Finance Committee on June 17th, 2021

[Ed Fast, Conservative, Abbotsford, BC]

Mr. Bilodeau, I did want to ask you a specific question.

That OECD report specifically highlighted four things that could be done to address the issue of, what they refer to as, professional enablers. They're talking about accountants. Let's be very frank about that.

The first was engaging in more communication. The second was leveraging the role of supervisory bodies in industry sectors. Third was early disclosure, and then whistle-blowing, and then a strong approach to enforcement.

I want to ask you a question about the second part, and that is supervisory bodies. Those are your professional societies that are governed provincially. Are you aware of anyone within KPMG, any accountant within KPMG, having been disciplined or cited or censured as a result of the Isle of Man offshore structures?

[Serge Bilodeau]

No, I don't have that information.

[Ed Fast, Conservative, Abbotsford, BC]

I'd like you to comment on what it is that your profession could do to help reduce or eliminate tax evasion. I know it's a tough question, but surely you, as a lifelong accountant, have been able to identify certain strategies that could help our country address this issue that costs taxpayers billions and billions of dollars every year.

[Serge Bilodeau]

You have to really think the issue through, to be aware of what tax authorities, either provincial or international, are saying. The most recent budget was clear. There are a huge number of tax compliance measures. Some measures are becoming more and more punitive for specific situations.

To answer your question, I would say that we are certainly on the right track.

[Ed Fast, Conservative, Abbotsford, BC]

Does your professional body.... Across Canada in the provinces, do those professional bodies actually have sanctions they can impose on accountants who engage in tax evasion?

[Serge Bilodeau]

I really do not know how to answer that question. I have no idea. I assume so, because that is what a professional organization is actually for.

[Ed Fast, Conservative, Abbotsford, BC]

Let me ask you this, then.

[The Chair, Liberal, Wayne Easter]

This will be your last question, Ed.

[Ed Fast, Conservative, Abbotsford, BC]

You're a member of a professional accounting body, correct? You could not practise otherwise, correct? That's in Quebec, correct?

[Serge Bilodeau]

That is correct. I am a member of the Ordre des comptables professionnels agréés du Québec.

[Ed Fast, Conservative, Abbotsford, BC]

Are you telling me that you don't know exactly what rules they have about you or any other accountant within that body engaging in tax evasion?

[Serge Bilodeau]

Yes, it has rules to make sure that training is provided and that clients get the best possible service. I am not familiar with the punitive rules and the sanctions, but I know that the Ordre des comptables professionnels agréés du Québec publishes the names of those who have been sanctioned.

[Ed Fast, Conservative, Abbotsford, BC]

Anybody KPMG—

[The Chair, Liberal, Wayne Easter]

Thank you, both.

Mr. Ste-Marie, we'll give you about two minutes, and Mr. Julian, about two, and then we're going to have a hard stop.

Go ahead, Mr. Ste-Marie.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Thank you, Mr. Chair.

Mr. Bilodeau, in your testimony, you distinguished between tax evasion and tax avoidance very well. Basically, you helped to establish strategies for tax avoidance, which is legal. That's what KPMG does.

But I do have a problem with that. I'm thinking about ordinary people, personal support workers, for example, because we are still in a pandemic. A lot of people earning minimum wage are paying 35% to 40% in income tax. Nurses may be paying 45% to 50% in income tax. Then we look at the multimillionaires and billionaires who use these strategies to pay a ridiculous amount in income tax, although they certainly have the means to pay their fair share.

So, on the one hand, we have ordinary people tightening their belts, and on the other hand, we have the extremely wealthy who, using strategies like those that you established, end up paying almost nothing. It may be legal, but do you think it's morally acceptable?

[Serge Bilodeau]

As professionals, our role is limited to interpreting and applying the legislation as it is written. If there is a lack of fairness between certain groups of taxpayers, as you mention, I feel that you have to talk to those who make the legislation.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Thank you. I won't go any further. So you do not acknowledge that what you were able to do is immoral.

That is exactly the problem that was raised by senior officials in the Department of Finance and officials of the Canada Revenue Agency. The legislation contains a lot of loopholes and intricacies, and people like you use them so that the wealthiest among us do not contribute. I find that to be unacceptable.

As you said, our role is to change that, because it is unacceptable. You have no idea how disappointed I am that you do not acknowledge that it is immoral.

That's all I have to say.

Thank you Mr. Chair.

[The Chair, Liberal, Wayne Easter]

I'll give Mr. Bilodeau 30 seconds to respond.

[Serge Bilodeau]

I am sorry, but I did not understand the question.

[The Chair, Liberal, Wayne Easter]

I think it was more a statement, in fact.

Mr. Julian, you have the floor.

[Peter Julian, NDP, New Westminster—Burnaby, BC]

Thank you, Mr. Chair.

Mr. Bilodeau, I am tempted to ask you a question about the victims, like Janet Watson, who appeared before our committee. She lost all her life savings because of these strategies.

But I will stick to questions about Parrhesia.

Two very troubling questions emerge from Ms. Iacovelli's testimony.

First, Parrhesia, which has links to the sword companies, was registered as the result of a document faxed from the offices of KPMG in Montreal.

Were you aware of the existence of Parrhesia? Was it discussed in the offices in Montreal? Do you believe that it is one of the issues that could have been discussed by your famous risk management committee?

Then, Ms. Iacovelli clearly stated that the services of those companies were not provided after 2003. However, we discovered that Pannhesia was dissolved on May 24, 2021, just a few weeks ago, and right after the revelations on Enquête and The Fifth Estate, programs on Radio‑Canada and CBC respectively.

Were you aware that Parrhesia existed until that date? How do you explain that Parrhesia was in existence for all that time, although, according to Ms. Iacovelli, it was not active after 2003?

[Serge Bilodeau]

I refer you to my previous comment. I have absolutely no knowledge of that company, so I will answer each of your questions by saying that I am not familiar with it. I had no information about Parrhesia or nor did I have any contact with people who were involved in setting it up.

[The Chair, Liberal, Wayne Easter]

You have a last question, Mr. Julian. Be very quick.

[Peter Julian, NDP, New Westminster—Burnaby, BC]

Actually, I still have a lot of questions.

[The Chair, Liberal, Wayne Easter]

I'm sorry, we don't have time.