Yes, that's right.
Evidence of meeting #33 for Finance in the 41st Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was information.
A video is available from Parliament.
Evidence of meeting #33 for Finance in the 41st Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was information.
A video is available from Parliament.
4:25 p.m.
Partner, Davies Ward Phillips and Vineberg LLP, As an Individual
Yes, that's right.
4:25 p.m.
NDP
Nathan Cullen NDP Skeena—Bulkley Valley, BC
That's essentially what they say on their website, and that's what they say—
4:25 p.m.
Partner, Davies Ward Phillips and Vineberg LLP, As an Individual
That's what they say right now.
If there were at least more rules around protecting the identity of the person, I think it would just help the program. People would feel more comfortable in providing the information.
There are a lot of hurdles. First of all, you have to provide very detailed information. That information has to be of high quality in order to get remuneration, and that has to be included in your income with the proposed rules here.
If you want the program to work, then you want to make sure people feel comfortable enough that their identity will be protected.
4:25 p.m.
NDP
Nathan Cullen NDP Skeena—Bulkley Valley, BC
Let me follow that, and then we'll get to the second piece. With $170 billion—and these are estimates that we deal with—sitting in these tax haven offshore accounts that are not coming through to the Canadian government, the corresponding effort from the government, you would imagine, would be equivalent to somewhere around $170 billion, which is a lot, and getting it right would also be very important. You wouldn't want any government to put into legislation something that would actually have a counter effect on exposing people who are illegally using tax havens.
Is that your concern?
4:25 p.m.
Partner, Davies Ward Phillips and Vineberg LLP, As an Individual
No, the concern is at a different level. We're talking at the level that if we accept the fact that, as a society in Canada, we're moving toward the American model—I'm not giving an opinion on that—but we want to go there and want to encourage people to come forward and be paid for it—
4:25 p.m.
Partner, Davies Ward Phillips and Vineberg LLP, As an Individual
—is that the other program existed before. If we take that for granted, I think the concern mostly with this program, as it is proposed right now, is that there are not sufficient rules to protect the identity of the person.
The CRA, I'm sure, will do whatever they are able to do, but that doesn't protect a person from being sued by third parties. All kinds of things can happen and because of that, the person might hesitate before coming forward with detailed information because international issues are complex matters.
Then they will have to include that on their income. To get 15%, they have to pay income. They might think it is not worth all the hassle if on top of it, there is a risk that their names might be provided. That's my point.
4:25 p.m.
NDP
Nathan Cullen NDP Skeena—Bulkley Valley, BC
It's both on privacy and then on what compensation is being contemplated as an individual, you would argue, that we could consider amendments to this legislation to actually get to the goal we are seeking.
4:25 p.m.
Partner, Davies Ward Phillips and Vineberg LLP, As an Individual
The answer is again if we take for granted we want that kind of a program, then, yes. If you are going to pay, the incentive has to be high enough for the person to take the risk of providing that information.
4:25 p.m.
Conservative
The Chair Conservative James Rajotte
Thank you.
Thank you, Mr. Cullen.
We'll go to Mr. Adler, please.
4:25 p.m.
Conservative
Mark Adler Conservative York Centre, ON
Thank you very much, Chair.
Thank you, witnesses, for coming today.
I do want to pursue this with Mr. Tonkovich and Mr. Eljarrat, and talk a bit about the integrity of the tax system, which you two are experts on. Nobody is disagreeing with the fact that, in principle, what you're saying may be correct. Are you saying that at 15%, people are going to be a little less risk averse to exposing themselves to that kind of a scenario? Is that correct?
4:25 p.m.
Partner, Davies Ward Phillips and Vineberg LLP, As an Individual
That's correct. Take it for granted that we accept the program, that we want it in Canada. I'm just saying that if you compare it to the U.S. model, they are paying much more. What I'm saying is that if you consider you're dealing with offshore tax matters and international tax issues, which are quite complex matters, it will require a lot of work, so the person might think twice about providing information for so little financial incentive.
4:25 p.m.
Conservative
Mark Adler Conservative York Centre, ON
Where would you put that figure? If you were the Minister of Finance, where would you put that?
4:25 p.m.
Partner, Davies Ward Phillips and Vineberg LLP, As an Individual
Again, it's difficult for me. That's a personal opinion—
4:25 p.m.
Partner, Davies Ward Phillips and Vineberg LLP, As an Individual
They have it at 30%, if I'm not mistaken. It is 15% to 30%.
4:25 p.m.
Conservative
Mark Adler Conservative York Centre, ON
Where are other OECD countries at? What is the general average?
4:25 p.m.
Partner, Davies Ward Phillips and Vineberg LLP, As an Individual
To my knowledge, not a lot of OECD countries have whistle-blowing programs of that nature, but I won't pretend to have the answer to your question.
4:25 p.m.
Conservative
Mark Adler Conservative York Centre, ON
In principle, you're not necessarily against doing this. What you're saying is that you are just against having the threshold so low.
4:25 p.m.
Partner, Davies Ward Phillips and Vineberg LLP, As an Individual
There are two things. I do have a fundamental issue at another level, which is that there are two things this program seems to want to aim at. On one hand it's abusive tax planning, and on the other hand, tax evasion.
4:25 p.m.
Conservative
4:25 p.m.
Partner, Davies Ward Phillips and Vineberg LLP, As an Individual
Abusive or aggressive tax planning, yes.
4:25 p.m.
Partner, Davies Ward Phillips and Vineberg LLP, As an Individual
It is illegal. It's just not criminal. Tax avoidance is legal. Abusive tax avoidance is illegal, but not criminal. Then you have tax evasion, which is criminal.