Thank you, Mr. Chair. Thank you, gentlemen, for being here with us.
Since I was myself a university professor at the École des hautes études commerciales, HEC Montreal, I can confirm that university professors habitually go off on tangents. However, this was not the case with you and you have defined the issue very well.
First, I must say I agree with you. Indeed, we cannot determine the income tax-related shortfall because if we knew that, we would know where to go and get the money. That's obvious. Tax evasion is like a prisoner's evasion. When a prisoner has gotten away and you know where he is, you can go and get him. It is the same thing in this case.
As you both mentioned but in different ways, the problem concerns very large businesses. SMEs are not trying to set up fiscal evasion mechanisms. They might try and do a little tax avoidance to pay as little tax as possible since the objective of private companies' chief financial officers is not only to maximize profits, but to pay as little income tax as possible. So we are talking about big business acting this way, and not ordinary individuals.
So it is not every Tom, Dick and Harry, as certain political parties say. Nor does this concern the average taxpayer; but the very wealthy and large taxpayer attempts tax evasion. So the impact is quite considerable.
I would like to attempt to make a link between your two presentations. Mr. Cockfield, one can see on the second page of your brief that there has been an increase in the number of audits, but one also senses that there has been an increase in tax evasion. More and more, we get that impression.
Mr. Rosen, one sees on page 5 of your brief that we are losing ground because of the IFRS, the International Financial Reporting Standards, and the blind use of generally misunderstood accounting standards that no one understands, even in a business that has good accounting practices. These accounting practices are like large clouds within which only the corporation's accountant or a tax specialist can navigate. So we are looking at a sort of de facto deregulation.
Mr. Cockfield or Mr. Rosen, is that not one of the reasons that explains the “open bar” in Canada?