Finance committee  The Income Tax Act covers privilege between client and lawyers and notaries. Accountants are not covered here in the Income Tax Act. The Supreme Court last week rendered a judgment regarding notaries with respect to their accounting files, accounting documents, des cas comptables, and the Supreme Court said that even though the Income Tax Act says they are not privileged, they are indeed privileged.

Finance committee  The United States has an interesting system called streamlined procedures. As long as the amounts in question are low, there is good faith on the part of the taxpayer and the situation is not repeated, non-U.S. residents may not be fined and Americans would be fined 5% of the amount due.

Finance committee  I don't know what the position of the Canada Revenue Agency or the court would be in this case. All I can tell you is that a donation is a divestiture. There must also be an intention to donate. There is a maxim in law that states, “donner et retenir ne vaut”, which means that someone cannot, at the same time, give something and be certain or almost certain of receiving something in return.

Finance committee  We have seen that in 2005 there was a fine of more than $400 million U.S. against KPMG, and other penalties after that for other accounting firms. This has not been a deterrent. There is so much money involved here that the only way that tax evaders will understand that tax evasion is stealing money is if they lose their freedom.

Finance committee  As I mentioned, the provisions of the act have become increasingly complex, given the ability of some firms to show a fertile imagination to create increasingly complex strategies. Some of these strategies are valid. We're talking about tax optimization in this case. Other strategies are more on the border of what is between the spirit and the letter of the act.

Finance committee  Mr. Chairman, I was invited to speak about KPMG, but I'll speak generally. If an accounting firm or a tax firm creates a scheme whereby a sum of money is eventually owned by an offshore corporation, and this money initially comes from a donor in Canada and then the money comes back to Canada, that is not covered by GAAR.

Finance committee  Good morning to you all. Good morning. My name is André Lareau. I am a professor of tax law at Université Laval. I was the faculty dean. I earned my bachelor's degree in law at the Université de Sherbrooke, my master's degree at Osgoode Hall Law School and a master's degree in American tax law at the University of Miami School of Law.