Bill S-217

Fairness for All Canadian Taxpayers Act (measuring the tax gap to fight international tax evasion)

An Act to amend the Canada Revenue Agency Act (reporting on unpaid income tax)

This enactment amends the Canada Revenue Agency Act to require the Canada Revenue Agency to list all convictions for tax evasion — including international tax evasion — in the annual report it submits to the Minister of National Revenue. It also requires the Agency, once every three years, to include statistics on the tax gap in the annual report. In addition, this enactment specifies that the Minister is to provide the Parliamentary Budget Officer with data on the tax gap.

Canada Revenue Agency Act

[Adam Chambers, Conservative, Simcoe North, ON]

moved that Bill S-217, An Act to amend the Canada Revenue Agency Act (reporting on unpaid income tax), be read the second time and referred to a committee.

Mr. Speaker, it is an absolute pleasure to rise in this chamber again to speak on a very important issue to Canadians.

Before I start, I want to pay tribute to a local individual, Mr. Dan Newman, who recently passed away. He was a two-time elected member of the provincial parliament and cabinet minister in the Ontario legislature from 1995 and re-elected in 1999. Dan was a dear friend of mine, a dear friend to many in the community, a quick wit and a wonderful individual. I would like to give his family my sincere condolences on behalf of all those in Simcoe North. I am sure they miss him deeply after his very unexpected passing. Thank you for your indulgence, Mr. Speaker.

Mr. Speaker, given that you seem to be in a giving mood tonight, I also wish my brother and my good friend Stephen Graham happy belated birthday, to give them a tribute in this speech.

Just crossing the desk, I want to make sure the House is fully aware that the Prime Minister was in New York today, and he said that a strong Canada would “help make America great again”. I did not have it on my bingo card that the Prime Minister would be embracing MAGA principles, but I seem to always be amazed by the opportunism of the Prime Minister.

Getting back to the issue at hand, it is an important bill that we are debating here tonight. I would like to start by thanking the House again for its co-operation on another bill, which I think is adjacent to this one, Bill C-230, which we passed here unanimously just a few weeks ago. This bill, Bill S-217, is basically identical to the bill by Senator Percy Downe that passed in the Senate three times. Senator Downe stands as an example to all parliamentarians that, with persistence and good-natured collaboration and engagement, good ideas have a real chance of becoming law in this country.

Senator Downe has been talking about the issues of tax evasion and the efficacy of the CRA in carrying out its primary objective of collecting the tax monies that are owed to the federal government. He has been highlighting these issues for many years and raising concerns about the actions of the CRA in pursuing individuals who participate in overseas tax evasion, which is evading taxes paid in Canada by using overseas tax havens.

Members will recall the Panama papers, a very well-publicized, international exposé by journalists, who later had their lives threatened and in fact had violence perpetrated against them. The Panama papers identified a number of Canadians who had assets hidden away in overseas tax havens. To date, there have been no Canadians convicted of overseas tax evasion from the Panama papers. This is one of the reasons for which Senator Downe has brought forward this legislation.

The legislation, in my mind, does a few key things. Number one, it would require greater transparency at the CRA to publish the list of individuals who are convicted of tax evasion. Number two, which is also a serious issue that we have dealt with many times in this chamber and in the government as a whole, is the ability of the Parliamentary Budget Officer to receive relevant data and information from the Canada Revenue Agency. This bill would require the Canada Revenue Agency to produce data and information and make that available to the Parliamentary Budget Officer, so the Parliamentary Budget Officer could complete independent analysis on the tax gap.

“What is the tax gap?” one might ask. The tax gap is an assessment of what the CRA believes it is owed on an annual basis by taxpayers, corporations and individuals, versus what it is actually able to receive: that is, what taxes are assessed and what taxes are collected.

The Parliamentary Budget Officer should be doing an independent analysis of this tax gap. The bill would also require the CRA to produce its own estimation of the tax gap so that it can be viewed by parliamentarians. This is consistent with best practices in other jurisdictions around the world.

These are the three main points of the bill.

I have to commend Senator Downe for a number of things, such as his leadership in making sure that these issues are not forgotten from Parliament to Parliament. Senator Downe has passed this bill three times in its basic exact form over previous Parliaments. This is the third time the bill is coming to this chamber.

I am on the record suggesting that the current majority status of this Parliament is a disadvantage to Canadians because that was not the result of the last election at the ballot box. However, if there is a silver lining to the majority status of this Parliament, and the fact that we may be here for a little while longer, it is that it will give the House the opportunity to properly consider, review and potentially amend this bill and to make it law, because it has been sent here three times and the House has been unable to make it law.

We owe Senator Downe this effort because of his persistence and leadership on this issue. He has convinced his colleagues in the Senate three times that the bill ought to become law. I think all members in this chamber should be willing to work together to examine this bill at committee. I was very proud to put my name on the bill in this chamber for a number of reasons, but also because Senator Downe has worked very closely with me on some of my private member's bills, one on money laundering in the last Parliament and, yet again, in this Parliament with Bill C-230, which, as I mentioned, passed here unanimously a couple of weeks ago and which is complementary to this bill in so many ways.

I would like to just talk a little about the bill in the words of Senator Downe. When taxpayers cheat, the rest of Canadians make up the shortfall. Taxes rise to cover the balance. The government is forced to take on more debt. Debt service payments increase, and the debt gets paid forward to the next generation. Enforcing compliance with Canada's tax laws and collecting monies owed to government is a core mandate of the CRA, but how well is the CRA fulfilling its responsibilities? Consider overseas tax evasion. Story after story follows the same pattern. A news story will break, and the CRA appears with its regular talking points: They are working hard to catch overseas tax evaders; they take it seriously; they have identified monies that are owed to the government; the work is ongoing to collect those monies. However, the results are ultimately disappointing.

I mentioned previously the 2016 Panama papers, the disclosures of overseas tax evasion. Other countries with citizens involved in this scandal have collected billions of dollars in taxes owed. A recent article by the International Consortium of Investigative Journalists, the journalists who broke the story, lists Australia as having recovered $44 million; Germany, $87 million; and Spain, $175 million. Iceland, a country of just 340,000, recovered $25 million.

Canada, however, after 10 years, has not announced the recovery of a nickel. Approximately 900 Canadians were identified as having accounts linked to the Panama papers. Not one person has been charged, much less convicted of this tax evasion, a stark contrast to what has happened in other countries.

The fairness for all Canadian taxpayers act, introduced by Senator Downe, would require the government, as I mentioned before, to disclose these convictions of tax evasion, to publish the estimates for the tax gap and then to make sure that the Parliamentary Budget Officer can complete independent analysis of the tax gap for the benefit of all members in the House.

Canada lags behind other countries that measure their tax gap and provide the public with more transparency and more information. The bill would certainly help legislators in this place and in the Senate make better laws to ensure that the CRA has the tools to carry out its core mandate effectively. I have to mention that, while Canadians may be frustrated with the Canada Revenue Agency's performance over the last number of years, there are a number of fantastic people who work there and work very hard. I believe that they deserve a level of sympathy, because the government has been asking the CRA to do more and more activities that are outside of its core mandate.

The government has asked the CRA to administer new benefit programs. It has asked the CRA to introduce and administer new tax reporting structures that are incredibly complicated. In one case, the CRA was to implement bare trust reporting rules that everyone knew were complicated. People spent hundreds of millions of dollars in total in complying with this new reporting requirement, only to have the government, a political actor, reverse the decision about submitting this paperwork at the last second, on the day the paperwork was due. Hundreds of thousands of taxpayers incurred, in some cases, multiple-thousand-dollar tax bills to send information to the CRA, only to have the CRA say that it was too complicated and that it did not need that information right now.

These are the operational decisions that the government has unfairly placed on the CRA, in my opinion.

I believe that there are wonderful agents at the CRA who work hard and try to collect the money owing to government, but I believe, and I concur with my friend in the Senate, that Canadians deserve greater transparency on those who are convicted of tax evasion. I think we should make sure that the Parliamentary Budget Officer has access to the information it needs to conduct independent analysis of the tax gap.

I would be remiss if I did not mention that, following my speech, I will be joined by the member for Louis-Saint-Laurent—Akiawenhrahk, who is a wonderful mentor of mine and a person from whom I have learned a great deal in this place about how he carries himself, how to collaborate and how to make sure that one is standing up for their constituents and their principles with vigour, as well as with integrity.

I look forward very much to his speech and thank him for his support on this bill and on my bill, Bill C-230, which, as I mentioned, I was pleased to see make it through this chamber.

[Kevin Lamoureux, Liberal, Parliamentary Secretary to the Leader of the Government in the House of Commons]

Mr. Speaker, I am wondering if the member can provide his thoughts in regard to the issue of privacy. I know a part of the legislation would ultimately see reports going to our PBO, the Parliamentary Budget Officer. Does the member have any concerns at all in regard to privacy? Can he expand on that issue?

[Adam Chambers, Conservative, Simcoe North, ON]

Mr. Speaker, my friend from Winnipeg North quite rightly points out a potential concern with privacy. I would say two things.

The first is that I think any data provided to the Parliamentary Budget Officer could be appropriately anonymized such that it would be impossible to identify any taxpayer, whether that is a corporate or individual taxpayer. We should judiciously protect the privacy rights of Canadians. However, with respect to the information that would be required to be publicly disclosed by the government, it would be about individuals who have been convicted of tax evasion in Canada. Those individuals, if they have been convicted, have been convicted in a court of law and do not deserve any privacy rights, in my opinion.

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

Mr. Speaker, I think this is a very worthwhile bill. My colleague will be pleased to hear that the Bloc Québécois is prepared to support this bill and carefully examine it in committee.

I have a question for him. In his speech, he talked about tax evasion, which is addressed in the bill. He also talked about tax avoidance and how businesses are able to avoid paying taxes by using tax havens. However, as far as I know, the bill does not address that issue.

Does he not think that the scope of his bill should be expanded to include tax avoidance? It is not fair that businesses are not paying their fair share.

[Adam Chambers, Conservative, Simcoe North, ON]

Mr. Speaker, that was an excellent question. I am certainly pleased to hear that the Bloc is open to supporting the bill's being studied at committee. He put his finger on an interesting point with respect to companies that are avoiding taxes. I think that is partially what the bill is trying to get at, with respect to measuring the tax gap. That is to say, what does the government believe is owed to the government, i.e., what does the CRA believe is owed versus what they are able to collect? I do think that is a portion of tax avoidance.

In my view, we could study this a bit more at committee, but I think that is one of the things this bill is trying to get at, with respect to companies that avoid paying the taxes they owe.

[Alex Ruff, Conservative, Bruce—Grey—Owen Sound, ON]

Mr. Speaker, I want to build on the two questions my hon. colleague was already asked, because in my opinion, when people are breaking the law or they are avoiding taxes, it is all about transparency and accountability.

In particular, I want to ask him what he thinks the end result will be. Will this help and potentially enable additional changes to our tax laws and our Criminal Code? As he talked about in his speech, unfortunately, Canada has a bad track record of not collecting any of the money that has not been properly paid to the government coffers.

[Adam Chambers, Conservative, Simcoe North, ON]

Mr. Speaker, my wonderful friend asked his question in English, although he does speak French. I just heard him in this chamber speaking French. He tried it out quite well. Maybe he was auditioning.

I think he is right about two things: We need more transparency, and we need more accountability. If parliamentarians and the broader Canadian public have this information, we can help the CRA refocus its efforts on its core mandate, which is to collect the money that is owed and go after tax evaders.

If we are lagging behind other countries in finding, prosecuting and convicting tax evaders, ensuring that we have transparency about that process will help us deliver better laws and maybe better tools to the CRA so that it can carry out its core mandate.

[Kevin Lamoureux, Liberal, Parliamentary Secretary to the Leader of the Government in the House of Commons]

Mr. Speaker, I want to start off with what my colleague across the way started his comments with. He made reference to the Prime Minister's going down to the United States. I think that a vast majority of Canadians see that we have a Prime Minister today who is in this for the long haul. He recognizes the importance of international trade and relationships. He was not only meeting with the President of the United States; in my understanding, the luncheon that the member across the way referred to was with 200 of the United States' top business people, individuals who control hundreds of millions, going into billions, of dollars.

In that speech, the Prime Minister did not just say, “We are just going to make America strong.” He prefaced it with some very important words. He indicated to this group that a stronger, more independent Canada, in a selective way, could help make America great again. Now, at the end of the day, does the member disagree with the idea that a healthier and stronger Canada would contribute to a healthier and stronger United States? That is what a trade agreement is all about, and the actions that this Prime Minister and this government have taken to date reinforce that.

We just went through a full day of debate on a Conservative motion in which the Conservatives are capitulating on our arts industry. They are saying that we can no longer defend the arts community; rather, we should just concede it. It is important to recognize that, when we talk about the issue of tax fairness, we have to factor in that we are in the midst of negotiations.

The member himself talked about the importance of having a stronger and healthier economy. Part of that means having a tax system that is fair, that has transparency and that has accountability. In budget 2025, members will see a number of measures that would allow for more tax fairness. There are a number of proposed changes to ensure that we are moving forward regarding the issue of tax fairness. It is interesting that my Conservative friends are voting against that, or at least they are voting against the budget.

However, I have some good news. Bill S-217 has been a very important issue for the Senate, particularly Senator Percy Downe. It has been an issue for him for many years. I believe it has been over 10 years that he has been working on this particular issue that we have before us today. We have a government that recognizes a number of principles within the legislation that could, in fact, make a positive difference. Therefore, when we look at the legislation, we see a number of actions that are being taken. We can talk about the convictions, that all convictions for tax evasions, including international tax evasions, would be listed and produced in the annual report from Canada Revenue Agency to the minister. There is a great deal of merit in that.

We also recognize the issue of the tax gap. It is important that we all recognize what the tax gap is. One of the answers the member gave was interesting. My understanding of the tax gap is, in theory, if everyone paid their taxes, there is a total amount that the government would have a very good sense of.

In reality, we are not going to achieve that total. I think it is fair to say that a vast majority of taxpayers pay their fair share of taxes in a timely fashion. We all know that CRA has a process to encourage people who have not paid their taxes in a timely fashion to do so. There is some merit in dealing with that issue in whatever way we can.

What I liked about his comments, because I think the member was right, was when he talked about the civil servants, or our CRA employees. They are doing an outstanding job for all Canadians. They have been called upon at different times, whether it was during the pandemic or for new programs outside of the pandemic, to step up to the plate. They have done that.

This is where I disagree with the member for Simcoe North. I believe that the CRA needs to be able to continue to support Canadians in different ways at times. I think of, for example, the disability program the government introduced just a couple of years ago, finally recognizing the importance of disabilities. I think of the tax breaks that would have been given during the pandemic, and ultimately payments that were very much relied on in terms of how much people were making. The CRA is the natural spot to go to. The employees, as I have indicated, have done an absolutely outstanding job administering the services Canadians need.

We all believe, I would like to think, that taxation is an important public policy. It is what gives us the opportunity to provide the type of social programming we are able to do. As I indicated, a vast majority of individuals and businesses pay their taxes in a timely fashion. At the end of the day, the CRA does go after those who do not.

Like Senator Downe, I too am concerned about the tax gap. However, I do believe, in looking at the legislation and in listening to the member who took up Senator Downe's cause, that this ultimately does need to go to committee. There is a great deal of merit to see this legislation pass second reading, with the idea that we would be able to get some amendments brought forward and allow for input from different stakeholders on the issue.

It is not the first time we have the government recognizing the merit of legislation in private members' business. As long as there is a willingness to look at amendments that would give it strength, deal with issues such as privacy and ensure we would not be diminishing anything that the CRA or the minister are currently doing, I think the legislation is a great opportunity.

I would like to thank Senator Percy Downe for the work that he has done to date, ultimately making sure that we have the legislation before us.

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

Mr. Speaker, I am pleased to have the opportunity to speak to this bill today, because I think it is a good one and my party agrees. I announced in my question that we will be supporting this bill at second reading so that we can carefully study it in committee.

This bill is important because it deals with the effective recovery of monies as well as with transparency. I think transparency is essential and that is what I will be focusing my comments on today: transparency and access to information. We cannot call for improvements, suggest solutions or explore new options if we do not know what is happening. That is the crux of the issue.

The Parliamentary Budget Officer made it quite clear that he approved of the previous versions of this bill. This is not the first time that this legislation has come before the House.

I was pleased to hear the parliamentary secretary say that the government is going to support the bill at second reading. That means we will be able to study it. I was pleased because, when I read up on the bill's history earlier, I learned that the majority Liberal Party at the time had rejected one of the initial versions of the bill, citing privacy reasons. It is always easy for the government to find excuses when it does not want to be completely open about something, when it does not want to be transparent and especially when it does not want an agency's underperformance to be on full display.

However, the government needs to have that courage. Until it finds it, there will be no improvement.

I was therefore worried about the position of this new majority government, which does not reflect the results of the last election. We will repeat this again from time to time. The reality is that they have a majority because members crossed the floor. We must accept that.

That said, I would go even further. The bill states that the tax gap must be published. The tax gap is the money the government believes it should have collected but did not. What income taxes and other amounts should have been collected, and what was actually received? If the figures do not add up, people may lose patience, but everything hinges on knowing the truth and on the public putting pressure on the government.

I believe this bill will help the general public, but it will help opposition MPs more so. It will help us force the government to be more effective in collecting this money. I would also include in this any agreements that may have been reached between the CRA and businesses regarding debt write-offs, relief measures or equity proposals aimed at waiving interest, fees or penalties, because I believe the public deserves to know.

The average worker who earns, say, $45,000 a year, made a mistake on their tax return and has to pay the money back with interest might well be interested to learn that millions of dollars have been forgiven for businesses.

It might also be interesting to know that the Prime Minister's companies are engaging in tax avoidance, which is unfortunately legal. That is why I asked my colleagues a question earlier, because they seemed to be saying that certain information would be published. That would be great.

However, from what I understand, what will be published mainly concerns tax evasion, that is, cases where people have been found guilty of tax offences. This is too bad, but when someone is found guilty of an offence, their right to privacy disappears a bit. We are talking about transparency. It is important not to go too far. However, it is a bit like when someone is convicted of a criminal offence in court. Unfortunately for them, it is public.

At a certain point, privacy can become an excuse in many of these cases. I would go further and also look at tax avoidance.

Canada has a lot of experience with that.

One need only think of Canadian Steamship Lines, which belonged to the family of Paul Martin, our former prime minister. Since then, we have gained some historical hindsight. Today, it is Brookfield that we often hear about, but we know very little about it. It would be interesting to know how much money has been transferred to tax havens to avoid paying a fair share.

Earlier, my colleague, who introduced the bill and sponsored it for the senator who introduced it, explained in his speech that when a person or a company does not pay their share, it goes beyond their failure to pay. Other people, meaning us, have to pick up the slack and make up the difference. There is the guy who declared everything and is paying his share, and there is the guy next door, who is dishonest, who is hiding money and who is not paying what he owes. If he gets caught and we manage to recover the money, and if it is all out in the open to a certain extent, I would say that no harm is done, because it could encourage him not to do it again. I am not sure that if a member of Parliament were to engage in tax avoidance or tax evasion, it would remain secret for very long. Why would that not apply to everyone? Let us treat everyone equally. We stand in solidarity. That is important.

I want to quickly come back to tax havens. I know that they are not addressed in the bill, but they should be. I do not know whether we will be able to go so far as to include tax evasion within the scope of the bill, but I think we should.

In 2024, Canada passed legislation to impose a minimum tax rate of 15% on companies that generate and declare their profits abroad before repatriating them here. I hope that law will be enforced. We are still waiting to see the results. Will that law be fully enforced? Will it be effective? Only time will tell. We need to see the numbers to know for sure. To get those numbers, I think a bill like Bill S-217 is a very useful tool. That is basically what I wanted to say.

Pressure needs to be exerted and the money owed must be recovered. Some say it is owed to the government, but that is not entirely accurate. Yes, the government acts as an intermediary, but that money is owed to society. It is owed to the community. Society needs things like public services, resources, a defence system and all kinds of things, but they all cost money. We are not living in a fairytale. These things do not appear out of thin air. They have to be purchased. If some folks do not have the integrity to do their part, I think it is okay to give them a little nudge and tell them they also have to do their bit. If there is a risk that their name will get out when they get caught, that could help encourage many of these folks to do the right thing. That argument therefore seems pretty weak.

There is also the question of what has been recovered, based on the historical figures we have. I have some figures here. Between 2014 and 2022, the gross tax gap was $59.5 billion, and approximately $10.8 billion of that is said to have been recovered from personal income tax. On the corporate side, out of $23.5 billion, $9.3 billion is said to have been recovered. That is not bad, but it is not huge either. The government could certainly do better. By sharing this information, by making it publicly available, we will be better able to take action and come up with more innovative ideas. The Canada Revenue Agency will be able to improve, and everyone will benefit.

To conclude, I want to reiterate that we must also urgently tackle tax havens. It is a serious injustice that companies protect their profits abroad. They claim that it is not tax avoidance. During the election campaign, the Prime Minister had the nerve to tell us that it is not tax avoidance because this money flows back to individuals through pension funds. Individuals, for their part, pay tax. The message we are getting is that the little people have to pay and the rich will not. This is a social injustice, and a serious one at that. It is a very dangerous message.

[Gérard Deltell, Conservative, Louis-Saint-Laurent—Akiawenhrahk, QC]

Mr. Speaker, I am very pleased to participate in this debate on Bill S‑217.

I am very pleased to see that the Bloc Québécois and the governing party are in agreement on this bill.

Of course, we are the ones introducing it through the member for Simcoe North. This is not the first time that Bill S-217, an act to amend the Canada Revenue Agency Act with regard to reporting on unpaid income tax, has been before this House.

Essentially, the purpose of this bill is to put more pressure on the CRA to track down the scoundrels who do not pay their taxes, especially those known as “white-collar criminals”, in other words, individuals or companies who refuse to pay taxes or who use loopholes and cook the books to avoid paying their taxes. We need to get to the bottom of things, and this bill does just that.

Some may be surprised that this is the third time this bill has been introduced and debated in the House, even though it is a no-brainer. As my Bloc Québécois colleague said earlier, the first time was under a majority government; the Liberals rejected it. That is part of public debate. There was then a sequence of three elections with minority governments. That meant there was not enough time to do the work properly. As a parliamentarian, I find that unfortunate, but let us remember that, from December 2024 to mid-December 2024 and then to mid-September 2025, over a nine-month period, the House sat for only five weeks. This was because of the change in government, the new Prime Minister's government, the elections and the summer recess. All of this prevented us from doing our parliamentary work.

Now, we are doing it, and we are going to do it right.

I will put on my glasses. I am going to do so often, because this whole subject is so technical that we need to get our facts straight.

This bill has three objectives: to compile a list of all convictions for tax evasion, including international tax evasion; to require the CRA to include statistics on the tax gap in its annual reports every three years; and to require the minister to provide the Parliamentary Budget Officer with data on the tax gap.

These three elements gripped the entire world when the Panama Papers scandal came to light. I am sure everyone remembers about ten years ago, when a consortium of investigative journalists unearthed what came to be known as the “Panama Papers”. They had unravelled a web of tax havens. The documents confirmed that several countries, including Canada, were indeed home to the scoundrels I mentioned earlier, whether companies or individuals. In total, 900 of them had flouted every possible law, and then some, to evade taxes.

Some countries have taken the bull by the horns and achieved concrete results. In Australia, $44 million was recovered, compared with $87 million in Germany, $175 million in Spain and $25 million in Iceland. Canada, for its part, has recovered nothing. That is pretty weak.

That is precisely why this bill must be passed. The CRA and anyone who cares about ensuring that everyone pays their fair share must be treated fairly. Being treated fairly means having to pay, and if a company does not pay, it should be seen as a bad guy who does not pay taxes. That is why it is important to do the right thing.

It is also important to note that there are key points in each of the three stages. For example, earlier we talked about the shortfall. I will not deny that certain phrases sometimes sound better in French than in English. One thing, however, can be expressed equally in both languages. I was talking earlier about the minority government, which has since become a majority government because of the floor crossers. The term “floor crossers” is funny, is it not? I think “floor crossers” sounds just as good in French, for that it what they are.

Getting back to the shortfall, some countries have handled that well, namely the United States, Great Britain, Turkey and Sweden. It is time for Canada to do the right thing so that everyone who is supposed to pay can do so properly. That is why it is essential that this bill pass.

Allow me to recognize the perseverance of Senator Percy Downe who, for years, did the necessary work to push for this critical cause. It is thanks to him that we can debate it today. I also want to thank my colleague from Simcoe North for this. I want to note that my colleague served, in a different era, in better times for Canada, in Prime Minister Harper's government, in various ministers' offices, and he distinguished himself in a most inspiring way. I would like to think that, in a few years, three years at most, Canadians will honour us with their trust and the member for Simcoe North would do a great service to the Canadian government in cabinet. I am saying that he would make a good minister.

Let us get back to the matter at hand.

Yes, the Canada Revenue Agency absolutely must do its job. It is clear that these are not great times for the CRA. Just a few months ago, the Auditor General tabled a scathing report about poor management at the CRA. The report notes that there was a complete lack of leadership, with terrible results for all Canadians.

Why would I say that? One reason is that people were waiting for ages when they called for information. Worse still, when information was provided, it was not always correct. Just imagine: People who cannot afford to pay a tax expert or an accountant to prepare their tax return for them pick up the phone, call CRA, talk to someone and get the wrong information one in five times. A few months later, CRA writes to let them know they made a mistake and owe $150, which they have to pay back right away because interest charges will keep adding up. That is what happened after 10 years of Liberal leadership at the Canada Revenue Agency.

I would like to reiterate what the member for Simcoe North said to my government colleague earlier. He said that CRA employees should not be blamed for not being properly trained. Nor should the CRA itself be blamed for being badly mismanaged in recent years. Let us not forget that Prime Minister Trudeau put someone in charge for seven years who did not necessarily have sufficient experience in this field to provide strong leadership.

I would like to commend and thank the current Prime Minister for firing this person from cabinet. I would also like to commend and thank the people of the Gaspé region for firing her from the House of Commons.

Obviously, we would have preferred to see our candidate, Jean‑Pierre Pigeon, elected in that riding. The people decided otherwise. That said, I have absolutely nothing against the current member from the Gaspé region, a former fellow journalist who truly stands out, and that is a good thing for Canadian democracy.

This bill needs to move forward. We need to move forward to keep Canada in the loop when it comes to targeting and tracking down white collar criminals who do not pay their full taxes. We need to flush out these characters who, unfortunately, do not have the honour and dignity of paying what they owe and who invest tens of thousands, if not millions, of dollars to avoid paying what they owe the Canadian government. Canada needs this legislation to flush out criminals, be more transparent and get access to all the necessary information.

That is why we obviously hope that the entire House will vote in favour of this bill.

[Dominique O'Rourke, Liberal, Guelph, ON]

Mr. Speaker, I am pleased to have this opportunity to discuss Bill S-217, an act to amend the Canada Revenue Agency Act with regard to reporting on unpaid income tax.

This bill would amend the Canada Revenue Agency Act to require the CRA to list all convictions for tax evasion, including international tax evasion, in its annual report. The bill also requires the CRA to include statistics on the tax gap in its annual report once every three years. Additionally, Bill S-217 specifies that the Minister of National Revenue is to provide the Parliamentary Budget Officer with data on the tax gap.

Broadly defined, the tax gap is the difference between the taxes that would be paid if all obligations were fully met in all instances, and taxes that are actually paid and collected. It is not difficult to imagine that a lot of circumstances could produce a tax gap. That said, I should point out that the CRA is firmly committed to protecting the integrity and fairness of Canada's tax system. This includes cracking down on tax avoidance and tax evasion both domestically and internationally. I should also mention that CRA takes a firm stand on non-compliance.

First, I would like to point out that the CRA has a robust criminal investigations program. This program investigates major cases of tax evasion, tax fraud and other serious criminal violations of tax laws. Where appropriate, the CRA's criminal investigations program refers cases to the Public Prosecution Service of Canada for potential criminal prosecution, which is extremely serious.

The consequences for taxpayers who commit tax fraud or hide assets or money abroad are very serious. If convicted of tax evasion, these taxpayers must still pay the full amount of tax owed, plus interest and administrative penalties imposed by the CRA. Under the Income Tax Act, offenders could face a fine of up to 200% of the taxes evaded. In addition, they could also be sentenced to up to five years in prison.

It should also be noted that a person convicted of fraud under the Criminal Code is liable in Canada to a sentence of up to 14 years in prison. Fingerprinting and restrictions on international travel are also possible consequences. However, it should be noted that all convictions related to tax evasion, including those involving tax evasion abroad, are already published via enforcement notices on the Canada.ca website.

The CRA has also set up a free subscription service to raise Canadian taxpayers' awareness of CRA enforcement actions and warn them about potential fraud schemes. During the period from April 1, 2020, to March 31, 2025, the courts sentenced 49 people to prison for a total of more than 98 years. Investigations are under way, prosecutions are under way, action is being taken and people are being sentenced. That represents more than $39 million in evaded federal taxes, with a total of $24.5 million in court-imposed fines.

As of March 31, 2025, the criminal investigations program, or CIP, had 200 ongoing investigations. That is a huge number of investigations. Between April 1, 2024, and March 31, 2025, the CIP also executed 86 search warrants, a 46% increase from the previous fiscal year. The CIP's computer forensics analysts seized at least 258 devices totalling more than 119 terabytes of data.

I would now like to bring up a second point, namely the CRA's work on estimating Canada's tax gap. Since 2016, the CRA has had a dedicated team studying the tax gap, which supports the Government of Canada's commitment to encouraging an open and transparent discussion on tax non-compliance.

Estimates of Canada's tax gap, combined with other indicators relating to compliance and non-compliance, can provide valuable insights into the overall health of our tax system.

At the end of March, the CRA published Canada's second overall tax gap report for the 2014 to 2022 tax years. This edition presents the overall federal tax gap and is supported by updated estimates based on the most recent data available for the 2014 to 2022 tax years. The report provides tax gap estimates for all key components. These include personal income tax, corporate income tax, GST, HST and excise revenue. The report also includes two new subcomponents: the payment payroll gap and the excise gap on cannabis. Furthermore, it examines the impact of the COVID-19 pandemic on the federal tax gap, providing an overall picture. Importantly, this report also highlights how the CRA's compliance and collection activities are impacting the tax gap.

The money recovered by the CRA puts downward pressure on the federal tax gap each year. We have the numbers in front of us, and we can compare the gross and net amounts. In tax year 2022, the gross tax gap was 16% of the federal tax revenue or $59.5 billion. However, the net tax gap would have been 9.3% of the federal tax revenue or $34.7 billion, so the CRA's compliance and collection activities resulted in a potential reduction of the overall gross tax gap by 42%, or $24.8 billion.

That said, I would like to mention that the data on Canada's tax gap is also published on the Government of Canada's open data portal and is widely available. That means that this information can be accessed by the Canadian public and interested parties, such as the Parliamentary Budget Officer. Canadians can rest assured that the Government of Canada and the CRA remain committed to supporting the Parliamentary Budget Officer in carrying out her mandate. This commitment is being fulfilled with the assurance that Canadians' confidential tax information is protected in accordance with the law. I would like to take this opportunity to recognize the recent appointment of Annette Ryan as the Parliamentary Budget Officer.

In conclusion, the work on the tax gap provides us with a clearer picture of the health of Canada's tax system. This work encourages an open and transparent discussion on tax non-compliance. That said, it is important to note that many factors remain beyond the control of any tax administration when estimating the tax gap. Moreover, there is an international consensus that a country's tax gap will likely never reach zero.

Furthermore, it is important to note that the tax gap is not a performance indicator for either the CRA or the government. It is a theoretical estimate of non-compliance with tax obligations over a given period, and this non-compliance can vary over time. As a result, the tax gap is primarily an important source of information to monitor what is happening in our tax system.

One thing is certain: These efforts to address the tax gap are aimed at ensuring that everyone, individuals and corporations alike, meets their tax obligations, because taxes not only fund government services and programs, but also promote economic development in Canada through investments in the many sectors of our economy.

[Michael Chong, Conservative, Wellington—Halton Hills North, ON]

Mr. Speaker, I rise to speak to Bill S-217, which was introduced by my friend and colleague in the other place Senator Percy Downe. I thank him for his perseverance in pushing this issue forward. I believe this is the third time the bill was introduced and adopted in the other place and the third time the bill has been sent to the House for consideration. I know Senator Downe has put a lot of work into this.

To be clear, we support this bill. It would, broadly, do three things. First, it would have the CRA publish a list of people who are criminally convicted for tax evasion, which I think is an important part of public disclosure and transparency. Second, it would require the CRA to estimate the tax gap between taxes owed and taxes collected. Third, it would require the CRA to provide data to the Parliamentary Budget Officer so that the Parliamentary Budget Officer can independently assess the tax gap between taxes owed and taxes collected. Those are, I think, three very good goals of the bill.

I would encourage my colleagues to support this legislation. It is important to maintain the integrity of our income tax system. This will give the institutions of state the tools they need to do that so that we can ensure lower taxes for everyone, because when we close the tax gap and reduce tax evasion, taxes can go down.

I look forward to the further debate and vote on this bill.

[The Deputy Speaker, Tom Kmiec]

The hon. member will have the balance of his time when the chamber next considers the bill. The time provided for the consideration of Private Members' Business has now expired, and the order is dropped to the bottom of the order of precedence on the Order Paper.

The House resumed from May 28 consideration of the motion that Bill S-217, An Act to amend the Canada Revenue Agency Act (reporting on unpaid income tax), be read the second time and referred to a committee.

[Michael Ma, Liberal, Markham—Unionville, ON]

Mr. Speaker, I am thankful for the opportunity to speak about Bill S-217, an act to amend the Canada Revenue Agency Act, regarding reporting on unpaid income tax. Maintaining the integrity and fairness of the Canadian tax system is a priority for the Government of Canada. It goes without saying that we are fighting on all fronts against tax evasion and tax avoidance, both nationally and internationally.

I want to emphasize that the tax gap estimate provides valuable information to the Government of Canada. The tax gap is the difference between the amount of taxes that taxpayers would have paid if they had fully met their tax obligations and the amount of taxes they actually reported and paid. By estimating the tax gap, we can get a clearer picture of tax non-compliance and a better understanding of the overall health of the Canadian tax system. It also plays a role in delivering on the government's commitment to transparency. Understanding how and why taxpayers are non-compliant is critical to preserving the integrity of the tax system. It is vital to protecting Canada's revenue base, which supports programs and benefits that improve the quality of life for all Canadians.

That being said, we are here today to discuss Bill S-217, which proposes to amend the Canada Revenue Agency Act. Specifically, it would require the CRA to list all convictions for tax evasion, including international tax evasion, in the annual report submitted to the Minister of National Revenue. It also proposes that the CRA, once every three years, include statistics on the tax gap in the annual report. In addition, it further proposes that the minister provide data on the tax gap to the Parliamentary Budget Officer without delay. I would like to take this opportunity to welcome the appointment of Ms. Annette Ryan as Canada's new Parliamentary Budget Officer.

I should note at the outset that the CRA takes a firm stance on non-compliance, such as posting all convictions on Canada.ca, including convictions related to offshore tax evasion. The CRA also remains committed to supporting the PBO in carrying out her mandate, while at the same time protecting Canadians' confidential tax information in accordance with the law. I recall that since 2016, the CRA has undertaken extensive work to study and report on the tax gap. Back in April 2016, the Government of Canada committed to estimating the federal tax gap. Consequently, the CRA established a dedicated unit to examine and publish a series of reports analyzing different aspects of the tax gap.

In June 2022, the CRA published Canada's first “Overall federal tax gap report”. This report brought together all of the agency's previously published tax gap components, as well as updated estimates and key findings up to the 2018 tax year. Most recently, in late March, the CRA published the second “Overall federal tax gap report”. This edition presented the overall federal tax gap with updated estimates based on the latest available data for tax years from 2014 to 2022.

This second overall report includes tax gap estimates for all major tax components: personal income tax, corporate income tax, goods and services tax, harmonized tax, sales tax and excise revenue. It also includes two new subcomponents, the payroll payment gap and cannabis excise gap, as well as the impact of the COVID-19 pandemic on the federal tax gap. All of the data in this report is also available through the Open Government portal for easy access.

In addition to publishing the report, the CRA published its approach to addressing the tax gap, which focuses on strengthening compliance efforts by encouraging voluntary compliance, identifying compliance gaps and addressing non-compliance. Publishing this approach supports the Government of Canada's commitment to transparency and fairness.

Let us take a closer look at some of the results related to the estimation of the tax gap in Canada. From 2014 to 2022, the tax gap has remained stable at approximately 9% of the federal tax revenue. In the 2022 tax year, the gross tax gap stood at 16% of the federal tax revenue, or $59.5 billion. However, after accounting for the CRA's compliance and collection activities, the total net tax gap was estimated at 9.3% of the federal revenue, or $34.7 billion.

This means that the CRA's compliance and collection activities continue to play a key role, potentially resulting in a 42% reduction, or $24.8 billion, in the overall gross tax gap. A detailed analysis shows that these compliance and collection activities represent a decrease of $10.8 billion of the gross personal income tax gap, $9.3 billion of the gross corporate income tax gap, $4.5 billion of the gross GST and HST gap, and $0.2 billion of the gross excise tax gap.

It is important to note that Canada is among the few countries leading in such vast work on studying the tax gap. To do so, the CRA collaborated with experts, other government departments and international partners to develop methodologies that work within the Canadian context for the different components of the tax gap. Canada is part of a select group of countries that estimates tax gaps and publishes its analysis. The CRA is a member of the tax gap community of interest of the Organisation for Economic Co-operation and Development, the OECD.

The CRA has clearly demonstrated its commitment since 2016 to better study and report on the tax gap. Our knowledge of this issue comes from a wide variety of factors, including tax evasion, honest mistakes and bankruptcies resulting in unpayable tax debt. Since there are many factors outside of the control of the tax administration, there is an international consensus that the tax gap is unlikely to ever reach zero.

In addition, the tax gap is a historical estimate of theoretical non-compliance and estimates can evolve over time as new data are obtained. Therefore, it is not a performance target for the CRA, but rather an important piece of information to monitor what is happening in the tax system. That being said, its measurement encourages an open and transparent discussion on tax non-compliance. In addition, a more insightful understanding of the tax gap can help the CRA better target its compliance and collection activities.

With enhanced data sources, the CRA is well positioned to target those who push, or exceed, the limits of acceptable tax planning to evade or avoid taxes. This, of course, includes wealthy individuals and businesses. As such, the CRA takes a comprehensive approach to monitor and address tax non-compliance. Those who wilfully choose not to fulfill their tax obligations can face serious consequences, including criminal charges, prosecution, court-imposed fines, jail time and a criminal record.

The CRA continues to use the tools at its disposal to detect and deter the most serious instances of non-compliance. In fact, through the CRA's enhanced risk assessment, business intelligence, advanced data analysis, use of legal tools and international collaboration, it is much more difficult for any taxpayer to evade or avoid paying the taxes they owe. The CRA will continue its work to better understand Canada's tax gap. It remains dedicated to playing a central role in maintaining tax fairness by administering tax laws and regulations impartially, conducting audits and taking—

[The Deputy Speaker, Tom Kmiec]

Resuming debate, the hon. member for Mirabel.

[Jean-Denis Garon, Bloc, Mirabel, QC]

Mr. Speaker, I would like to thank the senator who introduced this bill. Much of the work has therefore already been done in the other place.

I would also like to thank my colleague who is sponsoring Bill S-217, of course. This is a bill about accountability and transparency. The Bloc Québécois will be supporting it, so there is no suspense there.

Essentially, the bill seeks to have the Canada Revenue Agency disclose all convictions for offshore tax evasion and to have the agency release an annual report presenting statistics on the tax gap, which represents the taxes that should have been collected but were not and that Canadians and Quebeckers ultimately make up for through their own taxes. After all, there are some people who do pay their taxes.

The government member told us that Canada was part of a select group of countries that published this information. He told us that the Canada Revenue Agency had done so twice, successfully, and congratulated the government. My Liberal colleague is not wrong, because the federal government made that commitment in April 2016. It committed to estimating the tax gap, including data on fraud, bankruptcies and honest mistakes. However, the most recent data are from 2022. It is now 2026, almost 2027, and there has not been any update. It is true that the Canada Revenue Agency released a report in 2026, but the data covered only the period from 2016 to 2022.

The government supports the principle of the bill. However, it also serves as a reminder that binding legislation is needed for the Canada Revenue Agency to carry out this work. As taxpayers and parliamentarians, we have a right to know the size of the tax gap.

Earlier, my colleague told us that the tax gap will never be reduced to zero. There is nothing in the bill that calls for the tax gap to be eliminated. The bill does, however, require that the tax gap be measured and publicly reported so that it can be quantified. Moreover, this is only a first step, since the bill deals solely with offshore tax evasion. For example, a Canadian taxpayer may hold assets or real estate abroad, decide to sell those assets and fail to report the resulting capital gains in Canada. It is possible to develop estimates of those amounts. As taxpayers, we are entitled to that information.

I understand that this may seem like an original idea, but there are many other countries that do this. I think it is a transparency measure. I would like to point out that two other bills contained essentially the same measures, but they were defeated in the House: Bill S‑258, in the 44th Parliament, and Bill S‑243, in the 42nd Parliament.

What is interesting about Bill S‑243 is that the Liberals voted against it. The Liberals had a majority. Mr. Trudeau's government came in with all the best intentions in the world, which it kept up for one, two or three years and, ultimately, those intentions did not translate into results. When we demanded results, they voted against the bill that called on them to honour their own commitments. That is why we need legislation.

I said that this was not a partisan issue. The Parliamentary Budget Officer has come out in favour of the principle of the bill and the bill itself. It is also the role of the Parliamentary Budget Officer to prepare revenue projections for the government. What we heard from the Parliamentary Budget Officer is that a greater ability to access data on the tax gap would help her in her work. The last I heard, the Parliamentary Budget Officer is not the Bloc Québécois, it is not the Conservative Party and it is not the New Democratic Party.

In my opinion, there is a consensus in Quebec society, in Canadian society, among experts, those who do research and analyze the performance of our tax agencies, and among parliamentarians. I am certain that there are members on the other side of the House who would like to see improvements at the CRA.

The first person who should want that is the Minister of Finance and National Revenue, who is also responsible for the Canada Revenue Agency. If the goal is to improve, that needs to be quantified and done right.

Again, it is important to put a name to things. Back when the Liberal government rejected a similar bill, it told us that it was because the bill would violate the right to privacy, personal information and so on. Many cases of fraud and wrongdoing are made public when there are convictions. When it comes to tax evasion—not tax avoidance, which is legal even if it is not desirable—someone who is caught abroad creates a tax gap. I do not see the issue with making that information public.

This also brings us to the broader issue of the Canadian government's ability or lack thereof to collect tax revenues from taxpayers. As I said at the outset, a taxpayer who does not pay their fair share of taxes is a taxpayer who puts the burden of paying down the debt, servicing the debt, and paying for the armed forces, the public service and family benefits on the shoulders of another taxpayer. Those who do not pay their taxes are people who think that another taxpayer is going to pay them. At some point, some of our most vulnerable citizens might be in a position where they do not receive certain services because the Canadian government does not have the full fiscal capacity to pay for them. My Liberal colleague said earlier in his speech that this gap could be as much as 10% of federal government revenues. Do they realize what 10% means? Even if the government does not bring it down to zero, it is huge.

The bill addresses international tax evasion. However, it is important to document where the tax gap comes from. Are there bankruptcies involved? Are there people who are unable to pay their taxes, as we saw during the pandemic? How much of the gap is due to those situations? If the goal is to take action in the right place, it is important to know that information and put a name to those things. More broadly, the government will also have to take the issue of tax avoidance more seriously. For a number of years, certain corporations and the wealthiest individuals, those who should be contributing more, have been resorting to increasingly aggressive tax avoidance strategies. That is perfectly legal because, in many ways, Canada's tax laws are like sieves. As is known and documented, the Canada Revenue Agency has one of the lowest tax recovery rates among all the tax agencies in developed countries.

I remember that soon after the government came to power there was the KPMG scandal. KPMG is one of the companies known as “the big four”. One of those four firms went under. The big four are large firms with very large clients. They advised these clients on schemes to pay less tax, such as through transfer pricing, the shifting of intellectual property abroad and other similar mechanisms. So aggressive were these schemes that criminal charges were laid in the United States against KPMG for promoting them to clients. At the time, we asked the then minister of national revenue Ms. Lebouthillier why she was not using her authority to investigate what had happened at KPMG in Canada. While federal criminal charges had been brought in the United States, here the minister told us that her government could not do anything because the agency was at arm's length and that she was there merely to sit in the minister's chair. She made sure it stayed warm and did nothing else, even though the law allowed the minister to launch an investigation. While the law did not empower the minister to meddle in individual taxpayers' files, it did empower her to launch an investigation. What happened next? A backroom deal was made with KPMG. No charges were ever laid. We do not know what kind of accountability resulted from the agreement. We do not know what impact it had on the tax gap, namely the revenues that the government failed to collect. It has damaged Canada's reputation as a supposedly advanced tax jurisdiction. Perhaps had this law been passed, we would now have a clearer picture of what occurred in the KPMG case in Canada. I will conclude on this point: Because of the delay in disclosure, the report that would have resulted from the application of this legislation would have shed light on what happened in the KPMG scandal in Canada. We know what happened in the U.S.

It seems obvious to me that if the government wants to keep its word and its promise, it will have to vote in favour of this bill with the Bloc Québécois.

[Pat Kelly, Conservative, Calgary Crowfoot, AB]

Mr. Speaker, it is always a pleasure to rise to participate in Private Members' Business, because what we are here for is to debate legislation. However, it is disappointing that tonight we are debating this particular bill, because it has passed the Senate not once, not twice, but three times, and it has been presented in this chamber now three times. This bill should have been passed into law quite some time ago.

I carried this bill into this chamber in 2019. It was supported by all opposition parties. It was supported by independent members. The only group of people in this chamber that opposed this bill in 2019 was the Liberals. I have some hope that maybe they have smartened up a bit and might support this bill tonight. I hope they will. That is not really the indication that I seemed to get from the last Liberal speaker. I got a lot of self-congratulations for what a wonderful job the Liberals think they have done with the CRA. However, we need this bill, and I am going to talk about it.

First, I want to thank the member for Simcoe North for his leadership with respect to tax accountability, for sponsoring this bill in the chamber in this Parliament and in the last Parliament, and for his other bill, Bill C-230, which is an important piece of accountability to ensure that Canadians know what taxes are not collected and what taxes are written off.

This bill would do three basic things. It would force the CRA to calculate the tax gap, to share the data on the tax gap with the Parliamentary Budget Officer and to publish a list of tax evaders, those who have been convicted of tax evasion. The Liberals say that the CRA does calculate the tax gap; they do not see what all the fuss is about, but there are several problems with what exists now. The CRA's reports are not up to date, and the Parliamentary Budget Officer is not able to verify its homework. It does not share the data with the Parliamentary Budget Officer, so we need more than what we are getting right now.

The Parliamentary Budget Officer is an important officer of Parliament who is there to help parliamentarians develop policy that is based on the budgetary information that her or she provides. Several parliamentary budget officers have asked for this tax information, and they do not get it. CRA officials have repeatedly said that they will not give the data to the Parliamentary Budget Officer even though they are required to do so by law. They refuse to do so, usually citing some type of privacy excuse for not providing anonymized data to the Parliamentary Budget Officer. Yes, this is anonymized data. The Parliamentary Budget Officer has not asked for the identity of any tax filer, nor information that can be identified and connected to any particular tax filer. What the Parliamentary Budget Officer needs in order to do the work of the office is the data so they can come up with their own measurement of the tax gap

This is important because there is a history of the CRA, when left to its own devices, underrating its own performance. The Auditor General has repeatedly found that the internal audits of the CRA are not up to snuff. We can think of the call centre at the CRA. The CRA's internal auditors have thought that it answers the phone reasonably and gives Canadians the information they need. The call centre has been running just fine, according to its internal audits.

Every Canadian who has ever called that call centre knows the reality. It hangs up on 70% of the people who call. It gives incorrect information to 30% of the people who actually get through. This is what the Auditor General has found. They found that the CRA's version of what was going on in the agency was not matched to reality. It is important that the Parliamentary Budget Officer be given the data so that they can make their own estimate on the tax gap and advise Parliament so that parliamentarians have the information to formulate policy and judge legislation.

They talk a lot over there about the work they do and about combatting tax evasion, but in reality, we have the Panama papers, in which 900 Canadians were identified. No charges have been laid. In other jurisdictions where citizens were identified, charges were laid and convictions were achieved, but not in Canada. This is important to Canadians, because when people evade their taxes, the rest of Canadians have to pay more. Canadians, by and large, correctly provide information, declare their income accurately and do their best to comply with all of the onerous rules and complicated tax laws of this country. They do their best; they declare their income and pay their taxes, but some do not. It undermines the system and discourages honesty when people get away with evasion.

The last thing the bill would do is compel the publication of a list of evaders. Members might know that in a country with over 40 million people and tens of millions of tax returns, corporate and individual returns, excise tax returns and GST returns, all the different types of taxes that are filed, sadly a number of people do not pay their taxes. However, I think many Canadians would be quite disturbed to realize how few people are charged with and convicted of evasion. It is a staggeringly low number. On average, it is about a dozen a year. In a country of 40 million people, does that sound like a government that is tough on evasion? That is within a whole year, with tens of millions of returns. I do not know what the number of false or evasive returns is. We do not have accurate information on that, but most would presume that it is, sadly, a bigger number, and 12 convictions in a year is pretty disappointing.

The time for the bill has come. It is time to pass it. Let us have transparency. All members of Parliament, regardless of party, regardless of whether they sit on the government benches or the opposition benches, on behalf of their constituents should surely wish to see a Canada Revenue Agency that does a better job of collecting taxes accurately. Part of being able to do that is to have accurate data and accurate information that can be independently verified and that allows us to transparently see who is evading taxes. Yes, a trial is public, but we cannot search and create a list of evaders from that. An evader is someone who has committed a criminal offence and has been convicted. They do not have the right to privacy and for it to not be known that they have been convicted of a crime.

The bill's time has come. It should have been passed many years ago. I hope that it will pass second reading tonight and move on to the next stage. I hope the Liberals will vote for it. It sounds like all the opposition parties are in favour of the bill. I hope that it passes this stage within the hour.

[Tamara Kronis, Conservative, Nanaimo—Ladysmith, BC]

Mr. Speaker, we spend a lot of time in this place talking about how the government spends money. We debate appropriations, pore over spending reports from the Parliamentary Budget Officer and call out boondoggles like the arrive scam, PrescribeIT and the green slush fund. That is important work.

Bill S-217 has the potential to augment that work by helping Parliament pay the same attention to the revenue side of the ledger, because as we hold governments to account, we should also spend time checking that they do a good job of collecting what is owed and that they do so fairly. Parliament should be just as demanding about the government's ability to collect money as we are about its authority to spend it. We decide in this place what taxes may be imposed, and we authorize the expenditure of public funds. When revenue goes uncollected, it narrows our choices about borrowing, spending and taxes. We need reliable data to understand that.

Canada's tax system depends heavily on people complying voluntarily. Most businesses in my community are small. Their owners keep records and remit payroll deductions, and at tax time, many still bring a cardboard box of receipts to a bookkeeper or accountant. They pay their taxes even when they are struggling to pay their own bills. When the government does a good and fair job of collecting taxes owed, we have more choices about how to use that money, including reducing what we borrow, reducing the deficit and leaving Canadians with more money in their pockets. When the government does a bad job, more people evade their obligations and honest taxpayers end up carrying more of the burden. Tax evasion hurts us all, and Parliament should be able to get reliable data from the agency that administers the law in ways that will allow us to help ourselves.

The tax gap is the difference between the taxes Canadians and businesses legally owe and the amount the government actually collects. Not all of that is due to tax evasion. Taxpayer non-compliance can be intentional or unintentional, and in some cases can result from the inability to pay. It is one of the CRA's core jobs to minimize the tax gap.

Bill S-217 would give Parliament better information to judge how effectively the CRA is doing that and to tell whether we are giving CRA officials the training and tools they need in order to be successful. Bill S-217 would require the CRA's annual report to include a detailed list of tax evasion convictions, with international cases identified separately. Every three years, it would require tax gap statistics for individuals and corporations, broken down by size and trusts. It would also require the Minister of National Revenue to give the Parliamentary Budget Officer the tax gap data and other information needed for economists and others to do independent analysis. The bill would neither raise taxes, nor give the CRA new investigative powers. What it would ask the CRA to do is to provide data so that we can account for the government's performance.

The CRA already studies the tax gap and publishes some information about convictions. There is considerable expertise that lies behind that work, but the CRA's willingness to publish information is not the same as Parliament's right to receive it. Statutory reporting would provide a baseline and a consistent stream of data that we can use for analysis and improvement. It would survive changes in governments and changes in political priorities and would let us test the agency's assumption longitudinally instead of simply accepting its conclusions.

In March, the CRA published estimates for 2014 to 2022. For tax year 2022, its upper bound estimate of the gross federal tax gap was just under $60 billion. After projecting the effect of compliance and collection, the upper bound net gap was closer to $35 billion, or 9.3% of the federal tax revenue covered. These estimates include income tax, GST, HST and excise taxes.

That $35 billion is not a pile of cash waiting to be recovered, and it would be wrong to suggest that all of it reflects deliberate evasion. The gap includes unreported taxes and amounts assessed but unpaid, and the estimates depend on assumptions. Parliament still needs to understand where these shortfalls come from and what the CRA does about them. No matter how we look at it, it is big money at a time when we need all the help we can get.

Consider the CRA's 2024-25 departmental results report. It records $18.1 billion in what the agency calls “fiscal impact” from close to 85,000 completed compliance cases. Fiscal impact includes tax assessed, refunds reduced, interest, penalties and the present value of certain future tax assessments. The report expressly says it does not account for amounts reversed on appeal or left uncollected. That is a perfectly legitimate measure, if we understand what it measures. It is not the same thing as money collected.

A reassessment is not the final word on what a taxpayer owes. Reassessments can be challenged, and confirmed debts are sometimes uncollectible. It is valuable to know the difference between enforcement activity and recovered revenue. For the 2022 tax year, the CRA's upper-bound estimate of the corporate income tax reporting gap attributable to large corporations was $17.2 billion. That is an estimate, not a finding of deliberate evasion, but it gives Parliament a good reason to examine this part of the tax system carefully.

When former parliamentary budget officer Yves Giroux testified on an earlier version of this bill, he explained that section 241 of the Income Tax Act properly protects taxpayer information, yet the CRA sometimes aggregates data so heavily, to protect indirect identification, that it becomes difficult to analyze. Giroux said he needed useful data, not taxpayers' names. This is an example of the privacy balancing that needs to happen. This bill preserves existing confidentiality restrictions. We still need to test it at committee to know whether it solves the problem he identified. What he suggested was considering a carefully limited exception to section 241, and the committee should examine how to give the PBO useful evidence while protecting Canadians' private tax affairs.

The convictions list needs to be treated with similar care. Criminal prosecutions are appropriate for serious cases, but much tax enforcement takes place through civil reassessments. A higher conviction count does not necessarily mean better administration, because convictions do not always lead to collections. However, it is useful to know when and how well Canadian law has been followed, and whether the government is doing a good job of minimizing that tax gap.

The committee should also examine the definition of the tax gap in the bill, which is tied to the Income Tax Act even though the CRA's overall reporting includes GST, HST and excise. The new requirements should strengthen, not narrow, the reporting that is already available. Better reporting will not replace experienced investigators, and it will not make a complicated tax system easier to comply with. The former parliamentary budget officer testified that simplifying the rules could free CRA staff to concentrate on audits and collections. Instead of adding to the burden on taxpayers, we ought to be looking at where clearer laws and better targeted enforcement would actually improve results.

Collecting taxes already legally owed could relieve pressure to borrow or raise rates or create room to lower taxes for Canadians who are already paying their share. Instead of asking Canadians to contribute more at this difficult time, Bill S-217 would help us find out how effectively the government collects what Parliament has already required. That is why I support this bill and have made some suggestions on how the committee could make it a stronger instrument of parliamentary scrutiny.

Let us give the Parliamentary Budget Officer the best information she can use, with proper protections for people's privacy. We should get Parliament better information about what happens after taxes are assessed, and we should insist on an equally credible account of what the government has collected alongside what it spends.

[The Deputy Speaker, Tom Kmiec]

The hon. member for Simcoe North has the floor for his right of reply.

[Adam Chambers, Conservative, Simcoe North, ON]

Mr. Speaker, it was a pleasure indeed to hear the wonderful words of my colleagues from multiple parties in this chamber about the need for greater transparency at the CRA and, if I heard correctly, general support of the principles of Bill S-217.

I have to commend my hon. colleague from Calgary Crowfoot for his following of this issue, from sponsoring a bill similar to this in a previous Parliament to his work on the finance committee, which helped expose some of the challenges that this bill would help to address. As he has said, this is indeed the third time that this chamber has been given the opportunity to pass this bill into law, and I think the third time is the charm.

I also have to commend the principal proposer of this bill, Senator Downe, who is a tireless advocate for greater transparency, greater efficiency and a better-functioning CRA.

Many Canadians were dismayed and, frankly, shocked this weekend by what was reported by the CBC. Harvey Cashore has been doing a lot of work with his colleagues at the CBC, including Daniel Leblanc, on exposing some of the challenges of the large-scale frauds that are perpetrated on the public but that somehow escape even the most simple screening at the CRA. In one case, an individual was paid $40 million in tax refunds. This individual was a regular T4-ed employee living in northern Ontario. For fun, he submitted a fake tax return, and he got a $40-million refund as a result. Even he could not believe he was going to get that refund.

Bills like Bill S-217 would require greater transparency at the CRA, as has been discussed, to identify the tax gap and then, when there are bad actors or tax evasion, require that that information be made public to all Canadians. The least that Canadians should expect is greater transparency.

I want to thank Senator Percy Downe for his tireless advocacy and congratulate him on passing this bill for a third time. I hope we will be able to have a phone call tomorrow morning with the senator to tell him that this House duly passed this legislation this evening.

Of course, we should also thank the drafters and the parliamentary support personnel in the legal team here who support private members, both in the House and in the Senate, to bring forward common-sense pieces of legislation.

[The Deputy Speaker, Tom Kmiec]

The question is on the motion.

If a member participating in person wishes that the motion be carried or carried on division, or if a member of a recognized party participating in person wishes to request a recorded division, I would invite them to rise and indicate it to the Chair.

[Adam Chambers, Conservative, Simcoe North, ON]

Mr. Speaker, I request that it be carried.

[The Deputy Speaker, Tom Kmiec]

I declare the motion carried. Accordingly, the bill is referred to the Standing Committee on Finance.

(Motion agreed to, bill read the second time and referred to a committee)

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, I rise on a point of order. I suspect that if you were to canvass the House, you would find unanimous consent to call it 6:30 p.m. so we could move on to government business on Bill C-38.

[The Deputy Speaker, Tom Kmiec]

Is it agreed?

[Some hon. members]

Agreed.