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.
Professor, Wilfrid Laurier University, As an Individual
Very briefly, and this maybe piggybacks on Mr. Cochrane's comment from the previous session, the changes to the general anti-avoidance rule would help with that. I'm pleased to see that there are changes being made.
Liberal
The Chair Liberal Karina Gould
Thank you, Professor Farrar.
With apologies to the committee, we are trying to get in touch with Professor Li, but we haven't been able to yet. However, Ms. Cobena and Mr. Turnbull, who is next, if you'd like to send in your questions in a written way, we can get a written response.
Thank you.
Mr. Turnbull, you have five minutes.
Liberal
Ryan Turnbull Liberal Whitby, ON
I had really hoped to focus on Ms. Li for my questions.
Mr. Farrar, I'm sure you'll provide great answers to questions I was going to pose to her. I have no choice but to pose them to you.
I wanted to make you aware of some statistics that I have in front of me. One is the impact from CRA compliance activities between 2020 and 2024. We see a steady increase year over year from $12.2 billion in the 2020-21 tax year to $18.1 billion in the 2024-25 tax year. That's a steady increase.
The other stats that I have here in front of me are that CRA cases referred for criminal investigation have also steadily increased. In the 2020-21 tax year, it was at 110, and in the 2024-25 tax year, it was at 173.
Again, year over year, if you look at the stats, there's a steady increase in CRA cases being referred for criminal investigation. You said that when you were working with CRA, you were really impressed by their work, yet you were somewhat critical of whether we're getting the bang for the dollar in terms of their enforcement activities.
I guess what I wanted to say to you is that we also see that criminal investigations have decreased, but the CRA is not responsible for those criminal investigations, are they? Who is responsible for the criminal investigations, sir? We see they have gone from 31 to 15 over the same time period.
Professor, Wilfrid Laurier University, As an Individual
My understanding is that they would be referred to the Public Prosecution Service of Canada, which would work in harmony with the CRA. At some point, it passes from the CRA to a different government agency.
Liberal
Ryan Turnbull Liberal Whitby, ON
Would you direct the same criticism here that you seem to have for enforcement activities through the CRA? I'm just saying that the criminal prosecution of those specific cases seems to be the gap, because more cases are being referred.
We heard that from CRA officials when they were here. Mr. Kelly tried to make it seem as though CRA wasn't doing its job. I pushed back on that and asked them for clarification. They were very clear that they are actually referring cases for criminal investigation, but maybe those cases are not getting pursued.
Is your suggestion then to increase the federal prosecution service and the resources they have so they can prioritize these cases? Would that be a recommendation you'd make?
Professor, Wilfrid Laurier University, As an Individual
Yes. I would say definitely, yes.
Liberal
Ryan Turnbull Liberal Whitby, ON
That's great. That's exactly what we've committed to in our platform, which is good.
I would also note that in budget 2022, our government under previous leadership committed $1.2 billion to expand CRA audits and enforcement. That's over a five-year period. That's still in effect, in terms of money that's in the fiscal track that's added to CRA's capacity.
We see that this is having some impact. Over 850 audits were completed in 2023-24, resulting in $101 million. That's in the departmental results report. Would you say that the money is well spent from the increased audit that we see completed?
Professor, Wilfrid Laurier University, As an Individual
If you ask it in that way, I would say yes, it seems to be money well spent.
Liberal
Ryan Turnbull Liberal Whitby, ON
I also note that the Auditor General did a report in 2018 to look at the yield of audits and showed that there was an increase by 60% from the Harper era to the Trudeau era. Would you agree with that, that there was a dramatic shift in terms of what results they had as a result of those added resources?
Professor, Wilfrid Laurier University, As an Individual
Yes, the audits seemed to be more effective.
Liberal
Ryan Turnbull Liberal Whitby, ON
Ms. Li, you're back. Welcome back.
I'm sure my time is almost out, but how much do I have?
Liberal
Ryan Turnbull Liberal Whitby, ON
Ms. Li, I really appreciated your comments about the double-edged sword of rules and clarifying rules. I wonder if you could say a little bit more about that in the 10 seconds that I have left you.
Professor, Osgoode Hall Law School of York University, As an Individual
Every rule is double-edged, especially when it is an anti-avoidance rule.
Liberal
The Chair Liberal Karina Gould
Thank you very much.
On behalf of the committee, I would like to thank the witnesses.
Professor Li, I'm sorry that we lost you for a few minutes, but I think you might have some written questions coming your way. Hopefully, you'll be able to respond in writing.
Given the hour, thank you to our witnesses. We appreciate your time today.
Committee members, you received a budget request on Friday regarding the study of the report of the Bank of Canada on monetary policy. The amount requested is $2,250. Is it the pleasure of the committee to adopt this budget?
Liberal