Mr. Speaker, it is a pleasure to speak today to Bill S-3, an act to implement tax treaties between Canada and Colombia, Greece and Turkey. The objectives of this bill are twofold: first, the avoidance of double taxation; and second, the prevention of tax evasion.
The Organisation for Economic Co-operation and Development, the OECD, has long been an advocate of these treaties to ensure equitable treatment of taxpayers who work and invest in countries outside their own.
Canadian businesses have a long tradition of trading internationally. As well, we have many Canadian workers who work for longer periods abroad, for example, engineers in the oil industry, et cetera. The implementation of these treaties will ensure that those doing business and accepting employment in those countries covered will not face the prospect of having their income taxed unfairly by both their country of residence and the country in which they are working. This double taxation is be very unfair to the people.
The stated goals for entering into a treaty are often included in the reduction of double taxation, eliminating tax evasion and encouraging cross-border trade efficiency. It is generally accepted that tax treaties improve certainty for taxpayers and tax authorities in their international dealings.
As we continue to sign tax treaties such as these with other countries, Canadians will see a benefit through increased tax revenues generated from some individuals who probably try to hide their foreign income and investments.
Taxpayers may have relocated themselves and their assets in the past to avoid paying taxes, so some of the treaties that we are signing thus require each treaty country to assist the other in the collection of taxes and in other enforcement of their tax rules. These treaties include a requirement that the countries exchange information needed to foster enforcement. The requirements in these treaties would ensure that the information on individual and corporate taxpayers would only be shared by the competent legal entities in either country.
While I support the government in continuing to sign treaties such as these, which have been an ongoing process for the past few decades, I cannot and do not support some of the policies of the government in regard to taxes. For example, the Conservatives' plan to cut $6 billion in corporate taxes to the wealthiest corporations will do nothing to help small businesses.
The Liberal Party wants to do things differently. Our policies will help small businesses, create jobs, enhance competitiveness and build cutting edge industries.
As I have been canvassing small and medium sized enterprises, they are asking these questions. What is wrong with the Conservative government? Why does it not have its priorities in place? Why does it not understand that the corporate tax cuts given to large corporations will not create jobs? It is the small and medium sized enterprises that are the engines of growth and it is the small and medium sized enterprises that need the investment.
It is all about choice, choice for Canadians; the Liberals' choice or track record of fiscal responsibility, a plan to make strategic investment in lasting economic legacies versus the borrow and spend Conservatives who spent Canada into deficit even before the recession began, the Conservatives who are wasting billions more on prisons, untendered stealth fighters and tax breaks for large corporations.
The Liberal plan is to invest in people. It is important to invest in people. It is important to use taxpayer dollars wisely. The Liberals have had a track record. They eliminated the deficit and the debt that the Mulroney Conservatives created.
The Conservatives made a mess of the economy. There was record unemployment, mortgages were at 21% and people were losing their jobs. I remember because I was working in receivership. I had the unfortunate task of taking over people's businesses or homes. People were in a bad state. They were losing their shirts, so to speak. The IMF called Canada the basket case of the developed world.
When the Liberals took over, they reined in expenses, brought fiscal prudence and, after the hard efforts of the Liberal government with the help of the Canadian people, Canada was back in business. It was the envy of the G8, thanks to the efforts of Prime Ministers Jean Chrétien and Paul Martin. The Liberal government invested in people, gave Canadians the biggest tax break to the tune of $100 billion and invested in cities and health care. Canada has been the beneficiary of Liberal fiscal competence.
Now that we have a Conservative government, what does it do? It takes the $13 billion surplus and savings, which was meant to help Canada face economic hardship, and it blew it away even before the recession came.
What do the Conservatives have to show for that fiscal incompetence? They have a $56 billion deficit and climbing, cuts to programs, cuts to funding for organizations that serve people, and cuts to organizations that do not meet its ideology. It is going down the same slippery slope as the Mulroney government.
The current finance minister has been called the “architect of deficit” for good reason. It is because of his previous stint in Ontario. That is the same finance minister who wanted to imitate the subprime mortgage initiatives, and we know what would have happened.
On the current economic front, the Conservatives have been a poor fiscal managers and it is not surprising as it has never balanced a budget. The last time that happened was when the Titanic sank, and that is telling.
The Liberals believe that Canadians must live within their means, so too must the government. The questions Canadians are asking are: How can the government, which has a record deficit of $56 billion and counting, borrow money, $6 billion for example, to give cuts to large corporations, many whose head offices are not here? How can they justify this? Why are they not instead investing in Canadian SMBs which are the engines of growth?
Canadians are also asking why the government is borrowing an additional $10 billion to create super jails for unreported crimes when the money should be invested in literacy, mental health, educational institutions, social housing, et cetera, which are the determinants of crime. Why is the government so foolish in its choices?
Would a family be foolish enough to borrow money for unnecessary toys when given a choice between food on the table or frivolous expenses? No family would have the luxury to do such foolish things. Therefore, Canadians want their government to ensure it is not spending their hard-earned tax dollars foolishly.
While speaking of tax treaties with other nations, it must be noted that those treaties do not address the problems of unscrupulous individuals who hide earned income in offshore bank accounts to avoid paying Canadians taxes. The government has been very slow off the mark in pursuing the potential billions of dollars hidden in Swiss and other bank accounts.
To have an efficient tax system, it is desirable to have an efficient government that collects and spends tax revenues in a logical, fair and transparent manner. As I mentioned, unfortunately the government fails on all three of these requirements. For example, spending $16 billion on an untendered contract for stealth fighter jets at a time when many Canadians are unemployed and in danger of losing their homes is not logical.
Spending millions of dollars in the industry minister's riding on such things as sidewalk replacement miles away from the meeting site and pretending it to be related to the G8 is not fair. Spending $6 billion on unneeded tax breaks to big business while threatening to increase EI premiums is showing how transparent the government's disregard for the average Canadian worker really is.
Canada's federal government now faces a $56 billion deficit, and its expenditures are simply not under control as examples of waste continue to add up.
Even before the recession, the government has spent more than any other in the history of Canada, increasing government spending at three times the rate of inflation in its first three years.
Now the government is pushing the accelerator pedal with plans that will cost $10 billion more for new prisons when crime rates are falling and $16 billion more on a sole-source stealth fighter contract when Canada's military requirements have yet to be defined. This is after it has already spent $1.3 billion on a 72-hour G8 and G20 summit when South Korea is expected to do the same for less than $25 million.
People are worried about their jobs and their ability to pay down a level of household debt that has soared. Middle class families in Canada are being squeezed like never before, more severely in fact than anywhere else in the western world.
The average Canadian family is about $96,000 in debt. We owe almost $1.50 for every single $1 of disposable income and our cost of living keeps rising. Credit card balances are high, mortgages have been borrowed against and lines of credit are full.
Canadian families face serious economic challenges as they confront rising household debt, which is mounting. Educational costs are mounting. The challenge of saving for retirement and the cost of caring for sick or aging family members is mounting.
As I was canvassing, seniors came up to me and asked, “How can the government justify spending $1.2 billion on the G8-G20 for a 72-hour photo op and not invest in seniors? Seniors who have worked hard, who have invested in their country, who have put in whatever they have, now risk losing their house and their income because the government refuses to reform pensions”.
