In 2007 the government announced a policy of seeking to enter into tax information exchange agreements particularly with countries that Canada did not have a tax treaty with, typically low-tax or no-tax jurisdictions. Part of that policy included incentives to enter into such an exchange agreement as well as disincentives for countries that refused to act on an invitation to enter into such an agreement. The measure in the bill addresses a timing gap.
British Virgin Islands in particular took all necessary steps to enter into a tax information exchange agreement but through no fault of its own missed the deadline to avoid the disincentive tax measure.
The policy of entering into these tax information exchange agreements is relatively recent. There are 21 or so in place now. I understand that CRA is beginning to receive information under them, but it is fairly new. Officials, I think, believe that the fact of the information sharing in itself helps to discourage tax evasion, because taxpayers know that the information will be coming from low-tax and no-tax jurisdictions, so there's a lot of enthusiasm for this new initiative facilitating the provision of information to the Canada Revenue Agency.