House of Commons photoLost his last election, in 2019, with 33% of the vote.
Business of Supply February 2nd, 2017
Mr. Speaker, a couple of years ago, my wife and I made a fairly different amount of money. I was a parliamentary staffer, and she was not making a lot of money. We could not take advantage of the income splitting the member for Barrie—Innisfil defends so strongly, but he could take advantage of the full $2,000 as a member of Parliament. I wonder if that is his idea of tax fairness for the middle class.
Business of Supply February 2nd, 2017
Mr. Speaker, it seems fairness is allowing the member to present her alternative reality.
We were quite clear yesterday that the tax on the health plans would not be coming through. I wonder what other ideas she has of what we are going to do that we have no intention of doing.
Controlled Drugs and Substances Act January 31st, 2017
Madam Speaker, I listened intently to the speech by the member for Markham—Unionville. I am wondering if the member could explain to us how he expects to put drug users back on their feet by putting them in jail and giving them a criminal record. Maybe we should think about treating this as a medical issue. Maybe using controlled injection sites as a medical environment to encourage safe use and get people away from drugs might be better.
Does my colleague find it important to act on the opioid crisis or does he think the status quo works? It is really important. I would like to hear the member's support for real action going forward quickly.
On December 12, the member for Vancouver Kingsway asked for consent to have this legislation advance at all stages and I think that would be a good avenue for us to follow.
Controlled Drugs and Substances Act January 31st, 2017
Mr. Speaker, I listened to the speech from the member for Kamloops—Thompson—Cariboo with great interest. I heard her talk at length about the need to do this quickly. I agree with her. I wonder, if the member is so excited to get this done quickly, if she is willing to pass this through at all stages immediately.
Income Tax Act December 12th, 2016
Mr. Speaker, Bill C-301 is incompatible with the government's strategy to revitalize the economy, breathe life into the middle class, and help all Canadians save for retirement.
I am sympathetic to the intention of the bill, which my NDP colleague just explained. However, I would like to take a little time to go over some tax rules and the reality here.
Canadians who have a registered retirement savings plan, an RRSP, have to convert it into a registered retirement income fund, a RRIF, by the end of the year they turn 71. Beginning the following year, they must withdraw a minimum amount from their RRIF every year. By requiring individuals to withdraw increasing percentages of the funds in their RRIFs, the government ensures that tax deferral on amounts accumulated in RRSPs and RRIFs is in line with the purpose of these accounts, which is to supply retirement income, and prevents the undue hoarding of retirement savings for their estate.
Retirees are not forced to spend the money, but the idea is to defer tax, not eliminate it entirely. If this bill were to pass, there would be no mandatory minimum withdrawal. That would benefit mainly the wealthy, who would be able to save the money for their children without paying tax.
Bill C-301 is not consistent with the basic objectives of RRSPs and RRIFs since it allows seniors to postpone paying tax on the full amount of those savings until they are much older, well beyond retirement and well beyond age 71. An investor could even postpone it until death. The implementation of this legislation would also result in considerable fiscal costs.
It is estimated that eliminating the RRIF minimum withdrawal requirements would reduce federal tax revenue by at least $500 million a year in the short term. The bill would also reduce provincial tax revenues.
Furthermore, the bill will create significant inequities between different segments of the population when it comes to tax deferral opportunities. Indeed, it will increase tax deferral opportunities for those who have savings in RRSPs compared to those who contribute to RPPs. It would also create a major intergenerational disparity because younger seniors would not be obligated to withdraw a portion of the savings in their RRIFs every year while older seniors were forced to begin doing so at age 71.
I would add that this bill would favour seniors who do not need the savings accumulated in their RRIFs, in other words high-income seniors, instead of supporting those who could use a bit of help.
We know that there are better ways to enhance retirement income security for Canadians. Let us look at young people. At times they feel like they are worse off than their parents. Far fewer of them will have workplace pension plans than the previous generation did. It is worrisome. They wonder whether they will have saved enough for a decent retirement.
Those are legitimate questions and concerns since one in four families approaching retirement age, or 1.1 million families, will likely not save enough for retirement. Together with the provinces and territories, we have come up with concrete solutions for all those families.
The answer is to enhance the Canada pension plan, the CPP, which will benefit Canadians in a variety of ways. For example, the maximum benefit will be increased by almost half once the enhanced CPP is fully operational. Also, CPP provides secure and predictable benefits. In other words, Canadians will know how much money they will get and will not have to worry about their savings dwindling or being affected by the markets. CPP benefits will be fully indexed to prices, so inflation will not reduce the purchase power of their retirement savings.
An enhanced CPP is the perfect response to a changing labour market. It fills in part the void left by the steady reduction in employer pension plans. It also follows workers from province to province, which facilitates professional mobility. The CPP has several million contributors. That is vitally important because it allows the Canada Pension Plan Investment Board to benefit from economies of scale and returns on significant investments.
I would like to summarize the main concerns about the bill introduced by my opposition colleague. The implementation of this bill would reduce the federal and provincial governments' tax revenues. It would not be consistent with the basic objective of tax-deferred retirement income provided by RRSPs or RRIFs.
Contributors to RRSPs and RPPs, and also older and younger seniors would be treated differently under the bill.
On the one hand, we have all the disadvantages of Bill C-301, which we just listed. On the other, we have all the advantages of the enhanced Canada Pension Plan, especially higher benefits.
We could also discuss the government's middle class tax cut. However, I think we have identified enough flaws to realize that we must vote against this bill.
Tax Convention and Arrangement Implementation Act, 2016 December 8th, 2016
Madam Speaker, I do not know the answer to that question. I read through what I could, and I know that pensions were specifically addressed, but I do not know the specific details and cannot answer in a helpful way.
However, I know that Bill S-4 will be a positive bill for us in working with these other countries.
Tax Convention and Arrangement Implementation Act, 2016 December 8th, 2016
Madam Speaker, any time we have a new treaty to help our relations on fiscal policy and investment policy, it does help, with our relationship with those countries, to build out our economy and theirs.
We are one planet, and I think we should see it that way. We should work as best we can to work as a team within the bounds of what we find acceptable in each place.
Tax Convention and Arrangement Implementation Act, 2016 December 8th, 2016
Madam Speaker, Bill S-4 implements two treaties. For reasons unknown to me, those treaties are being implemented by a bill, which is perfectly fine.
In that regard, I do not see how Bill S-4 is problematic.
Tax Convention and Arrangement Implementation Act, 2016 December 8th, 2016
Madam Speaker, certainly, every time we reach an agreement with any country, we need to consider the current status of both countries. We cannot conclude a single agreement with the rest of the world and think that it would always work the same way.
I think we have tax agreements because they allow us to exchange information so we can determine who is tryring to evade the local tax laws. It is important to do this. I agree completely that it might not always be perfect.
However, the goal is to find those who are abusing the system, not to destroy the system because people are abusing it, and I think we need to look at it from that perspective going forward.
Tax Convention and Arrangement Implementation Act, 2016 December 8th, 2016
Madam Speaker, I thank my colleague from Vaughan—Woodbridge for sharing his time with me.
I am pleased to rise in the House to address the important matter of Bill S-4. As members will know, this bill implements a convention and an arrangement on double taxation that were recently signed and announced. The convention was concluded with the State of Israel, and the arrangement with Taiwan.
Canada now has 92 tax treaties in force, and it continues to work on developing other such treaties with other jurisdictions. Bill S-4 builds on Canada's ongoing efforts to update and modernize its network of tax treaties, which helps prevent double taxation and tax evasion.
Indeed, Canada currently has one of the world’s largest networks of tax treaties. This is an important feature of Canada’s international tax system, a feature that is key to promoting our ability to compete. At the same time, the system needs to ensure that everyone pays their fair share of taxes. We do not want certain foreign and domestic firms to be able to take advantage of Canadian tax rules to evade taxes, or for certain wealthy individuals to turn to foreign countries to hide their income and avoid paying taxes.
Every time that happens, workers and small businesses in Canada end up having to pay more taxes than they should have to. It is not right. The Canada Revenue Agency needs information from foreign countries in order to identify and discourage the hiding of income.
To that end, the convention and the arrangement on double taxation in Bill S-4 implement the current international standard on tax information exchange on request established by the Organisation for Economic Co-operation and Development, thus enabling Canadian tax authorities to obtain the necessary information for the administration and enforcement of Canadian tax laws, while helping them prevent international tax evasion.
Here at home, the Government of Canada continues to work to keep our tax system up to date and competitive, so that Canada can remain a leading player in the global economy. It is essential to take measures in support of a more competitive tax system in order to foster conditions that allow Canada's entrepreneurs and industries to excel, thus clearing their path to success.
Clearly, having modern tax conventions, such as those contained in Bill S-4, is a key component of that goal. Canada remains committed to maintaining a tax system that will continue to help Canadian businesses in their drive to be world leaders, while ensuring that everyone pays their fair share of taxes.
The tax conventions complement our government's broader commitment to implementing a more competitive tax system that will raise the standard of living of all Canadians. The convention and arrangement for the avoidance of double taxation set out in Bill S-4 directly support and encourage cross-border trade in goods and services, which in turn helps Canada's domestic economic performance.
Moreover, every year, Canada's economic wealth depends on foreign direct investment, as well as the entry of information, capital, and technology. In short, the convention and arrangement for the avoidance of double taxation set out in Bill S-4 provide individuals and businesses in Canada and the other countries involved with predictable and equitable tax results in their cross-border dealings.
I would now like to talk about two things that this bill proposes to do, namely reduce withholding taxes and prevent double taxation. Withholding taxes are a common feature of the international taxation system. They are levied by a country on certain items of income earned in that country and paid to the residents of the other country. The types of income normally subjected to withholding taxes would include, for example, interest, dividends, and royalties.
Without tax treaties, Canada usually taxes this income at the rate of 25%, which is a set rate under our own legislation for income tax, more specifically, the Income Tax Act. Withholding tax rates in other countries are often as high or even higher.
Since one of the main functions of a tax convention is to divide the powers of taxation among the signatory partners, the conventions contain provisions that reduce and, in some cases, eliminate withholding taxes that could be applied by the jurisdiction where certain payments originate.
For example, the convention and the arrangement for the avoidance of double taxation in Bill S-4 provides for a maximum withholding tax rate of 15% on portfolio dividends paid to non-residents in the case of the State of Israel and Taiwan. The maximum withholding tax rate for dividends paid by subsidiaries to their parent companies is reduced to a rate of 5% for the State of Israel and 10% for Taiwan.
Withholding rate reductions also apply to royalty, interest, and pension payments. The convention and the arrangement for the avoidance of double taxation covered by this bill caps the maximum withholding tax rate on interest and royalty payments to 10%, and the maximum withholding tax rate for periodic pension payments to 15%.
The other issue I want to talk about is double taxation. Double taxation at the international level happens when taxes are collected on the same taxable income for the same period in at least two jurisdictions. The convention and arrangement regarding double taxation in Bill S-4 will help prevent double taxation so that any given income is taxed only once.
Generally speaking, the Canadian tax system applies to the income earned by Canadian residents anywhere in the world. However, foreign authorities can also invoke their right to tax any income earned in their jurisdiction by Canadian residents. Canada usually gives a credit for foreign tax paid on that income. This duplication of taxes paid in the jurisdiction where the income was earned and in the taxpayer's country of residence can have unfair negative consequences for taxpayers. No one should have to pay taxes twice on the same income.
Without any convention or arrangement for the avoidance of double taxation such as the ones provided for in Bill S-4, that is exactly what happens. Both countries could claim taxes on the income without providing the taxpayer with any measures of relief for the tax paid in the other country.
In closing, the convention and arrangement for the avoidance of double taxation proposed in the bill will provide certainty and stability and create a favourable climate for trade, to the benefit of taxpayers and businesses in Canada and in the partner countries.
What is more, the convention and arrangement for the avoidance of double taxation proposed in the bill will strengthen Canada's position in an increasingly competitive global trade and investment environment.
Those are the reasons why I ask my colleagues to vote in favour of the bill.