missed.

Turning to Bill C-82, OECD Secretary-General Angel Gurría said the following:

The conclusion of this multilateral instrument marks a new turning point in tax treaty history. We are moving towards rapid implementation of the far-reaching reforms agreed under the BEPS Project in more than 1,200 tax treaties worldwide. In addition to saving the signatories form the burden of bilaterally renegotiating these treaties, the Convention will result in more certainty and predictability for businesses and a better functioning international tax system for the benefit of our citizens.

Bill C-82 basically follows our government agenda from budget 2016. In chapter 8, we talked about making our tax system fairer, simpler, more efficient and also ensuring all organizations, enterprises and high net worth individuals follow the tax rules that everyday businesses and people in my riding follow. It is great to see Bill C-82 come to the House for approval, and it is great to see our party is shepherding this as quickly as possible.

On a personal note, I sat on the Canadian Institute of Chartered Accountants user advisory council for a number of years. I understand full well the importance of working with our international partners at various accounting institutions in the world, and also with our partners for multilateral purposes, including the base erosion and profit shifting deal.

To give an indication of the annual losses that are occurring, the OECD estimates 10% of global corporate taxing income, or approximately $100 billion to $240 billion is lost, where little or no overall corporate tax is being paid. This agreement is far-reaching. Working together in the OECD G20 BEPS project, over 60 countries developed 15 actions to tackle tax avoidance, improve the coherence of international tax rules and ensure a more transparent tax environment. Leaders of OECD and G20 countries, as well as other leaders, urge the timely implementation of this comprehensive BEPS package.

That information comes right from the document I was reading over the weekend on the multilateral convention to implement tax treaty-related measures to prevent BEPS from OECD. I encourage my colleagues to read it because it is an interesting document.

It pertains to our economy and ensuring we have a strong middle class and that we continue to help those who are working hard to join the middle class. It pertains to ensuring that all corporations in Canada with operations in the world and vice versa, those foreign entities that operate in Canada domestically, pay their fair share, much like all our residents do in each of our ridings. With that, it is great to stand up and speak to Bill C-82.

Taxes paid by Canadians are what fund the programs and services that make our country thrive. When the wealthy use international tax avoidance schemes to avoid paying what they owe, it is the hard-working middle class, those folks in my riding of Vaughan—Woodbridge, who foot the bill. That is unacceptable.

Tax fairness continues to be a cornerstone of our government's promise to Canadians to grow a stronger middle class. In each of our three budgets, the government has passed laws on both the international and domestic fronts to enhance the integrity of Canada's tax system and give greater confidence that the system is fair for everyone. I encourage some of the opposition folks here this morning to look at our budgets. They are actually great documents that pertain to tax fairness for all Canadians, especially with respect to putting in resources. Over $1 billion was invested in the CRA, after those many years of cuts by the Conservatives. The Conservatives are synonymous with cuts to the system and the CRA. We want to ensure that all institutions in Canada are paying their fair share, because we know all hard-working Canadians go to work, pay their fair share of taxes, and want to make sure they create a better standard of living for their families and a better future for their children and for all Canadians.

Since our first budget in 2016, the government has continually strengthened the ability of the CRA to crack down on tax evasion and combat tax avoidance with increased funding. This funding has supported transformational changes to the CRA's compliance programs, allowing them to better target those posing the highest risk of tax avoidance, and more effectively fight tax evasion and aggressive tax avoidance.

Today we take another step toward levelling the playing field and ensuring all Canadians pay their fair share of taxes. With this legislation, the Government of Canada is upping the ante in the fight against aggressive international tax avoidance and safeguarding the government's ability to invest in the programs and services that help the middle class and people working hard to join it. Whether it is putting in place a 10% increase in the guaranteed income supplement for our most vulnerable seniors, increasing the Canada workers benefit for those hard-working Canadians at the lower end, giving them that bump up, that extra few hundred dollars a year to make a big difference in their lives, we are doing those things while ensuring that our tax system is sound, efficient and fair for all Canadians and all Canadian organizations.

Ensuring tax fairness is complex. I know that for a fact because I sat on the CICA user advisory council. Understanding tax and accounting language does require a certain amount of specialization. It requires that we work with a wide range of partners at home and around the world, which is what we have done with the legislation we are debating today.

Bill C-82 would implement treaty-related measures to counter base erosion and profit shifting, also known by its acronym BEPS. This term refers to tax avoidance strategies through which businesses and wealthy individuals can use gaps and loopholes in tax rules to shift profits inappropriately to low-tax or no-tax locations. It would also ensure that transfer pricing is done fairly.

My riding is blessed with entrepreneurs of all different stripes. The city of Vaughan has over 11,000 SMEs. We have some of the most successful entrepreneurs in the country. I applaud their efforts. I meet with them regularly. I like to listen to what is working to ensure they have the skills and resources for their workers and that they can invest in their Canadian operations, and they are doing that.

That is why our unemployment rate is at a 40-year low. That is why our growth rate is near 3%. That is why firms across the world are choosing Canada to invest in. I am proud of that. However, we also need to make sure that our social programs are funded, that investments are made in early learning, that we enhance the Canada pension plan, that we reduce taxes for nine million Canadians. Yes, we ask those who are very fortunate and privileged in our society, those who are doing well, to pay a bit more. I think that is fair. I wish my colleagues on the opposition benches would appreciate that as well.

With that, I would like to close by saying that Bill C-82 is a good piece of legislation. It concerns an instrument that has recently been ratified by our counterparts, by many European countries, by France, Australia, Singapore, and some of the South Asian countries which have also adopted it in the last few weeks.

It is something that moves the needle forward on combatting aggressive tax avoidance and tax evasion, which is something good for our society. It makes our society fairer but at the same time allows those companies and corporations that do the right thing day in and day out to make the right decisions for their employees and their employees' families. I will end with that.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Mr. Speaker, I will begin by telling the member about the so-called middle-income tax break. For Canadians earning $48,000, the tax break was $81.44. If we include an increase in the carbon tax and the increase in payroll taxes that people are paying at the end of the year, they are actually worse off under the current government than they were at any time between 2006 and 2015. That is just on domestic taxation.

The member crowed about how great CRA is doing, but I am hearing from small businesses in my riding and from many of my constituents about how aggressive CRA has become in its collection process, especially against single moms who are just trying to collect their child benefit, and from small business owners who are just trying to make ends meet. It is garnishing wages and getting straight into the bank accounts.

Is this the way the member imagines the CRA should be behaving with our small businesses, small entrepreneurs and single moms who are just trying to make ends meet? With the rising cost of living, at the end of the day, what matters is whether Canadians can make ends meet and whether businesses can actually pay their employees. CRA is making it much harder than at any point before 2015.

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

Mr. Speaker, it is great to see my hon. colleague from Alberta back in the House this morning. I was not here last week because I was travelling with the finance committee, but I welcome him back. It is really nice to see him, and I look forward to his getting back on the finance committee.

As an economist, as someone who follows the markets and looks at everything, and as someone who is also raising a family, I know the number of measures we have implemented, whether it is the Canada child benefit, the 10% increase in the GIS, or the tax cut. It is interesting that some of the research put out by reputed institutions is actually quite shameful as it ignores the Canada child benefit that is going to millions of families. It is literally a $5-billion increase to families from coast to coast to coast. It is shameful as the institution named earlier should have had that in its report. It would have made a big difference.

Yes, we have reduced taxes. The member will note that at a certain point taxes payable will become very low with the way the tax system works.

[Pierre Nantel, NDP, Longueuil—Saint-Hubert, QC]

Mr. Speaker, I would like to ask my colleague a question, particularly since he is a members of those committees.

Ordinary Canadians who work hard and pay their taxes find it unacceptable that the government is introducing bills that merely fiddle with minor details. Will the government review the tax system? The NDP has asked it to do so many times.

The government is encouraging cynicism among Canadians by failing to make major changes, such as establishing a public registry of those who benefit from the tax exemptions given to the wealthiest Canadians and big business. When people hear that a company did not pay taxes one year or that it was taxed at only 1% when they were taxed at 33% or 34%, it makes them very angry.

I am sorry, but I must remind the House that a Liberal prime minister registered his Great Lakes ships in Panama.

Would my colleague care to comment on that?

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

Mr. Speaker, in the first three budgets that our government brought forward, we invested about $1 billion into CRA to ensure that we keep an eye on aggressive tax-planning techniques or programs and tax avoidance. We are fighting those things and Bill C-82 is another large step in that direction.

As the member knows, tax planning is complex and tax measures need to be looked at. We have looked at certain tax expenditures in our budgets. For example, the multiplication of the small business tax deduction was something we eliminated so that people would not take advantage of it in ways it was not meant for.

Our government has invested a serious amount of funds, over $1 billion, into CRA to combat tax avoidance and tax evasion. We have also looked at our tax code with the goal of simplifying it. I personally feel that we have done a terrific job. There is always much work to do on all files. That is what life is about working in government, and what we all do here on a daily basis, but we need to ensure that we continue on as such.

[Darrell Samson, Liberal, Sackville—Preston—Chezzetcook, NS]

Mr. Speaker, I am pleased to be back in the House this morning after our constituency week. Constituency weeks give us a chance to spend time with people in our communities, which is incredibly important work.

It is a pleasure for me to speak to Bill C-82 this morning. It is definitely another clear step by our government in moving forward on taxes and fairness. When I say fairness, it is extremely important to realize that the tax loopholes that exist need to be shut when it comes to international base erosion and profit shifting. We are seeing wealthy individuals or businesses moving their money to countries where low taxes are available to them, and Canadians lose out on those revenues. That is crucial. For example, many programs we offer to our people we will not be able to continue or improve if money keeps flowing outside the country.

For example, there was nothing better than this week when I went around and heard veterans indicating how happy they are that our government brought back the pension for life. That is something they were asking for over a number of years that is very important to them. I hear veterans talk about the $40,000 education investment or the $80,000 four-year education investment. Those are major investments for veterans.

I was chatting not so long ago with some youth about what our government has done thus far to help and work with them. We underlined, of course, that we doubled the Canada summer jobs for individuals. We also created the youth Canada program, where we hired 870 young people on the ground for competitive co-op programs or internships. We can talk about the 1,200 green jobs for young people under STEM, which is science, technology, engineering and math.

This is very good legislation. It would continue our philosophy of ensuring that we can continue to offer programs for Canadians.

This multilateral convention came about when the OECD and G20 countries worked together to look at base erosion and profit shifting. While they were doing that, they realized that many of the tax treaties that existed had many loopholes and some challenges. Trying to find solutions for each and every one in all the countries involved would be time consuming, very costly and probably not very efficient. Because of that, they brought forward this framework, this multilateral convention, which is a framework for countries to move forward quickly and effectively. Our government signed on to it on June 7, 2017, and then, of course, we tabled it in the House in January 2018.

It is not just Canada. Over 100 countries have already signed on to this, because they know that this is an area they need to streamline so they can continue to grow and prosper.

Talking about growth and prosperity, we need to talk about our country. Of course, we have created over half a million jobs in the last two and a half years. That is an enormous increase in jobs. We have the lowest unemployment rate in the last 40 years. That is again an indication of the strength of this country, and it puts us in a great position to continue to grow and prosper, and we are going to take advantage of it. This is an opportunity, not a challenge, in that way. We will crack down on these programs to ensure that the revenues due to Canadians are there so we can reinvest them for the middle class and for Canadians. That is our objective.

This important multilateral convention would deal with three major fronts. The first one would modify existing tax treaties. It is extremely important to look at the loopholes and see how we can find solutions and bring them forward. However, we have also added minimum standards for the abuse of tax treaties. There is lots of abuse, so how we deal with those abuses is key. First are the loopholes. Second is finding tools or rules to reduce those abuses. That is what countries will have to find solutions for.

I want to talk about the minimum standards that focus on dispute resolution and arbitration. We have to make sure that there is dispute resolution where the objective is to find a solution. Instead of being very costly and fighting in court, we need to find a way to work together to find solutions that are acceptable and that ensure that Canadians receive the funds they are supposed to and can reinvest those funds in social programs for the middle class and less fortunate Canadians.

Tax fairness is our objective, and this would move another step closer to what we have introduced throughout the two and a half years the Liberals have been in government. I have to talk about the fact that we cut taxes for the middle class and raised taxes for the wealthiest one per cent. There were two objectives. One was to reduce taxes for the middle class and to increase those for the most fortunate, which is extremely important.

When I speak to young families in my riding about the Canada child benefit program, they recognize how important that investment is in their families for their children. It is essential. It is very touching to hear young families share that information, and it is not just in my riding but right across the country. In the riding of Sackville—Preston—Chezzetcook, which I represent, $5.2 million per month—yes, everyone heard me correctly, $5.2 million per month—goes to young families. That represents $60 million a year. If we multiply that by 338 members, everyone can see how much investment our government is putting into this important area.

This is Small Business Week, so we should be talking about small businesses and what our government has done to continue to improve the environment for small businesses to prosper. When we came into power, the tax rate was 11%. We reduced it to 10.5%, then 10%, and in April, we will reduce it once again to 9%. What does 9% represent? That 9% means that with the federal, provincial and territorial taxes together, it will be only 12%, which is the lowest in the G7 and one of the lowest in the OECD as well.

In conclusion, the money we invested, over $1 billion, in budgets 2016, 2017 and 2018 was to enhance a new program that will allow us to track closely any transactions of $10,000 or more that move about monthly. How big is this? It is very big. A million transactions per month is 12 million transactions of $10,000. We work closely with other countries to make sure that we share the information about foreign banking.

I am extremely happy to be here today to speak to this bill that will continue to allow Canadians and our government to support the middle class and ensure that there are jobs and programs as we move forward in a strong country.

[Todd Doherty, Conservative, Cariboo—Prince George, BC]

Mr. Speaker, I find it interesting that the government chose the member for Sackville—Preston—Chezzetcook to stand up. I will remind those listening, and those in the House, that his family was on the receiving end of a lucrative surf clam quota given by the former fisheries minister. Subsequently, the Ethics Commissioner did an investigation on this.

If that is not enough, our hon. colleague is waxing on about how great the government is, when its own Minister of Finance registered a Toronto-based company in Alberta. Is that not a version of tax avoidance? Could our colleague explain, in his own words, why he feels the Minister of Finance did that?

[Darrell Samson, Liberal, Sackville—Preston—Chezzetcook, NS]

Mr. Speaker, first of all, I would like to set the record straight. I think it is extremely important.

On this side of the benches, we do not need permission to speak for the party. We are not chosen because it is time for us to speak. We request the right to speak on any bill, and we do so, and that is how we do business. On that side, if members have to play games to get access to speak on behalf of their residents, that is pretty bad. That is why I am on this side and not on that side, that is for sure. I guarantee you that.

I believe the member opposite should spend a lot more time focusing on bills being debated in the House so that he can bring forward the perspective of the people he represents on these very important bills.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Mr. Speaker, it is interesting that we are talking about tax avoidance. I will say, in fairness to the Liberal government, that it has made a massive effort to go after tax avoidance. However, what it is perpetuating in the House is a fraud in not being honest about the fact that who the Liberals are going after are single mothers. They are not going after offshore tax havens. Ask any member of Parliament who deals with child tax benefits, and they will point out that the government is targeting single mothers. I know families that have never gotten child tax benefits, because they cannot prove that they actually live in this country. They will make single mothers jump through every single hoop imaginable and will never ask the same of the Bronfmans or of any trust fund friends of the Prime Minister.

The idea that the government is serious about offshore tax havens is a joke, because we can see how it targets child tax benefits and targets single mothers. If the member had any dignity, he would stand up and say that what is happening against single mothers and young families across this country is unconscionable.

[Darrell Samson, Liberal, Sackville—Preston—Chezzetcook, NS]

Mr. Speaker, there is always lots of energy behind my colleague's questions, and I appreciate that very much. He must keep in mind that since the Liberals took power, we have invested $1 billion in the CRA to put systems in place to better track and identify the loopholes and the wealthy individuals or companies that are not paying their fair share of taxes and to make sure that they pay those taxes. We will continue to do that. We have hired 250 more auditors to make sure that CRA is doing the job it needs to do.

The member should keep in mind that the government is focused on tax fairness and investing in the middle class.

[Erin Weir, Independent, Regina—Lewvan, SK]

Mr. Speaker, this is a very esoteric topic, and I think it makes sense to talk about tangible examples.

I spent this past weekend in Saskatoon at the Saskatchewan NDP convention. One of the largest companies in that city is Cameco, which mines uranium in the northern part of the province. For many years, it had a contract with its own subsidiary, in Zug, Switzerland, to sell uranium for the rock-bottom price of only $10 per pound. The uranium was not being consumed in Switzerland. The whole point of this arrangement was to transfer profits from Canada to Switzerland, avoiding hundreds of millions of dollars in corporate tax both federally and in the Province of Saskatchewan.

Could the member for Sackville—Preston—Chezzetcook explain to us how Bill C-82 would help to stop companies from engaging in that type of tax avoidance?

[Darrell Samson, Liberal, Sackville—Preston—Chezzetcook, NS]

Mr. Speaker, I do not know if my colleague should share the bad news with the company or if he wants the CRA to do so, but if it is not paying its taxes, Bill C-82 would force it to pay them. The member may deliver the bad news if he wants to, or I will, but the company will pay.

The sharing of information between companies has increased, which is extremely important. As well, with the new tracking system that will be put in place, we will be able to ensure with regard to those who are moving money monthly, $10,000 or more, or $1 million a month or $12 million a year, that we can assess the risks and focus on them and find solutions. We will be able to see if a lot of activity is happening with one company or 10 companies.

Objectively, Bill C-82 would ensure that companies and individuals that need to pay their taxes will pay them so that the Canadian government can—

[The Deputy Speaker, Bruce Stanton]

Resuming debate, the hon. member for Calgary Shepard.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Mr. Speaker, I am glad to be back this Monday to talk about what I think is a tax treaty for tax treaties. I can think of no drier subject to debate in the House other than maybe ways and means motions.

Bill C-82 looks at base erosion and profit shifting. It is a problem that tax regimes and tax administrators across different countries are increasingly starting to grasp as a result of the digital age now upon us and the ability of companies to create sub-companies and larger holding companies to shift around money quite easily, as well as IT, or intellectual property. They are able to shift the work of employees in a digital sense, not in a physical sense, to other countries to take advantage of lower taxes and tax loopholes and tax avoidance schemes that currently are legal in some ways, but in other ways go against the spirit of tax treaties that legislatures have introduced across different countries.

The Tax Justice Network has done some estimates and provided an aggregate of different statistics from the OECD, World Bank and IMF of how much money we are talking about in base erosion and profit shifting. It could be an excess of $200 billion that developing countries are losing out on from that money being shifted around. This is revenue that could be taxed and possibly provide social services that we all live off of. We need police forces and EMS. Also, this place does not run for free. We have to pay the clerks. We have to pay all of those who provide administration for this building. Some of the lowest estimates are as low as $100 billion while some of the higher one go up to about $300 billion. Large multinational corporations are typically best able to take advantage of different tax treaties and tax treatments for the type of work they do. This is happening mostly because the digital age is upon us and the ease with which companies can hire experts in this field.

Let us be honest. I am not a tax lawyer. Neither are the vast majority of the members in the House. I am humble enough to say this. Whenever I see a tax bill before the House, it takes me an extra long time to go through it. When I have to file my taxes every single year, it takes me the better part of an afternoon to do it. Dealing with tax treaties and their tax implications for multinational corporations and how these could be used is not my area of specialty. Those companies know that. Multinational companies are able to hire high-paid accountants, high-paid lawyers and high-paid lobbyists to ensure that they get the best possible tax treatment for their businesses. In some cases it may be justified to avoid a situation of being double taxed.

In Bill C-82, a lot of the provisions in this tax treaty for tax treaties will get rid of the double taxation of some companies. However, many simply abuse the rules. There are 78 jurisdictions that will be covered by this and 1,200-plus matching treaties that will be looked at. Countries are joining this process every day.

This was not started by the current Liberal government, let us be clear. It began under the previous Conservative government as a result of multinational bodies starting to look at this matter. I have heard several members on the government benches say this is part of the their initiative to improve tax collection somehow. They are taking credit for something that others started. The government repeatedly takes credit for things that others have done, either things that civic society has done or charities are doing on their own, or that a previous government has done or a provincial government is doing. The government takes these as its own, claiming victory that somehow these meet the campaign promises that the Liberals were elected upon.

I have an example that I found in a package that the OECD made available on its website. I want to read it into the record because it is an example of base erosion and profit shifting.

In the example set out in the video, company A, which resides in the Cayman Islands, wants to provide a licence for the use of intellectual property to company C in South Africa. South Africa, however, has not concluded a tax treaty with the Cayman Islands and would thus be entitled to apply its domestic withholding tax rate on outbound royalties. I hope that everyone is still with me on this. However, a European country has concluded a tax treaty with South Africa that reduced its withholding tax rates on royalties. Also, this country does not itself levy a source tax on royalties. Therefore, company A establishes a letterbox company in this European country and diverts the royalty payments through the letterbox company to reduce the tax withheld by South Africa. In this example, the principal purpose of establishing this arrangement, including the letterbox company, was to obtain the lower withholding tax rate available under the tax treaty between South Africa and the European country.

If everyone is still with me, that is what we call “base erosion profit shifting” in its simplest sense. Large international companies like Starbucks do this. Every time we go to Starbucks to get a triple spiced pumpkin latte, or whatever, that company engages in this type of behaviour. I am sure I am going to get a phone call from one of its lobbyists. Specifically, it is a popular thing to do with intellectual property and trademarks, particularly in the arts and cultural industries. At a certain size we are talking about large sums of money. In these cases, the trademarks and intellectual property have a very high value. A company's reputation and branding are how it differentiates itself from its competitors.

This matter is international. We also have it happening in a certain way domestically. We have a government that has been pursuing single moms, small business owners, and many residents in my riding who have been trying to make ends meet. The government wants to force them to provide documentation proving they are not engaging in tax avoidance or welfare fraud of some sort.

Other members have said that the Alberta registered corporation that the Minister of Finance uses is really a form of tax avoidance. It is not illegal in any way in Canada to go outside a jurisdiction where the work is being done in order to register in a lower tax jurisdiction, Alberta in this case, to avoid paying more taxes.

It is done domestically, which is why the Standing Committee on Finance has been doing a statutory review of the proceeds of crime and terrorist financing act. The reason I bring it up is that in the process of this study, the members of the committee would have had an amazing opportunity to learn from FINTRAC and other agencies of the government that are dedicated to tracking down illicit funds and suspicious transactions and activities.

What we do domestically has implications internationally. We know that business owners are engaging in aggressive tax planning, making use of tax firms and tax consultants, such as KPMG, PWC and all of the large firms out there. KPMG is notably the one that has made the news most often with its relationship with the Canada Revenue Agency. These companies are aggressively planning businesses' taxes to help them avoid paying their “fair share”. It is not a term I like to use, but it is one that has been used quite often in the House.

I wish we spent more time talking about how to get companies and Canadians to create more wealth. We spend an awful lot of time in the House trying to figure out ways to tax people and corporations in order to try to squeeze and get more water out of that stone in some way, but we do not really spend a whole lot of time talking about how to make sure that in the free market economy, where free people are working in their own best interests and figuring out how to make ends meet for their families, we can simplify and improve their lives. We are not doing that. We have been doing the opposite for the past three years. From this so-called middle-income tax cut, a Canadian who is earning $48,000 is saving $81.44 off their taxes. If we include carbon taxes, increased payroll taxes, depending on the provincial jurisdiction, where they are probably paying higher provincial taxes as well, costs are rising, including the costs of everyday essentials.

There are think tanks that say that the number one item on the average family's pay slip is taxes. They are paying more for taxes than for the essentials of life: rent, food, electricity or natural gas. For the first time ever, the average family is having to pay more in taxes than for anything else. We do not spend enough time talking about how to create more wealth and to broaden the base that has been a way of ensuring that more Canadians and corporations are at least paying a little bit into the system. When we pay into the system, it makes us part of it. There is a certain ownership in what the Government of Canada and what the Parliament of Canada do on our behalf. When we have to put a little money into it, we really do care what is being done with it.

The Liberals said in their campaign platform that a so-called tax hike on the top 1% would bring in $3 billion more. The Department of Finance then produced an estimate, saying it would bring in an extra $2 billion. The government actually lost money in its first year; $4.5 billion to $4.6 billion less money being brought in. Those are not my numbers. Those are Statistics Canada and CRA numbers, which say the government is bringing in less money than it did before.

The top 1% of income earners pay 20% of all taxes. The top 8% of income earners, including every member in the House, every cabinet minister, are paying half of all taxes right now. That is an incredible amount, just in the share of national revenue, that we are asking an increasingly smaller group of people to pay. It also speaks to the administration and the idea of taxing the rich, fleecing the rich, on a personal income side, which has been a total failure of the government.

Now we have Bill C-82, in which the Liberals want to go after multinational corporations and big business, and I am all for it. It is a fantastic idea. We have a tax treaty of tax treaties. It should be done right. I am glad we are at this point where we can talk about it.

However, where are we talking about the wealth creation to get small businesses and entrepreneurs to start creating more jobs, to want to invest? We had the aborted attempt by the Minister of Finance's department, and by him as well, to tax small businesses more because they were not paying their fair share. I heard loud and clear from general practitioners and small business owners in my riding who were just trying to make ends meet. They wondered how they could keep growing their small family businesses and eke out an existence to pay for the schooling for their kids and to continue living.

Calgary continues to have the highest unemployment rate in Canada. The reason for that is that the Government of Canada is in no way interested in ensuring that the energy industry of Alberta continues humming along. Most high-income earners come from Alberta. The Government of Canada has made changes to the tanker ban on the coast of British Columbia and the introduction of Bill C-69, which has passed through the House and is in another place. Every regulatory and legislative measure that the Government of Canada has been able to use to constrict and put the energy industry of Alberta into a pretzel, it has done it. The Liberals have succeeded in reducing our incomes. They have succeeded in undermining the ability of Albertans and Alberta families to make a living. They are not helping to create the wealth that they want to tax. We should be starting the conversation with how we can ensure people can create wealth for themselves and the Government of Canada can tax a reasonable amount from them to pay for common, public services that we all get to enjoy.

For multinational corporations, what we are talking about in this tax treaty is base erosion. They are using a digital economy to shift around so-called profits, and this is primarily used by big businesses. The ability of small businesses to do this is very limited because they need access to high-paid tax lawyers, lobbyists and accountants who know the details of these tax treaties, who can read the different tax treaties between different countries and take advantage of specific provisions in them.

After the paradise papers and the Panama papers, I think there is a general understanding among parliamentarians in both houses that something has to be done. It is not just in North America and in Canada that base erosion and profit-shifting for large multinationals is getting out of control. It is happening in European and developing countries as well. With the digital economy and the ability to cite their so-called work locations almost anywhere they wish, it has become profitable for companies to engage in this type of tax avoidance.

We also have to remember that they are trying to avoid taxes, sometimes punishing taxes, that limit their ability to continue working, to continue generating a profit for shareholders. If they are co-operatives, it limits their ability to provide a return to the members of the co-operatives. It goes back to the notion of whether we are creating an opportunity to create wealth. Instead, we usually talked about how we can tax more.

Another example is that during the whole cannabis decriminalization and legalization, the discussion primarily in the public was about how much taxes the Government of Canada would generate through the legalization provisions it had introduced. Oftentimes we did not talk about the potential for wealth creation through these businesses, through legalizing this one sector of the illegal economy, the black market that already exists.

The United States will not be a party to these international tax treaties that Canada and many other countries have, to this multinational effort on the base erosion of profit shifting, although it would be in its best interest to do so because it stands to gain quite a bit from it as well.

Canada's competitiveness is further eroding. We do not participate in measures such as this. The provisions in our federal corporate income taxes and the tax rates in comparison to those in the United States make us not competitive. In Canada, one of its champions for natural gas just cannot continue doing business in Canada at this pace. It costs it $100,000 in carbon taxes for every well drilled in British Columbia. That is a rig hand, an extra person on every rig who could be hired who did not need to be.

The Government of Canada crows about how great it is doing on the energy file, such as the LNG project that was approved. However, it does not talk about the $70 billion to $75 billion in projects that did not go ahead. It does not talk about the fact that this project, the LNG project, was approved in 2014. Businesses took until 2018 to decide to go ahead with it. They only went ahead when they got exempted from the carbon tax.

Large multinational corporations have been exempted from the domestic carbon tax that everyday Canadians will have to pay, every small business owner who owns a convenience store and every gentleman I meet who drives my Uber. Usually in Calgary it is a form of an oil and gas war. The drivers of my Ubers will pay higher carbon taxes, will pay a higher price on their gasoline, will pay a higher price on their natural gas to heat their homes. They will have to pay for that, but multinational corporations will not have to pay. That was the inducement, on top of other inducements, necessary to get them to invest in Canada.

I am all for Bill C-82, what I call the tax treaty of tax treaties, the driest subject we could possibly talk about. However, let us go back and talk about how we can get people to create more wealth. I do not mean the government-directed creation of wealth. I see this all the time in news releases, that the government created 100,000 jobs. It created no such thing. This place is not capable of creating jobs. People out there create jobs. They start businesses. They may start a family business. They go out and find a product or a service that somebody out there wants to buy. They fill a gap, a niche in the free market. That is popular capitalism. It is capitalism for the people. We do not talk about it enough in this place.

In this place what we often talk about is select industries that deserve a tax break or special treatment of some sort. I am glad we are going ahead and ensuring that base erosion and profit shifting stop happening as easily as they have been.

Let us go back to talking about how we can get junior oil and gas companies in Alberta to start drilling again, to start hiring again. Probably 10% to 15% of the people who live in my riding are either unemployed or underemployed. They are maybe working a day or two a week. This is years after the commodity prices, the so-called grand WTI went down. We do not even get that in Alberta. Last week, we were told that WCS, a standard Canadian mix of bitumen and dilbit, was selling at zero. Companies were paying others to take it for 8¢ to 18¢. They had to pay someone to take it because there was so much supply.

We rarely talk about all of these problems. We posture, which is pretty standard from that side of the benches. I do not hear us talk about wealth creation. How can we get people to create their own wealth? Then, at that time, the Government of Canada can come by and ask for a reasonable share of that amount.

However, for multinational corporations, I hope this treaty will be the starting point for reducing their ability to rob from the public purse, which should be justly paid to the Government of Canada for the provision of services that we all enjoy.

[Peter Fonseca, Liberal, Mississauga East—Cooksville, ON]

Mr. Speaker, after listening to the member across the way, I have to think he is living in a different time and in a different place. He should be well aware of the facts, those being 600,000 new jobs created and the lowest unemployment rate in the last 40 years at 5.9%.

We hear about companies opening and hiring people. Canadians are doing well. We just signed the USMCA with the United States and Mexico. We are moving forward in a positive way. There is the $40 billion project, the biggest infrastructure LNG agreement to be done in the history of our country. That member must be living in a different time and in a different place. We have the fundamentals in place.

I do not understand. The member's party was not able to get it done. His party took us into a technical recession, but we have come out of that and we are doing very well.

I would ask the member to get on board and see how things are progressing in a positive way for all Canadians, including the middle class.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Mr. Speaker, the member talked about the lowest unemployment rate in all of Canada. That is an aggregated number across all provinces. He did not talk about my home province of Alberta, which still has the highest unemployment rate and Calgary continues to have a high unemployment rate and an underemployment rate as well.

The LNG project that the member mentioned was approved under the previous Conservative government in 2014. Businesses took four years before deciding to go ahead because the price of doing business here was just too high. That deal comes from the exemption from the carbon tax, a carbon tax that people in British Columbia have to keep paying, while this multinational corporation, the conglomerate that will be a part of it, is exempted from it.

If things are going so well that they need to provide exemptions through the carbon tax, I guess that is the member's standard for the Liberals doing such a great job.

The member for Mississauga East—Cooksville also failed to mention the $100 billion-plus in new debt that has accumulated under the Liberal government's watch, which future generations will also have to pay.