Evidence of meeting #11 for Finance in the 45th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was rules.
A video is available from Parliament.
Liberal
Jake Sawatzky Liberal New Westminster—Burnaby—Maillardville, BC
Going forward, what would be your suggestion in terms of how we can do better for Canadians here?
Partner, Osler, Hoskin and Harcourt LLP, As an Individual
To me, the best way to improve things for Canadians is to add more clarity to the rules and simplify them.
We have done a lot for expanding rules, including our EIFEL rules, which restrict interest in financing expenses. We have not done enough to simplify the rules, for example, by eliminating the foreign affiliate dumping rules, which are entirely redundant.
Liberal
The Chair Liberal Karina Gould
Thank you, Mr. Marley. That concludes the time.
Thank you, Mr. Sawatzky.
Mr. Lemire, you have the floor for two and a half minutes.
Bloc
Sébastien Lemire Bloc Abitibi—Témiscamingue, QC
Thank you, Madam Chair.
Mr. Cochrane, in 2021, the European Union adopted a directive that requires large multinationals with sales of more than 750 million euros to publish their tax data, country by country. That directive applies to all companies operating in the European Union, even if their head office is abroad, such as in Canada.
Country-by-country reporting could make it possible to better monitor tax practices, but that data remains confidential in Canada.
Do you think that information should be made public in Canada?
Senior Economist, Canadian Labour Congress
Yes, I absolutely think this information should be made public.
I note the concerns that Mr. Marley raised. The same concerns were raised around the public beneficial ownership registry. Frankly, they are more significant around that measure, given that we're identifying actual beneficial owners, while in this case we're talking about massive transnational corporations, and 750 million euros is a very high threshold. This is really the biggest of the biggest companies.
Different countries, like Australia and the EU, are implementing public country-by-country reporting, and Canada making it public would help us understand much more about how transnational corporations are actually operating.
We need more than just tax officials understanding those things. Tax officials are going to look at this in one way, according to what their mandate is and according to what their technical expertise is; having the full slate of civil society actors looking at these matters will give us much more understanding about how transnational corporations are operating, for good and for ill.
Bloc
Sébastien Lemire Bloc Abitibi—Témiscamingue, QC
Since coming to power, the Carney government has given up on implementing a strategic tax tool, namely a minimum tax of 15% on the global revenue of multinationals.
How much does it cost the public purse for that measure to be abandoned?
Senior Economist, Canadian Labour Congress
There are costs of billions of dollars in not moving forward on this.
When I was at C4TF, we supported pillar two. However, given the fact that the entire integrated framework from the OECD looks like it's falling apart, we need to be looking to other mechanisms. Pillar two was important—
Liberal
The Chair Liberal Karina Gould
Thank you, Mr. Cochrane.
Thank you, Mr. Lemire.
Mr. Kelly, you have five minutes, please.
Conservative
Pat Kelly Conservative Calgary Crowfoot, AB
Thank you.
Mr. Cochrane, for years the Canada Revenue Agency has refused to supply anonymized data to the Parliamentary Budget Officer so that the Parliamentary Budget Officer could independently measure the tax gap.
How important is it to be able to independently quantify the problem of tax evasion?
Senior Economist, Canadian Labour Congress
It's extremely important. Knowledge is power. We should be empowering ourselves with all the forms of knowledge that we can. The Office of the Parliamentary Budget Officer is extremely important in that regard. Definitely, this should happen.
Conservative
Pat Kelly Conservative Calgary Crowfoot, AB
Without independent verification, it's difficult to take the CRA at their word when they measure these things, because the Auditor General continually exposes the inability of that agency to accurately report on itself. The call centre report is a perfect example: They thought they gave out correct information 95% of the time, but the Auditor General revealed that is not the case.
Can we take the CRA at its word, or do we need independent verification?
Senior Economist, Canadian Labour Congress
I think independent verification is needed any time any numbers are produced by anyone, regardless of what their reputation might be. Having some sort of independent verification is a basic tenet of science.
Conservative
Pat Kelly Conservative Calgary Crowfoot, AB
Yes. It keeps everyone honest, doesn't it?
We had testimony from the CRA last week. They revealed that they have had only 14 successful prosecutions since 2020, which is less than three per year on average. Are you impressed by that number or surprised? Do you have a reaction for us?
Senior Economist, Canadian Labour Congress
I'm not surprised. I wish I were.
Part of it is just how much behind the eight ball the CRA is versus the people whose interest it is to reduce their tax bill. They just have way more resources to be able to do so and to be able to fight the CRA. The CRA is very underequipped in this regard.
Is there a lack of urgency within the CRA for dealing with this problem? Perhaps.
Conservative
Pat Kelly Conservative Calgary Crowfoot, AB
Mr. Cochrane, I might challenge you a bit there and ask for your comments.
The CRA, in its last report, had 59,000 employees. That compares with the U.K. tax collection force, which has a little over 60,000, and the IRS in the United States, which has about 90,000. We have way more tax collectors per capita than our peer countries, yet they can only make 14 charges stick. Would that not suggest a misallocation of the resources they have?
Senior Economist, Canadian Labour Congress
I don't exactly how those are distributed. It would suggest they're not being utilized to their greatest effectiveness, but are they also being equipped with the kinds of technologies that are now required more and more to deal with these problems?
Conservative
Pat Kelly Conservative Calgary Crowfoot, AB
They also need the correct laws. Evasion is criminal behaviour and not a matter of Canada not having the correct laws. That's a matter of enforcing the law.
What about aggressive tax avoidance? We have tax avoidance, which we all understand. Every taxpayer has the right to minimize their taxes within the law. However, for aggressive avoidance, wherein one knows they are violating the spirit of the law and are simply trying to get away with something they think they can get away with, can we quantify the size of that class of a non-taxpayer?
Senior Economist, Canadian Labour Congress
In theory, you can quantify anything. We would need to establish what our rules are for what constitutes aggressive versus non-aggressive tax avoidance.
I appreciate Mr. Marley's pointing out that GAAR was updated. That it slipped by my radar is a consequence of my not focusing on tax the way I once did. I'm happy to hear it was updated, but I don't know exactly what those updates are. It would be great if they include that we're going to try to measure something such as aggressive tax avoidance to identify where it's occurring and how much it's costing the Canadian public.
Conservative
Pat Kelly Conservative Calgary Crowfoot, AB
You mentioned the lack of criminal prosecutions in Canada regarding the Paradise papers, the Panama papers and other schemes. Knowing the employee count, I can't accept that the CRA doesn't have the resources. It must surely be a lack of management or priority in this area. What other explanations could there possibly be for the disparity between Canada and its peers?
Senior Economist, Canadian Labour Congress
One of the things we've heard about is how their efforts for auditing get focused on the big players, where it can be a multi-year effort of a handful of auditors undertaking this—
Conservative
Pat Kelly Conservative Calgary Crowfoot, AB
If I may, in my last seconds, would this be as opposed to, say, smaller individuals or a small business that lacks those resources?
Liberal
The Chair Liberal Karina Gould
Thank you, Mr. Kelly.
Thank you, Mr. Cochrane.
I'll turn to Mr. Turnbull.
You have five minutes.
Liberal
Ryan Turnbull Liberal Whitby, ON
I thank both Mr. Marley and Mr. Cochrane for being here. It's great to have you.
Mr. Cochrane, you used to work for Canadians for Tax Fairness. You said that in your opening remarks. In July 2025, they produced a report called “The Rise and Rise of Tax Havens”. One of the quotes I noticed, which I'll read into the record, is, “We estimate that the signing of five tax information exchange agreements with tax havens in the early 2010s led to $47.1B being shifted to tax havens over the next five years”.
Do you agree with that statement?