Jennifer O'Connell

[Canada–Madagascar Tax Convention Implementation Act, 2018, February 21st, 2019]

Mr. Speaker, I know my hon. colleague is passionate about dealing with tax avoidance and tax evasion, and I have enjoyed working with him as well.

In regard to the technical question on the renewal, I will have to get back to the member opposite to make sure I do not misrepresent in this House, but I will ask that specific question on the renewal.

When it comes to this legislation, we are working to make sure that all pieces of legislation moving forward on tax evasion and tax avoidance are in keeping with international standards. Again, as I said in my speech, Canada wants to ensure that we continue to be a place that attracts foreign direct investments while protecting Canadians and ensuring that everybody is paying their fair share. These are the principles that we move forward with and that will guide us in all of this work.

I will get back to the member opposite in regard to the renewal question.

[Canada–Madagascar Tax Convention Implementation Act, 2018, February 21st, 2019]

Mr. Speaker, I thank my hon. colleague for his work on the finance committee with me.

There are a couple of items in there that the House should note.

One is the fact that the remediation agreements and those consultations started under the Harper Conservatives, so it is a little rich for the Conservatives now to be suggesting that they were in some way rushed through Parliament when in fact they were the ones who started the consultations and they were the ones who wanted to move forward with this legislation, which, by the way, is similar to legislation that a number of other countries have. By no means should the Conservatives suggest that this was legislation that started with us. In fact, it started under the Harper Conservatives.

In addition to that, I was on the finance committee during the budget implementation act, and in fact there were opportunities. Other committees were invited to hold hearings on portions of that legislation and refer back to the finance committee if they had recommendations or suggestions. Unfortunately, some committees decided not to take the chair up on that offer. That does not mean that the committee did not hold significant consultations and hearings.

Frankly, the Conservatives are just not interested in moving forward on initiatives and plans that are going to help the middle class and Canadians. The Conservatives want to stall at all costs, but we are moving forward to ensure Canadians are better off and that our economy is growing.

[Canada–Madagascar Tax Convention Implementation Act, 2018, February 21st, 2019]

Mr. Speaker, I am pleased to rise in the House to speak to this important piece of legislation that will help to advance the government's tax fairness agenda.

The legislation we are bringing forward has a single objective: addressing tax evasion and aggressive tax avoidance schemes in order to ensure that the tax system operates as fairly and effectively as possible. My colleagues in the House would agree that this is absolutely essential. It is about making sure that all Canadians pay their fair share.

Ensuring tax fairness demands engagement on many fronts. That is why Canada continues to expand and update its network of tax treaties and tax information exchange agreements. Canada has an extensive network of income tax treaties, with 93 comprehensive tax treaties currently in force. Worldwide, the OECD estimates that there are currently over 3,000 tax treaties in place.

Tax treaties are fundamental to trade and investment by eliminating double taxation. They provide the certainty needed to support open and advanced economies. They also permit the exchange of information needed to prevent international tax evasion.

Bilateral double tax conventions are used to eliminate tax barriers to trade and investment between two countries. They achieve their purpose in a number of ways.

First, they provide greater certainty to taxpayers regarding their potential liability to tax in the foreign jurisdiction. Second, they allocate taxing rights between the two jurisdictions and provide for the elimination of double taxation. Third, they reduce the risk of burdensome taxation due to high withholding taxes. Fourth, they ensure that taxpayers will not be subject to discriminatory taxation in the foreign jurisdiction. Fifth, tax treaties authorize the exchange of tax information to prevent tax avoidance and tax evasion. Finally, tax treaties provide a mechanism for jurisdictions to resolve tax disputes.

These are all important goals, and they are goals we can achieve with today's legislation. By updating the tax dimensions of our relations with Madagascar, we can strengthen trade and investment between our two countries.

It is important to the government and to all Canadians that we deliver the programs and services that Canadians need while keeping taxes low for small businesses and middle-class families.

When our government took office over three years ago, we made a commitment to invest in growth while upholding the principle of fairness for all taxpayers.

A fair tax system is key to ensuring that the benefits of a growing economy are felt by more and more people, with good, well-paying jobs for the middle class and everyone working hard to join it.

Let me remind my colleagues that one of the government's first actions was to cut taxes for the middle class and raise them for the wealthiest 1%, an action that directly benefited some nine million Canadians.

After moving forward with a middle-class tax cut, we then took action to replace the previous system of child benefits with the Canada child benefit, or the CCB. Compared to the old system of benefits, the CCB is simpler, more generous, and better targeted to those who need it most. It is also entirely tax-free. Today, nine out of 10 Canadian families are better off thanks to the Canada child benefit. It has helped to lift more than 520,000 people out of poverty, including about 300,000 children.

On average, families benefiting from the CCB are receiving $6,800 this year. That amount will help them afford the things they need for their families. It will help put healthy food on the table, pay for lessons and sports activities, and buy clothes and school supplies. The CCB is particularly helpful for families led by single parents. These families are often led by single mothers, and tend to have lower total income.

However, our government's commitment to supporting the middle class and those working hard to join it is also about helping the small businesses that families and communities depend on. That is why the government is supporting small businesses in Canada by reducing the federal small business tax rate.

We cut the small business tax rate twice. Specifically, the rate was reduced from 10.5% to 10% as of 2018 and to 9% as of last January. For the average small business, this will mean an additional $1,600 per year that they can use to reinvest in their business and create jobs. With these two small business tax rate deductions, the combined federal-provincial-territorial average tax rate for small businesses is now 12.2%. This is by far the lowest in the G7 and fourth-lowest among countries in the OECD.

Tax fairness has been and will continue to be a cornerstone of our government's promise to Canadians to strengthen and grow the middle class and grow the economy now and over the long term. In each of our past three budgets, our government has taken legislative actions on both international and domestic fronts to enhance the integrity of Canada's tax system and to give Canadians greater confidence that the system is fair for everyone.

An important focus of our efforts has been cracking down on tax evasion and tax avoidance, which create serious financial costs for the government and all taxpayers. Since budget 2016, the government has boosted the Canada Revenue Agency's capacity to crack down on tax evasion and combat tax avoidance. Investments made over the last two years have enabled the CRA to better target persons who pose the highest risk of tax avoidance and evasion and to be more effective in fighting tax avoidance and evasion. Those efforts are showing concrete results for Canadians.

With the new system, we are able to review international electronic fund transfers over $10,000 entering or leaving the country. This adds up to more than one million transactions each month. Reviewing these transfers helps us do a better risk assessment for unfair tax avoidance by persons and businesses.

Over the last two fiscal years, our government reviewed all electronic fund transfers between Canada and eight jurisdictions or financial institutions of concern. This amounted to 187,000 transactions, worth a total of more than $177 billion. Working closely with partners in Canada and around the world, we now have more than 1,000 offshore taxpayer audits under way, and more than 50 criminal investigations with links to offshore transactions.

Our government is also pursuing third parties who promote tax avoidance schemes. In the last fiscal year alone, it has imposed roughly $48 million in civil penalties on these third parties.

This year, we are also gaining better access to information on Canadians' overseas bank accounts, as we've put in place the common reporting standard. With this new system, Canada and more than 100 other countries will be exchanging financial account information to help us identify when Canadians are avoiding taxes by hiding money in offshore accounts.

We have also expanded our specialist audit teams, which focus on high-net-worth individuals. About 250 auditors are now checking to see that high-income earners and high-net-worth individuals are paying their fair share.

Another important means of ensuring tax fairness is knowing clearly who owns what. That's why the government is working with our provincial and territorial counterparts to ensure that Canadian authorities know who owns which corporations in this country.

We are also working to better harmonize requirements for corporate ownership records across our jurisdictions. This information will help Canadian authorities take appropriate legal action when people are hiding criminal activities behind corporate vehicles. In this way, we will be rooting out international tax evasion and avoidance, money laundering and other criminal activities.

I would like to note one further way that the government is acting to prevent misuse of our tax system. Canada is part of the OECD-G20 project to address the inappropriate shifting of profit offshore and other international planning by corporations and some wealthy individuals to avoid tax. That project is known as the “Base Erosion and Profit Shifting” project, or BEPS for short. The OECD's work on BEPS identified a number of instances in which the terms of current tax treaties could give rise to potential abuse. To address those concerns, it has recommended changes to the design of tax treaties that countries could use to close loopholes in their treaties with each other.

However, given the large number of treaties in existence and the long time it would take to renegotiate each of these treaties bilaterally, a new approach was developed to implement these changes more quickly. The result of this effort is the multilateral convention to implement tax treaty-related measures to prevent base erosion and profit shifting, also known as the multilateral instrument or MLI.

Based on the work of the OECD's BEPS project, this convention was developed and negotiated by more than 100 countries and jurisdictions, including Canada. The MLI would enable jurisdictions that become parties to it to change their bilateral tax treaties quickly to incorporate the OECD's BEPS provisions. It would also help the international tax system function better and provide greater certainty for Canadian taxpayers by improving dispute resolution under Canada's tax treaties. As it committed to in budget 2018, the government has tabled legislation in the House to enact the MLI into Canadian law.

This government is ensuring that Canada is known to the world as an outstanding place to invest and do business. We do this because Canada's economic success rests not only on the hard work of Canadians, but also on strong trade relationships and foreign direct investment.

Together, Canadians have built a country offering a distinctly attractive set of assets. Today our key strengths include the most educated workforce among the OECD countries and a highly competitive corporate income tax system, one of the most competitive in the G7. Also, no other country demands fewer days to start a new business, and Canada is the only G7 country holding trade agreements with every other G7 member. We have done this through the Canada-United States-Mexico Agreement, the Canada-European Union Comprehensive Economic and Trade Agreement and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. The tax treaty with Madagascar that we are now considering is in keeping with our approach to strengthening our international ties and co-operation.

By cracking down on international tax evasion, we are building on the tremendous advantages that Canada enjoys. We are also ensuring that the government has the money needed to deliver programs that help the middle class and people working hard to join it and that Canada remains positioned as an attractive place to work, invest and do business.

As I have made clear today, we have already made tremendous progress toward a stronger Canada, but as I also noted, tax fairness is a complex goal needing engagement on many fronts. That is why we will continue to address tax evasion and aggressive tax avoidance schemes to ensure that the tax system operates as fairly and effectively as possible. The legislation we have introduced today represents an important step toward meeting this goal. I encourage all honourable members to support this legislation.

[Business of Supply, February 4th, 2019]

Mr. Speaker, let us talk about the member opposite's riding specifically.

On average, families in her riding receive $7,400 each year because of the Canada child benefit. Is she going to turn to those families and tell them they do not need it anymore, that they do not need those funds or the help with the cost of living and that it is going to be taken away because the Conservatives believe in cutting and austerity?

With this program, the average payment in her riding is actually $620 a month and 16,000 children are benefiting in her riding alone from the Canada child benefit. Why does that member want to take this support away from those 16,000 children in her riding?

[Business of Supply, February 4th, 2019]

Mr. Speaker, that is precisely what we heard from Canadians in 2015. What I certainly heard from people when I was knocking on doors was that those benefits were really only helpful if people could afford them in the first place. They also wondered whether it was the type of program they actually needed.

The Canada child benefit is tax-free money that goes to the families that need it most. This has made a transformational difference in the lives of Canadians. As I have said, 300,000 children have been lifted out of poverty. Somehow the Conservatives seem to think this is a bad thing, that this should be cut and that we should not send that support and help to the families that need it most.

The Conservatives believe in austerity and cuts, and Canadians will suffer for it.

[Business of Supply, February 4th, 2019]

Mr. Speaker, our commitment to Canadians was to ensure we grew the economy for everybody and not just the wealthy millionaires who the Conservatives looked after during 10 years of feeble economic growth under the Harper Conservatives.

The Harper Conservatives' type of investment included fake lakes and gazebos. This meant they could not balance the budget. They added $150 billion to the debt and they had some of the worst growth since the Great Depression.

Our investments are in Canadians, not fake lakes, not gazebos. Canadians are seeing the results.

[Business of Supply, February 4th, 2019]

Mr. Speaker, we have been focused on working with content creators and dealing with measures that work for everybody. We have made investments for content creators. The Minister of Heritage has worked with Netflix to ensure that there is content that reflects our country's priorities. In addition, when the ministers were negotiating the new NAFTA, we ensured that Canadian content was an important and integral part.

We know that a focus on Canada's rich and unique diversity across this country is critically important. That is why it is found in multiple levels of our government's priorities.

[Business of Supply, February 4th, 2019]

Mr. Speaker, it is quite simple. Today a typical middle-class Canadian family is $2,000 better off than under the Harper Conservatives. We cannot take any lessons from the Conservatives, who believe in trickle-down economics. It has never worked. It does not work. We know that boutique tax credits do not help the families that need it most, but our investments do. We have made investments so that 800,000 new jobs have been created for Canadians. We have lifted hundreds of thousands of children out of poverty.

Our investments are to ensure that the economy is growing for everyone, not just for those at the top, those the Conservatives are so focused on defending.

[Business of Supply, February 4th, 2019]

Mr. Speaker, it seems that the hon. member for Carleton has a mixture of cherry-picked statistics that obscure more than they reveal. His speech reminded me of a saying by a former councillor from when I was on Pickering council. The Conservatives have their minds made up. They don't want to be confused by the facts. Let me go over in the chamber those important facts that the Conservatives do not want to be confused by.

First, we have a growing economy, and Canadians are benefiting from that growth. During the past three years, hard-working Canadians have created more than 800,000 new jobs, pushing the unemployment rate to its lowest level in 40 years. Wages are rising, and this year Canada is expected to remain among the fastest-growing economies in the G7. In fact, the work our government is doing is attracting praise from around the world. Recently, the U.S. News & World Report's ranking of 2019 best countries put Canada at number one for quality of life. This tells us that our plan to invest in people and communities is working.

From the beginning, our government has put people at the heart of its plan for economic growth. Our government is building a strong Canada, a better Canada, and we will continue to ensure that our fiscal plan is sustainable by maintaining our fiscal anchors. As part of that, our government will continue to reduce the federal debt-to-GDP ratio.

We began our mandate determined to help hard-working Canadians have more opportunities to share in the benefits that come from a strong and growing economy, and that is exactly what we have done. We have taken decisive and effective action based on the shared values that define us as a country to make the priorities of Canadians a reality. We asked the wealthiest 1% of Canadians to pay a little more so that we could cut taxes for the middle class. That middle-class tax cut is benefiting over nine million Canadians, who now have more in their pockets.

We also created the Canada child benefit. Compared to the previous system of child benefits, the CCB is simpler, more generous and better targeted to those families who need it most. It is also entirely tax free. Rather than offering boutique tax credits to millionaire families, we decided to help Canadians who need it the most. With the CCB, nine out of 10 Canadian families are getting more in benefits than they did under the previous system, and Canadian children are better off as a result. The CCB has already helped to lift hundreds of thousands of children out of poverty. The extra support it gives makes a big difference for those working hard to make ends meet. This additional support from the CCB helps pay for the things that can make a real difference in a child's future, like nutritious food, sports activities or music lessons.

Thanks to the middle-class tax cut and the Canada child benefit, a typical middle-class family of four will receive, on average, about $2,000 more each year to help with the costs of raising their children, save for their future and help grow the economy for the benefit of everyone. With our middle-class tax cut and the Canada child benefit, a two-earner couple, one earning the average wage and the other earning two-thirds of that wage, with two children, now keeps nearly 85% of their income. For a single parent of two children earning the average wage, or for families with two children where only one parent is working at the average wage, the benefits are even more significant.

According to the OECD, when the CCB and other benefits are added to family income, those families effectively pay personal tax rates of just 1.8% and 1.2% respectively. That means they keep more than 98% of what they earn. The fact is, a majority of Canadians are paying a lower effective tax rate under our government. Individuals are paying less, single-earner families are paying less, two-earner families are paying less and single mothers are paying a lot less. The only Canadians who are paying more are the top 1%, so we can lower taxes on the middle class.

We have gone even further to ensure that the benefits of economic growth are widely shared. We will continue to stand up for the middle class while Conservatives continue to advocate on behalf of their wealthy friends.

I would like to point to the Canada workers benefit, the CWB, as a good example of what our government has done to help those people working hard to join the middle class.

Beginning this year, the CWB replaces the working income tax benefit. It will provide a benefit that is more generous and more accessible. The CWB will put more money in the pockets of low-income workers, encouraging more people to join and stay in the workforce and offering real help to more than two million Canadians who are working hard to join the middle class.

To give members a sense of what this will mean for Canadians, a low-income worker earning $15,000 could receive up to almost $500 more from the Canada workers benefit in 2019 than under the old working income tax benefit in 2018. That money can be used to support their priorities and help them get ahead, making a real difference for Canadians who are working hard to join the middle class.

Our government has also taken action to ensure that all Canadians benefit from the opportunities we are creating and will continue to benefit from our actions in their retirement years. We have worked in collaboration with our provincial and territorial partners to enhance the Canada pension plan, the CPP, so that Canadians can enjoy a secure and dignified retirement.

We also reversed the Harper government's disastrous changes to the guaranteed income supplement and to old age security, which would have plunged 100,000 seniors into poverty each year.

The CPP enhancement will be phased in starting this month. It means more money for Canadians when they retire, so that they can worry less about their savings and focus more on enjoying time with their families.

Over time this enhancement will raise the maximum CPP retirement benefit by up to 50%. This translates into an increase in the current maximum retirement benefit of nearly $7,300, from $13,855 to more than $21,100 in today's dollar terms.

With the action taken by Quebec to enhance the Quebec pension plan along similar lines, all Canadian workers can now look forward to a safer and more secure retirement.

On their side, the Conservatives planned to push back the age of retirement and take money away from our seniors. They even called for the CPP to be scrapped.

Second, Canada has a favourable investment climate. Our government recognizes the importance of a beneficial tax environment for small businesses. That is why we reduced the small business tax rate, first to 10% as of January 1, 2018, and then to 9%, effective January 1, 2019.

The combined federal-provincial-territorial average income tax rate for small businesses is 12.2% in 2019, the lowest in the G7 and the fourth-lowest among members of the OECD.

Even with this good news, we cannot take Canada's economic strength for granted. The year 2018 was challenging, especially with regard to the recent tax changes in the U.S. and concerns about what ongoing global trade disputes might mean for Canadian businesses.

Last summer our government heard from a number of business leaders that there is strong interest in making investments, the kind that can position businesses for long-term growth and create good, well-paying jobs for Canadian workers. We heard from many businesses that welcomed our new trade deal with the United States and Mexico, because securing that deal really does help when it comes to being able to confidently invest for the future. We welcome this new modernized trade agreement because it will help support good, well-paying middle-class jobs right across this country.

In total, Canada has signed free trade agreements with our neighbours to the south, the United States and Mexico; with our partners with whom we share the Atlantic Ocean, the European Union; and with Asia-Pacific countries, with whom we share access to the Pacific Ocean.

Today Canada is the only G7 country to have trade agreements with all other G7 countries. In all, we have 14 trade agreements covering 51 countries. These agreements in total give Canadian businesses privileged access to 1.5 billion consumers worldwide. These trade agreements lead to business confidence, which leads to business investing in middle-class jobs.

In the 2018 fall economic statement, our government took forward action to strengthen Canada's already competitive position. This includes allowing businesses to immediately write off the full cost of machinery and equipment used for the manufacturing and processing of goods and the full cost of specified clean-energy equipment to spur new investment and the adoption of advanced clean technology in the Canadian economy.

We also introduced the accelerated investment incentive, which will allow businesses of all sizes and in all sectors of the economy to write off a larger share of the cost of newly acquired assets in the year the investment is made.

Under the accelerated investment incentive, capital investments will generally be eligible for a first-year deduction for depreciation equal to up to three times the amount that would otherwise apply in the year the asset is put into use. Tripling the current first-year rate will allow businesses to recover the initial cost of their investment more quickly. This means reduced risk and a better incentive for businesses in Canada to make investments. The accelerated investment incentive applies to all tangible assets, including long-lived investments like buildings. It also applies to intangible capital assets, such as patents and other intellectual property.

With these two measures, the average overall tax rate on new business investment in Canada, as measured by the marginal effective tax rate, or METR, will fall from 17% to 13.8%. This means that Canada will have the lowest rate in the G7, one that is significantly below the United States. The METR is important because it provides a good representation of the overall effect of many of the tax factors affecting businesses in any given location.

However, that is not all. We also took steps to do more to modernize regulations so that it is easier for businesses to grow.

We believe that concrete, comprehensive and systematic measures such as the ones I have mentioned are more effective than the piecemeal and ineffective boutique tax credits mentioned by the hon. member.

Our government has also made it clear that gender equality is very important for Canada's economic growth. Canadian women are among the best educated in the world, yet they are less likely to participate in the labour market then men and are more likely to work part time. This under-representation continues in positions of leadership, and businesses in Canada are overwhelmingly owned by men. It reflects a number of factors, including the fact that Canadian women often have greater demands from unpaid work, preventing them from pursuing opportunities to reach their full potential.

Our economy is not working to capacity when women who wish to participate cannot do so, and the evidence is clear. RBC Economics estimates that adding more women to the workforce could boost Canada's GDP by as much as 4%. Our economy is strengthened when women and girls have opportunities to contribute to economic growth and to benefit equally from it. The time is now to ensure that all Canadians, and women in particular, are provided with an opportunity to succeed and lead. That is why we took several actions to move Canada toward gender equality.

Budget 2018 legislation provided help for new parents to care for their children during those critical early months through the new employment insurance parental sharing benefit. It encourages a more equal sharing of child care responsibilities within the home and allows for more flexibility to go back to work earlier, especially for mothers, if that is their choice, feeling reassured that their family has the support they need.

We also took steps to address the gender gap in federally regulated workplaces by requiring equal pay for equal work of equal value. About 1.2 million employed Canadians fall under the scope of this legislation.

In conclusion, our government is committed to growing the economy by helping all Canadians. We maintain that a strong economy is the result of a strong middle class, and our policies and results reflect this. Over the past three years, our government has invested in Canadians and in the things that matter most to them. These investments reflect the choice to reject austerity policies and instead invest wisely in strengthening the middle class and growing the economy.

That is what we have done, and middle-class Canadians are now better off. I can assure hon. members that we will continue to build on our good work in budget 2019.

[Business of Supply, February 4th, 2019]

Mr. Speaker, given the member for Carleton's speech, the Conservatives sound pretty nervous about the next election. Out of their fear, they are resorting to making up complete falsehoods to try to scare Canadians into voting for them. That is quite the political stance, “Please vote for us or we will scare you into it.”

Getting back to the member's speech, Conservatives will not listen to the IMF, the OECD or the Government of Canada's independent statistics. They have been forced to rely on the phony Fraser Institute, where they cherry-pick the numbers. The fact is that Canadians are paying less under our government, and two-earner families are paying less.

In fact, the only group that taxes were raised on was the middle—sorry, the top 1%. The top 1% was the only group that taxes were increased on. Will the members opposite and the Conservatives finally acknowledge it is the richest 1% they are really standing up for?