That, in the opinion of the House, the government should put an end to the widespread tax avoidance practised by many shell companies set up in Barbados by Canadian companies, by amending subsection 95(1) of Income Tax Act and section 5907 of the Income Tax Regulations to specify that no business that is entitled to a special tax benefit conferred by Barbados under the Canada-Barbados Income Tax Agreement Act, 1980, shall be exempt from taxation because of a tax treaty.
He said: Madam Speaker, the top story in last week's news was the leak of the Panama papers. These leaks give us some idea of the extent of the use of tax havens. It is enormous.
This week, the government was in a hurry to say that it was working hard to combat tax havens. Last year, the Luxembourg schemes were leaked. The year before that, it was documents from HSBC Bank. The year before that, it was UBS, and prior to that it was Singapore and the Virgin Islands. Every time, the Canadian government announced that it would work very hard to combat this issue. Before that, it was ships from Canada Steamship Lines, and before that, it was the Bronfman trust and the Irving family. The government has been supposedly working hard on this for 25 years. Clearly, we have yet to see any results.
With each new scandal, the government announces new measures. However, this phenomenon continues to escalate. For 25 years, the government has announced measure after measure to catch cheaters. That is good, but it does not solve the problem.
The crux of the problem is that it is perfectly legal to use tax havens. We cannot fix this problem by going after individual cheaters. We need to be going after the bad laws, the bad regulations, the bad treaties, and the tax system.
Barbados is a small, faraway country, but in 2014 alone, $71 billion left Canada and ended up in Barbados. That is more than the amount that originates from all of Asia and 12 times more than the amount that originates from France. This happens year after year.
The colossal sums of money that Canadian businesses send there to avoid paying taxes are having a direct impact here at home. That tax-free $71 billion has a huge impact on government revenue.
Since Quebec is not a country, it cannot sign tax treaties. Quebec's tax law with respect to international taxation is identical to the federal law. We simply have no choice. When the federal government allows the use of tax havens, the Quebec government loses revenue too.
All taxpayers end up paying the price, whether they are in Quebec City or Ottawa or anywhere else in Canada. They have to pay more taxes and tariffs, and they have to cope with austerity measures. That is one consequence of our current status as a province.
For now, the key is the federal Parliament, so I would like to inform the House that, this morning, Quebec's National Assembly unanimously adopted a motion that is identical to the one we moved and are currently debating. Yes, it was adopted unanimously.
In Quebec City, every member of the Liberal Party, the Parti Québécois, the Coalition Avenir Québec, and Québec solidaire voted in favour of a motion calling on this House and the Canadian government to deal with the tax haven in Barbados.
The fight against tax havens, and specifically Barbados, is something all Quebeckers agree on. I believe that may also be the case for the rest of Canada.
International taxation is complicated. Every time organizations ask the government to do something to combat the use of tax havens, the government always says the same old thing, that nothing can be done, that this can only be fixed internationally, and that Canada would lose its competitiveness if it acted alone.
Let me draw a parallel. The fight against climate change is complicated too. For 10 years, every time groups called on the Conservative government to take action, it always said the same thing, that nothing could be done and that this could only be dealt with internationally. We all know that was an excuse to do nothing.
Environmental groups were not asking to withdraw from international efforts. They were simply asking Canada to take action at home and clean up its own backyard. This is also the case for tax havens. We must take action at the international level, but also at home. It can be done, and that is the point of the motion. Barbados is Canada's tax haven. It is the second-largest recipient of Canadian foreign investments, even though it is just a tiny island. The so-called investments are nothing more than accounting tricks. There is no real activity down there.
It was not a decision made internationally but a decision made by the Government of Canada that turned Barbados into Canada's tax haven. Furthermore, the decision was made without the consent of this Parliament. Parliament never supported the decision. We created the problem in this place, and it is here that we can put a stop to it. It is like environmental groups managing to fight climate change under the previous government. I want to show that we can take action in this place.
The motion offers a concrete, very specific solution. If Parliament adopts it, Canadian companies will no longer be able to use their subsidiary in Barbados to avoid paying taxes here. When they repatriate their profits, they will be taxed, quite simply, like any income for any taxpayer who cannot afford a creative and perhaps crooked tax expert.
I am not saying that this motion solves everything. We will also need to work really hard on the international scene. We need to ensure that profiteers can no longer use the differences between the various tax systems to separate their activities and ultimately not pay taxes anywhere at all. Now is the time for some real progress in this area. All over the world, governments are having money problems. Austerity is affecting people more or less everywhere. People are starting to feel real indignation about tax havens. Tax havens are like a cancer that is destroying our societies.
We do not need to wait for the entire planet to come to an agreement. The biggest users of tax havens are banks. It is hard to get the exact figures, but we know that most of the money in tax havens is from the financial sector.
Canada is able to act in a way that other countries cannot. The banking sector in Canada is protected. Banks are not subject to international competition. Canadian banks cannot move elsewhere. The Bank Act prohibits that, which means that Canada can take action against tax havens without hindering banks' competitiveness and prompting them to leave. In other words, Canada can do something.
I targeted Barbados because that is the most common tax haven to which Canadian money is directed, but the Conservatives opened the door to other tax havens in 2009. They also introduced this into the regulations, in secret, without any debate in Parliament.
Section 5907, which is targeted in the motion, has to do with Barbados. However, it also has to do with 22 other tax havens. I remind members that this motion does not have to do with a partisan issue. Yes, in the past, the Liberals authorized the use of Barbados. Yes, in the past, the Conservatives authorized others. However, Parliament never authorized a single one. The House never once made tax havens legal. Never.
I remind all hon. members that there are no party lines when it comes to private members' business. For the purposes of private members' business, Liberal members do not represent the government any more than Conservatives members represent the former government. Here, we all represent the people. We have the privilege of being the spokespeople for our constituents. We are the representatives of real people who pay their taxes so that we can live in a better society.
Of course members do not all share the same values. The Conservatives want to lower taxes. Some Liberals and the New Democrats want to put an end to austerity. Regardless of our different motivations and values, I think that we can all agree on one thing: everyone needs to pay his or her fair share. There is no reason why white collar profiteers should be making off with money and hiding it in tax havens.
I have not yet met any voter or any Canadian who is against this motion. On the contrary, what I am hearing is that we need to crack down on tax havens. What we need to do is to make changes to the regulatory framework to eliminate the loopholes that allow white collar profiteers to shirk their obligations.
Today's debate puts the issue on the table. In June, there will be a second hour of debate and a vote. In the meantime, I plan on writing to every member of the House and meeting with as many members from all parties as possible.
I would like to remind members that the motion is meant to be non-partisan and that, this morning, all members of the Quebec National Assembly from all parties adopted a motion that is exactly the same as the one that I moved. This motion calls on Parliament, on the federal government, to resolve the Barbados tax haven problem. I would also like to remind members that Parliament never voted on the regulations that allow the use of tax havens. Never. Because of this motion, for the first time in the history of Parliament, members will be called upon to vote on the regulations that allow tax havens to exist. It will be the first time. Parliament never authorized the use of tax havens. Never. That is what it will be doing if it does not support my motion. I have high hopes that the motion will be adopted in June.