Evidence of meeting #63 for Finance in the 40th Parliament, 3rd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was banks.
A recording is available from Parliament.
9:10 a.m.
Vice-President, Banking Operations, Canadian Bankers Association
No, not that I'm aware of.
I would defer to Mr. Hannah on that. He is more familiar with the exchange details.
9:10 a.m.
Director, Banking Operations, Canadian Bankers Association
Sure.
I can't speak specifically on specific conditions. Obviously Canada and the U.S. have a very close relationship, but I think our view is that if one is looking to try to enhance these and make them more effective, that perhaps is a model that can be explored.
Are there barriers in other places? There might be. I don't know. But I think it's something worth exploring.
9:10 a.m.
Liberal
Paul Szabo Liberal Mississauga South, ON
Okay.
One of the statements you made, Madam Fung, was that banks don't promote tax evasion.
9:10 a.m.
Liberal
Paul Szabo Liberal Mississauga South, ON
Thank you.
But your institutions are instruments for tax evaders. What banking protocols, etc., extraordinary protocols, might be taken by the banks to safeguard to the greatest extent possible while protecting privacy in all the other matters that are important in a banking relationship?
9:10 a.m.
Vice-President, Banking Operations, Canadian Bankers Association
I think it's common practice for our banks, when someone comes in and tries to open an account, to go through their normal “know your clients” protocol. In addition to that, if there's any suspicion of tax evasion or money laundering, they are obligated to report that.
I think probably the last place a tax evader would go to do tax evasion would be the bank.
9:10 a.m.
Liberal
Paul Szabo Liberal Mississauga South, ON
Really. Do you have information supporting that conclusion?
9:10 a.m.
Vice-President, Banking Operations, Canadian Bankers Association
No. The reason I indicate this is that given these particular procedures, I'm sure there are other ways of doing tax evasion without having to--
9:10 a.m.
Liberal
Paul Szabo Liberal Mississauga South, ON
All right.
I have one last quick question, and it's for either of you.
We have bilateral trade agreements with 90-odd countries, if not more. Do you believe those trade agreements also should incorporate commitments to provide tax information sharing?
9:10 a.m.
Chairman, Research on Public Finance and Taxation, Professor, Université de Sherbrooke, As an Individual
I do.
9:10 a.m.
Director, Banking Operations, Canadian Bankers Association
I can't say that we've really thought the issue through one way or the other. It's an interesting question, and it's one we can explore. I think our view is that whether it's done through a trade agreement or a stand-alone agreement, we're certainly strong supporters of information sharing.
9:10 a.m.
Liberal
Paul Szabo Liberal Mississauga South, ON
Okay.
Well, I think that's helpful. If you have a trade agreement, obviously there is a mutual interest and there is a cooperative relationship, at least to the extent of the trade elements. But if the relationship in fact is sound, and the values are consistent, would you not think that tax-sharing or information-sharing agreements, or other protocols with regard to tax evasion, would be useful to incorporate into the discussions on trade agreements--at least to pursue the possibility of having information-sharing agreements?
9:15 a.m.
Director, Banking Operations, Canadian Bankers Association
It's an interesting question. It's not one we've looked into. I think one would want to look in and see what the implications of that would be. I've never really thought it through.
Again, our view generally is that information exchange is a good thing. What the mechanics of that are in relation to a trade agreement is an interesting question. I just don't have an answer.
9:15 a.m.
Chairman, Research on Public Finance and Taxation, Professor, Université de Sherbrooke, As an Individual
Can I put in my two cents' worth?
9:15 a.m.
Chairman, Research on Public Finance and Taxation, Professor, Université de Sherbrooke, As an Individual
A bilateral trade agreement is one thing. It has nothing to do with a tax treaty, which protects people from both countries from double taxation and doesn't provide for any exchange of information.
So there are two separate issues. The reason I said that they should be part of a bilateral trade agreement...it's especially true in a case where we don't have a tax treaty with that country.
9:15 a.m.
Bloc
Daniel Paillé Bloc Hochelaga, QC
I really liked the connection you made when you said we have to find out which people are not paying taxes who should be paying them, compared to the ones who are paying them and should not be paying them. That is the whole basis of a tax policy.
In your brief, you draw a clear distinction between a treaty, a protocol and an agreement. They are three separate things. You can have a tax treaty, but a treaty without a protocol is not worth much. Is that right?
9:15 a.m.
Chairman, Research on Public Finance and Taxation, Professor, Université de Sherbrooke, As an Individual
It is, unless the treaty contains a provision that incorporates the equivalent of a protocol.
9:15 a.m.
Bloc
Daniel Paillé Bloc Hochelaga, QC
So, it is possible to have treaties without a protocol. In other words, you have the power to seek information, but if you cannot exercise it, you won't get very far.
On page 6, you said something that struck me, and that is why this kind of analysis is necessary. You say that there is a new OECD standard according to which tax havens that sign 12 TIEAs will be removed from the grey or black list and added to the white list.
First of all, 12 agreements doesn't seem like much out of a total of 192 countries. Furthermore, they are signing agreements among themselves. What is sauce for the goose is sauce for the gander. You scratch my back, I'll scratch yours, as they say. That's the way it works.
9:15 a.m.
Chairman, Research on Public Finance and Taxation, Professor, Université de Sherbrooke, As an Individual
What is even more interesting about that—and this is what I said I would come back to later—is that an agreement exclusively between tax havens was signed in 2010.
9:15 a.m.
Bloc
Daniel Paillé Bloc Hochelaga, QC
Yes, that's what I mean. Tax havens are like street gangs signing an agreement among themselves.
9:15 a.m.
Chairman, Research on Public Finance and Taxation, Professor, Université de Sherbrooke, As an Individual
Exactly.
