Mr. Speaker, I am pleased that our government was able to announce a 20¢ decrease in the EI tax. This is a major breakthrough. It is a major concession because it has cost us $1.4 billion. How can he say that this is negligible?
House of Commons photoWon his last election, in 2006, with 55% of the vote.
The Economy November 28th, 1997
Mr. Speaker, I am pleased that our government was able to announce a 20¢ decrease in the EI tax. This is a major breakthrough. It is a major concession because it has cost us $1.4 billion. How can he say that this is negligible?
Income Tax Conventions Implementation Act, 1997 November 28th, 1997
moved that the bill be read the third time and passed.
Mr. Speaker, as you have indicated, this involves tax treaties with a number of countries including Denmark, Iceland, Kazakhstan, Lithuania, Sweden and The Netherlands, but most important or certainly most in the news has been the amendments involving our treaty with the United States of America. This important amendment is taking place in terms of social security benefits which are paid by the American government to people living in Canada.
The effects of this tax apply basically to about 60,000 Canadians. About one-third of these are low income residents of Canada who are still in receipt of U.S. social security benefits.
Under the current law the Americans are entitled to withhold 25.5% of these social security payments they make to people living in Canada. Where these recipients, approximately 20,000 of them, lose out is if they were taxed at ordinary Canadian income tax rates on these benefits, their tax rates, because they are in lower income brackets, would be much lower. Therefore, this blanket withholding of 25.5% by the Americans is a detriment to these particular residents of Canada.
This is why we have undertaken on their behalf to renegotiate this treaty to ensure that they can be taxed not by the source country, the United States, by way of withholding, but in Canada where they would be taxed on their net income. Many of these low income residents of Canada will end up paying no taxes whatsoever.
For recipients of U.S. social security benefits who are in higher tax brackets, there will also be a relieving position which comes about because only 85% of the benefits will go into taxable incomes, rather than 100%. This is mirroring the way the United States would tax its residents on this income.
This bill has gone through the House for second reading where it received great support from all sides. It has gone to both committees where they have sent it back unamended. It is of course important that we enter into these new treaties with new trading partners so that Canada can continue to be at the forefront of avoiding double taxation and encouraging international investment, international flows of currency, international jobs, but particularly in terms of our provisions dealing with the Americans.
It is very important that we make these relieving provisions so that we can get on with the job of making sure that these people are treated fairly by both the United States and Canada as it relates to their social security benefits.
I would like to repeat what the hon. member for Kamouraska—Rivière-du-Loup—Témiscouata—Les Basques said about getting the co-operation of all parties because the main purpose of this bill is to remedy a fundamental inequity for low income persons.
We expect that as soon as this passes—and we certainly hope to have the unanimous support of all members of the House—that it will be signed into law very quickly and receive royal assent. We understand that the United States has done all that is necessary except receive presidential signature on this bill. As soon as it goes through, we would expect that within a few weeks, or in as short a time as possible, refund cheques will be sent out. Revenue Canada will be co-operating with the U.S. revenue authorities to track down every person who might have been unfairly prejudiced over the last two years by these provisions.
We expect, with the support of all members, to be able to correct this inequity and to make sure that the taxpayers in Canada who have been unfairly prejudiced are going to get their refunds.
I thank all members of this House for their splendid co-operation on this excellent bill.
Income Tax Conventions Implementation Act, 1997 November 28th, 1997
moved that the bill be concurred in. (Motion agreed to)
Pension Benefits Standards Act, 1985 November 26th, 1997
moved for leave to introduce Bill S-3, an act to amend the Pension Benefits Standards Act, 1985 and the Office of the Superintendent of Financial Institutions Act (Review Committee).
(Motions deemed adopted and bill read the first time)
Ways And Means November 26th, 1997
Mr. Speaker, I have the honour to lay upon the Table a Notice of Ways and Means motion to amend the Excise Tax Act and a related act, as well as explanatory notes on the preliminary bill and regulations pertaining to the GST and HST.
I ask that you designate an Order of the Day for the consideration of the motion.
Banks November 26th, 1997
Mr. Speaker, it is entirely up to the industry committee if it wishes to look into this issue.
We have the banks before the committee four times a year. It is quite capable of running its affairs. I am sure if the member were there he would be able to ask these questions.
Let me put a few facts on the table. Taxes for Canadian banks are 64% of net income. In the U.S. they are 54%, in the U.K. 52%. For Canadian manufactures the taxes are 47% and for our credit unions they are 45%.
We are the government that imposed the temporary surtax.
Banks November 25th, 1997
Mr. Speaker, the idea behind a community reinvestment act is that deposits taken out of a particular area will be equalled by investments or loans made back into that particular area.
If we look at the figures of the Bank of Canada from last year, seven provinces in Canada would be major losers under that type of proposal, including the four Atlantic provinces.
Banks November 25th, 1997
Mr. Speaker, perhaps I could lay a few facts before the House.
I am sure the hon. member would welcome, as his leader already has, reasonable profits for the banks. This is for two reasons. First, profits mean that investors including pensioners benefit. Second, increased profits mean vast increases in revenues from taxes on these profits for Canadians. Last year the banks paid $4.9 billion in federal, provincial and municipal levies.
If the member is concerned that their profits are too high perhaps he should realize—
Financial Institutions November 20th, 1997
Mr. Speaker, the banks have already published that and undertaken that in accordance with our instructions to them.
Let me quote from a press release of December 4, 1996, when the leader of the fourth party said: “We welcome bank profits if they are earned through good management, sound long term investment and progressive participation in the Canadian economy”.
Why is she changing her mind?
Privacy November 18th, 1997
Mr. Speaker, as the member knows, from 1990 to 1996 the Canadian Standards Association, which consists of management, labour, consumers, provincial and federal governments, worked to draw up a code of privacy for our financial institutions.
I am pleased to say that in this instance the guidelines of the Canadian Standards Association were met. However, privacy is an issue which is of very great concern to us. We hope the task force is going to look into it and, of course, the finance committee would welcome their views.