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View Philip Lawrence Profile
Madam Speaker, it is a true privilege to rise in the House today to speak to Motion No. 69. I am looking forward to talking about it today. I would like to start my speech with a quote that I believe is very relevant to the topic at hand. As part of the 2007 budget—
View Philip Lawrence Profile
Madam Speaker, it is an honour to rise today to speak to this important issue and to this motion.
This is part of a larger discussion that needs to happen, and I am very pleased to be talking about it today.
I would like to begin by quoting the great Jim Flaherty when he talked about the 2007 budget and had just recently announced an anti-tax-haven initiative. His words still ring very true today. He said:
When multinational corporations use this tax loophole, Canadian taxpayers are indirectly subsidizing their international operations. Our goal is to improve the fairness of our tax system and further reduce taxes for hard-working Canadians while preserving Canada's overall tax advantage for our globally successful companies.
There can be no doubt that taxation can be a challenging and difficult time when it comes to paying those taxes, but those taxes are often required. They are required for things such as making sure that we have street lights and paved roads, making sure that our firefighters are well paid and making sure that we continue to have the best education and health care systems in the world. It is critical that we have those.
As the Hon. Jim Flaherty said, when a certain portion of our tax population fails to pay its fair share, it is the rest of us who carry the burden. It is the folks on Main Street who have to subsidize Bay Street, and we do not believe that is right.
What is the size and scope of the issue that we are talking about today? Well, it is hard to put an exact figure on it, because we do not know exactly how much tax is being evaded, but there are estimates out there of anywhere between $5 billion and $10 billion, and even $15 billion. That is a lot of hospitals that could be built and a lot of schools that could be constructed. We need to focus on that, and as I said, when even a small portion of Canadians do not pay their appropriate fair share, that increases the burden for the rest of the taxpayers.
Beyond taxation, often tax havens are utilized not only to avoid paying federal corporate tax or federal individual tax but also to avoid financial regulations and financial liabilities. Some tax schemes have even been used to avoid alimony and support for children, which is obviously not okay in our great country. They have also allowed corporations to shelter income and potentially criminal behaviour. All of this represents an unfair advantage for a small portion of the ultra-wealthy here in Canada.
I will now focus on the actual motion and address some of the concerns that the previous hon. member had in her speech, which was obviously well researched and well thought out, but I think it contained a number of deficiencies. Perhaps I will be able to alleviate her concerns, and maybe we will get members from the other side voting for this motion.
I will go clause by clause for those in the House or at home who have the motion and are ready to read it.
I will start with subclause (a), which is:
amend the Income Tax Act and the Income Tax Regulations to ensure that income that Canadian corporations repatriate from their subsidiaries in tax havens ceases to be exempt from tax in Canada;
While we fully acknowledge that many of these agreements are done through a tax treaty and through international tax negotiation, that does not mean that we cannot have change. In fact, there appears to be a will throughout the world to have change to make sure that people across this world are paying their fair share of taxation. The ultra-wealthy, or a certain portion or them, do not pay it.
I will describe what is going on here for everyone at home who maybe does not eat and sleep tax law.
Generally, a Canadian corporation can set up another corporation in another territory. This is not bad news but great news, because we are bringing more Canada to the world, and I think it is a fantastic thing for successful corporations. We would never want to discourage that. However, unfortunately, there can be a tax disadvantage for the treasury. What happens is that these corporations pay tax on money in these foreign jurisdictions, and then they can repatriate it back to Canada, even to wealthy shareholders, and those wealthy shareholders may not necessarily be paying their full amount of tax.
What is more, there is planning that can be done so that the reality of the income is not really even generated in that foreign company but is just used as a way to avoid taxes. There can be and should be work done.
Do we want to make sure, as the hon. member said, that Canadian businesses are competitive wherever they are? Absolutely, but there is a way to do that. There is a way to make sure that Canadians pay their fair share while Canadian businesses remain competitive. It should be noted that this is not a novel concept. Many countries in the world do such things, including the United States. It does not allow the type of planning that allows the ultrawealthy to avoid taxation.
If we look at (d) in the motion, it states, “review the tax regime applicable to digital multinationals, whose operations do not depend on having a physical presence, to tax them based on where they conduct business rather than where they reside”.
As we look at taxation, a lot of the concepts date back 50 or 100 years. They are very geography-centric. We know that the world is increasingly moving away from being geographically centred. Capital, digital items and all sorts of intellectual property move in seconds from country to country, so we need to revisit this.
When we look at this, the language is “review”. It is not compelling the government to a specific action. It is saying that we need to review it. I think that is absolutely right because, as is the case with a lot of this motion, we need to have multinational treaties changed, which involves collaboration around the world, and I am in favour of that. However, it does not mean that we should not review this.
The world has changed so dramatically. We need to keep up with the speed of business and the speed of innovation. Quite frankly, the Canadian government and the Canadian taxation regime are not doing that. On the same point, we need to maintain Canadian sovereignty and protect the information of legitimate Canadian businesses.
Part (b) of the motion is to “review the concept of permanent establishment so that income reported by shell companies created abroad by Canadian taxpayers for tax purposes is taxed in Canada”.
This gets back to the geocentric version of taxation that made lots of sense in the early 1900s and even in the 1950s. We need to be open to new perspectives. Just because there is a physical location or even an operation in a particular country does not mean necessarily that is where the taxation should occur.
Again, this is a review of the concept. It is not commanding the government to do anything. However, to say we do not need to look at this I think is silly, because the world is changing and the tax code needs to reflect that. We need to look away from the geographic or geocentric view and look at where that income is being generated and where, fairly and rightfully, the Canada Revenue Agency and the Canadian taxpayers have rights. If millions or billions of dollars are being generated in Canada, I think there is an argument to at least have a discussion with respect to reviewing this principle, regardless of where the company operates.
The idea of a permanent establishment has been gamed by tax professionals for years by using trusts. Trusts can have the controlling mind located in a different country, but the remainder of the business operates outside of that tax haven. I think this is an excellent idea and I look forward to a robust discussion on that going forward.
If we look at part (e), it states to “work toward establishing a global registry of actual beneficiaries of shell companies to more effectively combat tax evasion”.
Let us take a step back. I think actual beneficial ownership versus legal ownership is not a really well-known concept among Canadians. Beneficial ownership is the right to benefit from it, and legal ownership is having the title to it.
I see we are getting to the end, Madam Speaker.
View Philip Lawrence Profile
Madam Speaker, I wanted to raise a point on behalf of the Green Party. Oftentimes they do not get the opportunity to speak. They have been polite and quiet while waiting. They have been up there. I could see on my screen that they were among the first. They are always some of the most respectful party members from one of the most passionate parties. Even though I disagree with them on a lot, I want to hear their voices, just like I want to hear all Canadians' voices.
I think it is incredibly important that we hear voices across this country, on the Internet and in—
View Philip Lawrence Profile
moved that bill be read the third time and passed.
He said: Madam Speaker, it is always a privilege to be in this House. It is an even greater privilege to be here with respect to Bill C-206, which of course is my private member's bill. Although I misspeak when I say it is mine. It really belongs to the farmers. That is what this bill is all about.
Our agriculture workers are tremendous. They produce some of the best agriculture products in the entire world. They work so hard every day. They get up early, go to bed late, and in between, continue their fantastic work.
Of course, we have all been challenged by the pandemic, and farmers are the same. Farmers have pushed through, even through the pandemic. Through all the barriers and challenges of the pandemic, they continued to plant their fields, tend their crops and take care of their animals, so we could always have a full belly here in Canada. During the pandemic, and really at any time in the recent past, farmers and Canadians have never had to worry about their food supply, and that is because we have the best farmers in the entire world.
Talking about the importance of agriculture, it is more than 7% of our GDP. More than that, farmers are really the heart of our community. They are the engine of our economy. Nearly one in eight Canadians are employed in agriculture and agri-food. That is an important statistic. That is the type of impact this industry has. On the whole, it employs more than 2.3 million Canadians.
We are one of the world's largest producers of flax seed, canola, pulses and durham wheat. We have some of the best beef, poultry and pork in the entire world produced right here in Canada, the greatest country in the world.
However, farmers have done this not in easy circumstances. In fact, in 2019, they had to go through what was dubbed, and I excuse the language, the “harvest from hell” when their crops were incredibly difficult to harvest due to the moisture and rainfall of 2019. This was an absolute challenge. Farmers had to run their grain dryers for nearly 24 hours straight at some points to save as much of their agriculture product as they could.
In 2019, the rain out west was not the only weather condition that farmers faced. That year a hurricane flattened fields in Atlantic Canada. Fields in Quebec faced unprecedented rainfall during harvest and planting times. There were snow-covered fields out west earlier on. Manitoba was in a state of emergency. Alberta and Saskatchewan faced drought.
In my riding, the fabulous riding, and I might say, perhaps the best riding in the entire world, Northumberland—Peterborough South, we faced an almost unprecedented late frost. Generally, after May 24 is the frost-free zone, but we had frost in our riding, and in other parts of southern Ontario, and if farmers had planted, they had to deal with that as well. As we can see, farmers are not without their challenges.
It goes beyond weather. There are issues that farmers are facing such as global trade issues. Currently, there are various trade issues where farmers in Canada are not getting appropriate, equitable treatment. They are often at the short end of the stick and in a highly subsidized industry. It is subsidized nearly throughout the world, in the EU and the United States. During the pandemic, the EU and the United States of America stepped up for their farmers. They gave millions, if not billions, of dollars to farmers to help them get through the pandemic.
In Canada, I would love to say it was the same, but that is just not the case. Unfortunately, the current government went through its tried and true strategy of making an announcement, having that policy or platform item fail and then reannouncing it again. It recycles failed announcements over and over again, and our farmers got precious little compared to other farmers around the world.
That, in a nutshell, is why I am so passionate about Bill C-206. When we boil it down, it is about giving farmers a fair shake. They need to have the same opportunities as farmers around the world. The carbon tax here in Canada is not imposed internationally, and because of that, they face barriers that other farmers in other countries simply do not face.
Bill C-206 would give those farmers a fair shake, an opportunity to compete globally. What would it do?
Currently, the Greenhouse Gas Pollution Pricing Act absolutely exempts certain types of fuel. It exempts gasoline and diesel, but it does not currently exempt natural gas and propane. In the spirit of team Canada and non-partisanship, I would like to give the government the benefit of the doubt that perhaps this was an oversight. This is the government's opportunity to correct that oversight. In fact, I would like to invite it to do so.
There is no logical reason why natural gas and propane would not be exempt when gasoline and diesel are. Natural gas and propane are cleaner fuels than diesel and gasoline. In fact, in my humble estimation, natural gas and propane are actually part of the solution.
For example, if we were to take all the coal-producing power plants in China and convert them to natural gas, the savings from that, the amount of carbon savings, the reduction in output, would be dramatically more than if we were to take Canada to net zero. If we were to convert China completely to natural gas from coal, that would be much more beneficial to the environment than even if Canada went to net zero tomorrow.
Natural gas and propane are a part of the problem and they are arguably cleaner than the exempt fossil fuel equivalents, which are diesel and gasoline.
When I look at natural gas and propane, who do we impact if it is not exempt? We are affecting a wide range of farmers, but particularly our grain farmers. As I said, we are among the leaders in grain farmers in the entire world. Those prices are set by international markets.
By having this bill in place, we will give those grain farmers a break. The Saskatchewan Association of Agricultural Societies and Exhibitions, the Manitoba Association of Agricultural Societies and the CFIB have various numbers, as does the PBO, but those numbers range anywhere from thousands to tens of thousands of dollars in costs for farmers. I saw them. I was emailed droves and droves receipts for the carbon tax, amounting to tens of thousands of dollars. Then to add insult to injury, they are charged GST on the carbon tax.
When I was at the public accounts committee, I asked the assistant deputy finance minister how the government could justify charging the GST on top of carbon tax, that the carbon tax was punitive enough. He said that it was not. He was wrong. The government does not even know how much damage it is inflicting on our farmers. To me, that is so damaging and so challenging.
When we look at this, we know farmers want to, and I definitely want to, fight climate change. Is there a more environmentally friendly way? Is there a better way than burning natural gas and propane?
We had session after session of expert witnesses. While they said that perhaps there were fledgling technologies and that there were opportunities for the future to perhaps burn biofuels or use other types of more environmentally friendly fuels and energy, right now there was not. The Grain Farmers of Ontario said, “there are no readily available grain drying technology replacement alternatives that are cost effective. Drying grain is essential for marketing grain.”
From these witnesses, we learned that farmers greatly care about the environment. For those folks who maybe are not in an agriculture setting, like I am, a one degree difference in temperature can make the difference for a season. An entire year, whether it is profitable or not, can be based on whether there is frost or not. That can be the difference of one degree.
There is no one more sensitive to environmental changes, to environmental concerns than our farmers. That testimony came out again and again. When I think about the environmental impact, and I will talk a little about that, it really affects them.
I was actually sleeping at six a.m. in my house. I rent out my property to a farmer. Of course, farmers, because they work immeasurably harder than politicians, were not asleep at six a.m. I heard a “rap, rap, rap,” and I came down to the door in my pyjamas, with the farmer knocking at my door. He rents the field from me. He said there was a tree down and asked if I have chainsaw. I asked him to give me five minutes so I could get changed and get my chainsaw. We went ahead and cut up that tree. In there, I started off a conversation with one of our local farmers, a great guy.
Members might wonder what we talked about. Did we talk about the fact that the Leafs are definitely going to win and that this was their year? No, we did not talk about that. Maybe we talked about Montreal and that maybe it would be their year. No, what we talked about was actually the GPS in his tractor and how he had two different GPS options, and he picked the one that was one inch as opposed to five inches. It was calibrated to one inch, and he said he had to do that, because it made his farms and fields more productive and because he did not want to use one extra ounce of chemical or fertilizer that he did not have to use. This is how much our farmers care about our environment. I think that is a bit of an undersold issue.
Of course, farmers are some of the first stewards of our lands. They protect so much. Other technology they have been involved in includes no-till technology, precision agriculture and satellite-driven agriculture. The farmers want to get this right. They want to do everything they can to preserve that land, because, quite frankly, their livelihood and the livelihood of the coming generations depend on it.
There is great news, too, with respect to farmers. They are actually ahead of the curve. What do we hear about from industries, even the oil industry and, of course, the government here? It is net-zero, and this is a fabulous concept and something we can all drive to, but most industries say “net-zero, 2050; net-zero 2060; net-zero 2040,” or, maybe if they are really ambitious, “net-zero, 2030”. How about, “net-zero, now”? That is what farmers are. They are net-zero now. They plant millions of these little devices, these terrific, amazing little carbon-capture devices. I like to call them “plants”. There are millions of them every single year, and they sequester this carbon. It is unbelievable. It is such an advance in science. They sequester this carbon in their fields, and yes they burn some fossil fuels in their tractors and in drying grain and keeping their barns heated, but overall they are net-zero and above, and farmers want to do even more.
I am so passionate here, I am happy to hopefully get through half of my speech here. I just could talk about this PMB all day.
When we look at the overall picture, we see farmers who want to do the right thing. We see Canadians who want to do the right thing and protect the environment, but we have to do it in a way that makes economic sense, as well. First, we have to make sure that farmers stay competitive in the global market and that we do not make our farmers pay an undue burden, as opposed to other industries and other countries around the world. The other part is that farmers want to do the right thing. The challenge is that agriculture has been, and is even more so now, an undercapitalized sector of our economy. In testimony at the agriculture committee, one of the the individuals said that if money was not an object, they would put in high-efficiency grain operation tomorrow, but they simply do not have the capital. Farmers are stretched out more thinly than they ever have been before, so that is why.
The idea of the carbon tax is that we are going to make less environmentally friendly solutions more expensive, so that we will naturally be pushed, in a free market system, to those that are more environmental. However, in this situation the reverse is true, because farmers want to do the more environmentally friendly thing. Members can trust me, as I was talking to my farmers on Saturday morning. They want to do that; they just do not have the money, so when we take more money from them, and it can literally be tens of thousands of dollars, they do not have the money to invest.
Farmers want to do the right thing. We want to do the right thing. Let us collaborate together. Let us vote together. Let us pass the PMB, Bill C-206.
View Philip Lawrence Profile
Madam Speaker, I also want to congratulate the member as he is a very passionate representative for the agriculture sector, and I think that he works very hard for his constituents.
However, I fundamentally disagree with him. In fact, it is nearly unanimous, except for the government. Stakeholders agree. Nearly everyone we spoke with at the agriculture committee agrees, the parliamentary drafting lawyers agree and we agree that, in fact, the definition is really quite simple: It is a piece of machinery that operates in farming.
If anyone has ever been to a farm where there are grain dryers, they would know that grain dryers are pieces of farming equipment used on farms. They are not used for tanning: They are actually used for farming.
View Philip Lawrence Profile
Madam Speaker, indeed, the agriculture committee is blessed with another fantastic member, and I appreciate him stalling a little while I listened to the interpretation. My French is almost there, I promise, but it is still a work in progress.
We added an amendment that the bill would expire in 10 years, which is a reasonable and good amendment in my opinion. We are hopeful that in five or 10 years there will be more environmental solutions, perhaps using biofuels or solar power. Perhaps the energy grid will be completely clean at that point. We could look at it then, but right now we need this solution.
As I said, we agreed to and voted for the amendment because in 10 years, maybe the technology will exist. Right now it does not.
View Philip Lawrence Profile
Madam Speaker, I also thank the member for his great service to the agriculture committee. He is another great advocate for it.
I am from the country. I liken this to an individual who owns an old pickup truck and knows they could save money if they bought a more fuel-efficient car. They want to do that, but they just do not have the money. That actually puts them in a poverty trap, which is what the carbon tax is doing with our farmers. They want to be more efficient, because if they are they make more money. However, they just do not have the capital to do it.
At the agriculture committee, we did an in-depth study. We heard from many witnesses, and they all said that there could be future technology, but it does not exist right now. These were some of the greatest experts in all the land who testified, and they said there just is not an economically viable alternative right now. That is why we have a sunset on this bill in 10 years, because hopefully that will change.
View Philip Lawrence Profile
Madam Speaker, today is the Republic Day of Azerbaijan, a day to honour the formation of the first parliamentary republic and first democratic, legal and secular state in the Turkish and Islamic world.
The republic, among other things, vowed to guarantee all its citizens within its borders free and full political and civil rights regardless of their ethnic origin, religion, class, profession or gender. Unfortunately, the republic only survived 23 months in its first iteration, as it was taken over by Bolshevik Russia and it remained part of the Soviet Union for 70 years.
Since its restoration, however, Azerbaijan has remained an ally to Canada through the partnership for peace programme through NATO.
Today, as chair of the Canada-Azerbaijan Friendship Group, I am joining the people of Azerbaijan, Azerbaijani Canadians and people around the world in celebrating Azerbaijan Republic Day.
Happy Republic Day.
View Philip Lawrence Profile
Madam Speaker, many Canadians will remember the issue that sent 30,000 self-employed individuals into a panic last Christmas as they were told they were ineligible for benefits and had to reimburse the government. The CRA's failure to define income in the context of small business caused anxiety for millions. In fact, many Canadians repaid benefits they were rightfully entitled to.
Can the minister please tell these hard-working Canadians when they will get their benefits back?
View Philip Lawrence Profile
Is there unanimous consent to not see the clock at 1:30 p.m.
Some hon. members: Agreed.
The Acting Speaker (Mr. Philip Lawrence): Questions and comments, the hon. member for Sydney—Victoria.
View Philip Lawrence Profile
The hon. member for Courtenay—Alberni.
View Philip Lawrence Profile
Madam Speaker, I thank my colleague. It is wonderful to talk with her.
Could the member talk more about the importance of what we, as citizens, can do every day, especially those of us who are non-indigenous, to help along the path of reconciliation? I look forward to her comments.
View Philip Lawrence Profile
Madam Speaker, first of all, I would like to thank the member for his passion and I invite him to use the first 10 seconds of his response to finish his speech.
Then I would like to ask him about a very serious concern that my constituents are raising with me over and over again, and that is inflation. The cost of groceries is going up. The cost of lumber is going up. The cost of housing is now out of reach for many millions and millions of Canadians. What in the budget will address this significant economic issue that my constituents keep bringing up maybe because I do not see anything?
View Philip Lawrence Profile
Madam Speaker, I thank my colleague for his wonderful speech.
Given the dramatic increase in debt, is the member not concerned that the Liberal government will cut transfers to the provinces, as happened in the 1990s under the Chrétien government?
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