Madam Speaker, since I have only a few minutes, I would like to focus on three key questions: what is the problem; how big is the problem, and what, if anything, is the government doing about it?

What is the problem? We need to talk about what tax rates are actually in effect in Barbados on international business companies. What we find is that on the first $5 million U.S. of profit the tax rate is 2.5%. That used to go down to a tax rate of 1%. However, as of 2013, Barbados has cut that all the way down to 0.25%. A quarter of a percentage point on profits over $15 million a year is what international companies pay in Barbados, so when the Conservative member for Brantford—Brant or the Liberal member for Sudbury give us these textbook explanations about avoiding double taxation, we have to talk about what is really happening in Barbados.

Certainly it makes sense that if a Canadian company actually pays a decent amount of tax somewhere and then repatriates profits back home it does not again pay Canadian tax on that same money, and fair enough. However, is the position of the Conservatives and the Liberals in this debate that when a Canadian company pays a tax rate of 0.25% in Barbados that is good enough, that the company has paid its fair share of tax and it should not owe any more Canadian tax on that money? It seems that is what we heard from the previous speakers.

There is absolutely a very serious problem of Barbados being a tax haven and it really does not make sense to exempt profits repatriated from that country from Canadian tax.

The next question is, how big a problem is it? Maybe there is a little loophole there, but if Canadian companies are not really taking advantage of it, we would not worry. The member for Mount Royal tried to suggest that there are all kinds of different tax havens out there, so why focus on Barbados. I will tell him why. If we look at Statistics Canada's figures on foreign direct investment positions, we find that most of Canada's foreign direct investment is in the United States, as one would expect, but the second-largest Canadian foreign direct investment position in the world is in Barbados at $71 billion. Why is that? Barbados is a pretty small country. Its GDP is something like $5 billion Canadian, so why would we be parking $71 billion in an economy of that size?

We have not heard an answer to that this evening. I think it is obvious that Barbados is just being used as a tax shelter. Why would Canadian companies be investing more in Barbados than, say, in the United Kingdom, the third-largest country for Canadian foreign direct investment? The United Kingdom, of course, has an actual economy and there are things there that corporate Canada might actually want to invest in.

There is a really big issue with Barbados. It is not to say there are not other tax havens, but clearly, Barbados is the biggest tax haven being abused by corporate Canada. We have to start somewhere and it makes sense to start with the biggest part of the problem. That is exactly what this excellent motion from my colleague, the member for Joliette proposes.

The third question that we need to address here is, what is the government doing about this very serious and very large problem? There was a lot of talk in speeches from the Liberals about all the good measures in the budget to deal with tax evasion. Indeed, the budget documents use the term “tax evasion” about a dozen times. It even uses the term “tax avoidance” about half a dozen times. A word that does not appear in the budget at all is “Barbados”. We are going to fight tax evasion without even talking about the largest source of tax evasion and tax avoidance. That is a very major problem, and that is the reason why members of the House need to vote in favour of the motion presented by my colleague from Joliette.

Erin Weir

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