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Feb/8/22 12:09:57 p.m.
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Madam Speaker, the parliamentary secretary will note that in my speech I detailed at some length the fact that CP, for some reason, has been paying its taxes for 100 years voluntarily despite a clause in the contract that clearly exempts it from doing so. The question I have is a similar one. Why all of a sudden is this railway company wanting its taxes reimbursed? What happened 13 years ago? Maybe there was a change in its legal team or a new staff member came in who wanted to prove themselves, but all of a sudden it is coming forward and saying that it wants 300 and some million dollars from the people of Saskatchewan and that does not want to pay taxes going forward. What changed in its philosophy as a company?

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Mr. Luc Desilets (Rivière-des-Mille-Îles, BQ)

Feb/8/22 12:10:55 p.m.
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Madam Speaker, my colleague and I seem to be on the same wavelength. If this Conservative Party motion is adopted and an amendment is made to the Constitution, what does he believe that would imply for Quebec, which in fact wants to revisit the Constitution?

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Mr. Taylor Bachrach

Feb/8/22 12:11:22 p.m.
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Madam Speaker, I listened carefully to the speech of the member's colleague on this matter, and I understand there are a number of long-standing grievances the Bloc would like to see remedied in one way or another. To make limited changes to the Constitution using this mechanism is something that has been done before by other provinces. It is an avenue available to every province. I am not a constitutional scholar, and I will leave it to those more educated in those areas to give some sense of what might be possible, but absolutely it is important that it is a living document and that we make changes as appropriate over time to reflect the will of the people of our country.

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Mr. Arnold Viersen (Peace River—Westlock, CPC)

Feb/8/22 12:12:37 p.m.
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Madam Speaker, it is always an honour to rise and ask the member for Skeena—Bulkley Valley a question, as I have family from that part of the world. Earlier my colleague was talking about pipelines, another transportation method in Canada, and the retort was about renewable energy. In Alberta, we do all of the things. We do renewable energy, traditional energy and all of these things. The lack of pipelines has really rejuvenated the rail system in northern Alberta because a lot of the oil is now going out on rail. I am wondering what my colleague's comments are on that.

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Mr. Taylor Bachrach

Feb/8/22 12:13:18 p.m.
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Madam Speaker, we seem to be straying a bit from the constitutional matter at hand, but I will humour the question from my colleague. Obviously, transporting oil by rail or by pipeline is a risky business, as we have seen evidenced by many spills over the years and all of the damage that has occurred. We need to do things as safely as possible, and I have grave concerns about the safety of our railroad system. The transport committee is currently studying rail safety, and I would invite my hon. colleague to attend some of those hearings and learn about—

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The Assistant Deputy Speaker (Mrs. Alexandra Mendès)

Feb/8/22 12:13:55 p.m.
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Resuming debate, the hon. member for Elmwood—Transcona.

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Mr. Daniel Blaikie (Elmwood—Transcona, NDP)

Feb/8/22 12:14:05 p.m.
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Madam Speaker, I thought I might start off in today's debate by making a couple of disclosures. First, my paternal grandfather comes from Saskatchewan: Biggar, to be exact. He ended up in Transcona, which is also a rail town, because at that time, in order to serve an apprenticeship with CN, one had to do time in Biggar and then in Transcona. That is how my father's family found its way to Transcona: by working on the railway for CN, of course, not CP. CN continues to be a very important company in Transcona. It does not employ anywhere near as many people as it used to, but it still employs a lot of people, and its training centre is in Transcona just about a stone's throw away from my home, where I am speaking from today. We deal with a lot of challenging issues in Parliament. One of the things we can take from the tenor of today's debate and the confluence of arguments is that this is a pretty straightforward question. It does not make sense to exempt a large and profitable corporation from paying the taxes its competitors pay by virtue of something that happens to be in the Constitution from a very long time ago. As people have remarked, it is legitimate to wonder what changed. Why, all of a sudden, has CP adopted a very different posture, and why does it want over $300 million in taxes it paid to Saskatchewan back from the province? It had been paying its taxes without issue for about 100 years, despite having access to this exemption under the Constitution. It is clear that CP operates in a competitive market, and its competitors do not get this kind of exemption. Therefore, if we want to have a fair and competitive industry, players have to be playing by the same rules at the very least. That is why I am very happy to support this change and to protect folks in Saskatchewan from having to reimburse taxes that I think were rightly paid by CP. What is interesting about this feature of the Constitution that we are trying to change today is that it hearkens back to a time when government was a lot more open and honest about the extent to which it was willing to patronize large companies. However, that kind of thing is happening today. I would argue that we should be just as concerned about the kind of flagrant disregard that governments in Ottawa, whether Liberal or Conservative, have had for big companies paying their fair share. We should be just as concerned with the examples of that today as we are regarding historical examples, because they certainly persist. Here we have something that at least is clear-cut. It is in the Constitution, so it is easy to see. What is a lot harder to see are the details of the transactions that go on, under various agreements, that establish tax havens so that wealthy corporations and individuals are able to move their money out of Canada without paying taxes. That is a lot harder to have an informed debate about. We do have folks who have done a lot of work on this, but it takes a lot of digging. It is not spelled out in the Constitution, and we do not have a company going to court to celebrate what it thinks is its right to get out of paying its fair share. Instead, we have a lot of shady dealings. They are under legal agreements, to be sure, but they are shady nonetheless. We do not have appropriate access to information about how much money is leaving the country and the extent to which large, profitable corporations are getting away without paying their fair share. As far as I am concerned, what is happening with CP is just one small, stark example, on the scale of what is going on, of what is happening every day in the Canadian economy. Based on the best information available, and it is not a very transparent process, the Parliamentary Budget Officer estimates that Canadians are losing out on $25 billion every year through the use of tax havens by Canada's wealthiest individuals and corporations. We are talking about a tax bill that has accrued over the last 20 years or so that is on the order of about $300 million. For those who are getting up today to highlight the unfairness of CP demanding back $300 million from Saskatchewan taxpayers, which it rightly paid and should not get back, I would hope that we can take our outrage and our shock at that and transform it into some meaningful action on something that might actually make a dent in the finances of the nation. There is certainly a need to be able to pay for things that are going to support people through the remainder of this pandemic, but also that will help make investments as we try to face the climate challenge. Of course, there are people who say that the government should not spending any money on encouraging renewable energy or other things like this, because the government has no place in deciding these things, but CP is an interesting case study with regard to that. Despite all the wrongs that were part of building that railway, whether it was the treatment of indigenous people and running roughshod over their land, or the Chinese people who were brought here to work on the railway and who were killed and treated horribly, there is no question that building the railway was a central component of making Canada the country it is today. There is a lot that we could talk about regarding what was wrong with it. That is a legacy we can talk about and debate another time. However, it did not happen solely through the ingenuity of private entrepreneurship. In fact, there was a fair bit of government investment. We are dealing with the legacy of that government involvement today. I think it shows the extent to which the big things do not happen without public involvement. They do not happen without the involvement of government. We can look at Alberta and the government of Peter Lougheed, and the amount that government invested in developing the technology that would ultimately produce the oil sands technology that has been part of driving Alberta's economy for decades now. There was massive public investment in that. There is certainly a lesson to learn from this, and that is that public investment is required for the big things that help move our country forward. Canadians should not expect that some few people get to benefit from that investment and make off with the money. That is too often the case, as CP is reminding us by insisting on what it takes to be its right to not pay its fair share, even though there were all sorts of different kinds of public subsidies, whether preferential tax treatment or direct investment. That is not the way these things should work. If we want to build Canada, and if we want to confront the big challenges of our time, that has only ever happened with massive public investment. The question should not be whether the public investment happens or not. The question should be who is benefiting from that investment and how do we, as legislators and governments elected by Canadians, ensure that Canadians are the ones ultimately benefiting from that. While there are people who make some money along the way, we have to make sure that does not get out of hand. In a country where 1% of the population now owns 25% of the wealth, we are in a position where that is getting out of hand again. This is an interesting reminder from the 19th century, which was a case study in just how bad things are when a very small number of people controls all of the wealth and resources. It is something we should be mindful of. We should turn ourselves to the task of combatting the big infrastructure challenge of our time, which is climate change, with our eyes wide open, appreciating that in the past, when there have been big infrastructure challenges, government has had an important role to play. We should learn a lesson from this, which is that we need vigilance not to keep the public sector out of developing the future of the country, but to ensure that a few people along the way do not make mad money while others suffer in order to create that progress. Let us deal with this today but learn the larger lesson and ensure the wealthy are paying their fair share, and ensure Canadians are benefiting to the extent that they should from investments and infrastructure that we have to make.

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Mr. Warren Steinley (Regina—Lewvan, CPC)

Feb/8/22 12:23:55 p.m.
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Madam Speaker, I want to thank the member for Elmwood—Transcona for his support on this motion today. I heard him mention Biggar. When driving into the town of Biggar, Saskatchewan, there is a sign that says, “New York is big, but this is Biggar”. The hon. member can take this back to his relatives: it is a cute little sign. I have been through Biggar many times. Once again, people are still trying to make that connection to Saskatchewan, because it is a great province to be from. Today, we will deal with this motion and I thank my colleague for his support, but I would also ask one more thing. If he does have friends in the Senate, if he knows a few Senators, I would ask that he go and talk to those friends to make sure the Senate deals with this important motion as soon as possible. I would like to have his support with the next step, which is making sure this motion passes in the Senate, so that the taxpayers of Saskatchewan receive fairness and make sure that the corporation pays its fair share. I would hope to have his assistance with that, as well.

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Mr. Daniel Blaikie

Feb/8/22 12:24:54 p.m.
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Madam Speaker, I thank the member, and I am quite familiar with that phrase out of Biggar. In fact, it was on a T-shirt that I wore quite a bit growing up. I am quite familiar with what the member is talking about. It may come as no surprise to the member that New Democrats are not the best people to solicit help from, when we talk about getting things through the other place. There are some historical reasons for that. I do know some senators, and I am certainly happy to talk to them, but I think it is outrageous that we need the approval of a group of completely unelected legislators who are accountable to no one in order to get something like this done.

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Mr. Kevin Lamoureux (Parliamentary Secretary to the Leader of the Government in the House of Commons, Lib.)

Feb/8/22 12:25:43 p.m.
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Madam Speaker, I appreciated a number of the comments the member made, especially when asking if there was something we could learn from CP and the Constitutional change, and how the Constitution reflected an agreement that pre-existed Saskatchewan entering Confederation. Are there things that we can learn from it? For example, we have a huge investment that came from the British Columbia NDP government toward LNG, which was supported by this national government and by huge contributions from the private sector. I am wondering if the member could provide his thoughts on that issue. Is that something he would support?

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Mr. Daniel Blaikie

Feb/8/22 12:26:37 p.m.
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Madam Speaker, the member, of course, raises his own example. The example I had in mind was the wage subsidy. It has paid out hundreds of millions of dollars just recently, without any meaningful accountability, to companies that we have seen raise their dividend payments and reward their shareholders in all sorts of ways, and that have not been asked to pay a single dime back. I think that was a terrible example of how to manage public funds. The NDP called for controls at the inception of that program, and we pointed to other jurisdictions that were doing it better. To me, the wage subsidy program is the best example of the government not having learned its lesson.

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Mr. Gord Johns (Courtenay—Alberni, NDP)

Feb/8/22 12:27:23 p.m.
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Madam Speaker, I thank my colleague for his important speech. As he outlined, this is a company that had $3 billion in profits last year. It paid taxes for 100 years and now, because it sees that there is a loophole, it wants to go back and claw back $300 million. This would have a huge impact on education services and health services in the province of Nova Scotia. Could my colleague speak about the trend we are seeing happening right now, with big corporations putting greed ahead of the public good when it comes to corporate and social responsibility, and how governments need to stand up and make sure that those corporations are paying their fair share?

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Mr. Daniel Blaikie

Feb/8/22 12:28:08 p.m.
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Madam Speaker, I think governments have created a very permissive environment that has encouraged corporations to pursue their own interests. We see that in the corporate tax rate being slashed from 28% to 15%. I do not think that there was ever a golden era when corporations were putting the public good ahead of their private interests, but there was a time when governments required more of them in order to occupy the positions that they occupy in terms of the power and influence that they enjoy. They were required to give more back. If they were not willing to do it in the way that they behaved, at the very least they were required to do it financially, by paying their fair share of taxes. We have really seen that decline, because we have seen governments stop requiring it of them. I think that, until governments grow a spine and start standing up to big companies and making them pay their fair share, this will continue.

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Mr. Michael Kram (Regina—Wascana, CPC)

Feb/8/22 12:29:12 p.m.
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Madam Speaker, I will be splitting my time today with the hon. member for Yorkton—Melville. There is a lot of Canadian history going on in today's debate. There is so much that I had to dig up my old university notes when preparing my speech. On that note, at this time I would like to thank my economics history 206 professor at the University of Regina, Dr. Richard Kleer, for his fascinating class way back when. If Dr. Kleer is watching, I have to say that I believe my speech today is worth at least a few bonus marks in his class. Before I get to the Canadian Pacific Railway, I would like to talk a bit about another historic Canadian company, the Hudson's Bay Company. In the year 1670, King Charles II granted the newly formed Hudson's Bay Company a monopoly on trading posts in all lands in North America whose rivers empty into Hudson Bay, an area including parts of present-day Alberta, Saskatchewan, Ontario, Quebec and Nunavut, and all of present-day Manitoba. Once King Charles II wrote up his royal charter and handed that piece of paper over to the Hudson's Bay Company, it became illegal for anyone else to operate a trading post in the land in North America that soon became known as Rupert's Land. This was great for business for the Hudson's Bay Company trading posts. If any other entrepreneur opened up a competing trading post, Hudson's Bay Company could simply arrest them and throw them in jail. This situation continued for 200 years, until the Hudson's Bay Company voluntarily surrendered its trading post monopoly in exchange for compensation from the government. However, the company still exists today in the form of Hudson's Bay department stores in malls all across the country. Imagine for a minute if the board of directors of Hudson's Bay department stores woke up tomorrow morning and decided that they wanted their old monopoly back. Imagine if they went to court and tried to shut down Canadian Tire or Shoppers Drug Mart. After all, Canadian Tire and Shoppers Drug Mart are violating the royal charter that granted the trading post monopoly to the Hudson's Bay Company way back in the year 1670. I hope everyone in this chamber can agree that this would be completely and totally ridiculous. Even if Hudson's Bay Company lawyers dusted off the original copy of the 1670 Royal Charter or the original copy of the 1870 Deed of Surrender and found one of the i's was not dotted or one of the t's was not crossed, it would still be completely and totally ridiculous to shut down every Canadian Tire and Shoppers Drug Mart. One way or another, we as lawmakers would not allow that to happen. We have almost as ridiculous a situation developing today in my home province of Saskatchewan with the Canadian Pacific Railway, which is another Canadian company that is almost as historic as the Hudson's Bay Company. The construction of a transcontinental railway was a condition of the Province of British Columbia joining Confederation in 1871. A few years later, Parliament passed the Canadian Pacific Railway Act as a way to contract out the construction and operation of the new transcontinental railway. The terms were very generous: $25 million; 25 million acres of Crown land in western Canada, including the mineral rights; a ban on new competing railways south of the main line; and certain tax exemptions for the Canadian Pacific Railway that were to last forever. A few years later, in 1905, when Parliament decided to pass the Saskatchewan Act to create the province of Saskatchewan, the tax exemptions granted to the Canadian Pacific Railway were included in section 24 of the act and transferred to the newly created provincial government. These terms were very generous, and rightfully so. The whole idea of building a transcontinental railway in the 1800s must have been on the same scale as NASA going to the moon in the 1900s or the prospect of sending astronauts to Mars in this century. The railway played a vital role in bringing British Columbia into Confederation and the settlement of western Canada. For its contribution, the Canadian Pacific Railway was well paid. However, as the saying goes, all good things must come to an end, and for CP Rail, these tax exemptions did come to an end in the year 1966. That year, federal politicians, provincial politicians from Saskatchewan and executives from CP Rail sat down and came to an agreement. At that time, all parties agreed that the tax exemptions included in section 24 of the Saskatchewan Act would be discontinued in exchange for certain railway regulatory changes, and CP Rail has been paying its fair share of taxes ever since, just like everyone else. This is where the story should have ended. After CP Rail started paying its taxes in 1966, historians should have been able to turn the page on this chapter of our history, just like historians have long since turned the page on the Hudson’s Bay Company’s trading post monopoly. Unfortunately, that is not what happened. Recently, these tax exemptions, which are technically still on the books, have become the subject of a lawsuit in my home province of Saskatchewan. CP Rail has decided that it wants to go back to the good old days when it did not have to pay taxes. It wants the tax exemptions specified in section 24 of the Saskatchewan Act of 1905 to be reactivated and brought back to life so that the company no longer has to pay taxes moving forward. CP Rail is also claiming that it is entitled to $341 million in taxes that it has been paying over the years, when it apparently did not have to. This lawsuit is almost as ridiculous as the Hudson’s Bay Company trying to shut down Canadian Tire and Shoppers Drug Mart for violating the trading post monopoly granted to them by King Charles II in the year 1670. The only difference in this case is that technically section 24 of the Saskatchewan Act of 1905 is still on the books, so we have not quite turned the final page on this chapter of our history. The time has come to turn the page. While I have a great deal of respect and admiration for the contributions the Canadian Pacific Railway has made to our collective history, the time has come to treat it like any other company, and that means paying its fair share of taxes. It is finally time to repeal section 24 of the Saskatchewan Act of 1905. I will be voting in favour of the motion brought forth by my friend and colleague, the hon. member for Regina—Lewvan, and I encourage all members to do the same.

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Mr. Kevin Lamoureux (Parliamentary Secretary to the Leader of the Government in the House of Commons, Lib.)

Feb/8/22 12:37:13 p.m.
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Madam Speaker, I hope to be able to expand upon this, but I appreciate the fact that CP did enter into an agreement back in the mid-sixties, in 1965 or 1966, as no doubt there would have been some discussions in the lead-up to it. I think it is important for us to recognize that CP as a corporation has been paying taxes. I do not know what triggered CP, whether it was a young intern or whomever, to ultimately decide this issue should be going to a court. Is the member aware of the situation? Do we know why CP made the decision to move in the direction of going to court?

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Mr. Michael Kram

Feb/8/22 12:38:04 p.m.
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Madam Speaker, the short answer is no. I have done some research outside of my economics history class, I have to say, and I have come up with no answer to that particular question. Some management and directors decided this would be a good idea, and CP Rail is giving it the old college try, but I do not know what motivated them to go down this path.

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Mr. Mario Simard (Jonquière, BQ)

Feb/8/22 12:38:31 p.m.
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Madam Speaker, my colleague has clearly shown that it was absurd for Canadian Pacific not to pay its taxes. What I am having difficulty understanding is the ambivalence of our Liberal colleagues. They have seemed very hesitant to support the Conservative motion right from the start of the day. Can my colleague explain why he thinks our Liberal colleagues are being so reserved?

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Mr. Michael Kram

Feb/8/22 12:39:12 p.m.
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Madam Speaker, the question by the hon. member from the Bloc is probably best posed to the Liberals on the other side of the House. It is certainly my sincere hope that all members of the House will be supporting this motion. It is very reasonable and more than a little overdue, as I have laid out. It is my understanding that CP Rail has been paying its taxes since 1966, and it is my hope and expectation that it will be doing so moving forward.

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Mr. Randall Garrison (Esquimalt—Saanich—Sooke, NDP)

Feb/8/22 12:39:53 p.m.
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Madam Speaker, I thank the member for Regina—Wascana for his contribution. It allowed us to remember the history of what we are talking about today. As a member from Vancouver Island, I cannot resist pointing out that we were promised train service and that train service ended on Vancouver Island almost 10 years ago. Maybe that is another thing we need to fix. I want to return to something I raised earlier. The member for Regina—Wascana talked about corporations paying their fair share of taxes. As I said before, I am glad to hear all members agreeing on that, but does that zeal for paying their fair share of taxes extend to closing down the use of international tax havens or perhaps putting a surtax on those who have profited during the pandemic?

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Mr. Michael Kram

Feb/8/22 12:40:34 p.m.
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Madam Speaker, I think everyone is in favour of everyone paying their fair share. It is our responsibility as parliamentarians to decide what everyone's fair share is. In terms of offshore tax havens, I think that warrants more than a little investigation from the CRA to see if some loopholes can be closed. As for profiting during the pandemic, I think it is a good thing that some companies owning a brewery or distillery retrofitted their factories to make hand sanitizer or other PPE. I certainly do not want to disincentivize entrepreneurs who have responded to the pandemic in a positive way.

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