Madam Speaker, it is a privilege to rise to speak in support of this motion moved by my colleague, the hon member for New Westminster—Burnaby, which reads as follows:
That the House recall its resolution adopted March 8, 2017, which asked the government to keep its promise to cap the stock option deduction loophole and to take aggressive action to combat tax havens, and that the House call on the government to respect that vote by ensuring that both measures are included in Budget 2018.
I, on behalf of the good people of Vancouver Kingsway, rise to state my full support for the motion and urge all members of the House to support it. Frankly, reading the motion, it is going to be difficult to understand how any member of the House can vote against it, but we will see what happens when it comes to a vote.
From a general philosophical point of view, I want to start by saying that we as parliamentarians are elected by the people of our ridings to come here to Ottawa to pass laws for the governance of Canada. When we do so, a question that is with us every day is this: what are the fundamental underlying principles and objectives and values that ought to come into play when we discharge those duties?
First and foremost, one of our most sacred obligations here as parliamentarians entrusted with the governance of our country is to make sure that the citizens of our country are safe and secure. Safety of course starts from a basic physical point of view. We want to make sure that every person in this country has the right to fully embrace the rights afforded by our Constitution and that are given in a free and democratic society such as Canada, and that they do so with their physical integrity completely intact.
At the same time, I do not think safety and security are limited just to the physical realm. I know that I, as a member of the New Democratic Party, come here with a very fundamental commitment to the concept that all citizens of this country also have a right to live their lives with a decent security of person, economically, socially, and culturally as well.
One of the fundamental issues in society and one of our fundamental obligations as parliamentarians is to pass laws and take measures that have, as their uppermost consideration, the welfare of our citizens. The ability of each individual in our country, every man, woman, and child, and people who identify in every expression in between, to achieve a decent standard of living is something that we as Canadians are proud of. We believe that every single person in this country should have a minimum standard of living as a feature of the dignity of living in a modern democratic advanced society.
At least we in the New Democratic Party understand the critical role that government plays in that. We wholly respect that the market is a critical part of our economy and delivers many things in an efficient and effective way that only the market can do. The full breadth of consumer items, the services that Canadians rely on, the innovation, creation, and production of all of the gamut of commodities and services and resources that Canadians treasure and that are a part and parcel of a modern economy in the 21st century are adequately provided by our market.
However, we in the New Democrats fundamentally understand that the market does not produce everything. There are some things that the market cannot do effectively or efficiently. It cannot produce housing for every single person. The market cannot make sure that every single child is educated in this country. I am not just saying that as a matter of philosophy. Anybody who understands history will know that left completely to the marketplace, which is motivated by the underlying profit criterion, capital will flow to where it is most profitably applied.
There are victims of that. There are people who, for various reasons, whether they are poor, disabled, or whether the vagaries of life's circumstances have put them in that place, are not able to prosper or compete, and they get left behind. That is where the role of government and the state come in. Most Canadians want a strong government that will fill in those gaps that the market cannot provide, and will help provide the standard of living that we want every single citizen in this country to achieve.
The government provides health care, education, and social programs, things like employment insurance, to be a social safety net to catch people when, through no fault of their own, they find themselves out of work, whether by technological change or by business failure. Social programs include worker's compensation for workers who through no fault of their own get hurt at work and are unable to work any longer. Social programs assist them, so that they are not cast upon the heap of poverty. We as a society recognize that there has to be a safety net for people like that.
We as a country of immigrants, and I dare say everybody, other than the indigenous members of this House, can trace our roots to immigrants at one point or another who have received support of some type to integrate, because we recognize that people need some assistance to fully integrate into society. We recognize that this basic financial protection and standard of living we want for everyone in this country is actually a foundation that makes meaningful participation in our democracy possible.
People cannot fully exercise their rights as citizens in this country to pursue their dreams, careers, and participate in our democratic traditions if they do not have their fundamental needs met, things like basic housing, enough food, and basic clothing, the essential ingredients that make meaningful participation in our society possible.
The question then becomes, how does the government fund these programs? How much money must the government raise in order to adequately provide the funds to discharge those responsibilities that I think everybody in the New Democratic Party believes every citizen deserves? The second question is, how do we raise that money, and from whom? These raise fundamental questions as to why we are here as parliamentarians, and strike at the heart of government and what we do.
The motion here touches on those fundamental questions in the following way. It calls on the government to act on a promise it made to Canadians in the 2015 election, where the Prime Minister and other Liberal candidates, who ran for office, told the electors in their ridings that if they were elected, if they received the trust of those voters, that they would come to this place and address an issue of inequity in our tax system.
What they said they would do is close or cap the stock option loophole, and take aggressive action to combat tax havens. In keeping with this, once the Liberal government was elected, 2015 and 2016 passed with little or no action on those promises.
That led the New Democrats to move a motion last year, which was passed in this House on March 8, 2017, almost a full year ago. It asked the government to address tax loopholes that primarily benefit the wealthy, including keeping that Liberal campaign promise of closing the stock option deduction loophole. It also called on the government to crack down on the use of tax havens by tightening rules for shell companies, renegotiating tax treaties that let companies repatriate profits from tax havens to Canada tax free, and ending penalty free amnesty deals for individuals suspected of tax evasion.
I am going to stop there and talk about the broader context. We are seeing two worlds in Canada. The world for most Canadians is becoming increasingly unaffordable. It involves more precarious work, and it is a harder place in which to get by.
In the riding I represent and come from, in Vancouver, an entire generation is unable to house themselves. Young people, students, young families, seniors, and middle-class families are being driven out of Vancouver and the Lower Mainland. They are being driven out of places like Victoria, and not because they want to. They have lived in these communities, made careers there, and had family there, but they are being driven out, because they cannot afford to locate any kind of housing that is affordable, whether to own or rent. That story is replicating itself in communities across the country, including the GTA and other places.
People in their 20s will say that with every year that passes it is increasingly difficult to find permanent, full-time jobs that have pensions and pay benefits, like people of my generation, once counted on as a matter of course. Instead, they are faced with part-time jobs, temporary jobs, jobs with no benefits, jobs that are, as we call them, precarious. This is the reality for people.
On a global scale, Oxfam released a study recently that said that 82% of the global wealth that was created last year went to the top 1%, and that fully 50%, half of the human beings walking on this earth, 3.5 billion human beings, received 0% of that wealth. Not only is there inequity in our society but the trend is getting worse.
The other world from the one I just described that most Canadians live in is one that could be described as an exclusive club for the wealthy, who get special access and are exempt from many of the rules the rest of Canadians play by. Tax avoidance and tax evasion by the rich undermine faith in our society and our democracy by starving social programs and public services. They send a message to ordinary citizens that the rules of the economic game do not work for them and are, in fact, rigged against them. I believe it will take strong political will to reverse the trend of rising inequality, which began decades ago, and has continued under both Conservative and Liberal governments.
Interestingly, the Liberals voted in favour of the motion that I spoke of that New Democrats moved in the House last March. Since then, not only have they failed to act on it but, increasingly, they have signed tax haven treaties with other countries like Cook Islands, Antigua, Barbuda, and Grenada. With the budget approaching, we think it is time for the Liberals to keep their promise.
I will throw out a few other statistics that describe the reality for people in Canada. By 11 a.m., on January 2, Canada's top paid CEOs had already earned what the average Canadian earns in a year. In other words, the top paid Canadian CEOs earn more in a day and a half than millions of hard-working Canadians will take home in a full year.
Canada's top CEOs earn 200 times the average person's salary, which, incidentally, places Canada in a very rarified crowd that is way out of proportion to the gaps in other countries between the wealthiest and the poor. Two Canadian billionaires possess the same amount of wealth as 11 million Canadians. The top 20% of Canadians in 2016 owned 67% of all wealth or net worth in Canada, and over four million Canadians, including 1.15 million children, live in homes that struggle to put food on the table every day.
In light of this, Canada has a tax code that is full of loopholes, after decades of Conservative and Liberal stewardship of our tax system, that benefit Canada's wealthiest, but leave most hard-working Canadians behind.
The Liberals have failed to fix tax loopholes or address tax havens that primarily benefit the wealthy. The last time I checked, the working people in my riding did not have bank accounts in Luxembourg, Canary Islands, or Bahamas. Liberals are, instead, embracing former Prime Minister Harper's corporate tax approach, and are putting the private interests of their wealthy few ahead of everyday Canadians who are struggling to get ahead.
I will briefly mention a few facts about tax loopholes.
A study by the Canadian Centre for Policy Alternatives showed that 59 tax measures that mostly benefit people with above-average income levels cost the government more than $100 billion in 2011 in foregone tax revenue. The wealth of the ultra-rich in Canada includes salaries, bonuses, share grants, and stock options, and those are aided by these loopholes. We now know these very people also aggressively lobbied the Liberal government to keep those loopholes in place, obviously so they could further grow and protect their wealth. One such loophole is the stock option deduction, which allows those that have stock options to have the revenue created by that stock option taxed at a highly preferential rate.
There was at one time a commission in this country that looked at tax fairness. I still remember the conclusion after it talked to many Canadians and examined our tax system as a whole. Its conclusion was this: a dollar is a dollar is a dollar. Its recommendation was that a dollar earned ought to be taxed the same way for everybody.
A worker who goes to work every day and puts in eight hours and gets paid by salary or by hourly wage at the end of the week gets taxed on that dollar. A CEO who works and makes a vastly increased income should have that income taxed in the same way that the worker does. That, however, is not the way the system works in this country. Instead, perversely, ironically, and most unjustly, people who make the most amount of money pay the least amount of tax on the money that they earned in these cases. That is what today's motion is calling on the government to fix.
In terms of tax havens, tax evasion, which is always illegal, involves the non-declaration or falsification of tax-related information in order to evade paying one's fair share of taxes. Tax avoidance, on the other hand, involves specific transactions to lower the amount of tax payable as a result of a technical reading or application of the law.
In this case, while it may be technically legal it goes against the spirit of Canada's tax laws for Canadians who are wealthy to use tax havens, which are jurisdictions with very low tax rates or other tax incentives that are used to basically wash money that is earned in Canada so it is paid at a lower tax rate and then those profits are repatriated to our country. These are the kinds of mechanisms that are available to a small percentage of Canadians in this country and it starves the government of revenue that ought to be paid here, which would then be used to address those fundamental obligations that I described at the beginning of my speech.
What could we do with that money? The Liberal government has a policy choice here. It can continue to favour ultra-wealthy people and allow them to make use of these tax havens and tax loopholes to keep the bulk of that revenue for themselves, or it can close these loopholes. It can address these tax havens to make sure that income pays its legitimate fair share in Canada to the government. That will result in billions of dollars coming to the federal government that can then be used for other things.
From New Democrats' point of view, we would urge the government to do that and here is what we would urge the government to do with those billions of dollars. We could pay for a national pharmacare program. We could pay for a national dental care program. We could make sure that every family in this country has access to affordable, secure, quality day care for every single child. We could lower tuition rates for students in this country so that we make sure that the next generation of young people can achieve an education that is not only important for their dreams and aspirations but actually is the foundation of our economic growth.
We could implement what New Democrats have been calling for for a decade and that is a national housing program. The federal government could once again re-enter the housing field in this country and start to build tens of thousands of co-operative units, fund social housing for seniors, for young families, for low income individuals, for the special needs community. The federal government has been absent from housing in this country since 1992.
I want to conclude by talking about integrity in the process. The Liberals told Canadians that if they were elected they would close the stock option loophole in 2015. Now they are saying they will not do it.
An hon. member: No, we didn't.
Mr. Don Davies: I hear a member say they did not do it, Madam Speaker. Any Canadian can read the Liberal platform.
The Liberals said they would bring in electoral reform. When the government of Brian Mulroney took CMHC out of the social housing field, the Liberals promised Canadians in their little red book in 1993 that they would restore that and then they broke that promise. They broke it in 1993, 1997, 2001, 2004, and 2006.
Here we are a generation later, and the federal government has been out of the social housing game for basically 25 years. The government's response is that it will get back into it, but the bulk of the money will flow in 2022.
It is time to put integrity back into politics. I am calling on the government to keep its promise and close this loophole.