Madam Speaker, in the riding of Vaughan—Woodbridge, which I am privileged to represent, the residents work hard and pay their taxes diligently. They want assurance of our tax system and its fairness, assurance that everyone is paying his or her fair share.
As a government, since being elected we have invested over a billion dollars in the Canada Revenue Agency to ensure that we have a system that works for all Canadians and that our country can have confidence in this department. As we all know, tax season has now come to an end. Millions of Canadians have filed their returns, and they can be assured that our government is putting in the resources necessary for a timely, efficient, fair service for all Canadians from coast to coast to coast.
Tax fairness is something that is important to me and to our government. In addition to Bill C-82, with budget 2019, which followed a wide-ranging review of federal tax expenditures introduced in budget 2016, our government has brought forward a number of changes to make our tax system fair, efficient and transparent, and to ensure that tax expenditures do not unfairly benefit the wealthiest Canadians rather than the middle class and those working hard to join it.
I am proud to announce that our government's actions are expected to recoup over $4 billion annually in revenues that have been reinvested in the Canada child benefit, in seniors and in those Canadians who need it the most. In my riding, the Canada child benefit delivers benefits to over 16,000 kids monthly, nearly $5 million to over 9,000 families.
We know that in late February, Statistics Canada, in its annual income survey, noted that we have lifted 825,000 Canadians from coast to coast to coast out of poverty. We have seen a reduction of nearly 20% in poverty rates across Canada. At the same time, over the last three years, we have created over 900,000 new jobs, a majority of them full-time and in Canada. That is attributed to the hard-working entrepreneurial spirit that people have in my riding of Vaughan—Woodbridge and across Canada, and we have helped lay the foundations for this strong period of growth that continues today.
In addition, in budget 2019 we will limit the usage of the stock option deduction, a measure that benefited only 2,330 individuals who claimed approximately $1.3 billion of employee stock option deductions. We will limit the use of the employee stock option deduction to ensure that it is only used in new start-ups and young firms.
Before I left the private sector for the public sector, to run and be elected as a Liberal member of Parliament, one of the things I advocated for was an adjustment to the employee stock option deduction that was and had been in use for many years. I already knew that it was unfair, that it was something that was not necessary for our economy to grow, and that it did not benefit middle-class Canadians. I am happy that our government came through and put this measure in the current budget.
In addition, as a reminder, the first thing our government did when elected was cut taxes for nine million middle-class Canadians and, yes, ask the 1% to pay a bit more. The second thing we did was cut taxes on small businesses by lowering the small business tax rate to 9%, which represented a $7,500 tax saving annually for small businesses. In my riding, there are over 4,000 small businesses that potentially can reduce their taxes this year by approximately $7,500. They can use this to reinvest in their human resources, in their capital equipment and in greater dividends for themselves, for personal use.
We have introduced policies, including in Bill C-82, that ensure that our economy is strong, that our tax system is fair, efficient and transparent, and that all Canadians and all wealthy Canadians are paying their fair share. These measures by our government will help strengthen confidence in Canada and encourage investment. They will help support Canadian businesses as they grow, expand into new markets and create more good, well-paying jobs with great benefits.
Ensuring taxpayer fairness is a complex process requiring ongoing engagement with a wide range of partners both at home and around the world.
I would like to add that for a number of years, I sat on the Accounting Standards Board's User Advisory Council here in Canada. Members can rest assured that I am quite aware of the intricacies and the difficulties of ensuring a fair and transparent accounting system and a fair, transparent and efficient tax system and of coming up with norms and regulations that are uniform internationally, which we have done and that are contained in Bill C-82.
The bill would ensure that corporations do not shift profits from a jurisdiction with a high tax rate to a jurisdiction with a low tax rate or, in some instances, shift profits from a jurisdiction where there are tax rates to a jurisdiction where no tax rates exist and they would have zero tax payable. We want to avoid that situation. Residents in my riding of Vaughan—Woodbridge and across Canada depend on the programs and services that we as a government deliver, and we need to ensure that those government programs are funded equitably by Canadians from coast to coast to coast.
The bill being considered today is another step forward in this process. It proposes to implement a multilateral instrument, or MLI, in respect of conventions for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income. When we refer to fiscal evasion, it is exactly what I mentioned earlier: profit shifting from one jurisdiction to another to lower one's tax bill and to avoid paying taxes. In other words, with Bill C-82, our government would not only be making Canada's tax system a fairer one, it would also help to escalate the fight against aggressive international tax avoidance.
Bill C-82 proposes to allow Canada to implement treaty-related measures to counter a practice known as base erosion and profit shifting, or BEPS. As this chamber has already heard, BEPS relates to strategies by which wealthy individuals can use loopholes to shift profits to low-tax or no-tax locations to avoid paying taxes. The multilateral instrument this bill seeks to enact is a product of a worldwide initiative involving over 100 jurisdictions, including Canada, again demonstrating Canadian leadership on the world stage to get done what is needed and what is right. It is the first multilateral convention to modify the application of bilateral tax treaties. It allows signatory nations to implement measures developed from the OECD/G20 project to counter the practice of base erosion and profit shifting and to do so in a timely manner. We are not talking about forward many years; we are talking about the near term.
Just as importantly, the MLI allows signatories to work more effectively together in the fight against aggressive international tax avoidance. In addition, the MLI contains provisions to improve dispute resolution under Canada's tax treaties.
While some of the provisions of the MLI are required, others are optional. The mandatory provisions meet the minimum standards established by the OECD, as agreed to by all the signatory jurisdictions, and each signatory is free to choose among the provisions that are optional. Our government proposes to adopt a number of the optional provisions of the MLI upon ratification in addition to the mandatory ones.
There are three provisions in particular I would like to reference that would prevent or reduce opportunities for inappropriate tax avoidance, which, again, is shifting profits from one jurisdiction to another. They look at transfer pricing and a number of measures wealthy individuals or some corporations utilize to reduce their tax bills, such as moving resources to a foreign jurisdiction so as to not pay taxes where the revenues are generated.
First would be a 365-day holding period for shares of Canadian companies held by non-resident companies. It would ensure that the lower treaty-based rate of withholding tax on dividends would not be available in the case of short-term share acquisitions.
Second would be a 365-day test period for non-residents who realize capital gains from the disposition of shares or other interests that derive their value principally from Canadian immovable property. It would aim to prevent non-residents from obtaining a treaty-based exemption from Canadian taxes on capital gains in inappropriate circumstances.
Third would be a provision for resolving dual-resident-entity cases to prevent potential double taxation, which would also help to protect against a company's ability to manipulate its tax residence to avoid or reduce its taxes.
Additionally, Canada would retain the option to adopt additional provisions of the multilateral instrument after ratification.
By implementing the optional provisions I mentioned, together with the required minimum international standards, Canada's ability to protect its tax base would be enhanced and would support the international effort to tackle base erosion and profit shifting.
Overall, the multilateral instrument is an international approach that makes it possible to implement necessary changes in a timely and efficient manner. It is an important tool in combatting aggressive international tax avoidance, and it would benefit both Canada and our international tax partners. Again, there are approximately 100 countries that have signed on to BEPS.
I am glad to see Canadian leadership on that front. That is what we have demonstrated as a government time and time again in the last three and a half years since we were elected and given the privilege of serving this great country and the 37 million residents that inhabit it.
The multilateral instrument this bill proposes to put in place, with its provisions designed to address aggressive tax avoidance, represents another step in our government's efforts to ensure tax fairness for Canadians. Again, we have lowered taxes for middle-class Canadians, nine million of them, with an approximately $20-billion tax cut, and have asked the wealthiest 1% to pay a little more. We know that the recent report by the Parliamentary Budget Officer looked at that tax cut and actually put a stamp of approval on it, saying that what we attempted to do in terms of lowering taxes for middle-class Canadians and ensuring that the 1% paid a little more actually worked. There was a net benefit for our economy.
We made a promise to middle-class Canadians that we would lower their taxes and make sure that everyone paid their fair share. While we have introduced a middle-class tax cut and reduced the small business tax rate, Canadians need to have confidence that the system will, at the same time, help grow the economy and ensure that the benefits of growth can be felt by everyone.
For many years, economic growth could not be defined as inclusive. For the last three and a half years, we have seen what inclusivity of economic growth means. It means lifting 825,000 Canadians out of poverty. It means creating 900,000 new jobs, the majority full time, the majority private sector. It means the lowest unemployment rate in over 40 years. It means wage growth, real wage growth, which we have not seen in Canada for many years. It means that Canadians are optimistic about their future.
We do face challenges in certain sectors, and our government is there to address those challenges, working in partnership with those sectors and those industries. That is the good work we were elected to do, and that is the good work we will continue to do.
I encourage all hon. members to support the proposed legislation, Bill C-82, which would implement such an important tool for tax fairness.
