Information & Ethics Committee on April 14th, 2016

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

First, thank you, Minister.

Second, I do want to shift gears a bit, but I want to stick to access to information, which is the mandate of this committee.

Specifically, I want to turn to the work of Senator Percy Downe. I commend him for his work in bringing attention to the tax gap. That's the difference between what the CRA is owed and what it actually collects or, in other words, how much is lost to tax evasion.

My question relates to a previous dispute between the CRA and the Parliamentary Budget Office. Has that dispute been resolved? Has the CRA agreed to provide the Parliamentary Budget Office with the documents that it has requested?

[The Chair, Conservative, Blaine Calkins]

It's not technically relevant to the study, to the motion that's before us; however, Madam Minister, if you're comfortable providing an answer—

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

The answer could be in writing to me later, but it is relevant to this committee. It is an access to information issue, I think, for Canadians to know the tax gap.

[The Chair, Conservative, Blaine Calkins]

Certainly, but we do have a very focused motion here, and I would appreciate it if we could keep on that track. I'll allow members a certain latitude when it comes to asking questions because these are parliamentary privileges that we all have.

Madame Minister, feel free to answer if you wish, but if you're not comfortable, you don't have to.

[Diane Lebouthillier, Liberal, Gaspésie—Les-Îles-de-la-Madeleine, QC]

On Monday, we made a historic announcement about an investment of $444.4 million. We certainly responded to Senator Percy Downe, who has also taken a public position saying that he was in agreement with our direction. So we are now going to work in collaboration with the senator on the tax gap.

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

Thanks very much.

[The Chair, Conservative, Blaine Calkins]

Was that your only question?

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

That was my only question.

[Blaine Calkins, Conservative, Red Deer—Lacombe, AB]

All right.

Mr. Saini, do you have some comments?

[Raj Saini, Liberal, Kitchener Centre, ON]

Madam Minister, thank you for taking the time to come and appear before the committee this morning.

There's a question I have for you. Could you could maybe highlight the main points in the Canada-U.S. intergovernmental agreement and also confirm whether there are any U. S. Patriot Act implications with this tax treaty that we have?

[Diane Lebouthillier, Liberal, Gaspésie—Les-Îles-de-la-Madeleine, QC]

I will ask Mr. Gallivan to answer your question.

[Ted Gallivan]

In terms of the agreement, the exclusion of RRSPs, TFSAs, and those kinds of accounts from the exchange and limiting certain small deposit-only institutions was an important narrowing of the scope of the exchange. Also, the mechanics of the exchange in terms of the timing of when the CRA would receive the information from the banks and the scope of the information we would receive were important aspects of the exchange itself.

Could you repeat the second part of your question?

[Raj Saini, Liberal, Kitchener Centre, ON]

It was whether there were any Patriot Act implications.

[Ted Gallivan]

Right. The intergovernmental agreement with the U.S. confirms that the information would only be used for tax administration purposes, so any use under the Patriot Act would be a breach of the agreement the U.S. signed with us.

[Raj Saini, Liberal, Kitchener Centre, ON]

You're confident that any tax information that's conveyed to the United States would only be used in that specific area and would not be shared with other U.S. departmental agencies?

[Ted Gallivan]

The U.S. government agreed not to, and we have a long history of exchanging significant volumes of information with the U.S. government, and so I have no reason to doubt their word.

[Raj Saini, Liberal, Kitchener Centre, ON]

In your opening remarks you mentioned, Madam Minister, that the next release of information will be on September 30, 2016. Is there a reason that date was specifically chosen? Is it because of the U.S. fiscal year-end, or was it just an arbitrary date that was assigned? It's just for my own interest.

[Marie-Claude Juneau]

I have no answer to that question. I will make a note of it and get back to you about it because I do not know whether there is any kind of regulation. My apologies.

[Raj Saini, Liberal, Kitchener Centre, ON]

That's okay.

[Diane Lebouthillier, Liberal, Gaspésie—Les-Îles-de-la-Madeleine, QC]

Perhaps I could—

[The Chair, Conservative, Blaine Calkins]

It won't be the first time an arbitrary date was set for some reason or some purpose. I'm sure the answer can be found to your question and submitted to the committee.

I'm sorry; I didn't mean to cut you off, Madam Minister.

[Ted Gallivan]

Just quickly in terms of context, data is being exchanged on the preceding tax years; in other words, in 2015 we shared tax data relating to 2014. The delay to September is to allow people to file their tax return, get it into the system, get it cleaned up. The banks need time as well. That was part of our work with the Canadian financial institutions: to minimize the burden on those businesses. If we're asking for information about a year, we're leaving time for the banks to clean up their data and get it to us and time for us to make sure that it's protected, and then get it off to the Americans.

However, we can get back with a more specific answer on the date.

[The Chair, Conservative, Blaine Calkins]

Certainly.

That ends our first round of questions. I'm sensing that the momentum around the table to ask more questions is fading, unless others have some questions.

Go ahead, Mr. Bratina.

[Bob Bratina, Liberal, Hamilton East—Stoney Creek, ON]

Thank you.

What does the act say about a breach? What would happen in the case of a breach of the agreement on either side? Is that stated clearly in the document?

[Ted Gallivan]

What kind of breach? By the financial institutions or by the U.S.?