Evidence of meeting #58 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.

On the agenda

MPs speaking

Also speaking

Ted Gallivan  Assistant Commissioner, Compliance Programs Branch, Canada Revenue Agency

4:35 p.m.

Conservative

Ted Falk Conservative Provencher, MB

Mr. Chair, Mrs. Jansen will be going first.

4:35 p.m.

Liberal

The Chair Liberal Wayne Easter

Okay.

Mr. Julian, you have six minutes.

4:35 p.m.

NDP

Peter Julian NDP New Westminster—Burnaby, BC

Thank you very much, Mr. Chair.

I also want to wish you a happy birthday. Someday we will celebrate together, I'm sure.

I would like to welcome the minister and Mr. Gallivan.

I'm going to continue in the same vein as Mr. Ste‑Marie.

We are talking about thousands of Canadians, victims who have lost all their life savings. We know very well that in the frauds committed by Norshield and Mount Real, there are thousands of Canadians who lost everything. The system has never got justice for them.

Minister, you have been the minister for six years. What do you say to the victims, like Janet Watson who appeared before the committee, who say that the government has done absolutely nothing to protect them or to bring the guilty parties to justice?

4:35 p.m.

Liberal

Diane Lebouthillier Liberal Gaspésie—Les-Îles-de-la-Madeleine, QC

Mr. Chair, I thank my colleague for his question. We know that I have very sincere sympathy for the people who have been victims of fraud, just as he does. I truly understand how much this can affect their lives.

However, as I said, and it doesn't bother me to repeat it, our government respects the CRA's status. I can't instruct the CRA to initiate audits and I do not intervene in audits. This is what protects the integrity of the tax system. We are going to continue doing the work we do, and because we want to keep moving forward, I invite my colleague to vote for the budget that has been introduced. It contains even greater resources to tighten the net and make sure that people pay their fair share.

If my colleague wishes to get any more technical and administrative information, Mr. Gallivan can answer him.

4:35 p.m.

NDP

Peter Julian NDP New Westminster—Burnaby, BC

I would like to get back to the question of the Panama Papers, the Bahama Leaks and the Paradise Papers.

All those papers, which are publicly available, contain almost 6,000 numbers of Canadian companies and names of Canadian individuals who benefited from a whole range of tax loopholes outside Canada.

It's a simple question: how many of those companies and those individuals, who have been named for six years now, have been charged? How many of them have been convicted?

4:35 p.m.

Liberal

Diane Lebouthillier Liberal Gaspésie—Les-Îles-de-la-Madeleine, QC

Mr. Chair, we are taking on very wealthy people. These people have the resources to pay the best lawyers, the best tax law experts, and the best teams to defend them.

Canada adheres to the rule of law, and these people use all legal means available to them to ensure that they do not pay their fair share.

I invite my colleague to support the budget so we can provide the resources to do even more to deal with those who commit fraud.

4:35 p.m.

NDP

Peter Julian NDP New Westminster—Burnaby, BC

You have not answered my question.

Mr. Gallivan, how many charges have been laid? How many convictions have there been?

4:35 p.m.

Assistant Commissioner, Compliance Programs Branch, Canada Revenue Agency

Ted Gallivan

As was said earlier, the investigations have not resulted in convictions at this point.

4:35 p.m.

NDP

Peter Julian NDP New Westminster—Burnaby, BC

That means that there have been no charges or convictions concerning the Isle of Man; no convictions relating to the Panama Papers; none in connection with the Bahama Leaks; and none concerning the Paradise Papers.

There have therefore been no convictions in six years.

You said in this committee in 2016 that we were talking about measures taken to get information about electronic funds transfers. Regarding the CRA's audits of electronic funds transfers in excess of $10,000, how many files are now subject to criminal prosecution? How many convictions are there?

We see Cinar, and we see the lack of action with the Isle of Man scam. We see that there have been absolutely no charges ever levied in all of these very clear violations of our tax code. I remind the minister, of course, of the comments made by Brigitte Unger, professor of economics, who said that this is effectively stealing money from public coffers, yet we see no action at all.

When it comes to electronic funds transfers, how many files are now subject to criminal prosecution?

4:40 p.m.

Liberal

The Chair Liberal Wayne Easter

Is this going to the minister or Mr. Gallivan?

4:40 p.m.

NDP

Peter Julian NDP New Westminster—Burnaby, BC

It's to the minister.

4:40 p.m.

Liberal

Diane Lebouthillier Liberal Gaspésie—Les-Îles-de-la-Madeleine, QC

As I have said multiple times since the meeting began, these are very complex cases.

I would ask my colleague not to act as if he doesn't understand simple things. If I were to interfere in criminal investigations, I would be before the committee being accused of exactly the opposite.

4:40 p.m.

NDP

Peter Julian NDP New Westminster—Burnaby, BC

It's simple; there has been a total failure for six years. There have been no prosecutions and no convictions.

I would like to ask you another question.

Tax audited files reported to the CRA by the criminal prosecution service have decreased over the last 10 years by 86%. Could the minister explain, when there's been no success in any of these areas we've just talked about, why even the tax audit files forwarded by the CRA to the Canadian criminal prosecution service have decreased by such a substantial amount, 86% since just before her term?

4:40 p.m.

Assistant Commissioner, Compliance Programs Branch, Canada Revenue Agency

Ted Gallivan

Mr. Chair, could I respond?

4:40 p.m.

Liberal

The Chair Liberal Wayne Easter

Yes, Mr. Gallivan, go ahead.

4:40 p.m.

Assistant Commissioner, Compliance Programs Branch, Canada Revenue Agency

Ted Gallivan

I'm not sure where the 86% came from. There has been a decrease in the referrals because we are focusing on more serious cases. I think similarly that complexity is what's driving the lack of convictions in relation to the Panama papers.

There's a high evidentiary standard. It takes the Crown a long time to put its case together. The fact that there's nothing to date shouldn't indicate that there will never be anything.

4:40 p.m.

Liberal

The Chair Liberal Wayne Easter

Okay, we will end it there.

We'll go to five-minute rounds, starting with Mrs. Jansen.

Tamara, you're up.

June 22nd, 2021 / 4:40 p.m.

Conservative

Tamara Jansen Conservative Cloverdale—Langley City, BC

Thank you.

Madam Minister, at committee we've spent almost 30 hours wading through a ton of incredibly complex tax changes while studying the BIA. Everyone agrees that the tax act is overly complex. As a matter of fact, it's so complex that even your own team at the call centres gave Canadian taxpayers false or erroneous information 30% of the time, so even your own people don't understand it.

Small businesses are spending an exorbitant amount of money and time trying to comply. Under your watch, it has become even more difficult and leaves small business owners in constant fear of accidentally being non-compliant.

Would you commit today to Canadians to simplify the system so that they can stop wasting their precious time trying to wade through piles of incomprehensible tax rules?

4:40 p.m.

Liberal

Diane Lebouthillier Liberal Gaspésie—Les-Îles-de-la-Madeleine, QC

Mr. Chair, I would like to tell my colleague that if she wants to change the laws, the Minister of National Revenue is not who she should be talking to; it's the Minister of Finance. The Minister of Finance is who prepares the legislation. At the Canada Revenue Agency, we just apply it.

4:40 p.m.

Conservative

Tamara Jansen Conservative Cloverdale—Langley City, BC

I'll pass it on to my colleague. I find that an absolutely unacceptable answer.

4:40 p.m.

Conservative

Ted Falk Conservative Provencher, MB

Thank you.

Thank you, Madam Minister, for coming to the committee today. It's good to see you here.

I'll get right into it. Can you tell this committee how many dollars are lost each year to overseas tax evasion?

4:40 p.m.

Liberal

Diane Lebouthillier Liberal Gaspésie—Les-Îles-de-la-Madeleine, QC

Mr. Chair, the CRA does not lose money every year fighting tax evasion. With the billion dollars that has been invested by our government, we have managed to recover $5 billion. Mr. Gallivan can provide all of the administrative information my colleague needs.

4:45 p.m.

Assistant Commissioner, Compliance Programs Branch, Canada Revenue Agency

Ted Gallivan

The tax gap reports that the CRA has published transparently would say the number is $800 million to $3 billion for individuals. For multinationals, we're finding about $6 billion, and there's another $6 billion out there.

Therefore, it's $800 million to $3 billion from individuals and about $6 billion from corporations that we're not finding. The tax gap estimates say we're finding about half of it from multinationals.

4:45 p.m.

Conservative

Ted Falk Conservative Provencher, MB

Okay. The Parliamentary Budget Officer estimates that annually we lose $25 billion in uncollected taxes due to overseas tax evasion.

4:45 p.m.

Assistant Commissioner, Compliance Programs Branch, Canada Revenue Agency

Ted Gallivan

I believe that number includes domestic....