Evidence of meeting #102 for Finance in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was evasion.
A recording is available from Parliament.
NDP
Raymond Côté NDP Beauport—Limoilou, QC
Okay, but the French version states something along these lines: [...] show that tax fraud costs governments around the world over US$3.1 trillion a year. In Canada, the annual tax losses are estimated at $81 billion.
That may be a clerical error.
Insp Jean Cormier
No, it's not an error. You were not given the right document. I had another document. Be that as it may, I can certainly check where those figures come from, if you will allow me a few moments.
Insp Jean Cormier
You should not rely on those figures. Those are estimates produced by the Tax Justice Network.
NDP
Raymond Côté NDP Beauport—Limoilou, QC
So these are the total transferred amounts that could be taxable. Otherwise, I would have thought that our efforts and successes were fairly minimal, as less than 2% of the $1.3 billion in unpaid taxes would have been recovered in 2011-2012. Thank you for the clarification.
Gentlemen, I would now like to raise another issue.
I had the honour of being a member of the Standing Committee on International Trade. But I have to admit that I am still somewhat upset over the agreements concluded with Panama and adopted in the House. In Quebec City, the International Pee-Wee Hockey Tournament is about to kick off. Yet I cannot imagine the Boston Bruins' professional team taking on pee-wee teams.
As for agreements against double taxation—which are perfectly valid—have we signed any such agreements with countries or tax heavens whose tax system is very inconsistent with Canada's system? I am talking about recognized tax heavens, such as Panama, the Cayman Islands and the Bahamas.
General Director, Tax Policy Branch, Department of Finance
I'm not certain of the question, but let me answer both interpretations I may have. One is whether or not we ought to have these tax information exchange agreements with so-called tax havens. To us, the unambiguous answer is yes. They're the countries that in the past have been of concern in terms of concealment of income and bank secrecy laws, so tax information exchange agreements that overcome them are important—in fact, that's largely the objective of the exercise in which we've been engaged for the last few years.
The other possible answer is on whether or not we should have tax treaties with countries that don't have tax rates similar to ours. We think that question has effectively been answered in what's been done by successive governments for many years and has been advanced with tax information exchange agreements, which is to say that Canada's policy in respect of international taxation is that we don't tax business income earned by foreign companies owned by Canadian multinationals. We don't do that for competitiveness reasons. And in that regard, it does not matter what the tax rate in the other country is.
NDP
Raymond Côté NDP Beauport—Limoilou, QC
In any case, that's decided in the political arena. I understand that perfectly.
My question is for Mr. McAuley.
Regarding the cuts the government imposed on the Canada Revenue Agency, a National Post article specified that the 400 job cuts applied to criminal investigations, the Special Enforcement Program and the Voluntary Disclosures Program.
Was that really the case?
Deputy Assistant Commissioner, Compliance Programs Branch, Canada Revenue Agency
I thank the member for his question.
The cuts you are talking about represent a restructuring of our criminal investigations programs. As Mr. McAuley explained earlier, no cuts have been made in the areas of international audits and audits of abusive practices. None of our auditors have been cut. I would even say that the restructuring was done internally. For instance, people from one section have now been transferred to another section within our branch. So no auditors have been cut.
Conservative
Conservative
Shelly Glover Conservative Saint Boniface, MB
Thank you, Mr. Chair.
Welcome to all the witnesses.
I just want to ask if the committee could perhaps get a list of the people involved in this regime that you speak about, Inspector Cormier. You talk about Canada's anti-money laundering and anti-terrorist financing regime and you talk about there being some non-funded partners and whatnot. I think it would be very helpful for our report if we could see who else is involved in that. I won't waste any time asking you to explain it.
I want to talk about page 7 of your opening remarks because I just want to understand what this is when you..... I'm not sure if there's a mistake there in the year, but it's the first large paragraph on page 7, where you say: “Since the launch of the Strategy, counterfeiting has fallen to 34 parts per million in 2001 from 470 parts per million in 2004.”
Is there a mistake in the year there?
Insp Jean Cormier
No. The interpretation could look to be backward, but it's not. That's how the figures appear when you want to show the decrease in the number of counterfeits. Parts per million is actually how it's described, and the increase in number is actually a decrease. It's quite deceiving.
Conservative
Shelly Glover Conservative Saint Boniface, MB
Okay, thanks.
It was Mr. Hoback who asked you about the 2,470 cases you referred to the CRA. I don't think we got a clear indication of how many cases the CRA actually refers to you. Is there a number?
Insp Jean Cormier
I would say it's not zero—for sure it's not zero—but it would not be as great as the number we refer to them.
Conservative
Shelly Glover Conservative Saint Boniface, MB
Okay. I want to ask how we can make this better. What advice would you give us to make your job easier? Is it legislative change? What can we do to make this more efficient for you and more successful for all Canadians?
Insp Jean Cormier
It's kind of difficult to answer. Obviously, as I mentioned earlier, there could be improved legislation that would improve the way we can share information, or whereby Revenue Canada can share information with us. At the same time, we recognize the importance of keeping that information secret, and obviously that has been established over a number of years.
Certainly legislation that would allow better information, even if it was to designate particular members of the RCMP to receive that information.... Right now we have designation to obtain that information for certain crimes. Maybe we could have designation of RCMP officers so that they could, in the course of an investigation, without obtaining a court order, maybe obtain information that would be secret. Let's face it, we have the proper security clearance at the end of the day. Would that be a possibility or a consideration? I don't know.
Conservative
Shelly Glover Conservative Saint Boniface, MB
Okay, excellent.
Mr. Ernewein, you mentioned a number of TIEAs, I believe. I think you said there have been 16 signed since 2006. How many were signed before 2006? How many existed?
General Director, Tax Policy Branch, Department of Finance
I was going to say zero, but that's not quite right. There was I think an exchange of information agreement with Mexico that existed for some time before a tax treaty with Mexico was signed to replace it.
The short answer is effectively zero, because the tax information exchange policy was really only created in 2007, in the budget of 2007, as a separate initiative independent and apart from our tax treaties. So all of them have been signed since 2007.
Conservative
Shelly Glover Conservative Saint Boniface, MB
Everyone has said how important these treaties are, how important information sharing is, how important it is that we use that information to then proceed to audits and of course enforcement, and yet it's only under this government that we've been able to sign TIEAs. That's shocking, frankly, and I'm glad you told me how well we're doing, but of course there is more to do.
I want to know what the difference is now with the Liechtenstein case that Mr. Rankin brought up. Now that we've got an agreement signed, how would that have improved what happened in 2008?
