Finance Committee on Feb. 1st, 2011

[Daniel Paillé, Bloc, Hochelaga, QC]

For the government.

[Brigitte Alepin]

That is because the penalty has to be a light one. You have to give people a carrot in order for them to make a voluntary disclosure. There really is no other way to go about it. Otherwise, you have to put an end to the voluntary disclosure program.

But it is still a good question. Of course, in situations like this, it is difficult to tell people that they are going to get absolution. From a political point of view, or even from an ethical one, there is some difficulty with that way of thinking. But the whole voluntary disclosures program essentially rests on it.

[The Chair, Conservative, James Rajotte]

Merci.

We'll go to Mr. Wallace, please.

[Mike Wallace, Conservative, Burlington, ON]

Thank you.

Just to follow up, I appreciate the clarification, Madame Alepin. You started your presentation talking about the Prime Minister, but then in your statements you said that even if you were the PM of Canada today, you couldn't solve the problem on your own and you wouldn't say it's due to lack of political will.

I understand the difference between the TIEAs and a tax treaty. I think we have 87 to 89 tax treaties. Our country is one of the leaders in the world in the number of tax treaties we have with other countries.

You're suggesting today that we continue along with that process and that we need to accelerate the continued activity of this government in signing tax treaties. You're not a big fan of the TIEAs, because you don't think we should be signing information exchanges with countries that are what you consider to be tax havens.

[Brigitte Alepin]

No.

[Mike Wallace, Conservative, Burlington, ON]

We've signed 11 or 12 of them, and we have 14 under negotiation. Should we stop trying to do those important tax exchange information agreements?

[Brigitte Alepin]

Let me say it again just so that it is very clear. First, if I were the Prime Minister, or any head of state on the planet, it would be almost impossible to solve the tax haven problem domestically without working with other countries. Second, I think that the OECD initiative on information sharing agreements is a very good one; I encourage Canada to sign as many of those agreements as possible and to do everything it can to put them into effect. Third, I find it regrettable and sad that Canada is signing tax agreements with tax havens.

If we want to do something about the tax haven problem domestically, this is one of the only options that Canada has, I feel. The fact that, as late as December 2010, I was here for a discussion about an agreement with Panama, shows that Canada seems to want to continue signing tax agreements with tax havens.

It was you who asked the question.

[Mike Wallace, Conservative, Burlington, ON]

In my view that's how you solve the problem. By not signing agreements with these folks, with the standards that are out there for improvement in tax information and tax treaties, nothing will get resolved. That's why you have to move on these things. It's exactly against the argument she's making.

Thank you very much.

[The Chair, Conservative, James Rajotte]

I don't know if we want to get into it.

[Daniel Paillé, Bloc, Hochelaga, QC]

I don't understand.

[The Chair, Conservative, James Rajotte]

I'll just follow up on that. I have a very brief question for Mr. Owens.

My understanding is that Madam Alepin is suggesting that the government pursue as many tax information exchange agreements as possible with other countries. Am I correct in that?

[Brigitte Alepin]

Yes, you are correct.

[Jeffrey Owens]

You're correct, and the government should not only sign the agreements, but get them ratified as well.

[The Chair, Conservative, James Rajotte]

Okay. Thank you.

Go ahead, Madame Alepin.

[Brigitte Alepin]

Exactly. When I started my tax practice, I wrote in my first book that I found it regrettable that there was no way to get access to information in tax havens. So I commend this initiative; it is not perfect, but it is a very, very good start.

[The Chair, Conservative, James Rajotte]

Merci.

My final question is for Mr. Owens.

Ms. Block asked you how effective these agreements have been from an OECD perspective. Do we have a sense of how effective they have been to this point, or is it too early to judge?

[Jeffrey Owens]

In the case of the Canadian agreements you are too early, because even though many of them are signed, they are not yet ratified. If I look at other countries, I can see that the agreements that have been signed and ratified are already having an impact.

There's the Irish example I quoted. Ireland would not have been able to collect a billion euros in taxes due from Irish residents using Channel Islands accounts if they hadn't put these agreements in place. Countries that have gone further down the road than Canada are already seeing an impact in terms of extra revenue.

[The Chair, Conservative, James Rajotte]

Okay. Thank you.

I want to thank our witnesses for being here today for this very important discussion. We will continue this on Thursday. If you have anything further to share with us, please do so. We'll ensure that all committee members get it. We especially want to thank Mr. Owens for being with us from the OECD in Paris.

Thank you very much for your presentations and your answers.

We will see you on Thursday, colleagues.

The meeting is adjourned.