Mr. Speaker, I am very pleased to speak today about tax fairness. I am proud to be a part of this government, which is doing a lot for tax fairness.
I am very happy to rise this afternoon to speak to the opposition day motion regarding tax fairness because our government's record after two years speaks for itself, and I am glad to comment on it.
First, in preparation for today's opposition motion, I went back and looked at our budgets for the last two years that we presented. I looked at budget 2016 and our platform to create a stronger middle class, which we are doing through the lowest unemployment rate over 40 years, and the fastest economic growth rate that we have seen in probably 10 or 15 years. A lot of great things are happening.
I looked at what was in budget 2016 and budget 2017 on tax fairness, on fighting tax avoidance, and on fighting tax evasion. If we look at budget 2016 and we take out some of the comments from there, it stated:
Canada and other members of the G20 and the Organisation for Economic Co-operation and Development (OECD) have worked together to develop recommendations aimed at addressing BEPS.
We joined our international profit partners to fight tax avoidance and tax evasion. As part of its commitment to protect the integrity of the Canadian tax base, the Government of Canada is acting on certain recommendations of the BEPS project.
Budget 2016 proposed new legislation to strengthen transfer pricing documentation by introducing country-by-country reporting for large multinational enterprises.
I wish to add that I will be splitting my time today with my hon. colleague and friend, the member for Davenport.
Second, the CRA is applying revised international guidance on transfer pricing by multinational enterprises, which provides an improved interpretation of the arm's length principle.
Third, Canada is participating in international work to develop multilateral instruments to streamline the implementation of treaty-related BEPS recommendations, including addressing treaty abuse.
We also enhanced domestic tax integrity. We looked at how high net worth individuals are using private corporations, or CCPCs, inappropriately to reduce or defer tax. To help address this, we put into place numerous measures in our first budget in 2016, including limiting the use of the multiplication of a small business tax credit, or the $500,000 small business tax deduction.
That was done to ensure that all individuals are paying their fair share of taxes in this country, and to ensure that we have the revenues needed to pay for those programs that Canadians use day in and day out, and that Canadians value.
We also put into place measures to ensure that investment income derived from an associated corporation's active business is ineligible for the small business deduction in certain circumstances. We also closed tax loopholes that allowed private corporations to use a life insurance policy to distribute amounts tax free that would otherwise be taxable.
More measures were put in place in budget 2017, including an additional $444 million for the CRA, so that it would have the tools and the resources to combat tax avoidance and tax evasion and, yes, to bring about tax fairness for all Canadians coast to coast to coast. This was on top of the first $500 million we put in place.
In budget 2017, we estimated the CRA would be able to recover $2.6 billion in additional federal revenues. The good work to recover those funds continues. Initial steps have been taken to prevent wealthy individuals from using private corporations to inappropriately reduce their tax payable. We closed tax loopholes on other measures. We have entered into agreements, and we introduced legislation that was passed in 2016 on BEPS. We have eliminated ineffective and inefficient tax measures, and we have also provided greater consistency in the tax treatment of similar types of income with other government priorities and current economic conditions.
We have given the CRA the tools to fight tax avoidance and tax evasion, which the previous government across the aisle, cut. The former Conservative government actually cut funds from the CRA. It did not give them the tools and the resources the agency needed to do its job.
Thus, in two years, we have given the resources and invested the funds necessary for the CRA to do its job. It has increased verification activities. CRA has hired additional auditors and specialists with a focus on the underground economy, and developed robust business intelligence infrastructure, and risk assessment systems to target high risk international tax avoidance cases. Also, it has improved the quality of investigative work that targets criminal tax evaders.
Those are only small parts of the measures that were done in budget 2016 and budget 2017, both budgets aimed at strengthening the middle class and helping those working hard at joining the middle class. Our work is not done. We have done a lot more.
On tax fairness, we have cut the small business tax rate from 11% to 9%. When these measures are fully enacted, every business in Canada, from coast to coast to coast, will have a reduction in its taxes payable by $7,500. That is $7,500 businesses can use to invest in HR training, capital, equipment or to give raises to their workers.
We have cut middle-class taxes for nine million Canadians. Over five years, that is about $25 billion in tax relief that will go to nine million Canadians, who work hard every day, so they will have more money to save, to invest, to spend on their kids, and so forth.
We have eliminated income splitting, which the prior government brought in. It was the most regressive form of taxation policy that only benefited the wealthiest in Canada. In fact, I do not know why the prior government introduced that measure because it was so regressive. It was so unfair to the majority of working Canadians across the country, to the majority of middle-class Canadians. We have eliminated that.
With that, we brought in the Canada child benefit, which benefits nine out of 10 Canadian families on average $2,300 more per year. The CCB is tax free, it is simple, it is monthly, and it is helping to lift Canadians out of poverty. Most important, it is helping to lift Canadian children out of poverty. We should all be proud of that.
On the CCPC, we consulted with Canadians on how to make our tax system more efficient and more fair. After the summer consultations, we came back and tackled income sprinkling. This measure was used by certain high net worth individuals across the country, and it was unfair. It was allowing them to reduce their taxes payable to levels that were unfair to other Canadians and it was allowing two individuals with the same income to avoid and create a big differential.
Another thing we reversed was the TFSA. The prior government would have doubled the TFSA amount to $10,000 when we knew the forgone revenue from that doubling would have impacted programs in the future, my children's program. We knew that the only individuals in Canada who could have afforded that $10,000 a year would have been wealthy individuals. Fewer than 10% of Canadians max out their TFSA at the $5,500 level currently. Shame on the other side for bringing in that measure.
We strengthened the Canada pension plan. We enhanced it for future generations. In my riding alone, the guaranteed income supplement increase benefited over 2,000 of my most vulnerable seniors, up to $800 each this year.
That is the good work our government is doing. That is the good work that Canadians elected us to do. We continue looking at ways to boost and to bring in tax fairness.
I am proud to say I that am the committee member on the finance committee. We invited our Minister of National Revenue to come to committee. I was the member on the finance committee who brought forward the motion to look at tax avoidance and tax evasion. I am proud of the work we did as committee members in producing a report that we brought forth to the national revenue minister and of the number of the recommendations within that report. In looking at the reply of the national revenue minister, a number of those recommendations have been fulfilled.
I am proud of what our government has done with regard to tax fairness. That is what our government is about. Those are the resources we have implemented in CRA.
Our record for offshore related files alone since the end of the year shows that the Canada Revenue Agency is conducting audits on more than 1,090 taxpayers and is criminally investigating more than 20 cases of tax evasion. The CRA, with the resources we have implemented, has the resources to risk assess 100% of large multinational corporations annually and is better able to identify those taxpayers who participate in aggressive tax avoidance schemes.
We have done a lot. We are co-operating with our partners internationally to tackle issues such as transfer pricing. We are co-operating on BEPS, which is coming into force. We are ensuring that CRA has the resources to tackle complex, multi-level cases of tax evasion. That is what a government does.
A government stands up for middle-class Canadians and working-class Canadians. We work very hard every day to ensure they have the resources to make a great living, to have a brighter future for their children, but also ensure all Canadians and all companies from coast to coast to coast are paying their fair share of taxes.