Bill S-2 aimed to ratify a series of taxation treaties between Canada and countries like Spain, Korea, Austria and Italy. Also on the list: the tiny Caribbean island country of Barbados, population 250,000.
Before the final vote was called, a fresh-faced Bob Rae, at the time the NDP's finance critic, rose to speak against it. Necktie askew, he warned that there had been precious little study of the consequences of signing a treaty that, like the one with Barbados, would drastically cut the tax rate for Canadian companies operating abroad.
"The government is entering into these tax treaties without being fully aware of the impact they will have on domestic taxation in Canada," Rae said. "Money that is income and is not being taxed at the corporate level, on which the government receives no revenue, has the unfortunate effect of increasing the load of taxation on the average citizen."
His protestations didn't stop the bill. After another hour of tepid debate, with a quick murmur of assent from the Liberal and Conservative MPs, the House passed it and it was signed into law the next week.
