Finance Committee on May 5th, 2016

[The Chair, Liberal, Wayne Easter]

The motion is on the floor, and we were in discussion on it previously. Is there any further discussion, or are we going to the question?

Mr. Sorbara.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

I'd like to propose an amendment to the motion.

[The Chair, Liberal, Wayne Easter]

Could you read it, and then we'll distribute it? Do we have it?

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

That the committee request that KPMG provide detailed information including, where legally allowable, documentation concerning the Isle of Man and other offshore tax shelter schemes as well as the names of the KPMG employees responsible for the development and marketing of those tax schemes.

[The Chair, Liberal, Wayne Easter]

I'm just trying to figure out whether this amendment is in order or not.

Mr. Caron.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

I'll submit that this is not in order. This is not an amendment; it is a new motion that would be replacing the intent of our motion.

[The Chair, Liberal, Wayne Easter]

I believe you are right, so I will rule the amendment out of order. We're on the original motion.

Mr. Caron.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

We started the argument at the last meeting regarding the importance of this motion.

This motion is important. Three meetings were scheduled, two of which have already taken place. At the first, we heard from a KPMG representative. At the second, today's, we heard from CRA and Department of Justice officials. At the third, scheduled for May 19, we will hear from the minister. In light of the two meetings we have had so far, however, it is clearly going to be extremely difficult to get to the bottom of this affair, especially as regards how exactly the scheme worked.

We need to be able to represent all taxpayers, to stand up for tax fairness under the system, and to make sure we can get to the bottom of this whole thing. In order to do that, we believe it's necessary to have the names of the people involved in creating this scheme and of those who benefited from it. That will give us crucial insight into their interpretation of the act and regulations. It will also tell us what the KPMG representatives said to those clients.

When we last talked about the motion, we were discussing the possibility of replacing the word “compel” with the word “request” in English, and the word “contraigne” with the word “demande” in French. As we see it, it's extremely important that we use the committee's authority to request these documents. If we use the word “request”, KPMG could refuse to co-operate because it is under absolutely no obligation to do so, and we would be no farther ahead than we are now. If KPMG refuses to hand over the documentation, without any discussion, we'll face an uphill battle trying to get to the bottom of things.

Our motion, then, stands. Our motion is a strong one that aims at ensuring that this issue will not slide, will not go down to oblivion, but will continue to do what we have to do as a committee, which is to ensure that it is well understood that this will not be repeated and that we will hold the people who are responsible, if that is the case, to account.

[The Chair, Liberal, Wayne Easter]

Mr. Grewal.

[Raj Grewal, Liberal, Brampton East, ON]

I have a question to the clerk, or to be honest to any committee member, for the sake of some of the new members of the committee. Does the committee have the legal authority to compel KPMG to release names? If something like this is in front of the court, and the Government of Canada has already made this request, where does the committee's role...? Is this a motion for the sake of a motion, or is there a legal method to actually compel KPMG to release names?

[The Chair, Liberal, Wayne Easter]

At the last meeting, Mr. Grewal, we initially thought that this would be out of order as a result of being sub judice. People within the clerk's office felt that this was going too far and that it should be debated, so that's why it is on the floor. It will thus have to be debated and a decision be made by committee.

But to your point, it's close to the line; there's no question about that.

I have Mr. MacKinnon first and then Mr. Caron.

[Steven MacKinnon, Liberal, Gatineau, QC]

I am going to object to the honourable member's motion, and I'm going to support the motion of my colleague, Mr. Sorbara, should he see fit to provide the required notice.

Mr. Caron knows full well that a case is before the courts, one that is being paid for and challenged by Canadian taxpayers and Her Majesty the Queen. It involves trying to gain access to the very information he wants to get from us.

I know he also realizes that, should his motion be ruled in order, it could lead to another legal challenge that would cost Canadian taxpayers thousands, if not hundreds of thousands, of dollars in legal fees. We, on our end, would prefer to let the case make its way through the legal system.

That said, should Mr. Sorbara put forward his motion and should it be adopted, we will get the information and be able to consider it, in addition to the witness testimony. By the way, three and a half hours of witness testimony shows just how seriously the committee is taking this study and its objective of getting to the bottom of the situation. We all want the same thing; we don't want to needlessly spark further legal battles that will conflict with or duplicate the case currently before the courts.

For that reason, I am against the motion.

[The Chair, Liberal, Wayne Easter]

I want to clarify one point because some people have questioned why the motion was ruled out of order. The original motion states the names of clients, and the proposed amendment states the names of KPMG employees. It is substantially different in that regard.

Mr. Caron and then Mr. Ouellette, and then if we could go to the question.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Thank you, Mr. Chair.

I see a major flaw in the Liberals' argument.

First of all, we aren't talking about people who are before the courts but, rather, about the minister's request to obtain people's names, the exact same request we are trying to make here in this committee. The Liberals are telling us that, because the minister has requested the names of those responsible for the scheme and those who benefited as a result, the committee cannot request the information. We have a serious problem with that.

As for the names of the five individuals currently before the courts, we have already made clear our willingness to exclude them from our motion. At the end of the day, we are talking about people who have been given amnesty. In order to be given amnesty, one must acknowledge one's guilt. In that sense, then, we shouldn't have any problem requesting those names or those of the individuals responsible for developing the scheme.

As I said, the main difference between compel and request lies in the outcome and will become very clear when we get nothing. The Liberals simply want to give up because the Government of Canada could be sued or wind up in litigation.

Do we really want to get to the bottom of things and make sure the Canadian government stands up for taxpayers and the tax system so that it is worthy of Canadians' confidence? If not, are the Liberals simply trying to water down the motion to make sure that KPMG will be under no obligation to hand over the documents because it might be too risky or dangerous?

The purpose of the motion before us is to make KPMG turn over the information in question. If KPMG refuses to co-operate and chooses to challenge the request, it will have to answer for its decision in the court of public opinion. It is our duty to protect the interests of taxpayers, of Canadians.

The choice is clear. Do the members of the government want to water down the motion, let the situation run its course, and have it fade from memory in the fullness of time? Or do they want to really use the authority of the committee, and ultimately of the House, to make KPMG turn over the documents for public scrutiny in order to represent and safeguard the interests of taxpayers and Canadians? That is the choice before the members of the government.

[The Chair, Liberal, Wayne Easter]

The question's been called.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

I would submit that there's no question being called in this committee. So if somebody else wants to speak, they are welcome to do so. If nobody does, then we can move to the question.

[The Chair, Liberal, Wayne Easter]

I don't hear anybody speaking.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Mr. Ouellette was on the list.

[The Chair, Liberal, Wayne Easter]

Okay, Mr. Ouellette.

[Robert-Falcon Ouellette, Liberal, Winnipeg Centre, MB]

I guess we want to go to the question pretty quick.

One of my issues is the names of the clients. I think there has to be a certain level of fairness and privacy for individuals when they're dealing with the Canada Revenue Agency. In the political environment here, I'm not always certain that that's perhaps the most appropriate means to be dealing with something, especially concerning people for whom we don't know their situation in their lives. So I'm a little concerned about that, because I'm very concerned about the idea surrounding privacy.

On the other hand, when we first started this idea of going and looking into KPMG and the Panama papers—this was in the media—the idea, I believe, the original intent, was that we would discuss with the officials and then we would see where that would lead us over time. I'm very supportive of the idea of getting more names to have greater discussion and trying to understand how these tax havens work, Canada's implication in the international community, but I think this is really what we should be trying to get to, trying to get more people here so we can truly understand it, get them on the record, and really try to gain a greater understanding of that.

I'm not sure what everyone else thinks, but I would actually like to propose not a substantive amendment, but a slight change. I don't think my change will be major in any way, but the idea in this one is to remove, for instance, the word “compel” and just have “request”. That does not preclude in the future, if KPMG refuses to provide that information, coming back and trying to deal with this again, and also just removing the names of clients.

Essentially, the original motion is, “That the committee compel KPMG to provide documents indicating the names of clients who used the Isle of Man tax sheltering scheme and the names of KPMG employees responsible for the development and marketing of the tax scheme.”

And we would replace it with, “That the committee”, not compel but , “request KPMG to provide documents on the Isle of Man tax sheltering and the names of the KPMG employees responsible for the development and marketing of the tax scheme”.

I don't believe this is a substantive change to this motion. I believe it's still in the spirit of what you're trying to get at and it wouldn't preclude, later on, coming back if KPMG refuses to provide more documentation to this committee so that we could continue to do our work and really get to the bottom of what's going on. I applaud Monsieur Dusseault and Monsieur Caron for bringing this to the forefront.

[The Chair, Liberal, Wayne Easter]

So you're moving an amendment that would read, so we're all clear on this, “That the committee request KPMG to provide documents on the Isle of Man tax sheltering scheme and the names of KPMG employees responsible for the development and marketing of the tax scheme.”

[Robert-Falcon Ouellette, Liberal, Winnipeg Centre, MB]

Yes.

[The Chair, Liberal, Wayne Easter]

The amendment is on the floor. I can't see there being a problem with it. The amendment's on the floor.

Go ahead, Mr. Caron.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Thank you for proposing that, Mr. Ouellette, but the issue is much too important.

The motion we want to see adopted is the one that uses the word “compel”—or “contraigne” in French. Words like “request” or “ask” have absolutely no teeth from a legal standpoint. All we would get from KPMG is a refusal to co-operate. What will the committee do then?

As for client names, we are totally prepared to exclude the names of those individuals currently involved in court challenges. But those clients who enjoy amnesty, by extension, have acknowledged their guilt. From that perspective, then, I think it's entirely appropriate for the committee to seek out individuals who can explain how the scheme was presented to them to help us understand how it works.

I appreciate the member's attempt to propose an amendment, but I cannot support it.

[The Chair, Liberal, Wayne Easter]

Mr. McColeman.