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Crucial Fact

  • His favourite word was benefits.

Last in Parliament October 2015, as Conservative MP for Souris—Moose Mountain (Saskatchewan)

Won his last election, in 2011, with 74% of the vote.

Statements in the House

Tax Conventions Implementation Act, 2013 June 10th, 2013

Mr. Speaker, I might remind the member that soon we will be off on summer break so time will be short.

To say that this treaty is of no consequence surely must mean the member has not read the legislation or has not listened to business, because business is quite clear. It wants this agreement. It wants to know what the rules of investment are. Billions of dollars are transferred that create jobs and long-term prosperity in both countries. Therefore, it is important that we deal with the legislation here today and that members are given the opportunity to debate this.

If we had said that members do not have the opportunity to debate this particular tax treaty, I cannot imagine what the member might have said. Perhaps, “We must have the time to debate it.” We have provided the time to debate it and the member talks about something else.

I know there are a lot of other issues and a lot of other pieces of legislation. However, today we are dealing with this legislation. If the member wants to debate she should debate this legislation, not something else.

So far what I have heard from the opposition is a debate on all kinds of other issues that may be of some significance but nothing to do with the tax treaties. If you want time to debate, when time to debate is given, debate the issues before you and not something else.

Tax Conventions Implementation Act, 2013 June 10th, 2013

Mr. Speaker, I would remind the member that this tax treaty deals with Namibia, Serbia, Poland, Hong Kong, Luxembourg and Switzerland. That is the legislation we are discussing. That is the legislation that needs to be passed. The member should look at it and read the bill as it applies to all these countries to see if there is are improvements, changes or amendments to make. If he supports it, he should support it.

With respect to the United States, it is nowhere in this document. It has nothing to do with this bill. I agree that there are probably a lot of issues that need to be dealt with between the two countries that I am sure are being looked at by the various levels and will be dealt with. However, that is not what we are talking about today, which is this particular legislation and ensuring that the rules of the road are understood by the parties of both countries.

I might also add that the OECD has set out what it thinks it should be. Basically, this ties into that. There should be more of these happening, notwithstanding there are other issues that need to be addressed as well.

Tax Conventions Implementation Act, 2013 June 10th, 2013

Mr. Speaker, there is always the opportunity to do more. Obviously we need more legislation. However, it is important to pass the legislation that is before us that specifically deals with the countries outlined in it. As I mentioned before, these tax agreements have been signed with over 90 countries. The OECD has set sort of a pattern of what these tax treaties should look like, and the kind of rules of the road that should be incorporated and that most countries have started to adopt.

Obviously there will be an increase in the number of treaties that are being signed, and I think we need to continue pursuing them and pursuing them actively. More could always be done, but for now this is the treaty that is before the House. It has been negotiated. It is a positive thing that business would like to see passed. It is important that this particular government does that.

Additionally, and contrary to what has been said here, there have been significant investments targeted with respect to the enforcement provisions and the seeking out provisions that CRA may have with respect to international investments.

Tax Conventions Implementation Act, 2013 June 10th, 2013

Mr. Speaker, it gives me pleasure to rise today in the House to speak to Bill S-17 the tax conventions implementation act, 2013, at second reading. This is technical legislation that would implement Canada's recently concluded tax treaties with Namibia, Serbia, Poland and Hong Kong, as well as tax agreements with Luxembourg and Switzerland.

The conversation has gone far and wide and far beyond the extent of the treaties and what we are discussing today with respect to the legislation itself.

Bill S-17 is part of Canada's ongoing efforts to update and modernize its network of income tax treaties with other countries, which is one of the most extensive of any country in the world.

Canada has comprehensive tax treaties in place with 90 countries, and our government is hard at work on agreements with other jurisdictions in connection with tax evasion, if we want to call it that. The double taxation that we spoke of relates to occurrences between countries and to movements of income, capital and properties between countries.

I want to make it clear that Bill S-17 does not represent any new or significant change in policy and should be considered standard and routine, but very important, legislation. In fact, tax treaties covered by this bill, like their predecessors, are patterned on the OECD model tax convention, which is accepted by most countries around the world. The pattern has been set, and these treaties are negotiated along that line.

As respected international tax commentator Jeffrey Owens, current senior policy adviser at Ernst & Young and former director for tax policy at the OECD, has noted, “Quite simply, the OECD model has established itself as the means of settling the most common problems that arise in the field of international taxation”.

Once again I would remind members we are talking about international taxation and not taxation within the country and the residents of that country itself. Therefore, it goes without saying that the provisions in these particular treaties comply with international norms and are based on standards that are generally acceptable.

The tax treaties in this bill have been designed with three goals in mind.

The first is to prevent double taxation and provide a level of certainty about tax rules that will apply to particular international transactions. That is important. Every business wants to know what the rules are. Businesses want to have a measure of certainty and know what to expect, and of course we want to do away with double taxation to ensure that appropriate investments take place.

The second goal is to prevent avoidance and evasion of taxes in various forms of income flows between the treaty partners. If the income flow is simply done to avoid tax, it needs to be dealt with.

The third goal is to facilitate international trade and investment, both incoming and outgoing.

These goals are consistent with the findings of the 2008 report of the advisory panel on Canada's system of international taxation, convened by our government to make recommendations to enhance Canada's international tax advantage. Not only is Bill S-17 consistent with the findings of that report, but the panel's observations helped clarify the importance of today's legislation for the Canadian economy. This allows for investment to take place, it allows for jobs to be created, and it allows for the long-term prosperity of Canada.

According to the report:

Canada's system of international taxation is important to our country's competitiveness. At the global level, competitiveness is crucial to attracting high-value activities, spurring innovation, and creating skilled jobs. ... Improving the international tax system will enhance Canada's advantage to the benefit of all Canadians.

I will speak further about this legislation's specific objectives, but first I would like to highlight how the tax treaties help contribute to a competitive tax system in Canada.

As members will know, our government is committed to expanding Canada's network of tax agreements with other countries. Better transparency and information exchange for tax purposes are critical to ensuring that Canadian taxpayers report their income earned from all sources and pay the right amount of tax in Canada.

We are serious about combatting tax evasion through the negotiation of tax treaties and tax information exchange agreements, sometimes known as TIEAs.

Since 2007, our government has brought into force 16 such agreements, signed three others and is actively negotiating with 11 other jurisdictions, including negotiations launched last year with Panama. Not only that, but we have provided the Canada Revenue Agency with even more tools to conduct international tax audits and enforcement.

As a direct result of action taken by our government, Canada continues to contribute actively to the efforts of both the OECD global forum on transparency and exchange of information and the G20, in order to further support the effective implementation of the OECD standard by all jurisdictions.

Our government understands the importance of open markets and full participation in the global economy and has shown continued leadership on the world stage by opposing protectionism and trade-restrictive measures. Canada believes open markets create jobs and economic growth for people around the world.

Indeed, the advisory panel identified the importance of trade as a key driver in improving Canada's system of international taxation. As the report noted:

Cross-border business investment has become central to the world economy. Global two-way trade is important to Canada’s prosperity, as it is to that of other countries. New competitors are emerging, notably from developing economies. ... Canadian businesses need to be able to compete with them for investment on both the outbound and inbound fronts.

To support Canadian business investment abroad, attract foreign business investment at home, and strengthen our open economy, tax policy must keep pace with global trends.

Our government strongly supports cross-border trade and investment, but we must ensure that cross-border investment is not used to avoid taxes with complicated tax schemes. In this spirit, the advisory panel identified a type of cross-border transaction, generally referred to as “foreign affiliate dumping”, as being abusive. These kinds of transactions reduce the Canadian tax base without providing any significant economic benefit to Canadians and need to be dealt with by legislation.

The panel recommended that a targeted measure be introduced to curtail these transactions while ensuring that legitimate transactions are not affected.

Foreign affiliate dumping transactions often involve a Canadian subsidiary using borrowed funds to acquire shares of a foreign affiliate from its foreign parent company.

Consistent with the advisory panel's recommendation, economic action plan 2012 announced rules to curtail foreign affiliate dumping transactions while at the same time preserving the ability of Canadian subsidiaries of foreign parents to undertake legitimate expansions of the Canadian-based businesses.

What we are trying to do is set the rules to ensure that people pay the tax they ought to pay and are not double-taxed, but also that they are not using means or mechanisms to create expenses or obviate income so that they do not have to pay taxes.

The new foreign affiliate dumping rules, where certain conditions are met, deal with deemed dividends to be paid by a Canadian subsidiary to its foreign parent to the extent of any debt funding incurred by the Canadian subsidiary, or other non-share consideration given by the Canadian subsidiary, for the acquisition of the shares of a foreign affiliate. Any dividend that is deemed a dividend in that fashion would be subject to non-resident withholding tax, which would generally be reduced to 5% of the gross amount of a dividend by an applicable tax treaty.

Going forward, our government will continue to monitor developments in this area to determine whether further action is required.

Now I will return to the measures contained in the legislation before us today and speak further to the importance of tax treaties, a vital part of the government's overall approach to improving the tax system. Indeed, they are an integral element of our economic action plan to bring jobs, growth and long-term prosperity to all Canadians.

Tax treaties like those in Bill S-17 directly affect cross-border trade in goods and services with our tax treaty partners, which in turn impacts Canada's domestic economy. In fact, over 40% of Canada's annual GDP can be attributed to exports. Moreover, Canada's economic wealth each year also depends on foreign direct investment as well as inflows of information, capital and technology.

In other words, the tax treaties contained in Bill S-17 would benefit Canadian businesses and individuals with operations and investment in the countries covered by this legislation, not only for their investments abroad but also for those investments that come into our country and bring all of what I mentioned with them.

Not only that, but tax treaties foster an atmosphere of certainty and stability for investors and traders that can only serve to enhance Canada's economic relationship with each country.

Another important aspect of these treaties is that they include a mechanism to settle problems encountered by taxpayers, in particular when double taxation arises. It is very important that if there is a dispute, there is a way to settle it, and there is provision in these agreements as to how that might happen, not only with respect to the taxpayer but also with the two countries involved as well. Under this mechanism, taxpayers can bring to the attention of taxing authorities issues that arise from the interaction of our tax system with that of the other treaty partner and seek a resolution to the issue.

Eliminating administrative difficulties and unnecessary tax impediments is an important priority for the Government of Canada and an important component of international tax treaties. In short, these treaties will provide individuals and businesses in Canada and other treaty partner countries with predictable and equitable tax results in their cross-border dealings, which can bring only positive outcomes for the Canadian economy.

As is common for tax treaties legislation, Bill S-17 would address double taxation issues, which occur internationally when two or more countries impose taxes on the same income for the exact same time period. Obviously that can happen, given the tax regimes of each country, and when it does, it needs to be dealt with. This would obviously be extremely unfair. Double taxation is not something that anyone would like and no parliamentarian would endorse, except, perhaps, the NDP, which is interested in spending and taxing on just about everything, not to mention the $26-billion carbon tax.

Addressing this issue, it is an non-partisan one. It is very common for tax treaty legislation. I want to underline that by reading verbatim from a speech given by the current member for Scarborough—Guildwood, who was the parliamentary secretary to the minister of finance under the former Liberal government in 2004. I will quote at some length, because I think he establishes the premises of why these treaties are as important as they are. He said:

The first, and probably the most important, objective of tax treaties is to avoid double taxation and provide a level of certainty about the tax rules that apply to international transactions.

Again, I want to re-emphasize that we are talking about international transactions. The member continued:

Relief from double taxation is so very necessary and deserves to be discussed in some detail. The potential arises when a taxpayer lives in one country and earns income in another. Without a tax treaty, both countries could claim tax on the income without providing the taxpayer with any measures of relief for the tax paid in the other country. This is simply unfair.

To alleviate the potential for this happening, a tax treaty between the two countries allocates taxing authority with respect to a given item of income in one of three ways: first, the income may be taxed exclusively in the country in which it arises; second, it may be taxed in the country in which the taxpayer resides; or, it may be taxable in both the source country and the residence country, with relief from double taxation provided in some form, usually the country of residence.

The member was saying that there are a lot of factors at play and we want to establish that these are the rules of the game. If a person earns income, he or she will be taxed only once, in one place, by one country and if that does not happen, here is the mechanism that can correct that.

I also want to speak about withholding taxes, because a lot of this deals not only with earning income, but with dividends, the disposition of shares, the disposition of capital property and so on. Another way to ensure that double taxation does not exist is to lower or reduce something called "withholding taxes". This is another common feature of tax treaty legislation. Obviously, it can be burdensome, with a lot of red tape and hassle, not to mention tying up huge sums of money by virtue of withholding.

These taxes are levied in one country on a certain income earned in that country and are paid to residents in another country. Again, I am quoting from the member for Scarborough—Guildwood from when he was the parliamentary secretary to the minister of finance under the formal Liberal government, who said:

Withholding taxes are a common feature of the international taxation system. In Canada's case, they are levied on certain payments that Canadian residents make to non-residents. These payments include interest, dividends and royalties, for example. Withholding taxes are often levied by a country on the gross amount of certain types of income paid to non-residents and such taxes normally represent the non-resident's final obligation with respect to income tax payable in that country with respect to that particular income.

There are obligations in the other country, there is withholding tax here, usually equally to what might be paid over there, when there are fairly large amounts of money being held. Tax treaties are important because they reduce the rates of withholding taxes and help to avoid double taxation.

Specifically with regard to Bill S-17, the treaties with Namibia, Serbia, Poland and Hong Kong provide for a maximum withholding tax on dividends between the affiliated companies at 5%. In respect to all other dividends, the treaties in Bill S-17 provide for a rate of withholding tax set at 15%. I should note that reductions also apply in respect of interest and royalties.

Our government is working with other countries to address the problem of double taxation. Another problem it is working on is to address tax evasion and avoidance, both tremendously unfair and steps that are harmful to our economy. The loss of revenue resulting from tax avoidance and evasion has the potential to adversely affect the efforts of governments in reaching important policy objectives.

Of course there will be certain sharing of information between the countries with respect to tax evasion, and that will help. Not only that, but tax evasion obviously places a disproportionate share of tax burden on honest taxpayers as has been mentioned in the House here earlier today. The government recognizes that one key component of the defence against international tax avoidance and evasion is through improved and expanded mechanisms for international co-operation and information sharing.

To facilitate that goal, treaties like those found in Bill S-17 permit the exchange of tax information between revenue authorities in accordance with standards developed by the OECD, and in doing so help them to identify cases of tax avoidance and evasion, and to act on them.

In conclusion, I would like to remind all members that Bill S-17 is not controversial, nor does it contain any surprises or contentious issues. There is little doubt that its benefits are clear. The treaties covered in this proposed legislation will promote certainty, stability and a better business climate for taxpayers and businesses in Canada and in these treaty countries.

Moreover, these treaties will help to secure Canada's position in the increasingly competitive world of international trade and investment. They comply with international OECD standards and will help ensure a stronger tax system for Canadians. They will help ensure our goal of tax fairness for Canadians.

They provide the rules of the road for foreign investment, for foreign movement of capital and income. This is something that investors and business would expect Parliament to deal with. It is important that Parliament deals with it at this stage, because the take-effect date is someplace down the road. We would like to see this particular legislation passed into law before the summer break.

I would ask all members to support this legislation.

Fighting Foreign Corruption Act June 3rd, 2013

Mr. Speaker, the accelerated capital cost is being very well received by businesses because it encourages them to buy the needed equipment and assets to better operate their business more efficiently and to provide jobs. They are able to get a tax writeoff in a quicker fashion than normal.

If people are in manufacturing and they wish to expand their plants and buy new equipment, this is the kind of thing that will make the manufacturers do that. They would have a more efficient business, a business that was able to expand and hire more people.

Those are the kinds of things that give initiative and impetus to the economy, the kinds of things that we need to see. It is one of many of them. If we look at the entire budget implementation bill, we would see a series of actions taken in the direction of creating jobs, long-term prosperity and a better country in which to live.

Fighting Foreign Corruption Act June 3rd, 2013

Mr. Speaker, I can assure the member, there will be a significant amount of dollars spent to ensure that when people get trained there will be a job for them. In other words, there is a job waiting to be filled and this will help that job be filled by ensuring we are training the people for the skills that are required by the workplace. That should be a common sense kind of approach. In fact, one of the people who spoke with respect to this said, “Finally we get some common sense going into the equation”. We will see the details when everyone has come to agreement on that.

Fighting Foreign Corruption Act June 3rd, 2013

Mr. Speaker, if I were to give him the precise date, what would happen then?

We heard other speakers say that we needed to negotiate, talk and discuss. We spent billions of dollars on the labour market agreements with the provinces, specifically in relation to skills training and upgrading. This program is one that will have discussion with the players involved, with other stakeholders, with the provinces—

Fighting Foreign Corruption Act June 3rd, 2013

Mr. Speaker, the temporary foreign workers are meant to work where there are key shortages for labour, when the positions cannot be filled by Canadians who are able to provide the service they need. That must happen first and foremost. If there are skilled people, then they would be hired.

It is only after employers have shown they have tried everything they can and cannot find people here, or cannot train them quickly enough, or provide them through the incentive grants that we have provided and when they have done everything and there still is a shortage and it will either go forward with the business or discontinue the business, will they rely on temporary foreign workers.

In fact, in the letter I was going to quote from, but we ran out of time, he said that he would have to probably close one part of his operation because he did not have the ability to service those people and that would affect its entire operation.

If we go the NDP way and not provide the human resources, tax and spend, we will drive our economy into the ground. What we are doing is continuing on the proper path.

Fighting Foreign Corruption Act June 3rd, 2013

Mr. Speaker, I rise to speak in favour of Bill C-60, the budget implementation bill and economic action plan 2013.

The opposition needs to get behind it, support it and get with it. The focus, of course, and it should be the focus, is what matters to most Canadians, and that is jobs, economic growth, and Canada's long-term prosperity.

In order for this to occur, and we hear this time and again from witnesses who appeared before our committee, we need infrastructure. Businesses need to function and expand. We need a tax system that would encourage business to grow and expand and invest. We also need the human resources, the people businesses need to provide a reasonable standard of service that we have grown to expect, to grow and expand their businesses, which in turn would provide for more jobs.

With respect to infrastructure, the economic action plan would provide the largest federal investment in job-creating infrastructure projects in Canadian history.

Since 2006, our government has made unprecedented investments in over 43,000 projects to build roads, bridges and other important infrastructure facilities.

In my riding, we have seen major water system upgrades in communities that wish to grow, but in order to do so, they need to upgrade their infrastructure.

In one case, they could not get approval for a subdivision until that infrastructure was agreed to.

It was water system upgrades in communities like Maryfield, Grenfell, Whitewood, Carlyle, Pangman and Stoughton and new sewer upgrades in places like Kipling and Moosomin.

In my consistency, we see new businesses in many small communities. We see the building of hotels, Subways, A&Ws and Tim Hortons to serve the boom taking place in the oil and gas industry. We also have potash mines, coal mining and a vibrant agricultural industry. We have also invested in recreational and public facilities.

All of this works together like a jigsaw puzzle to provide for economic growth and long-term prosperity.

Economic action plan 2013 would build on our investments and would announce a new building Canada plan, the largest investment in job-creating infrastructure in Canadian history.

The new building Canada plan would have three main components. The community improvement fund of $32.2 billion would consist of an indexed gas tax fund and the increased GST rebate for municipalities to build roads, recreational facilities and other community infrastructure across Canada. It would also have the effect of improving the quality of life of Canadian families.

Second, the new building Canada fund of $14 billion in support of major economic infrastructure projects would have a national and regional significance or scope. There would be a renewed P3 Canada fund to the extent of $1.25 billion.

Overall, the new building Canada plan would include $70 billion in federal infrastructure funding over 10 years.

Here is what the Federation of Canadian Municipalities had to say with respect to the budget 2013:

[It] delivers significant gains for Canada's cities and communities. We applaud the government for choosing to continue moving our communities forward even as it meets its immediate fiscal challenges....

It went on to say:

By maintaining and extending unprecedented investments in our cities' infrastructure, it will spur growth and job creation while laying the foundation for a more competitive economy.

Let me move to the third point, which is providing the human resources businesses need.

How do we meet the requirements of business, contractors and entrepreneurs who need both skilled and unskilled persons to maintain, grow and expand their business? Really, it requires a partnership of many stakeholders working together. In many cases, there needs to be more done to get students through high school, particularly in our first nation communities, to ensure that students have the literacy and numeracy competencies that are basic requirements to obtain jobs.

A greater emphasis is required to make known the skills and trades shortages in our schools and to encourage students to consider the trades as an option. Many of the jobs available are, indeed, very well-paying jobs.

Our government has invested billions of dollars in skills upgrading and training, particularly through federal-provincial labour market agreements, the older worker program, the employment insurance program and programs and support for under-represented groups.

The economic action plan introduced the Canada job grant, which provides up to $15,000 per person with combined federal, provincial, territorial and employer funding to help people get the skills they need for in-demand jobs.

Licia Corbella, of the Calgary Herald, on March 23 stated in her article that Christopher Smillie, senior government relations adviser for the Canadian Building Trades of the AFLCIO, had this to say: “Nothing is ever perfect but since when has a federal budget had so much in it about skilled trades”.

She adds:

Smillie says reports indicate that unless decisive action is taken now, Canada will face a shortage of 300,000 skilled tradespeople by 2017. Try building the Keystone XL pipeline then without all those labourers like carpenters, electricians, pipefitters, plumbers, welders and others....Smillie says this makes sense and will avoid job funding from winding up in a province’s general revenue fund or towards training more dental hygienists when what is needed is more welders and plumbers. It means that people will be trained for specific jobs which is a good thing. By attaching the money to an employer it means the worker will be trained for a job that actually exists. It’s about time this kind of common-sense approach was implemented...

Building on all these initiatives, we have made improvements for apprentices and employers in the apprenticeship program. Economic action plan 2013 supports the use of apprentices in federal construction and maintenance contracts. Our government will also ensure that funds transferred to provinces and territories through investment in the affordable housing program support the use of apprentices. As part of the new building Canada plan for infrastructure, the government will encourage provinces, territories and municipalities to support the use of apprentices in infrastructure projects receiving federal funding.

The Association of Canadian Community Colleges had this to say in its March 21, news release:

Federal commitments in Budget 2013 will encourage a reduction in barriers to Canada’s economic success, while maximizing the talents and advanced skills of Canadians. Virtually every opportunity that we suggested for addressing the skills shortage has been embraced...

Another source of human resources is through immigration. The use of the provincial nominee program in Saskatchewan provides an opportunity to attract the skilled people the province needs that will help it to continue to grow.

Going forward, our Minister of Immigration has indicated a new and innovative expression of interest to the immigration management system, which will allow for Canadian employers in provinces and territories to select skilled immigrants from a pool of applicants that best meets Canada's economic need.

However, all of this still does not meet all the needs we have. We need to look at ways and means to provide those through the temporary foreign workers program.

I have a letter that was written to me by a small business in southeastern Saskatchewan. It says:

We are a small community in the South East corner of the province with a population of approximately 960 people. We have been experiencing an oil boom in this region for the last 5 years and during this time I have witnessed dramatic reduction in the amount of applications for jobs posted within our organization. The jobs I mentioned are not always level entry positions but range from cashiers to supervisors and onto management positions.

Basically, what he is saying is that when all of the partners involved have done everything that they can do in places where there is a booming economy, in places where the unemployment rate is very low, we must still rely on the temporary foreign workers program. We must remember that.

Bill C-60 deals with the abuses of the program. Most can accept the fact that we need to deal with the abuses, including a small fee that would be charged for labour market opinions and permits. I think most businesses are prepared to pay that fee providing they get the service that one would expect.

The budget implementation bill addresses what we need for our economy to continue to grow, for us to continue to prosper and for jobs to continue to be created.

Committees of the House May 27th, 2013

Mr. Speaker, I have the honour to present, in both official languages, the 11th report of the Standing Committee on Human Resources, Skills and Social Development and the Status of Persons with Disabilities, entitled Main Estimates: 2013-14.

I also have the honour to present, in both official languages, the 10th report of the Standing Committee on Human Resources, Skills and Social Development and the Status of Persons with Disabilities, entitled Economic Opportunities for Young Apprentices.

Pursuant to Standing Order 109, the committee requests that the government table a comprehensive response to this report.