Finance Committee on March 10th, 2011

[Daniel Paillé, Bloc, Hochelaga, QC]

In Appendix A of your brief, you clearly show that, out of a total of 192 countries—and this is a figure you mention elsewhere—there are some 92 treaties, four of which are not in force. That is in the first two columns of your appendix and goes back a number of years. There are 25 TIEAs and only one is in force in a country that is shrinking. There are another 11 agreements which are just words and are not in force, precisely because they're just words, and 13 others have been signed, but are not in force.

[Prof. Gilles Larin]

That's correct. They haven't been ratified.

[Daniel Paillé, Bloc, Hochelaga, QC]

They haven't been ratified.

Why are the agreements which have been signed not in force? Can you give me a short answer to that question?

[Prof. Gilles Larin]

In my opinion, to ask the question is to answer it.

[Daniel Paillé, Bloc, Hochelaga, QC]

That's a very good answer.

You looked at the position taken by Switzerland. We are not talking about corporate bums here. We don't expect Switzerland to be a country of corporate bums. Yet you say that, as regards information exchange, the documentation requirement is “stricter”. What I would like you to clarify is the term you've used. Does the word “stricter” mean that it's not as easy for the CRA to obtain information from them? It's not “stricter” in the sense of being able to catch them quicker.

[Prof. Gilles Larin]

Exactly. It's not “strict” in the sense of “serious”. It's precisely the opposite.

[Daniel Paillé, Bloc, Hochelaga, QC]

So, it's more difficult for the CRA to recover money through the protocol with Switzerland.

Also, you say on page 5 of your brief that the protocol with Switzerland prohibits “retroactive information exchange”. That means that you can't go back in time even if you find something.

[Prof. Gilles Larin]

That's correct.

[Daniel Paillé, Bloc, Hochelaga, QC]

One thing has not been mentioned, however. On page 5 of your brief, you say that “Switzerland categorically refuses to help when an information exchange request is based on stolen data”, whether it is from informants or whistleblowers.

That means that the entire whistleblower system is not recognized by Switzerland.

[Prof. Gilles Larin]

Exactly.

[Daniel Paillé, Bloc, Hochelaga, QC]

And that means that we couldn't use the HSBC list that we have received, for example, and which somewhat motivated this investigation and others, since Switzerland does not recognize it.

[Prof. Gilles Larin]

That's right. In fact, France and Switzerland have actually reached an agreement regarding stolen banking information.

[Daniel Paillé, Bloc, Hochelaga, QC]

And who says that…?

[Prof. Gilles Larin]

And who says that France will comply by providing a copy of that information to Swiss authorities, that it will decide not to address a request for administrative assistance based on that information to Switzerland, and that it will ask third countries, like Canada, to which it has provided that information, not to use it.

[Daniel Paillé, Bloc, Hochelaga, QC]

There is some lobbying going on at the international level by some people on your left.

[Prof. Gilles Larin]

That is your interpretation, Mr. Paillé.

[Daniel Paillé, Bloc, Hochelaga, QC]

Probably. It is one interpretation and I have every right to voice it.

You say that you compared the protocols signed by Switzerland and the United States and by Germany and Switzerland, and that we basically look pretty pathetic compared to the others. Why is that? Is this another case where to ask the question is to answer it?

[Prof. Gilles Larin]

Yes, but to put it more politely, I would say that it's because Canada's bargaining power is not equal to that of Germany in relation to Switzerland, nor to the United States, in relation to Switzerland.

[Daniel Paillé, Bloc, Hochelaga, QC]

On page 6 of your brief—again, the devil is in the details, so to speak—you say that we are not able to secure information regarding income from dividends, royalties or capital gains. And you add that this may happen in 2018. But in 2018, none of them will still be around. And we hope we won't either.

Why wait so long to tackle what is clearly source income? Recovering 2% interest is not important; what's important are dividends, royalties and capital gains.

Is that your interpretation?

[Prof. Gilles Larin]

You are referring to--

[Daniel Paillé, Bloc, Hochelaga, QC]

This is on page 6, at the beginning of the first paragraph.

[Prof. Gilles Larin]

At the beginning of the first paragraph?

[Daniel Paillé, Bloc, Hochelaga, QC]

Yes. You say that “automatic information exchange” does not apply to dividends.

[Prof. Gilles Larin]

Yes, right. Automatic information exchange does not apply under the TIEAs that are currently in force.

[Daniel Paillé, Bloc, Hochelaga, QC]

That's right.