Information & Ethics Committee on Oct. 29th, 2025

[The Chair, Conservative, John Brassard]

Good afternoon, everyone. I call the meeting to order.

Welcome to meeting number 12 of the House of Commons Standing Committee on Access to Information, Privacy and Ethics.

Pursuant to Standing Order 108(3) and the motion adopted by the committee on Wednesday, September 17, 2025, the committee is resuming its review of the Conflict of Interest Act.

I'd like to welcome our first panel of witnesses.

As an individual, we have Allison Christians. She's a full professor and the H. Heward Stikeman chair in tax law at McGill University. We also have, from the Tax Justice Network, Andres Knobel. He's the lead researcher for beneficial ownership.

I'm going to start with you, Professor Christians. Welcome to the committee. You have up to five minutes for your opening statement.

[Allison Christians, Full Professor, H. Heward Stikeman Chair in Tax Law, McGill University, As an Individual]

Good afternoon, Chair and members of the committee. I appreciate the opportunity to appear before you today.

The disclosure language in the Conflict of Interest Act is potentially outdated. The Income Tax Act uses better information-gathering and -sharing tools, and you can consider using those tools if you are worried that not enough information is being reported under the Conflict of Interest Act.

My own area of expertise is domestic and international income tax, not ethics or the administration of conflict of interest regimes.

As you know, Parliament uses the Income Tax Act to regulate tax compliance, while it uses the Conflict of Interest Act, among other statutes, to regulate the conduct of public office holders. These regimes serve different purposes, though they may intersect when questions arise about perceptions of conflict connected to financial information, or lack thereof.

Both the Conflict of Interest Act and the Income Tax Act have information-reporting requirements, while the Conflict of Interest Act also requires some public declarations, even though the Income Tax Act does not. Parliament has many decisions about what has to be reported to government bodies and what has to be made transparent to the public, and the two regimes do these things for different reasons.

The Income Tax Act, in particular, reflects decades of legislative drafting and redrafting, as well as agreements made with other countries around gathering and sharing information. All of these rules and agreements demonstrate a keen awareness that obtaining relevant information is the key to effective and fair administration of the law, but we need to be clear about the language used in this context.

Taxpayers can take different actions in their lives, and Parliament legislates the tax consequences of those actions. That's what the income tax law is. In this context, two terms are often used interchangeably in public discourse, but they are, in fact, distinct, and I think this distinction should inform this committee's current inquiry. I am talking about tax avoidance and tax evasion. It is important not to conflate evasion and avoidance. Tax avoidance is not tax evasion, and tax evasion is not tax avoidance.

Tax evasion involves deliberately failing to comply with tax laws, hiding income, falsifying or destroying records, or otherwise wilfully evading or attempting to evade compliance with the act. That's tax evasion, not tax avoidance. The Income Tax Act contains sophisticated reporting rules to prevent tax evasion and has major penalties to deter and punish those who break the law.

I note that, in French, the word évitement is often used when talking about tax, but this word can mean both avoidance and evasion, so the word fraude should be used instead when referring to evasion in French, because we are talking about illegal actions. It is clear that lack of information begets, and is a major component of, tax evasion, not tax avoidance.

Tax avoidance is not the same thing. Failure to disclose information is not a key component of tax avoidance. Someone might choose one action over another to avoid a tax or to get a tax advantage that Parliament has legislated, but everyone has the information they need, and nothing is being fraudulently withheld to hide from the tax authority. A taxpayer and the Minister of National Revenue might disagree on the tax consequences of an action, but that does not make it tax evasion.

Ultimately, it is up to Canada's courts to determine tax outcomes. Parliament has adopted some rules to prevent tax avoidance in some cases, but we all know that Parliament has also adopted other rules to intentionally provide tax avoidance opportunities, such as to boost economic investment. Canada's courts have consistently upheld the taxpayers' rights to plan their affairs, including to reduce their taxes. Avoiding taxes is legal, until Parliament or a court says it is not.

That brings me to a third category that isn't as well understood in the public discourse, namely abusive tax avoidance or tax abuse. Parliament has also identified this category and has addressed it over many years in the Income Tax Act with a general anti-avoidance rule that defines abuse and that provides consequences when taxpayers go beyond avoidance and abuse the law. None of tax evasion, tax avoidance nor tax abuse necessarily violates the Conflict of Interest Act, though any of these may raise questions about a public office holder's conduct, depending on the circumstances.

To the extent that Parliament views the Conflict of Interest Act as insufficiently meeting its objectives because not enough information is being reported, it could consider using standards that are already in place in the Income Tax Act and in various tax agreements with other countries. For example, Parliament could expand what public office holders must disclose by revisiting the rules in the Conflict of Interest Act that refer to owning assets, without referring to indirect holdings. The Income Tax Act addresses relationships beyond relatives, friends and family by talking about affiliation and control, which gets at indirect ownership where needed.

I understand that, in connection with the 2012 review of the Conflict of Interest Act, and again in 2018, indirect ownership has been raised as an issue, but Parliament has not yet adopted a revision to that effect. There may be guidance on these matters, but statutory text might be needed to ensure consistency across different commissioners over time.

These are policy choices for Parliament to make. Public office holders make disclosures of information in light of what both the Income Tax Act and the Conflict of Interest Act demand. It is Parliament's role to determine what must be reported and what kind of public transparency is appropriate in our democratic system. If not enough information is being reported, Parliament can easily change the statutory rules to require more.

I would be pleased to answer any technical questions the committee may have about how tax rules operate, including how international tax information sharing works. While I can provide this technical expertise, I cannot opine on matters of morality or what policy choices Parliament should make regarding conflict of interest rules.

Thank you.

[The Chair, Conservative, John Brassard]

Thank you so much, Ms. Christians.

Mr. Knobel, you have up to five minutes to address the committee. Go ahead, please, sir.

[Andres Knobel, Lead Researcher, Beneficial Ownership, Tax Justice Network]

Thank you, Mr. Chair and members of the committee. I appreciate the opportunity to contribute to this very important discussion.

My name is Andres Knobel, and I am the lead beneficial ownership researcher at the Tax Justice Network, a civil society organization that promotes financial transparency and tax justice around the world. My research focuses on beneficial ownership, offshore trusts and the identification of secrecy jurisdictions, or tax havens.

My remarks will focus on two issues mentioned in the invitation to participate today: one, regulating public office holders' ownership of assets in tax havens, and two, the use of blind trusts as a compliance measure.

Let me begin with the first point. I fully support the goal of enhancing transparency. However, the proposal to regulate the ownership of assets in tax havens could be strengthened.

In my view, disclosure should apply to all assets regardless of where they are held, rather than only to those located in jurisdictions labelled as tax havens. The classification of a tax haven can often be political, and many major financial centres with limited transparency are not always identified as such.

If a specific list of jurisdictions must ultimately be established, I would recommend that it be based on objective and verifiable transparency criteria, such as whether the jurisdiction provides public online information on the legal owners and beneficial owners of companies, trusts, real estate and other assets, or if it exchanges financial account and crypto asset information with Canada, and other transparency measures.

The Tax Justice Network's financial secrecy index may be a helpful resource in this respect, as it ranks jurisdictions according to measurable indicators of financial secrecy.

Second, I would recommend that ownership be defined to include both legal and beneficial ownership. This would ensure that disclosures capture not only assets held directly in an official's name but also those that are indirectly owned, controlled or enjoyed through companies or family members. This broader definition would help prevent the concealment of assets or conflicts of interest through nominees or complex ownership structures.

Finally, while I understand this may go beyond the immediate mandate of this committee, I would note the importance of ensuring that Canada's beneficial ownership framework extends across different vehicles and asset types, such as companies, trusts, real estate, cars, yachts and aircraft. This would allow authorities and the committee to cross-check declarations and verify information rather than relying solely on self-reporting by public officials.

I'm turning now to the second issue, which is blind trusts. While trusts can serve legitimate and useful purposes, my research has also identified many cases where they have been misused for tax evasion, money laundering or sanctions evasion. Trusts can pose higher transparency risks because of their complex control structures involving many different types of parties and because of strong asset protection features. For that reason, I would caution against viewing blind trusts as a sufficient safeguard against conflicts of interest.

The most effective safeguard, in my view, is full transparency. Regardless of whether a public official's assets are held directly or through a blind trust, the underlying assets and interests should be disclosed and accessible to the general public. Public access to this information enables journalists, civil society organizations and citizens to assess whether a decision or government contract could create a potential conflict of interest.

Transparency should also be practical and usable. Information should be made available as structured, searchable and open data, allowing effective monitoring and analysis.

Ideally, Canada could consider developing an automated alert system that cross-checks asset declarations with procurement or land ownership data so as to flag potential conflicts both to the committee and to the general public. Such tools would provide a far stronger safeguard than relying on blind trusts alone.

Thank you again for inviting me to appear before you today. I would be pleased to answer any questions you may have.

[The Chair, Conservative, John Brassard]

Thank you, Mr. Knobel.

We're going to start with our first round of questions.

I'm going to Mr. Majumdar.

Sir, you have six minutes. Go ahead, please.

[Shuv Majumdar, Conservative, Calgary Heritage, AB]

Thank you very much.

Welcome to the committee. It's nice to hear your presentations.

Professor Christians, I'll start with you.

In your paper, “Trust in the Tax System: The Problem of Lobbying”, you write, “politically astute, well-resourced individuals and multinationals work diligently to influence the shape of the law”.

Professor, can you explain, even on an abstract level, how lobbying by investment firms shapes tax laws to allow layers of subsidiaries in jurisdictions like Bermuda and the Cayman Islands to shield profits from Canadian taxation?

[Allison Christians]

I don't know what you mean by “shield profits”. If you're talking about profit shifting, I can answer that question.

[Shuv Majumdar, Conservative, Calgary Heritage, AB]

Sure.

[Allison Christians]

The issue of profit shifting is something that is global in scope. All countries have this problem where, through the use of complex rule sets, a lot of judgment and a lot of discretion on the part of the taxpayer, which is given by Parliament, companies arrange their affairs to reduce their taxes. That is globally the case.

Canada is part of a global effort to create a minimum corporate tax to prevent, deter or get rid of the incentive for moving things to lower tax jurisdictions. This has been going on for decades. That is a problem which all countries face. We all want to attract capital, so we want to reduce our taxes on capital from outside, and we also want to raise taxes, which means we don't want to over compete when it comes to reducing taxes on capital.

What you find is that multinationals, but really anybody who has the capacity to hire lobbyists, will tell you the exact same thing. I'm sure you've heard it many times that, in order to get jobs and growth, you have to reduce taxes on them. Then the government, Parliament, over the years in Canada, as every other government in the world has done, has made legislative choices that reduce taxation in order to spur economic growth.

That's the issue of profit shifting, and it's not in any way limited. I'm not even sure which two jurisdictions you named or why you named them, because those aren't the problem. The problem is not jurisdiction—

[Shuv Majumdar, Conservative, Calgary Heritage, AB]

Right, I appreciate that. I think those are jurisdictions that impact how the Prime Minister's own disclosures work, so I was curious about the impact of that.

Your colleague Mr. Knobel just said that blind trust misuse is an issue in that it does not have sufficient safeguards. An antidote to that could be transparency and disclosures, perhaps even some sort of automated alert systems.

Do you think that, in the spirit of accomplishing the transparency you described in your paper and in your testimony today, the Canadian government today is pursuing that type of transparency and that disclosure around blind trusts?

[Allison Christians]

Are you speaking about the Conflict of Interest Act or the Income Tax Act?

[Shuv Majumdar, Conservative, Calgary Heritage, AB]

I'm speaking about the Conflict of Interest Act, which is the subject of this meeting.

[Allison Christians]

Unfortunately, I'm not an expert on the Conflict of Interest Act, so I won't be able to answer that question.

[Shuv Majumdar, Conservative, Calgary Heritage, AB]

Could you then try to look at it from the Income Tax Act provision for disclosures of foreign-held assets in tax havens?

[Allison Christians]

A tax haven is not a technical term, and it is just simply not a term. Every country could be accused of being a tax haven, including Canada itself. I don't recognize that term, and I can't use it for you.

What I can tell you is that the obligation to report information in the Income Tax Act is sophisticated and broad. There are few exceptions, and they are highly technical. You could read through those and see what the exceptions are.

[Shuv Majumdar, Conservative, Calgary Heritage, AB]

Thank you.

Mr. Knobel, in the short time I have left, maybe I'll turn to you because you did look at what tax haven policy could be by different parties in Canada, its definition and how different parties would act and react to the situations that Canadians are impacted by. The report noted that the Carney government was the only major party in the 2025 election that failed to address tax havens.

Why do you think that is, sir?

[Andres Knobel]

I would say that I do not know enough about Canadian politics to answer that. I would say that, in most countries, they tend to fail to properly address tax havens many times because of the political pressures of different countries and because they don't use objective criteria.

Many times there are national tax havens, even international tax havens, even by the EU. It's not very clear why they do that. That's why we offer the financial secrecy index and another one that focuses more on tax abuse or tax avoidance called the corporate tax haven index. This is where we try to explain why each country, including Canada, has provisions that could always be improved to become more transparent and to reduce tax minimization, avoidance or abuse provisions.

[Shuv Majumdar, Conservative, Calgary Heritage, AB]

Do you think it's ethical for a sitting Prime Minister to benefit from tax havens with assets that are held in blind trusts?

[Andres Knobel]

I would say two different things.

The main thing is that I personally would not really differentiate between if it's through a blind trust or through a trust or through another type of vehicle. I think any exploitation.... I would also say that although any public officer has, I feel, a larger responsibility because of their position, we would still expect, or I would personally, every citizen not to be undermining the rules that apply to everyone else. That usually happens with multinationals or high net worth individuals, maybe also with politicians who can, either through lawyers, accountants or big law firms, find ways to still pay less or be less subject to the rules that apply to everyone else. I completely agree that that should stop.

[The Chair, Conservative, John Brassard]

Okay.

[Andres Knobel]

Of course, for a public officer, there is more responsibility, but really we should expect that for everyone.

[The Chair, Conservative, John Brassard]

Thank you, sir.

Thank you, Mr. Majumdar.

Mr. Sari, you have six minutes.

[Abdelhaq Sari, Liberal, Bourassa, QC]

Thank you very much, Mr. Chair.

I would like to thank both witnesses for their exceptional testimony based on facts and research. The research before us and your work help to explain the democratization of our service and make these elements more factual.

Ms. Christians, I will address you first, if I may. I'd like to ask you a question about the model used in Canada, where the beneficiary is known, but the composition and management of the assets are completely hidden. This is a model used in several democratic countries, as you mentioned earlier.

In your opinion, does it raise legitimate concerns about transparency, or is it generally recognized around the world as a sound standard?

[Allison Christians]

Perhaps you could clarify, because I'm not sure I fully understood the question. Are we talking about tax information exchange agreements?

[Abdelhaq Sari, Liberal, Bourassa, QC]

I'm talking about asset management in particular. Is it truly hidden or is there a way to know the beneficiaries of these assets?