Good afternoon.
Thank you for inviting me to appear before the committee today.
The Association for the Taxation of Financial Transactions and Citizens' Action, or ATTAC, is an organization represented in several countries and on four continents. ATTAC‑Québec, like the other ATTACs, focuses on tax issues in particular. In our opinion, tax fairness plays a key role in achieving greater social justice, ensuring a better distribution of wealth and developing quality public services.
Since this involves an assessment of the Canada Revenue Agency's efforts to fight tax evasion and tax avoidance, we're speaking to you, members of Parliament, today. We'll be talking about your own efforts, since the agency reports to you.
First, we want to say that we're concerned about the state of Canada's public finances. The cost of dealing with the effects of COVID‑19 has been very high and will add significantly to the budget deficit. Further spending increases should be expected. The green transition, which is absolutely necessary for our economic health and for our survival as a species on this planet, will require major public investments. These investments will include major technological transformations based on energy conservation, the electrification of transportation, the transition from fossil fuels to renewable energy, and so on.
Given this situation, fiscal restraint, which has stifled us in recent years and greatly weakened our ability to respond to the pandemic, is no longer an option. This shows how much the CRA will play a fundamental role in the coming years and how much the fight against tax evasion and tax avoidance should be the focus of our collective concerns.
We're concerned about the CRA's funding, which we believe is still too low. According to the Échec aux paradis fiscaux collective, the Government of Canada has replenished the agency to the tune of $500 million since 2015. The latest federal budget added $534 million. This barely makes up for the $1 billion in cuts made by the Harper government, even though the current needs are much greater.
The recently implemented automatic exchange of information is finally providing access to a tremendous amount of data. This will make the work of investigators easier, but will mainly require a significant amount of analysis and data processing by leading experts. A substantial investment will be needed. ATTAC‑Québec is proposing that the CRA's budget be significantly increased, on top of the amounts already allocated, and that the money be spent on investigations targeting the major fraudsters, whether they're companies or individuals.
With respect to tax avoidance, we believe strongly in the effectiveness of a registry of beneficial owners, subject to the following conditions: access to the registry should be free and easy for the public at large; the information published should provide a complete picture of the identity of beneficial owners; adequate resources should be allocated to verifying the information provided; and the liability threshold should be 10% of the share of the company in question, thereby reflecting the distinction between a foreign direct investment and a portfolio investment proposed by Statistics Canada. There has never been a scientific consensus regarding the effectiveness of an overly high threshold, such as the 25% threshold in the United Kingdom.
We ultimately appreciate the G7 proposal for a global minimum tax on companies. This is a good way to fight tax avoidance and the particularly harmful strategy of transfer pricing. However, the 15% minimum tax rate seems too low and could contribute to increasing tax competition between states with good taxation systems. Moreover, this rate, which is meant for multinational companies only, makes us worry about preferential treatment for them, at the expense of SMEs and individuals. At this time, significant efforts should be made to ensure that taxation is truly progressive.
Your decisions on the CRA will play a key role in the coming years to ensure greater social justice and better environmental protection. Although progress has been made, it's far from sufficient. Every effort must be made to eliminate tax havens. We hope that you'll take the necessary steps to ensure that Canada becomes a world leader on these issues, rather than continuing to take the passive and wait‑and‑see approach that unfortunately has been in place for a long time.
This concludes my remarks.
Thank you for your attention.