Evidence of meeting #55 for Finance in the 43rd Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was cra.
A video is available from Parliament.
4 p.m.
Bloc
Gabriel Ste-Marie Bloc Joliette, QC
Thank you.
Is the KPMG case with the Isle of Man shell companies, in which some people refused to disclose their identity, still before the courts? Is it active?
What stage is it at?
What is the Canada Revenue Agency doing?
4 p.m.
Assistant Commissioner, Compliance Programs Branch, Canada Revenue Agency
In terms of the core group of participants, we have determined that $24 million is owed in taxes. As I mentioned, two files are still open.
We also found 70 more participants, represented by other accounting firms, whom we asked to repay $7 million.
We then reviewed all e‑transfers between the Isle of Man and Canada over a two‑year period. We found 90 records of Canadians of interest. Of those, we found 45 files that, when audited, resulted in the recovery of an additional $17 million.
In total, the Isle of Man file audits recovered $48 million in taxes. There are 15 non‑KPMG audits and two KPMG audits still open.
4 p.m.
Liberal
The Chair Liberal Wayne Easter
Sorry, Gabriel. You're way over the time. You'll get another round down the road a little ways.
We'll go to Mr. Julian next, followed by Mr. Lawrence.
4 p.m.
NDP
Peter Julian NDP New Westminster—Burnaby, BC
Thank you very much, Mr. Chair.
My thanks to all the officials who are here today. We hope their families have remained healthy during the pandemic. We also thank them for their service.
I, too, am flabbergasted that the Minister of National Revenue chose not to come to this committee meeting. She has a responsibility to answer our questions and explain why there has never been any follow-up on the fraud cases where Canadians watched their retirement savings vanish.
She had a responsibility to be here today.
I am very surprised and, quite frankly, profoundly disappointed that the Minister of National Revenue chose to avoid the committee today and decided not to come to answer questions about what has been a massive fraud that has deprived thousands of Canadians of their entire retirement savings. The case around the Isle of Man scam and KPMG is something that the minister needs to come to committee to explain. I hope that happens in very short order. I'll join my voice to colleagues' about this.
I have a number of questions about KPMG, but first off, Mr. Gallivan, I'm very happy to see you again. A year ago you came to committee, and I asked you a series of questions. I want to get a very brief update.
I'll start with the Panama papers. How many of the corporations named in the Panama papers have now been charged by CRA?
4 p.m.
Assistant Commissioner, Compliance Programs Branch, Canada Revenue Agency
As was explained previously, given the point we're at in terms of our investigations, we are—
4 p.m.
Assistant Commissioner, Compliance Programs Branch, Canada Revenue Agency
Yes, that's correct.
4 p.m.
NDP
Peter Julian NDP New Westminster—Burnaby, BC
Okay. How about the Paradise papers? How many of those corporations have been charged?
4 p.m.
Assistant Commissioner, Compliance Programs Branch, Canada Revenue Agency
Again, the Paradise papers was a very different case from the Panama papers. It was publicly available information that people would have already had. I don't think we've confirmed any investigation of criminality around the Paradise papers.
4:05 p.m.
NDP
Peter Julian NDP New Westminster—Burnaby, BC
Still none, one year later.
How about the Bahamas leaks? Again, these are publicly listed; the information's available online. How many of the corporations involved in tax evasion and have been named in the Panama papers have been charged?
4:05 p.m.
Assistant Commissioner, Compliance Programs Branch, Canada Revenue Agency
Mr. Chair, to get at the root of the question, the facts of the case will decide whether criminal charges will be relayed or not. It's not a discretionary choice on the part of the Revenue Agency. In the case of the Bahamas leaks, it is zero.
4:05 p.m.
NDP
Peter Julian NDP New Westminster—Burnaby, BC
Okay, so it is zero for Panama, zero for Paradise and zero for Bahamas.
How about the Isle of Man scam? How many of the corporations or individuals involved have been charged?
4:05 p.m.
Assistant Commissioner, Compliance Programs Branch, Canada Revenue Agency
Again, Mr. Chair, based on the facts of those cases, the statutes and the jurisprudence, there have been no charges laid to date.
4:05 p.m.
NDP
Peter Julian NDP New Westminster—Burnaby, BC
Thank you. I appreciate your honesty on this. This is a year later; I asked you those same questions a year ago. There has been absolutely no progress, yet the Parliamentary Budget Officer estimates that Canadians lose $25 billion a year to massive overseas tax evasion. That means that over the last five years—the life of this government—there's been $150 billion that could have gone to housing or to a wide variety of supports, to safe water in first nations communities—
4:05 p.m.
Liberal
The Chair Liberal Wayne Easter
Peter, I hate to correct your arithmetic, but it's $125 billion, not $150 billion, in five years.
4:05 p.m.
NDP
Peter Julian NDP New Westminster—Burnaby, BC
Well, you're now in your sixth year, so by the end of this year, it'll be $150—
4:05 p.m.
NDP
Peter Julian NDP New Westminster—Burnaby, BC
Thank you, I appreciate that.
Mr. Gallivan, at the time, you said, “Based on the facts, the current jurisprudence and current Canadian law, we believe we took every action we could.”
A year ago, no charges were laid in any of these cases. A year later, there are still no charges laid in any of these cases. What do you believe the government should be doing to bring forward legislative tools so that this massive tax evasion, which costs Canadians so dearly, is effectively dealt with?
4:05 p.m.
Assistant Commissioner, Compliance Programs Branch, Canada Revenue Agency
Beyond criminal investigations—including criminal investigations, but also including civil actions—there are three areas, and one is CRA access to information. Whether it is information that's protected by solicitor-client privilege or whether it is taxpayers objecting through the audit phase to providing information, and the fact lawyers in Canada clearly enjoy significant protections, we have a hard time getting the evidence we need to advance both criminal files with the evidence seized, and civil files.
4:05 p.m.
NDP
Peter Julian NDP New Westminster—Burnaby, BC
Thank you very much.
Now, I'd like to go specifically to the issue of KPMG. On this file with KPMG, how many meetings were held between CRA and KPMG?
4:05 p.m.
Assistant Commissioner, Compliance Programs Branch, Canada Revenue Agency
I would have to get the answer, but I would say there would have been dozens of meetings.
4:05 p.m.
NDP
Peter Julian NDP New Westminster—Burnaby, BC
How many written communications were there between KPMG and CRA?
4:05 p.m.
Assistant Commissioner, Compliance Programs Branch, Canada Revenue Agency
Again, we're talking about more than 25 clients, so there would have easily been 100 different pieces of correspondence. There was litigation on finding out who they were and then resolving the actual tax bill that they had to pay in getting to that $24 million amount I talked about.
4:05 p.m.
NDP
Peter Julian NDP New Westminster—Burnaby, BC
Yes. You can understand, when we're talking about $150 billion by the end of this year that has disappeared in overseas tax havens, the amounts that you're citing of what been collected are appallingly low.
I want to come back to your comment about Canada's ninth place. In terms of the actual size of the economy and tax collected, what place is Canada in? Many of the smaller countries may have collected less in tax but have smaller economies, so proportionally, they're doing much better. Is Canada in 20th place, 25th place, when you compare apples with apples?