That is a substantial increase.
Evidence of meeting #54 for Finance in the 40th Parliament, 3rd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was evasion.
A recording is available from Parliament.
Evidence of meeting #54 for Finance in the 40th Parliament, 3rd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was evasion.
A recording is available from Parliament.
4:05 p.m.
Conservative
Bernard Généreux Conservative Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
That is a substantial increase.
4:05 p.m.
Conservative
Bernard Généreux Conservative Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
Is that because additional resources were made available to your department?
4:05 p.m.
Deputy Commissioner, Canada Revenue Agency
Yes. Would you like to add anything, Ms. Bergevin?
4:05 p.m.
Director General, International and Large Business Directorate, Compliance Programs Branch, Canada Revenue Agency
The funding we received allowed us to expand our coverage of transfers and aggressive tax planning activities. It has allowed us to conduct more audits, and therefore achieve better results.
The funding that we obtained also allowed us to establish centres of expertise, which are research centres that allow us to build up an information system in order to achieve better results.
4:05 p.m.
Conservative
Bernard Généreux Conservative Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
Under the current legislation, does that mean that the amounts you recovered can be reinjected into such activities?
4:05 p.m.
Director General, International and Large Business Directorate, Compliance Programs Branch, Canada Revenue Agency
Yes.
4:05 p.m.
Conservative
Bernard Généreux Conservative Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
Therefore, the amounts do not go back into the department's consolidated fund?
4:05 p.m.
Director General, International and Large Business Directorate, Compliance Programs Branch, Canada Revenue Agency
Yes, they are put into the consolidated fund.
4:05 p.m.
Conservative
Bernard Généreux Conservative Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
But you can tap into those amounts.
4:05 p.m.
Deputy Commissioner, Canada Revenue Agency
No. Our budget is allocated, and everything we recover is put into the Consolidated Revenue Fund. Over the years, we have received additional funding that has allowed us to increase our audit and research resources.
4:05 p.m.
Conservative
Bernard Généreux Conservative Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
In your opening remarks, on page 6, you state and I quote:
The CRA also combats tax avoidance in the courts. The unnamed persons requirement is a judicial authorization that allows the CRA to obtain information.
How does that requirement work exactly?
4:05 p.m.
Deputy Assistant Commissioner, Compliance Programs Branch, Canada Revenue Agency
Thank you, Mr. Chair.
The unnamed persons requirement is a tool that is in the Income Tax Act to help obtain information, whether from individuals or third parties. We can recover money from taxpayers who might have funds or information outside of Canada.
The classic example would be when we make a request to a financial institution regarding a third party. The institution gives us the names and amounts of individuals' funds. It is with that information that we can conduct research and open audits.
4:10 p.m.
Conservative
Bernard Généreux Conservative Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
Is that a productive way to catch people who want to avoid paying taxes? I imagine that you are able to recover substantial amounts, no?
4:10 p.m.
Deputy Assistant Commissioner, Compliance Programs Branch, Canada Revenue Agency
Absolutely. In recent years, we have been increasingly relying on that tool to obtain information from financial institutions. I would say that those institutions have been of great help to us until now by giving us the requested information, and that information has allowed us to undertake a number of audits. In fact, that is one of the reasons why the number of audits, and the amount of money we have collected as a result of those audits, has increased in recent years.
4:10 p.m.
Conservative
Bernard Généreux Conservative Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
Is there a link between that and the fact that last year, in January I believe, Minister Blackburn received a list of clients or bank account numbers in Switzerland?
4:10 p.m.
Director General, International and Large Business Directorate, Compliance Programs Branch, Canada Revenue Agency
Those are two different issues. However, the unnamed persons requirement has allowed us to gain a much better understanding of tax schemes and the persons involved. Based on that, we can request other information to better understand who the players and promoters are.
4:10 p.m.
Conservative
Bernard Généreux Conservative Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
And how was the list of names Minister Blackburn was given last year obtained?
4:10 p.m.
Director General, International and Large Business Directorate, Compliance Programs Branch, Canada Revenue Agency
That was, rather, through exchanges with our international partners.
4:10 p.m.
Conservative
4:10 p.m.
Deputy Commissioner, Canada Revenue Agency
Thanks to our treaty with France, he was able to ask for a list.
4:10 p.m.
Conservative
Bernard Généreux Conservative Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
Will there be consequences for the people whose names were on that list?
4:10 p.m.
Deputy Commissioner, Canada Revenue Agency
We have obtained the list and will undertake our audits.
4:10 p.m.
Conservative
Bernard Généreux Conservative Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
What is the average time allotted for an audit? How does that work? I suppose that an audit can last several years.
4:10 p.m.
Director General, International and Large Business Directorate, Compliance Programs Branch, Canada Revenue Agency
I would like to explain the process in a few words. First, we conduct a risk assessment after having obtained the information. We compare the information obtained with that in our systems. The first challenge is to ensure that we are dealing with the right individuals, because we often have very little information, not even their social insurance number or address. That is our first challenge.
We then contact the taxpayer. For example, we will send out a questionnaire. That might be one of the methods used. We rarely receive any cooperation from these individuals. This is when we might have to use other existing tools. Therefore, obtaining information is quite time-consuming, especially if it is found overseas.