As I mentioned, the provisions of the act have become increasingly complex, given the ability of some firms to show a fertile imagination to create increasingly complex strategies. Some of these strategies are valid. We're talking about tax optimization in this case. Other strategies are more on the border of what is between the spirit and the letter of the act. So we are talking about tax avoidance, which will be sanctioned by the court when there is an abuse involving the act.
However, the burden of proof lies with the Canada Revenue Agency, which must demonstrate that abuse took place. We have a real problem here because this burden of proof is difficult and complicated to establish. That is why I am not at all convinced that the general anti-avoidance regulation, which came into effect in 1988, was the right answer, given that an additional burden was created for the Canada Revenue Agency.
In other situations, some tax experts take fewer precautions, cut more corners and move more toward tax evasion. Clearly, under the Income Tax Act, we can't counter each tax evasion strategy. It would be impossible for the act to specify not to do one thing or another. The act therefore provides penalties for tax evasion. However, the complexity of the act and the complexity of tracing large-scale—international, obviously—tax evasion are such that the only tool to counter it is tougher penalties for the architects of these tax tools.
In many cases, the clients aren't the ones who have designed the tax strategy. I'm not talking about simply hiding undeclared money in a bank account in the Bahamas. I'm talking about complex tax strategies where there are candidates for an administrator position and people who are behind the screens. In those cases, the only way to make the architects of these tax gimmicks understand that they have gone past the limit allowed would be to deprive them of their freedom. Imprisonment should be seriously considered.
The Canada Revenue Agency has the duty to prosecute individuals and entities in general, to the extent of the act. These aren't just people who have signed a document, but also people responsible for the actions of a firm that must face justice. Financial penalties are too light for a major firm. No matter how many millions of dollars the financial penalty is, it will never be enough. Loss of freedom will be the only appropriate punishment in many circumstances.