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.
4:55 p.m.
Conservative
Kelly Block Conservative Saskatoon—Rosetown—Biggar, SK
Can you explain for me the process of a tax evasion conviction and how long that would take?
4:55 p.m.
Deputy Assistant Commissioner, Compliance Programs Branch, Canada Revenue Agency
As a lawyer, I would tell you that the simple answer is that it takes a long time. In any sort of criminal case there are different reasons why it takes time. We have an approach in the agency where we like to obviously publicize our successes in criminal cases.
As a result, we put a lot of work into our efforts to make sure that our files, so to speak, are as solid as possible to ensure that when we do go to court on a tax evasion case, we're successful. I believe our numbers show that in upwards of 90% of cases where we file for tax evasion charges, we're successful. It's as a result of the good work that goes on beforehand.
It takes a long time to prepare a case to make sure it goes to court. Even when it does go to court, obviously, the taxpayers we're going after are doing everything in their power to delay the process. It simply takes a long time.
4:55 p.m.
Conservative
Kelly Block Conservative Saskatoon—Rosetown—Biggar, SK
The process is long and the files are complex, but the number of tax avoidance audits is increasing, as well as an increased use of named and unnamed requirements. Do you anticipate the rate of convictions will increase due to the results of the work that you've done over the past four years?
4:55 p.m.
Deputy Assistant Commissioner, Compliance Programs Branch, Canada Revenue Agency
I would say in a perfect world there would be less tax evasion. It's a combination of many, many things. My colleague from the Department of Finance talked about the tax exchange of information agreements that will enable us to get information from various countries to enable us to review assessments. Although the TIEAs are not in place yet, the fear of the CRA having access to that information--we've already seen people coming forward to correct their tax matters.
It's a difficult question to answer. Will we see an increase? It is possible, in the sense that if people continue to avoid paying taxes, despite the fact that our tools have increased with the TIEAs, tax exchange of information agreements, we're confident we will be able to get more and more information in years to come to build more cases.
4:55 p.m.
NDP
Thomas Mulcair NDP Outremont, QC
Thank you, Mr. Chairman.
Mr. Ernewein, first, I will spontaneously invite you to come back before the committee with Léo-Paul Lauzon and the team from the Université du Québec in Montreal, since your colleagues from the other place have not had time to read their study. You generally dismissed their study out of hand by claiming that their approach is not sound. I am looking forward to hearing you justify your position with substantial arguments, because the study carried out by the Université du Québec in Montreal seems fairly valid to me.
So I am inviting you unofficially, but rest assured that this will be followed by a more official invitation.
I'm going to go down the list of a few different cases very quickly and just try to get an answer from the people at Revenue as to where things are.
In an investigation carried out by France with regard to a Swiss branch of HSBC, it was discovered that over a billion dollars had been hidden in Switzerland by Canadians. You are investigating this matter. How far along, specifically, is your investigation? Is this, in fact, the matter you said you have been meaning to investigate since last spring, and for which you have no follow-up information to provide us with today? Is that correct? Fine.
There is also the case of RBC Dominion Securities. I have an affidavit here which was signed by one of your auditors. I'm sorry, but it is in English. This is what it says:
...Canadian residents are using structures involving Liechtenstein entity account holders and offshore accounts, allowing them to masquerade as non-residents, hiding their investments and other income from the CRA, and neglecting their obligation to pay Canadian tax....
This was in the Globe and Mail and on the CBC. What are we doing with regard to Liechtenstein?
5 p.m.
Director General, International and Large Business Directorate, Compliance Programs Branch, Canada Revenue Agency
We regard to Liechtenstein, we had already conducted 26 audits by the spring. Up to October, we conducted 30 audits. We are continuing with the audits. We have obtained good results following the 26 audits, namely $5.8 million.
5 p.m.
NDP
Thomas Mulcair NDP Outremont, QC
According to the January 12, 2010, Globe and Mail—it was 11 months ago—your agency is also trying to obtain results from Scotiabank regarding a trust fund that would be holding the assets of several very wealthy families, including $900 million that could belong to six big Canadian families in the business sector.
There's the Irish branch of Scotiabank. This branch manages the trust fund and pretends that it cannot have any access to the information held by its own branch. This much is clear: this is a branch of a Canadian bank, owned 100% by the Canadian bank. It has this information, but it says that it cannot disclose the information that comes from its branch in Ireland. How is this affair progressing?
5 p.m.
Deputy Commissioner, Canada Revenue Agency
Section 241 of the act does not allow us to speak of specific cases or files.
5 p.m.
NDP
Thomas Mulcair NDP Outremont, QC
Even if you do not talk about specific cases, could you at least tell me, as you did for other cases, that you are pursuing this matter, or are you abandoning it? This is a matter of public interest and this is why we are discussing it today.
5 p.m.
NDP
Thomas Mulcair NDP Outremont, QC
—wealthy families. In fact, you spoke about the other cases earlier.
5 p.m.
Deputy Commissioner, Canada Revenue Agency
We discussed the lists, we did not discuss any specific situation.
5 p.m.
NDP
5 p.m.
Deputy Commissioner, Canada Revenue Agency
Mr. Chair, I'm afraid I cannot answer questions that are that specific.
5 p.m.
NDP
Thomas Mulcair NDP Outremont, QC
Oh, heck! We wanted so much to have a little more information, Mr. Chair.
Now we will discuss your evaluation of the advantage of investing in the expertise that you mentioned. You said that the agency had some very committed people in its ranks—we have no doubt about that.
Is there a calculation of the public assets, in terms of management, to find out how much income we can get from investing so much in repression and control? Have you any objective analysis of this investment and of the income it could bring in, if we invest in a strict enforcement of tax legislation?
5 p.m.
Deputy Commissioner, Canada Revenue Agency
This is part of our way of establishing our costs to determine what resources we will allocate. According to past experience, what could that...? But it is not objective.
5 p.m.
NDP
Thomas Mulcair NDP Outremont, QC
You have no figures showing that if we invest more in this, it will be more profitable?
5 p.m.
Deputy Commissioner, Canada Revenue Agency
It all depends on the costing that we are currently doing. Following our past experience, we look at what happens in various sectors and what all that could mean.
5 p.m.
NDP
Thomas Mulcair NDP Outremont, QC
Thank you.
Rest assured, Mr. Ernewein, that the team from the Université du Québec à Montréal will be extremely anxious to hear you.
