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Oct/6/22 11:50:40 a.m.
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Uqaqtittiji, Canadians deserve answers. We deserve to learn why corporate greed is protected while Canadians pay more for food. This motion is a way to try to get some of those answers. Does the member agree that the agriculture committee should call the CEOs of the major grocery chains to come and explain their excessive profits?

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Mr. Yves Perron

Oct/6/22 11:51:13 a.m.
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Madam Speaker, I would like to thank my colleague from Nunavut for her question. We certainly do agree that we need to examine the issue in depth and call witnesses. I would like to take this opportunity to say publicly that I love the sound of my colleague's language when she speaks it. I encourage her to use it more often. I said that we agree. However, when I am told that we need to condemn greed on the part of major corporations, I say that we should study the matter first, before we decide whether they have in fact been greedy. Of course, there is always greed in the capitalist system. We need to find out if there is any abuse happening. I think that there probably is, but I do not want to go out on a limb today, because I have not yet examined the matter.

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Mr. Lloyd Longfield (Guelph, Lib.)

Oct/6/22 11:52:02 a.m.
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Madam Speaker, I am looking forward to seeing how the agriculture committee goes about its study. It was good to sub in on the committee when it was talking about grain dryers this week and the complexities around that. Most of the retail profit growth from Loblaws came from its pharmacies, like Shoppers Drug Mart and Pharmaprix. The study of profit growth and where the profits are happening could be part—

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The Assistant Deputy Speaker (Mrs. Carol Hughes)

Oct/6/22 11:52:33 a.m.
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I think there is a problem with interpretation. Is it working now? Now that everything is working, I would ask the hon. member for Guelph to please start from the beginning.

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Mr. Lloyd Longfield

Oct/6/22 11:52:49 a.m.
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Madam Speaker, I thank the interpreters for helping us through my lack of French knowledge. I thank the hon. member for Berthier—Maskinongé for his work here this morning and also his work on the agriculture committee. The study the agriculture committee will be looking at, I am hoping, will look into the source of profits. Loblaws has drug store chains like Shoppers Drug Mart and Pharmaprix, which have actually been the highest part of their profit growth through this, with the sale of medications the drug stores provide. Also, with the transfer of food from restaurant sales to sales through the retail sector, there has been a shift in demand, so that will also impact prices. As the member mentioned, with climate change, California is not supplying fruits and vegetables to Canada to the degree it used to because of climate change impacts. Are these the types of things they will be able to look at during the study?

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Mr. Yves Perron

Oct/6/22 11:53:59 a.m.
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Madam Speaker, I thank my colleague for his intervention. Yes, that is our goal. That is why I am saying that we need to do a serious study. We have a certain number of meetings planned, and we can hold more as needed. I think it is our duty to do things intelligently and identify the sources of this inflation. I said it in my speech, but I want to repeat that we must help the people who are less privileged right now by providing some money so they can deal with the impacts of inflation, because it could take us quite a while to complete our analysis and take action, and in the meantime, people need to eat.

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Mr. Luc Berthold (Mégantic—L'Érable, CPC)

Oct/6/22 11:54:45 a.m.
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Madam Speaker, I agree with my colleague on two points. I agree with his view of the government's incompetence in fighting inflation and improving the cost of living for everyone. I also agree with him when he talks about acting wisely to provide quick solutions for Canadians. Acting wisely would have meant voting for our motion to stop the government from going ahead with its plan to raise taxes, which will increase the cost of absolutely everything for Canadians in the coming months. That would have been wise.

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Mr. Yves Perron

Oct/6/22 11:55:19 a.m.
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Madam Speaker, acting wisely in Parliament would mean not repeating the same stupid nonsense three times in every speech. It would also mean—

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The Assistant Deputy Speaker (Mrs. Carol Hughes)

Oct/6/22 11:55:27 a.m.
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Order. The hon. member for Mégantic—L'Érable.

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Mr. Luc Berthold

Oct/6/22 11:55:30 a.m.
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Madam Speaker, I think my colleague ought to apologize. I am not stupid. I am not someone who repeats words and uses words like that. I find this totally unacceptable. This is the second time today that my colleague has used this type of language. I would like him to withdraw his remarks and apologize.

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The Assistant Deputy Speaker (Mrs. Carol Hughes)

Oct/6/22 11:55:48 a.m.
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I do not believe the member said that the member for Mégantic—L'Érable was repeating those words. He did not say anyone's name. I will allow his comment, but I would ask members to choose their words wisely.

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Mr. Yves Perron

Oct/6/22 11:56:09 a.m.
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Madam Speaker, I am very sorry if the member felt personally offended. My intention was to speak out against the fact that people have been saying the same thing over and over for days. In my view, that does not contribute to the debate. I did not intend to attack him personally. I hope that clears things up. That said, acting wisely might also mean not taking the populist tack of arguing for an end to all taxes. Mr. Luc Berthold: Oh, oh! Mr. Yves Perron: Mr. Speaker, I would like it if people could hear our answers to questions. I think I did that properly. The Speaker may want to check what I said and let me know if I followed the rules of the House. Acting wisely means considering all aspects of a debate, listening to what other people have to say, and using government money to help the less fortunate. We have to find the equilibrium there.

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Mr. Gabriel Ste-Marie (Joliette, BQ)

Oct/6/22 11:57:07 a.m.
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Madam Speaker, the motion calls for: (a) forcing CEOs and big corporations to pay what they owe, by closing the loopholes that have allowed them to avoid $30 billion in taxes in 2021 alone, resulting in a corporate tax rate that is effectively lower now than when this government was elected; The motion talks about tax avoidance by all corporations in every sector to the tune of $30 billion. In fact, that corresponds to the difference between the corporate tax rate, which is 25%, and the rate corporations actually pay, which is around 15%. We have to be very careful when we make such statements since the gap between the tax rate and the effective tax rate is not necessarily due to abuse. Parliament often adopts measures to provide tax breaks and tax credits to encourage good behaviour. Just look at the research and development tax credit and the production technology tax credits, which increase productivity and help limit the effects of the labour shortage. Look at the tax credit for clean technologies and the deductibility of contributions to pension plans and workers' group insurance plans. All those credits lower the effective tax rate, but they are neither abuse nor fraud. It is false and inflammatory to suggest that inflation is due in large part to greedy corporations not paying their fair share of taxes. Madam Speaker, I would ask the Liberals to respect decorum. I know they do not listen when members are speaking in French in the House, but they could at least keep quiet so as not to interfere with the business of the House.

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The Assistant Deputy Speaker (Mrs. Carol Hughes)

Oct/6/22 11:59:02 a.m.
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Order. I would like to remind members that, if they want to have discussions outside the time provided for questions and comments, they have to go to the lobby. In the meantime, I will let the hon. member for Joliette continue his speech.

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Mr. Gabriel Ste-Marie

Oct/6/22 11:59:27 a.m.
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Madam Speaker, we need a tax system that is fair and equitable. The system should be progressive, with the wealthy contributing more to support public services. Obviously, that should apply to corporate profits too. To achieve a fair and equitable tax system, I urge parliamentarians to do much more to fight tax evasion and tax avoidance. Tax havens are becoming increasingly popular because of lax legislation. Companies open subsidiaries that are nothing but empty shells. They do not do anything. They exist solely for the purpose of tax evasion. By recording revenue in empty shells, profitable corporations declare next to no profits in countries with normal tax rules. That is how they avoid paying tax. These despicable schemes carried out with the help of unscrupulous experts are usually perfectly legal. That is what we call tax avoidance. We need to change the laws and regulations as soon as possible. Wealthy individuals usually opt to shelter their fortunes and their income in tax havens where information is less transparent so they can cheat the tax system. That kind of fraud is tax evasion. It is also important to note that organized crime and terrorist groups use tax havens. According to the World Bank, in 2016, tax havens held more than $36 trillion U.S. Yes, I said $36 trillion U.S. The situation is probably even worse today. According to economist Gabriel Zucman, in 2017, no less than 40% of international financial transactions involved tax havens in some way. The International Monetary Fund estimates that the use of tax havens costs governments $600 billion a year in lost corporate income tax revenue and $200 billion in lost individual income tax revenue, for a total of $800 billion. As expert Alain Deneault notes, everyone else has to make up this shortfall, either by paying higher taxes or by enduring austerity policies. Considering their impact on government finances and operations, tax havens are a major political issue. The public wants them to disappear, but those profiting from them want them to stay. As the IMF concluded, “the wealthier the individual and the larger the multinational corporation...the more deeply they are embedded in the offshore system and the more vigorously they defend it”. That has to change. Statistics Canada reports that Canadian corporations invested $381 billion in the top 12 tax havens in 2019. That is nearly one-third of all Canadian foreign investment. In a 2019 report, the Parliamentary Budget Officer found that “financial flows between Canada and certain jurisdictions are disproportionately large compared to their GDP”. This proves that those amounts are not genuine investments, but rather accounting manoeuvres aimed at evading taxes. Also in 2019, the CRA estimated that the use of tax havens by Canadian companies could be costing the treasury up to $11.4 billion in lost revenue, more than three-quarters of which would be from large corporations. That is four times more than the CRA had estimated that it was losing to individuals' use of tax havens in a report published the previous year. That amount is undoubtedly vastly underestimated. In fact, the CRA was only considering schemes that were fraudulent or dubious, not those that were perfectly legal, as “its report does not estimate the gap resulting from ‘legal’ tax avoidance through profit shifting”, which is much greater. The federal government is complacent with respect to the fraud and abuse that takes place with the use of tax havens. Parliament allocates ever higher amounts to help the agency tackle the problem, but nothing happens and we are not seeing results. Not only is the government complacent in going after fraudsters but it has essentially legalized the use of tax havens. Unlike the NDP motion, which only condemns the greed of bad companies and accuses them of causing inflation, the Bloc Québécois's more constructive approach specifically targets the problem of tax avoidance with the use of foreign tax havens. We are proposing six possible solutions. First, 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. Second, 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. Third, require banks and other federally regulated financial institutions to disclose, in their annual reports, a list of their foreign subsidiaries and the amount of tax they would have been subject to had their income been reported in Canada. Fourth, 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. Progress is being made in that regard. Fifth, work toward establishing a global registry of actual beneficiaries of shell companies to more effectively combat tax evasion. Sixth, and finally, use the global financial crisis caused by the pandemic to launch, or relaunch, a strong offensive at the Organisation for Economic Co-operation and Development against tax havens with the aim of eradicating them for good.

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Mr. Richard Cannings (South Okanagan—West Kootenay, NDP)

Oct/6/22 12:05:45 p.m.
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Madam Speaker, I would like to thank my colleague for his speech, and I hope that Bloc Québécois members bring all of those points forward in their next opposition day motion. It would be a bit much if we included all of that in ours today, but I think we totally agree with the member. I will bring up one example that I would like to talk about here in the House, because it shows how egregious these offshore tax havens are. A Canadian mining company had a big mine in Mongolia, and over the course of five years or so, it was facing $600 million in Canadian tax and $200 million in Mongolian tax. However, the company opened a post office box, not an office, in Luxembourg and wrote to the CRA to ask if it was legitimate. The CRA said it could go for it because it was perfectly legal. The company ended up paying no tax in Canada, no tax in Mongolia and $80 million in tax to Luxembourg, and it is legal. We have to change this.

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Mr. Gabriel Ste-Marie

Oct/6/22 12:06:49 p.m.
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Madam Speaker, I completely agree with my colleague that this has to change. We just need the government to show some political will. The problem is that the power keeps bouncing back and forth between two parties that have no interest in doing anything about it, so it remains legal. The kind of scheme my colleague described would simply be illegal in many other countries, and possibly even punishable by imprisonment. Here, companies ask for advice and are told that everything is just fine. If there is a problem, they are told to simply pay the tax they should have paid, without any further consequences. Meanwhile, people would go to jail in many other countries. This has to change, but the government needs to show the political will to change it.

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

Oct/6/22 12:07:33 p.m.
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Madam Speaker, I had the opportunity to listen to quite a bit of the debate today, and I guess the overriding concern that I have is the bottom line, which is the cost of inflation with respect to food for the constituents I represent. This is something that is so critically important for all of us. The debate on the floor of the House of Commons here in Ottawa has an impact in itself. I would ask the member if he agrees that, since the Standing Committee on Agriculture and Agri-Food will now be looking at this, in part because of this debate, the committee has a great opportunity to ensure that there is going to be more accountability in terms of the cost of food in Canada today.

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Mr. Gabriel Ste-Marie

Oct/6/22 12:08:33 p.m.
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Madam Speaker, I would like to thank my colleague for his speech. When it comes to the work of the Standing Committee on Agriculture and Agri-Food, we should draw inspiration from what the British Parliament is doing. We know that the food distribution sector is an oligopoly. Do its members engage in reprehensible practices? Did they take advantage of their position and increase profits off the backs of the thousands of farmers who compete with each other or the millions of consumers who buy their products? Was there collusion that would explain these excessive profits? The Competition Bureau should look into this. The British Parliament has given that mandate to its competition bureau. As stated in this motion, the Competition Bureau should be given the mandate to study whether there is collusion that resulted in excessive profits, and then we can intervene. It is our duty to give this mandate to the Competition Bureau.

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Mrs. Julie Vignola (Beauport—Limoilou, BQ)

Oct/6/22 12:09:43 p.m.
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Madam Speaker, it is always exciting and interesting to hear my colleague speak so passionately. Is Canada's Competition Bureau doing enough? Can it be given a stricter mandate and should it be given a stricter mandate?

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