Evidence of meeting #33 for Finance in the 41st Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was information.
A video is available from Parliament.
Conservative
Chungsen Leung Conservative Willowdale, ON
So my closing conclusion is that as long as we keep Canada as a low-tax jurisdiction, then we are on the right track.
Partner, Davies Ward Phillips and Vineberg LLP, As an Individual
That I agree with.
Conservative
The Chair Conservative James Rajotte
Okay. Thank you.
Thank you, Mr. Leung.
I'm going to take the next round. I wanted to start with Ms. Keleher Raffoul. You've talked about the situation with respect to the GST/HST and hospitals, and I appreciate your comments there very much. I just wanted to know if you or your organization has any comments on the expansion of the medical expense tax credit in this piece of legislation? Is that something your organization has looked at in terms of this bill?
Vice-President, Public Affairs, Association of Canadian Academic Healthcare Organizations and Canadian Healthcare Association
No, we have not looked at it or taken a position as an association on it, so I can't comment.
Conservative
The Chair Conservative James Rajotte
Okay. I appreciate that. If you do have any further comments for the committee, please feel free to submit them. We'd appreciate that.
Vice-President, Public Affairs, Association of Canadian Academic Healthcare Organizations and Canadian Healthcare Association
Great. Thank you.
Conservative
The Chair Conservative James Rajotte
I have just a quick question for Ms. Presseault. In your opening statement you talk about an amendment to really encapsulate what Mr. Allen put in his private member's bill. Do you have an amendment or a suggested wording that would change this budget implementation act to ensure that we are capturing the intent of that legislation, of his private member's bill?
Vice-President, Government and Regulatory Affairs, Certified General Accountants Association of Canada
I do, and I'm just going to turn to clause 31.
In clause 31 at proposed paragraph 162(2)(a), striking the words “after the last general election and” would probably fix it.
Vice-President, Government and Regulatory Affairs, Certified General Accountants Association of Canada
Yes, “after the last general election and”.
Conservative
The Chair Conservative James Rajotte
I appreciate that very much.
Next, I wanted to move to Mr. Tonkovich. In your opening remarks you talked about...and I tend to agree with Mr. Keddy on this. In your third point you said that it's also unclear to what ends the CRA will go to protect the informant's identity. So what do you see as necessary either from a legislative, regulatory, or policy point of view in order to do that, in addition to CRA's mandate that it has right now?
Associate, Baker and McKenzie LLP, As an Individual
I think the one concern with that is that there is a statement in the context of the CRA's guidance documents that they will work to protect the identity, and I'm not sure what the phrasing is, but it's to the effect of “to the extent possible”, something like that.
I think that this is a good start, but at the end of the day, it is simply an interpretation. It's simply a guidance document that has been posted on their website. There are limited ways that taxpayers or informants could enforce those types of statements, and including even a statement of the same type of principle in a legislative provision or in a regulatory provision will give that much more comfort. However, there are ways to beef up that kind of protection.
The Income Tax Act itself defines protections like solicitor-client privilege. There would be the ability to extend a broader protection in a legislative provision saying the identity will not be disclosed except in these types of circumstances. I think that this is a policy choice to decide precisely how far Parliament wants the protection to go, but I think the point is that the choice should be made, rather than simply leaving it as a vague comment that may or may not be enforced against the CRA.
Conservative
The Chair Conservative James Rajotte
I have your opening remarks, but your schedule here simply relates to the provisions in this particular bill. These are not suggested amendments to the bill.
Conservative
The Chair Conservative James Rajotte
Do you have suggested amendments to the bill or things that the committee should consider?
Associate, Baker and McKenzie LLP, As an Individual
I do not. I may be able to put something together if that would be of use to the committee.
Conservative
The Chair Conservative James Rajotte
I would appreciate that.
The next point I wanted to raise is that you say, “An important public institution such as the CRA should not be seen as encouraging taxpayers or their advisers to cheat or steal to obtain potentially helpful tax information in order to make a buck.”
Can you expand on that for me?
Associate, Baker and McKenzie LLP, As an Individual
Certainly.
The concern here is that there are obviously different ways that informants could obtain the information that may be useful to the Canada Revenue Agency to go after tax avoiders.
It could be in the context of a professional relationship. It could be a lawyer-client relationship. It could be a CGA relationship. It could be any number of professional advisers. It could also be employees that are part of that offshore organization or a Canadian organization that has an offshore office, for example. Because there are so many different ways this information can be obtained, it's not clear whether there are any limits to how that information is obtained. It's not clear whether the Canada Revenue Agency will have concerns with stolen information and stolen hard drives or whether it should have concerns.
This again is another policy decision that should be made if there are any limits that the CRA wants to put on the type of information that can be used, because it's one thing to say we want whatever kind of information would help us go after these tax avoiders and it's another thing to say there are still practical limits here. We don't want the informants to be viewed as agents of the CRA who are going out and stealing those hard drives if that's something that Parliament doesn't want to happen.
Conservative
The Chair Conservative James Rajotte
Do the U.S. or other jurisdictions have limits? If so, what limits do they have in place?
Associate, Baker and McKenzie LLP, As an Individual
They do have limits. I am not able to comment to a full extent as to what those limits are. Most of them have to do with how involved the informant is in the particular tax avoidance work or the tax evasion. If they are involved and personally benefiting then there are limits on what kind of awards can be paid out. But again, this is another policy decision that should be made. The only example that comes to mind in the criminal context, which is different than the civil tax avoidance context, is that there is a balancing that takes place between how information or evidence is obtained and how it should be used against a particular individual. This may be a situation where a similar type of balancing, perhaps with some overarching rules, would be useful.
Conservative
The Chair Conservative James Rajotte
I have about 30 seconds.
Mr. Eljarrat, do you want to address any of that? Or do you largely agree with Mr. Tonkovich?
Partner, Davies Ward Phillips and Vineberg LLP, As an Individual
On your question on protection of informants, I think there is going to be a distinction to be made between the informant who provides information in the context of tax evasion, which is a crime, which would benefit from the police informant protection at common law, which courts have a duty to enforce unless there are special circumstances where innocence is at stake....
Where it becomes more difficult is when we're talking about informants who will provide information in regard to abusive tax planning and that type of thing, which is of a civil nature. That protection would not apply. Therefore there should be protection. If they're going to have real protection, that protection should be provided by law.
Like my colleague, Mr. Tonkovich, just mentioned, I think it's important that if the Canada Revenue Agency wants to encourage people to come forward, people have to know what they're getting into. So amendments in that regard would be helpful.
Conservative
The Chair Conservative James Rajotte
Okay. I appreciate your comments.
I want to thank all of our witnesses for being here this afternoon and for appearing with respect to this budget implementation act. If you have anything further for the committee to consider, please submit it to the clerk and we'll ensure that all members get it.
Colleagues we'll take a break for a few minutes and then we'll bring forward the next panel.
Thank you.
Conservative
The Chair Conservative James Rajotte
I call this meeting back to order and encourage colleagues and our next panel to take their seats, please. We are resuming discussion here of BillC-31, an act to implement certain provisions of the budget tabled in Parliament on February 11, 2014 and other measures.
At our second panel here this afternoon and evening, we have four individuals presenting. First of all, from the Canadian Cancer Society, we have the president and CEO, Ms. Pamela Fralick—I always forget, is it Fralick or Frolick?
Pamela Fralick President and Chief Executive Officer, Canadian Cancer Society
Fralick. Well done.