Information & Ethics Committee on April 14th, 2016

[Ted Gallivan]

I would add that it is not just the money that concerns the banks, there is also the burden of administering the withholding tax on all those funds. Basically, it is about the money, of course, but there is also a lot of work to do in making those deductions.

[Joël Lightbound, Liberal, Louis-Hébert, QC]

That’s all for me.

Thank you.

[The Chair, Conservative, Blaine Calkins]

Mr. Saini, there's about a minute left.

[Raj Saini, Liberal, Kitchener Centre, ON]

Mr. Gallivan, I'll direct this question to you. In the minister's opening remarks, she said that there were 92 tax treaties and 22 other tax information agreements in force around the world.

We have a robust system of information and declaration. When you're dealing bilaterally with other countries and they're asking us for tax information within these agreements, I'm confident that the information that we would provide would be second to none.

When the CRA asks another country for bilateral information, what guarantee do we have that the information that they're providing to us meets the same high standards we apply when we convey that information to them? That is my concern.

Do we have a standard that we can apply? The information going out probably meets a high standard, but the information being received from other tax regimes may not meet our standard. How do we assess that the information we're getting is clear and transparent?

[Ted Gallivan]

The best way to answer your question is that we don't just take that information and issue a notice of assessment to the taxpayer. The kind of information we're talking about is called risk assessment.

We're getting a list of people's names and we're saying, “Aha, maybe we should take a second look at these people.” Often what happens in tax authorities is that those lists are compared to other lists. We look for inconsistencies; in other words, we may see significant bank accounts connected to very low incomes. That puts you on a list for a closer review. We'll do a closer review of the information to actually confirm what's going on.

The assurance I could give you is that we don't blindly take that information and change people's tax returns, but it's one ingredient in helping us decide who to take a closer look at. Then we would work with that taxpayer to kind of confirm the information.

[Raj Saini, Liberal, Kitchener Centre, ON]

Is that an inconsistency?

[The Chair, Conservative, Blaine Calkins]

We've already gone over the five minutes. I hate to be a stickler. I was looking for people to take up time earlier, and now I have to cut people off.

Go ahead, Mr. Dusseault, for up to three minutes, please.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Thank you, Mr. Chair.

Once again, I will be sharing my time with Mr. Boulerice.

Madam Minister, I would like to ask you a quick question. I would like your opinion. Do you believe that it would be helpful or reasonable to warn Canadians who also have American citizenship in this case, that their information has been transferred to the United States and to give them a copy of that information? Do you think that would be a good idea?

Do you think that would be a good idea, Madam Minister?

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

Do you want to know whether it would be a good idea to send all the information?

Under our current agreement, people who want to receive information about what has been transferred can get in touch with the agency or with their financial institution and the information will be provided to them.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Do you not think that it should be automatic?

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

As well, on the Canada Revenue Agency website, there is a special section on FATCA and everything that is involved.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Do you not believe that people should be automatically informed when the Government of Canada transfers data about them?

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

If you want to amend the agreement, you would have to talk to the Department of Finance. That is the department that negotiated the agreement.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

In your opinion, would it not be a good idea to do that?

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

The Department of Finance negotiated the agreement. So you would have to check with that department to see if it is possible to change it.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

You have no opinion on it?

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

Let me repeat the answer I gave. The Department of Finance negotiated the agreement. The Canada Revenue Agency implements the agreements negotiated by the Department of Finance.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Thank you.

[Alexandre Boulerice, NDP, Rosemont—La Petite-Patrie, QC]

Madam Minister, you said that there are very strict measures that protect the confidentiality of private information about Canadian citizens.

How can you explain the news item today on iPolitcis saying that the TD Bank had sent a letter to some parents because the bank account for their little eight-month-old daughter could possibly be transferred to the Canada Revenue Agency and then sent on to the United States? Is that what we call strict measures that protect the citizens of our country?

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

I will let Mr. Gallivan answer that question.

[Ted Gallivan]

I believe you are referring to a financial institution that contacted one of its clients to confirm her citizenship. I feel that it is perfectly normal for an institution to communicate with its clients. I believe that, further on, the article in question referred to funds in a registered education savings plan. Our agreement with the Americans excludes those amounts. The article says that any future money in the child’s name for education purposes would come under the agreement, but that really is one of the exclusions that we negotiated with the Americans.

[The Chair, Conservative, Blaine Calkins]

We've gone over the time there.

Thank you very much, gentlemen, for your questions.

When we came through the rounds... We're almost there, Minister. I hope you can stay. We've got about three minutes left, and I owe the Conservatives four minutes now and the Liberals a minute and a half. How do you guys want to do this? If we have one question here and one question there, is that okay?

[Matt Jeneroux, Conservative, Edmonton Riverbend, AB]

Thank you.

Minister, yes, we're almost done. There are a few more minutes left here.

I just want to bring one additional example to the table. In 2012, the hon. member for Bourassa, who's joined us here today, who is also your parliamentary secretary, mentioned—again, that was in 2012—that he'd vigorously fight against a similar change.

Again, for the record, we have the Minister of Transport, we have the Treasury Board president, we have yourself to an extent, we have a member from Nova Scotia, we have the parliamentary secretary, and we have the Right Hon. Prime Minister who have said that this is something that they do not want, something they do not want to support. However, on October 19, 2015, they had a complete reversal of opinion on it, and again, just to be clear, your position is now that it's because you have had a chance to read through the legislation in more detail than you had before, and that's why there's this reversal of opinions that have been long held going back to 2012.

Again, Minister, could you just clarify for me one more time this is the position that you take?

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

As I said a little earlier, if our government had been in place at the time, we would have taken the time to explain clearly to Canadians and to parliamentarians the reasons why this agreement was being adopted and to discuss it in an open and transparent manner. The problem really is with the process, and the fact that an agreement was rushed through in an omnibus bill more than 400 pages long.

[Matt Jeneroux, Conservative, Edmonton Riverbend, AB]

It sounds eerily similar to the answer to my last question. It was word for word, almost.

Is that my time, Mr. Chair?