THE STANDING SENATE COMMITTEE ON NATIONAL FINANCE
EVIDENCE
OTTAWA, Tuesday, December 17, 2024
The Standing Senate Committee on National Finance met in camera at 9 a.m. [ET] this day to study Bill S-264, An Act to establish International Tax Justice and Cooperation Day; and, in public, to study the Main Estimates for the fiscal year ending March 31, 2025, with the exception of Library of Parliament Vote 1.
Senator Claude Carignan (Chair) in the chair.
[Translation]
(The committee continued in camera.)
(The committee resumed in public.)
The Chair: Honourable senators, we are now proceeding with the clause-by-clause consideration of Bill S-264.
My name is Claude Carignan, senator from Quebec and chair of the Standing Senate Committee on National Finance.
I would like to ask my colleagues to introduce themselves, starting on my left.
Senator Forest: Éric Forest, Gulf division, Quebec.
Senator Moreau: Pierre Moreau, Laurentides division, Quebec.
Senator Dalphond: Pierre Dalphond, De Lorimier division, Quebec.
Senator Loffreda: Tony Loffreda, from Montreal, Quebec.
[English]
Senator Kingston: Joan Kingston, New Brunswick.
Senator Ross: Krista Ross, New Brunswick.
Senator MacAdam: Jane MacAdam, Prince Edward Island.
Senator Pate: Kim Pate. I live here in the unceded, unsurrendered, unreturned territory of the Algonquin Anishinaabe.
[Translation]
Senator Youance: Suze Youance, Lauzon division, Quebec.
Senator Smith: Larry Smith, Sorel division, Quebec.
The Chair: Thank you, colleagues.
Before we begin, I would like to remind senators of a number of points.
If at any point a senator is not clear where we are in the process, please ask for clarification.
When more than one amendment is proposed to be moved in a clause, amendments should be proposed in the order of the lines of a clause.
If a senator is opposed to an entire clause, the proper process is not to move a motion to delete the entire clause but to vote against the clause as standing as part of the bill.
Some amendments that are moved may have consequential effect on other parts of the bill. It would be useful to this process if a senator moving an amendment identifies to the committee other clauses in this bill where this amendment could have an effect.
If committee members ever have any questions about the process or about the propriety of anything occurring, they can certainly raise a point of order. As chair, I will listen to argument, decide when there has been sufficient discussion of a matter or order and make a ruling.
The committee is the ultimate master of its business within the bounds established by the Senate and a ruling can be appealed to the full committee by asking whether the ruling shall be sustained.
If there is ever any uncertainty as to the results of a voice vote or a show of hands, the most effective route is to request a roll call vote.
Finally, senators are aware that any tied vote negates the motion in question.
Is it agreed that the committee proceed to clause-by-clause consideration of Bill S-264, An Act to establish International Tax Justice and Cooperation Day?
Some Hon. Senators: Yes.
The Chair: So agreed.
Shall the title stand postponed?
Some Hon. Senators: Yes.
The Chair: So agreed.
Shall the preamble stand postponed?
Some Hon. Senators: Yes.
The Chair: So agreed.
Shall clause 1, which contains the short title, stand postponed?
Some Hon. Senators: Yes.
The Chair: So agreed.
Shall clause 2 carry?
Some Hon. Senators: Yes.
The Chair: The motion is carried.
Shall clause 3 carry?
Some Hon. Senators: Yes.
The Chair: The motion is carried.
Shall clause 1, which contains the short title, carry?
Some Hon. Senators: Yes.
The Chair: The motion is carried.
Shall the preamble carry?
Senator Dalphond: With leave of the committee members, I would like to make some amendments to this bill.
I have shared the document with everyone.
[English]
I also share a comparative table, because the amendment looks long because we say replace line 7 to 9 with this and that. I also did a comparative table to show exactly what it means.
[Translation]
The Chair: Are you going to read it so that it is in the recording of the meeting?
Senator Dalphond: Yes.
[English]
Essentially, there is some interest for that bill. I am glad to report that there was interest here. There were also people who have suggested things or corrected dates. That is what is in the corrections in the preamble.
Essentially, I suggest that we add a whereas that refers to the fact that since 1963 the Organisation for Economic Co-operation and Development, OECD, has produced a model convention to eliminate double taxation and to facilitate tax cooperation. That’s a fact to be added, because it is something to recognize the important contribution of the OECD.
The next whereas says, “Whereas, since 2009 . . . .” It’s a typo. It should read since 2000, so it is three zeros and not two zeros and a nine. In both languages it will be 2000, not 2009.
The next proposed amendment, which would be part of the preamble, is to add another whereas about the OECD:
Whereas, in 2014, the OECD agreed on the Common Reporting Standard under which more than 100 jurisdictions exchange financial account information to tackle tax avoidance and evasion and improve tax compliance.
Some people suggested I should put 125, because that’s the current number. I said let’s say more than 100 to avoid having to amend before we do third reading when it is 126.
The next amendment is adding to a whereas. It is on page 2 on the table, which countries begin to implement in 2024. By the time the bill was tabled, it was not yet starting to be implemented. It was a year and a half ago. Now some countries have already implemented. If we wait long enough, maybe I will have another chance to say “many countries,” but so far that is the status now.
Finally, it has been suggested to me to add the penultimate “whereas.” “Whereas, in summary, it is globally recognized that improving tax justice and cooperation is an increasingly important need.” It was suggested to me that should be addressed through international consensus.
I say that’s fine. I have no problem with that. That’s all I have to say.
Senator Moreau: I think you skipped the fourth “whereas” where you add, “. . . all taxpayers, including enterprises, that operate in Canada . . . .”
Senator Dalphond: Yes, sorry, because we had in the original text “. . . resident of Canada . . . .” Somebody suggested to me that there are many U.S. companies that are not resident of Canada but pay taxes, so we refer to them as taxpayers. It shows that some people with expertise have looked at that, so I welcome the comment. That’s all.
Senator Pate: I have more of a question. I’m curious, the last amendment, Senator Dalphond, what are the implications given that the U.S. and others haven’t signed on to the OECD measures?
Senator Dalphond: Do you mean the phrase “international consensus”?
Senator Pate: Yes. I’m thinking in particular what’s happening, of course, right now.
Senator Dalphond: Yes, and I listened to what they said. They said it works by consensus. I checked, and consensus doesn’t mean unanimity.
Senator Pate: I’m thinking of things like digital tax and the global minimum tax, those two pillars.
Senator Dalphond: The U.S. is the sole country so far, the main partner of the OECD that is not participating.
Senator Pate: So you don’t see any particular implications?
Senator Dalphond: No. We used the word “consensus” to avoid unanimity. It is more consensus oriented.
[Translation]
The Chair: Senator Dalphond, can you also read it in French?
Senator Dalphond: Yes. I am going to read it in French for those who have the translation; it will look like what was said in English. After the fourth paragraph, I propose that there be a new paragraph that will read as follows:
That Bill S-264 be amended in the preamble,
(a) on page 1,
(ii) by adding the following after line 17:
“que, depuis 1963, l’Organisation de coopération et de développement économiques (« OCDE ») propose un modèle de convention visant à éliminer la double imposition et à faciliter la coopération fiscale;”
I was told here that the OECD’s role was not adequately recognized in the preamble. There was a reference a little later, but there was no explanation regarding its longstanding involvement. I am also proposing, in the fourth paragraph of the preamble, that the reference to taxes paid by “residents of Canada” be replaced, and I quote:
(a) on page 1,
(i) by replacing lines 15 and 16 with the following:
“nationales en matière fiscale afin que tous les contribuables, y compris les entreprises qui exercent des activités au Canada,”
Obviously, we are talking about people who are not residents of Canada.
Someone observed that the words “residents of Canada” did not cover everyone who pays taxes; that is a good point. It wasn’t Mr. McSween, it was people who love tax law.
The next amendment relates to the “whereas” that follows that one, which was the fifth paragraph in the original version. There was a typo; it said “2009” but it should read “2000”.
It also said that it “réunit plus de 160 pays membres”, when there are 170 today, so I was asked to correct this as follows, and I quote: “— — qui réunit plus de 170 administrations membres — en renfor-”.
The reference to 170 member jurisdictions rather than countries is a clarification because, in some countries, there may be two tax jurisdictions that are members.
Next, a new paragraph would be added to the preamble, again to recognize the role of the OECD, that would read as follows:
“que, en 2014, l’OCDE a adopté la norme commune de déclaration en vertu de laquelle plus de 100 administrations échangent des renseignements sur les comptes financiers pour lutter contre l’évitement fiscal et l’évasion fiscale et améliorer l’observation fiscale;”
Next, the third preamble from the end is to recognize that there have been changes since I introduced the bill in 2023, it now being 2024, so the preamble would read as follows, and I quote:
“que, en 2019, l’OCDE a proposé des règles relatives à un impôt minimum mondial sur les bénéfices des sociétés que les pays ont commencé à mettre en œuvre en 2024;”
Since the bill was introduced, that is.
Finally, in the third paragraph from the end, I propose that the following be added at the end, and I quote:
(ii) by replacing line 9 with the following:
“cales est un besoin grandissant qui devrait faire l’objet d’un consensus international;”
So the “whereas” would read as follows, and I quote:
que, en somme, il est reconnu mondialement que l’amélioration de la coopération et de la justice fiscales est un besoin grandissant qui devrait faire l’objet d’un consensus international.
The Chair: I have a question about the French. The “s” in both the title and the “whereases” is bothering me a bit. Does the word “fiscales“ apply to “coopération et justice“ or only to the word “justice“? Have you checked whether there should be an “s” on “fiscales“?
Senator Dalphond: Yes, the people at the Senate who drafted the bill had a discussion with the translators at that time.
Honestly, it doesn’t matter to me whether there is an “s”, because I hadn’t put it in the version I submitted.
The Chair: The linguistics experts or translation experts said it took an “s”?
Senator Dalphond: Let’s say that the people who do the drafting here were firm about putting an “s”. I believe that is my recollection. I don’t know whether Dimitri recalls —
The Chair: If it’s “coopération et justice fiscale“, then it’s tax justice but not tax cooperation? If it’s both, that may be why. Would it be okay with you if we check that point with the steering committee?
Senator Dalphond: Yes, absolutely.
The Chair: In both the title and the “whereases”.
[English]
Senator Dalphond: I must say that the English title of the bill is An Act to Establish International Tax Justice and Cooperation Day. It’s all cooperation about tax.
[Translation]
That’s why they said that in French, it reflected the subject better if we put an “s” on “fiscales“.
The Chair: Right. Do you have any further comments?
Is it your pleasure, honourable senators, to adopt the motion in amendment?
Some Hon. Senators: Agreed.
The Chair: Shall the preamble, as amended, carry?
Some Hon. Senators: Agreed.
The Chair: Shall the title carry?
Some Hon. Senators: Agreed.
The Chair: This is all subject to the amendment regarding the “s”.
Shall the bill with the preamble, as amended, carry?
Some Hon. Senators: Agreed.
The Chair: Does the committee wish to consider appending observations to the report?
[English]
Senator Pate: Do you want me to read it into the record?
The Chair: Yes.
Senator Pate: I propose the following observation:
Particularly given the role of taxation in supporting appropriate investment in public and social services and responses to all-of-society challenges, including climate change, in addition to naming this day, Canada must take steps to ensure that its domestic tax policy reflects the principle that all must pay their fair share and to support increased tax justice and cooperation internationally.
As part of this work, the federal government must ensure that Canadians have adequate and transparent access to information about the social, economic and other concrete consequences of the policies of tax competition and tax cooperation.
Do you need me to go through the evidence or provide the rationale?
[Translation]
The Chair: Are there questions or comments?
Senator Dalphond: I have no comments.
The Chair: Is everyone in agreement?
So we will append the observations.
Does the committee wish to consider appending observations to the report?
Some Hon. Senators: Yes.
The Chair: So agreed.
Are members in agreement with the observations?
Some Hon. Senators: Yes.
The Chair: So agreed.
Is it agreed that the Subcommittee on Agenda and Procedure be empowered to approve the final version of the observations being appended to the report, in both official languages, taking into consideration today’s discussion and with any necessary editorial, grammatical or translation changes as required?
Some Hon. Senators: Yes.
The Chair: So agreed.
The same applies to the bill. Is it agreed that the Law Clerk and Parliamentary Counsel be authorized to make necessary technical, grammatical, or other required non-substantive changes as a result of the amendments adopted by the committee, in both official languages, including updating cross-references, renumbering of provisions and the title?
Some Hon. Senators: Yes.
The Chair: So agreed.
Is it agreed that I report this Bill, as amended, to the Senate, in both official languages?
Some Hon. Senators: Yes.
The Chair: So agreed.
Thank you. I think that concludes the clause-by-clause study.
Senator Dalphond: I want to thank the members of the committee. There have been a lot of questions and a lot of interest, which I appreciated. I would again like to thank Brigitte Alepin, who suggested this idea. There are people from her movement listening to us. I want to tell them that it has been a pleasure to work with her. Thank you.
The Chair: Thank you, everyone. This was our last meeting of the year. Thanks to all senators for their active participation. Thanks to the team, the clerks, the analysts, our entire support team, and the interpreters. We hope that the brief instructions were effective and that you experienced no incidents and everything went well. Thank you, everyone. Of course, I wish you a very happy holiday. Take care. I wish you health and happiness in 2025, maybe with some unforeseen turns of events such as we have seen in the last few days. Thank you and take care.
(The committee adjourned.)