June 17, 2019

RE: Consultation on Draft Goods and Services Tax/Harmonized Sales Tax Legislation

To Whom It May Concern: I appreciate this opportunity to offer feedback on the Department of Finance’s draft legislation amending the Excise Tax Act. My brief comments today will focus on the proposal to treat virtual currency as a financial instrument. Given that these proposed changes are likely to simplify the registration, reporting and remittance requirements for suppliers, we should be mindful of the wider socioeconomic and environmental impacts of facilitating the use of cryptocurrency.

The draft legislation leaves unanswered the question of how industry participants, namely crypto-mining, will be treated with respect to GST/HST. For instance, were zero-rating to be applied in lieu of exemptions, would it benefit non-residents disproportionately to resident Canadians, and how can we determine that with any certainty given the anonymity of the platform?

We should ensure that any tax incentives to establish crypto-mining in a Canadian jurisdiction is attended by energy regulations, similar to what Quebec has done this spring. There should be requirements that the company use green energy sources, like Iceland’s Genesis Mining, and that they engage in efficient blockchain systems like “Proof of Stake,” which reduces duplication in effort and resources. All these activities should be further constrained within Canada’s international obligations in respect of climate change. Keeping down the high energy demands of any blockchain industry in Canada is essential if we are serious about reaching the Paris Target. Not to mention, doing so will prevent costs from trickling down to the consumer.

Meetings of the House Standing Committee on Public Safety and National Security regarding cybersecurity in the financial sector make clear that we need solutions to reduce the incidence of fraud and to protect sensitive data. Cryptocurrency may be part of this, bringing with it the additional benefit of integrating people into the market without need of a bank account. More broadly speaking, distributed ledger technologies could also help to prevent vote tampering during elections, facilitate government services like visa applications, and protect information in government registries as B.C. is now doing with land titles. I support moving in this direction as long as we proceed cautiously and with an eye towards protecting people’s privacy.

Thank you in advance for your consideration.

Best regards,

Elizabeth May, O.C.
Member of Parliament
Saanich-Gulf Islands
Leader of the Green Party of Canada

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RE: Consultations on Tax Planning Using Private Corporations

September 27, 2017

Dear Minister Morneau,

On July 18, 2017, your Liberal government introduced substantial and complex proposed changes to Canadian tax law. Where some are much needed they are unfortunately too limited in scope, and where others are over-broad, they risk punishing small and medium sized enterprises. I hope that you’ll consider broadening the scope of your reforms, providing targeted relief for small businesses and farmers, and going after stagnant and stashed coffers of large corporations.

The 2015 Liberal platform promised to end unfair loopholes for the wealthy, but it focused on the Universal Child Care Benefit, Income Splitting, and the income tax rate. The three changes proposed by the government in this package of amendments – income sprinkling, passive income and capital gains – were previously announced in Budget 2017, yet were not included in your government’s spring budget implementation act. Despite being proposed in the budget in March, the consultation was not opened on the measures until the middle of the summer, and even then, only for 75 days. This continues a worrying trend of your government (e.g.: Electoral Reform, Environmental Assessment legislation) to bury unpopular or otherwise undesirable consultations in the middle of the summer. Whether unintentional or deliberately strategic, the outcome is the same: a less successful and engaging consultation exercise.

On the other hand, I believe Finance Canada has set a good precedent by directly releasing draft legislation for (most) of these proposed measures. Had draft legislation guided the environmental assessment consultation it would have been far more effective. It’s a good practice that allows stakeholders, opposition members and the public to get a better grasp of the proposed measures. Despite the Conservatives, and others, efforts to simplify the conversation, the amount of detail in draft legislation forces the media and others to take a multi-dimensional approach. In a time of fake news and increasingly aggressive partisan chicanery, having a surfeit of information ensures clear signals to the public and stakeholders about policy intent and gives the media a foothold to provide thoughtful, timely analysis.

Income Sprinkling

This is perhaps the clearest form of tax manipulation that the government cites, and seems a worthwhile pursuit for Finance Canada. The sum total that might be recouped however is quite small, approximately $250 million in additional revenues for the government. Certain forms of income sprinkling, particularly upon considering comparisons between salaried and incorporated single-family businesses, may justify government action. It’s important to note that while this practice is perceived by many as unfair, it is not illegal, and those that engage in it do not do so in violation of Canadian law. It is possible to engage with these Canadians in a non-divisive manner, simply making the case that while this advantage was available to them in times of high tax rates, it’s no longer necessary in a low tax environment. Tax measures must be responsive to professionals who have used income sprinkling in making childcare arrangements. An adequate phase-in period will reduce hardships for people with young children who are not abusing the system.

Which brings us to what the government could offer as a carrot to justify cracking down on those who sprinkle their income within their family. Every party in the 2015 election, including the Liberals, agreed to lower the small business tax rate. And to do so in conjunction with the elimination of income sprinkling was the plan laid out in the Liberal platform. Some are suggesting that you may in fact be exploring pairing these two reforms. I hope you do. It sends a clear message: our aim is to resolve inequities in the small business tax framework, not tax small businesses more.  In addition, I support a longer term review of the structure of corporate taxes, not just the tax rate. Some European countries have successfully implemented a reform that changes the Corporate Income Tax (CIT) into a “rent” tax, so that the tax cannot be said to act as a disincentive to investment and innovation. Among other things, this Allowance for Corporate Equity tax (ACE) enables firms to deduct the cost of borrowing and equity for their own investment.

Finally, the ‘reasonableness’ test that your government proposes for determining the legitimacy of dividend partners must be allowed to be studied by Parliament with caution. These rules will make small businesses feel as though they are under the microscope of the Canada Revenue Agency, and should be, once decided upon, made clear through a publicly financed education campaign. This will ensure the new rules are clear to everyone and avoid any perception of arbitrariness.

Passive Income

Corporations are not all equally worthy of Finance Canada’s extensive scrutiny. Yes, the government has seemingly identified a wealth of corporate  money  that is stagnant and being taxed at a lower rate. By taxing passive incomes at a higher rate, the government estimates that given there was $27 billion in passive income distributed from private corporations a year as per 2015, there exists a substantial amount of potential tax revenue. I agree that that income is not currently being taxed appropriately, and some amount of that should justly be in government coffers. However there are some legitimate concerns that the passive incomes targeted here are in fact intended for use by many doctors and other small business as retirement savings plans. While this may not be the government’s preferred form of retirement investment vehicle, the reality is that it is being used that way. Any changes the government makes that impact retirement savings for Canadians who own small businesses should be made with great care taken to ensuring there are no unintended consequences. There must be more consultation. But there is also a much bigger fish to fry.

From the 1970s onward Canada slowly but surely lowered its income tax rate on large corporations in response to growing neoliberal pressures. One of your predecessors, Paul Martin, drastically cut the income tax on large corporations by six percentage points in three years during the course of his tenure. A global recession and a near decade of  Harper’s government led to the further reduction of corporate tax income even lower. The reasoning behind such reductions was that corporations would use the extra cash to create jobs. The economic experiment lowering corporate taxes to create jobs is not proving to be money well spent. In the words of Mark Carney, former Governor of the Bank of Canada, the money that would have gone to pay for critical infrastructure, veterans’ benefits, and environmental research is “dead money.” It has not created jobs. It is sloshing around in the bank accounts of Canada’s biggest corporations.

As of 2015, it approached $700 billion – equaled to then 35% of Canada’s GDP. The federal personal income tax for top earners is 29 per cent – almost double the corporate income tax rate, now. Forty years ago, the share of personal income tax revenue in the federal government’s total revenue was 30 per cent; it was almost 50 per cent in 2013. But the share of corporate income tax has dropped from 20 per cent to 13.6 per cent today. Successive governments have systematically shifted the corporate tax burden to the middle class.

In 2013/14, the federal government collected $34.6 billion in corporate income tax. If our rate were 30 per cent (still 5 per cent lower than the U.S.), the federal coffer would have collected an additional $30 billion, substantially more than the government could expect from raising rates on passive income. This is money that could be used on health care, child care, senior care, veteran support, advance education, job training, retirement, environment, social housing, infrastructure, and the list goes on.

I support raising taxes on large corporations gradually, from the current level of 15% back to the level set in 2009 – 19.5%. We are well aware of the familiar argument that higher corporate taxes are inevitably passed on to consumers via increased prices for goods and services.  However, in light of the evidence of hoards of cash accumulated by corporations after the financial crash of 2008, then used too often for mergers or to buy back shares which benefitted executive bonuses rather than being spent on employment and increasing productivity, this rings hollow. Raising the corporate tax rate to 19% would still leave some $595 billion in corporate coffers. (It is estimated that each percentage point increase in the federal corporate tax rate raises $1.5 billion in revenue.)

I believe the government would be best served by going after the corporate tax rate than implementing a rule that would potentially have unintended consequences. That said, if  you can show that doctors and small businesses that have passive incomes invested in their corporations as retirement savings vehicles will not be unduly harmed by their plan, you would be well served to demonstrate this to parliamentarians during the legislative process. As this reform has no corresponding proposed legislative format, I look forward to seeing what Finance Canada tables in legislation this fall before Parliament.

Capital Gains

I generally support the idea of reform that seeks to harmonize the tax rates that apply to corporate surplus, however I am concerned about impact tof the inter generational business transfer provisions on farmers and other small business owners. Farmers are concerned that your proposals make it easier to pass their farms onto unrelated buyers than their heirs. As stated above with respect to passive income, where Canadians retirement security is at stake, legislators must tread with great caution. The changes to Sectoin 84.1 that apply immediately is throwing family business retirement and succession planning into chaos and has business owners struggling to chart a path forward. It might be beneficial for the government to pursue extending the ‘special election’ period that may allow for more farmers the option to cash out on their retirement savings. It would also communicate to farmers and other small business owners that the government isn’t looking for a simple cash grab, but rather levelling the playing field and attempting to secure tax equity.

I am disappointed the government has not placed more emphasis on pursuing the stock option deduction loophole. According to the Canadian Centre for Policy Alternatives, the employee stock option deduction alone costs the government approximately $740 million per year. They also conclude that the loophole benefits not merely those in the top decile of Canadian society, but that a shocking 100% of the benefits go to the richest 1%. This is, on its face, unacceptable. There are reasonable concerns about the impact that closing the loophole will have on the start-up industry, especially the tech sector which is an important source of jobs and growth for the Canadian economy. But there are many policy solutions that could balance the needs of growing businesses with the desire of many Canadians to see more tax fairness. The government should consider these, and the tech sector particularly, as it proceeds implementing these changes. However, I would also hope that the government would more aggressively pursue closing loopholes on offshore tax havens estimated to be sheltering at least $12 billion from Canadian tax authorities.

Ambitious, daring reform

I believe that taxation should be fair, efficient and effective. Canada has long recognized the importance of small and medium sized enterprises to our economy. While I support some of the reforms your government proposes in your consultation, I can’t help but expect more. A more holistic approach toward creating opportunities for SMEs to thrive in our economy. More attention to the billions in stagnant accounts, accumulated due to inconceivably low corporate tax rates. More aggressive tactics toward exposing offshore tax havens. And the time is coming to revisit the tax code completely, with the aim of root and branch reform that simplifies its burden on both individuals and businesses.

I would also repeat my recommendation from Question Period on September 25th: a phase-in of these changes and a fair grandfather clause would go a long way to showing Canadians that these reforms are, in fact, seeking tax fairness.

I truly appreciate your openness to comments. I hope that Finance Canada fully considers the participation and comments submitted by so many engaged Canadians. I look forward to seeing legislation on these changes this fall before Parliament. I hope they receive a full and fair airing of the issues, in a separate piece of legislation, that will not be time allocated.

Sincerely,

Elizabeth May, O.C.
Member of Parliament
Saanich – Gulf-Islands
Leader of the Green Party of Canada

A PDF copy of the original submission is available, here.

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The best legal minds in our country are advising the administration not to cave in just because the United States says it has a right under its domestically passed legislation, but which has not been ratified as an international treaty by its senate. There are a number of legal issues here, for which I do not think we have shown sufficient backbone in response. We do not need to accept a law passed by the U.S. Congress. Would we accept a law passed by the People’s Republic of China that requested information of Chinese citizens in Canada? Are we to accept that in response to laws passed in other countries with implications for Canadian citizens, the Government of Canada can do nothing but say, “Here’s all the information we can provide you. It’s private. We’re not warning Canadians. We’re giving it to you. Good luck”.

Everyone knows that Canada is not a tax haven. People who live here, Canadian citizens and residents, pay taxes. We pay more taxes than people do in other countries. We need to protect the privacy and charter rights of Canadians.

Helene LeBlanc: Mr. Speaker, I think that the Conservative member, the Minister of State for Western Economic Diversification, clearly proved that this portion of Bill C-31 should be studied separately.

The member for Saanich—Gulf Islands eloquently established and demonstrated that this part of the budget should be studied independently of Bill C-31. She also demonstrated that parliamentarians, regardless of party, are being denied an opportunity to study this part of the bill in detail, even though it will significantly affect Canadians, financial institutions and the Canada Revenue Agency. A Radio-Canada report stated that implementing this would cost CRA $100 million.

Who does my colleague think will have to foot this pricey bill?

Elizabeth May: Mr. Speaker, I would like to thank the hon. member for her question.

I completely agree with the member. It is clear that FATCA is advantageous for the United States alone. There is nothing in it to help Canadians. As the lawyers and legal experts explained, the only reason why the Government of Canada accepted this agreement, which will violate the rights of Canadians, is that the U.S. government threatened to impose sanctions on our banks.

We need to take this very complex section out. As the legal experts have commented, there was a truncated period for public comment. Very little time was provided for the financial sector, and look at the costs and what it will mean to our banking institutions and credit unions to comb through all the material they have on every customer. It will raise the costs. The banking sector does very well, but this is going to raise consumer costs and it will violate charter rights.

Surely it should be removed from an omnibus budget bill for proper study. Additionally, we should go to international court to challenge the idea that the U.S., through a domestically passed law, has the right to punish commercial banks in Canada.

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However, relative to collecting on tax debt, I was prompted by the member’s comments about cutting back on staff at CRA. I am wondering if he is familiar with the train of reports we have had since 2006 from the auditor general pointing out that the CRA seemed to have a very poor understanding of where the tax debt was and why it was rising. It was failing to use its risk assessment models properly. The auditor general, for years, has found that CRA staff tends to go after smaller debts, harassing what I think of as regular folks, and leaving aside the millionaires. The large, low-hanging fruit is with the millionaires. Does the hon. member have any comments on the pattern of CRA tax collection?

Peter Julian: Mr. Speaker, that is really one of the major points I hoped to bring forward tonight. That is why the Conservatives have wanted to shut down debate. This is the 44th time now they have invoked closure. They always have another excuse. Tonight it was because people support the bill itself. I guess beyond that, what they are actually saying is they hope that no one brings forward their shoddy record on uncollected tax debt and allowing these tax havens. Of course, even though we are operating under closure, we have no hesitation in bringing forward the shoddy record of the Conservatives.

The reality is, as I pointed out and as was pointed out in the auditor general’s report, the $10 million debts are the ones the Conservatives just seem to let go by, but they go after individual taxpayers to pay their fair share and catch up on monies they owe to Revenue Canada.

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John Carmichael: Mr. Speaker, economic action plan 2013 is about creating jobs, growing our economy and creating prosperity for all Canadians. Throughout the years, we have developed a tax plan that provides incentives and tax relief from coast to coast to coast, and I believe our tax plan today meets those needs and helps Canadians and especially families keep more of their hard-earned money in their pockets. Quite frankly, that is what our job is all about.

The post The Budget appeared first on Elizabeth May.

There is money for the burial of our veterans and $8 million for the restoration of Massey Hall. “Public outcry over the savaging of fisheries habitat has lead to a small sop this time around — $10 million over 2 years to work with local conservation groups to improve fish habitat –and a salmon conservation stamp,” said May.

Encouragingly, a number of the Green Party’s recommendations made during pre-budget consultations were adopted. These include:

• new funding to Sustainable Development Technology Fund (although at $325 million over 8, less than what had been recommended by Pembina);
• going after off-shore tax-havens;
• reducing money wasted in Government of Canada travel and greater use of telecommunications and video-conferencing;
• money for First Nations education, although much less than recommended;
• funds to municipal infrastructure, and while less than what the crisis demands, it is certainly a step in the right direction;
• a just transition for asbestos workers with $50 million for 7 years toward retraining of workers in that shameful industry.

Same Direction, New Tone

However, the overall direction of this government is unchanged. Whereas last budget’s only use of the word “climate” was restricted to “investment climate”, Budget 2013 actually references climate change and mentions the Copenhagen target, though predictably repeats the falsehood that we are “halfway to meeting (it).” (p.242)  The same page even boasts of the accomplishments of the ecoEnergy retrofit program – a program they killed last year.

“The problem with the budget documents is that they are increasingly vague documents.  We no longer receive the appendices with the total budget numbers for departments.  So, is the total envelope going up or down?  Who knows?” asked May.

“For instance, VIA Rail is mentioned and gets money — $54 million this year and $58 million spread out over the next five years.  But there is no context to know if the 50% cut in VIA support in the Main Estimates would be redressed in the Supplementary Estimates, or whether the cuts are devastating and these amounts are band-aids on a fatal blow,” continued May.

“What we will not know until we see the implementing legislation is how many egregious measures will be rammed through the House in a 2013 Omnibus bill that claims to derive its legitimacy from this budget,” said May.

“The reality is this is a fudge-it, a PR piece, rather than a real plan. The 2012 budget made no mention of the Fisheries Act, but Budget Implementation Act C-38, destroyed fish habitat.  So it will take a few more months to be sure the second of one of Mr. Flaherty’s new shoes is not about to fall,” concluded May.

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“It is already unthinkable that the Harper Conservatives would consider putting the interests of the United States before those of the Canadian citizens whose lives have been turned upside-down as a result of the FATCA”, said MP Elizabeth May, “but it is worse still that they would do so in violation of the Canadian Constitution.”

Mr. Hogg’s letter is dated December 12, 2012 and was submitted as part of the call for public comments as part of the ongoing negotiations. “To the extent that any implementing legislation adopts provisions similar to those found in the Model IGA, in my opinion, the legislation would violate s. 15 of the Charter,” he writes. “The source of this problem is the fact that the Model IGA requires financial institutions to treat people differently based on such innate characteristics as place of birth or citizenship.”

The Model IGA that is being proposed would compel Canadian financial institutions to disclose the private financial information of their clients to the IRS. This would be, in Mr. Hogg’s opinion, in clear violation of Section 15(1) of the Charter, which prohibits discrimination on the grounds of “national or ethnic origin”.

“Professor Hogg is Canada’s foremost constitutional expert, so this letter should provide some cause for hope to the one million Canadians, including hundreds of my constituents in Saanich-Gulf Islands, who have been threatened by this financial witch-hunt,” said Elizabeth May. “Yet in a political environment where the Harper Conservatives are willing to push through legislation that is likely unconstitutional, as raised last week in the House of Commons, I will continue to be vigilant on behalf of my constituents and all other Canadians caught up in this sorry mess.”

Note: The Green Party of Canada’s backgrounder on FATCA

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Green Party leader Elizabeth May is calling on Canada to avoid being party to a U.S. law seeking to collect financial information on Canadians, arguing that it amounts to a violation of privacy.

Her appeal comes on the heels of regulations released by the U.S. Treasury Department mandating that foreign financial institutions report information on American taxpayers investing money abroad – the result of a major effort to crack down on tax evasion.

“I continue to hold (Finance Minister Jim) Flaherty to his commitment to protect Canadians from the extra-territorial application of U.S. law,” May wrote in an email to iPolitics about the Foreign Account Tax Compliance Act. “FATCA is moving fast down a track that violates our rights as Canadian citizens.”

View the full original article >>

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Others in this House might not have been thinking throughout this debate of the famous palindrome: a man, a plan, a canal — Panama. As members know, a palindrome is something that reads the same forward and backward. Unfortunately, I cannot read this trade deal as anything but backward. When the man is the Prime Minister and the plan is this free trade agreement, we do not get anything very progressive. We do not get a canal; we get a ditch.

We have a very small level of trade with Panama. While we see the Conservatives trying their best to gather up as many small trade agreements as possible, such as the one we passed with Jordan and this one with Panama, it is worth bearing in mind the level of trade that is currently at stake.

In 2010, there was just under $214 million in trade in goods between Canada and Panama. We do not expect this to go up very much even with a free trade agreement. If we look at previous free trade agreements with countries like Costa Rica and other small bilateral free trade agreements, we find that in a number of cases our trade has declined after signing the agreements.

We have a global trading framework already which includes the general agreement on tariffs and trade, and under the Uruguay round the creation of the World Trade Organization. We are not labouring any longer as a global society of nations under high tariffs and protectionist measures. They have been mostly slashed.

What would one want in trading and approving a trade agreement with Panama?

We have heard much in this House of the need to improve labour rights within Panama. We have heard that Panama continues to be a nation that traffics heavily in narcotics and drugs, and the rest of the world would like to stem their flow. We also know that Panama is a country that has extensive money laundering problems. This agreement does nothing to address these issues.

When we look at the ways in which Panama has operated as a tax haven, according to the Organisation for Economic Co-operation and Development, Panama is one of 26 jurisdictions in the world that have not yet fulfilled their promise as of 2002 to provide tax sharing information. That would provide a greater understanding of when a country is operating unfairly and illegally to harbour revenue and wealth so that the country of origin cannot tax it properly.

The trade agreement with Panama unfortunately does not deal with any of these issues. It does not deal with narcotics trading. It does not deal with the tax haven problem. It does not deal with money laundering. It does have a side agreement to deal with labour, but we can already measure from previous efforts with such side agreements that they have no real effect on improving labour conditions in a country. 

Through the 1990s there was a great increase in trade agreements and a great wave of globalization. Its triumphalism was the creation of the World Trade Organization, but things have slightly stalled since Doha and there is a little less triumphalism. Some people feel that trade, trade liberalization and greater economic activity, particularly greater strength and power to corporations, will raise all boats. Gus Speth, the former head of the United Nations Development Programme, famously said, “This kind of trade raises all yachts”, but it does not do much for the poor. It certainly does nothing to improve labour conditions. If we negotiate a trade agreement while turning a blind eye to the things about our trading partner that worry us, things like drug trafficking, money laundering, human rights abuses, tax havens and places to shelter income that should be taxed under public revenue elsewhere, it is unlikely we would be able to fix them later.

Turning to the text of the agreement, in article 106 there are some carve outs so that the agreement would not unfairly target multilateral environmental agreements. I wish the trade negotiators for Canada had listed all the agreements that are important. They certainly have carved out the ones that were listed in NAFTA, such as, CITES, the Convention on International Trade in Endangered Species, the Montreal protocol on the ozone layer, the Basel convention on the transport of hazardous materials, the Rotterdam convention on trade in hazardous goods, and the Stockholm convention on persistent organic pollutants. 

A startling omission, since both Panama and Canada are parties to the framework convention on climate change, is that the framework convention on climate change is not listed as an agreement that would be protected against any incidental accidental implications from this trade agreement to climate policies. As we speak, both Canada and Panama remain parties to the Kyoto protocol, although we know that Canada has signalled its intention, quite shamefully I may add, to withdraw from its legal commitments there. I would not expect to see the Kyoto protocol in this agreement, but I certainly expected to see the United Nations framework convention on climate change, to which both countries are currently committed.

More concerning are the sections that appear in chapter 9 of the Canada-Panama free trade agreement. Chapter 9 deals with the quite devastating investor state provisions.

It sounds like the most boring of topics, an investor state provision. What could it be and why do we care? I want all Canadians to care. This provision is our innovation. We were the first anywhere on the planet to create this provision. It was done in NAFTA. In NAFTA, it is chapter 11. In the Canada-Panama agreement it is chapter 9, but it has the same effect.

There was an effort to make this kind of provision global. Some may remember the efforts were negotiated within the Organisation for Economic Co-operation and Development. It started within the World Trade Organization, but it stalled there. At the WTO they were called multilateral investor agreements. They regrouped and went to the OECD and called them the multilateral agreement on investment, the MAI instead of the MIA. It stalled and failed there. Thank goodness. It was the result of widespread grassroots opposition.

It is the first truly global campaign I have ever seen where grassroots groups using the Internet reached out to each other. I remember one parliamentarian saying to me at the time, “I can’t imagine that any Canadian citizen is really worried about something called the multilateral agreement on investment”. He came back to me a few days later, after he had been on an MPs’ study tour and said that while he was paying for gas at a station in Corner Brook, Newfoundland, he saw on a clipboard a petition to stop the MAI. It contained several pages of signatures.

Why do Canadians at the grassroots and people globally not want more investor state provisions? I should say that once it failed at the OECD, largely thanks to France, but other countries ran to catch up, once it failed there, they abandoned it. By they I am referring to the corporate entities that are pursuing the notion that corporations should have powers superior to those of elected legislatures. The essence of an investor state provision is that multilateral corporations should be able to trump decisions made by democratically elected parliaments and legislatures around the world and they should be able to sue a country if that country passes legislation that a corporation does not like. That is the essence of it. It is not in any traditional way an expropriation.

They have taken it from global to doing it BIT by BIT, literally the acronym BIT, bilateral investment treaty, such as this one. They are collecting up by BITs to replace what they could not do directly, a global agreement that allows corporations to sue governments when governments take action, even when that action is not in any way designed to inhibit trade. It is as such when Canada banned a toxic gasoline additive, or when Canada took steps to ban the export of PCB contaminated waste pursuant to the Basel convention I mentioned earlier, or in the very sad and tragic case of Metalclad, a U.S. corporation. Metalclad wanted to put a toxic waste site next to a little community in Mexico called San Luis Potosi. The people of San Luis Potosi said no, that it was too close to their water source and they would not let that giant U.S. corporation, Metalclad, put its toxic waste disposal facility there. Under chapter 11 of NAFTA, Metalclad sued the federal state of Mexico. 

This agreement means that any corporation with a mailbox in Panama can claim to be an investor and sue Canada at the municipal, provincial or federal levels for any decision it does not like, that it feels impedes its expectation of profits.

In the case of poor little San Luis Potosi, Mexico ended up owing Metalclad just under $17 million.

I fear that my time to speak to this agreement may be coming to a close. I want to conclude by saying firmly and clearly that we must learn from what has gone wrong with chapter 11 of NAFTA and stop including investor-state provisions as an automatic, unthinking addition to every single trade agreement we negotiate.

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I am speaking of things that are not in the act, and I hope this will not be a troubling question. The financial transaction tax was mentioned earlier today in debate by a Conservative member as something the Conservative Party opposed. The Green Party supports it. 

Does the hon. member have any thoughts about bringing in an international levy at a very tiny level that would create funds that could be used if we were to have another collapse of the highly speculative derivative market globally, which in my view is still not adequately regulated?

Scott Simms: Mr. Speaker, that opens up a fascinating discussion if we are talking about an international levy, and I am assuming in minuscule amounts. As a cushion or protection, I do not think the government would be adverse to talking about that. It did bring in the security fee for people travelling in airports, which I would call a travellers tax. Nonetheless, the Conservatives certainly see the importance of bringing in some of these fees or particular levies for the sake of protection of the consumer, in that case the protection of the traveller.

I do not have much knowledge on the levy itself she is talking about, but I would consider it if in the end it provided protection, not just for a particular consumer but also for employees in case of bankruptcy or environmental hazards.

I would like to see some kind of international levy for businesses regarding environmental hazardous waste. When companies wind down and leave, who cleans up after them? There is no money available for that, unless it is on a military base or something of that sort, but what about industrial bases? I may be getting off topic, and I think I am, but nonetheless I should probably stop there.

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