Mr. Speaker, we even have friends among the Liberals, who believe that we do serious work, not only in terms of criticism, but also in terms of the suggestions that we make to the government. In fact, the ultimate goal of any opposition party is to make much better governments. I think that, since September, the opposition, whether we are talking about the Conservative Party, the Bloc Québécois or the New Democratic Party, has made this government govern somewhat better than it had over the previous 11 years.
I think that this bill includes measures that are a big step in the right direction, but they fall totally short. There are a lot of missed opportunities that the government could have seized to really improve things. Here is just one example. In Bill C-33, they talk about reducing the air traveller security charge. This is the airport tax that has been imposed since the September 2001 events in the United States.
Right from the start—and the government does not want to admit it—having an airport security tax is an extremely bad idea. Not that security is a bad idea, but funding security by taxing travellers, in various airports in Canada, compromises the competitiveness of this sector. Since this tax was introduced, all the representatives of the airline industry and related sectors, at various levels, have stated that repeatedly. It must be eliminated.
A reduction has been proposed, and this is a good step forward, but the tax must be eliminated. Small regional airports must collect this tax and follow extreme security measures. I think that this tax and security issue has been exaggerated, particularly in small airports in a number of rural regions in Quebec and Canada. This airport tax must be eliminated. I hope that, in the next budget, the Minister of Finance will see that good old common sense must prevail in his decisions, especially with regard to such a tax.
I want to take this opportunity to address another point. We have just finished pre-budgetary consultations. There was a consensus everywhere, be it in Quebec—the Bloc Québécois held its own pre-budgetary consultations across Quebec—or in the Standing Committee on Finance across Canada, where representatives came to see us in Ottawa. There is one tax needs to be reviewed and that is the fee immigrants must pay to enter Canada.
It is not normal for immigrants, who are experiencing socio-economic problems in their country of origin, to have to pay an entry fee that represents a fortune to them. The entry fees should be reduced; keep them but scale them according to the socio-economic situation in the country of origin.
It is not normal for a refugee, who is fleeing a country where civil liberties do not exist and where there is extreme poverty, to arrive in their new country and have to pay this fee. Immigration is essential. It is not a gift we are giving them. Given our declining population, we need immigrants and we need to welcome them. We should not impose a tax on them. I am taking this opportunity to stress this point.
Bill C-33 contains a hypocritical provision. It always looks good when, in the throne speech and the various budgets, persons with disabilities are mentioned. Is the government ever compassionate. It is great how it wears its heart on its sleeve.
There is a problem with how persons with disabilities are treated in Quebec and in Canada. The tax legislation passed in this place is not even enforced. I am talking about the disability tax credit. I notice my colleagues around me, the hon. member for Compton—Stanstead in particular, and all the new members who were sent here following the June 28 election.
My colleagues and I are all aware of the problems persons with disabilities are facing with respect to the disability tax credit they had been receiving for years. The year they visited us, the revenue agency had decided to audit them, asking that they provide pretty incredible proof of their disability. In some cases, these are totally degenerative diseases. They cannot get better, yet these people are asked to provide more documentation from the doctor proving that they still have a disability, when that is obvious.
We have heard horror stories. One person who was really disabled in every way, who could not walk, even the length of a short desk, was instructed to go back to her doctor's office to get papers filled again.
They even disputed money that had been paid in past years. It is total nonsense to hassle people whose lives are already difficult enough, often horrendously difficult.
Now we find ourselves with a proposal for a special deduction for products and services for the disabled. I am no different than anyone else here in my desire to improve things for the disabled, but we need to start by properly respecting the credits available under the federal Income Tax Act and properly applying its provisions.
We are still being treated to all the government's flowery speeches about the disabled, as we have been since 1993. When the lack of investment in the social housing sector is being discussed, they always forget that this issue includes the component of adapted housing for the disabled. There has not been one red cent for that since 1993. It is all very fine to talk about this measure or that, but the government's decisions never include what is really essential.
We hope that the government, in the person of the Minister of Finance, will be a bit more attuned to the situation of the disabled when he tables his next budget. A major surplus will be generated during the next fiscal year, regardless of all his creative calculations, all his fancy manoeuvres, up to and including a triple flip if he so desires. I think it would therefore be a good idea to keep the disabled in mind on an ongoing basis.
In connection with the disabled, according to a Finance Department study, for the fiscal year 2002-03, 148,000 of them were unable to benefit from the tax credit because they had no taxable income. It would be a good thing for this credit to be converted into a refundable tax credit for the disabled who have low incomes and therefore cannot benefit from it. SInce it is not refundable, the only way to benefit from this credit is to pay taxes to the federal government.
Another missed opportunity involves a review of personal income tax, especially income tax for low income earners. I am referring to low income families. The federal government has huge surpluses. I think the cumulative surplus over the past eight years is roughly $63 billion. Again this year, the surplus will be $9.1 billion when they estimated it would be $1.9 billion. Is it normal in such a budgetary context that the federal government does not even think about reviewing personal income tax, especially for low income families? Is it normal that among the G-7 nations, Canada most readily taxes the earnings of low income families?
They talk about a zero tax threshold, which seems to be a rather complicated phrase. It is the point at which taxpayers start to pay tax. For the federal government, the zero tax threshold here in Canada is $8,200. Unless I am mistaken, this is far below the poverty line or the low income cutoff. Experts go to great lengths to try to be more politically correct and use gentler terms than “poverty line”. That is too harsh, so they talk about “low income cutoff” instead.
The poverty line is well above the taxable income amount of $8,200, in terms of federal income tax. Among the G-7 nations, the Canadian government is the one that most readily taxes the earnings of personal and family incomes. The last budget—which was the premise for Bill C-33—was a good opportunity for the government to review personal income tax.
If memory serves me correctly, in 1996 the Bloc Québécois had presented a series of measures to make the personal income tax system more equitable. We had done this for businesses as well. I remember that the then Minister of Finance, the current Prime Minister, rose in this House to congratulate the Bloc Québécois for having conducted such a comprehensive study. However, since that time there has not been any true taxation reform in order to include some tax equity in the federal system.
Aberrations like a zero tax threshold of $8,200 for individuals and approximately $10,000 for families still exist. That makes no sense. Do hon. members know who the first victims of such inefficiency are? Single mothers with one or more dependent children. With $9 billion in surplus, possibly up to $10 billion or $12 billion for the current year ending on March 31, 2005, why is it so difficult for the government to see exactly what we are seeing and to take measures accordingly? It always comes up with half measures, producing alarming statistics. For example, since 1993, the number of children living in poverty in Canada has not decreased in real terms. We still have 1.2 million children living in poverty. And children live in poverty because their parents live in poverty. In this respect, taxation can do a lot. Taxation is a major determinant of the relative wealth or poverty of citizens.
Measures can be taken to improve the situation somewhat in terms of the management of the tax conventions signed between Canada and various countries considered by the OECD to be tax havens, that is, countries or regions which provide undue benefits with respect to taxation. In Barbados, for instance, the tax rate on corporate dividends is between 1.5% and 2.5%, while it is around 28% or 29% in Canada. So, we are talking about countries that do not have transparency as a watchword, be it concerning bank accounts, or banking and industrial activities of Canadian or other foreign subsidiaries established in Barbados or elsewhere, in Fiji, for example.
These are often countries where money is laundered, making them veritable laundry machines, which the OECD denounces every year. But, except for a handful of European countries, no one has really taken any drastic measures to put an end to the tax evasion made possible because tax havens exist.
At present, there are two measures in this bill that affect tax agreements. They are positive measures, but they do not tackle the heart of the problem. The heart of the problem stands on two feet: he was elected Prime Minister on June 28, 2004. We cannot set an example for businesses who invest in tax havens and send their billions every year to tax havens. We cannot set an example here, because our Prime Minister does not set an example.
I have mentioned the tax agreement with Barbados because it is the worst example of tax avoidance and the flight of capital to countries considered tax havens. Businesses are taxed at a ridiculously low level on their profits, and when they return their money here, they are exempt from taxes in Canada. Barbados is one of the worst tax havens identified by the OECD. The Prime Minister, the former finance minister, owns a family business called CSL International. It is an international marine shipping company that has an office—not called a head office or headquarters and I will explain that in a moment—in Barbados. He himself profits from the existence of a tax agreement.
When one looks at the tax agreement itself, it seems fine. But we have been analyzing it for a long time now, and denouncing it, too. It appears proper. There are even clauses stipulating that businesses paying only 1.5% or 2.5% as Barbadian income tax, when they return their profits to Canadian subsidiaries, will be taxed on the difference between normal Canadian tax they would pay if their business were in Canada and what they have paid in Barbados.
But a few years ago the government adopted tax regulations. Regulations do not go through the House of Commons, but are defined by the executive. We analyze the bills that become law, but there are regulations to go with the laws.
However, paragraph 5907(11.2)( c ) of the income tax regulations allows businesses such as CSL International, and the major Canadian banks—nearly two weeks ago, a study was made public by a university professor who said that the banks had benefited from this kind of tax evasion—to proceed in a way that, when they pay tax once in Barbados, they circumvent the provision in the tax treaty with Barbados that states that they still have to pay tax here.
Under a regulation adopted by this government, not this Parliament, an exception is made for companies that pay Barbados an initial tax of 1.5% or 2.5%, depending on the type of business. When these profits are repatriated, the federal regulation adopted by the government, by the governor in council, and not put before parliament, ensures that this company does not pay taxes twice.
So, they are taxed once at 1.5% or 2.5% of profits or dividends. When this money comes back here, it is not subject to the federal Income Tax Act. This is not normal. An exception was created by a regulation voted by the executive, and the Minister of Finance, the current Prime Minister, was there when this regulation was passed.
This is not normal. We must abolish this regulation to ensure that all businesses, be it CSL International, the Prime Minister's family business, or the major Canadian banks, pay their fair share of taxes. Billions of dollars are not going into federal and provincial coffers because of a regulation adopted by the governor in council, meaning the government, because the regulations are not subject to approval by parliament but are determined by the governor in council.
Worse still—members will say I am exaggerating, but I am not, because these are facts—I was here in 1998. The finance minister at the time, the current Prime Minister, introduced omnibus legislation containing various measures, a bit like Bill C-33. There were small and big measures, things that were clear and things that were not, because it was extremely technical at times.
However, there was a small paragraph at the end of the bill that said, “And we are amending the Income Tax Act for international shipping corporations”. This statement was followed by references to all sorts of things. Of course, that got my attention. I began reading this omnibus bill from the end of it and discovered that the Prime Minister had tabled, when he was the Minister of Finance, through Bill C-28, provisions that benefited his own company, which has since become a family business, since he supposedly gave it to his children.
What did Bill C-28 say? It added more things. Not only did we have regulations, so that companies would not have to pay taxes twice, even though tax rates were ridiculously low compared to the North American average and to those that apply to us, but there was also an additional exception that applied strictly to international shipping corporations. There are eight of those in Canada and he is involved in all of them.
What was contained in this somewhat technical provision with the incredible impact? It said that even dormant corporations, that is companies that are not directly involved in international shipping, but that are part of conglomerates, can benefit from the tax provisions found in the regulations to avoid double taxation, even if the first tax rate is very low.
In other words, the then Minister of Finance and current Prime Minister introduced an act that was custom made for his own company to avoid having to pay deferred tax here, and to ensure that his type of corporation could benefit from the tax provision, even though it does not qualify.
Worse still—and some might think I am exaggerating, but I am not—in order to benefit from a tax convention, a Canadian corporation that has a subsidiary abroad, such as in Barbados for example, must be a business whose mind and management are located in that country. In other words, all the managerial and administrative decisions must be made in that country.
A CBC broadcast aired several months ago indicated that a reporter had tried to get answers about CSL International in Barbados, but was referred to CSL in Montreal. This means that the management and planning of CSL International is not even located in Barbados, but in Montreal.
So, the first condition is not met to be able to benefit from such a tax treatment, according to the federal income legislation for corporations. This is serious. These are missed opportunities, but now we know why.