Finance Committee on June 11th, 2019

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Thank you, Mr. Chair.

The waiting time may be 10 or 15 minutes, but this only applies to half of the incoming calls, those who manage to get a line. For the other half, the system rejects them outright. However, I don't want to come back to this subject.

I would rather go back to the KPMG case, on which I have some questions. We said that the process was not transparent and that the final result was uncertain. You did not seem convinced that the judge would rule in favour of the Canada Revenue Agency in this case.

Yet, the scheme in question is considered by everyone, the general public and even experts, as one of the most flagrant examples of dubious and abusive schemes. I do not have any quotes from experts to hand at this precise moment, but I know that there have been several who have spoken out to that effect.

However, you are saying today that you were not sure of the decision the judge was going to make. Given that this scheme was so abusive and so clearly out of line, could you explain your lack of certainty?

[Ted Gallivan]

As a general rule—and I am therefore not just talking about the KPMG case here—the court relies on the evidence and arguments of the Crown and taxpayers. The judge in charge asks questions, tries to shed light on the case and encourages the parties to reach a settlement. With the assistance of the Department of Justice and with the judges' comments in mind, we conduct a risk assessment to see if we could lose our case in relation to the tax years we are targeting, the penalties we want or our opinion that it is income and not capital gains. We then do an internal assessment.

In the KPMG case, I can tell you that we concluded that there was a probable outcome based on all this information. However, the possibility of a better settlement arose and the agency determined that it was beneficial to the public.

We consider precedents and evidence. Some knowledgeable taxpayers may object to our audits. We must therefore present evidence and data to support our case. Sometimes it's like doing risk management and seeing if it's worth it to proceed.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Thank you, Mr. Gallivan.

[The Chair, Liberal, Wayne Easter]

Is there a question?

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Mr. Chair, I would not like to ask a question, but to move a motion of which I gave notice on May 31. I would like to present it at this time, in the wake of what we have heard today about these internal processes and policies that allow for out-of-court settlements. I therefore move the following:

That the committee invite the Honourable Diane Lebouthillier, Minister of National Revenue, to appear before the committee to inform it on the work being done by the Canada Revenue Agency to combat abusive tax schemes and also on the policies and internal processes surrounding out-of-court settlements in tax evasion and abusive tax avoidance cases.

Mr. Chair, I hope you will find this motion in order. I justify it by the fact that the committee was not able to benefit from the minister's presence today. If she had been here, we could have asked her about this case and then moved on to another item, but she is obviously trying to avoid her responsibilities. That is why I am proposing this motion, in order to shed light on internal policies and processes and to question the minister, who is responsible for this agreement that has been signed, of which she was informed. We would like to know what she thinks about it and what she has done.

[The Chair, Liberal, Wayne Easter]

The motion is in order, so it is up for debate.

We're done with our CRA officials within the time frame we gave them. In fact, we're over.

Thank you for your testimony, folks, and for appearing before us on the estimates. We appreciate that.

[Bob Hamilton]

Thank you.

[The Chair, Liberal, Wayne Easter]

We'll turn to the discussion on the motion that Mr. Dusseault has proposed. It was on the list, so it is in order.

Does everybody have a copy?

Mr. Dusseault, is there anything more you want to add on the motion? After that, we'll open it up to the floor.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Mr. Chair, I would just like to add a few words to follow up on what you said yourself during the meeting about the lack of transparency. You also had an opinion on this subject. I did not indicate the number of meetings, but I think one would be sufficient to allow the minister to explain what happened in this case and what she has done to increase transparency. We have to see what she thinks is important, what you think is important, Mr. Chair, and what the committee members on this side of the table think is important.

I believe it is self-evident that we will invite the minister again, given that she refused to appear before us today on the 2019-2020 main estimates. Given the latitude you're giving us, Mr. Chair, we could have asked her questions about it and she could have answered them. If she had appeared before us, I would not have had to move this motion, but she is trying to escape her responsibilities. That is why I am now introducing this motion.

[The Chair, Liberal, Wayne Easter]

Ms. Rudd and then Mr. Poilievre.

[Kim Rudd, Liberal, Northumberland—Peterborough South, ON]

Thank you, Mr. Chair.

I appreciate it, especially after our conversation with the CRA, whose officials gave us some very good information about some of the modernization and some of the work they're doing to make the CRA more transparent, to make it more user-friendly, and to make sure we're getting everything we should be getting from folks who use the system.

So having the minister appear to further talk about.... As Bob Hamilton said, these processes are with the justice department and themselves. The decision is made at a table, by a group of people, to decide how to proceed, and the minister is not made aware of that until after the decision is made. The minister has stood in the House and said, indeed, that she would like to see more transparency around this process. We certainly heard that today from the CRA.

I think we're all on the same page with this, so I certainly would support your motion.

[The Chair, Liberal, Wayne Easter]

Mr. Poilievre.

[Pierre Poilievre, Conservative, Carleton, ON]

Me too.

[The Chair, Liberal, Wayne Easter]

That's it?

[Pierre Poilievre, Conservative, Carleton, ON]

That's it.

[The Chair, Liberal, Wayne Easter]

Okay.

On the question, then, all those in favour of the motion from Mr. Dusseault?

Do you want a recorded vote?

All right. We'll have a recorded vote.

(Motion agreed to: yeas 9; nays 0)

[The Chair, Liberal, Wayne Easter]

The motion is carried and that request will be made.

Mr. Sorbara, you have a motion...or no, I guess I'll have the report, which is your motion.

Do people have copies of the report of the subcommittee? I guess I'd best read it.

The subcommittee met yesterday, on Monday, to consider the business of the committee and agreed to make the following recommendations:

1. That, with respect to Bill C-101, An Act to amend the Customs Tariff and the Canadian International Trade Tribunal Act:

a) the Committee begin a subject matter study of the Bill on Tuesday, June 11, 2019, if the Bill itself has not yet been referred to the Committee;

b) the Committee hear from departmental officials on the subject matter of Bill C-101 on Tuesday, June 11, 2019, from 3:30 p.m. to 5:30 p.m.;

c) if Bill C-101 is referred to the Committee by the House during the subject matter study of the Bill, all evidence and documentation received in public in relation to its subject matter study of Bill C-101 be deemed received by the Committee in the context of its legislative study of Bill C-101;

d) the Clerk of the Committee write immediately to each Member of Parliament who is not a member of a caucus represented on the Committee, to inform them of the beginning of the subject matter study of Bill C-101 by the Committee and to invite them to start working on their proposed amendments to the Bill, which would be considered during the clause-by-clause study of the Bill;

e) Members of the Committee submit their prioritized witness lists for the study of Bill C-101 to the Clerk of the Committee by no later than 3 p.m. on Tuesday, June 11, 2019, and that these lists be distributed to Members that same day;

f) the Committee hear from witnesses on Bill C-101 from June 11, 2019, to June 12, 2019;

g) the Committee invite the Minister of Finance to appear on Bill C-101;

h) proposed amendments to Bill C-101 be submitted to the Clerk of the Committee in both official languages by 8:00 p.m. on Wednesday, June 12, 2019, at the latest;

i) the Committee commence clause-by-clause consideration of Bill C-101 on Thursday, June 13, 2019, at 3:30 PM, subject to the Bill being referred to the Committee;

j) the Chair may limit debate on each clause to a maximum of five minutes per party, per clause; and

k) if the Committee has not completed the clause-by-clause consideration of the Bill by 9:00 p.m. on Thursday, June 13, 2019, all remaining amendments submitted to the Committee shall be deemed moved, the Chair shall put the question, forthwith and successively, without further debate on all remaining clauses and proposed amendments, as well as each and every question necessary to dispose of clause-by-clause consideration of the Bill, as well as all questions necessary to report the Bill to the House and to order the Chair to report the Bill to the House as soon as possible.

2. That the Parliamentary Budget Officer be invited to appear on Thursday, June 20, 2019, to discuss his report on [the] tax gap.

That was the information agreed to yesterday at the subcommittee.

Is there any discussion?

Are we agreed?

Go ahead, Mr. Richards.

[Blake Richards, Conservative, Banff—Airdrie, AB]

I guess this is more of a question than anything else. Obviously, the witnesses would be here today and tomorrow. Has there been discussion? Do we have any indication of who those witnesses are, at this point? If we're lining people up for this afternoon, I'm assuming that the work has already been done on that.

[The Chair, Liberal, Wayne Easter]

Yes. I believe officials have agreed to come on the bill this afternoon at 3:30. I understand that a number of witnesses have been presented by Mr. Dusseault, and a number from the government side as well. I believe it's five, but I'm not sure.

[Blake Richards, Conservative, Banff—Airdrie, AB]

Have some of them been lined up for this afternoon—

[The Chair, Liberal, Wayne Easter]

No, they would be for tomorrow.

[Blake Richards, Conservative, Banff—Airdrie, AB]

Okay. So the officials will be here this afternoon, and maybe this afternoon we'll get a list of who will be appearing tomorrow. Is that the idea?

[The Chair, Liberal, Wayne Easter]

Yes.

Okay?

(Motion agreed to)

Then we're in agreement, and we've agreed to invite the Parliamentary Budget Officer for next Thursday, assuming that Parliament is still sitting.

Mr. Dusseault, a last point.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Thank you for supporting my motion earlier today. I really appreciate that. It shows that our committee is doing its work.

I think we can agree that we will be flexible on the date to accommodate the minister's agenda to make sure that she appears and she doesn't say, if she's not available on Tuesday and Thursday, that she is not able to appear. We need to make sure that flexibility is proposed to her ensure that she has an opportunity to appear.

[The Chair, Liberal, Wayne Easter]

We're fairly open as a committee to meeting extra days, if we have to. As long as you don't adjourn the House too early, we'll have lots of time.