Evidence of meeting #54 for Finance in the 40th Parliament, 3rd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was evasion.
A recording is available from Parliament.
4:10 p.m.
Conservative
4:10 p.m.
NDP
Thomas Mulcair NDP Outremont, QC
Thank you very much, Mr. Chair.
As time is short, I will let you decide among yourselves who can best answer my questions. I have several questions for you.
Would you have an idea of the overall size of the loss of revenue for the Canadian treasury, between what was due in taxes and what is being stowed away in foreign countries? The Americans estimate approximately $100 billion. What would the estimate be for Canada?
4:10 p.m.
Deputy Commissioner, Canada Revenue Agency
At the agency, we never tried to estimate the amount. It could be very difficult, it could take a lot of our resources, because we are looking for undeclared income and hidden unpaid taxes.
4:10 p.m.
NDP
Thomas Mulcair NDP Outremont, QC
Nevertheless the United States, Mexico, Sweden and the United Kingdom do publish an estimate. Why can they do it and why can you not do it?
4:10 p.m.
Deputy Commissioner, Canada Revenue Agency
I have nothing to show you that our colleagues in the United States have published—
4:10 p.m.
NDP
Thomas Mulcair NDP Outremont, QC
Yes, yes they did publish an estimate: $100 billion. That is their figure.
4:10 p.m.
Deputy Commissioner, Canada Revenue Agency
I saw in the literature that several organizations in the United States have published estimates, including—
4:10 p.m.
NDP
Thomas Mulcair NDP Outremont, QC
The estimate I am talking about was published by the U.S. Department of the Treasury. These are not individuals, it is not an NGO, these are not lobbyists, it is the U.S. Department of the Treasury.
4:10 p.m.
Deputy Commissioner, Canada Revenue Agency
I do not know if these people from the U.S. Department of the Treasury are the colleagues of our colleagues in the Department of Finance.
4:10 p.m.
General Director, Tax Policy Branch, Department of Finance
No, we don't have those estimates. It's possible to create estimates using assumptions, but by its very nature the amount of tax evaded is a very difficult thing to determine. It's by definition that which you do not know. So one could make assumptions, as I've said, to estimate what some call this tax gap—
4:10 p.m.
NDP
Thomas Mulcair NDP Outremont, QC
Well, let's make an assumption together about our tax gap.
The Americans are estimating theirs at $100 billion. Is it reasonable to assume that ours could be in the $10 billion range?
4:15 p.m.
General Director, Tax Policy Branch, Department of Finance
Again, we can run arithmetic together, Mr. Chairman, but it would all be based on assumptions. If you wanted to say 10% of what the Americans—
4:15 p.m.
NDP
Thomas Mulcair NDP Outremont, QC
Why can the U.S. Treasury make that estimate and you can't? I just don't understand.
4:15 p.m.
General Director, Tax Policy Branch, Department of Finance
Frankly, I'm not familiar with the U.S. estimate, or that it's a Treasury estimate, or how it's framed or constructed.
4:15 p.m.
NDP
Thomas Mulcair NDP Outremont, QC
In 2009, Barbados, Bermuda and the Cayman Islands received direct investments from Canada amounting to $78.4 billion. This is $13 billion more than our total direct investment in the United Kingdom, which is the second most important country after the United States. It is one of the most important places.
Can they tell us if that did not set off an alarm bell for them, telling them that we were facing an enormous attempt at tax evasion?
4:15 p.m.
General Director, Tax Policy Branch, Department of Finance
No, I don't think it necessarily points to that at all. I think there's a large amount of investment made by Canadian multinationals in a number of jurisdictions, including Barbados, Bermuda, and others, and it's reflected by the investment of other countries as well. These places are important destinations for investment. Bermuda is a noted insurance locale; Barbados has been a long-standing treaty partner with Canada, and a large volume of investment goes through it as well.
4:15 p.m.
NDP
Thomas Mulcair NDP Outremont, QC
Mr. Chair, the OEDC reckons that the total sum held in "opaque jurisdictions" would be somewhere between $5,000 billion and $7,000 billion, while the Tax Justice Network of the United Kingdom has a slightly higher figure, but within the same range of magnitude, amounting to $11,000 billion.
Do these figures look anything like those that our Revenue Agency is aware of?
4:15 p.m.
Deputy Commissioner, Canada Revenue Agency
We did not try to estimate how much money was in the... Nonetheless, I can tell you that we have had additional budgets that allowed us to increase our capacity substantially. As we work with our foreign colleagues, within a bilateral or multilateral framework, we have an opportunity to learn the strategies and to share them as a group.
4:15 p.m.
NDP
Thomas Mulcair NDP Outremont, QC
Let us take a look of what we have learned about the strategies as a whole. UQAM published a validated study—no one ever challenged their figures—according to which it is reckoned that between 1992 and 2007, the five biggest Canadian banks succeeded in evading $16 billion in payments of federal and provincial taxes and duties.
Have you any reason to challenge the figures advanced by UQAM?
4:15 p.m.
Deputy Commissioner, Canada Revenue Agency
I have no reason to challenge them or not to challenge them. I have not consulted the study done by UQAM.
4:15 p.m.
NDP
Thomas Mulcair NDP Outremont, QC
You did not consult the study done by UQAM? You come here and you tell us that you do not have any estimate. Have you never consulted the only valid, validated and unchallenged study on the topic?
4:15 p.m.
Deputy Commissioner, Canada Revenue Agency
No, I have not consulted it. And have you, Ms. Bergevin?
4:15 p.m.
Director General, International and Large Business Directorate, Compliance Programs Branch, Canada Revenue Agency
I have not consulted it either. However, what I can say is that the OECD studied the issue of financial institutions at length and any abusive fiscal planning they may have engaged in. So we are aware of the situation, and, as far as the administration of taxes is concerned, we are taking that into account.
