Debates of April 8th, 2019

Multilateral Instrument in Respect of Tax Conventions Act

[Joël Lightbound, Liberal, Louis-Hébert, QC]

Mr. Speaker, I want to thank my colleague for his work as finance critic, and I want to thank the NDP members who have examined the issue of money laundering.

The Liberal government has taken a leadership role on beneficial ownership. As I said in my speech, the Minister of Finance met with his provincial counterparts and came to an agreement with them to move forward with harmonization and to get a better idea of who owns Canadian companies. He realizes that the vast majority of businesses fall under provincial jurisdiction, so he must work with the provinces.

Under the leadership of the federal government and the Minister of Finance, we are working with the provinces to give authorities greater access to the beneficial ownership of Canadian companies, to see where the owners of different companies are located.

In addition, we allocated significant resources to the Canada Revenue Agency in the 2016 and 2017 budgets to help the agency combat tax evasion or avoidance. This has been a priority for our government since we came to power.

This obviously will not happen overnight; these investigations take time. It will also take a significant amount of job training. This was obviously not a priority for the former government, but has been for us since budget 2016. I think this is clear to the Canadians watching.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Mr. Speaker, the Conservatives are proud to support this bill, but there is a lot of hypocrisy in what we hear from the government on this. I will go into some of that in my speech, but I will give the member an opportunity to respond to this point.

The member talks about whether we are concerned with the situation of wealthy corporate executives versus the considerations of everyday people. However, on the carbon tax, the government has given a break to Canada's largest emitters. It says that they need the break. However, it will not provide any kind of break, with respect to the impact of the carbon tax, to everyday Canadians who now pay so much more at the pumps and elsewhere as a result of the government's punitive approach.

If this were an environmental measure, if the Liberals were serious about the environment and if they thought this actually would help the environment, they would apply it consistently across the board. They are not doing that.

In spite of the man-of-the-people rhetoric from the parliamentary secretary, why are the Liberals giving a holiday on the carbon tax to Canada's largest emitters, while ensuring the maximum impact on everyday Canadians?

[Joël Lightbound, Liberal, Louis-Hébert, QC]

Mr. Speaker, it is the opposite. We have to wonder where the hon. member has been for the past few months and weeks. The Conservatives are starting to believe their own nonsense. The average Canadian receives a climate incentive that exceeds the anticipated cost. Through this policy, we made sure that we are truly supporting middle-class Canadians and I believe nine out of 10 families will have more money because of his policy.

I invite the hon. member to take another look at his numbers. When it comes to the importance of dealing with climate change, it is interesting to see that over the past 20 years the Conservatives have, at times, had the wisdom to want to put a price on pollution. While the entire planet is now realizing the importance of dealing with climate change, the Conservatives are retreating and burying their heads even further in the sand.

They refuse to see the importance of acting to protect the planet and to fight climate change. It is disappointing and the debt they are leaving future generations on this issue is despicable. I encourage them to do some serious soul-searching when it comes to their plan for the climate.

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

Mr. Speaker, I wanted to ask the hon. member and parliamentary secretary about the theme of our government for the last three and a half years, which has focused on tax fairness. We have Bill C-82 with respect to base erosion and profit shifting, along with budget 2019, which limits the stock option tax deduction. We did a full tax expenditure review beginning in 2016, with $4 billion in savings. Those funds are being invested for everyday programs.

Could the parliamentary secretary comment on how important tax fairness is for our government?

[Joël Lightbound, Liberal, Louis-Hébert, QC]

Mr. Speaker, I think our government has been clear from the very beginning about this. We asked the wealthiest 1% to pay a little more so that we could give a tax break to the middle class. It was the first thing we did, but the Conservatives voted against it. It comes as no surprise that they would vote against it, because there has been a stark difference between their approach and ours.

For instance, when the Conservatives fought to keep sending the Canada child benefit to families of millionaires, we took a different approach, one that is based on the needs of Canadian families. It is more generous and free of taxes, and it is helping to lift hundreds of thousands of kids out of poverty.

That approach differentiates us as well with respect to the TFSA. One of the Conservative policies during their former mandate was to double the TFSA limit to $11,000. I wonder how many Canadians at the end of the year have $11,000 after taxes to put in their TFSA. The American who invented the TFSA said that in the long term this would put the Canadian government in a fiscal straitjacket. When the former Conservative finance minister was asked what he was going to do about it, he said that it was a problem for Stephen Harper's granddaughter to solve.

That is the Conservatives' approach: to give more to the wealthiest while letting inequalities flourish and grow. That is what they did during their decade in government.

We have taken a different approach, and it is working. Statistics Canada, in the last two weeks, said that poverty has been reduced by 20% over the last three years in Canada. That is huge. I think it is something that Canadians should be proud of.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Mr. Speaker, it is a pleasure for me to rise in the House today. I understand my friend from Carleton was trying to give me a run for my money in terms of being the most verbose Conservative, so today I am going to try to catch up to him, with a 20-minute speech on this important bill.

Before I get to the substance of the bill, I feel the need to respond to some of the things that the parliamentary secretary for finance said, because he is trying to set up this narrative that is based on made-up things. I want to point to some clear facts that my friends across the way will hopefully take on board and recognize.

What were the fiscal policies of the Conservative government with respect to tax reduction? It is important to underline that all of the taxes that were lowered by the Conservatives are the ones that were disproportionately paid by lower-income Canadians. We raised the base personal exemption; that is, we increased the amount of money that people can earn before they have to pay any tax. Surely, my friend across the way would not say that raising the base personal exemption was somehow targeted at helping the wealthy. Indeed, we took many low-income Canadians off the tax rolls completely.

We lowered the GST from 7% to 6% to 5%. It is the tax that all Canadians pay. In particular, it is a regressive tax that is paid disproportionately, because a higher proportion of GST is paid by lower-income Canadians than is paid as a proportion of other taxes. Therefore, lowering the GST was particularly beneficial to middle and low-income Canadians. We also lowered the lowest marginal income tax rate.

We lowered business tax rates, in particular small business tax rates. Why did we lower business tax rates? When we lower business tax rates, the evidence shows that it creates jobs. It also raised business tax revenue over the time that we have seen a reduction in business taxes in this country. It was a process that began under the previous Liberal government, which, relatively speaking, I think was better than the current Liberal government on many fiscal issues. It began the process of lowering business taxes, which was continued under the Harper Conservative government. The effect of that was that over the same period, we saw an increase in business tax revenue. The tax reductions we were making were targeted at improving the effectiveness of our economy and providing tax relief to those Canadians who needed tax relief the most. Did we lower the highest marginal tax rate? No, we did not. We targeted tax relief to Canadians who needed it most by raising the base personal exemption, by lowering the GST and by lowering the lowest marginal tax rate.

The parliamentary secretary for finance can say that the Conservatives think a certain way or that we want certain things, but I challenge him to speak specifically, which the current government never does. We believe that helping low and middle-income Canadians can be done most effectively by letting them keep more of their own money and deciding how they want to spend it themselves. We do not take a paternalistic approach when it comes to helping Canadians who are struggling financially. We think people can make good monetary decisions about what is in their interest and how they want to pursue projects and needs that are important to them and their family. That is why our approach emphasizes tax reductions.

The current government has raised taxes for middle-class Canadians and those, as it likes to say, who are working hard to join it.

[Some hon. members]

Hear, hear!

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Members were clapping when I pointed out that the government is raising taxes on Canadians working hard to join the middle class, so they finally realize it. We certainly invite those members who realize this flaw to come over and join us. There is still some time. I know there are so many people coming over to the opposition benches these days, some voluntarily and some not, and we welcome more to see the light.

If we look at the contrast in approach, we have the carbon tax, which is a new tax imposed by the the current government. That is specifically targeted at punishing Canadians who can least pay the tax. The government has said it is an environmental measure and that the Conservatives want to make pollution free again.

The Liberals are giving a holiday on the carbon tax to Canada's largest emitters. There is no paying of the carbon tax and there is no cost to those large emitters. Instead, they are imposing the cost on Canadians who can least afford it, on the single mom who needs to drive her car to take the kids to grandma's and grandpa's, on the small business owner just starting out and on individual Canadians who are struggling and do not have high-priced lobbyists or the ability to access the PMO.

We know how many meetings happened in the PMO on how to help SNC-Lavalin avoid prosecution. I wish they had at least that many meetings to think about Canadians who are struggling and will struggle more because of the carbon tax that is being imposed on Canadians who can least afford it while large emitters are getting a break.

If the Liberals were at all serious in their claim that this is an environmental measure, then they would impose a carbon tax across the board. However, it is not an environmental measure, it is a revenue measure and that is why Conservatives will get rid of the carbon tax. We will not just get rid of the carbon tax on large emitters, but we will make sure that no Canadian is paying the federally imposed carbon tax that the Prime Minister is so desperate to impose on them.

My friend from Winnipeg North wants to know what is going to happen in the provinces. We see in provincial elections across the country that more and more Canadians are rejecting the carbon tax as well. We have seen that rejection in Ontario, New Brunswick, his province of Manitoba and very soon we will see that in Alberta as well. I am looking forward, next week, to Albertans joining the growing movement of Canadians who are rejecting the carbon tax. People in my constituency may still face a federally imposed carbon tax even after the next provincial election. However, they will not have long to wait until we replace the current government this fall and ensure that Albertans and all Canadians do not have the burden of the carbon tax.

For the members who want to say this is the only possible way to respond to climate change, I point out to them that we saw a reduction in greenhouse gas emissions under the previous Conservative government. We saw in every jurisdiction across the country that emissions either went down or up by less than they had during the previous period. We saw an increase in emissions in British Columbia under the carbon tax that they have had in place for quite a while. All the evidence suggests that this is not an environmental measure and, again, the Liberals' own decision to give a holiday on the carbon tax to the largest emitters shows that they are just not serious about this.

The government needs to re-examine the rhetoric it is using in light of the reality and in light of the fact that it is imposing tax increases at every opportunity it can. It is clear why it is imposing these tax increases. It simply cannot get a handle on spending.

In the last election the Prime Minister looked Canadians in the eyes and told them that he would run deficits lower than $10 billion, and then he would balance the budget by the 2018-19 fiscal year. There was no balance. We saw very clearly in the budget that the government has not balanced the budget. It has no intention of balancing the budget and it will not face up to the fact that it made a promise that it simply did not have any plan or sincerity about keeping.

Now the Liberals are desperate to start to plug that fiscal hole by imposing new taxes on Canadians at every opportunity, and they have tried to do this in so many ways. After the last election, despite promising to lower the small business tax rate to 9%, they undid that promise and said they were going to leave the tax rate at 10.5%, effectively a tax increase on small business. Then, with great fanfare, after they had attacked small businesses, after they had called small business owners tax cheats, after they tried to impose these new rules that were met with such frustration, such virulent objection from the business community, guess what they said. They said they were going to lower the small business tax rate to 9%, which is what they had promised they were going to do in the last election before they unmade that promise. However, they still have changed rules for small businesses that impose a new and greater tax burden on them.

We know what the current government is about. It is about raising taxes at every turn to try to plug its wide-open hole in terms of its fiscal plan and we cannot let it do that. As these deficits and these debts grow, it will certainly be raising taxes unless we get a new government in place that ensures Canadians are no longer paying for the mistakes of the current Prime Minister and that instead allows Canadians to get ahead by lowering their taxes.

We can be sure that, as we have seen in the past, the approach of a Conservative government, under the able leadership of the member for Regina—Qu'Appelle, would be focused on providing tax relief to those Canadians who need it most, those Canadians who are suffering the most under the current government's high-tax, high-spend agenda.

There are members across the way who are shouting the phrase “trickle down”. The approach of the current government is to pour subsidies on the largest corporations, to try to give special deals to its friends, to try to help SNC-Lavalin to get out of its prosecution and to somehow think that will trickle down. On this side of the House, we oppose the Liberals' theory of trickle-down government, and that is why we believe in providing tax relief to Canadians who need it most as we did by lowering the GST, by lowering the lowest marginal tax rate and by raising the basic personal exemption.

It was important for me to start out by responding to my colleague, the parliamentary secretary, but let me now make a few comments on this legislation, which, contrary to my tone until now, is actually legislation that we support. It is legislation that really builds on great work done by the previous government. We would not necessarily know it by hearing some of the comments across the way, but Conservatives in government were actively engaged with our international partners in ensuring that we have a fair and more transparent tax system. The work that we are dealing with in terms of the bill began as a result of an agreement in 2013 and Conservatives from that period onward, and indeed before that period, were active in engaging with our international partners.

In January 2015, we put in place a requirement that electronic transfers of $10,000 or more had to be reported to the Canada Revenue Agency by banks and financial institutions. We have always, in terms of our policy declarations and the principles we have put out there in platforms since, emphasized tax fairness and emphasized simplification of the tax code. This is vitally needed. An area that many Canadians bring to our attention on a regular basis is that there are opportunities for us to ensure proper reporting and ensure tax fairness and, therefore, strengthen Canada's revenue position.

Therefore, this is legislation that builds on that work that our colleagues have spoken in favour of up until now and certainly that we continue to support.

Even as we discuss this legislation, we continue to see the gaps in terms of some of the things the government members say and the reality in terms of what they do. In many cases with these international conventions, we talk about the issues of simplification, of consistency, of ensuring that CRA is treating everybody fairly and of making sure that there is not double taxation.

In that way, it is worth pointing out again the good work of my colleague from Calgary Rocky Ridge who put forward Motion No. 43, which was a motion that would impose a duty of care on the Canada Revenue Agency in its interactions with Canadians, basically to ensure that people are treated fairly in their interactions with the Canada Revenue Agency. While, on the one hand, we have situations where companies may be taking advantage of some of these creative tax-planning arrangements, we have situations where individuals who may be low-income individuals face the CRA coming down very hard on them and they have a difficult time responding. It was a common-sense, reasonable motion that my colleague from Calgary put forward and I was pleased to support that. Unfortunately, it was only members of the Conservative caucus who supported Motion No. 43.

All members of the government opposed this common sense tax fairness measure. Unfortunately, my colleagues in the NDP opposed it. We do hear the NDP members sometimes talk about the problem their constituents face with respect to interactions with CRA.

However, I hope we will have an opportunity to bring a similar initiative in the future, perhaps in a future Parliament. Maybe in light of the more recent comments we have heard on this from the NDP, maybe its members will support it at that time. Canadians can have confidence that when it comes to holding CRA accountable to ensure that people are treated fairly and equally under the law, thus far it has only been the Conservatives who have taken that clear, consistent principled position.

If the Liberals are concerned about fairness for the middle class, then we would expect them to vote in favour of initiatives that would ensure fairness for the middle class when they have an opportunity. Unfortunately, they have not done that.

On the issue of double taxation, I spoke earlier about the carbon tax. We have with the carbon tax a form of double taxation, which is the fact that the federal government is requiring a carbon tax in every jurisdiction. It is imposing a federal carbon tax in jurisdictions where provinces are not imposing it themselves. Then it is collecting GST on top of it.

The Liberals have said that this will be revenue neutral for the federal government. It is not revenue neutral for the federal government. In and of itself, the federal carbon tax imposed on provinces that have rejected it is not revenue neutral from the perspective of the federal government. They have said in their announcements that most of the money will be rebated back. That is a big difference from all of the money, but the government is collecting GST on top of that.

Therefore, right here within our own domestic reality, we have a problem of double taxation. We have taxes being imposed on top of other taxes. This increases the burden on Canadians who really can least afford it.

We have had a number of initiatives, and not just speaking of the work of the previous government, in this Parliament from different members of our Conservative team who have been trying to bring about tax relief for Canadians. Every time we propose measures to bring tax relief to Canadians, the Liberals oppose them.

The leader of the opposition had an excellent initiative around making parental leave tax free. This would give parents a greater ability to plan to preserve their own fiscal situation while they were going through the transition of having a child. Certainly, we want to support parents in that situation. The government's approach to parental leave is to try to reduce that flexibility by reducing the flexibility that families have to allocate leave between different partners. Our approach is to provide more choice, more opportunity by reducing taxes across the board. Unfortunately, the Liberals voted against it.

Finally, with respect to Bill C-82, a mixed signal is being sent by the government. On the one hand, it wants to look like it is being tough on tax evasion and tax avoidance. On the other hand, we have seen how dedicated the Prime Minister and his team were to try and get a special deal for SNC-Lavalin. We do not exactly send a message that we are tough on anything when it comes to the actions of big corporations, if then we also try to put as much pressure as we can to get a special deal for those well-connected companies that can afford high-priced lobbyists and can push back there. It is gravely inconsistent.

If the government wants to address this issue and the issues around it, it needs to send a message that everybody is equal under the law, that it does not matter if one is a big company or a Canadian who is struggling to get by, that the law is the law. Sending that message in a clear and consistent way, ensuring that everybody is treated equally and fairly under the law, would very much address what we are talking about. It would confront the problems that this legislation seeks to confront.

Therefore, while we support the bill before us, we recognize the desperate need for the government to do better, to stop piling taxes on those Canadians who can least afford to pay them and to start sending a message that everybody, regardless of where one is situated in society, is equal under the law.

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

Mr. Speaker, I have heard a similar speech from the member many times before, and I find it very troubling particularly when he talks about getting a handle on spending.

How does he justify that Stephen Harper ran up the debt up by $160 billion? I know his response, because we hear it a lot from those on the other side of the House. They say it was the economic times and the circumstances, and that they needed to come back out of the 2008 recession.

However, in reality, if we were to go back over the last 151 years, we would see that Conservatives have been in power for 36% of the time but have racked up well over 55% of the debt. In fact, of the last 19 budgets introduced by Conservatives in the House, 16 of them ran deficits, occurring under Mulroney and Harper. The only three that ran surpluses were the two that came after Paul Martin's $13-billion surplus and the one in 2015, after Conservatives slashed veterans services and sold off shares of GM at bargain prices so that they could produce a budget to bring into the election.

How can the member opposite square off that argument about Stephen Harper's record?

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Mr. Speaker, the member is asking a similar question to one he has asked before, so he will no doubt receive a similar answer. Let me answer each point he made.

He said that Conservatives ran up $160 billion. Usually we hear the Liberals say it was $150 billion. Maybe by the election they will be saying it was $300 billion. The figure of $150 billion is not even accurate. In fact, in spite of the global financial crisis, the federal debt-to-GDP ratio went down during the period of the last Conservative government.

During this time, members across the way, some of whom were not here at that time, were calling for an increase in spending. Liberals thought we should be spending more, but we said, no, we would have timely, targeted and temporary deficits and we would get back to balance, which we did.

The member opposite wants to compare Canada's history over the last 150 years. I do not know if I can say much about the record of former prime minister Charles Tupper, for example, when it comes to deficit spending.

We could go back a long way. I do not hold the member opposite responsible for the Liberal policy under Pierre Trudeau of opening residential schools. I do not hold the Liberal Party responsible for all of the things it has done over the last 150 years, and I cannot necessarily be held responsible for Conservative policies that were pursued in the early part of the 20th century and last part of the 19th century.

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

Mr. Speaker, I would like to bring the debate back to the issue before us today, tax treaties.

Does my colleague have an opinion on concluding tax treaties with administrations where the tax rate is extremely low compared to the tax rate in Canada? These tax treaties can become loopholes for certain multinationals that manage to transfer their international profits to these places. Instead of declaring their income in Canada, they declare it in these places that have agreements with Canada. I would like my colleague's opinion on these agreements, to come back to the matter at hand today.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Mr. Speaker, the reason we enter into tax treaties, whether with higher tax jurisdictions or lower tax jurisdictions, is to ensure a framework for tax fairness so that people are not facing double taxation and to ensure there is a proper reporting structure to address possible issues of tax avoidance.

To the member's point, there is a principle here such that, regardless of the agreement, taxes should be paid in the jurisdiction where, in some sense, the work is being done. If there is a case, for instance, where all of the operational aspects are in one place but none of the taxes are being paid there, that is obviously an issue to discuss and to explore how we can respond to it.

I will also point out for the member that when other jurisdictions have lower taxes, companies can relocate to those jurisdictions if they wish to. It is not possible to, say, prohibit a company from moving its headquarters somewhere else. In fact, under the previous government, companies from the United States chose to move their headquarters to Canada. However, they would have had to bring aspects of their operations to Canada associated with that as well. When we are a low-tax jurisdiction, that can work to our advantage as well.

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

Mr. Speaker, one of the concerns Canadians have is that as we get closer to an election, they expect a certain element of truth from leaders. We saw a good example of that today from the Leader of the Opposition, who continued to deny that he did not retweet after making some changes and so forth.

Let me give an example of what the member across the way said in terms of trying to give misinformation.

He is trying to give the impression that most of the residents in Winnipeg North are going to have to pay additional taxes as a direct result of the price on pollution, knowing full well that there is a tax rebate. People will find they are actually getting money from Ottawa. Most of the residents in Winnipeg North will benefit by the price on pollution, yet the Conservative Party will try to give a false impression to Canadians.

Is it the Conservative Party's overall plan to try to gain votes by trying to deceive Canadians?

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Mr. Speaker, what unbelievable language and what an unbelievable approach from the member for Winnipeg North.

I look forward to talking to his constituents about the carbon tax, because I am sure that people in Winnipeg North, as in Sherwood Park—Fort Saskatchewan and elsewhere, are deeply skeptical of the government's claim that it will take more money from people, process it over here, and then give even more of it back. When has that worked out?

That is about the quality of math that we would expect from a Prime Minister who said he would balance the budget by this year, and yet we are still tens of billions of dollars in deficit.

Canadians know they are paying more as a result of the Liberal carbon tax, and they simply do not accept that they would be any further ahead with this process of taking their money and processing it and rebating some of it back.

I look forward to having the conversation in the next election about the government's plan on the carbon tax. We have shown that we can do more for the environment by not imposing new taxes on Canadians. The Liberals believe that the only solution, the only thing worth doing, is to impose new taxes under all kinds of different names and excuses. We reject that and we look forward to having that debate.

[Colin Carrie, Conservative, Oshawa, ON]

Mr. Speaker, I would ask my colleague a very important question. He mentioned how companies can relocate. As everyone knows, General Motors is leaving Oshawa. We have seen 1,500 job losses in Windsor, and manufacturing is very susceptible to bad tax policy and uncertainty. I want the member to address how important the tax policy is for certainty and competitiveness.

We heard our colleagues talk about the carbon tax. When I was knocking on doors this weekend, a constituent told me I had to go back and tell the Liberals to make the carbon tax even higher because he wanted it to be $1 million per tonne. That way, with Liberal math, he would be getting back $200,000 or $300,000. He said that then he could retire.

I do not know if Canadians realize how bad a policy this is. Could my colleague please talk about how important it is to have good tax policy to provide business certainty and to make sure we have competitiveness?

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Mr. Speaker, it is a great question from my colleague, who obviously lives these issues and is hearing directly from his constituents about them.

I come from an energy-producing part of the country. He comes from a part of the country where manufacturing jobs in the auto sector in particular are very important. We see in both of these areas how the imposition of taxes and regulatory changes, in particular the imposition of new taxes, is hurting economic development.

We saw in the past how lowering business taxes led to an increase in business tax revenue. That was because companies were looking at those tax policies and making decisions about investment that reflected those calculations. They were choosing to invest in Canada as a result of the fact that Canada was a good place to invest.

We have many advantages. We have an educated workforce and many things going for us as a country, but the financial dimension of it is obviously critical as well for companies that are thinking about making these investments.

The government's solution to this is to tax more and put the money forward in corporate welfare for things like superclusters. We have seen it has much less effect for the government to pick winners and losers and give money to some of its friends while taxing other people more. It is a much less effective approach than simply lowering taxes for all Canadians, especially targeting tax relief for small business and to those Canadians who need that tax relief at the individual level the most, thus putting them in the driver's seat and allowing them to make decisions to take advantage of the opportunities that result. It is up to the government to give people as much opportunity as possible to get ahead and then to let them do that with their own resources.

[The Deputy Speaker, Conservative, Bruce Stanton]

Before giving the floor to the hon. member for Sherbrooke, I must inform him that there are 11 minutes remaining before the expiry of the time provided for government orders.

The hon. member for Sherbrooke.

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

Mr. Speaker, I am honoured to have these 11 minutes to speak to Bill C-82 and share my opinion on it as part of the debate and before it is eventually voted on at third reading in the House and sent to the other chamber.

As we saw at report stage, this bill has the unanimous support of the House. All members voted to support it. It has not been the subject of heated debates, from what I saw today, although it is relatively important. I will try not to repeat too much of what I said at second reading before it was referred to committee. On that point, the committee study went pretty well. There were no amendments to this bill, but still, there were some good debates. I will try to summarize them for the House to illustrate some of the dangers possibly in store for us regarding this bill, which simply aims to update the tax treaties we already have with 93 countries around the world. That said, it is anything but simple.

Concluding tax agreements with countless countries has almost become Canada's trademark. Other countries do not have so many tax agreements. Nevertheless, these tax treaties are a double-edged sword. On the one hand, they help avoid double taxation. In other words, companies and individuals are not taxed twice on the same income. That makes sense when we are talking about similar administrations with similar tax rates. Obviously a person should not have to pay twice on the same income in two different places, especially when their tax rate is similar. It makes sense to establish this type of connection with other countries to eliminate double taxation, whether informally or formally, as in the case of the 93 countries with which we have such agreements. This allows individuals and companies to have a residence in either country and be taxed according to their country of residence.

However, it makes less sense to sign tax treaties with tax havens. That is what Canada is doing with its trademark tax treaties, but it is sort of glossing over the fact that it has signed treaties with tax havens like Barbados, which has a tax rate of 0.5% to 2% for foreign corporations.

Canada's trademark is even seeping into its tax policy. It will not say so openly, but it is very happy to have a treaty with Barbados, a country where Canadians invest heavily year after year. Barbados is often the third or fourth biggest destination for Canadian foreign direct investment, after the United States and the United Kingdom.

That is no coincidence. It is not because the Barbadian economy is booming, because tons of new hotels and banks are going up, because its population is flourishing and wealthy, or because things are hopping there. It is simply because the government's unspoken tax policy allows Canadian companies to outsource their subsidiaries abroad; they can open a subsidiary in Barbados, which they use as a Canadian financial centre from which to run their international business instead of establishing a headquarters in Canada and doing business out of Canada. That is why we need to be cautious and make sure tax treaties are being used appropriately in cases where countries have similar administrations.

[The Deputy Speaker, Conservative, Bruce Stanton]

Order. The hon. government House leader is rising on a point of order.

[Bardish Chagger, Liberal, Waterloo, ON]

Mr. Speaker, I will not interrupt for long. I saw that he was pausing.

I would like to table the government's response to Order Paper Questions Nos. 2246 to 2264.

Bill C-82—Notice of time allocation

[Bardish Chagger, Liberal, Leader of the Government in the House of Commons]

Mr. Speaker, I would like to advise that agreements could not be reached under the provisions of Standing Orders 78(1) or 78(2) with respect to the third reading stage of Bill C-82, An Act to implement a multilateral convention to implement tax treaty related measures to prevent base erosion and profit shifting. Therefore, under the provisions of Standing 78(3), I give notice that a minister of the Crown will propose at the next sitting a motion to allot a specific number of days or hours for the consideration and disposal of proceedings at the respective stage of the bill.

Bill C-93—Notice of Time Allocation

[Bardish Chagger, Liberal, Leader of the Government in the House of Commons]

Mr. Speaker, I would like to advise that agreements could not be reached under the provisions of Standing Orders 78(1) or 78(2) with respect to the second reading stage of Bill C-93, An Act to provide no-cost, expedited record suspensions for simple possession of cannabis. Therefore, under the provisions of Standing 78(3), I give notice that a minister of the Crown will propose at the next sitting a motion to allot a specific number of days or hours for the consideration and disposal of proceedings at the respective stage of the bill. I hope that we can find a better way forward.

The House resumed consideration of the motion that Bill C-82, An Act to implement a multilateral convention to implement tax treaty related measures to prevent base erosion and profit shifting, be read the third time and passed.

Multilateral Instrument in Respect of Tax Conventions Act

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

Mr. Speaker, I was saying that there has been a form of unanimity on the bill, and that we must be careful with tax treaties on the whole.

The bill was introduced and debated because we want to modernize tax conventions to prevent them from being abused, as the government itself has stated. At committee, for one, the government said that tax conventions were being abused. Bill C-82 can help with this by modernizing these conventions and ensuring that they are not abused in future.

It is an admission of guilt by the government to recognize that, although the conventions have good intentions, some taxpayers abuse them. The bill will clarify the language of these conventions to ensure that this no longer occurs and that the courts have more teeth to enforce the provisions of the convention pertaining to the fight against tax evasion. This bill attempts to address the loopholes in these conventions.

The fundamental problem, which was also brought up in committee, is that the modernization of these treaties requires the support of both countries that are party to the tax treaties. There are 93 treaties, and not only will Canada have to ratify Bill C-82, but the co-contracting country will also have to ratify an equivalent bill in its own jurisdiction so that the instrument can be implemented in both countries and the new and improved treaty can be applied. In my opinion, that severely limits the future scope of the bill.

What we were told in committee is that both countries are indeed required to complete the ratification process for the convention to take effect. To date, only 12 to 15 countries have ratified this sort of bill and done the same thing that Canada is in the process of doing today. That means there are still about 80 countries that have not yet taken such action and may not even be in the process of doing so. The best example I can give is that of Barbados. Barbados signed the document during a nice photo op. The only thing the country has not done is initiate its own legislative process, which is required to implement the convention.

I find that troubling, because I am not convinced that all the partners of these 93 countries are going to sign them. This legitimizes to some extent the countries that are so-called tax havens, which will continue to exist and might just sign the document for a nice photo op but do nothing afterwards. That will only perpetuate the problem. If this instrument is going to improve the treaty, both countries have to sign it. If either country does not sign it, there is absolutely no point to the treaty, and we will be left with the old system, the old treaty that, by the government's own admission, is not working properly and has loopholes that the courts cannot close. That is the legal and inherent limit to this bill, which means that its enforcement will also be quite limited.

It will be up to us to look at it again in the future. It will be up to legislators and the government to keep a close eye on the situation in other countries. Having nice signing ceremonies is all well and good, but if we cannot move forward and if we decide to let it go and not assume our responsibilities, we will wind up with the same problem.

One thing that was clearly stated during the committee's study was that this bill might be limited in scope, so we need to take a closer look at that. We also need to make sure that we are monitoring the countries we have these agreements with over time.

Bill C-82 will make for better treaties. I would like to thank the NDP for that because we are the ones who, for years, have been urging the government to renegotiate all the tax treaties people are abusing. Members may recall that, two years ago, my caucus was behind a motion the House adopted to, among other things, renegotiate tax treaties. We should all thank the NDP leader for his insistence on tax fairness, because it is thanks to him that renegotiation is happening now.

We will have to make sure that everyone follows through on these promises and that the new instrument is implemented by the countries with which we have signed treaties.

[The Deputy Speaker, Conservative, Bruce Stanton]

The hon. member for Sherbrooke will have 10 minutes for questions and answers when the House resumes consideration of this motion.