October 3, 1996

BQ

Michel Gauthier

Bloc Québécois

Mr. Michel Gauthier (Leader of the Opposition, BQ)

Mr. Speaker, could the Minister of Finance confirm that the action he took yesterday regarding this problem of tax evasion did not plug the loophole, did not prevent money from being taken out of the country, but, on the contrary, only made things easier than in 1991, because now, with what the Minister of Finance has done, trusts will no longer have to pull a December 23 and obtain special authorization in order to be allowed the huge privilege of taking money out of Canada tax free?

Topic:   Oral Question Period
Subtopic:   Tax Evasion
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LIB

Paul Martin

Liberal

Hon. Paul Martin (Minister of Finance, Lib.)

Mr. Speaker, first of all, this has nothing to do with trusts. I was very clear in the 1995 budget; we have eliminated all tax advantages for family trusts. The question is how to treat capital gains when someone, whether a trust, an individual or a corporation, wishes to leave the country.

This was precisely the problem dealt with yesterday. In the past, it was not necessary, in certain cases, on leaving the country, to pay tax on gains that had accrued. As I said in yesterday's announcement, emigrants are now required to pay tax on capital gains or give us a security in order to ensure that Canada will receive its fair share.

Topic:   Oral Question Period
Subtopic:   Tax Evasion
Permalink
BQ

Michel Gauthier

Bloc Québécois

Mr. Michel Gauthier (Leader of the Opposition, BQ)

Mr. Speaker, I am aware that this is a problem involving trusts and other financial vehicles as well, but the minister cannot say that he has removed all advantages for trusts in his last budget. This is effective 1999, so between now and then, they have the same advantages they had before. I take pleasure in correcting the minister on this point.

When the Minister of Finance says that an emigrant will give securities, he is relying on the signature of a notice of waiver, because sufficient security, under the Income Tax Act, usually takes the form of a notice of waiver. That is the basis on which he says that the taxes will eventually be paid to Canada.

Will the minister confirm that the notice of waiver on which he is pinning his hopes of recovering the taxes due Revenue Canada at some future date has no legal value, but merely a moral one, as the deputy minister of Revenue Canada, Pierre Gravelle, yesterday told the public accounts committee?

Topic:   Oral Question Period
Subtopic:   Tax Evasion
Permalink
LIB

Paul Martin

Liberal

Hon. Paul Martin (Minister of Finance, Lib.)

Mr. Speaker, once again, the Leader of the Opposition is mistaken. If there is the slightest risk the Canadian government will not be paid its fair share of taxes, we will require a lot more than a notice of waiver. We will require a bond, a debenture, a valid security for ensuring that the taxes will be paid.

Topic:   Oral Question Period
Subtopic:   Tax Evasion
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BQ

Yvan Loubier

Bloc Québécois

Mr. Yvan Loubier (Saint-Hyacinthe-Bagot, BQ)

Mr. Speaker, the usual practice at this time, when assets are being transferred and we want to make sure that the trustee does not evade taxes, is that a notice of quit claim is required. That is the only guarantee we require at present, and it has no value in international law and tax conventions. That is the reality.

Yesterday, contrary to what he has claimed, the Minister of Finance did not close up the tax loophole for family trusts. On the contrary, he announced that the interpretation of December 23, 1991, which allowed the tax-free transfer to the United States of a two billion dollar trust will, in future, be government policy for all of the assets of millionaires and billionaires.

Will the minister confirm that, by extending the concept of taxable Canadian assets to Canadian residents, as he did yesterday in his ministerial statement, he has given his blessing to the scandal of 1991, which now becomes the basis of his taxation policy?

Topic:   Oral Question Period
Subtopic:   Tax Evasion
Permalink
LIB

Paul Martin

Liberal

Hon. Paul Martin (Minister of Finance, Lib.)

Mr. Speaker, the Bloc is having a little trouble getting the point. As I have just said, and as I said clearly in my speech of yesterday, the security we intend to require will be far more than a quit claim, if there is any risk whatsoever of the individual's not paying his fair share of Canadian taxes. It is very clear, and I said so in my speech, that it

could take the form of a debenture, a bond, but we will insist upon the security if necessary.

Second, there was a loophole in the legislation in 1991. The legislation was applied as it stood, but there was a loophole.

That loophole was blocked yesterday. We have closed up a great many loopholes, and will continue to do so, because it is our objective to have Canadians pay their fair share of the taxes owing to the government.

Topic:   Oral Question Period
Subtopic:   Tax Evasion
Permalink
BQ

Yvan Loubier

Bloc Québécois

Mr. Yvan Loubier (Saint-Hyacinthe-Bagot, BQ)

Mr. Speaker, I see the minister is in a co-operative mood today. If I have understood correctly-and we will see in the bill that will be introduced-he intends to require firm monetary commitments, real binding commitments. That is what we have been asking him to do since the beginning, so we are pleased today that he has just now given us at least part of an answer.

Since he is in a co-operative mood, could he respond to other requests from the official opposition concerning the case of interest to us here? First of all, contrary to what he said yesterday in his ministerial statement, can he limit the use of the TCAs, taxable Canadian assets, solely to non-residents? Second- something he has not wanted to do from the start-could he demand that there be a complete investigation of the 1991 case, which is still somewhat unclear, and which is still an outrageous scandal for Canadian taxpayers?

Topic:   Oral Question Period
Subtopic:   Tax Evasion
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LIB

Paul Martin

Liberal

Hon. Paul Martin (Minister of Finance, Lib.)

Mr. Speaker, there is no scandal, The auditor general himself has said that there was no scandal of any kind, that the integrity of the public servants concerned was not in question.

The auditor general himself, whom the hon. member has quoted on numerous occasions, has said that there was no scandal.

It is quite important that we understand what has happened here. There was a law in place in 1991, of which certain taxpayers took advantage. The government decided there was a loophole in the law which should be closed.

We gave the matter to a parliamentary committee which made a series of recommendations. Within a month of those recommendations we stood up in this House of Commons and closed that loophole.

Let us understand what the opposition is asking. Because it refuses to deal with the substance of the issue, it wants to make a lot of unsubstantiated charges. Also, opposition members are asking us to act retroactively.

They are asking us to say to the world that Canada's laws do not stand, that we cannot count on them. They would destroy the economy of this country, and we will not do it.

Topic:   Oral Question Period
Subtopic:   Tax Evasion
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REF

Preston Manning

Reform

Mr. Preston Manning (Calgary Southwest, Ref.)

Mr. Speaker, the government has a problem that it cannot avoid. The Minister of National Defence has become a lame duck minister.

The minister has committed so many mistakes, from interference in the Somalia inquiry to personal contracts for political friends, bungling the downsizing of the forces, bungling the base closures, from budget overruns to mismanagement of morale, that nothing the Somalia inquiry finds or the Prime Minister says can rehabilitate this minister.

Does the government believe that it is in the national interest to leave a lame duck minister in charge of the Canadian military?

Topic:   Oral Question Period
Subtopic:   National Defence
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LIB

David Collenette

Liberal

Hon. David M. Collenette (Minister of National Defence and Minister of Veterans Affairs, Lib.)

Mr. Speaker, the point was made yesterday by the Prime Minister that what we are seeing here is the politicizing of the entire hearing process dealing with our deployment to Somalia.

This government has tried to do the right thing. We proposed an inquiry. We created the inquiry. We want the inquiry to do its job. We will hold to that line.

Obviously the leader of the Reform Party does not like those answers, but he is going to get those answers until the inquiry reports.

He says there is one thing that cannot be avoided and that there is a problem. I would say that we could use the same language about him and his party. There is one thing his party cannot avoid. The fact is there is a problem with leadership; it is a problem with his leadership.

Topic:   Oral Question Period
Subtopic:   National Defence
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REF

Preston Manning

Reform

Mr. Preston Manning (Calgary Southwest, Ref.)

Mr. Speaker, the Prime Minister and now the minister keep repeating the same old thing, let the inquiry do its work. We agree.

Canadians also want the Prime Minister to do some work. The Prime Minister says do not interfere with the inquiry. The minister says the same thing. At the same time, this minister repeatedly protects and endorses General Boyle, one of the key figures being investigated by that inquiry. The government cannot have it both ways.

If the government is serious about letting the inquiry do its work, why does it not instruct the Minister of National Defence to withdraw his protection and endorsation of General Boyle?

Topic:   Oral Question Period
Subtopic:   National Defence
Permalink
LIB

David Collenette

Liberal

Hon. David M. Collenette (Minister of National Defence and Minister of Veterans Affairs, Lib.)

Mr. Speaker, I think the public is finding it quite odd that the Reform Party, day in and day out, is going at this issue. It is, in effect, undermining the integrity of the inquiry process.

Canadians want constructive suggestions about the economy, about national unity, about pension reform, about agriculture, about a host of other issues that affect them in their daily lives.

What do we have here? We have a party that ostensibly supported the inquiry process but has done everything, by its behaviour in the House of Commons, to undermine it. That is unacceptable.

Topic:   Oral Question Period
Subtopic:   National Defence
Permalink
REF

Preston Manning

Reform

Mr. Preston Manning (Calgary Southwest, Ref.)

Mr. Speaker, this answer from a minister who attempted to influence who sat on the inquiry, who tolerates document tampering before the inquiry and who himself makes statements of endorsation about General Boyle even before he gets off the stand at the inquiry. Who is interfering with the inquiry?

We hear that the government is looking for an election slogan. We have one from a letter from a retired soldier: "Canadians deserve better". Our soldiers have been saddled with a lame duck minister and chief of defence staff.

How long is it going to take the government to acknowledge that Canadians deserve better leadership at the top of the Canadian military?

Topic:   Oral Question Period
Subtopic:   National Defence
Permalink
LIB

David Collenette

Liberal

Hon. David M. Collenette (Minister of National Defence and Minister of Veterans Affairs, Lib.)

Mr. Speaker, I really have tried to avoid politics as much as possible in this whole matter.

Canadians want to find the truth regarding what happened with our deployment to Somalia. They want the commission to do its work.

The leader of the Reform Party talks about Canadians deserving better from the government. Canadians deserve better from the opposition. They deserve an opposition that asks constructive, intelligent questions that contribute to the national policy debate, not to come here every day and try to make partisan political interjections on the facts not only of the inquiry but of the Canadian military itself.

Topic:   Oral Question Period
Subtopic:   National Defence
Permalink
BQ

Réal Ménard

Bloc Québécois

Mr. Réal Ménard (Hochelaga-Maisonneuve, BQ)

Mr. Speaker, my question is for the Minister of Industry.

As the minister knows, our country's major defence industry companies are concentrated in Quebec. These include Expro, Bell Helicopter, SNC and Oerlikon. It is also a fact that, without government support, up to 10,000 jobs will disappear in this sector over the next five years.

Considering that 56 per cent of the aerospace industry is located in Quebec, and that, for ten years now, Quebec has been receiving $115 million annually under the existing program, will the minister pledge to maintain the same level of funding for Quebec under the technology partnerships program?

Topic:   Oral Question Period
Subtopic:   The Aerospace Industry
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LIB

John Manley

Liberal

Hon. John Manley (Minister of Industry, Minister for the Atlantic Canada Opportunities Agency, Minister of Western Economic Diversification and Minister responsible for the Federal Office of Regional Development-Quebec, Lib.)

Mr. Speaker, I thank the hon. member for mentioning that federal support to Quebec's aerospace industry has been very significant.

Indeed, it is the Government of Canada that established technology centres in the Montreal region. It is also the Government of Canada that set up the base on which was built the industry in Montreal. And now, we are committed to continue supporting Montreal's technology sector.

Topic:   Oral Question Period
Subtopic:   The Aerospace Industry
Permalink
BQ

Réal Ménard

Bloc Québécois

Mr. Réal Ménard (Hochelaga-Maisonneuve, BQ)

Mr. Speaker, we take note of the fact that the minister will have to set aside $115 million for Quebec.

I have a supplementary. Does the minister know that the English version of his document on the technology partnership program points out that funding will be exclusively for feasibility studies, while this information is lacking in the French version-

Topic:   Oral Question Period
Subtopic:   The Aerospace Industry
Permalink
?

The Speaker

I remind the hon. member that he must not use props when putting his questions. The Minister of Industry has the floor.

Topic:   Oral Question Period
Subtopic:   The Aerospace Industry
Permalink
LIB

John Manley

Liberal

Hon. John Manley (Minister of Industry, Minister for the Atlantic Canada Opportunities Agency, Minister of Western Economic Diversification and Minister responsible for the Federal Office of Regional Development-Quebec, Lib.)

Mr. Speaker, if the hon. member had reviewed Montreal's economic situation, he would know that it is those sectors relying on the political framework, and the industry sectors supported by the government of Canada that do well, namely the pharmaceutical, biotechnology, telecommunication and aerospace industries.

By contrast, the sectors that depend on the government of Quebec are doing very badly.

Topic:   Oral Question Period
Subtopic:   The Aerospace Industry
Permalink
REF

Jim Hart

Reform

Mr. Jim Hart (Okanagan-Similkameen-Merritt, Ref.)

Mr. Speaker, Canadians know it is this Liberal government that has destroyed the morale of the Canadian Armed Forces. It is this lame duck minister and this government that are playing politics at the expense of armed forces personnel.

Despite what the Liberals think, most military personnel who served in Somalia served with distinction and should be recognized for their often stellar performance.

The Prime Minister and the defence minister continue to support General Boyle but refuse to support the rank and file in the Canadian Armed Forces.

Will the defence minister move his support from General Boyle to our Somalia veterans and strike and issue a Somalia medal?

Topic:   Oral Question Period
Subtopic:   National Defence
Permalink

October 3, 1996