Joe Daniel

[Tax Conventions Implementation Act, 2013, June 10th, 2013]

Mr. Speaker, the bill does not look at avoiding the issues with Switzerland specifically on taxes. It is designed to improve businesses and make our position as Canadians competitive globally. The bill would allow more business to take place, which in itself would generate a lot more taxes.

[Tax Conventions Implementation Act, 2013, June 10th, 2013]

Mr. Speaker, it would have been appropriate if the member had read the bill in detail, because one of the key aspects of it is the double taxation, which would actually increase our business with the countries we have these treaties with, thus helping us in that sense.

There are also opportunities to invest both ways and make sure that works well for us and increases our competitiveness on a global scale.

That is what is contained in Bill S-17.

[Tax Conventions Implementation Act, 2013, June 10th, 2013]

Mr. Speaker, when we make life easier and reduce the bureaucracy between countries, there is much better opportunity for trade. By having these agreements, we would protect both Canadian companies doing business with the treaty countries and the treaty countries being able to work closely with us.

Clearly, an exchange of the phenomenal resources we have in this country in terms of providing services to countries like Namibia and Hong Kong and access to the Asian markets is a great opportunity. We need to stay with it and compete globally. That is why this bill is so appropriate.

[Tax Conventions Implementation Act, 2013, June 10th, 2013]

Mr. Speaker, just because it is not being published does not mean that we do not keep track of it or are looking at that.

What we would do with this bill is enhance what we can do with other countries and make sure we can maximize the transfer of business, which would generate more revenue for Canada.

[Tax Conventions Implementation Act, 2013, June 10th, 2013]

Mr. Speaker, clearly Bill S-17 is looking to improve on the situation we currently have and looks forward to dealing with the various tax situations between the countries to capture more of the taxes and return them to Canada.

[Tax Conventions Implementation Act, 2013, June 10th, 2013]

Mr. Speaker, hopefully we can bring this discussion back to the bill that we are looking at.

I appreciate this opportunity to discuss Bill S-17, an act to implement conventions, protocols, agreements and a supplementary convention, concluded between Canada and Namibia, Serbia, Poland, Hong Kong, Luxembourg and Switzerland, for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes.

Before I begin, I would like to take this opportunity to thank all the members of the banking, trade and commerce committee in the Senate for their thorough and timely review of this piece of legislation recently. I would also like to extend my thanks to the Minister of State for Finance for his appearance at the Senate committee as well as the other officials and witnesses for their attendance. Their insightful testimony on this subject, which can often be technical, was greatly appreciated.

I think I am speaking for all in saying that the information they provided was invaluable in helping Canadians obtain a clear understanding of how Canada's network of taxes, treaties and information exchange agreements functions. As Cyndee Cherniak of LexSage Professional Corporation, a leading international trade firm in Canada, told the Senate banking, trade and commerce committee earlier this year, and I quote:

Bill S-17 is a good law and should be supported....Tax treaties facilitate trade. Tax treaties are symbols of cooperation, trust and friendship between nations. Tax treaties prevent double taxation.... They improve stability, transparency, fairness, procedural fairness and tax certainty relating to international trade and transactions. Tax treaties are good for Canadian businesses with activities abroad through branches, subsidiaries and other business enterprises. Tax treaties are good for individuals, employers, directors of corporations, students, shareholders, et cetera.

I could not agree more. Tax treaties are a vital part of a government's overall approach to improve the tax system.

Currently, Canada has comprehensive tax treaties in place with 90 countries and continues to work on agreements with their jurisdictions. Bill S-17 is part of Canada's ongoing effort to update and modernize our network of income tax treaties, which helps prevent double taxation and tax evasion. In the past, Parliament adopted many similar tax treaties. In fact, beginning in 1976, governments, both Liberal and Conservative, brought forward 30 such pieces of legislation, and most recently, those concerning Colombia, Greece and Turkey. I should note that Canada maintains one of the world's largest networks of bilateral 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 must ensure that everyone pays their fair share of taxes. It is not appropriate that some corporations, both foreign-owned and Canadian, take advantage of Canada's tax rules to avoid taxes and that some wealthy individuals use offshore jurisdictions to help them hide income and evade taxes. In all of these cases, working Canadians and small businesses, among others, are left having to pay more taxes than they otherwise should. This is simply not fair.

To detect and deter the concealment of income, the Canada Revenue Agency needs information from foreign governments. To this end, Canada supports the international consensus to encourage jurisdictions to meet and implement the Organisation for Economic Co-operation and Development standards for international tax information exchange. That standard is implemented under the bilateral tax treaties and tax information exchange agreements, like those being discussed today.

Here at home, our Conservative government continues to work hard to keep our tax system up to date and competitive so that Canada can remain a leading player in the global economy. Action in support of a more competitive tax system is essential to create an environment that enables Canada's visionary entrepreneurs and industries to excel and that does not stand in the way of their success. Moreover, tax treaties are an integral element of our plan to improve the standard of living of 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 economic performance.

Over 40% of Canada's annual gross domestic product can be attributed to exports. Moreover, Canada's economic wealth each year also depends on foreign direct investment as well as the 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 investments in countries covered by this legislation. Tax treaties foster an atmosphere of certainty and stability for investors and traders that can substantially enhance Canada's economic relationship with each country.

Another important facet of these treaties is that they include a mechanism to settle problems encountered by taxpayers, in particular where double taxation arises. Under this mechanism, taxpayers can bring to the attention of taxation authorities issues that arise from the interaction of our tax system with that of other treaty partners and seek a resolution on the issue.

In short, tax treaties provide individuals and businesses in Canada and other treaty partner countries with predictable and equitable tax results in their cross-border dealings. This can only have a favourable effect on the Canadian economy.

Likewise, the tax treaties in the bill have been designed with three goals in mind: first, to facilitate international trade and investment; second, to prevent double taxation and provide a level of certainty about the tax rules that apply to particular international transactions; and third, to prevent avoidance and evasion of taxes on various forms of income flows between the treaty partners.

Today's legislation is part of Canada's ongoing effort to update and modernize its network of income tax treaties, which will help prevent taxation and tax evasion.

Let me go on to the issue of double taxation for a moment. Double taxation in an international sense arises as a result of imposition of taxes in two or more states on the same taxable income for the same period of time. This overlap between taxation by the country where the income is generated and taxation by the country where the taxpayer resides can have obvious adverse and unfair consequences for the taxpayer. Nobody wants to have their income taxed twice, nor should it be, but without a tax treaty such as those contained in today's bill, this is exactly what could happen.

Tax treaties ensure that double taxation relief is provided where both countries claim taxes on the same income. Tax treaties also allocate tax rights between two countries as a means of protecting taxpayers against potential double taxation. In some cases, the exclusive right to tax particular income is granted to the country where the taxpayer resides. This precludes taxation in the state of source and, therefore, double taxation.

For example, if a Canadian resident employed by a Canadian company were sent on a short-term assignment for, say, three months to any one of the treaty countries covered by the bill, Canada would have the exclusive right to tax that person's employment income. On the other hand, if the same person were employed abroad for a longer period of time, say one year, then the country where the person works could also tax the employment income. However, in this case under the terms of the tax treaty, through the foreign tax credit mechanism, Canada must credit that tax paid in the other country against the Canadian tax otherwise payable on the income. This is an example of how the allocation of taxing rights between countries and between bilateral tax treaties would ensure that individuals and businesses are taxed fairly.

One way to reduce the potential of double taxation is to reduce withholding taxes. These taxes are a common feature in international taxation. 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.

Withholding taxes are levied on the gross amount paid to the non-resident and represent the final obligation with respect to Canadian income tax. 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.

Withholding tax rates in other countries are often as high or even higher. Tax treaties reduce rates for withholding taxes. For example, the treaties with Namibia, Serbia, Poland and Hong Kong in Bill S-17 would provide for a maximum withholding tax rate on dividends between affiliated companies at 5%. In respect to other dividends, those treaties would provide for a rate of withholding taxes set at 15%.

Reductions would also apply in respect of interest and royalties. Again, the treaties covered in this proposed legislation would promote certainty, stability and a better business climate for taxpayers and businesses in Canada and in the treaty countries.

Moreover, these treaties would help to secure Canada's position in an increasingly competitive world of international trade and investment. Clearly, having modern international tax conventions, such as these contained in Bill S-17, 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. Tax treaties like those in Bill S-17 would directly support cross-border trade in goods and services, which in turn helps Canada's domestic economic performance.

Moreover, Canada's economic wealth each year also depends on foreign direct investment, as well as inflows of information, capital and technology. In fact, during the committee's examination of this legislation, well-respected tax professional Nick Pantaleo, of PricewaterhouseCoopers, remarked that:

...a key objective of the Canadian government is to pursue new and deeper international trade and investment relationships.... In my view, tax treaties contribute toward the success of such global trading arrangements.

This is not surprising given that more than 60% of the Canadian economy and 1 in 5 jobs in Canada are generated by trade. It would seem clear that the tax treaties contained in Bill S-17 are a critical tool in strengthening Canada's trade and investment relationships and in creating jobs for Canadians here at home. That is especially the case with the agreement with Hong Kong.

Our government considers Hong Kong a priority in Canada's global trade efforts. Hong Kong is our third largest financial market in Asia and an important source of direct investment. It is Canada's 10th largest export market, including everything from telecommunications devices to train signalling systems to educational and financial services.

An example of the importance of Hong Kong in our trade efforts is an agreement between Canada and Hong Kong for the avoidance of double taxation, which the Prime Minister announced when he was in Hong Kong last November.

Of course the region itself is a key market for us, which is why Canada is at the negotiating table for the trans-Pacific partnership, which would open up new markets and increase Canadian exports to fast-growing markets throughout the Asia-Pacific region.

Our government is also working hard to forge stronger links through such multilateral organizations such as the Asia-Pacific Economic Cooperation and the World Trade Organization to which Canada, China and Hong Kong all belong.

The Canada-Hong Kong tax treaty would truly foster an atmosphere of certainty and stability that would enhance Canada's economic relationship with Hong Kong.

As the Canadian Manufacturers and Exporters noted of the Hong Kong tax treaty included in Bill S-17:

Hong Kong holds tremendous potential for Canadian businesses looking to establish a strong presence in China and...across all of Asia, and this Agreement will help fulfill this potential....

(It) reduces barriers to two-way trade and investment between Canada and Hong Kong.

Listen to the words of the Investment Industry Association of Canada, again in reference to the Hong Kong tax treaty included in Bill S-17, who said it would expand:

....savings and capital flows between our two markets....

Moreover, the attraction of Canadian equities would benefit Canadian financial firms expanding their wealth management business in Hong Kong and, through Hong Kong, to a market of over one billion Chinese.

To conclude, the treaties covered in this proposed legislation would promote certainty, stability and a better business climate for taxpayers and businesses in Canada and in these treaty countries.

More importantly, the treaties would help to secure Canada's position in the increasingly competitive world of international trade and investment.

[North York General Hospital, June 10th, 2013]

Mr. Speaker, I rise to draw attention to North York General Hospital located in my riding of Don Valley East.

Yesterday I was very happy to participate in the OrthoWalk at the North York General Hospital in support of orthopedic care and research. This was the fifth anniversary of the special event and for the first time this was held on the grounds of the hospital. Each year OrthoWalk provides an opportunity for patients and family members to thank and honour the surgeons, nurses, physiotherapists and staff who provide compassionate and quality orthopedic care. The walk raised over $100,000 that will go toward education, research, orthopedic programs and the purchase of much needed equipment.

I thank all the volunteers who organized the event, including CEO Tim Rutledge, Terry Pursell, Lisa Tobias, Tess Rizan, Dr. Ted Rumble and Dr. Maurice Bent. I ask all members in the House to join me in sending our congratulations on a job well done.

[Conservative Party of Canada, June 7th, 2013]

Mr. Speaker, last night, the CBC ran a false story by reporter Greg Weston. The CBC claimed that there is a secret Conservative Party fund, run by the PMO. This is false. The CBC claimed party funds are hidden from Elections Canada. Once again, this is false.

All Conservative Party expenses are paid by one account, controlled by the Conservative Party. All funds are properly reported to Elections Canada and audited annually. The Conservative Party ensures that non-governmental activities undertaken by our Prime Minister are never billed to the taxpayers. CBC failed to mention that this is standard practice for all political parties. The NDP and Liberal Party have both confirmed that they also maintain funds to cover expenses that should not be charged to the taxpayer.

The CBC's Peter Mansbridge and Greg Weston misled Canadians. They should retract this piece of shoddy journalism. We will be taking this matter to the CBC's ombudsman.

[New Democratic Party of Canada, May 24th, 2013]

Mr. Speaker, taxpayers in my riding of Don Valley East believe that all Canadian taxpayers are expected to follow the rules and pay their fair share. The NDP's own revenue critic said, “Hard-working Canadians who are filing their taxes right now deserve a government that stands up against tax evaders”. My constituents would fully support this statement if the NDP was serious about it.

My question to the NDP is if it wants to stand up for law-abiding Canadian taxpayers, will the NDP start by standing up against tax evaders in its own caucus?

[Mother's Day, May 8th, 2013]

Mr. Speaker, every year in May we celebrate Mother's Day. We are reminded of the important role mothers play in our lives. We celebrate and praise our mothers with gifts of appreciation and generally make a big fuss over them.

The second Sunday in May is Mother's Day and Mother's Day is now celebrated in 13 countries around the world, including Canada. I am reminded of one of my constituents in Don Valley East. When he heard I was visiting my mother, Chinnamma Daniel, living in Windsor, he rushed off and brought me some flowers. When I asked why, he said it was his way of celebrating Mother's Day. His mother died giving birth to him.

I extend Mother's Day wishes to all mothers in my riding of Don Valley East and acknowledge my appreciation for what they have contributed in all our lives. I urge all members to take time out of their busy schedules to celebrate Mother's Day this Sunday.