Mr. Speaker, I am pleased to rise in the House to speak to this important piece of legislation that will help to advance the government's tax fairness agenda.
The legislation we are bringing forward has a single objective: addressing tax evasion and aggressive tax avoidance schemes in order to ensure that the tax system operates as fairly and effectively as possible. My colleagues in the House would agree that this is absolutely essential. It is about making sure that all Canadians pay their fair share.
Ensuring tax fairness demands engagement on many fronts. That is why Canada continues to expand and update its network of tax treaties and tax information exchange agreements. Canada has an extensive network of income tax treaties, with 93 comprehensive tax treaties currently in force. Worldwide, the OECD estimates that there are currently over 3,000 tax treaties in place.
Tax treaties are fundamental to trade and investment by eliminating double taxation. They provide the certainty needed to support open and advanced economies. They also permit the exchange of information needed to prevent international tax evasion.
Bilateral double tax conventions are used to eliminate tax barriers to trade and investment between two countries. They achieve their purpose in a number of ways.
First, they provide greater certainty to taxpayers regarding their potential liability to tax in the foreign jurisdiction. Second, they allocate taxing rights between the two jurisdictions and provide for the elimination of double taxation. Third, they reduce the risk of burdensome taxation due to high withholding taxes. Fourth, they ensure that taxpayers will not be subject to discriminatory taxation in the foreign jurisdiction. Fifth, tax treaties authorize the exchange of tax information to prevent tax avoidance and tax evasion. Finally, tax treaties provide a mechanism for jurisdictions to resolve tax disputes.
These are all important goals, and they are goals we can achieve with today's legislation. By updating the tax dimensions of our relations with Madagascar, we can strengthen trade and investment between our two countries.
It is important to the government and to all Canadians that we deliver the programs and services that Canadians need while keeping taxes low for small businesses and middle-class families.
When our government took office over three years ago, we made a commitment to invest in growth while upholding the principle of fairness for all taxpayers.
A fair tax system is key to ensuring that the benefits of a growing economy are felt by more and more people, with good, well-paying jobs for the middle class and everyone working hard to join it.
Let me remind my colleagues that one of the government's first actions was to cut taxes for the middle class and raise them for the wealthiest 1%, an action that directly benefited some nine million Canadians.
After moving forward with a middle-class tax cut, we then took action to replace the previous system of child benefits with the Canada child benefit, or the CCB. Compared to the old system of benefits, the CCB is simpler, more generous, and better targeted to those who need it most. It is also entirely tax-free. Today, nine out of 10 Canadian families are better off thanks to the Canada child benefit. It has helped to lift more than 520,000 people out of poverty, including about 300,000 children.
On average, families benefiting from the CCB are receiving $6,800 this year. That amount will help them afford the things they need for their families. It will help put healthy food on the table, pay for lessons and sports activities, and buy clothes and school supplies. The CCB is particularly helpful for families led by single parents. These families are often led by single mothers, and tend to have lower total income.
However, our government's commitment to supporting the middle class and those working hard to join it is also about helping the small businesses that families and communities depend on. That is why the government is supporting small businesses in Canada by reducing the federal small business tax rate.
We cut the small business tax rate twice. Specifically, the rate was reduced from 10.5% to 10% as of 2018 and to 9% as of last January. For the average small business, this will mean an additional $1,600 per year that they can use to reinvest in their business and create jobs. With these two small business tax rate deductions, the combined federal-provincial-territorial average tax rate for small businesses is now 12.2%. This is by far the lowest in the G7 and fourth-lowest among countries in the OECD.
Tax fairness has been and will continue to be a cornerstone of our government's promise to Canadians to strengthen and grow the middle class and grow the economy now and over the long term. In each of our past three budgets, our government has taken legislative actions on both international and domestic fronts to enhance the integrity of Canada's tax system and to give Canadians greater confidence that the system is fair for everyone.
An important focus of our efforts has been cracking down on tax evasion and tax avoidance, which create serious financial costs for the government and all taxpayers. Since budget 2016, the government has boosted the Canada Revenue Agency's capacity to crack down on tax evasion and combat tax avoidance. Investments made over the last two years have enabled the CRA to better target persons who pose the highest risk of tax avoidance and evasion and to be more effective in fighting tax avoidance and evasion. Those efforts are showing concrete results for Canadians.
With the new system, we are able to review international electronic fund transfers over $10,000 entering or leaving the country. This adds up to more than one million transactions each month. Reviewing these transfers helps us do a better risk assessment for unfair tax avoidance by persons and businesses.
Over the last two fiscal years, our government reviewed all electronic fund transfers between Canada and eight jurisdictions or financial institutions of concern. This amounted to 187,000 transactions, worth a total of more than $177 billion. Working closely with partners in Canada and around the world, we now have more than 1,000 offshore taxpayer audits under way, and more than 50 criminal investigations with links to offshore transactions.
Our government is also pursuing third parties who promote tax avoidance schemes. In the last fiscal year alone, it has imposed roughly $48 million in civil penalties on these third parties.
This year, we are also gaining better access to information on Canadians' overseas bank accounts, as we've put in place the common reporting standard. With this new system, Canada and more than 100 other countries will be exchanging financial account information to help us identify when Canadians are avoiding taxes by hiding money in offshore accounts.
We have also expanded our specialist audit teams, which focus on high-net-worth individuals. About 250 auditors are now checking to see that high-income earners and high-net-worth individuals are paying their fair share.
Another important means of ensuring tax fairness is knowing clearly who owns what. That's why the government is working with our provincial and territorial counterparts to ensure that Canadian authorities know who owns which corporations in this country.
We are also working to better harmonize requirements for corporate ownership records across our jurisdictions. This information will help Canadian authorities take appropriate legal action when people are hiding criminal activities behind corporate vehicles. In this way, we will be rooting out international tax evasion and avoidance, money laundering and other criminal activities.
I would like to note one further way that the government is acting to prevent misuse of our tax system. Canada is part of the OECD-G20 project to address the inappropriate shifting of profit offshore and other international planning by corporations and some wealthy individuals to avoid tax. That project is known as the “Base Erosion and Profit Shifting” project, or BEPS for short. The OECD's work on BEPS identified a number of instances in which the terms of current tax treaties could give rise to potential abuse. To address those concerns, it has recommended changes to the design of tax treaties that countries could use to close loopholes in their treaties with each other.
However, given the large number of treaties in existence and the long time it would take to renegotiate each of these treaties bilaterally, a new approach was developed to implement these changes more quickly. The result of this effort is the multilateral convention to implement tax treaty-related measures to prevent base erosion and profit shifting, also known as the multilateral instrument or MLI.
Based on the work of the OECD's BEPS project, this convention was developed and negotiated by more than 100 countries and jurisdictions, including Canada. The MLI would enable jurisdictions that become parties to it to change their bilateral tax treaties quickly to incorporate the OECD's BEPS provisions. It would also help the international tax system function better and provide greater certainty for Canadian taxpayers by improving dispute resolution under Canada's tax treaties. As it committed to in budget 2018, the government has tabled legislation in the House to enact the MLI into Canadian law.
This government is ensuring that Canada is known to the world as an outstanding place to invest and do business. We do this because Canada's economic success rests not only on the hard work of Canadians, but also on strong trade relationships and foreign direct investment.
Together, Canadians have built a country offering a distinctly attractive set of assets. Today our key strengths include the most educated workforce among the OECD countries and a highly competitive corporate income tax system, one of the most competitive in the G7. Also, no other country demands fewer days to start a new business, and Canada is the only G7 country holding trade agreements with every other G7 member. We have done this through the Canada-United States-Mexico Agreement, the Canada-European Union Comprehensive Economic and Trade Agreement and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. The tax treaty with Madagascar that we are now considering is in keeping with our approach to strengthening our international ties and co-operation.
By cracking down on international tax evasion, we are building on the tremendous advantages that Canada enjoys. We are also ensuring that the government has the money needed to deliver programs that help the middle class and people working hard to join it and that Canada remains positioned as an attractive place to work, invest and do business.
As I have made clear today, we have already made tremendous progress toward a stronger Canada, but as I also noted, tax fairness is a complex goal needing engagement on many fronts. That is why we will continue to address tax evasion and aggressive tax avoidance schemes to ensure that the tax system operates as fairly and effectively as possible. The legislation we have introduced today represents an important step toward meeting this goal. I encourage all honourable members to support this legislation.