Finance Committee on May 19th, 2016

[Raj Grewal, Liberal, Brampton East, ON]

On international wire transfers, right now anything over $10,000 is tracked. Is that an amount that needs to be increased given the avoidance? In my opinion, $10,000 seems low. It probably just ties up legitimate transfers. I'm not an expert, but I'd love to hear your comments on that.

[Diane Lebouthillier, Liberal, Gaspésie—Les-Îles-de-la-Madeleine, QC]

It's important to specify that 17 million electronic funds transfers of $10,000 are something major in Canada. And, as I was saying, our new tools are bringing the non-compliance abroad to light.

We are on the right track toward uncovering $1 billion through voluntary disclosure programs. That's an increase of more than 400% in the course of the last six years.

[Raj Grewal, Liberal, Brampton East, ON]

Thank you, Minister.

Mr. Chair, I'm going to give my remaining time to Mr. Whalen.

[The Chair, Liberal, Wayne Easter]

Okay. Mr. Whalen.

[Nick Whalen, Liberal, St. John's East, NL]

Yes, thank you very much, Madam Minister, and Mr. Gallivan, for coming.

With respect to this notion of the opportunity for people to come forward with their tax information, have the last 16 years reviewed, and have 60 days to pay, with 25% interest, these sound like settlement terms and a type of enforcement. Can you explain to me why this isn't amnesty, and why this is an enforcement mechanism used properly by the CRA in settlement negotiations?

[Diane Lebouthillier, Liberal, Gaspésie—Les-Îles-de-la-Madeleine, QC]

Given the technical aspect of this question, I will ask Mr. Gallivan to respond.

[Ted Gallivan]

I think you're asking an important question. Within the CRA we're clear on certain policies and practices in terms of how many tax years we go back. For ordinary salaried Canadians, we focus on the current tax year. We find a mistake. We don't go back to the maximum limit. We just take a perspective approach and say, “Don't make that mistake again.”

With businesses and high net-worth individuals, we tend to stay in the two- to four-year range. Again, it's educational; let's correct it and let's move on. When you get into aggressive tax planning, we start to move to a six-year review. We sought legislative changes to get nine years. In exceptional cases we can justify going to 16 years. The CRA tries to adjust its approach, but that's an internal policy. We haven't had that up on the website where we could point to that to explain to taxpayers what we normally do and in which exceptional cases we would we go further.

[Nick Whalen, Liberal, St. John's East, NL]

These things sound like amnesty to me.

[The Chair, Liberal, Wayne Easter]

Thank you both.

We'll take two more rounds of questions.

Mr. Liepert, and then Ms. O'Connell, and then we'll go to the motion.

Mr. Liepert.

[Ron Liepert, Conservative, Calgary Signal Hill, AB]

I have a couple of things I'd like to follow up on. How much time do I have?

[The Chair, Liberal, Wayne Easter]

You have five minutes.

[Ron Liepert, Conservative, Calgary Signal Hill, AB]

I might give Mr. Caron a couple of my minutes.

I want to confirm for the record that a number of tax treaties, in fact all of the tax treaties, that our good friend Mr. Grewal was referring to were those that were brought in between 2009 and 2014 under a previous government, Mr. Chair.

I would like to follow up and get a little confirmation that with what we heard earlier on in the testimony from KPMG, there is concurrence at the table from the CRA.

Madam Minister, are you familiar with the presentation that Mr. Wiebe made on behalf of KPMG?

[Diane Lebouthillier, Liberal, Gaspésie—Les-Îles-de-la-Madeleine, QC]

In the matter we're discussing—the KPMG matter—I can tell you that I wasn't present when agreements were signed on the subject. Mr. Gallivan will be able to respond to the various points in your question.

[Ron Liepert, Conservative, Calgary Signal Hill, AB]

Let me just follow up a little further.

One of the things I am trying to get a better sense of, without having a lot of knowledge about this particular situation.... The essence of Mr. Wiebe's presentation—either one of you can answer this—is that what is being discussed today is looking at things through a different lens from the one back in 1988, when it was established. In essence, what Mr. Wiebe was telling our committee, and I want to make sure that he has his facts correct at the table, is that at that period of time, and looking through the lens of those 10 years, this was a legal means of tax planning.

[The Chair, Liberal, Wayne Easter]

Mr. Gallivan, Minister, just to be clear, Mr. Wiebe gave testimony before this committee. I think that is what Mr. Liepert is referring to, not any of the arrangements that have been made.

Mr. Gallivan, go ahead.

[Ted Gallivan]

It is the CRA's position that the structure promoted by KPMG was offside. I think it has been correctly pointed out that the courts haven't ruled on the matter, so different people can have differing views on that.

In terms of the change, the CRA would take the position that there is one law. That is the law that exists and that is the law we apply. I think we have noticed that the reputational impact is influencing a lot of taxpayers, whether they be businesses or individuals. I think the societal norms have shifted. What is of concern to businesses is that, when they are in a tax dispute with the CRA through financial disclosure or court filings, there is a reputational impact. I think that is starting to drive people towards compliance.

[The Chair, Liberal, Wayne Easter]

Mr. Caron, you have two minutes.

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

Thank you very much, Mr. Chair.

Ms. Lebouthillier, I would like to come back to the letter by Ms. Henderson. I asked you a question on the subject, but did not get an answer. Could you provide a yes or no answer? Is the letter before us genuine, or not?

[Diane Lebouthillier, Liberal, Gaspésie—Les-Îles-de-la-Madeleine, QC]

I am unable to confirm the authenticity of the document posted online by the CBC.

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

Did you make efforts to find out, and did you conduct an investigation into the letter to ascertain whether it's genuine?

[Diane Lebouthillier, Liberal, Gaspésie—Les-Îles-de-la-Madeleine, QC]

I'm unable to confirm the authenticity of the document.

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

We have a letter that supposedly does not exist, but we know 16 letters of agreement were signed with 25 clients. The CBC/Radio-Canada investigation confirms it. Can you confirm that this is indeed the case?

[Diane Lebouthillier, Liberal, Gaspésie—Les-Îles-de-la-Madeleine, QC]

I cannot confirm the authenticity of the document to you.

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

Can you confirm that 16 agreements were signed?

[Diane Lebouthillier, Liberal, Gaspésie—Les-Îles-de-la-Madeleine, QC]

Mr. Gallivan, could you please answer the question?