Certainly, Mr. Chair.
Acquisition of property by partnerships in section 97 of the act sets out rules that apply when a partnership acquires property from a taxpayer.
Subsection 97(2) of the act sets out rules that allow a taxpayer to transfer certain types of property on a tax-deferred basis to a Canadian partnership. Subsection 97(2) is amended to make it subject to new subsection 97(3), which is described as follows. The amendment applies in respect of dispositions made after March 28, 2012.
All of us at this committee want to clamp down.... This deals with tax avoidance. The broader issue, and probably the more important one, is outright tax evasion. I think we're not doing enough to actually focus on the issue of tax evasion.
Again, Mr. Chair, other countries have done work on this. Mr. Mai and Senator Percy Downe have done a lot of work on this. We have identified that we have not done an adequate job on what really is more of a tax evasion issue rather than tax avoidance.
My concern is that these types of actions may make somewhat of a difference but actually do not have the same level of impact of simply a targeted, focused, and well-resourced effort by CRA. Ms. McLeod, the parliamentary secretary for CRA, is here. This is something I would argue Ms. McLeod's department deserves more resources for. If Ms. McLeod's department had more resources, they would be able to have a multiplier effect in terms of collections from those who would have sheltered money through international tax havens. I think that ought to be the focus.
It has not been clear, Mr. Chair, at this committee that this is going to have a significant impact if, in fact, the resources are not going to be there to really focus on what is the bigger prize and the bigger challenge and issue, and that is outright tax evasion and the use of foreign tax havens. Frankly, that's where the focus ought to be.
I go back to this partnership issue. We have heard from tax experts on this and there are various opinions out there, and I quoted earlier Vern Krishna, who is well known in terms of his views on this issue. There is some ambiguity in terms of the effect of these changes, some ambiguity as to whether or not they will have unintended consequences. I want to cite Mr. Krishna's piece one more time. This is an issue that ought to be considered important by all members, the issue of taxpayers' rights.
It is well settled that one is entitled to arrange one's affairs so as to attract a minimum amount of tax. We usually identify this principle with a decision of the House of Lords in IRC v. Duke of Westminster, where Lord Tomlin said:
Every man is entitled if he can to order his affairs so as that the tax attaching under the appropriate Acts is less than it otherwise would be. If he succeeds in ordering them so as to secure this result, then, however unappreciative the Commissioners of Inland Revenue or his fellow tax-payers may be of his ingenuity, he cannot be compelled to pay an increased tax.
That's about tax avoidance.
The bigger issue is that of outright tax evasion. At a time when you say you want to clamp down on tax evasion, you can't cut the resources of the agency that's actually in charge of enforcing that.
I think the context of this clause has to be considered at a time when we're seeing a reduction of the resources of our public servants, our professionals at CRA. I think that's important.