Senator Gignac: Thank you, Senator Gold. I understand that CPP Investments is independent of the political power, and I respect that.

In my opinion, Canadians have the right to know more about the nature of the investments that their retirement plan is making abroad. That would help us to validate not only the carbon footprint of those investments, but also their tax footprint and democratic footprint, given that they’re being made in many countries that don’t really respect the rules of law, human rights and tax fairness. Senator Gold, don’t you think it is time for the Minister of Finance to require CPP Investments and other public sector pension plans in Canada to provide more information and to be more transparent about their activities abroad?

Hon. Clément Gignac: My question is for the Government Representative in the Senate. Last week, the Toronto Star published an article about the Canada Pension Plan Investment Board. The article stated that this federal institution set up a network of more than 30 subsidiaries in the Cayman Islands, which is known as the tax haven capital of the world. According to the organization’s spokesperson, the purpose is to minimize taxes paid abroad solely to maximize annual returns for its 21 million Canadians contributors and beneficiaries.

Senator Gold, although this tax avoidance operation is still completely legal in 2023, is your government comfortable with this federal institution’s approach? Don’t you think this is unethical? Doesn’t it undermine Canada’s credibility within the OECD despite the Minister of Finance’s oft-repeated pledge to end the use of tax havens by financial institutions and multinational corporations?

Hon. Clément Gignac: Senator Loffreda, thank you for agreeing to answer the question. Congratulations on the leadership that you’ve shown as the sponsor of this bill.

I learned that it is complicated to request an amendment to a bill, especially a budget implementation bill. That has happened only three times since 2009. I got the message that I wouldn’t be moving any amendments to the budget implementation act.

However, I’d like to ask you about clauses 114 to 116 of the bill. You referred to the threshold for the application of the GST and the payment card compensation services. For those senators who are listening, it is important to understand that the federal government lost its case before the Federal Court of Appeal in January 2021, because, basically, these payment cards aren’t taxable and are considered non-taxable since they are financial services. However, the government is claiming that they are actually administrative services.

Are you comfortable with including an observation at the end of our report stating that it is completely unacceptable for the federal government to have waited 26 months after losing its appeal to introduce a measure in the budget? What’s more, this measure is retroactive and could go back as far as 1991. How comfortable are you with that and would you at least agree to let the committee present an observation?

Senator Loffreda: Thank you for the question, Senator Gignac. As you know, we’re both members of the committee and have debated this issue there many times. The committee heard from Department of Finance officials, who told us that this measure shouldn’t come as a surprise to the banks. They told us retroactivity is perfectly reasonable, in their opinion, and something the banks should expect because it was never acceptable as such. I have a great deal of confidence in our Department of Finance and our National Finance Committee. I agree to adding an observation because it’s an observation, as such.

[English]

Legislating 26 months after a court decision is a delay that should not be acceptable. Going retroactively is a concern. The independence of our judicial system is also a concern. I trust the finance officials who appeared before our committee and explained that it should not be a surprise to the banks and that it was discussed with the banks that this was not permissible. We are discussing a windfall of $195 million to the banks. I think a strong observation will be well accepted. Going forward, I think this will be in discussion with the government. I am looking forward to your observation.

[Translation]

Thank you for your question, Senator Gignac.

[English]