Finance Committee on Feb. 14th, 2013

[Shelly Glover, Conservative, Saint Boniface, MB]

No problem.

Happy St. Valentine's Day, and welcome.

First of all, I need to correct the record, just to make sure we're all on the same page. CRA has appeared and they have indicated this is their number one priority. So for anyone who thinks it's not a priority, that's just not true, and that's why we've seen an increase of nearly 40% in the number of experts on the file.

And yes, more needs to be done, and that's why we're asking you for some advice. Because this has been suggested a number of times, I'd like to follow the same lines as Ms. McLeod in asking each of you what you think of the mandatory disclosure of company ownership.

Does anyone disagree with this move?

Mr. Wrobel, do you agree?

[Marion Wrobel]

We haven't really thought about that. I don't want to give an answer off the cuff, so we can get back to you.

[Shelly Glover, Conservative, Saint Boniface, MB]

Mr. Howlett.

[Dennis Howlett]

It's mandatory disclosure, not just of companies but of individual accounts. The secrecy is a particular problem, more than just the low tax regime in some of these tax havens. So—

[Shelly Glover, Conservative, Saint Boniface, MB]

But the specific question I've asked is right now there is secrecy. When you buy a company you can hide who you are, and then it's very difficult to determine—

[Dennis Howlett]

And this is—

[Shelly Glover, Conservative, Saint Boniface, MB]

I have a number of other questions, but my simple question is, do you agree with mandatory disclosure?

[Dennis Howlett]

I agree fully, and particularly in terms of curbing crime.

[Shelly Glover, Conservative, Saint Boniface, MB]

Very good.

Mr. Murphy.

[Richard Murphy]

Yes.

[Shelly Glover, Conservative, Saint Boniface, MB]

And Mr. Cockfield?

[Prof. Arthur Cockfield]

I agree.

[Shelly Glover, Conservative, Saint Boniface, MB]

Did Mr. Murphy get in on that?

[Richard Murphy]

Yes, I did. I do agree. I think it's absolutely essential. The price of limited liability is accountability, and that's what's missing.

[Shelly Glover, Conservative, Saint Boniface, MB]

Okay. I just wanted to make sure that we had a discussion on that.

Mr. Brison was talking about compliance rates, and I know, Mr. Cockfield, when you were here last time you talked about Canada's compliance rates as being some of the highest in the world. Could you expand on that?

[Prof. Arthur Cockfield]

Cross-country comparative surveys are conducted every year that try to estimate things like government corruption as well as taxpayer compliance rates. Historically we Canadians have performed very well on these surveys. They suggest that the bulk of Canadians are law-abiding and properly disclose their earnings to the government.

[Shelly Glover, Conservative, Saint Boniface, MB]

And I tend to agree with you.

Mr. Wrobel, can you take me through step by step? You said that part of the plan in many of our banks in dealing with some of the information that comes to them is ascertaining identity when some large transfers, etc., are coming in, cash exchanges over $10,000, that kind of thing. What do you do to ascertain identity when this occurs?

[Marion Wrobel]

Say a new customer comes in and makes a large deposit. We clearly establish the identity of the individual.

[Shelly Glover, Conservative, Saint Boniface, MB]

That's an easy one because the person is there, but most of this happens electronically.

[Marion Wrobel]

No, we're talking about opening accounts; these are done in person. We identify who is opening the account, the source of the income, and again, we're talking about relatively large accounts here. Try to understand—

[Shelly Glover, Conservative, Saint Boniface, MB]

I'd rather focus on the transfers that are going offshore. I'm not concerned...and I wish the banks were here. To be frank with you, I'm quite disappointed they're not, because I would think they would probably be able to take me through step by step exactly what I'm talking about, but they refused to come. So I'm a little disappointed by that, but having said that, can you transfer to the larger problem we have, and that is ascertaining identities, particularly in transferring money offshore?

[Marion Wrobel]

Let me try to take you through the steps, and let me try to be helpful to the committee, as I represent the industry.

We identify who is opening the account and understand the source of the income. They have to be able to explain where it came from.

[Shelly Glover, Conservative, Saint Boniface, MB]

So how did you identify the person who's not standing before you? That's what I'm asking you.

[Marion Wrobel]

The person has to stand before us to open the account. We're talking about opening an account.

[Shelly Glover, Conservative, Saint Boniface, MB]

I'm not talking about opening an account; I'm talking about transferring money.