Evidence of meeting #40 for Finance in the 43rd Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was kpmg.
A video is available from Parliament.
5:50 p.m.
Liberal
The Chair Liberal Wayne Easter
I'm sorry, Ted; we are going to have to end there.
Who wants to come forward from the Liberals? I don't have a list.
While they're thinking, Mr. Fragiskatos, did I see you?
Okay, we'll go to Mr. Ste-Marie and we'll come back to you.
I want somebody from the Liberals to give me their hand, because time's a-passing.
Go ahead, Mr. Ste-Marie.
5:50 p.m.
Bloc
Gabriel Ste-Marie Bloc Joliette, QC
My question is for Senator Downe, Ms. Watson, Ms. Daviau, Mr. Campbell and Mr. Cohen.
CBC/Radio-Canada published an article suggesting a potential connection between KPMG and the four sword companies in the Isle of Man, and KPMG is telling us that there is no connection.
Who do you think is right?
May 6th, 2021 / 5:50 p.m.
President, Professional Institute of the Public Service of Canada
I'll start by saying I have no idea.
5:50 p.m.
Percy E. Downe
I'm the same. I've only studied the CRA and what they have done, so I haven't followed this at all.
5:50 p.m.
Executive Director, Transparency International Canada
I'll say that I'm the same. I don't know enough of the details of the cases to know.
5:50 p.m.
As an Individual
I would say that Mr. Cashore of The Fifth Estate has been working on this since 2016, and I think there are a lot of very important coincidences. There have also been tax experts on the show who said it was too much of a coincidence, so yes, I would say there is a link.
5:50 p.m.
Liberal
The Chair Liberal Wayne Easter
Okay. Thank you. We'll come back to Mr. Fragiskatos for three minutes, and then Mr. Julian will wrap it up.
5:50 p.m.
Liberal
Peter Fragiskatos Liberal London North Centre, ON
Again to Mr. Cohen, if I could, what would you say ought to be the absolute priority of the Canadian government to meaningfully address tax evasion? You have pointed out that some significant steps have been taken in recent years, and also that the most recent budget provides a promising path forward.
If you're going to prioritize anything as far as recommendations go, and also based on the experience of what we've seen internationally with respect to democracies that you spoke about before, what are the key things?
5:50 p.m.
Executive Director, Transparency International Canada
Thank you for the question. I would say two things.
Not to repeat myself, but on the beneficial ownership registry, I'd agree with Senator Downe. If we can get it before 2025, that would be excellent. We're coming to halfway through 2021. There need to be discussions with the provinces and territories, so there is time required, but let's see if we can be optimistic and get it done more quickly and to the best standard possible, with ID verification and proactive investigations and a tip line.
The second point would be to echo our colleagues from the public service union and talk about reintegrating expertise into the right areas and looking at how the dissolution of specified units affected the capacity of the CRA to look at overseas tax avoidance. Without knowing the specifics of that case and CRA, I've definitely heard anecdotally from a number of investigators across Canada about the lack of specialized units in issues of corruption, and more specifically in money laundering. There's a trend to have a specialized unit and then dissipate it across other units, and then that expertise gets wound up in other cases as opposed to putting a priority on anti-money laundering, on tax evasion and on corruption.
I know we've been hearing a lot about complexity. People don't want to hear that as an excuse, but between mutual legal assistance with sometimes unco-operative jurisdictions and the sheer terabytes of data that are involved in some complex white-collar crime cases, these specialized units are required.
I recommend getting the beneficial ownership registry on track and doing it to the highest quality possible, and looking into the ability to reorganize the capacity of specialized units across authorities in Canada.
5:55 p.m.
Liberal
Peter Fragiskatos Liberal London North Centre, ON
It is unfortunate that cuts to the international focus did happen 10 years ago, as we heard before, under a previous government, but the past is the past. We have to focus on what is needed now, and the budget does provide a promising way forward, as we have heard.
Mr. Chair, do I have time remaining?
5:55 p.m.
Liberal
Peter Fragiskatos Liberal London North Centre, ON
I didn't think I did. I was going to see how I could sneak a question in there, but no. That's fine.
5:55 p.m.
Liberal
The Chair Liberal Wayne Easter
You have 20 seconds.
I would say, just for the information of everyone, that the beneficial ownership registry had all-party agreement, I believe in 2017, at this committee. When we did the money laundering study, it was recommended.
Peter, you have about three minutes. You'll wrap it up.
5:55 p.m.
NDP
Peter Julian NDP New Westminster—Burnaby, BC
Thank you very much, Mr. Chair.
I beg to correct you. The beneficial ownership registry was supported by the other two parties. The NDP pushed for a publicly accessible beneficial ownership registry, and as we can see from the report on snow washing, it was declined by the other parties, so I'm very glad to see that the idea of a publicly accessible beneficial ownership registry has now come back.
I want to come back to Ms. Iacovelli.
There are two directors for Parrhesia. Nigel Glazier Scott and Paul Joseph Valentine Dougherty were directors of Parrhesia, which was incorporated by KPMG and, as I mentioned, was summarily dissolved 43 days ago. They are the same directors for the “sword” companies.
Could you tell us if there's a connection between these two individuals, Nigel Glazier Scott and Paul Joseph Valentine Dougherty, and KPMG?
5:55 p.m.
Canadian Managing Partner, Tax, KPMG
With respect to the fact that they were the same directors, again it speaks to what the corporate service providers offer. They set up these corporations. They prepare documents and articles that they provide to shareholders. They also arrange for manager shareholders and directors, so I'm not surprised that they would be the same directors. Corporate service providers make all of those arrangements.
5:55 p.m.
NDP
Peter Julian NDP New Westminster—Burnaby, BC
I'm sorry. I have a follow-up question.
Who was the corporate service provider that set up Parrhesia?
5:55 p.m.
Canadian Managing Partner, Tax, KPMG
Again, I can't speak to Parrhesia. The corporate service provider that we worked with was Cordery.
Again, Mr. Julian, can I make a clarification on something?
5:55 p.m.
Canadian Managing Partner, Tax, KPMG
Thank you.
I just want to clarify that we stopped offering the product in 2003. The last time we offered it was in 2003. We did not manage the structure after that time, so I don't have information as to when any of these companies were dissolved. I just want to make that point of clarification.
We have provided the CRA with all of the information on the 16 implementations we've done.
5:55 p.m.
NDP
Peter Julian NDP New Westminster—Burnaby, BC
We will certainly come back with other questions.
I wanted to save my last question for Ms. Daviau.
We certainly appreciate the professionalism of PIPSC. Your members are extraordinary.
You've raised a whole range of areas where we could approve providing supports to PIPSC so that they can actually do the work they want to do, but what we've seen from CRA employees is that they don't actually have legislation in place so that they're not outgunned by these big players.
Would you also add legislation with teeth to the list of things that you've given us in terms of improvements that would mean that PIPSC members could do the work they want to do on behalf of Canadians?