Taxation

Tuesday February 26, 2002

 

    Ms. Alexa McDonough (Halifax, NDP): Mr. Speaker, last year the CIBC racked up .7 billion in profits yet paid only million in income tax, an effective tax rate of only 5%. For CIBC bank tellers, the situation was quite different. On a ,000 salary there was a 20% tax rate. Even Bay Street analysts cannot figure out how the CIBC did it.

    Perhaps the finance minister could explain how the CIBC did it, because ordinary Canadians would just love the same treatment.

    Hon. Paul Martin (Minister of Finance, Lib.): Mr. Speaker, in 2000 Canadian banks and their subsidiaries paid about .5 billion in income taxes and capital taxes to the federal government. In fact they paid close to billion to all levels of government.

    The hon. member talked about the CIBC. The numbers I have in front of me show that 35% of CIBC's net income came from Canadian operations and that the banks paid substantial income tax. In fact their tax rate is close to 47%.

    Ms. Alexa McDonough (Halifax, NDP): Mr. Speaker, even the finance minister must be able to see that something does not add up here.

    The CIBC claims that most of its money was made in the Caribbean. Come on. The CIBC has 42 Caribbean branches and 1,170 Canadian branches. With 2% of its branches, the CIBC racked up 70% of its profits? I do not think so.

    The finance minister has a choice, either close this gaping tax loophole or look the other way while all the other banks escape paying their fair share of taxes next year.

    Hon. Paul Martin (Minister of Finance, Lib.): Mr. Speaker, I have just given the hon. member the numbers for the CIBC. Those are published numbers. She can check them. In fact, probably something does not add up and I think Tony Blair pointed that out to her in this House.

 

Taxation

    Mr. Bill Blaikie (Winnipeg--Transcona, NDP): Mr. Speaker, I would like to return to the question my leader asked the Minister of Finance. The minister did not seem to get the point, perhaps because CIBC has been taking lessons from the steamship industry.

    The point is not what percentage of tax they pay in Canada on income claimed in Canada. The point is, how do they get to claim so much income outside of Canada?

    Surely the Minister of Finance should be concerned about that. Why is he not concerned about that?

    Hon. Paul Martin (Minister of Finance, Lib.): Mr. Speaker, obviously every major company, and certainly including the banks, are audited by CCRA.

    The fact is that we want to see Canadian institutions operating in Canada, earning profits in Canada, but also operating abroad. The fact is that they do. Those statements are all published.