Thank you for your question.
The measures relating to BEPS, base erosion and profit shifting, are certainly encouraging, but they are also quite inadequate because they do not address a number of fundamental mechanisms of tax evasion, such as patent boxes.
Patent boxes enable companies to avoid paying taxes by transferring intellectual property titles to subsidiaries in tax havens. In that way, these companies can ensure that, within the tax year of a multinational group, for instance, the trademark of a group is the property of a subsidiary in a tax haven. This subsidiary can issue royalty interests to other members of the multinational group in the form of invoices, so that as much capital as possible is concentrated in accounts in tax havens. You see what I mean. This mechanism was not raised in BEPS deliberations, even though it is fundamental. We know full well that this is how the transfer price is established, which is one of the most common practices that multinationals use to evade taxes. There is a way to attack the structure of this system. E-commerce is another topic that was not fully discussed.
There is also the whole issue of confidentiality, and there is now talk of the automatic exchange of tax information between countries. Secrecy is already a big problem, but this would at least make it possible to pinpoint a number of tax evaders who are individuals. Very often, even if banking secrecy is lifted, companies arrange their financial affairs to give the appearance of legality. Even with banking secrecy lifted, we are no further ahead. More complex provisions are clearly needed.
This might be progress, but citizens have no way of monitoring public authorities. This is evident in the various matters that the Canada Revenue Agency has taken an interest in recently. The report by Canadians for Tax Fairness is relevant. I know you find it controversial, but there is potential for political interference. This is nothing new. We know there is potential for political interference in public agencies. If there is no mechanism to ensure that, when a government receives information about a company or wealthy individuals, it does not remain anonymous or confidential, that is problematic.
That's all I'm saying. What I'm saying is that there are problems at the OECD. Thus far, Canada has not been the strongest advocate in the OECD in this regard. For my part, I hear from my international partners that Canada does not have a good reputation in these circles or, in any case, in the view of those fighting tax avoidance and evasion. Let's hope this situation improves.
I would just add one point in this regard. Canada gives the impression—to use Pierre Bourdieu's phrase—of the right hand not knowing what the left hand is doing. While it claims to be fighting tax havens by being active within the OECD, Canada shares its seat, at the World Bank and the International Monetary Fund, for example, with 12 tax havens, 11 of which are in the Caribbean and which are among the most controversial. They include the Bahamas, St. Vincent and the Grenadines, and St. Kitts and Nevis, which are not known for their strong rule of law. When Canada speaks out at the World Bank or the IMF, it does so on behalf of these 12 governments, that is, 11 tax havens in the Carribean, and Ireland. Its message is mixed. In my book, Canada: A New Tax Haven, I provide examples of when the Government of Canada officially stands up for the tax havens it is mandated to represent. At some point, you have to decide which side you are on.