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.